Wildfires. Hurricanes. Drought. We’ve just come through a summer of environmental catastrophes, signaling climate change effects that are not only accelerating, but getting far worse. In August, the latest IPCC report issued a “code red for humanity” and found that the earth’s global surface temperature had already risen 1.09°C since the 19th century. The last decade is quite likely the hottest the planet has seen in 125,000 years, the report stated.
The scientific evidence is unequivocal—and time is running out.
A major United Nations Climate Change conference in Glasgow, called COP26, is fast approaching. For the community of world leaders in attendance, how to reach Net Zero—in which we take as much carbon, methane and other greenhouse gases out of the air as we put in—will be the main topic of discussion.
“Net Zero has become an organizing principle for sustainability—it’s become much clearer to a much broader range of actors,” said former Bank of Canada governor Mark Carney, now the UN special envoy on climate action and finance, and chair of the Glasgow Financial Alliance for Net Zero.
Carney and renowned climate scientist Dr. Katherine Hayhoe join RBC’s John Stackhouse for the opening episode of The Climate Conversations, a special podcast miniseries from Disruptors. The team spent weeks interviewing leading experts like Hayhoe and Carney to gather the best insights on Canada’s path to Net Zero emissions.
Our current commitment is to reach Net Zero by 2050. But using existing technologies and know how will get us only two-thirds of the way to that goal. RBC’s latest report, The $2 Trillion Transition: Canada’s Road to Net Zero, lays out six possible pathways to go the full distance—and estimates the costs by sector. As we lay out in the report, for Canada to get just 65% of the way to Net Zero, it will need roughly $60 billion annually in private and public investment in new technologies, products and processes.
“Climate is changing faster than at any time in the history of human civilization on this planet, and that’s why it matters,” said Hayhoe, who is chief scientist at the Nature Conservancy and a distinguished professor at Texas Tech University. “It’s not about saving the world—the planet will still be orbiting the sun long after we’re gone. It is literally about saving us.”
Hayhoe refers to herself as a “rational optimist,” who looks to form connections with those who oppose her views as a scientist. Those connections, she believes, are critical to charting a course out of the climate emergency.
“How did the world change before?” she asks. “It wasn’t because the prime minister or a president or a king or a CEO or even a celebrity decided it had to. It was when ordinary people used their voices to say, ‘you know what? The world can and must be different’.”
Though Hayhoe and Carney come at the challenge of climate action from different angles, they share an optimism about how we can meet the moment—and both are using their globally-respected voices to win over skeptics in an existential battle for our planet.
What we learned: large-scale, global Net Zero initiatives are required now if we’re to keep the world’s temperature from rising another two, three or even four degrees.
As Carney told us, collective action is what’s needed to make meaningful change.
“We have a carbon budget and we are spending it rapidly. Emissions need to go down — ultimately every country, region, sector, company, financial institution will have to be at Net Zero.”
Stay tuned for our next episode of Disruptors, focusing on the agriculture sector and creating a more sustainable food chain. “The Climate Conversations: How to Build a Greener Food Chain” will be available Nov. 2nd wherever you get your podcasts.
Speaker 1 [00:00:02] Hi, it’s John here,
Speaker 2 [00:00:04] and it’s Theresa.
Speaker 1 [00:00:05] Theresa, how are you?
Speaker 2 [00:00:06] I’m not too bad. How are you, John?
Speaker 1 [00:00:09] That’s actually a tough question to answer these days because we’re coming out of a pandemic, so we should all feel a little better. But we’re also facing the extraordinary climate crisis, and it’s so easy to get down on it for all the high level talk about climate, and we heard a lot of it in the election. We can’t forget it comes back to us as consumers, as citizens, as neighbors. The choices we make every day add up in the conversations we have really do have an impact. And yet climate, I find, is one of the most difficult conversations. Sometimes it’s just too big to think about or too personal to talk about, but it really is about us.
Speaker 2 [00:00:49] So speaking of us, John, you’ve talked to people inside RBC and outside RBC, where one of the largest companies in Canada and the leading financial institution. What sort of role should RBC play in these big climate conversations?
