Welcome to "Explain it to a Comedian". I am a comedian, Dhaya Lakshminarayanan. I'm joined here by Professor Ivo Welch, who is not a comedian, but you have a book.
It's not funny, but it's important. Tell us about the book. I will be happy to do that. First.
It's very unfair that you are the comedian and I'm not the comedian. That means presumably, I cannot make the jokes. You can make jokes. I can make them. Okay.
You have my permission. I won't do economics, but you can do jokes. So I am a half comedian and a half serious professor and I'm going to try and explain it in a serious fashion.
Are you half comedian on your mother's side or on your father's side? More on my children's side. Okay. great. Okay. My book is trying to explain climate change, what we can do about it, how we can fix it.
It makes two very simple points. The first point is that most of the emissions are going to come from the developing countries in the world, about two 2/3 of it within about 50 years. So any solution that you might come up with, it only works in Europe and the United States and Japan, and countries like that, is not going to solve the problems of this world. I'm agreeing with you. That's good, because this is pretty factual and it's pretty difficult to disagree with this. About 2/3 is going to come from China and India and Malaysia and Indonesia and Latin America.
So we've got to find solutions that also work there. Now, if I want to find solutions, I've got to find solutions that are in the self-interests of people and that are in the self-interests of countries. The idea that personal carbon footprints are going to make a huge difference isn't going to work that well, because they are like New Year's resolutions, people are not going to follow them for a very long time. They like to go skiing and they like to go driving and they like to do all sorts of other things.
The running joke that I like to make to my students is... Great! Jokes! Jokes Is that if you could cure climate change by getting up from your TV chair and just switching the channel by hand, we would have no chance of ever curing climate change. Is it different now that we have remote controls? Yes.
But the remote controls are still not going to save the planet because unfortunately, my hypothetical that if it were the case, isn't really true. This all sounds so far, like a big bummer. Is there any good news Ivo? There are many good news, but the good news are not that we can negotiate treaties that are in the interests of individual countries, because for the most part, India and China want to develop and they want to help their poor people, and they're not really as interested in solving the problems of the world. What can we do for them? We can make it a lot cheaper for them to solve the problems of the world if we can give them renewable technology, renewable energy that is a lot cheaper than what it is that they currently are planning to do with fossil fuels.
Okay. So our personal impact and behavior doesn't matter that much. How did you get here to this interview? And does that matter? Fortunately, it doesn't matter because I didn't walk I actually took a cab. Oh, wow! Okay. I took public transportation. Does that make me better? Yes.
However, I would think that the amount of global warming that you prevented by that would be 0.00000000001%. Wow, so insignificant. All right. So I don't get any points for climate change from taking public transit, but maybe I get moral points but that's not the point of your book. Is this book an anomaly for you? You're an economics and finance professor.
Why did you write this book? Don't you have other things to talk about, like economics and finance principles? There's banks that are failing. There's almost a recession. Why is this important right now? It's probably the defining problem of our times. There are other problems. It's not the only one.
So we should be worried about overfishing. We should be worried about pollution. We should be worried about epidemics, maybe even about terrorism and nuclear wars. Yes, there are also problems in economics and finance and I've looked at them for the very longest time, but they are not as important as those questions.
And I was drawn to doing something that I thought would be really important, and maybe bring an outsider's view to this. A lot of the people that are very engaged in researching those questions, I wouldn't say are developing tunnel visions, but they're very invested in what they are doing and coming in as an outsider, sometimes it's good. I can take the perspective of a student, for example, who wants to learn the basic, most important things. And so I sort of traveled that journey and what took me three years, hopefully will take them three weeks.
Amazing. You're trying to help this next generation. A question for you. You mentioned this is a complex problem. There's people that have brought public policy, you know, other kinds of things.
I like that you're an economist / finance professor. There are some cool economic stuff in here. Free Rider Principle, Law of Diminishing Returns, Tragedy of the Commons, Externalities – can you give us a mini crash course on the economics and finance of climate change? And then follow up question – if global warming occurs, would that allow you to take off your scarf? This is California Ivo, I'm not sure how cold you are. I think you are first, assuming that I can remember two questions at the same time, which is already very difficult for me to do. So why don't we start with one question at a time.
