Author David Wallace Wells on the new economics of climate

The Ideaspace publishes interviews with authors, artists, designers, economists, researchers, venture capitalists, political activists, and others working on the frontiers of value and self-interest. 

Interviewee: David Wallace Wells
Background: Author of The Uninhabitable Earth, Editor at New York Magazine
Topic: The new economics of climate
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“The conditions of possibility have really changed. The landscape used to look tilted against decarbonization. Now it's tilted towards decarbonization.” — David Wallace Wells

“It’s worse, much worse, than you think.”

This is the opening line of The Uninhabitable Earth, the bestselling and Earth-shaking 2019 book by David Wallace Wells about the climate crisis. The first time I read The Uninhabitable Earth was a life-changing experience. However bad I thought climate change was, the book explained in unforgettable detail the potential horror we might be barreling towards.

The picture remains grim, however recently things have begun to change. In the article “After Alarmism,” David Wallace Wells shares reasons for optimism: massive improvements in solar and batteries, a new paradigm for how we think about public money, and a growing belief in business and government that decarbonization will happen, increasingly for economic reasons, as came up in our recent conversation with venture capitalist Albert Wenger.

Last week I spoke with David Wallace Wells about where we are and where we’re headed. In a deep and fascinating conversation, he shared what he’s most worried about, why our wildest fears are not going to come true, and the new economics of climate. Listen to our conversation in full on Apple, Spotify, or on the web. Click here to read a complete transcript, which explores renewables, COVID, the political climate, and much more. A condensed transcript is below.

YANCEY: Recently there have been dueling narratives about the climate. Greta Thunberg highlighted a UN report showing how woefully short we are of various climate targets. But I also saw the climatologist Michael Mann expressing optimism, and you’ve written about reasons for optimism. Where are we now and what direction are we headed?

DAVID: Climate change is not a matter of mood affiliation. Whether I'm feeling slightly more optimistic or slightly less pessimistic is trivial compared to the big picture trajectory, and that big picture trajectory remains bleak. We have basically foreclosed any futures that our grandparents would have recognized as comfortable and manageable. That's not to say that we can't figure out ways to manage them and even invent ways to live relatively prosperously and justly in that future, but that's how much we've squandered the time that we've had. That's really bad.

That's my baseline, but I also used to expect that we were heading towards something that would have appeared to just about anybody alive today, even those of us who are worried about climate, as a really alarming climate future. I thought the path that we were on, and would take unbelievably dramatic global action to avoid, was something like 3°C or 4°C of warming. That would mean twice as much war, half as much food, hundreds of millions of climate refugees, $600 trillion in global climate damages — which is twice as much wealth as there is in the world today — parts of the world hit by multiple climate-driven natural disasters at once, you can go down a list of truly catastrophic outcomes. I thought that's where we were headed.

We've done a lot over the last year or two to make sure that future is looking less and less likely. We would have to really try hard to bring ourselves to that level of warming this century, or at least be really surprised by things in the climate system that we didn't expect to happen, like dramatic feedback mechanisms that most scientists would tell you aren't very likely. So both things at once are true. The pictures are still really bad and yet it’s much sunnier than it seemed a year or two ago. I would say even much sunnier than I thought was possible. 

We tend to think about big important questions in binary terms even when they're not binary problems. It's not like we're heading down one path and it’s going to be fine or we're heading down another path of climate apocalypse. We're somewhere in the middle. Our best future is an ugly muddle that will be defined by climate struggle and climate suffering, and our worst path is considerably worse.

YANCEY: The “good news” is we're trending towards two degrees of warming, but even at two degrees of warming you write that as many people would die every year from climate as died of COVID last year. That’s “good news”?

DAVID: The novelty of threat is a big part of how we process these things. It would be scary enough to say what you said about climate and COVID. On the other hand it's also the case that nine million people are dying of air pollution every year and that's a horror, it's a moral outrage, and yet it isn't exactly the central emotional or psychological or political fact of our lives at an individual level or global level. As depressing and distressing as it is to process these degraded futures, we continue to live in ways that are not defined by them even if they should be.

YANCEY: In “After Alarmism,” you write about reasons for climate optimism: 

“The second source of good news is the arrival on the global stage of climate self-interest. By this I don't mean the profiteering logic of BlackRock, which opportunistically announced some halfhearted climate commitments, but rather the growing consensus in almost every part of the globe and at almost every level of society and governance that the world would be made better through decarbonization... A decade ago many of the more ruthless capitalists to analyze that project deemed it too expensive to undertake. Today it suddenly appears almost too good a deal to pass up.” 

Can you talk about climate self-interest? Is this something new?

DAVID: Over the last year or two, for a number of reasons ranging from political movements to actual natural disasters opening people's eyes to generational change and a lot of other factors, there's been a genuine tipping point on these questions. Economic analysis is now much more sophisticated on the question of the benefits of climate action and the damages that would come from unchecked climate change. The cost-benefit analysis of moving quickly is really, really clear when you're studying it in your office at MIT or Stanford. That alone’s not enough to change the whole path of the world's economic system, but it's something. 

We now know, for instance, that we could pay for the entire decarbonization of the American economy simply through the public health benefits that would come from the side effect of decarbonizing through the cleaner air we would have. The air would be so much cleaner, the public health benefits would be so strong, that alone would pay for the entire project of decarbonization. We wouldn't have to worry about any of the other climate benefits. We wouldn't have to worry about the effect on droughts or wildfires or sea level rise or whatever else.

On top of that, because there's been a conceptual step change, every CEO in every boardroom is planning for a future predicated on at least moderately fast decarbonization. That's not to say that Larry Fink at BlackRock thinks that the world is going to decarbonize as fast as Greta Thunberg wants it to. Obviously not. Last year they announced that they were focusing on climate but they continue to invest in oil and gas. They're just pulling back on coal, which is again a reflection of the dollars and cents because coal is much less profitable than oil and gas. Yet the fact that there’s even that level of conversation and PR spin is a real cultural change. Those of us who are hoping for more ambitious movement often have a reflex to discount those changes. There's obviously reason to be skeptical and hold those people to account. But it’s also very much the case that a world in which every person of social, financial, and political consequence feels obligated to at least pay lip service to climate change is a world in which climate action is easier than one in which the majority of them don't want to talk about it. That's not to say that the battle is won. We need to do a lot more. But the conditions of possibility have really changed. The landscape used to look tilted against decarbonization. Now it's tilted towards decarbonization.

What's been remarkable about the last year of climate action is so many countries have announced dramatically ambitious climate plans totally independent of one another. They see so clearly now that decarbonization is in their individual self-interest, in addition to being a certain moral good for the world as a whole. It may be much more scattered and decentralized than anyone might have assumed three or five years ago, in part a reflection of the changes we’re talking about in which the market logic of decarbonizing is so obvious that you don't need to bully or cajole nations to get there.

We're going to be moving there no matter what we do. The question is how fast and how comprehensively. Looking at the last couple of years, personally I've been shocked at how fast the movement has already been and would not be surprised to see it accelerate quite dramatically in the years ahead. Which is necessary, because even at the pace of change we're seeing today, which like I said was unthinkable to me a few years ago, we're still so, so, so far short of where we want to be if we want to get a handle on things. 

YANCEY: I hear the phrase “climate adaptation” a lot. I have some sense of what that means in terms of infrastructure — redoing the grid, that kind of stuff. But I'm curious about the cultural and social adaptations. If you look at the teenage activists, anything we can learn as we think about how our lives and decisions are different in a world where climate is front and center?

DAVID: The thing that comes to mind – and this may be a little strange coming from me – but I worry about coming of age thinking that you’re in the midst of an apocalypse. It's inevitable that climate suffering will increase probably dramatically and that there will be much more pain in the world as a result of our inaction and delay. But I also think — in ways that we have a hard time imagining from the vantage of today — we will figure out ways of living amidst that wreckage and suffering to allow ourselves the possibility of comfortable and fulfilling lives however we define them. 

The psychological wellbeing of the climate strikers, I worry less about their resilience. They have an enormous amount of intellectual and emotional integrity. One reason why they are millennials, millennialists, or millenarians is because they see much more clearly the suffering of the world. I think that's a virtue rather than a failing.

I find myself routinely amazed by climate activists, teenage climate activists in particular. Greta’s been the clearest, most famous example, but the Climate Strike movement is led by teenagers all around the world. None of them old enough to vote in the countries even where adults have the right to vote. Some of them are in much more authoritarian environments. Many of them are from marginalized ethnic communities. Many of them are queer. These are people who are basically the least powerful people you could possibly imagine on the planet. I think of people like you and me, not to disparage your climate engagement, but we would often look at this problem and think, “Oh, it's so big. What can we do? What can one person do? What can even one outspoken public person do? It's just such a huge challenge.” Which is true. It is, and it’s intimidating to anyone who's hoping to make a difference. 

But the generation of climate strikers face those challenges at an even more intimidatingly high scale. They were even more disempowered and even farther from the levers of political power than you and I are. They were not intimidated. They had the opposite response. They thought, “I'm going to make room for myself at this table, even if there's never been room for me before and change the course of the planet as a result.” Amazingly, in just a couple of years they truly have. What we were talking about at the top of this conversation, that there has been large-scale global political activism on climate over the last couple of years, this has been led by teenagers.

YANCEY: Coming off the Texas electricity fail, there seem to be two lessons: One is that we need better, more reliable infrastructure everywhere. Two is that I as a person can't count on my infrastructure. I may need to provide for myself or be in a community with other people who can provide for themselves. How do you think about the tension between self reliance and institutional reliance?

DAVID: The only hope we have of protecting each other at a large scale is by reinvesting in state capacity. At the level of paying taxes, but also trying to rebuild our faith that government can be a force for good. There will be things that private forces do better, but no rich person or corporation is going to be as rich or powerful as the US government. If we're talking about making really dramatic, large-scale investments and changes, the most powerful actor is always going to be the state. 

It's a tragedy in many ways, not just on climate, that culturally we've so internalized the values of the Reagan‑Thatcher revolution that we distrust the capacity of centralized governments to do good and be efficient. We're living with the catastrophic impacts of that cultural change all the way down the line. Not just in the US, but all around the world. If we have a hope of responding to climate change and other inequities and injustices, it requires a return to faith in the state. That's going to require some leap of faith on the part of individuals, but also protracted, focused trust-building on the part of political leaders.

I am encouraged to see how dramatically the boundaries of economic discourse have changed in particular over the last couple of years. It used to be the case that almost every powerful government in the world advised by almost every pedigreed economist in the world would prefer a market solution to almost any problem. For a number of reasons, that just isn't the consensus anymore. There are a number of very prominent voices who take a very different approach — I'm thinking in particular of Mariana Mazzucato and Stephanie Kelton, but there are many others — and it really has reshaped the way especially people on the left all over the world are thinking. Even people on the right are talking about industrial policy in a much more comfortable and agreeable way. They're talking about deficits in a much more forgiving way. 

The total amount of money that the US has spent on COVID stimulus is now $5 trillion and it's probably going to go up from there. There's even more being spent all around the world. There’s starting to be little hints here and there of people worrying about inflation or whether we're spending too much money, but we're talking about a stimulus package that's six times the size of the biggest stimulus package in American history that was signed just a decade ago. There's much, much less drama about what it means. There's much, much more willingness among central bankers to support spending of this kind. 

If we spent just 10% of the money that we spent on COVID stimulus each of the next four years, totaling 40% of the money that the world has spent on COVID stimulus, we could decarbonize the entire planet fast enough to allow us to meet the goals of the Paris Accords. If you had said two years ago you're going to have to spend that many trillions of dollars to do it, a lot of people's eyes would have gone wide and thought that's never going to happen. But less than half of what we spent on COVID and we can secure the planet's climate ever after and alleviate the psychological suffering that we're all going through now and the real suffering that we will be living through if we don't do anything. It starts to seem like a manageable price to pay.

YANCEY: The first line of Uninhabitable Earth is: “It is worse, much worse than you think.” What would you say today?

DAVID: Honestly I would still say almost everyone on the planet is in denial about how bad climate change is likely to be. Something like a two degree world is basically our best-case outcome. Scientists would tell you that means 150 million people dying of air pollution. It means floods that we used to see once a century we will see every single year. It will mean such intense heat, especially across South Asia and the Middle East, that during summer, cities that are today home to 10 to 15 million people will be so hot you can’t walk outside on certain days without risking heatstroke or death. I saw one calculation recently that in Calcutta at just two degrees, which we’ll likely reach by 2040 or 2050, there will be 200 days of lethal heat every single year. We're talking about a world where there's some real grim, gruesome climate features and that's our best-case scenario. Very few people see clearly how much suffering there would be in that world. 

But I also think that best-case-but-still-terrible world is possible. To the extent that your nightmares are dominated by civilizational collapse or human extinction, those fears are not rational, and maybe even amount to a retreat from the demands of engagement and action. We are almost certainly going to be landing in a future in which it is still up to us and we are still empowered as a species, divided as we are by politics and everything else. It is still in our power to shape and secure the planet's climate future. The bleaker outcomes in which things get out of our control are almost certainly not going to come to pass. 

We will always retain responsibility to do more, to help more people, to alleviate more suffering. It's always uncomfortable to talk in climate in terms of “we” and “us” because it is such a fractious world, but it is ultimately up to us. That means a moral burden on each of us as individuals too.

I often think about what’s been achieved by the Sunrise Movement, and especially by Varshini Prakash, their leader. This is a group that graded Joe Biden with an F during the primary, yet made themselves so central to the climate conversation on the American left that Biden, being a conciliatory broad tent kind of politician, invited her along with AOC and a few other people to write his climate plan. The climate plan that emerged calls for $2.5 trillion in spending, which is just beyond anything that any politician, even a green politician in the US, might have dreamed of as recently as a year or two ago. It's not quite all the way to what I or Varshini or AOC might want, but it’s so far past where we have been before that even if it's compromised down, which it inevitably will be, the ultimate impact is going to be progress. 

We always have to keep in mind just moving in the right direction is not good enough because there's so little time and there's so much to do. But we also need to keep in mind that progress is still good and to celebrate it when we see it. Even when we see it in establishmentarian politicians like Joe Biden. It’s amazing that climate is now so central to the political energy of the global left and the American left that even someone like Joe Biden has become, and can plausibly claim to be, a climate champion.


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Peace and love my friends,

Yancey Strickler
The Bento Society