Speaker 1 [00:01:04] We see climate change as one of the most significant issues in our world and in our country, and it has a meaningful impact on almost everything we do as a bank. We hear about it from our clients, whether they’re big companies or individuals. We see it impacting the direction of the economy. We see it increasingly influencing investment flows. And in a lot of ways, these are really positive changes. We’re seeing more and more dynamism in the economy among our clients. Among businesses we work with investing in new technologies, finding new processes that are making companies and entire industries more efficient, more competitive globally. We’re hearing from individuals and communities who are really hungry for change, and we want to be part of that conversation. Theresa, you’ve been involved in a research report that we’re putting out this fall looking at pathways to net zero and the two trillion dollar transition, as we call it, which is what Canada needs to think about over the next 30 years up to 2050. We need to transition the economy, and it’s not just oil and gas, it’s not just agriculture. It’s every part of the economy, it’s every region of the country. Teresa, you’ve seen a lot of the evidence from our research and the part of the conversations about what we need to do in the decades to come. Here we are in the fall of 2021. What do you think we stand?
Speaker 2 [00:02:27] I would say that if we were heading out report cards, I think our great at the moment would be needs improvement. Canada is on course to meet only two thirds of our climate commitment with existing technologies and existing know-how and for the sake of our audience net zero. It’s a it’s a complex concept, but at its most basic level, it’s about removing as much greenhouse gas from the atmosphere as we’re putting into it. Why net zero matters and why we talk about it so much is that it’s our only way to stabilize the temperature increases that our planet’s seeing. The Paris Agreement set out to limit global rises to 1.5 degrees. So if you don’t change how we’re living now, how we’re working our current approach, we’re going to be on track to see temperatures rise 3.4 3.9 Celsius this century. And the consequences are catastrophic.
Speaker 1 [00:03:17] It’s a pretty tall order. Do you think we can make it?
Speaker 2 [00:03:20] I think it will take some ingenuity, a lot of hard work, maybe a bit of luck, but I am very hopeful that we can work our way up to a passing grade.
Speaker 1 [00:03:28] Me too. Over the next several weeks, Theresa and I will be talking to some of the business innovators and market disruptors who are working to get us on that net zero path. We’ll also speak to some of the leading climate thinkers and advocates for climate action, each of whom is helping us become more knowledgeable about and more engaged in this existential fight for our planet. This is Disruptors, an RBC podcast. I’m John Stackhouse.
Speaker 2 [00:03:58] and I’m Trinh Theresa Do. Welcome to the climate conversations.
Speaker 1 [00:04:08] On today’s episode, we’re talking with two of the leading evangelists on climate action. In the second half. We’ll hear from Mark Carney, the former Bank of Canada governor who is now the U.N. special envoy on climate action and finance and also chairs the Glasgow Financial Alliance for Net Zero. But first, we’re going to speak with a woman who’s often called the most influential climate scientist on the planet. Katharine Hayhoe is the Toronto born chief scientist for the Nature Conservancy and a distinguished professor at Texas Tech University. Her work has resulted in more than 125 peer reviewed papers, and she’s contributed to multiple climate reports for the U.S. government and the United Nations. But you know what? What Hayhoe is best known for is her ability to connect with regular people and having those difficult conversations about what needs to change, even with those who don’t agree with her. In 2014, she cracked TIME magazine’s 100 Most Influential People list, and in 2018 she delivered a TED talk called The Most Important Thing You Can Do to Fight Climate Change. Talk about it. It’s been viewed almost four million times, so people do want to talk about us. Kathryn’s latest book is saving us a climate scientist case for hope and healing in a divided world. Fellow Canadian Margaret Atwood calls it a must read. If we’re serious about enacting positive change from the ground up, Katharine, welcome to disrupters.
Speaker 3 [00:05:37] Thank you so much for having me.
Speaker 1 [00:05:38] I want to start Katharine with a question about optimism because so many climate conversations are negative or pessimistic. You’re an optimist. What gives you optimism?
Speaker 3 [00:05:49] I am, and I would like to say that I’m a rational optimist because I am a scientist and as a scientist, I see all the bad news firsthand. In fact, I get it hot off the press, so to speak. I look at the data myself, and the science does not give us a lot of hope. When we look at what’s happening to our world, climate is changing faster than any time in the history of human civilization on this planet. And that’s why it matters. It’s not about saving the world. The planet will still be orbiting the sun long after we’re gone. It is literally about saving us. But what I’ve noticed wherever I go, and I literally got this question even twice yesterday, once talking to medical students and then once talking to an academic group every single day, almost I’m asked what gives you hope? And so that’s actually why I wrote the book is because I figured there’s enough doom and gloom out there. Enough of us are activated. We’re concerned about it. The majority of Canadians understand that it’s a serious issue. So what can we do about it? It turns out that hope comes from action that interesting and not recycling. And though, you know, every little bit helps. But specifically, when we get out and we use our voice to advocate for change would reengage with others when we speak within the place where we work or the neighborhood or a kid’s school or, you know, an organization where part of obviously our city and our province and at the national scale when we use our voices to talk about why this matters and what we can do to help fix it. We don’t have to be David Suzuki to do this. I’m absolutely convinced that every single Canadian can do this. And when you look to the past, when you look to massive issues like slavery and women being able to vote and civil rights in the states and apartheid in South Africa, how did the world change before? It wasn’t because the prime minister or a president or a king or a CEO or even a celebrity decided it had to. It was when ordinary people used their voices to say, You know what? The world can and must be different. That’s how change happened.