The taking of the scarf is probably not going to work because we're indoors. It also is unlikely to happen mostly in my lifetime. So I have noticed that it is warmer than it used to be when I grew up, but since I'm now in my close to 60, chances are I will not see a lot of that global warming that's going to hit the Earth.
It's going to be more your children, my children, our grandchildren. Those people are going to suffer more. Also, in the United States, we're not going to suffer very much. The big suffering is going to be in warmer places such as Africa and Australia, actually more the northern part of Australia, Indonesia. Those are going to be far harder hit. And your first question was...
About all the cool economic stuff that you fit into this book. I learned a lot. Can you tell us a little bit, like a small mini crash course, on economic principles that you're bringing to this perspective of climate change? Well, the most important one that you should remember for climate change is, the people that are causing the pollution are not going to pay for cleaning it up and they're not going to pay for the harm that's going to be involved.
And this is a problem that occurs on all kinds of sizes. It can occur in the city, so when you took the bus here, you actually reduced the local pollution. That actually does make a little bit more of a difference than reducing the global pollution.
So I did do a good job in taking the BART today. BART is the public transit. It's not a bus. It's a light rail, kind of.
That's the Free Rider Principle then. Right? Is that what you're referring to? Well, you weren't driving for free, I hope? I hope you paid your ticket. I paid my ticket. What's an example of the Free Rider Principle then? Is it because I'm doing my part and other people are not? Is that an example? Yes.
That is an example. Although it's... You can find many examples of that. So for example, if somebody else is taking their car to ride, they are not willing to do the same thing that you are doing. That is, they are not willing to take BART, so they are going to emit a lot of the pollution.
And in that sense, they are free riding, even though they are of course paying for their cars. So in addition to economics, there's chapters about science, engineering, public policy. You've fit so many different topics in here and you're not just limiting yourself to finance and economics. I didn't see any recipes in this book. Was that an oversight? And do you have any to share today? By recipe you mean cooking recipes? Yeah. Absolutely.
Sadly, no. I do not know what to recommend. I guess an icemaker would be very good. But that's something that you buy and plug in. Icemaker.
Okay. Why an icemaker? Because it's going to get a lot warmer very soon. Oh, no.
So we'll need to have ice. Okay. And again, people in the developing world, OECD, can afford an icemaker, but what you're talking about is people in these other countries, Indonesia, India, Sub-Saharan Africa, they can't afford an icemaker.
So if we act in our own self-interest, how are we going to help these people in these other countries if inherently we're all selfish? Well, we've got to try and invent technology that makes it a lot cheaper for them to install air conditioning and thereby work harder and presumably pay us back the loans that they may have to take to buy all these icemakers or more accurately air conditioners. And then, let's talk about terminology a little bit. Am I wrong to say climate change? There's other terms. Which one is less scary? Global warming, weather destabilization, climate crisis, environmental collapse, which is the feel-good term that we should be using? The feel-good term. Yeah.
Or the feel-bad term? Feel-good, because this is kind of a bummer. Is there a word that will make me feel better about everything in the world? No, not really. They're all bummers. However, the world today is a lot better off than it was a hundred years ago. Your life expectancy is a lot higher than it would have been a hundred years ago.
In fact, that is something that Steven Pinker wrote about, that humanity has become much less violent over the centuries, millennia on all kinds of scales. It's a wonderful description. And I think it would be wrong to think that your children and grandchildren will be worse off than you are. They are going to be a lot better off.
So if you think this is all doom and gloom, it is. Now those specific issues are doom and gloom. It doesn't look that good at the moment. We can do things to improve them and we should do things to improve them. And this is what my book is trying to push for. But yes, this is not the best of news for the future.
There is other news that are much better than this one. Let me administer a pop quiz for you right now, Professor. How bad are these ideas in terms of impacting climate change on a scale from terrible, and then very bad, meh and fine. you can use your own scale if you'd like. Buying carbon offsets for a jet.
Useless. Okay. Great. Eating vegan, not vegans. Eating vegan. Also useless.
