Transcript: Global Climate Compensation

Interview with Henrik Nordborg

Transcript of episode with Henrik Nordborg.

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[00:03:28] Rachel Donald: Well, Henrik, thank you very much for joining me on planet critical. It's a pleasure to have you on the show.

[00:03:32] Henrik Nordborg: Okay, thanks for having me.

[00:03:34] Rachel Donald: Could you give a whistle stop tour of your career? What you've been working on, uh, before we come to the main topic of today?

[00:03:41] Henrik Nordborg: Uh, yes, of course. So, um, my background is actually in physics I'm, um, did a PhD in theoretical physics at the, uh, Swiss federal, um, Institute of technology. So it's the ETH in Zurich. And, um, then I moved to industries. I worked for 10 years in the private sector. Um, eight of those years with ABB, which is a big engineering power company, uh, which gave me quite an insight into how the energy sector actually works.

And now since 2010 or so, I'm at the engineering school in Switzerland where I'm responsible for the curriculum in renewable energies and environmental technology. And I started giving public, uh, climate lectures some eight years ago. And, and the reason was really because I didn't really know what to tell my students anymore, because I mean, you, you are, you're standing in front of like young people, early, mid twenties, and these are people are supposed to have a bright future ahead of them.

And I was really, uh, questioning whether what I'm telling them, because basically we're teaching the same thing we taught 20 years ago. And is that the relevant information? And then I thought, I, I, I have to tell, tell them something about what really matters. So I started give public lectures and the global climate compensation grew of that because I realized you can't- I mean, giving a lecturer, tell people that we're all gonna die is not really very helpful. You really have to start with, with some plan or some idea how we could fix this mess.

[00:05:19] Rachel Donald: Absolutely. I think, especially with the kind of role that, um, academics play in society, like being held as the most knowledgeable, if you guys start saying that it's game over and we're all gonna die, then it it's, uh, quite a disempowering message.

[00:05:35] Henrik Nordborg: Exactly. I mean, you can't do that. I mean, you have a responsibility, but you also have the responsibility of telling the truth. I mean, you can, you can be hopeful, but you should not, um, you should not, uh, try to hide the, the, the truth that we are, we are in a very difficult situation. And, and that is actually my feeling.

I mean, the problem I have is I think we can, I do believe that we can solve the problem. If we all get together, it's like all hands on deck and we all need to pull in one direction, uh, how to get, make that happen. That's completely different story.

[00:06:16] Rachel Donald: Mm. What, at what point in your research did you become aware of the, the extent of the problem?

[00:06:26] Henrik Nordborg: Well, I mean, it was, I mean, the extent of the problem is I think today fairly obvious. Um, I mean, first you see it with a naked eye, but if you look at the statistics, you look at how the carbon dioxide concentration is actually not only increasing, but it's increasing at an accelerating rate. I mean, it's actually growing faster and faster, then it's clear that at some point, I mean, it doesn't really matter where the limit is, but because as long as it's increasing, we are going to hit any limit.

So, and at some point life will not be possible anymore as... so, um, I mean, that was fairly obvious, but what I really, what really shocked me was really was that there were surprisingly few plans out there with, with that were sufficiently ambitious and sufficiently, uh, uh, that really targeted the, the, the real problem.

And I, I started making this comparison, I think it's actually quite a good comparison. So imagine we are all on board, a cruise ship, which is sinking. So there are like holes in the hull and we are taking in water at an increasing rate. So the scientists are trying to figure out how much water the ship can hold before it sinks. And the engineers all working on trying to design pumps that could keep us afloat even while we are taking in water. And the economists are basically trying to keep the casino open. And surprisingly, nobody is thinking about plugging the holes and actually it's even worse because we are actually paying fee people for drilling new holes. And if you, if you, I mean, this is a very good comparison because carbon, after all, climate change is caused by the fact that we have drilled holes into the crust of the earth, and we are taking out coal and methane, coal and gas and oil outta these holes. And that ends up in the atmosphere. There's no chance of preventing stopping climate change unless we plug these holes. That is simply out of the question. We need to close down all coal mines, gas wells, and oil wells in a foreseeable future as quickly as possible.

[00:09:04] Rachel Donald: If, if I may jump in here, the tricky thing of course is when looking at the, the, the, the system's perspective of it, which is, and I think so many scientists are reaching this sort of like glass ceiling of thought, which is well, okay, we know that we need to shut down the oil and gas industry, but what impact is that gonna have on our food systems or on people's access to universal basic services, on poverty?

[00:09:29] Henrik Nordborg: Exactly. And, and this is what at least got me thinking. And, and why I, I made this suggestion about, uh, global climate compensation, because I mean, the very, the devil is in the details. And if you, you can think about what we have been trying so far has been to say, let's try to reduce the demand for fossil fuels by making renewable energy available.

And that hasn't really worked. I mean, it's not going fast enough, we know that. But I think there is also fundamental problem, which people do not talk about. And that is that a large part of a world's population lives in energy poverty, still. There is really no upper limit to the amount of energy we can use.

I mean, I think the energy market is supply driven. The more energy we make available, the more energy will be used. And that of course has been the problem in the past. Now, yes, we have been building a lot of renewable energies, but total energy demand has been increasing faster, so it hasn’t really solved the problem.

