Transcript: Tom Rand: Can Capitalism Stop Climate Change? | Aug 13, 2020

Nam sits in the studio. She's in her early forties, with shoulder length curly brown hair. She's wearing glasses and a black blazer over a pink blouse.

A caption on screen reads "Can capitalism save the climate? Nam Kiwanuka, @namshine, @theagenda."

Nam says CLIMATE CHANGE DEBATES ARE OFTEN SEEN AS BATTLES BETWEEN LEFT AND RIGHT ON THE POLITICAL SPECTRUM. AND THE PROBLEM WITH THAT IS THAT IT DOESN'T LEAD TO SOLUTIONS. TOM RAND SEES A BETTER WAY FORWARD. HE IS AN ENTREPRENEUR, A CLEAN TECHNOLOGY VENTURE CAPITALIST, AND AUTHOR MOST RECENTLY OF: "THE CASE FOR CLIMATE CAPITALISM: ECONOMIC SOLUTIONS FOR A PLANET IN CRISIS." AND TOM RAND JOINS US NOW FROM MONTREAL TO EXPLAIN...

Tom is in his late forties, clean-shaven, with short white hair. He's wearing a light gray pinstripe suit and a black tee.
A picture of his book appears briefly on screen. The cover is white and beige, with the title in green and blue.

Nam continues HI, TOM RAND HI. GOOD TO BE HERE.

Nam says IT'S REALLY NICE TO VIRTUALLY MEET YOU. I'M GOING TO START OUR CONVERSATION OFF WITH A VERY PESSIMISTIC QUOTE ABOUT OUR CLIMATE FUTURE FROM NOVELIST JONATHAN FRANZEN, AND HE WRITES...

A quote appears on screen, under the title "The pessimistic view." The quote reads "It's important to acknowledge that drastic planetary overheating is a done deal. Even in the nations most threatened by flooding or drought, even in the nations most virtuously committed to alternative energy sources, no head of state has ever made a commitment to leaving any carbon in the ground. Without such a commitment, 'alternative' merely means 'additional' -postponement of human catastrophe, not prevention. The Earth as we now know it resembles a patient with bad cancer."
Quoted from Jonathan Franzen, "The end of the end of the Earth." 2018.

Nam says THAT IS A PESSIMISTIC VIEW. DO YOU SHARE THAT VIEW?

The caption changes to "Tom Rand. Author, 'The case for climate capitalism.'"

Tom says I'M SYMPATHETIC TO IT. TO BE HONEST, I FIND OUR PUBLIC DEBATE ABOUT CLIMATE RISK, WHICH IS MUCH DARKER AND STARKER THAN THE PUBLIC DEBATE WOULD SORT OF ADMIT, I FIND THAT PUBLIC DEBATE TO BE SOMEWHAT CHILDISH COMPARED TO THAT PESSIMISTIC VIEW. I THINK THE TRUTH IS SOMEWHERE BETWEEN THE TWO.

Nam says YOU SAY IT'S STRONG.

The caption changes to "Arctern Ventures."

Tom says WE'RE BETWEEN THE TITANIC. I'M A NEW DAD. I HAVE A THREE-YEAR-OLD BOY, HENRY RUPERT. MAKES ME VERY HAPPY. AFTER I FOUND OUT I WAS GOING TO BE A NEW DAD, I WAS AT A SECURITY CONFERENCE IN THE HAGUE. THESE ARE SERIOUS PEOPLE. FIVE-STAR GENERALS, HEADS OF NATIONAL SECURITY AND SO ON. AND THAT CONVERSATION WAS FRIGHTENING AND REFRESHING. FRIGHTENING IN THE SENSE THAT THEY DON'T THINK ABOUT CLIMATE RISK AS A FLOOD HERE AND A DROUGHT THERE. THEY VIEW ESCALATING SETS OF FLOODS AND DROUGHTS AS RIPPING OUR SOCIAL FABRIC IN WAYS THAT WE'RE ONLY BEGINNING TO UNDERSTAND. AN EXAMPLE THEY GAVE WAS EVERY REFUGEE WHO HIT EUROPE'S SHORES IN THE YEAR 2016 CAME FROM A WATER-STRESSED COUNTRY AND A MILLION OF THOSE REFUGEES SETTLED IN GERMANY. THEY'RE FROM SYRIA. AND THAT RESETTLEMENT CAUSED THE RESURGENCE OF THE FAR RIGHT. THE MILITARY IS BEGINNING TO LINK THESE EVENTS TO CIVIC INFRASTRUCTURE AND SECURITY. IT FRIGHTENS ME TO THINK MY BOY AND HIS PEERS WILL HAVE A GOOD PROBABILITY OF LIVING THROUGH IT IN THE FUTURE WHERE THEY WILL WATCH THE BREAKDOWN OF CIVIC SOCIETY AND CIVIC INFRASTRUCTURE. ON THE OTHER SIDE OF THE COIN, OF COURSE, ONLY IN FACING THAT RISK HEAD ON, HAVING AN ADULT CONVERSATION ABOUT THAT RISK, CAN WE TRY TO SOLVE IT. AND THAT'S WHAT I'M TRYING TO DO WITH THIS BOOK IS SQUARE THAT CIRCLE. ACKNOWLEDGE THAT RISK BUT REALLY FIND A WAY FORWARD IN THE NEXT DECADE OR TWO THAT CAN SOLVE IT.

