Episode 226: Matthias Schmelzer
Today’s guest is Matthias Schmelzer, an economic historian, networker and climate activist.
This episode is complementary to a previous podcast with Timothée Parrique, who covered the topic of degrowth. Matthias’ main interests include the political economy of capitalism, social and environmental history, climate catastrophe, aviation, and alternative economics. He is author of the award-winning The Hegemony of Growth and co-author of The Future Is Degrowth: A Guide to a World Beyond Capitalism.
To further the conversation about degrowth, Jason and Matthias discuss the overall concept and build bridges to not only increase understanding, but also help us unify to address the problem that we all share.
Get connected:
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Matthias' Twitter
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*You can also reach us via email at info@mcjcollective.com, where we encourage you to share your feedback on episodes and suggestions for future topics or guests.
Episode recorded on August 9, 2022.
In today's episode, we cover:
[6:14] How Matthias became interested in degrowth
[9:57] Labeling and its impact on progress
[16:30] Growth focused reforms and social justice that need to be addressed to reduce emissions
[24:42] GDP growth while emissions have fallen in Western countries
[27:09] Alternative policies that would help reduce emissions without a total overhaul
[29:59] Degrowth as a proposal for early industrialized rich countries in the global north
[33:36] How we can fund the transition
[41:48] Focusing on the demand side of emissions, including aviation and vehicle size
[44:30] Decarbonizing cement and other materials
[48:07] Ensuring a just transition away from fossil fuels
[52:13] What Matthias wants capitalists to hear
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Jason Jacobs (00:00):
Hello everyone. This is Jason Jacobs.
Cody Simms (00:02):
And I'm Cody Simms.
Jason Jacobs (00:02):
And welcome to My Climate Journey. This show is a growing body of knowledge focused on climate change and potential solutions.
Cody Simms (00:08):
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Jason Jacobs (00:20):
We appreciate you tuning in, sharing this episode, and if you feel like it, leaving us a review to help more people find out about us so they can figure out where they fit in addressing the problem of climate change.
Jason Jacobs (01:56):
Today's guest is Matthias Schmelzer, an economic historian, networker and climate activists based in Germany. He combines activism in social movements around climate justice and degrowth with academic research. His current research interests include degrowth, social movements, capitalism, the history of economic ideas and social ecological transformations. He also recently published a book called The Future is Degrowth: A Guide to a World Beyond Capitalism.
Jason Jacobs (02:27):
Now I got to Matthias because when I tweeted about degrowth and how I was skeptical of its viability, I was interested to talk to some experts who could try to convince me otherwise. I did one episode recently with Timothée Parrique, and Matthias was another person that many people on that Twitter thread pointed me to. And when I looked up his body of work, there was a lot of it. We have an interesting discussion in this episode, a compliment to the one with Timothée, where we talk about degrowth and Matt's path to doing the work that he does, what it is that motivates him to do that work, how his views have evolved as he's done more of that work. And we have a great discussion about capitalism, its role, its flaws, the path forwards. What in Matthias view a better path might be and how we might go about getting there.
Jason Jacobs (03:24):
Now I had a lot of questions and I have a lot of questions about this path, but I must say I'm grateful that Matthias made the time to come on the show. I learned a lot and building these bridges and increasing this understanding, I think will only help us unify to address the problem that we all share the mission alignment to do. Matthias, welcome to the show.
Matthias Schmelzer (03:46):
Thanks. Hey Jason.
Jason Jacobs (03:47):
Well, thanks so much for coming. We chatted a little bit before we hit record here, but I had tweeted a while back that I wasn't really sold on degrowth as a concept, but that I had an open mind and wanted to talk to the best people that could tell me that I was misguided and why I was misguided. And so I did one episode recently with Timothée Parrique and so many people on that Twitter thread pointed me to you. I know you recently published a book on degrowth and that in addition to your work in degrowth, you're an economic historian. I'm just so grateful for you making the time to come on the show and to give me and listeners a chance to learn from you and your work. Maybe just for context setting, talk a little bit about your work and your portfolio of professional time.
Matthias Schmelzer (04:45):
I'm based in Berlin, Germany. I work as an economic historian at the university. I'm having a postdoc position and currently actually researching the history of cement and concrete as the worlds most used material and the ecological repercussions. But this is just work that I'm starting now. Before this I started intellectually in the field of economic history with my PhD thesis, which focused on the question, why in basically all societies around the globe economic growth is the prime goal of policy. I published this book called The Hegemony of Growth, which came out in 2016. And while doing this research I obviously also dealt with all the possibly problematic or interesting repercussions this growth focus actually has, also the entire question of why the statistics behind the growth domestic product is problematic. And then I started to more learn about the critiques of economic growth, which have been going on since basically the beginning of the growth focus in the 19th century, but became particularly important in the 2000s and 2010s. There's this new concept of degrowth, which then I started to develop with other scholars mainly from Europe. And that's where I've been working on over the last years.
Jason Jacobs (06:09):
What is it that led you to do this work in the first place? How did you become interested in it?
Matthias Schmelzer (06:14):
I've been interested in global inequalities for a long time and in the economic reasons. And if I talk about economic reasons I mean macroeconomic systemic reasons for global injustices. I used to work a lot on finance and the financial crisis in 2008 triggered this interest massively. So trying to figure out what are the problems underlying our current financial system and the instability it brings. I started to work on the history of the OECD, one of the key actors. It's the organization for economic operation and development and international organization based in Paris, one of the main actors behind the liberalization of finance. And while in the archive I actually found a lot of documents from the 1960s that pointed very interestingly to these huge efforts by governments to put economic growth as the prime objective of policies.
Matthias Schmelzer (07:08):
And they launched in Western capitalist governments. They launched at this time growth targets that were very reminiscent of Soviet style growth plans at the same time. I really got curious about this concept of economic growth and why so much public interest was put behind it. And that got my curiosity going. And then I started to read and really found it very interesting and peculiar that so much focus is on economic growth, while at the same time, there's a huge amount of studies that show that in rich societies, economic growth is not any more beneficial for human wellbeing. And also secondly that economic growth is most likely not compatible with stable climate over the long term. And for these reasons I basically got into this whole field of growth, the economics of growth, the growth focus and alternatives.
Jason Jacobs (08:01):
How much does climate change motivate the work that you do if at all?
Matthias Schmelzer (08:06):
I'd say a lot. I've been on the side of the academic and research work. I've been a climate activist since decades, starting basically with the work on the Arctic globalization movement in the late 1990s to early 2000s. And starting from this very much to focus on climate justice. I've been to many protests, actions of civil disobedience. It's really close to my heart and this whole intersection of global injustices and climate injustices and what to do about it, is very much what I focus on and why I think that the whole debate about growth and degrowth is indispensable if you want climate security for the future. I really think it's a crucial discussion we need to be having. That's why I write these books and go to podcasts like this one.
Jason Jacobs (08:50):
Of the things I've been thinking about is, actually it started with this whole concept of Democrats and Republicans here in the US, where, when I was in college I pledged a fraternity freshman year, but I ended up deactivating quickly not because they were bad people, but because I didn't feel comfortable with the concept of being ascribed a set of values, like upon me, one size fits all across this larger group of people when people are unique and different from each other, even within the same tribe. And some of that is happening in US politics as well, where there's just a lot of nuance that gets lost in this polarized world. And so I can see the merits for example, of naming and branding something. So the Green New Deal or degrowth or eco modernism or capitalism or socialism or that. But I also worry sometimes that in the actual real world, the lines aren't so rigid.
Matthias Schmelzer (09:48):
No, I get it.
Jason Jacobs (09:49):
That's a long winded way of asking you, do you think these names and branding are helpful or hurtful for progress?
Matthias Schmelzer (09:57):
That's definitely a really good question to ask, in particular because the title of the book we just published with Verso, is The Future is Degrowth: A Guide to a World Beyond Capitalism. We have at least two of these trigger words in the title already, but then I partly agree with what you're saying in the book. We make the argument and I've been arguing along these lines for many years, is that it's not about the labels in the end, the labels serve a particular function for a particular purpose. And right now I think the term degrowth serves the particular function because it stirs controversy, it enables the right kinds of discussion we need to be having, about, is it possible to decouple the resource use and emissions from GDP, from economic growth and similar questions?
Matthias Schmelzer (10:46):
It's important to open debates about radical alternatives, which we need to be having given the escalation of the climate situation we're in. But in the end, I don't believe that a larger social progressive actor or set of forces or movement that will actually bring about the changes that we need, will run under the label of the growth. And we make this claim that we think possibly the term a green new deal is a much better term, but it needs to incorporate some of the critical perspectives and the proposals from the degrowth debate. I totally agree with that labels can be devisive that we shouldn't use labels to distinguish particular groups of people very rigidly, but then if they are used to start certain discussions and to make clear certain positions, then I think they can also be quite useful.
Jason Jacobs (11:37):
Even with the critiques of capitalism, let's say, and I am not a student of economic histories. The big caveat here is that I'm a rookie, but even with the critiques of capitalism, I wonder sometimes if the people that were debating on Twitter and going back and forth actually just tried to define capitalism, what it is that they were debating about, that they would be operating off of wildly different sets of definitions. Do you worry about that sometimes where maybe we're more closely aligned than meets the eye because we just aren't operating off the same sheet of music?
Matthias Schmelzer (12:11):
I don't like Twitter debates very much because I think very often they are of this sort, people are debating about things that in the end aren't real debates, but it's more about identities and certain groups and these kinds of things. I think it's very divisive technology for discussions. I think Twitter is a very bad example for this. But I think if we are having a conversation about the longer term trajectory that we need to be having to actually reduce emissions fast enough to alleviate the climate emergency, I think in this context, it's crucially important to not evade certain issues around the future of growth or the future of capitalist institutions such as competition and markets, because they are key.
Matthias Schmelzer (12:55):
Currently we are seeing a certain set of, if you just look at the Inflation Reduction Act that will be passed soon most likely. Again here we see a particular focus that is on investments, which is great, even though not enough. If we look at the total numbers, I just read this. If we analyze it for each year it's just 5% of the military budget in effect. It's not so much, but we could imagine what we could actually do if we set the right priorities in this context. Investment is great, but then we don't focus enough on the divestment part that I think is crucially important if we want to face out fossil fuels. It's not enough, and this is one of the key differences of the key advantages of the degrowth perspective I think.
Matthias Schmelzer (13:38):
It's not enough to wait, to basically fast invest in the green technologies and the renewable energies and electric cars, and then hope that they will outcompete combustion engine cars, coal, energy, gas, et cetera, in time. This is naive and will just not happen in the short timeframe that we are having right now. We also need to focus on actively divesting and dealing with the repercussions this is having from the fossil fuel industry. I think this is crucially important and it's not something that should be evaded because then we are having a more harmonious debate.
Jason Jacobs (14:15):
When you say we don't have, or the short timelines that we're operating under, can you expand on that a bit and talk about how you think about timelines and urgency, before we even get to solutions, just in terms of the nature of the problem and the threat, if you will?
Matthias Schmelzer (14:30):
I think we are all experiencing more the repercussions the climate crisis is already having today. We are at around 1.1 degree of global warming, and we are already seeing crazy effects happening. For example, currently in Germany, the Rhein river, which is the biggest river used for transporting all kinds of things through Europe is so dried up that it's impossible for the larger ships to actually carry on using this as a route for transporting things, also things such as coal that we need currently because we haven't figured out the alternatives to fire the coal plants. These are the facts we are having at 1.1 degree of global warming. The scientific consensus is very clear that we need to stay below 1.5 degree of global warming, otherwise there will be these self-reinforcing feedback loops that could drive the climate to really, really dangerous zones.
Matthias Schmelzer (15:30):
And for this to happen, we need to reduce emissions by around 10% every single year. And these are the magnitudes I'm speaking for Europe here, that we saw during the first phase of the lockdown in the first half of 2020, where large parts of the economy were actually shut down. This needs to happen not just one year, but every consecutive year until around 2035 at the latest. It's a very short time span we are having. There is a lot of things we need to invest in to rebuild the alternatives, but at the same time we need to also downsize those parts of the economy that just aren't future fit and that cannot be made future fit in time.
Jason Jacobs (16:11):
When you think about the current system, and I was going to say capitalism, but I feel like that's a trigger word. So instead I'll say competition and markets, what are the biggest issues you have with it or said another way, what do you think the biggest ways are that it is holding us back from making the progress that we need to make?
Matthias Schmelzer (16:30):
There are so many things one could talk about here, but I start with from a degrowth perspective speaking, one of the key issues is the whole growth context in which many good reforms are happening. In Germany we have built up a lot of renewable energies over the past, but because we didn't face down fossil fuels rapidly enough and because cars got bigger, and because we kept on increasing the overall energy use in our societies, this didn't lead to rapid reductions in emissions. This led to some reductions in emissions, but largely because we shut down the low hanging fruits where it's easiest first, and that's much easier than the more difficult parts such as steel, cement, and the more tricky issues like heating in homes.
Matthias Schmelzer (17:18):
The whole growth focus, which is the context of where these good reforms are happening is very problematic. That's one thing. Then secondly I'd say it's very problematic that in these debates we don't highlight enough the social justice aspect. I think this is holding back many of the important reforms. So again, talking about the Inflation Reduction Act, because it was now wound down from the original proposals. A lot of the things that are now proposed will be benefiting mainly wealthy people. It will be benefiting those who own homes in which you can get subsidies for refurbishing, those that will be able to buy electric vehicles because they, again can benefit from the subsidies for buying these cars. And those that can benefit from the large tax reductions in this boat.
Matthias Schmelzer (18:08):
I think what's most important is that we need to focus on the social basis, provisioning basis for those who are already struggling to get along, to create a situation of safety in which we can discuss the more radical steps that need to be taken if we want to actually phase out fossil view rapidly. I think one of the key degrowth proposals that I think are crucial for other debates to be taken up, is to focus on publicly funded, social provisioning. So something like a basic public services in the areas of housing, energy, mobility, things people have a right to access in a certain amount just because they are citizens of a country or live there.
Matthias Schmelzer (18:53):
I think if we would have this so people can get along quite all right, without a fear of the transition, then I think we have an important basis for a debate that needs to be happening and for the steps towards this. Otherwise we'll always encounter protests like Yellow Vest and friends, I don't know if you've heard about them, that reacted to rising gas prices very violently and thus will be blocking these reforms along the way.
Jason Jacobs (19:20):
If you take the bill that you were just discussing, and you mentioned that the provisions in there largely benefited the wealthy and what was missing was social justice, any specifics on what types of things you would've liked to see from the social justice standpoint? Because I've heard that critique a lot, I've yet to see specifics, and I'd love to just understand that better.
Matthias Schmelzer (19:43):
In the original proposals for Green New Deal that were developed by Alexandria Ocasio-Cortez, for example, there were a lot of specifics in there that would benefit firstly the frontline communities in those areas where the extraction of fossil fuels is happening, that would benefit, and this is discussed from an intersectional perspective, benefit the poor, those affected by racism, those affected by classism and sexism. And this is all the way from the provisioning of public housing, the provisioning of basic services in the areas of health and things like that. Now, I think it's very important to not distinguish them from the climate policies. That's the strength of the Green New Deal, to put them in one package.
Matthias Schmelzer (20:29):
To basically create a situation where we have climate justice, where a climate secure world is also one that is better for the large majority of people. This will create the basis for actually pushing through something that can have these 10% of reductions every single year.
Jason Jacobs (20:45):
You talked about the EV subsidies or the subsidies to clean up your home, but what types of things could have been in there to bring about the vision that you're describing?
Matthias Schmelzer (20:54):
Firstly, there could have been more provisions that are not mediated via the market, just by subsidizing. For example, if you only have access to electric cars, if you can afford one, which is along the lines of $50,000 or so, or even more, which is very expensive. It's a very small group of the population that will be able to afford these cars. And what about the rest? For the rest, something that would be much more important is to provide a good functioning public system of transport in the municipality where they're living. This is something that used to be there in many American cities that we are having much better in Europe, but that also needs to improve here.
Matthias Schmelzer (21:34):
Something that is affordable possibly for free for everyone, and that can create a situation where you actually don't need a car to get along in life. I think reforms along these lines would benefit much more the majority of the population rather than just a particular group.
Jason Jacobs (21:51):
A few ways I could go from there, one way is that, when Tesla started with a high end car, they got that critique that it was just for the rich people that can afford it. But it's a pretty common entry strategy into market that if you start the high end with the people that can pay, then it gets you the revenue and the capital to then reinvest. And then it gets you the economies of scale where ultimately the cost go down and it becomes available to everybody else. Whereas if you try to start with the mainstream right out of the shoot, it wouldn't be practical and you would never make it to the long term. So that's one comment.
Matthias Schmelzer (22:27):
I totally get this. This is what you need to do if you go from this, from a private investor's perspective, definitely you need to start with a segment of the market that it can actually pay for the innovations that need to be happening. But then I think the key question is, if it's the right approach to only focus on shifting from combustion engine cars to electric cars, or if we don't need a more different approach that also focuses on getting away from private mobility, everyone needing to own a car, to assist them where we focus much more on the collective public provisioning via public transportation. I think this focus is missing, and this is something that is very difficult to imagine coming out of a private investors initiative, but would be something that needs to be a public project.
Jason Jacobs (23:16):
You talked about how we don't have a lot of time, I guess I'm just curious how you think about, it seems like it would take more time to try to screech the breaks on how society already operates and essentially start over versus just taking the behavior that's so ingrained in our populations for better or for worse it's just like an object in motion stays in motion and swapping it out. That might not be the perfect long term solution, but if we really are under the gun for time, like you said, it seems like the one that can make progress faster, no.
Matthias Schmelzer (23:48):
I guess it depends. I'm not against all kinds of initiatives that make progress fast. I think it's great. But we've also told ourselves this kind of story for the last 30 years and we are seeing emissions still going up. We are in a kind of emergency situation where-
Jason Jacobs (24:05):
Not in Western countries though, right?
Matthias Schmelzer (24:06):
Not in Western countries, even though this is also very, if you look at the details of consumption based emissions and where products are actually produced, we are still at a far too high level and it's not feasible to see how with the current technological developments and the current policy process that we are basing our hopes on, we could actually get to these drastic reductions of emissions.
Jason Jacobs (24:30):
Has GDP continued to grow while emissions have fallen in Western countries?
Matthias Schmelzer (24:34):
Definitely yes.
Jason Jacobs (24:35):
Doesn't that refute the objection that you can't untether GDP from or growth from emissions?
Matthias Schmelzer (24:42):
In the end it's a very complicated debate, but you're right, we definitely seeing progress here. And this is certainly good and needs to be celebrated, but it's also something that shouldn't surprise anyone, it's quite normal. Our economies are getting more efficient, more energy efficient. We need to use less energy to produce the same amount of output or even more output, even more it's more emissions efficient. The intensity of the economy in terms of emissions is going down rapidly, but it's not going down rapidly enough by far. I think this is the key message. It's not something that we can discuss in the abstract, whether there is some decoupling happening, some decoupling that will lead us to net zero by the end of the century, because we need to be at net zero in the next 15 years.
Matthias Schmelzer (25:30):
And this is a big difference. I think for this, there's just no evidence that this is possible. Let me say it this way, it's much more difficult to achieve the necessary decoupling rates if we at the same time increase the economies, in particular, the global economy over this period.
Jason Jacobs (25:46):
It's fascinating. I had on Alex Trembath from the Breakthrough Technology Institute yesterday actually. We recorded and he's got obviously a very different perspective with the eco modernist viewpoint. And so it seems like we're at this crossroads where we have a lot of work to do, we are under the gun, the symptoms are getting worse. So a lot of it is already baked in. I feel like all sides can, unless you're some like Exxon funded climate denier through some trade group or something, we can all generally agree on that part. I think we can also agree that we're not making progress fast enough. And so I feel like the fork in the road is we can either double down on markets and competition, but find a way to factor in the externalities.
Jason Jacobs (26:30):
And then there's big debate about the best way to factor in those externalities. Is it a tax? Is it subsidies? Is it mandates? Is it low carbon trading system? Stuff that's over my pay grade. But there's a whole world of things over there. Or do we try to get off the growth train when the whole world is essentially conditioned to be on the growth chain for generations. I look at the power of markets, like look at the pickle we're in. We got in this pickle because of the power of markets. And so it seems like if you could harness the power, factor in the externalities, that the power of market is the most powerful way to then get us to where we need to go. It sounds like you have a very different view there.
Matthias Schmelzer (27:09):
Definitely. I also say that in the short timeframe we are having, it's very unrealistic to rely on a total overhaul of the economic and social systems we are having. That's definitely not the perspective I'm having or that degrowth is taking in general. It's rather that if we look at the particular policies that we are seeing, we are not satisfied with them and we want to propose alternative policies that could start to move in a different direction. It's not this total vision that you either buy the whole package or not. You can look at particular things. I think, for example, it's just insane that in the year 2022 we are still investing in fossil fuels.
Matthias Schmelzer (27:51):
This should be a common starting point for the whole climate discussion to stop all the investments in fossil fuels and to rapidly move out of them and then deal with the consequences and not let the argument that we don't have enough energy be in the way of the necessary shutdowns of fossil fluids, but rather look for alternatives, how we can actually organize society based on the decreasing amount of energy that's available. I think this, for example, would take a lot of pressure out of the whole debate we are having, where currently, for example, in Germany, we are scaling up coal after the decision to phase out coal.
Matthias Schmelzer (28:30):
We are scaling up coal use again, in the context of the energy shortages you caused by the war in Ukraine. And this is something that just shouldn't be happening and that doesn't need to happen if you would take into account the demand side proposals in the degrowth debate.
Jason Jacobs (28:47):
You talked about how the IRA bill didn't incorporate enough justice, and I can't help but think if you are talking about ripping the bandaid and stopping fossil fuel production, that there's a huge justice issue there with the billion plus people that don't have access to basic electricity or the developing countries that are just now starting to come up after us in the west rode on the backs of fossil fuel over the last many decades. That doesn't seem like justice to me.
Matthias Schmelzer (29:14):
That's why I said that justice oriented policies that focus on the social provisioning of basic services for everyone, they are the basis for this. And currently we are having a very unequal distribution of the use of energy. And in particular the abuse of emissions in society. This is not right. There should be a lot more equality by focusing on providing energy to those who can't afford enough energy right now., by scaling down the overuse of energy in those sectors of society that use much more than the average. That's basically my answer for the US context or the European context. But you also mentioned the global perspective, which is a different conversation we need to be having.
Matthias Schmelzer (29:59):
Maybe it's important to clarify that degrowth is not a proposal for the entire globe. It's rather a proposal for the early industrialized rich countries in the global north to scale down energy use and emissions, so that there is space for development and global justice for countries in the global south. It's a global justice perspective that is actually at the root of what is happening here in the degrowth conversation.
Jason Jacobs (30:24):
Who would police this when it's we need to bring about, who's we?
Matthias Schmelzer (30:28):
That's a totally complex question to which I don't have the answer, but it's a challenge that we are having already in the whole context of the climate negotiations. We are seeing this at the cops that are happening every year. It's a crucial question, how to deal with the geopolitical repercussions and the governance of such a system. There are some proposals in the degrowth debate that are basically based on a much more cooperative approach to this, that is not so much focusing on each nation trying to secure global investments and export markets, et cetera, for the particular population, but a more cooperative approach. I'm also still working on these issues and trying to figure out good answers to this because it's definitely a key challenge.
Jason Jacobs (31:14):
Some of the stuff that you're saying resonates, for example, I would love better public infrastructure. I don't like driving my car. If I could just hop on a train and sit and relax or read a book or do emails or play a board game with my kids or something like that, that is a far preferred way to travel. The airports are an absolute disaster. I would love to take a high speed rail to travel across the country, for example. At the same time, and I'm just speaking with a US context view, but we can't build big things. We're a mess. Our public good stuff is a disaster. If you look at the train system in Boston where I live, they're shutting it down for a month and people are just going to be screwed in terms of getting to work every day. People that rely on that train to get to work because of safety reasons, because it's a disaster.
Jason Jacobs (31:59):
When I look at the private sector, the private sector and competition and markets is what pushes people to be at the top of the game and deliver the best products and experiences because there's money there for better or for worse. It's very motivating to people. It's ingrained in who we are. And we can talk about if we can be reprogrammed essentially as a society, which sounds like you're suggesting us to do. Are there examples in the past of societies getting reprogrammed that weren't led by a technological breakthrough?
Matthias Schmelzer (32:28):
If you're talking about the example of public transportation, you can see this in the difference between Europe and the US. We are struggling with our public transport systems and there needs to be a lot more investments here. And we are having a lot of struggles around these issues that are currently happening in different European countries. But in general, it's much better, but you need to talk to experts on the US situation. But I think it's a myth that public infrastructure is worse than private-
Jason Jacobs (32:57):
Well it depends on where you are infrastructure, I would say. Because, I don't know, my experience is that it's worse. You look at our healthcare system, you look at our education system, we're a mess.
Matthias Schmelzer (33:06):
Yeah, yeah, definitely. But it's a question of public priorities and US public infrastructure has been defunded over the last four and five decades. There's a long period where you see the priorities shifting from the public sector to the private sector. And obviously if there's no money, if there's no priority, if there's no political focus, then you can't.
Jason Jacobs (33:31):
But doesn't that money come from taxes and doesn't that taxes come from capitalism?
Matthias Schmelzer (33:36):
That's another question. How do we actually fund the transition? It's a great question. A whole conversation that needs to be going on. Firstly we need to get the numbers right. For example, what I mentioned in the beginning, the whole package that is now labored as the biggest climate law in history, in the US media, et cetera, if you analyze it's only 5% of the military budget. And here we see, I think very clearly the priorities and how they need to be shifting. We are putting a lot of funding right now into things that I think should have less priority given the emergency we earn. This is the first approach we could take to the question, how to fund it. Secondly, there's the possibility of obviously using higher taxes, higher taxes for those that have benefited from the increasing inequality over the last decades.
Matthias Schmelzer (34:29):
I think this is a huge area and there have been all these studies showing how immensely unequal the wealth is distributed in globally but also in European or in particular the American society. There is a lot of wealth, it just needs to be distributed differently. And then thirdly, obviously there's different forms of monetary politics that you could use to create public money for a particular period and a particular purpose. Mainly the energy transition we need to be having. This is definitely possible. I don't think in the end money should be the obstacle in different areas.
Jason Jacobs (35:03):
One area we agree on is I'm not for laissez-faire government light, if you will. I think there needs to be some government oversight and investment and guardrails and things, especially for a problem like this, which is it's not invisible, it's visible, but it is more invisible than if my backyard was on fire. It's emissions in the atmosphere. It's a heat blanket. We agree on that. I would love better public infrastructure. I don't think it's either or, I think we should also electrify the cars and incentivize and get more people doing that. And same thing with homes and things like that. I don't think it's either or. Do you think it's either or, or should we be kind of pushing on all these things in parallel with the understanding that some are going to resonate better in different parts of the country or parts of the world or different economies, but that as long as we get to where we need to go, one doesn't need a win?
Matthias Schmelzer (35:58):
I'm definitely not of the either or type. I think in this situation we definitely should be pushing in all different directions. It's more about the priorities we are setting. I think right now the priority and also the understanding of the transition, it's mainly one where we basically leave the whole mode of living and the whole system of production intact and just use a different type of energy from renewable sources, and use more resources that are not fossil based, but renewable. This perspective is lacking in that is unrealistic in the end. We need to also work with social innovations. We need to, for example, shift from cars to public transportation in cities, this is crucially important.
Matthias Schmelzer (36:44):
This doesn't mean that we don't need electric cars. Obviously we need electric cars because not everyone's living in a city and there's the need for electric buses, et cetera. But I think the priority should be on also focusing on these social innovations.
Jason Jacobs (36:59):
Whether it's realistic or not I think it's subject to debate. I think it's too early to tell. One concern I have is that if it ever were to be realistic, I worry that people that believe in their gut, that it's not realistic based on a point in time snapshot or maybe the early days what they believed and just kind of get stuck in that mode, wouldn't actually come around to support it even if it was enough.
Matthias Schmelzer (37:27):
You mean they wouldn't support the degrowth agenda or they wouldn't support what?
Jason Jacobs (37:31):
No. I'm saying the people from the degrowth that say that technological innovation and just swapping a mode in the society will continue to run how it is, isn't enough. I think that even if it was enough, I still don't think they would support it because I don't actually think that's the primary driver of why they don't like it. I think some of these other things, and then we can debate about whether those other things, capitalism is extractive and wealth inequality and things like that. That's fine, but that doesn't have to do with our carbon problem. It's a related issue, but it's a different issue. And so it's framed in the lens of it won't help us solve our carbon problem. I am putting out there that even if it was enough for our carbon problem, that wouldn't actually make anyone any less resistant about status quo.
Matthias Schmelzer (38:11):
I can say I'd be really happy if we were to develop the technologies fast enough to make it easier to transition out of fossil fuels. I'm all for this. I'm just skeptical. But aside from this, I think it's also important to acknowledge that we are not just having a carbon problem. And this is something that is called the carbon lens in the climate debate. It's basically narrowing of the perspective to just look at emissions and reductions of emissions. I think this is highly simplistic because firstly there's other environmental issues that we need to be focusing, in particular the biodiversity crisis and mass extinction, which is crucially important from which our food systems depends, et cetera.
Matthias Schmelzer (38:53):
There are these other environmental crisis that are happening, that are by the way often closely related to the green capitalist ecologically modernization approaches. So dealing with the other problem, the climate crisis. For example, the whole question, where are the renewable energies in the farm of bio energy? Where are they coming from? What does it do to the biodiversity in these huge swaths of land where then bio crop is farmed to produce biofuels? Is this really a sustainable proposal? And on what scale? I think these are crucially and connected issues to holistic approach to climate justice.
Matthias Schmelzer (39:30):
And then as I argued before, I think it's not just about the emissions, but about reducing the emissions in a way that is globally just, and that will also garner the support that we need to actually bring this about. I'm a bit skeptical of just looking at the emissions in the end because we live in a society where there's other problems as well, besides that we emit too much CO2.
Jason Jacobs (39:56):
If I'm hearing right, and this is a clarifying question, but you believe that we should stop burning fossil fuels immediately. Yes?
Matthias Schmelzer (40:03):
No. I'd say what we need is fossil fuel, non proliferation treaty, in international agreement to not further invest in the expansion of fossil fuels and to stop the expansion of all fossil fuel projects immediately. Because as you know if you invest in something, then there's a high incentive to work with this investment over decades. It's a really long time span. This is the first step. And then we need a globally binding agreement to cut down progressively the use of fossil fuels in a globally just way, which means that the rich countries need to reduce faster than the poor countries. And from what I've read, this is the climate science numbers. Basically this means for countries in Europe to scale down fossil fuels by the year 2030 at the latest.
Matthias Schmelzer (40:49):
This doesn't mean next year, but it means next year, 10% less. And then going down from this. It's a steep decline, much steeper than what we've seen as happening in the last years that are often praised as showing that we have enough decoupling already happening.
Jason Jacobs (41:05):
Maybe talk a little bit about that because you can swap it out for cleaner alternatives or you can work on the demand side. And so it sounds like you're skeptical of the greener alternatives. So what is an equitable way and a viable, practical way to reduce demand?
Matthias Schmelzer (41:23):
I'm not saying that we shouldn't focus on the supply side. It's definitely key, but there is a lot of focus on the supply side already and not enough focus on the demand side. That's what we are saying. We should also look at the demand side.
Jason Jacobs (41:34):
What would that look like? Here I am. I have a big pool of resources in my chair and platform, and I'm not saying me, I'm saying hypothetically, and I'm ready to focus on the demand side. You're the portfolio manager for the demand side to determine where we put that focus, where would you put it?
Matthias Schmelzer (41:48):
I'd start with emissions that are luxury emissions in the end, that are used or caused by a small group of people, and that are not really necessary for the wellbeing. For example, I think a very reasonable thing to do, to ban private jets for private users. I don't see any reason why people should be using private jets in the current climate emergency. This is not so much emissions in the end, but I think it sets an example. Then I think we could go on from this, for example, we could ask, is it necessary to have first class in aviation, in flights, or if we cannot create just one class for everyone to use? Because one key issue is that the whole aviation sector is there is no technology available to decarbonize in the next 15 years on scale, there needs to be some stop of the growth of these aviation growth trajectories.
Matthias Schmelzer (42:45):
And then we can look at other sectors. We can look at, for example, is it necessary that the size of cars is increasing over the last four decades? Or can we not have an agreement to use the most efficient technologies that everyone needs to use, the most efficient technologies that are on the market and to do this in a way that basically minimizes the overall energy use for the use of cars? I think these are reasonable things to do. Not everyone needs to drive an SUV in a city. And there's a lot of potential along these lines to actually reduce from the demand side over use emissions. And then there's the whole area of which industries are currently producing a lot of emissions for which purposes. And is it really worthwhile? I think this is also a conversation we need to be having if certain products that are very emissions intensive are really worth the effort if we look at it from a holistic perspective.
Jason Jacobs (43:44):
I can't remember if you said this on camera or if it was before we hit record, but you mentioned that you'd been doing some work recently on the history of cement and concrete. I want to ask, cement and concrete's a good example, big source of emissions, hard to decarbonize. Although I did an episode recently with someone who works at a foundation overseeing decarbonization of industrials and her premise was that it's not actually harder to decarbonize were just earlier in the decarbonization journey, but it'll be difficult just like it's difficult to decarbonize a lot of things. But I guess the question is, do we outlaw it's use in this framework that you're putting out, do we say that you can't build new buildings using these products or that only X new buildings can be built per year? Because don't we also, at least here the US, there's a big housing shortage in many cities and people are getting priced out of markets because there's not enough supply, but in order to get more supply it takes more materials.
Matthias Schmelzer (44:30):
I'd say it's basically a difficult question how to do these things. But in the end it's also the same thing. It's key to try to decarbonize these industries and to set a roadmap for this, that decarbonizes rapidly enough. So we're talking about the next 15 years at most. And then it's important to look at those users of cement that are most crucial for society. I'd probably say this is mostly in the area of infrastructure, but also possibly in the grounding of houses. But then there's other aspects of building where there are alternatives readily available. And in these areas, I think it's key to just strengthen these and also use laws to basically create something like a front runner, that people need to build houses by only using X percent of cement and otherwise use renewable materials where possible.
Matthias Schmelzer (45:22):
There's not enough research going into these truly sustainable alternatives in the end, because we are focusing mainly on these, I think illusionary promises of decarbonizing this whole sector that rely to a large degree on the carbon capture storage technologies and the resucking out of emissions out of the air that is not really tested on scale for such a huge sector.
Jason Jacobs (45:46):
When you talk about crucial for society, I guess my first thought is according to who and my other thought is even if you can agree on a framework for assessing that, which seems like it's ripe for gray areas, if you will, that would be arbitrary or certainly subject to debate. But I guess my question is just, would you trust the government to be making those decisions on your behalf? Because who's to say that there's good actors in the government or that the government is well functioning?
Matthias Schmelzer (46:16):
Definitely a very good question. I think I give a double answer. The first thing is that a lot of things can be done or people are already doing a lot of things without governments. They are working on the alternatives, be via the private sector or in associations and other contexts. But in the end for these big transitions to happen, we need to be having some form of good government, in quotation marks. Otherwise I think it's very difficult to conceive of these large transitions that are actually according to the climate science necessary. We need to work on this by building social movements and a lot of pressure to actually put in place some form of government. I think a lot of things can happen on the local level here that will actually deliver along these lines. But it's definitely a very difficult thing to do.
Jason Jacobs (47:07):
If you had a magic wand and you could change one thing that would most accelerate our progress to fulfilling this worldview that you're describing, what would you change and how would you change it?
Matthias Schmelzer (47:19):
The first thing I do is, I mentioned this earlier, stop the proliferation of fossil fuels, stop all the investments and agree on some international binding agreement to cut down the use of fossil fuels within the next 15 years or 13 years. This would be I think the most crucial thing to do. And this would then create conditions that are not easy to deal with, but that at least we have the right context to work in, because currently we are still working in the opposite direction. I think this is very, very frightening for our collective future.
Jason Jacobs (47:54):
And then what would you do for, if anything, for the communities and families in the regions that are dependent on fossil fuel production for their livelihoods.
Matthias Schmelzer (48:07):
There's a whole debate coming out of straight union circles around just transitions. I think it's important to build on these proposals. I think it's definitely the collective responsibility of society to deal with the consequence of this transition, of moving out of fossil fuels. There's different ideas from setting up a fund that could be funded over the transitory period by taxes on the use of fossil fuels, that gives people the income they need to learn another job and to transition these industries, the fossil fuel industries to produce energy in a renewable fashion. Ideally this would also go hand in hand with radical, I think, democratization and decentralization of the provision of energy use, which would be a much better and more just way of dealing with energy in the future.
Jason Jacobs (48:58):
What do you think of nuclear energy, for example?
Matthias Schmelzer (49:00):
It's a complex debate. Being from Germany we are having right now an interesting discussion of after we agreed to phase out fossil fuels about the possible restarting of certain nuclear plants. I'm very skeptical from what I read from the science. It's not producing a lot of energy, not even in Germany and it's not feasible to scale it up rapidly enough. It's immensely expensive if you also include the public costs that were never paid for by the private energy nuclear companies, but were paid for by tax euros. And also that it just doesn't help in the transition because it's a base load energy, and what we need is a flexible form of energy that we can scale up in times of where there's little sun and little wind. This is something that we need for the transitory period, but for this, nuclear is just not helping.
Jason Jacobs (49:57):
I'm not the expert that's well equipped to engage in that debate, but I've certainly heard from a lot of experts that I think would quite disagree with you. I'll rather just let this ship and then hopefully foster the dialogue so we can all learn something. But what I hear from them is carbon free energy and yeah it's expensive, but the waste is largely overblown and security is largely overblown. And that historically it's been the regulatory environment that's held it back and especially with advanced nuclear that's smaller and more modular and more iterative and ultimately faster to market, that it shows real promise. But again, I'm just kind of parroting what I've heard from people closer to it than I am.
Matthias Schmelzer (50:40):
But in the end we do have renewable alternatives that we can scale up and that are already there, that are cheap, that don't have these problems. So why not use them? I think focusing on the scale up of wind and solar and geothermal is much more important than the whole debate we're having about nuclear energy.
Jason Jacobs (51:00):
But back to if it's really an emergency, then it's not either or, and so by being purist and only backing the pure thing, like everything's got trade offs, how far can renewables take us with given intermittency? Right? And again, I'm just using the words that I hear from the experts, but base load power is very important. And if we're really in the emergency, I think you want to push on the technological innovation just as hard as you push on the supply with the understanding that everything has trade offs and nothing is perfect. And given the pickle that we're in, we need to be okay with some trade offs that are less than optimal so that we can minimize the suffering overall and get to where we need to go.
Matthias Schmelzer (51:39):
It could be, but from what I'm reading and hearing from the experts, at least for the German situation, it's just not helping in reducing emissions. It's a different form of energy that we need and that we are currently lacking, the nuclear energy.
Jason Jacobs (51:50):
Well, great. Well, we'll pull that clip and we'll post it and hopefully there'll be some productive discourse on that. Because again, I don't feel equipped, but I'd love to understand it better, which is the premise for the show.
Matthias Schmelzer (52:00):
Great.
Jason Jacobs (52:01):
Let's see. I guess in wrapping up here, there's a pretty wide range of listeners, but a lot of the people listening to the show are capitalists, not all of them, but a lot of them. Talk to them for a moment. What do you want them to hear?
Matthias Schmelzer (52:13):
I think we are all in this together. We should look at the climate situation and see the crisis and the emergency that we are in and really open our eyes for a variety of different perspectives and look at what's working, and really focus on where we want to put our priorities. I think in this basically overcome possibly dogmatic perspectives that say, we need markets, only capitalism works, it's just the private sector. And also look for other solutions because I think in the end we need a great diversity of tactics and approaches and it's crucially important that we are not divisive, but that we also focus on the core and difficult issues such as the question of the future of growth or the future of certain capitalist institutions that are standing in the way of the transition that we need.
Jason Jacobs (53:07):
You didn't ask me to say this, but talk about the book that you recently published as well.
Matthias Schmelzer (53:11):
Sure. It's called, The Future is Degrowth: A Guide to a World Beyond Capitalism. It's published this June by Verso press. And it's basically an introduction to this whole school of thought. We have a whole chapter on what is actually growth. How can we understand the history of growth and the concept of growth? Then we discuss critiques of growth. It's not just the ecological critique, but there's other forms of critique that will include a feminist critique, south, north critique, industrial critique, et cetera. And then we discuss a lot of policy proposals for alternatives, for a degrowth future. You're welcome to look at it.
Jason Jacobs (53:46):
Awesome. And Matthias, anything I didn't ask that I should have or any parting words for listeners?
Matthias Schmelzer (53:50):
No, I think it was an interesting discussion. I hope I could at least clarify a bit what degrowth could mean. It's certainly a very complex topic and the whole question of how we actually transition from here to a climate just future, is a great question, a difficult conversation to be having, and thanks for pushing the debate in a context that I didn't know about before this conversation.
Jason Jacobs (54:10):
Yeah, no, it's great. I feel like if we tried to have this conversation on Twitter for example, it just would've been like, no, it's my way. No, it's my way. And then we would've ended up block each other something, and instead we spent an hour or a little over an hour and we just talk through it and it's not about winners or losers. I'm honestly just trying to understand better, and that's the service I'm trying to provide for listeners. I definitely feel like I learned a lot from this discussion and I'm just so grateful that you made the time to do it, because we may not always agree, but I think it's important to understand the context and also that we're all humans and that we're on the same team.
Jason Jacobs (54:45):
We're mission aligned. We want to avert the climate crisis and we want adjust and sustainable and prolific world. What brings about prolific, we could spend a whole episode just on that, but we want the same things and it just comes down to tactics. Thank you again.
Matthias Schmelzer (55:00):
Thank you Jason.
Jason Jacobs (55:02):
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 at myclimatejourney.co. Note that is dot co not dot com. