Episode 208: Gerald Butts, Eurasia Group
Today's guest is Gerald Butts, Vice Chair of the Eurasia Group and former Principal Secretary in the Office of the Prime Minister of Canada and Premier of Ontario. He also served as the CEO of the World Wildlife Fund Canada. In 2014, McLean's Magazine declared Gerald to be the 14th most powerful Canadian. And as the former Principal Secretary to Prime Minister Trudeau, Gerald was praised as the architect behind the Liberal Party of Canada's platform that led to their victory in October of 2015. He was also one of Prime Minister Trudeau's most senior staffers.
I was excited about this one on a number of levels. One, it's just great to hear from someone that's operated in the political realm at such a high of given how important politics is for climate action. Two, it was great to hear from someone outside of the walls of the U.S, but a pretty close neighbor about the U.S' role. It's also interesting that after hundreds of MCJ episodes, conventional wisdom is while a carbon tax might be super impactful, no one thinks it's possible or most people certainly don't and yet Canada did it. And Gerald was a key person that helped get that over the line.
Enjoy the show!
You can find me on Twitter @jjacobs22 (me), @mcjpod (podcast), or @mcjcollective (company) and via email at info@mcjcollective.com, where I encourage you to share your feedback on episodes and suggestions for future topics or guests.
Episode recorded April 4, 2022.
In Today's episode, we cover:
Gerald’s background and how he started focusing on climate change
The scale of the clean energy transition
His views on the Paris Climate Accord, which he helped negotiate on behalf of Canada
An overview of Canada’s carbon tax
His theory of change for addressing climate change
How climate change impacts geopolitical stability and national security
His views on carbon offsets and carbon removal
The roles of natural gas and nuclear in the climate transition
An overview of the Eurasia Group
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EP.210 - Gerald Butts FINAL (1)
Jason Jacobs: Hey everyone, Jason here. I am the My Climate Journey show host. Before we get going, I wanted to take a minute and tell you about the, My Climate Journey or MCJ as we call it, membership option.
Membership came to be because there were a bunch of people that were listening to the show that weren't just looking for education, but they were longing for a peer group as well. So we set up a slack community for those people that's now mushroomed into more than 1300 members. There is an application to become a member. It's not an exclusive thing. There's four criteria we screen for, determination to tackle the problem of climate change, ambition to work on the most impactful solution areas, optimism that we can make a dent, and we're not wasting our time for trying, and a collaborative spirit. Beyond that, the more diversity the better.
There's a bunch of great things that have come out of that community. A number of founding teams that have met in there, a number of nonprofits that have been established, a bunch of hiring that's been done, a bunch of companies that have raised capital in there. A bunch of funds that have gotten limited partners or investors for their funds in there, as well as a bunch of events and programming by members and for members, and some open source projects that are getting actively worked on that hatched in there as well. At any rate, if you wanna learn more, you can go to myclimatejourney.co, the website, and click to-become-a-member tab at the top. Enjoy the show.
Hello everyone. This is Jason Jacobs. And welcome to My Climate Journey. This show follows my journey to interview a wide range of guests to better understand and make sense of the formidable problem of climate change and try to figure out how people like you and I can help. Today's guest is Gerald Butts. Gerald is Vice Chair of the Eurasia Group and former Principal Secretary in the Office of the Prime Minister of Canada and Premier of Ontario. He also served as the CEO of the World Wildlife Fund Canada. In 2014, McLean's Magazine declared Gerald to be the 14th most powerful Canadian. And as the former Principal Secretary to Prime Minister Trudeau, Gerald was praised as the architect behind the Liberal Party of Canada's platform that led to their victory in October of 2015. He was also one of Prime Minister Trudeau's most senior staffers.
I was excited about this one on a number of levels. One, it's just great to hear from someone that's operated in the political realm at such a high of given how important politics is for climate action. Two, it was great to hear from someone outside of the walls of the U.S, but a pretty close neighbor about the U.S' role. And do we need the U.S, and what does the U.S have at risk if it doesn't respond to climate action, forget about the collective good, also just in the geopolitical realm?
It's also interesting that after hundreds of MCJ episodes, conventional wisdom is while a Carbon tax might be super impactful, no one thinks it's possible or most people certainly don't and yet Canada did it. And Gerald was a key person that helped get that over the line. That and much more, there was a whole lot to talk about in this one will probably need a follow up at this point, but I'm so grateful that Gerald made the time and I hope you enjoy it. Gerald, welcome to the show.
Gerald Butts: Uh, it's great to be here, Jason.
Jason Jacobs: Well it’s a huge honor to have you. And I have to admit, I'm pretty nervous for this discussion as, I think you know, I, I mean, I spent my career as an entrepreneur in an unrelated space to climate change and certainly didn't touch any policy stuff before, before I started down this path three and a half years ago. Um, but policy is so important to the climate fight. And because I'm looking at it at a systems level, I've found that it's been impossible to ignore. And the other thing I should say is that the bulk of the content and investing and things like that we've been doing have been North American or U.S-focused specifically, not because we think the U.S is somehow more important for addressing climate change, but just because that's where I am and where I've spent my whole life, but opportunity...
And I mean, sure Canada is not exactly, you know [laughs] uh, I mean, it, it more closely resembles the U.S than maybe a lot of other places, but, but sh- but getting out of our little U.S bubble and under, and especially on the carbon tax where, uh, conventional wisdom in the U.S essentially defied all of it. Right? And so, so the opportunity to learn from you is just hugely important to me and I'm sure for many listeners as well, so thank you.
Gerald Butts: Oh, it's great to be here.
Jason Jacobs: For anyone that, that might not be familiar, do you want, do you wanna just take a minute and introduce yourself and maybe the work you're up to today and a bit of context on, on, uh, historical as well?