Nam says IN ORDER TO SQUARE THAT CIRCLE, AS YOU'VE SAID, I THINK FOR A LOT OF PEOPLE, UNLESS SOMETHING IS HAPPENING TO YOU, I THINK WE'VE SEEN THIS WITH COVID-19. UNLESS SOMETHING IS HAPPENING TO YOU, IT SEEMS REALLY HARD TO UNDERSTAND THE SEVERITY OF AN ISSUE. SO HOW DO YOU GET PEOPLE TO UNDERSTAND THE SEVERITY OF AN ISSUE. YOUR BOOK IS ABOUT, YOU KNOW, LEFT AND RIGHT NOT GETTING... NOT SPEAKING TOGETHER. SO HOW DO YOU GET US TO HAVE THAT SAME SENSE OF URGENCY IF WE DON'T SEE WHAT'S HAPPENING?

The caption changes to "Tom Rand, @tomrand."

Tom says THAT'S A... THAT IS THE NUB OF THE QUESTION. SO UNTIL WE ACKNOWLEDGE THE RISK, THE IDEAS OF THE LEFT AND RIGHT ARE GOING TO GET TOGETHER AND FIGURE OUT A WAY THROUGH THIS IS VERY DIFFICULT TO SEE. THE FIRST STEP IS UNDERSTANDING THE RISK. THERE'S A LOT OF US TRYING TO RING THE ALARM BELLS, BUT I THINK IT'S A MIXTURE. I THINK YOU HAVE TO BE SERIOUS ABOUT THE RISK AND TALK ABOUT THE RISK IN WAYS THAT ARE MEANINGFUL. SO THE MILITARY, BY TALKING ABOUT IT IN QUALITATIVE TERMS AND TALKING ABOUT MAINTAINING CIVIC INFRASTRUCTURE, MAINTAINING SECURITY, IS A LANGUAGE I THINK THE PUBLIC UNDERSTANDS. WHEN WE TALK ABOUT AND DITHER ON SHOULD THE PRICE OF CARBON BE 20 BUCKS OR 22 BUCKS, HOW DO WE PROTECT THE INCUMBENTS AND THE JOBS OVER THERE, THAT DISCUSSION I THINK IS CHILDISH. BECAUSE IT'S NOT SOMETHING THAT PEOPLE UNDERSTAND INTUITIVELY AND IT'S NIV ELING. IF WE TALK ABOUT THE WORLD WE LIVE IN, IT'S QUALITATIVE AND DOESN'T HIDE BEHIND A SPREADSHEET. THAT'S WHAT I MEAN ABOUT AN ADULT CONVERSATION.

Nam says YOU SAID ONCE UPON A TIME YOU WERE AN IDEALIST. WHAT HAPPENED? WHAT CHANGED?

Tom says BY IDEALIST, I MEAN I THOUGHT THE WAYS OF APPROACHING PROBLEMS IN A COMPLEX WORLD WAS TO BREAK THEM DOWN TO AN IDEOLOGY, A THEORETICAL FRAMEWORK, AND IF YOU UNDERSTOOD THOSE SETS OF PRINCIPLES YOU COULD BUILD SOMETHING BACK UP AND ADDRESS IT. PEOPLE HAVE DONE THIS IN PHILOSOPHY FOREVER. RUSSELL TRIED TO BUILD MATHEMATICS OUT OF LOGIC UNTIL IT WAS BURNED DOWN AND BUILD MORTAL FRAMEWORKS FROM SMALL BEGINNINGS. THEY'VE NEVER DONE MUCH MORE THAN THE GOLDEN RULE. THAT'S WHAT I MEAN BY IDEOLOGY. THERE'S A THEORETICAL FRAMEWORK BY WHICH WE CAN UNDERSTAND THE WORLD. AS I'VE GROWN UP I'VE DISCOVERED THE WORLD IS FAR TOO COMPLICATED TO BE CAPTURED BY A THEORETICAL FRAMEWORK. I THINK YOU NEED... THAT'S WHY I'M SORT OF A PRAGMATIST. I THINK YOU LOOK AT TOOLS THAT SOLVE PARTICULAR KINDS OF PROBLEMS, YOU LOOK AT WAYS TO BE EFFECTIVE IN WAYS THAT ARE MEANINGFUL, AND YOU ENDORSE THOSE KINDS OF ACTIONS RATHER THAN TRY TO APPROACH THE WORLD THROUGH A THEORETICAL FRAMEWORK AND THEN BUILD A SOLUTION. BASICALLY YOU LOOK FOR TOOLS THAT WORK AND YOU USE THEM AS BEST YOU CAN.

Nam says DO YOU THINK THAT THE BIRTH OF YOUR SON PLAYED A ROLE IN ANY OF THAT? I'VE ALWAYS SAID THAT WHEN I WAS A STARVING STUDENT IN UNIVERSITY, I COULD EAT BOXED MAC AND CHEESE FOREVER, SLEEP ON THE FLOOR. BUT ONCE I HAD KIDS, EVERYTHING FELT IMMEDIATE. HOW WAS THE BIRTH OF YOUR SON, HOW HAS THAT CHANGED HOW YOU VIEW THE WORLD?

Tom says IT DOESN'T CHANGE THE WAY I VIEW CLIMATE RISK. I'VE ALWAYS BEEN AWARE OF THIS RISK. THE DIFFERENCE FOR ME NOW IT'S PERSONAL. ONCE YOU UNDERSTAND CLIMATE RISK, IT HURTS. YOU WAKE UP LATE AT NIGHT IN A COLD SWEAT. THIS IS GOT A GAME. THE MILITARY PEOPLE ARE RIGHT. WE'RE TALKING ABOUT THE BREAKDOWN OF CIVIC INFRASTRUCTURE IN MY CHILD'S LIFETIME. THAT IS A HARD TRUTH TO TAKE ON BOARD. I USED TO TREAT THE PROBLEM AT LEAST AT ARM'S LENGTH. IT WAS AN ANTHROPOLOGICAL ISSUE. BUT RUPERT MAKES IT REAL. HE'S GOING TO BE ALIVE IN THE DECADES IN WHICH THIS STUFF WILL BREAK DOWN IF WE DON'T GET IT RIGHT. SO NOW I'VE GOT REAL MONEY ON THE TABLE, REAL CHIPS IN PLAY, AND THAT CHANGES IT FOR ME. IT'S MORE FRIGHTENING. BUT AT THE SAME TIME, I CAN'T HIDE AT HOME AND SORT OF JUST LIVE IN3 PROBLEM. I COULDN'T THINK OF SOMETHING MORE CENTRIST, RIGHT? USEFUL POWERFUL TOOLS TO SOLVE BIG PROBLEMS. THE LEFT AND THE RIGHT WOULD AGREE IN A STRANGE WAY THAT MARKET FORCES, PRIVATE CAPITAL, CORPORATIONS ARE VERY POWERFUL THINGS. THE LEFT ARE AFRAID OF THAT POWER AND THEY HAVE GOOD REASON. THERE ARE LOTS OF THINGS THAT THOSE INSTITUTIONS AREN'T SOLVING. AND THE RIGHT THINK THEY'RE THE BEE'S KNEES. IT'S NOT RADICAL TO SAY WHY DON'T WE USE THOSE TOOLS TO SOLVE THIS PROBLEM? BUT THAT IS SEEN AS RADICAL. IT'S SEEN AS RADICAL FROM THE LEFT TODAY BECAUSE IT FAILS TO REJECT CAPITALISM. THIS IS THE NAOMI KLEIN LINE. AND TO THE RIGHT, THE KIND OF MARKET INTERVENTIONS I'M TALKING ABOUT ARE NOT NIBBLING AROUND THE EDGES. THIS IS A MASSIVE SHIFT IN ECONOMIC ACTIVITY OVER A PERIOD OF 10 OR 15 YEARS. THAT'S SEEN AS TOO RADICAL FOR THEM. I THINK WE NEED TO LEAVE THAT IDEOLOGY AT THE DOOR AND JUST ASK THE QUESTION: WHAT TOOLS DO WE HAVE? WE DON'T HAVE TIME TO BUILD NEW ONES, RIGHT? LET'S NOT REJECT THE WTO, LET'S CO-OP IT. WE DON'T HAVE TIME TO WAIT FOR THE REVOLUTION, WHATEVER THAT MEANS. WE HAVE A PRACTICAL PROBLEM TO SOLVE. IN THAT WAY I'M DIFFERENTIATING ECONOMIC RADICALISM FROM POLITICAL RADICALISM. I WOULD ARGUE IT IS POLITICALLY CENTRIST BUT ECONOMICALLY RADICAL.

Nam says I'M JUST GOING TO PUSH BACK BECAUSE I KNOW RIGHT NOW WE SEEM TO LIVE IN A TIME WHERE PEOPLE WEAR THEIR POLITICAL STRIPES WITH PRIDE, SO I'M GUESSING SOMEONE MAY BE WATCHING THIS AND THINK, WELL, IF IT'S NOT THE LEFT AND IT'S NOT THE RIGHT AND BEING IN THE MIDDLE, THAT'S ALSO A DOGMA, ISN'T IT?

Tom says IT'S DOGMA IN THE SENSE THAT MY DOGMA IS PRAGMATISM. I SAY WE HAVE A PROBLEM TO SOLVE AND LET'S USE POWERFUL TOOLS. THERE'S NO IDEOLOGY IN THERE AT ALL. THERE'S NO PRESUPPOSITIONS ABOUT THE MARKET OR GOVERNMENT. THERE'S JUST A SIMPLE QUESTION: WHAT ARE THE MOST POWERFUL TOOLS WE HAVE, WHAT'S THE BIGGEST PROBLEM, HOW DO WE LINK THE TWO TOGETHER? THAT'S PRAGMATISM AS OPPOSED TO IDEOLOGY.

Nam says THERE HAVE BEEN GROWING CALLS FOR A GREEN NEW DEAL HERE IN CANADA AND THE U.S. WHY IS IT, AS YOU DESCRIBE IT, DIVISIVE?

Tom says WELL, LOOK. IN A DEMOCRACY, IF YOU WANT RADICAL ACTION ON SOMETHING, YOU HAVE TO BUILD A BIG TENT, RIGHT? AND THE REVOLUTION, I'M SORRY, DOES NOT HAVE A BIG TENT. THERE'S A WHOLE LOT OF PEOPLE THAT DON'T LIKE THAT IDEA, AND SO WHEN YOU LINK CLIMATE TO A WHOLE BUNCH OF OTHER ISSUES OF SOCIAL JUSTICE THAT INDIVIDUALLY ARE CERTAINLY IMPORTANT. NO ONE IS DENYING THE IMPORTANCE OF SOCIAL JUSTICE AND HOUSING AND HEALTH CARE AND THOSE ARE ALL IMPORTANT THINGS. BUT WHEN... BUT THE LEFT IS ALREADY ON BOARD. OUR CHALLENGE IS TO GET PEOPLE IN THE CENTRE TO MOVE HARDER AND PEOPLE ON THE RIGHT TO MOVE AT ALL. AND IF YOU LINK CLIMATE ACTION WITH A WHOLE GRAB BAG OF SOCIAL JUSTICE ISSUES, YOU MAKE THE TENT SMALLER, NOT BIGGER. THE REAL WORK IS IN GETTING TO HAVE THOSE WHO DISAGREE WITH YOU TO ACT IN A WAY THAT BENEFITS AND SOLVES THE PROBLEMS YOU'RE AFTER, AND THAT'S HOW... THAT'S THE REAL WORK OF DEMOCRACY. WE DON'T HAVE THE LUXURY OF BEING MORALLY PURE. WE HAVE TO ENGAGE WITH OTHER PEOPLE AND WE HAVE TO BUILD A BIG TENT, AND THAT'S WHAT I'M TRYING TO DO WITH THIS BOOK.

Nam says TO ME, CORRECT ME IF I'M WRONG, IT SEEMS LIKE CAPITALISM COULD MEAN DIFFERENT THINGS TO DIFFERENT PEOPLE. IS THAT A FAIR STATEMENT TO MAKE?

Tom says 100 PERCENT. THAT IS ONE OF MY MAIN ARGUMENTS, THAT IF THE TARGET OF THE LEFT'S IRE IS THE LIBERTARIAN NEO CONSERVATIVE AMERICAN STYLE OF HIGHLY CORRUPT... SURE, LET'S DITCH IT. I HAVE NO PROBLEM AGREEING WITH THAT ARGUMENT. BUT CAPITALISM COMES IN MANY FLAVOURS AND MEANS DIFFERENT THINGS. IT CAN MEAN TO AN INDIVIDUAL THE RIGHT TO OWN THEIR OWN BAKERY OR GET OPTIONS IN A TECH STARTUP OR HAVE YOUR RSP GROW. THAT'S ALL CAPITALISM TO AN INDIVIDUAL. AT THE NATIONAL LEVEL, LOOK, SWEDEN IS A CAPITALIST COUNTRY. THEY HAVE A DIFFERENT FLAVOUR OF CAPITALISM. THERE'S PRIVATE MARKETS, THERE'S GREED, THERE'S CORPORATIONS... BUT IT DIMINISHES THE TERM CAPITALISM TO LUMP IT IN WITH THE AMERICAN FREE-WHEELING STUFF AND I THINK WE NEED TO EXPAND OUR VIEW OF WHAT IT MIGHT BE, AND THAT'S WHY I USE THE WORD CLIMATE CAPITALISM.

Nam says WHAT WOULD THAT DEFINITION THEN BE? WHAT WOULD CLIMATE CAPITALISM BE? WHAT'S THE DEFINITION?

Tom says WELL, THE DEFINITION AGAIN IS JUST GOING BACK TO THE START OF OUR CONVERSATION WHERE WE SAY, LET'S LEVERAGE AND CO-OP THE MOST POWERFUL TOOLS WE HAVE TO SOLVE THE BIGGEST PROBLEMS THAT WE HAVE. THERE ARE A SERIES OF PRACTICAL POLICY THINGS I HAVE. BUT THAT'S THE TOP-LEVEL THING. REWIRING OUR ECONOMY IN A WAY THAT'S RELEVANT TO CLIMATE RISK IS WHAT I CALL CLIMATE CAPITALISM.

Nam says OKAY. SO LET'S DIG INTO THE SOLUTIONS. THE GOAL, YOU WRITE, IN YOUR BOOK, IS TO GROW CLEAN ENERGY AS FAST AS WE CAN. HOW CAN WE DO THAT?

Tom says WELL, THERE'S A NUMBER OF WAYS TO DO THAT. I MEAN, I THINK YOU START WITH A PRICE ON CARBON. EVERY ECONOMIST THAT I'VE EVER SPOKEN TO OR READ ABOUT AGREES THAT A PRICE ON CARBON IS THE MOST EFFICIENT WAY TO SOLVE THIS PROBLEM, AND I'VE ARGUED EXTENSIVELY IN THE PAST THAT A PRICE ON CARBON IS UNIQUE IN THAT IT BOTH HARNESSES THE MARKET FORCES AND UNLEASHES THOSE MARKET FORCES. IT'S SORT OF GOT A BIT OF A PARADOX THERE. SO PRICES ON CARBON I THINK ARE ABSOLUTELY ESSENTIAL. BUT THE PROBLEM WE HAVE IS, YOU KNOW, IF THIS IS 1990, WE COULD PUT A LITTLE PRICE ON CARBON, RAISE IT BY A FEW BUCKS A YEAR, AND EVERYONE'S HAPPY AND WE TURN THE SHIP AROUND AND THE MARKET SOLVES THE PROBLEM. THE PROBLEM IS THAT IT'S 2020, IT'S VERY LATE IN THE GAME, AND THERE IS ABSOLUTELY NO WAY A PRICE ON CARBON IS EFFICIENT. IMAGINE IF YOUR HOUSE IS ON FIRE. IT'S AN APT METAPHOR. OUR HOUSE IS ON FIRE. AND YOU DON'T REALLY CARE ABOUT THE EFFICIENCY OF THE WATER DELIVERY METHOD, RIGHT? IF YOU WANT THE MOST EFFICIENT WATER DELIVERY METHOD TO YOUR HOUSE, YOU PROBABLY HAVE AN ISRAELI DRIP SYSTEM WHERE EVERY DROP GETS TO THE CENTRE OF THE FLAME. THAT'S NOT WHAT YOU WANT. YOU WANT A BIG FAT FIRE HOSE THAT PUTS A TON OF WATER ON THE HOUSE AND YOU DON'T CARE IF THE FIRE HOSE LEAKS. THAT'S WHY I TALK ABOUT QUIBBLING AND WORRYING ABOUT THE INCUMBENTS AND SO ON. THIS HOUSE IS ON FIRE AND WE NEED TO ASK SOME VERY SERIOUS QUESTIONS ABOUT HOW WE MOVE CLEAN ENERGY TO THE FRONT OF THE GAME AND ACCELERATE IT MASSIVELY. AND A PRICE ON CARBON IS NOT SUFFICIENT TO DO THAT.

Nam says WELL, I MEAN, THE SOLUTION... IT SOUNDS EXPENSIVE, RIGHT? YOU KNOW, A FAST TRANSITION TO CLEAN ENERGY WILL REQUIRE MASSIVE INVESTMENT. WHERE WOULD THESE INVESTMENTS COME FROM AND WHERE SHOULD THEY GO?

Tom says WELL, THAT'S A REALLY GOOD QUESTION. THAT WILL BE DIFFERENT FOR EVERY COUNTRY. I WOULD POINT OUT SOMETHING, THOUGH, RIGHT? FIRST OF ALL, NOT ACTING IS THE MOST EXPENSIVE THING WE CAN DO. OUR HOUSE IS ON FIRE. SO, YOU KNOW [INDISCERNIBLE] THERE WAS A STUDY DONE BY THE INTERNATIONAL ENERGY AGENCY A FEW YEARS BACK THAT SAID EVERY YEAR WE DELAY PAST THE YEAR 2020, A DOLLAR THAT WE SPENT TEN YEARS AGO WILL COST 4 dollars TO GET THE SAME JOB DONE NOW IN TERMS OF RISK REDUCTION. SO DELAY COSTS MONEY. INACTION WILL ULTIMATELY COST THE MOST MONEY BECAUSE WE'RE TALKING ABOUT... AGAIN, I GO BACK TO THOSE MILITARY PEOPLE. WE'RE TALKING ABOUT THE BREAKDOWN OF CIVIC SOCIETY. WHAT DOES THAT COST US? I WOULD FIRST MAKE THAT FUNDAMENTAL ARGUMENT, RIGHT, THAT IT COSTS MORE TO DO NOTHING. BUT LET'S BE CLEAR. EVERY TIME SOMETHING HAS UNDERGONE A TECHNOLOGICAL TRANSITION, WHETHER IT WAS THE MECHANIZATION OFF CULTURE, THE DIGITIZATION OF COMMUNICATIONS, THE WORLD HAS GOT BETTER OFF AS A WHOLE. THERE ARE INDUSTRIES THAT HURT. THERE ARE INDIVIDUALS THAT HURT. AND WE HAVE TO THINK ABOUT THAT. BUT TECHNOLOGY REVOLUTIONS MAKE THE WORLD WEALTHIER. AND IF WE'RE BUILDING AN ENERGY SYSTEM THAT IS PREDICATED ON TECHNOLOGY AND SUCKING ENERGY FROM THE SUN AND THE GROUND AND THE WIND AND STORING IT AND SO ON, THAT'S AN INVESTMENT THAT PAYS DIVIDENDS FOR A VERY, VERY LONG TIME COMPARED TO DIGGING STUFF OUT OF THE GROUND AND BURNING IT. SO THERE'S GOING TO BE A SHORT-TERM COST. LET'S BE AWARE OF THAT. BUT I WOULD ARGUE, ASIDE FROM MITIGATING THE DAMAGE THAT'S COMING, WE BUILD AN ECONOMY THAT IS MORE EFFICIENT, MORE INCLUSIVE. THIS IS AN ENERGY SYSTEM PREDICATED ON TECHNOLOGY, THAT HAS LITERALLY LIMITLESS SUPPLIES OF ENERGY, THAT IS FREE ONCE YOU BUILD THE SYSTEM. SO, YES, OF COURSE THERE IS AN UPFRONT COST. THERE'S AN INVESTMENT THAT NEEDS TO BE MADE. BUT THERE ARE FINANCIAL DIVIDENDS, NEVER MIND ENVIRONMENTAL DIVIDENDS, THAT WILL PAY FOR A VERY, VERY LONG TIME. AND WHERE DOES THE MONEY COME FROM? THERE ARE TRILLIONS AND TRILLIONS OF DOLLARS SITTING IN MONEY MARKET ACCOUNTS RIGHT NOW DOING NOTHING, EARNING NOTHING. SO IF WE PUT THE RIGHT SIGNALS IN PLACE, THE PRIVATE SECTOR WILL SHOVEL THAT MONEY INTO SOLVING THIS PROBLEM BECAUSE THEY WILL BE MOTIVATED BY MAKING MONEY ON THOSE TRILLIONS OF DOLLARS. THAT'S PART OF WHAT I MEAN BY CO-OPTING THE SYSTEM RATHER THAN REJECTING IT. THE RESOURCES ARE THERE. THE TECHNOLOGY IS THERE. BIG ENGINEERING COMPANIES ARE CAPABLE OF EXECUTING ON THIS STUFF. WE JUST NEED TO HAVE A POLICY FRAMEWORK THAT PUTS RULES INTO PLACE THAT ENABLES THAT MONEY TO FLOW IN THAT DIRECTION AND LO AND BEHOLD WE'D ALL BE BETTER OFF IN THE LONG TERM ECONOMICALLY AND ENVIRONMENTALLY.

