Radio Davos Podcast Club: ‘Zero’ from Bloomberg Green

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Robin Pomeroy: So I'm joined on Radio Davos by Akshat Rathi. How are you?

Akshat Rathi, host of 'Zero': I'm very well, thank you.

Robin Pomeroy: I'm delighted to hear from you because I'm a big fan of your newsletter, the daily newsletter from Bloomberg about climate change. And I was very delighted when you launched a podcast. So tell us about Zero, you call it Zero or is it 'Bloomberg Zero'? What is it and what what are you aiming to do?

Akshat Rathi: Yes, it is called Zero and it's by Bloomberg Green. And we are trying to build something that will essentially bring decision-makers and people who influence the place where the world is going on emissions, on energy, on politics tied to climate change, and have conversations so that people are able to grasp the complexity and the nuance of what is a very fast changing world because of climate change, but a fast changing world in all other forms as we try and tackle climate change.

Robin Pomeroy: So you're looking for explanation of a complex issue. Are you also looking for solutions?

Akshat Rathi: It is very much a solutions-focused podcast. We can talk about the problems, we will talk about the problems, and they are growing in size, scope, intensity, geographic reach.

But we've been talking about problems for quite some time and that hasn't yet led to the kind of solutions we need. Finally, though, because of the Paris Agreement and the forces that have shaped our economic future, those solutions are starting to be deployed, and at scale. And so the goal is to try and understand what are the bottlenecks. What are the major levers that businesspeople and politicians and everyday people can pull to help scale these solutions faster. Because without that, we're not going to be able to match the solutions with the problem.

Robin Pomeroy: So I wonder how you go about creating a podcast like this, because you could look at it from so many angles, from the science to the political side, the technologies... From the few episodes you've already put out, you've broken it down into, 'okay, this one is about, for example, policy'. How did you even start kind of constructing this?

Akshat Rathi: This is true of all things I do, not just the podcast. Ever since I left university after a PhD, I have tried to tell stories that I find interesting. And most of the times the things that I find interesting are between this gap where a small group of people know something that is very important and very interesting, and a large group of people don't know that thing that is very important, very interesting. And I try and bridge that gap, because most of the time those people have the expertise, but they don't always have the ability to tell the wider world that this is very important and this is very interesting and I try and bridge that gap.

Now, in climate, it's especially true because it touches almost everything that we do on a day-to-day basis. That might be at an individual level or at a community level or national or international. And breaking it down in those ways has been the way in which we've gone about building each of the episodes.

Robin Pomeroy: So your first episode, we might as well start there, was very much about policy. It was a deliberate thing. Is policy at the heart of getting action against climate change?

Akshat Rathi: It's a good point. I mean, we could have started many places. Policy was a natural place to start because it is the biggest lever that can be pulled and all people have a say in it because people have the ability to vote in the political leaders that will create policy. So, yes, it was a deliberate choice in trying to go bigger, broader and provide people with a high level understanding of how to put a framework around creating climate solutions.

Robin Pomeroy: Okay. So let's hear from Bryony Worthington. Remind us what part she plays in this whole story.

Akshat Rathi: So Bryony Worthington is a member of the House of Lords and she was one of the authors of the [UK] Climate Change Act.

Robin Pomeroy: We can hear some of that.

Akshat Rathi: One thing that many people will find surprising is that the UK has cut the most emissions amongst rich countries in the world. Its emissions have declined 40% since 1990.

Bryony Worthington, UK legislator: Yes. You've seen the lovely graph of how we've decarbonised our electricity system faster than any country on the planet. It's brilliant!

Akshat Rathi: Now, how much of that is because of the Climate Change Act?

Bryony Worthington: Oh, well, yeah, hmmm. The Climate Change Act is a long-term thing and that decarbonisation was already under way. And that's an interesting story in itself because in the late 1990s, actually early 1990s, you're starting to see privatisation of the electricity sector, which was putting enormous pressure on the nuclear industry. And so they lobbied very effectively for a support mechanism that would mean they could still compete in an open market and it was called the Non-Fossil Fuel Obligation and that was widened from beyond nuclear into all clean and that gave a market in wind. And that piece of policy really kickstarted a massive industry that's now at the gigawatt scale, through successive policies.

And it was helped by the European Union passing renewables targets, legally binding renewables targets on all member states. And the Climate Change Act provided a good framework. But I couldn't say hand-on-heart it wouldn't have happened without the Climate Change Act.

Where I think that comes into its own is ensuring that this is not just about one sector, but these are all sectors and we don't just stop at one.

One thing we shouldn't discount is the 'soft' effect. And I've seen this first hand really. A project that was being discussed by a power company was coming in with the economics of it - a clean energy project, a hydro project. The economics were marginal, but in the deck that they used to come to a conclusion on whether to invest, they had a slide on the Climate Change Act and really the message was all things being equal, given the Climate Change Act, clean power is going to have a premium in the future. So that helped tip in favour of the project.

So it's had a transformative effect of the direction of travel is clear and it's legally backed. So there's no doubting that that's going to be in place with all the political backing that it has.

Akshat Rathi: We've seen similar acts being passed in New Zealand, in Sweden, in France. Just last week, Australia's new climate legislation was passed. It's not as comprehensive as the UK's, but it's at least set a target that the country is now legally bound to meet. What have they taken on board and are there things that they've done that are interesting and different?

Bryony Worthington: The Swedish one's interesting as they've gone early, you know, they've gone to zero early and I believe that they're planning to go negative. So they've already gone beyond. Because really what countries like the UK should be thinking is not just our own flow emissions on an annual basis, that's relatively straightforward - we're not a big emitter. What we should be doing is thinking about the historic, the liability that we've built up over the hundred plus years post-industrial revolution. So we've got to be paying back and that's the equitable way of doing it.

Because if you go to a country like India and say, 'Hey, you know, we've decarbonised and now you need to.' They're like 'hang on, we didn't even carbonise. So, you know, you've got rich on the back of this, now you're telling us to stop. That seems a little unfair given our per capita emissions are tiny.'

The UK has to, I think, embrace the fact that we're going beyond zero. I think New Zealand's interesting because they've got a very different emissions profile. Most of their emissions come from land use sector, whether that's livestock or forestry. So they've have been grappling with the problems of methane and how do they really do land use well. And they've done some really interesting things. They've put some sensors into their forest to try and work out genuinely empirically which are the forest that are sinks, which are not, so that they base it on science. And that's really interesting. We're going to have to do something similar, I suspect.

The land use and land use change parts of the budgets are a little fuzzy and they're used by countries because they're not very precise. So that's going to have to be a lot more fine tuned and New Zealand's probably at the forefront of that.

Akshat Rathi: Knowing what you know now, is there a generalisable formula that you would apply for a climate act that any country could pass?

Bryony Worthington: I think there are some features. One is try to make it a technology agnostic framework, because the minute you get into picking winners at that level you get into fights. Everyone's got their favourite idea of what the solution is going to be. So try and keep out of that and put in a framework that's truly just about the outcome, not the means.

I think the probably other thing I learnt was that ambition and flexibility are correlated. So if you put a lot of ambition into something you need flexibility and vice versa. So why we have five-year [carbon] budgets is it gives government five years to sort themselves out, not a single year. And that's why we could get three of them. I wanted nine, I got three. And so, you know, there are flexibilities that make it possible for politicians or for civil servants to go, okay, we'll we'll live with this. And that's an important thing to bear in mind when you're drafting.

Robin Pomeroy: So that was Bryony Worthington from the UK House of Lords speaking on the Zero podcast.

Let's turn away from policy for a moment and talk about business, business and investment. This seems to be something you're very keen on. You've travelled, I think, to North America in particular looking for innovators, people who are finding new ways of producing goods that are usually carbon intensive. What what have you found? What are the stories that have inspired you so far or what are you hoping to find?

Akshat Rathi: It was three years after my last visit to the U.S. and every time I go to the U.S., I am energised by the sheer number of ideas being pursued to try and tackle emissions. Many of them tend to be at a smaller scale.

And so when I visited previously in 2019, lots of startups had great ideas and I was very keen on figuring out and seeing what they had built in the last three years. And I was astonished again by how big the solution set and the number of people involved in it and the amount of money flowing into it has become. And that's happened just in the last few years. And it's going to be boosted by this new climate bill that the U.S. has passed called the Inflation Reduction Act. And so I got a chance to see something like two dozen startups in my three weeks there. And you'll hear from Gabriel Kra who's a venture capitalist who invests in many different startups about why this is the right time to do so.

Akshat Rathi: The model of venture capital is to make many bets.

Gabriel Kra co-founder of Prelude Ventures: Yes.

Akshat Rathi: Early on.

Gabriel Kra: Yes.

Akshat Rathi: Risky bets.

Gabriel Kra: Yes.

Akshat Rathi: Very few will succeed.

Gabriel Kra: Yes.

Akshat Rathi: And some of those that succeed wildly will pay for the many, many failures that were funded.

Gabriel Kra: Yes.

Akshat Rathi: What succeeds? How much of that is luck?

Gabriel Kra:
That's an interesting question. I don't think it is luck. I don't think that's the right word.

Akshat Rathi: Chance.

Gabriel Kra: No, no, no. It's almost like it's not the right concept. I'm having trouble with the word 'luck', and I'm wondering why am I having trouble with it. Because, yeah, in the simplest formulation, luck does matter. It plays a role. But I'm thinking of some specific companies that I've had the privilege to be involved with. And you could say, 'Oh, they got lucky there', but then you can sort of fall back - 'what I really did was I chose the right set of entrepreneurs'.

There's a company that's public now in our portfolio called QuantumScape, led by Jagdeep Singh, and I think QuantumScape is his third or fourth successful venture, at least by financial metrics. QuantumScape still has a ways to go. But the original chemistry, the original idea for the battery was nothing about what they eventually are bringing to market now. It was a completely different set of physics principles that they were investigating, and then even the earliest iterations of the electrochemical battery that they started in on were very different from what they ended up with. So was it luck that they made those discoveries or was it an incredible team backed by supportive venture capitalists who saw that this was a team that was solving problems and pivoting and making changes that succeeded? Was it luck or was it a great team?

Akshat Rathi: So another way to ask that question then is: would the company have succeeded regardless of whether Prelude bet on it? Because the fundamentals of the company and the people and the ideas and the grit and the combination and the pivots would have happened regardless of the money, where it came from, whether it came from Prelude or somebody else.

Gabriel Kra: I think there's some people, I think there are some entrepreneurs who are going to succeed, for whom the money is just a source of fuel. I think there's a small segment of those. I think there's a much larger middle range that says, 'yes, they succeeded and yes, they probably would have succeeded with whomever backed them'. But those people, those investors, did something to help them out.

I was involved in and I'm sorry, I'm obviously going to use no names on these kind of descriptions. I held hands through, you know, six or nine months with the CEO. We were on the phone multiple times per week trying to sort out what was going on in the company. I wasn't helping with the tech, let's be clear, and I had no helpful insights into that in the least, but I was working super closely with the CEO and the founding team to help solve the problems or the challenges on the business side and on the investor side. And one of the most rewarding things of my career is when the technical founder, not just the CEO, said to me after we had this exit, he said, 'You know, we sat back and identified a number of single points of failure, and you were one of them. Had you not been there, this company would have failed.'

Robin Pomeroy: So you've looked at venture capitalists, people investing, and you spoke then to someone who's investing vast amounts of money, Bill Gates. It must have been interesting chatting to him. Is he someone who's an optimist? I'm always interested in this. People involved in climate change. Some people are very fatalistic, pessimistic, but kind of plough ahead anyway. Bill Gates is someone with an eye on technology, obviously is where he's from. Did you get a feeling from him that he thinks technology will save humanity from climate change?

Akshat Rathi: I think he's certainly a techno optimist. I would say he's also a realist in that sense where he knows that technology can help solve this problem, but there is no way it will alone solve the problem, that you need politics and you need finance and all the other pieces to move along.

But he focuses on technology because that is his strength. However, he hasn't left the other portions of the solution set just sitting on the side. And so in our chat we get into how he has built this organisation which works on policy, which works on bringing in private players beyond just his own billions of dollars that he's accumulated, but from large corporations to spend money on things like green cement and green steel. And he's now very focused on helping startups build their first large scale plant, which is the riskiest step you can take in terms of the financial commitment you have to make versus the success or failure that it might become.

Robin Pomeroy: Let's hear techno optimist Bill Gates.

Akshat Rathi: You're a techno optimist. But the scale of the climate challenge is so much bigger than anything humans have done. It requires the rebuilding of the physical economy so that it produces no emissions. You once told me when we spoke the last time that if we managed to do this, it would be a bigger achievement than winning the Second World War. But is technology the only innovation we need, or do we also need a social and political revolution alongside it?

Bill Gates: Well, I don't know what those words mean. We need more than technology because we have to have the political will. We're asking society to stop using really stuff that other than climate things, you know, that coal plant would last longer, and those jobs, and that, you know, natural gas plant and that way of making cement. We're asking society to walk away from those. Of course the more you walk away from, say, natural gas, the cheaper it'll be. It'll just be sitting there just as cheap as can be because you're trying to drive demand to zero.

Anyone who says that: tell people to stop eating meat or stop wanting to have a nice house and we'll just basically change human desires, I think that that's too difficult. I mean, you can make a case for it, but I don't think it's realistic for that to play an absolutely central role.

I mean, after all, if the rich countries completely disappeared, that's only less than a third of emissions. You know, if we all completely just weren't in that picture at all. And those two-thirds of emissions are pretty basic in terms of the calories and shelter and transport and goods being used. So the excesses of the rich country, even kerbing those completely out of existence, is not a solution to this problem. It may feel calvinistically appropriate, but I'm looking at what the world has to do to get to zero, not using climate as a moral crusade.

Akshat Rathi: But there are people who are getting louder about the idea of degrowth. They say it's a moral imperative for developing countries to grow so that they can meet their basic needs. And they argue that the planet is finite, which means developed countries have to rein in their excesses. Does capitalism, as it exists today, allow for such an outcome?

Bill Gates: I don't think it's realistic to say that people are utterly going to change their lifestyle because of concerns about climate. You can have a cultural revolution where you try and throw everything up, you can create a North Korean type situation where the state's in control. Other than immense central authority to have people just obey, I think the collective action problem is just completely not solvable.

And when people say the Earth is finite, I don't actually know what they mean. We can grow enough food. The water's not disappearing. The minerals are not disappearing. It's not a malthusian situation. In fact, other than the continent of Africa, we're actually in population decline. We reached so-called 'peak baby' in the last decade. The only reason we have population growth is not that we have more babies. It's just that life spans are longer. So there's not like some equation, like some, you know, plan B, 'it can't possibly work' type thing. That's not a problem.

Robin Pomeroy: Bill Gates talking about technology and investment. We've also talked about policy. I guess a step above policy would be politics. So you've interviewed Justin Trudeau, the prime minister of Canada, which was a live a live show. I'd be interested to know. I've not done a live podcast yet, it may well happen sooner sooner than I want it to. But how was that for you doing that, doing a live podcast interview? Was it different from just doing it on Zoom.

Akshat Rathi: At that point I was more focused on, 'Oh my God, I have to interview the leader of a G7 country' than the live podcast site, which became the second priority.

But yeah, I mean, it's, it's an interesting challenge because we spent a lot of time framing the questions because it couldn't have been [just] a conversation on stage. It is a little bit of a performance because there is an audience that is there to listen to your conversation. So you can't have the uhms and ahs and you can't have too much of the small talk.

But in being able to do that, you know, I think we ended up having some meaningful questions placed to Justin Trudeau. We know politicians have their ways around words and they have their talking points. And of course, Justin Trudeau's been prime minister for seven years. He's faced all sorts of questions, in prime minister's questions, he's faced all kinds of journalists. He knows what to say when you ask something. And so we had to ask him the same question in three different ways to try and get an answer on when will Canada peak its emissions because it's yet to do so. I really enjoyed the experience. Huge credit to Justin Trudeau. He is the prime minister of a G7 country, but he is ready to take policy-level questions from an environmental journalist and do so for more than half an hour and hold himself with those answers, even if they weren't all to my satisfaction.

Robin Pomeroy: And you didn't give him an easy time, did you? It's not just. 'Hey, Justin, tell us, your great aspirations for climate'. You were saying to him, 'Your emissions are still going up. You're exporting fossil fuels at a rate that's going up'. So you got to ask him the hard questions. And he answered like a politician, you seem to be saying.

Akshat Rathi: Yes, I mean, he is a politician. He is in power. He is responsible for answering to Canadians. But increasingly, given how much presence he has on the global stage to citizens of the world. And my hope was that I can try and place some of those questions to him and at least try and price some answers. And we succeeded, maybe partially.

Robin Pomeroy: Well, let's hear that then.

Akshat Rathi: When do you think emissions will actually start falling? Which year? Give me a year.

Justin Trudeau: Emissions in a number of sectors are decreasing. And yes, you caught me. We still produce oil and gas in this country, aren't you clever Akshat!

The fact is, we are doing more to bend that curve in more difficult circumstances than just about any other stable democracy around. And of course, when I say stable democracy, I exclude a whole bunch of countries these days. But the reality is we are on a track to hit our carbon reduction targets, to grow the number of jobs and good careers for Canadians, and to get to net zero by 2050.

Robin Pomeroy: Justin Trudeau, the prime minister of Canada, talking to my guest today, Akshat Rathi on his podcast, Zero. Bloomberg Zero. We're recording this just a few days ahead of the next international climate conference, COP27. Will you be covering that on the podcast and elsewhere in your journalistic endeavours?

Akshat Rathi: Absolutely. So we'll be going to Sharm el Sheikh in two days time and figuring out where we are staying and where the rooms are to record and where the meeting rooms and where can we get lunch and all those things. And it's going to be a long two weeks. I've done a COP meeting last year in Glasgow and we know those are 12, 14 hour days.

And the topic of discussion at this COP, the main topic of discussion is going to be around this phrase called loss and damage, where rich countries promised and signed on to a pledge under the Paris Agreement to compensate developing countries for the losses and damages caused by climate change. That was in 2015. Nothing has happened since.

And what happened in summer with a third of Pakistan under water, what's happening right now in Nigeria, which is still large portions of it, are under water. It's really caused those countries and advocates for those countries to try and put pressure on developed countries to finally come up with a loss and damage facility even if they don't put money on the table. If there is a structure to be able to allow for that compensation, it would be a big step forward.

Robin Pomeroy: Now, how will you do stories on a podcast about COP? Because you'll have Bloomberg there with my former employer, Reuters, all running around. I've done several COPs as a reporter. Real time news, timed to the second. You're not going to do that for for a podcast. So what's your approach to making a programme?

Akshat Rathi: Absolutely. Podcasts are a very different form of being able to do journalism. So the goal is to try and bring people into the tent. We have a large presence in different reporters coming from different regions within the Bloomberg family onto Sharm el Sheikh. And so the goal would be to do maybe 4 to 6 episodes from on the ground, publishing roughly on an alternative day basis, and have some of those journalists at the top bringing people inside the tent, giving them the gossip and the scene of what it is to be at such a meeting, and then go into a talk with a guest, an expert, somebody from Bangladesh or somebody from Barbados or somebody from the United States, which are all guests that we've lined up already. It's a place where everybody comes. And I'm hoping that we'd be able to give a wide variety of views and diverse opinions about where things are headed.

Robin Pomeroy: So as the podcast progresses, do you have in your mind a dream guest who's the person you would most want to interview?

Akshat Rathi: Oh, it's very hard to say one person, but if I had to choose only one person, I guess I'd bring on David Attenborough to talk about his conversion from being a broadcaster to now, I think being a campaigner very late in life. But now he appreciates it more than ever, and he has influence even now on a huge number of people. So I'd love to know about how that happened.

Robin Pomeroy: Well, we'll look forward to that episode. I assume you invited him. That sounds like a great one. I can very much recommend to my listeners Zero. Check it out wherever you get your podcasts. Akshat Rathi from Bloomberg Green, thanks for joining us on Radio Dallas.

Akshat Rathi: Well, thanks so much for having me.

Robin Pomeroy: Akshat Rathi's podcast is called Zero. This podcast is called Radio Davos. If you liked it, could you please take a little moment to leave us a rating on your podcast app? It really helps us reach a wider audience.

And if you love podcasts, please join the conversation on the World Economic Forum Podcast Club. Look for that on Facebook. This episode of Radio Davos was written and presented by me. Robin Pomeroy. Studio production was by Gareth Nolan. We'll be back next week. But for now, thanks to you for listening and goodbye.