[00:10:44] Rachel Donald: I found this to be a very interesting part of, um, the, the proposal that you've put together, that key detail that no matter how much renewable energy is still being built, the, what we're using in fossil fuels is still increasing because, um, supply overall is increasing. And I think that that that's a key detail that needs to be broadcasted more.

[00:11:05] Henrik Nordborg: I think so that, that is a very important point. So I think that is a fundamental flaw in this thinking. I can, of course understand why people, I think it's this approach is, is mainly motivated by the fact that it's very convenient because I mean, it allows us to stick to the narrative of growth and innovation, et cetera. We're going to fix this problem with through growth and innovation. And it also avoids a direct confrontation with the oil industry.

[00:11:35] Rachel Donald: Yeah,

[00:11:36] Henrik Nordborg: Um, so it's, it's the would be the easy way out if it worked.

[00:11:42] Rachel Donald: The transition.

[00:11:43] Henrik Nordborg: Then on the others. Exactly. Then the other way you could do, you could of course try to reduce demand and that, or, or supply.

And that is of course what some environmental organizations, there is in German, this Ende Gelände there who try to block the coal mines and, and you try to block the, the oil wells and oil transports, et cetera. And again, that sounds like a very good idea. You, you, you should do that. Uh. However, it's not that smart actually, because if you reduce supply, what will...

I mean, first it would be very difficult to do that. I smell lawsuits. I mean, these companies will try to defend their right to produce oil and gas and coal. Secondly, if you reduce demand or the supply, then of course the price will go up. So that means that the companies that are still in business, they will make a killing. They will earn a lot of money.

And secondly, the high prices will of course be a real problem, especially for poor nations. So again, you have a basic, fundamental flaw, flaw with this approach. I mean, we can't simply stop producing oil because we depend on it. I mean, very many people, our food production, our food distribution systems, they depend on it.

So therefore I thought, okay, i, I think we need two things first. It is much better to, it's much more predictable to say let's introduce a global carbon tax instead, because if we do so we, we know what happens. I mean, we, there have been fluctuations in the oil price in the past. Um. We know that if we increase the, the, if the oil prices arises by $40 per barrel, that's, that is annoying. But I mean, the world economy doesn't collapse because of that, because that has happened in the past. And if you combine that with a redistribution mechanism, that actually makes sure that the poor nations are compensated or poorer people, people who are, vulnerable people, I perhaps should say, then I think that will not be such a big deal and then we'll have to ramp up this price, this, uh, tax or price or fee, whatever you want to call it, uh, gradually to see what, what happens.

[00:14:13] Rachel Donald: Let's clarify then. So this is, this is the global climate compensation plan. It is at heart, a carbon tax with a built in redistribution program. So the wealthiest pay for, um, their use of fossil fuels and their use of putting the planet at risk. And then at the same time, the money that they pay into that fund is distributed towards the world's most vulnerable people, nations, so that they can, what, begin their own transition?

[00:14:44] Henrik Nordborg: Yeah, so that that's the core and, and it's, the intention was to make it as simple as possible. And, and one key element is of course that the carbon tax should be paid directly by the producers of fossil fuel. And I think that is a very important, uh, feature for two reasons. First, because there are very few companies that actually are in that business, there are about a couple of hundred companies that actually extract and produce fossil fuels.

So it be, would be fairly easy to tax these companies. And the second point is of course, that, um, it's much easier to tax production than to tax emissions. I mean, companies don't want to measure their emissions because they know their, if I measure their emissions, they will have to pay for it. So, I mean, it's, I mean, an airline most, well, I mean, it, it is like that, most companies try to sort of hide their emissions.

Um. The carbon that the fossil fuel companies produce that is of course their production and they have to measure their production because that's the stuff they sell. I mean, they actually in the business of selling carbon. So, I mean, there's no way, there's no way around this. So that would made, that would make the whole thing very manageable and very easy.

I mean, of course you have to sort of enforce that, too. I mean, I, I don't believe that these companies would volunteer to pay this fee, but I mean, it, it's... the enforcement problem seems reasonable if you could do it like that. And then the other way is of course, to-

[00:16:25] Rachel Donald: Sorry, Henrik, there's a, there's a very slight, like one and a half second delay, which is what I don't mean to keep talking over you. Um. There, the thing that I particularly like about production taxing production, rather than emissions as well is you can't offset production. You can't say, oh, well, yes, we might produce this, but this other company didn't produce this and whatever, because obviously what we're seeing with the carbon credit market is exactly the offsetting of emissions, which is just the financialization of the, of the crisis and really quite disastrous for any attempts at progress or addressing the, the issue. So I feel like this almost bypasses that that potential problem.

[00:17:02] Henrik Nordborg: Yeah. I, I think it does. I mean, this is a significant, um, it, it will, there's no way around it. And then of course it is, it is also clever use of the market forces because, um, or the, the way markets work, because we are not telling the, I mean, the, the fossil fuel companies will probably not pay this out of their own pockets.

They will pass the higher cost onto their customers. So at the end of the day, it will be the person who burns the carbon, who actually uses the carbon and can't pass it on, um, who actually pays for things. Uh. And that is of course very important because I don't know if you know, there's a big discussion about the Chinese, the emissions from China.