Speaker 1 [00:07:48] What can each of us be doing more of? I recycle, and as our longtime listeners know, I’m an active biker, but I don’t think I’m doing nearly enough. What can each of us be doing more of?
Speaker 3 [00:08:00] Well, it’s so interesting because when I first started to talk to people about climate change, I would get that question immediately. And, you know, I would say the traditional things that we would all say. I would say, Well, you know, have you changed your light bulbs? Have you looked at where your electricity comes from? But then I thought to myself, Is that really enough? So I stepped on the carbon scales myself. I stepped on, you know, I went to a carbon footprint calculator and I calculated my carbon footprint. And I was absolutely shocked because the number one source of my personal carbon emissions was not my light bulbs, and it was not even the car that I drove. It was not my hydro bill. It was my travel. And I’m not talking about like travel. The yoga retreats in Bali. The last time I went on an actual vacation, I can’t even remember. I mean, just to see family. It was travel to scientific conferences and to talk to people about climate change. I thought to myself, Well, this is
Speaker 1 [00:08:54] Oh the irony, the irony.
Speaker 3 [00:08:57] So, so I decided that pre-COVID I was going to transition 80 percent of the events I did to virtual events, whether people liked it or not. And if I traveled, I was only going to travel by bundling. My events together, so I would go somewhere and do like five, eight, 10. I think my record so far is 29 events in six days, which is kind of crazy, but it’s a very effective use of your time and your carbon. But then and here’s where being a scientist comes in. I started to calculate, OK. So I did this, and here’s how much I could reduce my carbon footprint. And I also got solar panels and plug-in car and address food waste and diet and stuff like that. What if everybody else who’s concerned and activated did it too? How much impact would that have on our national emissions? A fraction, a very small fraction, not even a third. And so I thought to myself, Look, this is not the answer. This is not the most effective thing that we can be doing. So that’s what I did this deep dove into. How is the world changed before? Was it because individual people took individual steps and that’s all they did? No, it’s because individual people use their voices to advocate for change in the larger sphere that they are in.
Speaker 1 [00:10:08] We’ve just come through the summer of the apocalypse. It felt like in many parts of the world. Did that dent your optimism?
Speaker 3 [00:10:16] Unfortunately, it did, because with climate change, a big part of our problem is something called psychological distance. We all agree it’s a big issue. We agree it will affect future generations and plants and animals and people living over there. But you know, we’re the north. We sort of see ourselves as invulnerable to global warming. We see it as a distant issue. And studies have shown that as we decrease our psychological distance, as we’re able to say, look, that crazy heat wave out west, it was one hundred and fifty times more likely because of climate change. The wildfire season we had back in 2017, it burned about 10 times the area because of climate change. The floods that we’re seeing, the hurricane category one passing over Newfoundland, we’re seeing climate change loading the weather dice against us. And so studies have shown that when we’re able to connect the impacts of climate change to our lives, our lived experience, our activation increases, our concern increases. But then you get Covid and I live in Texas. I live in a place where I know people who lost their lives and with their dying breath, we’re saying this isn’t coronavirus. I know people who their families then did not wear a mask or get vaccinated, and then they got Covid. And I’m thinking to myself, have I overestimated the human capability for self preservation?
Speaker 1 [00:11:36] You’ve argued as well that climate is about values, and we’re also talking to Mark Carney, who has a book called Values and I think would agree with a lot of what you’re saying. But you’re also saying it’s a rational decision. And I just wonder how we can balance in our conversations just the rational decision that saves you money or saves you time or makes your neighborhood safer versus the moral decision that this is about values and our collective being an even more existential questions.
Speaker 3 [00:12:10] In most cases, for most of us, those two are not incompatible, in fact, often they’re very compatible. I have a really funny story in my book, probably my favorite story of my colleague John. His dad lives in a rural area of Australia and his dad is a fiscal conservative, but he’s also an ideological conservative. And so in Australia, like in Canada, many conservatives reject the science of climate change because they don’t think there’s any solution other than destroying the economy. So its solution aversion masked to science sounding arguments. Because if you say it’s real, but I don’t want to fix it, that would make you a bad person. And most of us don’t want to be a bad person. So John’s dad would drag up, Oh, there’s more polar bears now than there ever were. What are you saying? The Arctic is melting dot every time John went home for dinner. And so John went back to school. He got a p, h d and cognitive psychology to understand denial. He created the world leading skeptical science website that lists 198 science sounding arguments against climate change and provides peer reviewed responses. Do you think that changed his father’s mind?
Speaker 1 [00:13:14] I suspect not
Speaker 3 [00:13:16] correct. It did not. But then there was a rebate on solar panels in his dad’s area, and so his dad got solar panels started to save a ton of money. Every month, you would send on his power bill, saying, John, look how much money I saved. It reinforced his own identity. It fit rate with one of the things at the top of his priority list. And so two years later, John was sitting with his dad and out of nowhere, his dad said, Oh, you know, global warming. I’ve always thought that was real. And John was like, what? Not only had he changed his mind, but he had forgotten that he had ever denied it because the solutions change his mind. You know what? There is nothing wrong with that.
Speaker 1 [00:13:52] I sometimes think about smoking and cigarettes, and it’s an imperfect and maybe a bad analogy, but that has been a decades long struggle with behavioral change. And when I think about some of the behavioral changes we need for true climate action, maybe there’s some lessons we can draw that out. And even though with the smoking, all the science is there and many of us smoked regardless, we knew the risks that that we were taking and we did it anyway because it was maybe enjoyable, definitely addictive. But it was also cool. And I wonder, in terms of climate and our own behaviors, what kind of norms in terms of mass media pop culture, we may need to start to challenge or think about to help change our own thinking and our own behavior.
Speaker 3 [00:14:41] I think you’re absolutely right. I mean, that’s that whole idea of social norms, the idea that we determine what’s acceptable and what’s not, because we always, as humans have these antenna, these invisible antenna up that are taking, you know, sort of taking the measure of what’s going on. So is it acceptable to have a plastic water bottle? No. Well, I better not have one. Is it acceptable to drive a giant gas guzzler? Oh, well, not really. That’s not cool anymore. What’s cool is the fast electric car better. Think about that next time. So you’re right, that has a huge impact, and that has played a big role in the changes that we’ve seen in the world. Before that I mentioned everything from, you know, women getting the right to vote to civil rights, to all kinds of changes. It’s been changes in social norms where people like that’s just not acceptable anymore. And how do we figure that out when we see other people doing it and when we hear other people talking about it? So, you know, get your solar panels or do whatever it is that you’re doing, but then talk about what you’re doing. That’s how you can change people. And in my book, even talk about how their scientific studies showing the impact of contagion, for example, with solar panels, the number one predictor of whether you’ve got solar panels is whether there’s somebody else within about a kilometer and a half of your house that has the that’s the number one predictor. It’s contagious literally in a good way, not a bad way.
Speaker 1 [00:15:52] We’ve been having a fairly optimistic conversation, which I appreciate, but there may be people listening who say, that’s not the full story. There will be people. There will be sectors. There may be regions that will be losers in this transition. How do you engage people who feel they see writing on the wall? That is not for them. Happy writing.
Speaker 3 [00:16:15] Well, first of all, I think the most important thing is to be proactive about that engagement. Acknowledge it upfront. Don’t wait for them to tell you. Think of it and look at it yourself and realize, Hey, there’s a lot of people who are just trying to feed their families. They have a well-paying job in Alberta, in the oil and gas industry, or here in West Texas, which is also the home to the oil and gas industry. And they’re not doing it. They did that job because they wanted to, you know, help destroy civilization as we know it. They picked that job because we need energy and energy is something that is inextricably linked with human well-being around the world. Access to electricity specifically is one of the major metrics that determines our level of well-being. So when I had the chance to talk to the Board of Big Oil and Gas Company here in Texas a couple of years ago, I was invited to speak and I thought to myself, Well, I can’t do it unless I figure out how we can connect over something we share first. I’m not. Go in there and start with something we disagree on, I have to start with something that we agree on, and if I can’t do that, I’m not the right person to have that conversation. Finally, I realize, you know what? I am profoundly grateful for fossil fuels. Imagine what a woman’s life was like. Imagine what anyone’s life is like 200 years ago, it was short, miserable and filled with bone breaking, repetitive tasks that left them no time for education, no time for leisure, no time for travel, no time for anything that we enjoy doing today. Energy has transformed our lives, so I actually started off by telling them how grateful I was for fossil fuels and how I realized that they were doing this because it helped people and we need energy and a solution to our future is not to just pull the plug. It’s to figure out new ways of getting energy. The same way we don’t use a Model T Ford today, the same way we don’t use a party line telephone in the same way we need energy just as much, if not more in the future than we did in the past. But in the same way, we’re transitioning to new sources of energy. So how can we work together to try to figure out how to get those new sources while still providing good paying jobs for people who have these skills who again are just trying to support their family and be part of the local economy? And I can tell you it was amazing because I went in and meeting all the arms were folded. All the pastor was leaning back. Everybody was giving side I to the one guy who invited me there, like, why did you invite her to speak to us? He sort of read the brainwaves, but when I said that? You could see like the arms were unfolding, people were leaning forward, and then one guy finally said, he’s like, You get it. We’re not the bad guys. We’re doing this because people need energy. And I was like, Yes, that’s right. And how can we keep on making sure they get energy in the future? And so that conversation was supposed to be about 40 minutes ended up going two plus hours. Everybody wanted to know what’s really happening. How is it affecting people and how can they be the good guys?
Speaker 1 [00:18:57] You mentioned the transition and this is a transition. It will take time. There are many people, thoughtful people who say, we don’t have time. There’s a lot of people, including maybe a whole generation, that is convinced that 2030 is not the end, but is, you know, a significant marker in their lives and frankly, their century. And I’m starting to wonder, well, what? What’s it going to be like if we fall short, even a little bit short, but maybe a lot short, how are we going to kind of stay together as people and keep keep at it?
Speaker 3 [00:19:35] Well, that’s part of the danger of having these hard targets, like saying, you know, 20, 30, because if we end up at, you know, one percent over by 2030, it’s not like everything’s lost. We’re a lot closer to 2030 than we would have been if we hadn’t had that goal. Every action counts, every bit of warming counts, every time counts, and we are taking a lot more action today than we were a year ago. And then next year, more, hopefully than. But you’re right. Are we going to achieve our ambitious goals? Are we going to stop smoking fast enough to avoid all of the impacts on our lands? I can tell you the answer is no, because some of the impacts already here, we’ve been essentially smoking that pack of cigarettes every day for years and even decades. And so we have some impaired breathing. We have some spots in our lungs, but we don’t have emphysema, we don’t have lung cancer and we’re not dead. So the time to act is now. And so I think when we sort of remind ourselves that what’s at stake is all of us, we’re all at stake. We all sink or swim together. We can get angry. We can get frustrated. And believe me, I do too. But ultimately, understanding that most people want to do the right thing, but they’re just scared and coming from that place of sort of understanding and forgiveness and encouragement. And in some places, you know, drawing that line and saying this is not acceptable and we cannot keep on doing this, but doing it in a way that recognizes that it’s not about us or that it’s not about allies or enemies, it’s about the fact that we’re all humans together.
Speaker 1 [00:20:55] Catherine, you are an optimist
Speaker 3 [00:20:58] in my immediate moments. I absolutely am.
Speaker 1 [00:21:01] And it’s contagious. Katharine, thank you for being on disruptors.
Speaker 3 [00:21:05] Thank you for having me.
Speaker 1 [00:21:06] Coming up after the break, we turn our attention to some of the biggest players in the global economy and speak to one of the most influential people in finance to figure out who needs to do what to get us to net zero. So stay right there.
Speaker 2 [00:21:24] You’re listening to Disruptors, an RBC podcast. I’m Theresa Do. As we mentioned off the top of this episode, RBC Economics and Thought Leadership has a new report coming out this month called the two trillion dollar transition. It explores the costs and benefits of Canada’s shift to a carbon neutral economy and how it can fuel a new generation of Canadian innovation, from carbon capture technology to sustainable agriculture to the full potential of super charging electric vehicles. If we look at all the ways for Canada to take a leading role in the fight for climate action and the economic opportunities they create. To learn more. Check out the link in the show notes of this episode and visit our rbc.com. slash Net zero. And be sure to like and follow disruptors wherever you get your podcasts.
Speaker 1 [00:22:15] Welcome back, Theresa. I don’t know about you, but listening to Katharine Hayhoe, it’s hard not to be inspired. What stood out for you?
Speaker 2 [00:22:23] She is so inspiring. I love her overall messaging on the power of the olive branch or finding a way to connect with people who may not agree with you. Being able to reach across the aisle gets to that global cooperation that you had been talking about, and it’s the only way that we’re going to able to move forward.
Speaker 1 [00:22:41] That’s so true. And, you know, maybe you have to be a climate scientist, a Canadian climate scientist living in Texas to know how to engage in those conversations because she’s done it with incredible effect. Well, our second guest is no less an advocate for individual climate action, but much of what Mark Carney focuses on these days is corralling the forces of business and the forces of finance to help get us to net zero. As the U.N. special envoy on climate action and finance, Carney is getting deep into the plumbing of the global financial system to find ways to get capital to the areas that will be critical to the transition to net zero. And as chair of the Glasgow Financial Alliance for Net Zero, Carney is working with more than 160 financial firms that control $70 billion in assets to make that a reality by 2050, if not sooner. There are many people better suited for the task. Carney is a former top banker in both Canada and England. He has deep experience in the private sector, including 13 years at Goldman Sachs and his latest book, He’s done. A lot of thinking about. This is called values building a better world for all. Mark Carney, welcome to disruptors.
Speaker 4 [00:23:54] John Stackhouse, a pleasure to be with you.
Speaker 1 [00:23:58] And I want to ask a question that came to me this morning when I woke up because this is the 20th anniversary of 911 and there’s much debate about how much it changed the world in different ways. And we’re talking about climate, and I wonder why 20 years ago, the world galvanized around a horrific event and was able to mobilize, rightly or wrongly, trillions of dollars and mobilized nations, as well as individual action to change the world. And arguably, we have not been able to mobilize the same will or resources on climate. I wonder how you think through our different collective approaches to global challenges.
Speaker 4 [00:24:42] You know, there has been a lot of progress over those 20 years, but let’s focus on what hasn’t been accomplished and how much more difficult it has become to galvanize global action, as you say. And I think there is a couple of roots of that. One was how quickly the goodwill the global goodwill of the response to 911 was dissipated within a few years. I think the second thing, though I’d underscore, is we had the financial crisis. You and I know that well, we from different vantage points lived and worked through that and the response to the financial crisis. The policy response was overwhelmingly an economic policy response in the run up to twenty seven eight. There was increasing focus on climate action at the global level. The you know, the elements of the consensus of which you just spoke were there and within the private sector an increasing focus. And I would suggest in the financial sector as well that it didn’t absolutely stop. But it was set back dramatically. As the issues in the financial sector became survival, the issues from a public policy perspective became recovering from what was then the worst economic crisis of anyone’s lifetime and had the prospect of moving into a depression if the right policy hadn’t been followed. And that set back climate efforts almost a decade when we got back to the level of public urgency, maybe arguably a greater public urgency around addressing climate in the run up to the start of 2020, government starting to come together, the financial sector starting to focus on this more. And then, of course, we had the COVID health crisis and economic crisis associated with it. And I given that history thought, Well, this is 50. You know, this could be history repeating itself and will be set back again. What’s happened and I’m sure we’ll get into this is has been the opposite that the experience of COVID and the economic circumstances and the right economic response, also a social response has galvanized climate action.
Speaker 1 [00:26:49] Why is climate not relegated by yet another global crisis?
Speaker 4 [00:26:53] Well, I think there’s several factors. One of them is I’ll start with the negative, which is that it’s 10 years later and it’s that much later. It’s that much more obvious. The climate impacts. It’s that much more urgent. That’s the first. The second is that technology has moved on quite substantially. So many more of the opportunities are economic today. It’s a question of will and getting capital to work and investment in the ground that I’m not saying that. We’ve got all of the solutions at an economic level to fully decarbonize, but there is a path for at least the next decade for substantial progress that makes a big difference. I think thirdly, a number of governments and informally I’ve been involved in these discussions with a number of governments over the last 18 months. They took a lesson from a few countries, had a climate focused response to 2008 South Korea, elements of China, elements of the German fiscal response. And lo and behold, those countries established quite competitive position, very competitive positions in key industries, solar, wind as well. So again, the economic congruence, if I can say it that way, the alignment is much better now and it’s much better understood. And I think the last thing which is a softer point, if you will, or a values point in many respects, that’s a harder point. A stronger point is what lessons do you take from the health crisis? We undervalued resilience. We didn’t prepare for something that wasn’t just a possibility, it was a certainty, and there were ample warnings. So we undervalued resilience. We didn’t listen enough to science. We didn’t think about sustainability. And by and large, and you know, there are exceptions to this. But by and large, people’s response to COVID was one of solidarity. They did what they needed to do, not just for themselves and their families, but for others.