Nam says WELL, SOMETHING ELSE THAT YOU WRITE IN THE BOOK IS OVER THE HORIZON PROBLEM. WHAT IS THAT? AND HOW DO YOU SOLVE IT?

Tom says MARK CARNEY TALKS ABOUT IT... YEAH. WE TYPICALLY TALK ABOUT CLIMATE IN TERMS OF TRAGEDY OF THE COMMONS WHERE NO INDIVIDUAL ACTOR, BE IT A NATION OR COMPANY OR PERSON IS MOTIVATED TO ACT UNTIL EVERYONE ELSE DOES. WE ALL STAND THERE WAITING. NO ONE WANTS TO GO ON THE DANCE FLOOR FIRST, WHY TAKE THE RISK, YOU LOOK LIKE AN IDIOT, JOIN EVERYBODY LATER. TRAGEDY ON THE HORIZON IS A LITTLE DIFFERENT. CARNEY TALKS ABOUT THIS. IT JUST MEANS THAT THE PROBLEMS WE'RE TRYING TO SOLVE... THESE ARE RUPERT PROBLEMS. HENRY RUPERT, HIS LIFETIME, HIS PEERS, THAT'S WHO BENEFITS FROM THE INVESTMENTS THAT WE MAKE, AND THAT'S NOT OUR DIRECT BENEFIT. AND SO THE 20, 30, 40-YEAR TIME HORIZON OVER WHICH WE BEGIN TO FEEL THE BENEFITS OF MITIGATING CARBON, IT'S A 40-YEAR CYCLE. AND SO THAT IS WHY I TALK ABOUT MY KID. THAT IS A WAY OF HAVING PEOPLE, INDIVIDUALS UNDERSTAND WHY WE'RE MAKING THESE INVESTMENTS. IT'S SO THAT HE HAS A CHANCE AT A DECENT LIFE. NOW, IF YOU WANT TO THINK ABOUT INSTITUTIONS IN OUR ECONOMY THAT CAN SOLVE THIS HORIZON PROBLEM, RIGHT, THE BENEFITS AND SO FORTH, IT'S PENSION FUNDS, RIGHT? GOVERNMENTS DON'T THINK IN 40-YEAR TIME HORIZONS, THEY THINK IN THREE OR FOUR YEARS, MAYBE. CORPORATIONS ARE CYCLE TO CYCLE. PENSION FUNDS HAVE AN OBLIGATION TO MEET THEIR REQUIREMENTS OF THEIR HOLDERS 30, 40 YEARS FROM NOW. I ACTUALLY THINK THAT'S WHERE THE SOLUTIONS LIE. THAT CAPITAL IS PATIENT. IT WILL TAKE A RETURN OVER 40 YEARS. AND I THINK AN ARGUMENT CAN BE MADE THAT IF THE ECONOMY AND THE PLANET ARE NOT STABLE IN 30, 40 YEARS, THERE'S NO WAY THOSE PENSION FUNDS CAN MEET THOSE OBLIGATIONS BECAUSE THE WHOLE THING IS MAD MAX. I ARGUE THERE'S A FIDUCIARY OBLIGATION ON BEHALF OF PENSION FUNDS TO BE A REALLY ACTIVE PART OF THE SOLUTION BECAUSE THERE'S NO WAY THEY CAN MEET THEIR OBLIGATIONS OF PAYING OUT PENSIONS 30, 40 YEARS FROM NOW UNLESS WE HAVE A FUNCTIONING ECOSYSTEM AND CIVIC INFRASTRUCTURE. NO INDIVIDUAL PENSION FUND CAN MAKE THIS WORK BY THEMSELVES. SO I THINK THERE THE ANSWER IS, PENSION FUND LEADERS SHOULD BE ADVOCATING AND THEY HAVE AN OBLIGATION TO ADVOCATE FOR THE KINDS OF POLICY MEASURES THAT I TALK ABOUT IN THIS BOOK THAT AGGRESSIVELY WORK TO SOLVE THIS PROBLEM BECAUSE THEY HAVE AN OBLIGATION TO SOLVE THIS PROBLEM AND IT'S WRITTEN INTO THEIR DOCUMENTS. SO I THINK THAT'S KIND OF A NICE LEGAL LOOPHOLE THAT WE MIGHT TAKE ADVANTAGE OF TO SOLVE THE PROBLEM OF THE HORIZON, WHO BENEFITS FROM ACTIONS WE TAKE 40 YEARS FROM NOW... MY SON AND PENSION FUNDS.

Nam laughs, then says FROM LOOKING TOWARDS THE FUTURE, I WANT TO LOOK BACK A LITTLE BIT. IN THE 2000S, WE WERE TALKING ABOUT TECH A FEW MOMENTS AGO, THERE WAS A LOT OF CLEAN ENERGY TECH BACK THEN. WHAT'S HAPPENED SINCE THEN? BECAUSE A LOT OF MONEY SEEMS TO BE INVESTED AND THEN...