Gerald Butts: Yeah, sure. Thanks, Jason. Uh, I'm uh, most of my time is spent as Vice Chairman of, uh, Eurasia Group, which is, uh, a research and political risk consultancy. We're headquartered in New York, but we have offices all over the world and we try and, um, our modest, uh, motto is that we're the place that people come when they wanna understand what's really going on in the world. Uh, obviously like a lot of people in the geopolitical risk space, we've been spending out of time on Russia, Ukraine lately, and its m- many implications, uh, for basically all the work we do. But I think a lot about what it means for the climate agenda, what it means for energy security in Europe and beyond, what it means for the energy transition. So I'm happy to get into any of that.
Before that, I was principal secretary to both the Prime Minister of Canada at separate times, the Prime Minister of Canada and the Premier of Ontario. And I've also been CEO of the World Wildlife Fund here in Canada. So I've been working on climate in one way, shape or form for about 25 years, which makes me feel old just saying it. But I look at my teenage kids and I realized it checks out.
Jason Jacobs: And how, how did that come to be? When, when and how, and why did you first become concerned about climate and how did that translate? And when did those worlds intersect in terms of how that mapped to your professional pursuits?
Gerald Butts: Sure. Well, I had taken a role as policy director for the then leader of the opposition in Ontario, which is our biggest province here in Canada for your American listeners. And it's...
Jason Jacobs: I like that you give us no benefit of the doubt. That's probably warranted. [laughs].
Gerald Butts: It's hard to appreciate because there really is no American analog. Ontario's about 40% of the population and, and the economy. And it's, uh... What happens in Ontario, not just from an economic perspective, but also from a climate perspective, matters a lot. Funnily enough, I got into, I got into politics, uh, through the education policy route and, uh, was working with Dalton McGuinty who became a very successful Premier of Ontario who was elected three times. Uh, and he turned me into a climate person. He was, interestingly enough, I think he was the first Premier of Ontario who was a scientist yet he was a lawyer, but he also had a bachelor of science in biology and he read Amory Lovins book back in Natural Capitalism in, uh, back in the '90s and started to study the science and climate change and drew the correct conclusion that this was gonna become nothing but an ever bigger and bigger and bigger issue.
And unlike a lot of other political issues, climate really isn't a subject to politics at least as it manifests itself, it's not a political issue at all. It's an issue of physics and chemistry. And Dalton understood that really, really well. And, uh, he decided the main contribution that Ontario could make to the agenda was to retire at 7,500 megawatts of coal fire to electricity. And as policy director, I was kind of in overseeing the process that made that happen.
Jason Jacobs: I mean, w- wasn't your dad a coal miner as well. Did I read that correctly?
Gerald Butts: Absolutely.
Jason Jacobs: Yeah.
Gerald Butts: 40 years. Nova Scotia started in the 19- in the dirty '30s and retired in the 1970s.
Jason Jacobs: Well, I have lots of questions about that, but I, I don't wanna, I, I don't wanna derail this, this monologue 'cause I think it's a productive one. So keep going.
Gerald Butts: No, that's, uh, I was wrapping up there anyway, Jason. So I'm happy to take any questions on any of that.
Jason Jacobs: Uh, great. Well, well you said that he converted you to a climate person. I mean, from my seat, at MCJ, for example, we don't try to convert people. We try to find the already converted that, that don't know where to start, but it's like I found... And, and maybe this goes back to when I was running a fitness app company for a decade. Like we didn't try to convert people into runners, we found people who had decided like, "I am ready for change-
Gerald Butts: Yeah.
Jason Jacobs: ... but I dunno where to start." And then we try to give them tools and build bridges and give them accountability, and give them a social network, and give them guidance, and give them incentives and, and things like that. But, um, yeah. So I, I just wanna maybe double click on that word converted. Why do you think... What was it that made you convert and is that, are there any learnings there that we can replicate to get more people, uh, to follow a similar path?
Gerald Butts: Yeah, maybe I, uh, maybe that's the wrong word, but I, what got me, sort of what gripped me about the issue was the certainty, the scientific certainty of it, which is ironic 'cause then we spent the next 10 years trying to fight people who were denying the basic science climate change, and that wasted an enormous amount of time that our grandchildren will probably not look fondly upon us for wasting, but we had to do it. And I guess it's ironic that what made me so attached to the agenda is that I looked at the basic science as it was explained at the time and thought, "Holy smokes, this is gonna be the biggest thing of my adult life and probably of my children's lives." And therefore it stands to reason that you devote your time and energy to dealing with the biggest issues.
And you know, I've always had this saying that I stole from somewhere and I can't remember where it was that in, uh, any complex task in life, the main thing is to keep the main thing, the main thing. And that sounds like a really simple thing, but it's very hard to do in particular in politics where there are a million issues that can distract you from what you're really focused on on any given day. Uh, so I decided to spend my professional life working on climate from, uh, a variety of different issues, a va- variety of different angles in the public, private and not-for-profit sectors.
Jason Jacobs: When I have been learning about the problem of climate change, I see why it's so important and existential and, you know, the, the symptoms of the next several decades aren't based on what we're doing today or over the next several decades, but what we've already done and same thing about cleaning it up. Like if we clean it up, it's not like can clean it up and it just like stops the symptoms, right? Because all the, I mean, all the pollution is, is already up there and, and will be for hundreds of years. So, so, and plus I work on a full-time. I, I, I can't imagine a bigger problem.
So like we're, we're on the same page there. One challenge I've found is that because everything's so interrelated, it's like we, we have, I mean, Ukraine, Russian conflict as one example, or energy poverty as one example, or wealth inequality as one example, or jobs as one example, and dying industry is like, um... I've heard some people say that climate change is, it's a luxury for rich people to get to worry about climate change because most people have far more pressing priorities. So how do you respond to that? How do you think about that?