Speaker 1 [00:28:48] Let’s talk about values. That’s of course, the title of your book, which I read with great interest. It’s an excellent book for those who haven’t read it in a very. Serious book, and I mean, not in a complimentary way. I read it concurrently with the Bill Gates book and wrestled with similarities and differences. I think you agree on many, many things, but stepping back, I found Gates. And this shouldn’t be surprising. Perhaps for a math guy like him took a very technological approach. That’s what we would expect from Bill Gates. It was almost Cartesian that this is a problem that can be solved, and you take a more bit more of a moralistic point, if I can put it that way, kind of Hobbesian. And as I compare and contrast the two works, I thought, and this is oversimplifying it, but there’s a real tension between man and machine, both in the cause of the climate crisis, but also in the solutions. But I wonder how you, you know, in the balance, are weighing technology and human behavior as we get deeper into trying to solve this crisis.
Speaker 4 [00:29:51] As you say, John, it’s both. We need the engineering technologies, and I referenced a moment ago that some of them are fully economic, profitable today when solar increasingly on the storage side, prospectively on hydrogen, they’re economic today. But we need those and I’ll use Bill Gates is termed breakthrough technologies elements of green hydrogen, sustainable aviation fuels, direct air capture and even large scale carbon capture, which is a big issue for Canada. We need those to become economic, so we need the engineers. We need the technological solutions. And what I argue in the book and what I really believe, of course I believe it. But is that when you get a consensus around something like sustainability and you move out of a trade off the planet and profit, you know, sustainability today versus tomorrow and people say, no, we want the climate crisis addressed. We expect our businesses, our governments, our financial institutions to be addressing this. This changes the value equation. It means that it is valuable to do things that reduce our carbon footprint that move us towards net zero and it becomes not just risky but actively harmful to the viability of a business. If you’re still part of the problem, if you’re not moving and that gets to the third leg of the triangle, which is financial technology, and that’s a lot of what the work I’ve been doing for the U.N. and run up to the Glasgow cop, which is and you’ve been helping with this as an institution is to put in place the plumbing of the system so that there is proper disclosure about who’s part of the solution, who’s still part of the problem. That there’s new markets that help to invest in not just the breakthrough technologies, but carbon offsets and other things that are necessary to optimize the carbon budget to have bigger capital flows into emerging economies, creating those, but also to have the commitments of the financial institutions. And with that, the transparency about what they’re doing to solve the problem.
Speaker 1 [00:31:57] I’ve been tracking summits and cops back to the to the first one in Rio. There has been a diminishment of the state in those 30 years and an expectation that the private sector, the business should do more and can do more. That was not a dominant line of thinking in Rio in 92, but it is Glasgow in in twenty one. I wonder what has shifted in those 30 years? Has the state failed in its obligations to society or is it just reached its limits? Or is there a greater robustness to private initiative, whether it’s technology or financial mobilization that we’re finally appreciating?
Speaker 4 [00:32:40] I’m not sure I would fully subscribe that the state has had the face in or has set the ground rules and been aggressive enough in the objectives and and in playing its role over the period of time. And so many in the private sector have, I mean, I’ll put it in the pejorative, but have either ignored the issue or a free road on others efforts. And so we have not been nearly aggressive enough in pricing carbon and investing in primary research. The 2008 experience. I won’t belabor it, but is an example where over 90 percent of the quote shovel ready infrastructure was carbon intensive. Effectively, it was anything but green, so it was a massive missed opportunity. What has mainstreamed over the course of the last decade and accelerated since Paris? Net zero has become an organizing principle for sustainability. It’s become much clearer to a much broader range of actors. If I can put it that way that we have a carbon budget, we are spending it rapidly, that emissions need to go down, that ultimately every country, region, sector, company, financial institutions. We’ll have to be at net zero. Candidly, that’s from my perspective, that’s one of gratitude Berg’s contributions, the sort of remorseless logic of a of a teenager, very intelligent teenager, but of a teenager, which is, well, how does this all that up? And you know, it wasn’t anywhere near shape or form and even in the financial sector or especially maybe I should say, in the financial sector 18 months ago, certainly the start of 2020, focus on climate risk management focused on disclosure. We set up pretty big objectives for the Glasgow summit, and at the heart of it was that climate was part of every major financial decision, and mapping to get there was to organize the system around net zero. And now we’re seeing that.
Speaker 1 [00:34:43] But there’s an important tension underway in the world. I would argue around timelines. When I talk to my environmentalist friends, I often divide them into two camps the 2030 camp and the 2050 camp and the 2030 camp. For people who say we can’t really think too much about net zero by 2050. The crisis has to be solved by 2030 by getting emissions down by 40 or 50 percent in that range. And then the 2050 camp for those and I’ve heard Bill Gates speak to those who say, let’s, let’s not undermine the 30 year journey by trying to do too much in the 10 year now eight year journey to 2030. So maybe we’ll fall a bit short of 2030. But the real need is to get on the right path to 2050. And hey, it’d be great to have both, but just don’t let one undermine the other. Are you a 2050 or 2030?
Speaker 4 [00:35:38] I’m more of a 20 30 year. I think that I mean, experience in managing things to extent I have and I have some is that you need objectives that are within your timeline of responsibility. Let’s put it that way that you’re going to live to live for the consequences. Now that’s the first reason. The second, just given how tight the carbon budget is, it is. It is essential. I think the third point I’ll make, which is tangential to this, but I just want to make it, which is some in the 20 30 camp, maybe not those you’ve talked to. Take the view. OK, well, we just need to radically change and shut down a variety of things. I think the lesson of the last 18 months is we’re not going to shrink our way to net zero. You know, we shut down a quarter of the global economy effectively, maybe more and only just met that seven percent annual reduction. We’re not going to shut down another quarter of our economy and then another and another. I mean, so we need to invest at scale to grow.
Speaker 1 [00:36:41] You get to see Canada both as a Canadian on Canadian soil, but also from a from a global perch. What are the two or three most important things the country can do in the next 24 months to get moving?
Speaker 4 [00:36:55] I think I’d say the following one I’d lock down those 20, 30, 20, 30, five hard commitments. So on the auto side, on the electricity side, I think that’s an imperative. I think the initiative in the net zero oil sands, the private initiative making that fully tangible, credible and moving it forward, you know, an appropriately scaled. I think having the whole of the financial sector organized for net zero and being transparent about being organized to net zero as a necessary facilitator of that, if you establish a reputation that climate policies is headed in the right direction and the market can anticipate the future entrepreneurs, innovators, investors, banks, others, they’ll put money behind the future and we’ll get there faster.
Speaker 1 [00:37:44] Well, if this were, this was outstanding. Mark, thank you.
Speaker 4 [00:37:46] Thank you. My pleasure. No, it’s great pleasure, John.
Speaker 2 [00:37:51] Well, that was a lot to chew on there, John. Are you as hopeful as Mark Carney about the ability of capital to nudge countries to try harder, in his words in Glasgow?
Speaker 1 [00:38:03] I’m hopeful that capital can play a really constructive role, but we can’t assume that others are going to take care of this, whether the others are governments or multilateral institutions like the U.N. or so-called big business. Ultimately, this all rests on all of us. We are consumers, we are citizens, we are neighbors, and the choices we make in our everyday lives may not seem consequential in their own, but together that’s what capital responds to. Let’s ensure that we’re all in this together and making informed decisions and making sure that information flows freely in open democratic systems, whether it’s in politics or in the economy or in our own communities.
Speaker 2 [00:38:47] Yeah, I love that, and I think it’s extremely important to remember the power of our own voices to make change happen. So on that note, please stay with us. In the weeks ahead, four more provocative climate conversations and cutting edge solutions, including how Canada’s farmers and food producers are responding to a rapidly warming world. Until then, I’m Theresa Do and
Speaker 1 [00:39:10] I’m John Stackhouse. This is Disruptors, an RBC podcast. Talk to you soon.
Speaker 3 [00:39:21] Disruptors, an RBC podcast is created by the RBC Thought Leadership group and does not constitute a recommendation for any organization, product or service. It’s produced and recorded by Jar Audio. For more disruptors content, like or subscribe wherever you get your podcasts or visit rbc.com slash disruptors.
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