Tom says WELL, VENTURE FUNDS IN SILICON VALLEY GOT THEIR HEADS HANDED TO THEM ON A PLATTER. THEY TREATED CLEAN TECH LIKE I.T. AND IT'S NOT. SO WE LEARNED LESSONS. EVERY VENTURE FUND HAS LOSSES, OTHERWISE YOU'RE NOT TAKING RISKS. SO THAT'S NORMAL. BUT I THINK THE REAL LESSON IS TO LOOK AT THE WINNERS. CHINA MADE A VERY CONCERTED EFFORT AT A POLICY LEVEL TO OWN THE SOLAR INDUSTRY. IF YOU BUY A SOLAR PANEL TODAY, YOU'RE BUYING IT FROM CHINA. SO THEY HAVE AN ENORMOUS ECONOMIC BENEFIT FROM LONG TERM... SOLAR PANELS HAVE COME DOWN 90 percent IN COST. THERE'S NOTHING THAT CAN TOUCH SOLAR FROM A COST PERSPECTIVE IN TERMS OF NEW ENERGY. SAME THING WITH ION BATTERIES. ELON MUSK AND TESLA [INDISCERNIBLE] BUILD TO ASSET SCALE AND THEY OWN THOSE SECTORS BECAUSE THEY DECIDED TO TAKE A LONG-TERM STRATEGIC VIEW IN TERMS OF OWNING IT. SO I THINK CANADA CAN ASK THE SAME QUESTION: WHAT'S OUR ROLE TO PLAY? HOW DO WE MAKE A LONG-TERM PLAY HERE? I THINK IT'S THE SUCCESSES THAT ARE REALLY IMPORTANT TO LOOK AT. IF I WAS TO BE SPOOKED BY INVESTMENT TODAY, IT'S NOT CLEAN TECH. I MEAN, SOLAR POWER IS THE LOWEST COST OF ENERGY ON THE PLANET TODAY. ENERGY STORAGE IS COMING DOWN MASSIVELY. I THINK IT'S FOSSIL FUELS THAT I WOULD WORRY ABOUT, AND I HATE TO SAY IT BUT ALBERTA'S TAR SANDS ARE A DEAD MAN WALKING. THERE IS NO WAY OVER THE LONG TERM THAT EXPENSIVE, AND IT HAPPENS TO BE CARBON HEAVY, BUT THAT EXPENSIVE OIL CAN SURVIVE AGAINST A TECHNOLOGY ONSLAUGHT, RIGHT? THE COST OF TECHNOLOGY GOES DOWN OVER TIME AND ITS PERFORMANCE GOES UP OVER TIME, AND THOSE ARE THE FORCES, THOSE TECHNOLOGY FORCES THAT WE'RE TRYING TO UNLOCK TODAY WITH VENTURE CAPITAL AND SCALE QUICKLY WITH POLICY.

Nam says BUT AS YOU SAID, THE WHOLE PREMISE OF THE BOOK IS GETTING PEOPLE FROM EITHER SIDE TO HAVE THESE CONVERSATIONS. WHAT IS YOUR TAKE ON SOMETHING THAT IS AFFECTING ALL OF US, HOW IT'S MORPHED INTO A PARTISAN ISSUE, OR HAS IT ALWAYS BEEN LIKE THAT?

Tom says WELL, CLIMATE RISK I THINK HAS BECOME PARTISAN MAINLY BECAUSE THE SOLUTIONS HAVE BEEN WRAPPED IN LEFT WING IDEOLOGY. NOW, THE TRAGEDY OF COURSE IS THAT THIS IS NOT THE CASE. WHEN DOUG FORD RIPPED UP THE CAP-AND-TRADE PROGRAM, THE IRONY IS, THAT'S A MARKET-BASED MECHANISM, AND AS A RIGHT WING GOVERNMENT, HE SHOULD EMBRACE THOSE. BUT HE HAD PREVIOUSLY, AS HAVE OTHER RIGHT WING POLITICIANS, COMMITTED TO PLAYING DOWN CLIMATE AND THEY DID THAT I THINK BECAUSE IT'S IMPOSSIBLE TO SOLVE THE CLIMATE PROBLEM WITHOUT MARKET INTERFERENCE. NOW, YOU CAN PICK YOUR FAVOURITE MARKET INTERFERENCE, AND THE RIGHT WING... MILTON FRIEDMAN, THE GODFATHER OF NEOCONSERVATIVE, ACKNOWLEDGED YOU HAVE TO PRICE EXTERNALITY. A PRICE ON CARBON IS RIGHT UP THE RIGHT WING'S ALLEY. BUT THEY HAVE PENNED THEMSELVES INTO A CORNER BY DENYING THE PROBLEM FOR A LONG TIME BECAUSE IT WAS THOUGHT OF AS A LEFT WING ISSUE. SO BY TALKING ABOUT ECONOMIC UPSIDE, TECHNOLOGY, WINNING THE GLOBAL RACE FOR NEW CLEAN TECH MARKET SHARE, GENERATING JOBS, YOU KNOW, CHANGING CAPITAL MARKETS TO OUR BENEFIT, THAT LANGUAGE IS SOMETHING THAT THE RIGHT CAN ENDORSE AND THEREFORE I THINK MAY BE MORE OPEN TO ACKNOWLEDGING THIS PROBLEM. BUT THAT'S REALLY, YOU KNOW, RIGHT WING PARTIES ALL OVER THE WORLD HAVE PANDERED TO THEIR BASES AND THEY'VE BEEN BEATING THE DRUM ON CLIMATE RISK BEING A SHAM FOR A LONG TIME, AND THAT'S MORALLY REPREHENSIBLE, IT'S POLITICALLY A MISTAKE BECAUSE THEY PEN THEMSELVES INTO A CORNER AND I THINK WE NEED TO GIVE THEM AN OUT. LOOK, ALL IS FORGIVEN, CAN WE GET ON WITH THE PROBLEM NOW. AND GUESS WHAT? YOUR HERO, THE MARKET, IS CHAMPION. AND THAT'S WHY I FRAME IT IN THESE KINDS OF WAYS BECAUSE IT'S THE RIGHT THAT WE NEED TO GET TO MOVE, NOT THE LEFT.