Gerald Butts: Well, I mean, look, the irony of that statement is that the poorest most vulnerable people on earth are the ones who are gonna be most significantly harmed by climate change. And it's something that opponents of progress on climate have been honing and focus-group testing for years. And they know it's a persuasive argument that it's something that people who live in New York or San Francisco and drive their Teslas, when they drive, they get to worry about 'cause all of the other things are taken care of.
And when you look at both within the United States, but around the world, the opposite is true that wealthy people are gonna be able to buy themselves out of the problem. They'll be inconvenienced and have their investment portfolios disrupted by it, but they won't have to worry about baking in 50 degree heat or having their town submerged in seawater. Whereas if you're in Sri Lanka or Bangladesh or certain parts of India, this is a existential issue of most urgent kind.
So I think it's, it's I, again, I keep using this word, but it's, in fact it's not really ironic 'cause it's deliberate. It's people have been led to believe that the opposite of what is actually true is true. And it reminds me very much of the way the cigarette companies marketed their [laughs] their product through the '30s, '40s and '50s, even into the 1960s.
Jason Jacobs: So some are of the school thought that yes, we need to wean off fossil fuels ultimately. But if we try to do it quick- too quickly, the system's just not gonna be ready. And it's the poorest and most vulnerable that are gonna suffer because they're not gonna have access to basic electricity. On the other side, you have people saying, "Whoa, we need to wean off it as quickly as possible. And that's just an excuse to stall. And if we rip the bandaid and inflict near term pain, it'll be more motivating to get to the other side of the chasm." W- where do you sit on that spectrum?
Gerald Butts: Uh, kind of in the middle of it, Jason. I, I, I think that the truth is a lot more complex than that. And maybe I can start with a really simple statement of the problem because we do tend to over complicate the issue. You alluded to a lot of the dynamics of change, but if you start with the basic scientific problem that there's about a trillion times of carbon in the atmosphere that shouldn't be there, that's kind of the root of the problem, right? It used to be in a s- in safe, in a very safe place, which was underground. We've taken it out of the ground and burned it. And as a consequence, it has been put into the atmosphere and into oceans where it is unsafe for us.
So the question becomes; one, how do you stop doing that in the most efficient way possible and the most expeditious way possible without causing undue harm to people and ecosystems. And the second is how do you get the stuff we've already put up there out of the atmosphere. And, and final, I think maybe unco- we're unintentionally heading toward this outcome. How do you manage the most pernicious downside consequences of the situation we've created for ourselves? So we know with relative certainty that large swaths of the equatorial world are gonna become very uncomfortable to live in if possible, to live there at all. But we have no plan to move people. We have no plan to make migration more acceptable as a political issue for surrounding countries. That's, that's one. We could talk about any of these things at length.
The other one, and I've said this my whole career since learning and studying the science, I think that most people will feel climate change. First, it will present as a water problem. And you are certainly feeling that in the Western half of North America now in particular. And, uh, it's getting more pressed than it used to, but the water situation, the water security situation in the Western desert in the United States and in California is gonna be one of those issues that the majority of citizens of the United States wake up to and go, "Holy smokes, how did we let this happen?" But it's been a low, it's been a low burn, a slow burn for a long time, and it's gonna present itself as an unmanageable infrastructure problem over the next 10 to 15 years. And versions of that are gonna happen everywhere.
You know, to answer your original question, climate by definition affects everybody, but it affects the people who have the fewest resources to manage its consequences most comprehensively. And those are the poorest people on earth. So the people who are saying this is a rich person's problem, have it exactly wrong.
Jason Jacobs: Now I, I know that, that, that you were involved in, uh, negotiating the Paris Agreement on, uh, Canada's behalf. And when I look at the international collaboration that's required to tackle this type of problem, it, it, it makes perfect sense that countries need to come together and set targets and hold each other accountable and put pressure on each other and, and things like that. And then same thing with companies with the big net zero commitments that they're making.
On the flip side, for someone like me and maybe it's just because I've been so removed from international collaboration and from, you know, big company policies and politics, but it, it seems just so abstract and academic, the other side of the spectrum though, and this is more my world. It's like investing in a startup that makes a new kind of battery or a carbon marketplace or a carbon accou- Like any one of these point solutions just seems so immaterial given the magnitude of the problem. So it's like the tangible is immaterial and the potentially impactful is abstract. So how do we get anything done?
Gerald Butts: Well, uh, when- it's, uh, it can be a discouraging situation when- whenever you, and you're trying to clean up a mess that's really somebody else's doing, right? And for the most part, for most people on earth, they're trying to deal with a mess that somebody else is doing. All that said, I've long felt I'm a believer in markets. I think that they're the most efficient allocators of capital and talent that we've ever invented. And the, the genius in my view behind the Paris Accord was, it was the understanding that it's government's role to set long term policy and stick to it. And then it was the market's role to innovate to find the solutions to meet the objectives that public policy had set.
You know, I think that's a pretty good working definition of what happened in the Paris negotiations that we all agreed to a macro level aspirational target. And then we all agreed to go back to our home countries and develop national plans to meet those targets. And everybody's got different politics, whether they're democratic or not, it's not like politics don't exist in non-democratic countries. So the assumption was that people would do things that work for them. That best practices would be shared around the world. And we'd learn from one another's mistakes as globally finance started to allocate capital to decarbonization. And I think that, that's happening, right?
I mean, uh, it, it's, it's easy to be pessimistic about the action we've taken or failed to take on climate change. But had you told me in 2003, '02 when I started working on this issue, that by the middle of the, beginning of the 2020s, 85% of global GDP would have to a zero target, I would say, "Well, I take that outcome." So a lot of progress has been made and it's because of a combination of policy and scientific innovation, particularly but not exclusively, in bringing the cost down of renewable electricity over the past 10 years, that while the goals are still a stretch, there, you can kinda see how we're gonna get there.
The issue for me... And I, I kinda think the mitigation, uh, problems, the big mitigation problems have been solved, at least from a technological point of view. The issue is how do we deploy that technology at scale and prevent politics from getting in the way of doing that where it needs to be done. What I worry about, getting back to my answer to your previous question, is how are we gonna manage the inevitable downside consequences? 'Cause you alluded to this that the most pernicious aspect of climate causing emissions is that they persist.
And no matter what we do now, we have baked probably a one and half to two degree warming scenario into the atmosphere. And the, IPCC says it's 1.3. Um, so we'll even go, we'll just go with that. And that's gonna create a lot of problems for a lot of people, be it more wildfires and hurricanes in North America to sea level rise, to all kind of unpredictable things that we're gonna get over the next 20, 30, 40, 50 years. So I really worry about our lack of preparedness to deal with the cataclysmic events that the already baked in climate change is gonna bring to us over the next, uh, foreseeable years, number of foreseeable years.
Jason Jacobs: Well, I've done, uh, hundreds of episodes at this point over the last few years, just trying to learn. And by far when I've asked people the most impactful thing that could change that's outside of their control, what they've said is a price on carbon. Um, but then at least in the U.S, when I ask them when the camera's not on, if they think there's any chance that'll ever happen, they say, "No." In Canada, you not only manage to get it over the line, but at least from my, with my untrained eye and you, you can share more light on it, but it seems to be working well. You know, the price is rising and it, it seems like the, the body's kind of accepted the organ here.
So can you talk a little bit, I guess there's a few things, one, like what was the process to get that over the line. Two, uh, what are the learnings from that? And three, how much of those learnings can carry over to someplace like the U.S versus needing a completely different playbook, given that it's a very different political landscape?
Gerald Butts: That's a really good set of questions, Jason. I, I think that in the Canadian context, one thing I could say that would be hopeful is 10 years ago, people would've said the same thing about Canada, that elections had been lost on trying to implement a carbon tax. There was very little optimism about the prospect of one and that it happened, right? So the old cliche that, uh, everything's impossible until it happens [laughs] is definitely true in this case. I would not say that the future of the carbon price in Canada is secure. I think that until you have cross partisan support for such a thing, it is never secure, and it is certainly true that the conservative movement in Canada is dug in against it.
The, the Conservative Party is currently having a leadership contest. You know, they're probably gonna elect somebody who's gonna be m- maybe even more violently anti-carbon pricing than their past three leaders, which is an achievement and in of itself. But I would not, I wouldn't break our arms patting ourselves on the back in Canada, I guess, is the short story. The hard truth of it is that it, it was work. You know, it was work to build the constituency for it. It was work to build the right policy that fit our politics and our constitution. It was fought by its opponents all the way up to the Supreme Court of Canada, and they lost.
My advice to politic- people who are active in the political sphere is to really do your homework on this stuff and understand the people that you're seeking to represent and tailor a policy that fits their needs, which is what we did. And I think most famously our policy is redistributive, um, but not regionally redistributive. And that's an important thing in the Canadian context, because there was no way we could support nationally a policy that took a bunch of money from the oil producing provinces and gave it to provinces that didn't produce oil. That is a legacy scar of the politics of the 1970s and '80s in Canada.
So we crafted a policy that, uh, blunted that argument against it, by keeping all of the money we collected within the province where it was collected and gave it, gave the mo- didn't keep the money collected from the carbon tax within the government, but gave it back to people in a progressive way. So in a, in a nutshell, uh, we created a progressive carbon tax, and that's why it worked in Canada. And it's why all of the arguments against it were difficult to sustain objectively in the light of day. So that sounds like a really boring answer, but like most things in politics, there wasn't some like flashy speech that somebody gave and changed everybody's minds. Politics is not the west wing. And it was mostly a lot of hard work by a lot of people over a long period of time who had a shared goal and kept at it.
Jason Jacobs: Now, I've heard people also say that there's just no silver bullets when tackling climate change. And, and there's certain things that can be more impactful than others, but ultimately we're gonna need thousands of things. It's not like there's... Like one VC, uh, says like, "Give me 14 entrepreneurs and I'll solve climate change," which to me is just absolutely bonkers, um, and...
Gerald Butts: They're usually the same VCs that created, uh, world changing technologies like Facebook.
Jason Jacobs: [laughs]. Exactly. Um, so, so I guess two questions, one, how impactful can a carbon tax be if it reaches its fullest form? And second is just how essential is it? Like, can we make meaningful progress on addressing climate change without...
Gerald Butts: I think a carbon tax, and I, I think this is true everywhere. It's not quite a scientific law, but it's close. It's as close as you get in public policy that free things, there's an infinite market for free things, right? And if there are downside consequences to something that is free, you're gonna get an oversupply of those downside consequences, which is essentially why we are where we are. I think when Prime Minister Trudeau launched our carbon price, uh, plan, he said, uh, uh, pollution is free and therefore we have too much of it. And I think that's kinda the problem in a nutshell. So while I don't think it is sufficient in and of itself by itself to address climate change, it is necessary. So that road services, if you hear the, uh...
Jason Jacobs: I do, yeah. [laughs].
Gerald Butts: Sorry. Should we pause or, until they go by?
Jason Jacobs: Uh, yeah, we can give it a minute.
Gerald Butts: Okay. Sorry. Um, people will know this is real. Uh, I've got Ottawa Road Services outside trying to undertake the massive, uh, spring clean up that always happen when all of the snow melts here.
Jason Jacobs: Those are, those are straight street cleaners?
Gerald Butts: Yeah, that's right. Um, they're very large, uh, and very loud. So I apologize to your listeners. But, uh, to get back to what I was talking about, I think that carbon tax is a necessary, but not by itself, sufficient tool to deal with climate change. I have a hard time believing that we're gonna reduce our carbon emissions if they remain free to emit, uh, which I think just stands to reason. And there are lots of different ways to go about pricing carbon, but I think the most honest way to do it is, uh, a pretty straightforward tax.
Jason Jacobs: And if you take a step back, I mean, I, I know you come from the, you know, f- from the political and, and policy realm. And, and so we've been talking about politics and policy, which is, which is no surprise, but do you have a clear theory of change as it relates to the best ways for us globally to address the problem of climate change? Or, or do you have certain like hot button, like if I had a magic wand, here's the three things I wish would get done or? I, I guess how, how do... When you picture us getting to where we need to go, if you picture us getting to where we need to go, what does that look like?
Gerald Butts: Well, look, I, I, I think this stuff is really well documented. What we need to do is to stop emitting carbon and, uh, make our best efforts to clean up the carbon we've already admitted. So what does that mean? It means that we need an economical replacement for a large wedge of our energy stack that is currently produced by fossil fuels. And we've made a lot of progress in the last 10 years in doing that in particular, as you look at the, uh, amount of private capital that has gone into the renewable sector, the battery sector. I think we're just beginning to see the fruits of all of that R&D that has been going on for 15 years.
You know, surprise, surprise when human beings set their minds to solving a problem and get capital and discipline behind it, they can solve those problems. So I'm very, like I said, I'm very optimistic about that side of the equation, but if I were to summarize my advice to policy makers, it's, look at the jurisdictions that have made great advancements on this and do what they're doing, right? Like set hard targets on emissions, put a carbon price in place, invest in the, uh, replacements for high, high carbon, the high carbon energy system, and we'll invent it.
I know just enough physics to be dangerous. I went to university to be a physics, uh, student, and then realized it was both too hard and too boring. And I can do hard and I can do boring, but I can't do hard and boring. So the math just... That's why I switched into, into, uh, social sciences and humanities after my first year. But I know enough about the science to know that unlike political laws, scientific laws are true all the time everywhere. And one thing that is true about our planet is that we are a wash and usable energy. We just don't use the right kinds of energy in the right kinda way. But I do think that human beings are smart enough to figure out how to do that.
Jason Jacobs: And, uh, when you look at, this is a systems problem, and so policies and energy sources and these kinda big systems level things, a lot of that is under the hood. So I guess my question for you is, how much of this do you expect will be and should be visible to the average Joe out there? And that could be the average Joe consumer, that could be the average Joe voter. Like is their life gonna change a lot? And, uh, and how important is it that we educate them on the, on the, you know, on the science and the whys and the how important it is versus just pushing to do the things that need to be done under the hood invisibly?
Gerald Butts: One thing you said that we should highlight is that this is a systems problem, right? You mentioned personal fitness. I'm a runner too.
Jason Jacobs: You're a hockey fan I saw on your Twitter, which I am a huge hockey fan. So-
Gerald Butts: Totally, diehard-
Jason Jacobs: ... we share two things in common, then.
Gerald Butts: ... diehard hockey fan, but, uh, I'm fulfilling the Canadian cliche and being a hockey fan, but, uh, it's been a rough year for us, Montreal Canadians fans. So let's not speak of it. I think it's really important that people understand it's a, it's a systems problem and not a problem of personal virtue, right?
If you're a runner and as painful as the inputs into running can be at times, you're gonna turn around the result that you want in relatively short order. If you get up to running, you know, 20K, 25K a week, you're gonna lose a bunch of weight, your legs are gonna get stronger, you're gonna be skinnier, right? That is gonna happen no matter who you are. The issue with systemic problems is that you can change your behavior completely and nothing changes systemically.
When people ask me, as you just did, and I should have said it when you asked, what's my advice, and what's the most important thing an individual citizen can do on climate change, absolutely by far, it's choose carefully how you vote. So put people in charge of your community, regional and national systems who care about changing those systems so that they become more sustainable over to time. That is by far the most important thing you can do as a citizen. And in fact, there's been a concerted campaign by the forces of inertia in climate change who don't wanna see the energy transition happen, to call people hypocrites for not behaving, you know, for emitting an at- atom of carbon in their personal lives while calling for action on climate change, which is of course, uh, it does not bear much scrutiny that argument. So I think that that's really important.
As for how much, I'm one who believes that the more people know about the problem, the more they're gonna support action to solve it. But there's also of this communications argument, which I'm not sure where I stand on, but lots of people I respect make it. A friend of mine in the polling industry here in Canada used to say, "The problem with climate activists is they're selling the flight and not the beach," making an analogy to a, uh, a vacation sales company. You know, you don't, you don't tell people come to Florida or Barbados or Costa Rica based on how crappy the flight is gonna be to get there. You ignore the flight completely and yous sell them on the, uh, beach cabana and the white sands and the aqua marine water. And I think that there's a lot of wisdom in that, right? Because it is gonna be a very difficult transition. I fear our tardiness has made it a lot more difficult and bumpy than it needed to be. It's, it is where we are.
Jason Jacobs: Now in order to address it, there are certain things that bring outside gains, but then there are a lot of other things that just like pitch in and help. And I guess my question for you is all those "little things that pitch in and help", are they helpful or are they a distra- a distraction? For example, uh, if it, like, even just look in the, on the investing side at the climate tech category, it's like climate tech could be carbon accounting. It could be forward-looking resili- you know, planning for resiliency. It could be helping consumers assess which brands, uh, they buy from and how, uh, how much they're doing to clean up their own footprints, or which brands use more sustainable materials or... It's like, there's big things, there's little things, there's everything in between. And you can go category to category, to category, to category and, and look at these, these, uh, these, you know, big things and little things. And, and what's your view on the little things, helpful or harmful?
Gerald Butts: Uh, I think they're mostly helpful. They're mostly helpful. I think that it's important to engage people, when you need people to do big things, it's important to engage them in smaller things. So I think strategically it's helpful. From a theory of change perspective, it's helpful. And I think that, you know, climate is just one of the many environmental problems we have, and it's the one that's least susceptible to individual action. So if you create habits, uh, you can also solve local environmental problems. Be they water scarcity or local air pollution or land use planning, that sort of thing. There are all kinds of local environmental problems that are a lot more susceptible to individual action than climate change's, uh, climate change is.
So you kinda, that theory is you create a habit. People get into good habits. Uh, we are creatures of habits, as we all know. And when you develop good ones, they solve local problems. So I think that's a... I, I'm an optimist but I describe myself as a skeptical optimist, but I'm an optimist nonetheless. And I genuine- genuinely believe that people are good and that they want to solve problems, not create them for each other. And that's our, that's when we feel best about ourselves and our lives. So giving people something constructive and positive to do, or describing what is a constructive or positive thing to do is always a good thing.
Jason Jacobs: Uh, I'd love to talk for a moment about national security. When you think about the clean energy transition, uh, is there an angle where leaning into it will help with national security? And if so, what does that look like? And by the same token, are there risks to national security, uh, if we continue to be apathetic, and how do you think about those?
Gerald Butts: Well, look, the U.S Department of Defense has been calling climate change a national security issue since the Bush presidency, the second Bush presidency, or the s- first term of the second Bush [laughs] uh, presidency, to be, uh, precise about it. And that involves everything from supply chain, uh, security to direct threats on the continental United States from the manifestations of climate change. So I think it's, at least amongst the field, it's well accepted that climate is a first order national security issue, not just for the United States, but since most of your audience is in the United States, I think that those studies by U.S DOD, are very much worth looking up.
It's a geopolitical stability issue. And this is a lot of the work that we do with our clients at Eurasia Group, uh, explaining this context and situation, uh, that we are leaving a world, not as quickly as we should be, where we basically got energy from a few places and transported it everywhere. And we're moving into a world where the feed stock next to energy system. If you accept the basic premise that the energy transition is moving from a world in which our primary unit of usable energy was the carbon, was based on the carbon atom, toward one where the primary unit of usable energy will be the renewable electron.
And I think the direction of travel is clear whether you think the velocity is sufficient, but that's the way we're headed, then that geopolitical world, uh, and the politics of energy and the politics of geopolitical power have always been intermingled. Um, that is very different world. The oil producing countries matter a lot less. The supply chains for the components of the renewable energy system matter a lot more. And that's gonna change power politics all over the world.
Jason Jacobs: If it's right, I, um, I just have kinda a punch list of things I'm curious to get your opinion about. Can we do almost like a rapid, ra- rapid fire?
Gerald Butts: We'll do the speed round.
Jason Jacobs: Yeah. So...
Gerald Butts: Quite an diplomatic way of telling me to give shorter answers, I guess.
Jason Jacobs: No, no, no, no. It's, it's more like, I'm looking at the clock and seeing how much left we, that I wanna know about your perspective on, and just making sure that we get in as much of it as we can. Uh, offsets, helpful or harmful?
Gerald Butts: Uh, they're very helpful if they're real. Uh, I think there's a lot of snake oil in offsets as they're currently constructed.
Jason Jacobs: Okay. And is it, it, is it better to try to fix 'em and get 'em to be higher quality and more consistent and more transparent and more permanent, or, or do we need to ditch 'em and, and focus on doing the hard work of, of, uh, of mitigation?
Gerald Butts: No, we are gonna need, uh, a large supply of lar- of high quality transparent verifiable offsets for the sectors in the economy that are very difficult to de- like really difficult to decarbonize. Uh, here, I'm talking about global logistics, air travel, maybe, although I was gonna say steel and commit and cement, but I think that hydrogen in the midterm will be, not in the short term, but in the midterm, will be a viable replacement.
So, you know, at the end of the day, we're gonna have a bunch of things that are very difficult to stop doing. And we shouldn't... What I'm worried about is that offsets become like, uh, you go confession on Sunday and you're absolved of all your sins. That's what I worry about that they become more, this is the, the, the, the childhood Catholic in me coming out, Jason, but they become more like indulgences than true offsets. And there's lots of evidence of that around the world.
Jason Jacobs: Uh, relatively, carbon removal?
Gerald Butts: Carbon remo- removal is gonna have to be part out of the picture. Uh, it's, there's a moral hazard associated with it that it allows us to keep doing what we're doing and the, the, with the surf and hope that at one point we'll be able to suck, uh, all of the carbon out of the atmosphere. It's, uh, not all of the carbon obviously, but I'm from Missouri on that one. The- there are a lot of promising technologies on both carbon removal and carbon capture and storage, but there are no successful examples of it being deployed at scale.
Jason Jacobs: Uh-huh [affirmative]. So you think we'll need it, but, but just because we'll need, it doesn't mean it's viable, but just because it's not viable, doesn't mean we shouldn't be trying to make it so, is that correct?
Gerald Butts: Absolutely.
Jason Jacobs: Okay. Uh, relatively, uh, doing things like plugging methane leaks and, and stuff that, that, uh, you know, that some would say is an important piece of the problem that we can't ignore and need to address, especially because we're not gonna wean off fossil fuels anytime soon. And others would say it just, you know, helps make them more economical and gives us an excuse to, to drag our feet.
Gerald Butts: Yeah, I, I'm...
Jason Jacobs: What's, what say you do? [laughs].
Gerald Butts: I, I'm kind of in the all of the above, uh, camp on this that we, it's, uh, total effort, we need to abate our sources of carbon emissions, so.
Jason Jacobs: Natural gas. Uh, natural gas, is it a bridge or is it a long term piece of the solution set?
Gerald Butts: That is the multi-trillion dollar question. Uh, we spend a lot of time on this topic at Eurasia Group. As I said, I've bee working on climate for about 25 years. And for that entire time, uh, natural gas or fossil gas, depending on which side of the debate you're on, has been called a transition fuel, which I guess begs the question, how long is the transition? I think you're seeing, uh, how can I put this diplomatically? You're seeing the downside consequences of a lazy approach to gas in the European energy situation right now, where they decided that, uh, it was a risk worth taking to expose the, depending on which country you're in, a quarter to half of the gas supply to Russian sources, and they're paying for that dearly now.
I think we're gonna find out a couple of things about gas over the next five years. One is that it's really volatile and expensive, and it's not the low cost alternative that its advocates present it to be. And it's, it looks really good in the American context where over the past 10 years, you've basically replaced your coal flee- coal fleet with gas. That's not the situation that every country finds itself in. Secondly, and I think this is really important that the more we look closely at a true accounting and the emissions from gas and a lot of this involves methane flaring at, uh, source, the emissions are higher than we thought.
And I think one of the most exciting technologies that is, I think, rapidly gonna be brought to scale is you're just not gonna be able to hide your emissions anymore, 'cause we can detect them from space. So I, I don't know if you've ever had anybody on your show to talk about this, but I would highly encourage you to because...
Jason Jacobs: Who, who, who should we have?
Gerald Butts: Let me think about it and I'll get back to you offline. But, uh, you know, you think about the way public policy works in different countries, most heavy emitters self report their emissions, and you can see what kind of, uh, pervasive incentives exist to lower your emissions count. And then every year, we figure out, "Holy smokes, we're emitting more than we were projected to emit." And a large part of that is that we have no independent verification system. Now suddenly because of LIDAR and, uh, satellite technology in general, we can tell you where emissions are coming from anywhere on earth. And as a consequence, I think we're gonna find out that the oil and gas industry emits a lot more than it reports.
Jason Jacobs: Nuclear?
Gerald Butts: Nuclear. Uh, I've been pronuclear technology my whole career. Uh, we have, probably depending on the day, somewhere between 40 1/2% of our electricity here in Ontario produced by nuclear. The problems with clear are not environmental, they're all financial, and they're to do with the residual liability, uh, that you have once you build one, right? So, you know, you better be able to build a secure storage site that lasts 10,000 years, which I, I remind people all the time, we were in caves 10,000 years ago. And I don't think we want our ancestors 10,000 years from now to be in them. That's a long time. I think from a technological perspective, most of the issues have been solved. It always costs more than people think. And most things in politics and public policy aren't rocket science, nuclear energy is rocket science.
Jason Jacobs: Crypto as a climate risk, and crypto as a potential climate solution?
Gerald Butts: Uh, I am pessimistic. I think to date, crypto, crypto has been a climate catastrophe that a lot of dirty energy sources are, uh, being used that wouldn't otherwise be used solely to create cryptocurrency. And I don't know what the latest count wa- is. The last time it was something like, if you put all the emissions related to crypto together, it was, they were emitting, their total emissions were about the size of Spain. I think that's kinda nuts that we're doing that [laughs] when we find, when we find ourselves where we are. Solution? I don't know enough about the technology, and I'm not one of these technology utopians who thinks that we're gonna invent, you know, the next software that we need to download to just fix the climate problem. That's not the way this is gonna turn out.
Jason Jacobs: Geoengineering research?
Gerald Butts: That's a tough one. You know, I think it's kinda like, uh, carbon removal at scale that you have to worry that it creates perverse incentives to keep business as usual going for longer than we need to. I worry about it from a global governance perspective. You can certainly imagine there's... I'm sure many of your listeners have read, have read this great, uh, Kim Stanley Robi- Robinson novel, The Ministry for the Future. Uh, you can easily envision a scenario where the local effects of climate change get so unmanageable for a given government that they use cloud seating at, uh, some macro scale or some other form of yet to be in invented geo engineering.
It kinda feels like, feels a bit like Frankenstein to me, to be honest. [laughs]. I think that, uh, we've, technology has been great. I love technology. I'm not a Luddite. Uh, we're speaking, using it right now, but this unbridled faith in its ability to create nothing but upside and no downside, I think has not proven to be very smart or strategic, and geoengineering really worries me.
Jason Jacobs: Uh, one more in the speed round and then just two wrap up questions. I know we're running outta time here. So, uh, so the last one is, uh, c- is consumer behavior change, you know, less flying and less meet and, uh, and less driving and, and things like that.
Gerald Butts: Well, it's not gonna solve the problem for all of the reasons that we described earlier in the conversation, Jason. Um, I think it's a, it's a matter of personal choice. Most of my household is vegetarian and it's mostly because my kids wanted to be vegetarian. And as they joke with me, I'm more, I'm more, um, vegetarian-curious these days [laughs] than an actual vegetarian. Uh, I still eat meat from time to time. Uh, I think this personal mobility is, probably gets solved by the electric vehicle transition faster than people expect it to. Uh, air travel's a, a much more difficult to unsolve, but in the grand scheme of things, it, it's, uh, a, a material, but it's not a decisive contributor to the global climate problem. So I think all those things are good to do. And I certainly applaud the people who do them, but...
Jason Jacobs: I had two final questions, but I'm gonna pull a quick audible 'cause I thought of a good one, which is just clearly the U.S doesn't wanna be left behind as it relates to the clean energy transition. So the clean energy transition matters to the U.S. But my question is, does the U.S matter to the clean energy transition?
Gerald Butts: You know, that's a great question. And, uh, it's something that, that we think a lot about at Eurasia Group. Uh, and it's something that we talk a lot about with our clients, because I think one of, not to open a whole other topic as we are signing, getting close to signing off. But I think one of the key geopolitical changes that the energy transition, and we talked a little bit about this, has, has catalyzed, is that we're now in a very, you alluded to it earlier that, uh, we thought through the Paris Accord, we're all gonna come together and collectively, collegially solve this problem.
And then principally, but not exclusively, the Chinese decided that it was gonna be a huge competitive advantage to own the materials part, parts of the supply chain for solar energy and, uh, wind, uh, turbine production and the rare earth mineral supply chain that is required for both plus battery storage. And they spent a ton of money in monopolizing those supply chains. The United States, and you saw this in the rhetoric of the Biden campaign and Tony Blanken, the Secretary of State has said this repeatedly in the last year and a half that they see the competition for primacy in the post-carbon energy world as a first order geopolitical objective. And they should in, in my view.
I think that living in a world where policy takers and not policy makers on energy by definition makes the West less powerful, and therefore less in control of our own economic social development. So that's, uh, I think that we are just scratching the surface and beginning to learn about and understand how this is gonna play out as a geopolitical issue. And I think it's, you know, I'm not sure there's a bigger one for the rest of our lives.
Jason Jacobs: Uh, so two final questions. Uh, and if these are too long, then, then just cut me off, 'cause I know we're basically out of time. But, but one is, if you had a magic wand and you could go on, you know, let's say a genie gave you three wishes, and I don't know if three is the right number, but if there's like particularly burning day that it's like, "Man, these are outside of the scope of my control, but if I could change this thing and that thing and this thing, here's the things that I would change. And here's how I would change 'em to most impactful accelerate to transition," what would they be? And that could be one thing, two things, three things, no things, whatever comes to mind.
Gerald Butts: Well, the most important thing in my view if someone gave me a, uh, as my grade nine English teacher used to say, if someone screwed God's face on me today, uh, I would say that you create an optimistic economic future for the people who are currently employed in the high carbon energy sector, that it's often grouped under the category of just transition, but it's more than that. It's, it's about people. Like I said, you alluded to at the outside, I grew up in a coal mining town, uh, in Nova Scotia and the coal mine blew up when I was a kid and suddenly we had 30% unemployment and all of the problems that go along with that.
I think that policy makers need to be constantly attuned to the needs of the communities that are gonna suffer most or most at risk from the energy transition and create a, a future, help create a future for them that they can be positive about for themselves and their families. So that, to me, hard to do, easy to say hard to do. I understand that. But that to is the most important thing that, at the end of the day, what we're trying to do with the energy transition is to create a safer, more secure future for our children. And we should be doing that, not just for the future, but for the present.
Jason Jacobs: If you can... You're one of the, the only people I've ever, maybe the only person I've ever had on the show that, uh, you can't say price on a carbon, 'cause you already did that. [laughs]. That's the most impactful thing. [laughs].
Gerald Butts: Uh, I hope that that becomes a Canadian innovation that is emulated around the world.
Jason Jacobs: And the last thing and typically this is the thing, but we almost escaped the episode without touching on this at all. Can you just take two minutes and talk about the Eurasia Group?
Gerald Butts: Sure.
Jason Jacobs: The work you do, the types of clients you serve, and for anyone listening that is inspired, just a chance for you to give a shout out of, of how we can be helpful to you or what kinds of people you, you might wanna hear from if any?
Gerald Butts: We're headquartered in New York. But we have offices around the world. We cover about 90% of global GDP. Uh, and our clients are about half global investors and about half, uh, global corporates, almost entirely private sector clients, who are trying to understand in their own detailed and meticulous way, all of the issues that we've been describing and more, right? We have a very... Uh, we also advise our clients a lot on what we call geotechnology risk, uh, which we think is another big determining factor of geopolitics. But more broadly from a macro perspective, we're heading...
The, the world that we've, the equilibrium that investors and, uh, private sector actors have enjoyed for most of our adult lives, Jason, is coming to a rapid close. Our founder, Ian Bremmer, coined the term G zero many years ago to describe a world in which there is no accepted multilateral framework for governing it. And we're now fully in that world. Russia's invasion of Ukraine has probably accelerated our transition into it, but that's the world we help our clients understand.
Jason Jacobs: And either, uh, a, you know, who do you wanna hear from, or just, you know, given, given the soapbox here, just as someone that cares a lot about addressing this problem, what message do you want wanna leave behind for listeners?
Gerald Butts: Be optimistic. Nothing good ever came from being a pessimist, uh, in my view. Uh, don't be Pollyannish about it, but be optimistic. We created these problems and therefore we can solve them. And, uh, you know, just keep at it.
Jason Jacobs: Great. Well, Gerald, I can't thank you enough for coming on the show. And we've covered like 50 topics, and any one of 'em we could do like a whole, probably a whole engagement, uh, with the Eurasia Group on. And, uh, and we get just a little teaser of each, but, uh, but it was super helpful to me and, and that means, uh, you can bet it'll be super helpful to others as well. So thank you so much and, uh, best of luck to you and the team. And maybe we'll do a follow up at some point, 'cause gosh, uh, we, uh, I do leave with a lot of other questions, but uh, but very grateful for the time that you spent.
Gerald Butts: Yeah, sure. And let me say, Jason, that I think the work you're doing is important work it's, climate change can be a daunting and complex topic for people. And what you're doing to help explain it, ways that people can appreciate and associate with their own lives is really vital work. So keep it up.
Jason Jacobs: Thanks. Yeah, no, I get to be the token dummy that comes in and doesn't know anything and, and gets to just ask questions of smart people all day long. So it's pretty fun. [laughs].
Gerald Butts: Yeah.
Jason Jacobs: Uh, okay. Thank you.
Gerald Butts: Thanks, man.
Jason Jacobs: Hey everyone, Jason here. Thanks again for joining me on My Climate Journey. If you'd like to learn more about the journey, you can visit us @myclimatejourney.co. Note, that is .co not .com. Someday we'll get the .com, but right now .co. You can also find me on Twitter @jjacobs22, where I would encourage you to share your feedback on the episode or suggestions for future guests you'd like to hear. And before I let you go, if you enjoyed the show, please share an episode with a friend or consider leaving a review on iTunes. The lawyers made me say that. Thank you.