Protesting by living in a tree. Useless. Useless. Useless. Wow! Okay.
Shaming someone for smelling like methane. Twice as useless because methane actually doesn't have an odor. Oh, wow! Okay. So all of these things are useless.
These are the things that we've been told will help us. So why are they all useless then? Because what you need has to operate at scale. That means it has to be something that 8 billion people, or at least a good number of billion people will want to voluntarily adopt. As much as we would like jets to emit less, buying carbon offsets is not going to change the temperature of the globe very much. So I wouldn't count on that. Okay.
So we kind of got out of the way what's not going to work. Let's talk more about specifics in your book that I read. Chapter 15 is called Transition and here is a direct quote by you, I believe.
"We need science and engineering to become sexy again." What sexy suggestions do you have to impact the climate? I hope my co-author wrote this. I'm kidding. It was me who wrote this.
So at the moment if you look at many people in the developed world, that is Americans, Canadians, Europeans, Australians, Japanese, engineering doesn't have as high a stature anymore. Many of our graduates like to go into disciplines such as law and... Terrible! They like to sue one another.
They like to sue comedians. Oh no! We don't have any money. They like to sue professors too. Okay. Do you guys have more money? Yes, we have more money. So we make much better targets.
Okay. So, what I would like to happen is, I would like to have a lot more of our own students also become more interested in engineering again, rather than see their engineering courses as just a hurdle that they want to overcome. In many other countries in the world, China, India, Africa, Latin America, engineering is a very high stature profession and in fact, interestingly enough, they don't have any shortage of women going into these professions. Whereas if I look at American or European women, engineering doesn't seem to be very high on the list of preferred professions. Is it better for people in rich countries or rich people to help poor people's quality of life, rather than work on this issue of climate change? Why don't we just get them food, help them move from an area that's going to be flooded, give them better education? Should we just focus our efforts on that instead? We should focus our efforts on all of the above, Okay. It's difficult.
It's hard. The solutions aren't that simple, but there are no alternatives. We are humans. We are humanitarians. We want those countries to develop.
We want those countries to become richer. We want to give them the technology that enables them to live better in the future, have fewer emissions, have less local pollution. We have to do all of these things.
And is that in Western countries', rich countries', OECD countries' best interests? You said that people act in their own self-interest. How do we get people to be less selfish about this stuff? Do we give them a sticker? Do we give them some kind of banana bread incentive? What do we do to get people to be nice? The clear answer at the moment is that we subsidize technologies, clean technologies, in particular energy storage. Those are the most important ones. Now, it is true that we are going to spend some of our own money in the development of this, but there's money in it for us.
And there's advantages in it for the third world. And we need to find things where both of these are the case. Okay. Good. Win-Win situations.
There are many great ideas in the book and it's about how they're implemented. So there's carbon taxes, forestation, R&D, commercialization, lowering the cost of clean tech, storage, batteries, electricity pricing, agricultural change, electric cars, better regulation, stopping subsidies. There are so many ideas. Can you break it down for us? What can an individual do? What can corporations do? What can governments do? Because you said eating vegan, not going to do much.
Having a dictator, not going to do much. Corporations having something for Earth Day, not going to do much. But what can people do? It is a very big problem and it is very difficult for an individual to make much change.
This is a very, very big ship. There are 8 billion people on it. There's going to be 11 billion on them. Okay.
What can we do? So the most important ones – if I was an 18-year-old and this was really of my principal concern, I want to improve the world, is figure out the skills that you need to work in the exciting new technology arena. So either become an engineer or a scientist or a businessman. Or get rich by bringing these renewable technologies and solar cells and batteries and all sorts of other innovations to places that don't have them at the moment. And there's nothing wrong with getting rich and making the world a better place.
What can countries do? They can subsidize those activities, and in between, there is really not that many other things that they can do. Okay. So you're not taking a moral stance on any of this. But you are a humanitarian.
You believe that we should treat all these people around the globe equally. And is it easier to just evolve as a species, and just be used to the hot sun and learn to breathe in bad air? Should we just do that instead of using technology or public policy? Well, we could also try to shrink us maybe to the size of this microphone and then we would use a lot fewer resources. So become smaller also, like this old movie called "Honey, I Shrunk the Kids". Yes. So if we could shrink all 8 billion kids, I am sure, after escaping our cat, would put a lot less stress on the planet. Except on the cats, which would then have to hunt all the 8 billion people.
So in wealthier countries, people are going to buy, as you said… Cats… Cats, to eat the rodent population, which will undoubtedly explode because of climate change. Air conditioners, air purifiers, maybe specialized sunscreens, maybe oxygen masks, that kind of thing. Do you see a future where people are so selfish that they’ll just rely on individual technology, kind of like bottled water, to make their standard of living better and not care about anyone else across the world? Well, that future is mostly already here.
I mean, if you go to many countries of the world, people have their own electricity generators. They have their own air purifiers. Living in places like Beijing or New Delhi is miserable for a good part of the year because you go outside and you can't see the next building due to all the air pollution. We're already there. We're already doing this individually.
Is that how it should be? No, but it is. So Ivo, I want to ask you a question about this book. What is it called and where can people get it? The book is free.
It's online. And I made it free so that even comedians get to read it. Thank you. I read it for free. I didn't contribute anything.
Why is it free? Aren't you a professor of economics? Aren't you a capitalist? Why are you giving this away for free? Why are you willing to interview me here without me paying for you? Oh, I'm getting paid. It's just you're not paying for it. You're a free rider in fact.
Yes, I am. And in fact, David Stolin, who is the person behind the scene who I'm looking at just over there, is responsible for it all. Yeah. Okay. So why free? Why make it available to people? Is it because you're generous and kind? Or is there some self-interest involved? I wish I could say that I'm just generous and kind. But that's not altogether true.
I want the message of this book to spread far and beyond. And if I want to do this, and also have some impact in countries that don't have that much money, the easiest way to do this today is to just make it free. And that's the reason why I made it free. Have you heard from people all over the world who have access to your book for free? What's the opinion outside of the very storied academic circles that you travel in? I do not want to repeat all the expletives. Expletives? You can repeat them.
We'll just bleep them. Okay. Bleep, bleep, bleep, bleep, bleep. Usually the people that actually contact you are the ones that are really offended by the book.
Oh, no! It's sort of like the ones that are probably commenting on your most inappropriate comedic statements that you've ever made. Those are not the people that are going to say, "Wow! I really loved you talking about this." It's usually the people that are really offended by this. So I hope it's not representative of the general reaction to my book because if it is, then maybe I should charge a lot of money for it. Yeah. How do you handle mean comments? I had no idea professors have to deal with mean comments as well.
Do you cry? Do you write them back? Do you have a spiritual practice? How do I deal with those comments? Probably the same way that all of us deal with it. I crawl into bed and cry. That's unfortunate.
I hope that these mean comments will go away. The book is very good. It caused me to think. It's given me a lot of interesting things to share.
For example, riding on BART makes me morally good, but not a great environmentalist. So I'm already reflecting on my behavior. So don't write to Ivo and say mean things because it will make him cry. And we can't afford to lose any more tears because he will desiccate and that's not what we want for this interview. One of the things that I learned writing the book is that there's actually remarkably little that we need to argue about because what we really should focus on is what's actionable. What can we actually do right now? What makes the most sense? So whether you think that the earth is going to come to an end in a hundred years, which it probably won't, or whether you think it's almost completely harmless, isn't really that important.
What's really important right now is to reduce the pollution, reduce greenhouse gas emission (fossil fuels emit both) and we can actually focus on the things that we agree on. And there is more than enough things that we can do. So there's really not that much need for disagreement. What about global treaties? Do they work? Do they not work? Is it a good idea? And how do you get people to sign on to these treaties? We wish they would work but history tells us that countries do things that are now on self-interest. Self-interest, I'm paying attention. Very big self-interests.
That means that the countries that are really going to matter in the future, which are no longer Europe and the United States. They are going to be countries like India, that want to climb up, Nigeria, Indonesia. Those kinds of countries really need to find it in their own self-interest. They're not going to come to a treaty, sign away the right of their people to get to the modern standards of living that we already enjoy. All that they want, is basically what we have enjoyed already for dozens and dozens of years.
We cannot blame them. That makes no sense. But we can also not expect them to forego this.
So I think realistically, we can't expect much from these treaties to actually happen. If they did, it would be great. But the fact is, you cannot count on this. Do not count on the world being solved, all the problems being solved by treaties. It's just not going to happen.
Okay. Great. Knowing everything we've talked about, what are the top three myths or biggest misconceptions about climate change and how we can do something about it? I don't think it's that important compared to the kinds of actions we should undertake. What I really would rather highlight is what are the three things that we can do now that make a lot of sense to do now. Please, highlight those. Those are the things that we should do, Please.
So we should, as a country subsidize a lot more clean technology, we should locally tax fossil fuels, because they emit a lot of pollution and they kill a lot of people. And we should plant a lot more trees. What are the best kind of trees to plant? You're asking me something that goes beyond my expertise. But there are certainly some plants that grow faster than others. We are beginning to be able to engineer some plants that are actually better at absorbing carbon dioxide than others.
There is a lot of interesting things we can do. We also always have to worry about inadvertent consequences when we do this. But the basics of reforesting a lot of areas is something that is good for the environment; and it's good for greenhouse gases; and it's something that most people enjoy; and it's not that expensive.
So we really should be doing those. What about carbon sequestering from the oceans? Is that going to work as a weird out-there technology? Would you invest in it? We're trying to figure out at the moment whether some of these technologies could be made to be economically viable. Right now, none of them are viable.
They are well worth researching. I hope that somebody will come up with some methods to make that really cheap. Right now, we don't have them yet.
Tree planting, algae harvesting, that seems to be a lot more productive at the moment than trying industrial or ocean carbon sequestering. Maybe this won't make a big impact. But if I want to feel better about how sad I am about climate change, what are some things I can do to make myself feel better, but are also not completely useless? What are some things that I can give money to or contribute to? Or should I wear a certain kind of fiber instead of polyester? Are there things that will make me feel like I'm a good person, but are also not stupid? That depends. You can do a lot of very good things and you could donate to a lot of very good causes. If you think that that's going to change the temperature of the world, I am afraid that's not going to make that much difference. However, there are many good causes and you shouldn't be too frustrated.
There's only so many things that an individual can change and you focus on the good things that you can do in this life. And you should. This is quite an optimistic conversation. In the beginning I was sad, but I feel a lot better that I can actually do something, now that I'm not focusing my efforts into useless categories. So would you say that this is a book to inspire people to take the right kind of action? Or are you just putting the information out there and inspiration isn't your jam? No.
I actually do try and inspire many of the students to perhaps pursue careers in these particular areas because many of the younger people care very deeply about the subjects, both local pollution and global pollution. And it's really encouraging to see so many people do that. This is great that I had the effect of you, of making you a little bit happier and a little bit less sad and to tell you what it is that you should and could focus on.
Yeah, absolutely. And some of these young people that you have as students are going to become very, very wealthy. We have so many billionaires now. What can very, very wealthy people do in terms of philanthropy? Not in the government sector, not in the corporate sector, but as extremely rich individuals. Is there a place for philanthropists? Yes, there is.
But it's actually impact investing. And if you look at what Bill Gates does, whatever you may think of his history at Microsoft, in terms of what he is doing these days, in terms of what he is funding in new energy technologies and what he's funding in researching epidemics and a whole variety of other issues, it's just absolutely wonderful. And I know a couple of those guys. And I am also, as much as I'm encouraged by my students, I'm also encouraged by many of what those billionaires are doing.
They are putting their money towards better causes, because let's face it, they're going to die just like you and me and they can't take the money with them. So they better do something that makes a difference and then makes the world around them a better place. And I would think without having taken a scientific survey, the majority of them actually do feel like that. Okay.
So there is a role for people in the public sector, in the private sector as individuals in philanthropy/nonprofits. There are many such things. Unfortunately, they are not what the environmentalist movement usually focuses on. So I love environmentalism. Many of the people that are involved with this have the most wonderful of motives, but they are doing things that are often not very effective. And if there was one reason why I wanted to write this book, is that I would love those people to read it, how to become more effective environmentalists.
Ivo, a couple of questions. You just taught a class about the economics of climate change. Was this for undergrads, graduate students? What departments did they come from? What did you like most about teaching this class? And were there any surprises? I usually teach to graduate students not by choice, but because I'm sitting in a graduate school of business, both at UCLA and here at Stanford, where I was just teaching. What is it that I enjoy most of this is that the kind of students that I draw have an interest in environmentalism and energy at the same time. And I do believe many of them come out of the class with a better understanding of where they can make a difference.
And they do get quite excited in going out and actually conquering the world and I change a lot of the world views of those kids. Kids, they're 30 years old. And that is what makes teaching rewarding. This is why it's fun to do that. So that is perhaps not surprising, but the delightful aspect about teaching.
Okay. And how do your children deal with having a boomer in the house? Not very well. Do they make fun of you? Yes. Although they make more fun of me when I try and pronounce anything Chinese, since they can speak Chinese and I cannot and the pronunciations I always butcher and they always turn out to be some Chinese insult that sounds just like what I say. That's amazing.
So you have a skill for insulting people in Chinese. In Chinese. Yes.
That's amazing. Yes. I will invite you to come to Shanghai with me, so you can talk about pollution and if anyone messes with me, I'll just unleash you on them. This is a great superpower. I have never thought of myself as a weapon, but that might be interesting.
Yeah. And as you know, I sometimes use my limited skills of German as a weapon. I just will say random things, you know.
So like, "Eins bier," and people will leave me alone. So I have limited vocabulary, but I think language is powerful to bring people together, but also repel people. Start by speaking after me.
Eins schnitzel bitte. Eins schnitzel bitte. Very good. So now you can go visit Germany. Danke. Ja.
Ja. I've been to Germany. I rode the Maglev test track in Emsland. That was the test track that after the first second it goes vroom, and it like floats over. And the Americans didn't commercialize it, so it went to China.
But I had a very nice time. No. No. Actually, the really bad part is the whole thing crashed. Oh, the test track crashed? The train on this, they collided and they actually fell apart.
So I'm glad you weren't on that train because otherwise, you wouldn't have been on the train from San Francisco to here. No. Yeah, that's right.
The test track just kind of went around and around. And it was very cool. Even though it was that short, the Germans actually still managed to collide two of them.
It was really quite remarkable. That's unusual. You know, I enjoyed my time in Germany, everyone seemed like they knew what they were doing. So how did this happen? They were asleep at the switch, maybe? Oh no.
I think that is an English expression and the Germans should have put in more switches. Okay. So switches are important.
Does that make people suspicious of new climate technologies when something like this happens? Or the Hindenburg? People still talk about the Hindenburg. But it wasn't really about the hydrogen, it was about something. And then people are afraid of nuclear power because Homer Simpson worked at a nuclear power plant.
What can we do to alleviate people's fear around renewable energy? Remove the television. Okay. Filming. What if they have it on their phone? Have them listen to more video casts like us and fewer videocasts of explosions and train tracks and bank collapses and whatever else there may be. We basically want to listen to Dhaya. Okay.
And before we wrap up any resources that you recommend, besides your book, that people can learn how to take action on climate change? My book. Besides your book? Yes. Any resources you like that you recommend? My book. Okay. So only the book. So thank you, Ivo, for having this delightful conversation, teaching me some more German phrases.
I also know leberkäse, which I've never eaten, but I know is a German word and so thank you. And I would like to learn some insults also. And where can people get your book? And how can people take your class? Well, one of the marvelous things about my name is that it's probably unique in this world. It's a very strange combination. And if you Google me, you will almost surely get to my website. At that point, you just have to click this little icon, which you cannot miss, and you will get to my book, which is totally free, and hopefully totally enjoyable.
Thank you so much for this time. I feel inspired. I learned a lot. And even if I take the train back, I know that that's not going to do much, but I will commit to doing more things. So thank you.
And you can read my book again on the train. I will. I will read your book again. And hopefully I will not fall asleep at the switches.
Good. It's been a delight. Thank you, Ivo.
2023-05-01