Nam says WELL, I'M GLAD YOU BROUGHT THAT UP BECAUSE IT IS SOMETHING THAT SEEMS TO BE HAPPENING AROUND THE WORLD. CANADA COULD DOUBLE DOWN ON FIGHTING CLIMATE CHANGE, BUT THERE IS NO GUARANTEE OTHER COUNTRIES WILL DO THE SAME. IS THERE ANYTHING IN YOUR IDEA OF A NEW CLIMATE CAPITALISM THAT WOULD ENSURE GLOBAL COOPERATION?

Tom says WELL, THE ONLY WAY TO SORT OF DO THAT TO ENSURE COOPERATION IS TO CO-OP PLACES LIKE THE WTO, THE WORLD TRADE ORGANIZATION. IF A GUY LIKE TRUMP CAN WALK IN TO NATO AND POKE THAT HORNET'S NEST AND CAUSE RISK ON SOMETHING AS HISTORICAL AND VALID AS NATO, SOMEONE WHO IS JUST AS MOTIVATED POLITICALLY FROM THE OTHER SIDE CAN WALK INTO THE WTO AND SAY, OKAY, FOLKS, THE RULES WE ARE OPERATING UNDER ARE FROM TWO DECADES AGO AND WE NEED TO UPDATE THEM. IF ANY COUNTRY IS GOING TO BE A LAGGARD ON CLIMATE, THERE WILL BE TARIFFS ON THE BORDER TO ENSURE WE HAVE AN EQUAL PLAYING FIELD. THAT IS LEVERAGING. THE WTO HAS TEETH. THEY HAVE PRIVATE TRIBUNALS THAT MAKE DECISIONS ON WHETHER LAWS ARE VALID OR NOT, RIGHT? THOSE ARE REAL TEETH. AND WE GAVE THOSE TEETH UP. WE GAVE UP SOVEREIGNTY TO THE WTO. LET'S GRAB THAT INSTITUTION, CO-OP IT, AND USE ITS TEETH. THAT'S CO-OPTING RATHER THAN TEARING EVERYTHING DOWN.

Nam says YOU DEDICATE THE BOOK TO YOUR SON AND ALSO TO GRETA THUNBERG. YOU REFERENCE THE BOOK BY SAYING MAYBE PANIC IS BETTER THAN HOPE. IS OPTIMISM MAYBE NOT THE BEST MOTIVATOR FOR ACTIVISM?

Tom says I SUPPOSE IT'S LIKE CAKE. YOU NEED THE RIGHT BALANCE OF INGREDIENTS. I DON'T THINK PANIC DOES IT BY ITSELF. WE DON'T REACT TO PANIC. BUT AT THE SAME TIME, YOU KNOW, PANIC CAN MOTIVATE YOU. IF IT'S SPICED WITH A SOLUTION. SO IT'S A FINE BALANCE, AND I THINK I SEE-SAW ON THIS SAME QUESTION EVERY DAY, BUT I TALK ABOUT THE ECONOMIC GAINS TO BE HAD FROM CANADA. JUST OUR TAKING THE LEAD ON CLEAN TECH. IF CANADA GOT JUST OUR PRO RATA SHARE OF THE MARKET, PRO RATA IS WHAT YOU GET FOR SHOWING UP. IF WE GOT A PRO RATA SHARE OF THE GLOBAL CLEAN TECH MARKET, THE CLEAN TECH IN THIS COUNTRY WOULD BE BIGGER THAN OUR AUTOMOTIVE SECTOR. AND IF WE FRAME THE OPPORTUNITY IN THAT WAY WHILE AT THE SAME TIME BEING HONEST ABOUT THE RISKS WE'RE TRYING TO SOLVE, I THINK THOSE TWO SIMULTANEOUSLY CAN ACT AS WHAT WE NEED, WHICH IS A MOTIVATOR TO REALLY RE-THINK HOW AND WHY WE'RE OPERATING OUR ECONOMY.

The caption changes to "Producer: Eric Bombicino, @ebombicino."

Nam says TOM RAND, THANK YOU SO MUCH FOR BEING WITH US. I REALLY ENJOYED THE BOOK. I LEARNED SO MUCH. THANK YOU FOR SHARING YOUR INSIGHTS WITH US TONIGHT.

Tom says IT'S BEEN GREAT TO BE HERE THANK YOU.

Watch: Tom Rand: Can Capitalism Stop Climate Change?