On the one hand, China is emitting a lot of carbon carbon dioxide, that is, that's given. On the other hand, very much of this is, is caused by their production of stuff of industrialised world. And of course, they then argue that why in a way, why should we pay for that? I mean, it's consumers in the west that should pay for this.

If you use this carbon price, what will happen is of course the Chinese manufacturer will have to pay more for his fuel for his energy. And he will pass that cost onto the, to the, his customers. So at the end of the day, it will be actually the consumers in the west who pay for the, or the consumers everywhere who pay for the carbon footprint of a product, regardless of where it was produced, which is quite clever.

[00:18:47] Rachel Donald: This is something though that this was the first thing when I was reading the proposal that I wanted to stick on and discuss, because we're seeing a kind of, um, um, we're seeing almost like a practice round of that, uh, difference in price and how it's affecting people in the west due to Russia's invasion of Ukraine.

So the speculative market has just gone absolutely out of control and even in a wealthy nation, like the UK, there are people that are, um, terrified about the ability or not to heat their homes this winter. Um, we're worried about the effect on food systems on, on production, all this kind of stuff. So even in wealthy nations, like at the UK, the USA, we do have a class of very vulnerable, poor precarious people.

Therefore surely, you know, creating a system whereby it's the end user that pays in the end. I mean, isn't that just gonna hit the most vulnerable first?

[00:19:47] Henrik Nordborg: Um. It definitely would be without this redistribution mechanism. So, um, the point is of course that every nation would then get a payout from this fund and it's, it's a fairly... so I did this calculation with a hundred dollars per ton of carbon dioxide just to get some numbers. And, and then of course the idea was that if you redistribute this, if, you give it back on a per capita basis, every human being gets like $450 U.S dollars per year. Uh. But that's of course, assuming you distributed evenly.

That that's a lot of money for poor nations for like, for countries like Bangladesh or Sudan or so that would be, have an enormous impact. In great Britain, I don't think, or in the UK you would probably give that money to, to the vulnerable. Hopefully. 

I mean, this is a political decision that the UK government will have to make. Of course, um, I didn't want to get involved there because I mean, you can't solve all problems. I mean, the point is that every nation gets a significant sum of money from this fund, and if they do not decide to use that money for, for protecting the vulnerable, well, sorry, I can't help.

I, I mean, I think, but I, it is an issue, i- of course it is an issue. But this, this, um, this issue gets even worse if you look at the global perspective, of course, because I mean, even the poorest in the UK are of course, fairly well to do compared to the poorest people in, in like many parts of Africa. Absolutely.

[00:21:41] Rachel Donald: Yeah, I, I, yes, absolutely. I mean, you know, in, in the west, we're all the 1%. Um. But still, I mean, it's, it's a really, really big "if". Because if, if the governments that we have already are not doing what is necessary to be equitable, to be fair, or to be climate conscious, um, could this not be another model then that would end up being capitalized upon, by the wealthy to maintain their own lifestyles, whilst the most vulnerable around the world are hit? Because I mean, even look at other nations like India, these con, or Saudi Arabia or Malaysia where the elite are incredibly wealthy. They have such a wealthy elite class and they're not redistributing anything amongst their own people. Um. So this is, this is my concern, when the "if" is, well, it's on governments to do the right thing. And I know that obviously you're a physicist, you're an engineer, it's not your job to solve all of the problems. Um. But is there another policy that we could - like, what would we need to implement at the same time as the global climate, um, global climate compensation fund to ensure that it was used in the most effective manner?

[00:22:53] Henrik Nordborg: Um, I mean, that is a very important and relevant point. I mean, I, I, I, I would like to point out of course, that the good thing about this plan is that it makes the, the, the amount you, your, the increased living cost that you have will be, of course, the increase will be proportional to the amount of your carbon footprint.

And of course, rich people have a larger carbon footprint. One of the big benefits is that even the, the billionaire at The Bahamas, uh, in The Bahamas who has like his luxury yacht and his, um, his private jet, there's no way to get around this, that there will be no tax loopholes from this tax. If you, if you use car fossil fuels, then you pay regardless of where you live.

So I think that is actually a good thing. The, the other thing I, I was, I mean, again, as you said, I'm, I'm a physicist. I didn't want to get too involved in this. I, I had this feeling that... I mean, one of the problem, this game is, one of the problems, if we don't have a world government

I thought if you want to make this plan palatable to, to governments everywhere or to, to vote this everywhere, if you say, if, if you say you give, you redistribute the money with, with no strings attached, it would be easier than to say we, you will get the money back under these and these conditions.

I mean, trying to try to get the Republicans in the UK to say that, and United Nations will now decide where the money goes. I don't think they would like that. I'm not saying that the other approach is going to... there will be problems. Yes. But I mean, at, at the end of the day, the only, the only societal... we don't have a world government.

And it is as simple as that there are functioning governments, government systems, democracies out there, and I think for many of these countries, they would probably use this money in a reasonable manner. Then, then of course there would be problems with, with, with, um, some countries. But I, I made this point in, in this, um, in the paper I wrote that, um, we are not appealing to their altruism.

That's at least a good thing. So you could of course say we take some, some corrupt country and the government says, okay, The, the price of fossil fuels will go up. We take all the money and, and build, build swimming pools and, and, and large villas for the elite, et cetera. I mean, that, that could happen. Um. But it would be kind of suicidal because as the price increases globally, many countries will try to decarbonize.

And that means, of course, that the, the revenue, the money that flows into this fund would actually decrease over time and being energy efficient, or have a low carbon footprint, would actually be necessary to be remain competitive. So if I don't use at least part of the money to decarbonize their economy, after a couple of years, I will simply not be competitive anymore.

So I think that there is a really a selfish reason. I mean, the hope is that this will create this dynamics, that, that for, for purely selfish reasons, countries would start to decarbonize.

[00:26:38] Rachel Donald: But doesn't that assume a certain, uh, long-termism in these people's thinking that currently is unavailable because they're not only committing suicide with their current ways of governance and a policy, but they're also committing mass murder.

[00:26:55] Henrik Nordborg: Um, yes. Uh, it does. I mean, the, the, the thing is, um, but that I think is also an argument for this plan. I, I don't know. I, I, um, that there is this brilliant book. I think it's, it's really astonishing, 'The Affluent Society' by J K Galbraith. And it's really amazing book cause it, he wrote, he, it was published in 1958 and he writes in this book that, I mean, obviously capitalism is the wrong system for the problems we have today.

Which, I mean, many people are saying today. He said it in 1958, which I think is quite impressive. And, and one of the things he talks about is the conventional wisdom. He, he got quite famous for this. So conventional wisdom is the things that everyone consists of, the things that everyone believes believe in, even if it's not true.

So, uh, like the, the, um, economic growth. I mean, everyone is supposed to believe that we need economic growth and it has to go on forever. Of course, everyone knows that, that it cannot go on forever, but that's not acceptable. So he's, he makes this point that the conventional truth consists of what is acceptable to say, not what is not necessarily or what is true.

And, but then he says, and I think that is an important point. He says that the enemy of the conventional wisdom is the march of events. Uh. That things don't change because people suddenly become more clever or more rational or more and more altruistic, whatever. It changes because suddenly it is impossible to keep up this conventional wisdom. And I think it's an important point. 

I made this, um, comparison, if you think about the scientific revolution and, and the reformation in the 16th, 17th centuries, which was about breaking the power of a Catholic church, I think one important aspect was, of course, that this coincided with the European expansion when Europe started conquering the world.

So Europe needed a way to circumnavigate the, the globe and, and, and cross the oceans. And for that you need navigation and navigation needs modern astronomy. So it was not possible to keep up the old worldview anymore because it was simply not compatible with reality. And this is why I think, I mean, I, I totally agree, agree with all people who] say, we need to fun- fundamentally, we have to rethink our ways completely. I, I'm also convinced that we need degrowth. I'm just skeptical that people, people decide to do that without feeling a real pressure, uh, to do so. I mean, it..

And on the other hand, I think people are really good, that people are very adaptable and very good at rationalizing things. So we know that, I mean, we, we, are we in a way, this is a problem. We have it because people are getting, in a way we are getting used to climate change, we're getting- people adapt. People, I mean, you, we used to be able to do that, but now we can't do that anymore. Okay. So let's do something else instead. And, and we don't really see that this is a fundamental problem. But I think one could turn that to our advantage and say, so if we now, suddenly it becomes too expensive to fly because, uh, you can't fly on vacation because, um, the fuel prices are too high. I don't think most people will go around, like sit around for weeks bemoaning the fact that they can't afford flying. And most of them will say, okay, so let's do something else instead. So it, it is about creating a reality where the rational choice will be to stop using fossil fuels. I mean, then that's, that's what I hope that this plan could actually achieve.

[00:30:57] Rachel Donald: It's so, um, interesting how few companies there are that are producing fossil fuels, couple of hundred in the world. I mean, we, we know and we see that there definitely is a, uh, a system of, uh, elites and a system of wealth that pushes levers around the world and, you know, tend to get their way, the oligarchs

But that just seems like a much more manageable kind of vision. Like you print out 300 names of these companies that are essentially putting the entire planet at risk and whether or not that- and I think in that respect as well, it's all right to isolate them outwith the concept of like, well, you know, they support the food system and da da, da, da.

It just seems like so much more manageable to think about them and their actions than about climate change as an abstract concept that is going to, you know, set the world on fire in 2030, which I think is what is exciting about this proposal.

[00:32:01] Henrik Nordborg: Yes. And I, I, I also think I was inspired by, um, he's a German, I think he's actually historian, philosopher, author Harald Welzer. And he made this point that, I'm not an, I'm not an expert in activism, but I really have a feeling, a strong feeling that in order for activism to be effective, you need to have a very clearly defined goal and a clearly defined target or enemy.

So you saw that with a climate strikes, uh, everywhere. So one of the demands was they wanted like the, the local city or a country or whatever to declare a climate emergency. And now you can say that's like more greenwashing and didn't really help much, but at least that that happened because it was a clear demand and it was something that politicians could do.

Um. It's very difficult to go on the streets and, and demand that the politicians solve a climate crisis because it's like, it's okay. What do we do now? So that is another aspect. I think by, with this idea, it is first a very small group of companies, as you say. I mean, the, so the target, the enemy is, is well defined and, and we know where they live and what their names are. So we can, I mean, you can put an enormous pressure on these guys. And secondly, I think it is a reasonable ask. 

I actually once met, uh, a guy from the management, uh, team of Shell. It was some event many years ago and I was a bit naive about it. And I asked him what he thought about this idea. And, and he said, basically, well, I mean, if, if the rules are the same for everyone, I don't see why Shell should have a problem with that. Um. And then of course, because at those days I thought there were like the five big oil companies that, uh, ruled the world. But he then, uh, explained to me that they're actually more than that, that many of these or state owned and that is a problem.

Uh. So, um, it might not be so easy to, to do it, but I thought it was interesting because it was like not, I mean, it's a demand that I think every corporation would know what to do with. I mean, it's not, it's not that it would difficult to implement. I mean, for them it's easy, then they measure their production anyway. And if they now are forced to pay a fee proportional to their production, I mean, it's easy. I mean, the, for their C, C, for their finance CFO, I mean, you just have to add that to the cost and then, then they have to calculate the new price they have to sell their oil barrels for, and then, then their own business again.

I mean, it's nothing, they, I mean, they can handle this demand. Of course, um, they're not going to do this without pressure, but I mean, it's, it's a clearly, it's a clear, well, well defined and well formulated demand, and it's clear who has to act and it's clear what they have to do. And I think that is a very important aspect.

If you want to be successful with activism, then of course you have to build up an enormous pressure on these companies to actually do that. But that, that's another topic.

[00:35:21] Rachel Donald: What impact would this plan have on the renewable, uh, industry? Because if the cost would be offset eventually to the renewable sector, whoever was buying it, because fossil fuels, we need them to, to decarbonize the economy, that's sort of the great irony. Um. Renewables that, yes, the price is going down, they are attracting increasing investment, but they are still such, such a small part of our world energy infrastructure. Could this have a negative effect potentially on the renewable industry? Could this scare people off for whatever reason?

[00:35:55] Henrik Nordborg: No, I think it would, I think it would definitely have a positive effect and especially... the important thing is that, um, the, the price has to be, they have to be able to plan for this price increase. So what one would have to do is you have to define this price globally and also probably define, uh, and, uh, or fix the rate of increase. So you say, this is now, so this is now the common price, and this is now going to increase by 20% annually, so get used to it. Uh. 

Then, of course, people would start planning ahead. And I mean, when I talk to, I talk to a lot of people in the power, power industry and, and um, to them, it's, it's fairly obvious. They, they, you invest in currently in many countries, the situation is like this: you, they have to sort of guess what the future will be. So, I mean, you, you invest in a wind turbine, so you, you have to CA pay some, some millions or whatever for, for that. And then you have to calculate the return on investment. 

And today it's kind of, it's not very large. The payback time is very long. And you have no clue what is going to happen with the energy prices during this time. And that makes it a, a, not a very safe investment. I think it, if it were clear that carbon fossil fuel prices are going to rise, so we can, we can, it's, it's a given that the energy price will go up and if we want to build it, we should probably build it now, because as you say, we need fossil fuels to, to build these things.

So let's build them as long as fossil fuels are affordable and then we can cash in later. I, I'm convinced that this plan would be enormous boost for the, uh, renewable energy sector.

[00:37:58] Rachel Donald: That's great to hear. What, what, um, do you, you've mentioned a couple of times we don't have a world government and certainly when thinking about this plan and implementing it and to get the best out of it, it would be wonderful to wield an altruistic and benevolent fist and force all of the countries in the world to redistribute wisely and for these companies to pay up. Um. Do you think that, um, and I know this isn't your realm necessarily, but do you think that's something that we should be looking at too?

If we set up a global climate compensation, do we also set up an international climate tax body to attempt, um, to make this plan as effective as it can be?

[00:38:43] Henrik Nordborg: Yeah, I mean, and there would of course have to be some monitoring and, and I don't, I think the administrative effort would not be very large because it really is. I mean, you have to monitor these couple of hundred companies that produce things and, and that can be done. Um. Of course I believe that could be a good role for the United nations to do this.

So, I mean, it, it, there is a body that is responsible for this with United nations, but it's, I mean, you, you do not have to do that much because the rules are quite simple. Um. Then how to get the, the countries to participate. I mean, I could imagine that one could of course put up one way of implementing it and, and of course this is out of my realm, but I, I could, of course I could imagine like, assume European union say, okay, this is a good thing.

So we will say we are, will only, I mean, first we will force our oil companies to join. So like Shell and BP, the thing, well now BP is not in, in the EU anymore, but anyway, I mean, um, the, the, the French ones would, would perhaps be forced to participate. And then you could say, we are not, we are going, only going to buy from oil companies that, that support this plan or are part of this plan, and we are going to pressure. And if they're not part of the plan, then we will simply charge them and they will have to pay an import, uh, fee when, or we will sort of tax them at, at the, at the ports instead when they deliver to us. 

So I think it could be possible to do it that way and, and trying to then, so you basically say, uh, we only have, we, we prefer to trade with companies and countries that support this plan and if they don't, then we, we would basically tax him at the border. Could be one way of doing it.

[00:40:50] Rachel Donald: There's quite an interesting split, I think, geopolitically happening right now because, um, the global south, I think generally speaking would be very much on board with, um, having some of the wealth in the world redistributed back to them for very often the plundering of their own resources and the chance to transition or, or decarbonize, or just even for some of them, get their hands on some more money.

Uh. The global north, I think Europe with the kind of progressive image that it's branded itself with since World War 2, Europe probably would be on board. The UK and the USA, I can see them having very big, uh, temper tantrums about something like this, um, to protect the free market.

[00:41:37] Henrik Nordborg: But, well, I'm, I totally agree with you, of course. And then I, I was actually thinking, I, whether everyone should still use these terminology, the global south and the global north. You should probably talk about the exploited and the exploiteers or something, because that, that's basically what it is.

Um. And I mean, we're of course, the, the point is, I think this has been the fundamental problem with all these climate negotiations, anyway. That, I mean, we have, you have this split, you have the countries that have gotten enormously wealthy from the use of fossil fuels in the past, and they're still using enormous amounts of it. And if they... 

I don't see a solution to this problem that allows us to remain up there and, and forces the other poorer countries to remain poor. I mean, that, that is the basic problem with the climate negotiations. And you have the same problem- i, I, some while ago I actually started reading at looking at the sustainable development goals and, and you have the same kind of problem there because I mean, they talk about they, they want to lift everyone out of poverty, etcetera. And then you realize goal number one is growth. They have growth and why do they need growth? Because if you want to lift people out of poverty and you don't have growth, that actually means that then the rich country would have to share their wealth. And we don't want to do that. So I mean, this, this growth was put in the by necessity.

So they basically said, so let's, uh, yeah, we are not going to give away anything, but future growth could, we could allow these countries to have a bigger part of future growth and they're never mollified. And, and this is the same kind of self deception we are doing with the climate problem. I mean, if, to try to find a solution to the climate crisis, which doesn't involve, um, involve the rich countries, the countries who I, I mean, definitely have contributed the most to the problem, that doesn't force them to pay the most, I think would be very difficult. I think at some point we have to accept this reality. 

That is of course also what Jason Hickel is talking about. I saw recent tweet about him. I mean, solving the climate crisis means degrowth for the rich countries. I mean, there's no, no question about it. And um, I think we have to be honest about that. Then the question is how to implement it and, and I'm sure, I mean, I've given my suggestion. If someone has a better plan, I'm fine with that. 

[00:44:40] Rachel Donald: Could you lay out, because this is using the market forces in order to implement climate justice and in order to, you know, attack the fossil fuel industry, essentially, could you lay out a little bit how you would see this fund then transition into a global de-growth economy? Um. After the vast majority were decarbonized and the fund was getting smaller and smaller annually?

[00:45:04] Henrik Nordborg: That's, that's a very good question. And I'm, I'm, uh, I think that is also one important point here. I'm not, I'm not, I'm, I'm personally not totally in favor of the term degrowth, because why... After all, We, we are better off than our grandparents. I mean, we live in a society that, I mean, materially, I wouldn't want to live like, uh, like my father grew up in, in, in a farmhouse that was connected directly to the stable and, and they didn't have running water and they didn't have, I mean, it, this was tough life.

So there has, of course, been progress. And I think the problem in the past has been that when we look at economic growth, this has consisted of some level, there's certainly some amount of innovation and clever thinking there that we actually have gotten smart and we have invented things that are actually better.

Then the bulk part has been simply exploitation of natural resources. And we have not managed to separate this, which I think is a big problem. And I think what people have, people are scared with degrowth for one. One of the things that scares people with degrowth is that like, are we not supposed to be innovative anymore? I mean, what if I have a good idea that that is really good and it doesn't use resources. Wouldn't, shouldn't we allow that idea? 

And of course the market economy has worked quite well in the past of sort of promoting and making sure that good ideas have been turned into product. So, uh, what would happen with global compensation is of course that if you have a business model or you build a product and somewhere in the supply chain, you use a lot of fossil fuels.

That means that a large part of the cost, manufacturing cost of this project product, or will be, uh, the, the, the carbon tax basically. And you will basically, if your product depends on fossil fuels, you will be forced by the system to share the profits with every other human being on, on the planet. That is basically what is happening.

So you cannot make a profit. I mean, eventually you can still use fossil fuels and, and I'm sure we will continue to use fossil fuels for certain applications because it is difficult to replace them, but it will not be possible to make a profit. You cannot make a profit from fossil fuels because if your product depends on, is very reliant on fossil fuels, then, um, you will share the profits with the rest of world population.

And I, most people are probably not willing to do that, so they will stop or try to get out of that. That's my hope at least.

[00:48:02] Rachel Donald: I think, uh, that sounds great. um. Again, the thing I'm imagining is like, right, okay, so do we need an international body of something in order to, to police all of this, essentially, and that's not a verb that I'm quite comfortable using with the climate crisis either.

[00:48:21] Henrik Nordborg: Yeah. Um. Yes, but the policing will be limited to policing the, the fossil fuel companies in this case.

[00:48:28] Rachel Donald: Hmm. It's so funny when people talk about the, uh, the, the, the market economy, even what you're just saying about it driving innovation and everything. I think we've gotten to such a grotesque stage of, of, of late stage capitalism, where like the market economy is hindered by the very essence of hereditary wealth and how much of it, like the market economy would be better and work much more effectively if redistribution were a part of its, um, its set up.

[00:49:01] Henrik Nordborg: Totally. And I think this is what, um, Yanis Varoufakis talking a lot about that. That, I mean, the, the important role of the government is really redistribution because there is a basic flaw in capitalism and that is that wealth attracts wealth, money attracts money. So there is sort of a built in, um, instability in the system and the, the, one of the prime , uh, tasks of the government is to redistribute that.

But I mean, this is, um, this is also a good point. I have at least come to the conclusion that there's not, the market economy is not fundamentally flawed. But the condition is, of course, for a working market economy. Then we have to make sure that every human being has enough money to participate in the market economy and has enough money to buy what is essential, what, what their essential needs, to cover the essential needs in the market economy, if it can provide that. And this is why I also think these ideas with universal basic income, et cetera, are very, very interesting because as long as we pro, manage to provide that, then I don't see a fundamental problem with the market economy.

[00:50:21] Rachel Donald: Well, also all research is shown that wherever they've introduced a UBI universal basic income to, uh, experiment with it, it's driven innovation and entrepreneurship as well as quality of life and access, you know, so it's actually a massive, uh, proponent of the market economy. It's just, uh, more fair. Um. And so, you know, the heavyweight capitalists aren't keen on it.

I wonder then if this, because there would be no strings attached to the global climate compensation fund with the, the redistribution, some countries then could choose to use that to implement a UBI or invest in healthcare or invest in renewables. So what I think is interesting as well, very much so about your proposal, is that it allows for a diversification of investment, which we need from a systems perspective to kind of attack like the multiplicity of the climate crisis, because it's not just, you know, carbon, it's also the economic inequality and energy and equity and all those sorts of things.

So depending on, uh, a government's national interest, if it has the interest of the best of its people at heart, um, it could redirect that money where it needs rather than being forced to implement it in a, in a certain industry.

[00:51:33] Henrik Nordborg: And I, I think this is of course... um. It seems fairly obvious that if you want to be serious about decarbonization, we have to take lots of money out of the fossil fuel sector and, and, and invest it elsewhere. And this is what this plan does. 

And I mean, the funny thing, what really shocked me was that I, I did this calculation for, for 100 dollars per tonne of carbon dioxide. And you realize, I mean, that that's turns out that we will then redistribute 3.6, uh, trillion, which is a significant amount of money. So three, $3,600 billion. And if you compare that to their, in the climate negotiations, we're talking about this fund, climate fund, hundred, hundred billion that the rich countries are supposed to provide to for- yeah, I mean, they have been discussing it. It was first, I think, introducing Copenhagen 2009, and they talked about the, they discussed the financing of that in 2015. And then now in Glasgow, I think they finally decided that they had the money. So they, they... 

But if you look at the details, it it's really it's to me, it's sickening because first it's a hundred billion. Russia invades Ukraine and Germany decides just like that to increase the defense funding by a hundred billion. I mean, this is nothing. I mean, it's, it's far too little, I mean, there's at least one zero missing on that number. It should be like more thousand billion. 

Secondly, if you look at how they provide this funding, it is, most of the countries do it through loans. So they're saying, yes, we, we will actually lend you the money, but you have to pay it back somehow. Or, many countries, I think even Switzerland did this, I mean, uh, that they basically relabelled their foreign aid budgets. So they took their foreign aid budgets and relabel them to like, so, so they didn't actually have to cash out any extra money.

So, so compared to that, this global climate compensation, if you implemented that, where you would say like it's like 30, 30 times more money would flow to the global south, I think, I think they would be fairly happy with that.

[00:53:56] Rachel Donald: Massively. 

[00:53:57] Henrik Nordborg: No, and even if all of it, it is not well spent, I think it's difficult to make the argument that they will be worse off when they get all this money.

[00:54:07] Rachel Donald: Um. Okay, honestly, honestly, just with the level of corruption that it does exist in the world, I'm thinking particular like one of the countries that I do a lot of investigating and, um, I could see those bastards just pocketing it all and then using it to invest in the, all the equally destructive industries that they are home to.

Um. But they were gonna find that money anyway, from somewhere on the market economy. So, and also what, you know, what's quite exciting is how this could galvanize populations as well into becoming more politically active. If there's a global climate compensation fund that's available and citizens are, are aware that their government is not redistributing the money that they know is coming into the country, then perhaps that would be an upswing for opposition parties around the world or for leftist, uh, parties around the world. It would be a very easy thing to say, this is number one in our manifesto.

[00:55:06] Henrik Nordborg: Yeah. And it is actually, um, I think that that is an important difference. I think it was Jason Hickel who wrote about this in one of his books about corruption. I mean, it takes two to participate in corruption. I mean, it's easy to talk about these poor nations, they're so corrupt, but the money that is being provided for this to them is of course, these are like men in dark suits that bring suitcases full of, of newly printed dollar bills.

It's easy to be, to corrupt people that way. Of course, this fund, that would be very trans- and, and, and the, the, I think the, the only way to defeat corruption is transparency. And in this case it would be very public, very official, that on this day, the government of countries so, uh, so and so received this amount of dollars from the United Nations and it was paid onto this account and it's, then it becomes a bit more difficult to hide that money again.

And as you say, the opposition politicians would then clearly ask what happened to all these money you received.

[00:56:13] Rachel Donald: I mean, to me, this is the, the thing that we need to get people, the thing to get people excited in politics, again, is more international cooperation, whether it's global or pan European or whatever. And I think having a singular global policy, um, that is, as you say, there's, there's no extra accounting on top, it is just laying, um, out the figures that we have more transparently and redirecting some, some money. Uh. We have the infrastructure in place already to do it. I think it could just be exciting enough to get people, uh, believing again in the, in, uh, I don't know ,our capacity to change or confront a problem or just in, in politics once more. Because it's all fine and well for academics to figure out the numbers and solutions and what needs to be done, but we also need to be creating, uh, politicians around the world that are willing to implement them. And then also people that are willing to vote those politicians in

[00:57:12] Henrik Nordborg: Yeah. And, and that is, of course, I think a very interesting point because I claim that this idea is testable because it doesn't involve much administration because it's so easy to implement if, if the, the political will, is there. I mean, okay, so perhaps 100 dollars per barrel of oil is too much. I mean, so, or 100 dollars per ton of carbon dioxide. Let's so let's I mean, that—

[00:57:38] Rachel Donald: What is a tonne? Could you just explain-

[00:57:40] Henrik Nordborg: Tonne is just a metric tonne, 1000 kilos of -

[00:57:44] Rachel Donald: yeah, yeah, yeah, no, no, I know it's a metric ton, but like what, what does that mean in terms of emission?

[00:57:50] Henrik Nordborg: That that's a good point. I think going flying to New York and back from, from London, I guess is two tons or something of emissions. 

[00:58:01] Rachel Donald: Okay. So that's still pretty cheap actually, 100 per ton.

[00:58:04] Henrik Nordborg: So you would add $200 to, to fly to, or, I mean, it would add like some, perhaps 40 cents or so 30, 40 cents to, to a liter of, of gas or something. So, I mean, it's not, yes, it would be significant, but it wouldn't be completely absurd. I mean, you, you can do this calculation. But the point is so, so like 100 dollars per tonne of CO2 would add, um, would add like 40 bucks, I think, to barrel of oil. Uh. And that's significant. 

If you, if you start with 20, I mean then, then we'll down to less than $10 per barrel of oil. And if you look at oil prices over history, they have fluctuated by far more than that. So, I mean, no one can complain that this is going to be the end of the world or going to destroy the economy.

So it it's a testable plan. Let's do it. See what happens. Because after all, at the moment we are, we are, we are conducting like, uh, uncontrolled irreversible experiment with the whole planet. Uh. That doesn't seem like a very clever idea here. We have a chance to do like a controlled, um, reversible experiment.

If you, if we see that it doesn't work somehow or that there are some unintended consequences, well, okay, then we, we , we, we go back to the old system where we, we scrap the plan. I mean, it is like, I don't see what we have to lose by introducing this plan. Even if we do it at, at the low level.

[00:59:44] Rachel Donald: Yeah. So tell me, have you gone and approached any political groups, parties, figures with this? Has there been any feedback?

[00:59:54] Henrik Nordborg: I am, I have, um... I'm working on it. I haven't been very successful, I have to admit that. I'm, I would love to have some economists looking into this because I think it's also interesting enough just to, to have a look at the, what, what would the effect be on, on the global economy of such a plan? Um. I've talked to lots of charities and environmental organizations, et cetera, and, and, and they have looked into, so... I mean, I don't have too many, many direct contacts with politicians, but typically these NGOs and, and environmental organizations have. So I'm trying to approach politicians that way. And, um.. 

But in a way, I don't think, I don't think politicians will do this voluntarily because at least not in the Western world. I mean, and I don't have too much contact in, in the global south, unfortunately, but because the problem is, of course, as you say, I mean, it will hurt the rich countries. I mean, that's the whole point. I mean, the rich guys will have to pay, but they will have to pay up anyway at some point, so.. But therefore, I, I, I don't expect like politicians in the rich countries to sort of volunteer, to implement this plan without significant pressure from like NGOs and, and, and activists, et cetera.

So, this is what I think, I think we have to approach the problem from that side.

[01:01:26] Rachel Donald: All right. Well, if there's any European Western politicians listening, and you think that this is a good plan, please, to reach out to Henrick and let's get the ball rolling on this.

Henrick, where can people contact you or learn more about this? 

[01:01:40] Henrik Nordborg: So I have a, a blog on substack, which is called, uh, so it's called global-climate-compensation.org. So I think it's very easy to find. And, um, I, I'm trying to publish things about, about it there. And of course I, I love, I'd love, love it if people get in touch.

[01:02:01] Rachel Donald: Great. And my final question of course, is who would you like to platform.

[01:02:08] Henrik Nordborg: Yeah. I've been thinking of this, I think, um, Vaclav Smil or, uh, however you pronounce it, I think would be interesting because it seemed to be a very um, knowledgeable person about like the situation we are in. Um. Otherwise I, I was thinking about if you want to get more like a societal perspective, people like Chris Hedges could be interesting, the American journalist who is, I mean, he's an expert on what's wrong with our society, at least. So that could be an interesting perspective. He's not like a climate expert, but if you want someone to criticize capitalism, he, he would be the go to guy.

[01:02:52] Rachel Donald: Excellent. I will reach out to both of them. Henrik, thank you so much for your time. It was such a pleasure and thank you for introducing the global climate compensation fund.

[01:03:02] Henrik Nordborg: Yeah. Thanks a lot.

© Rachel Donald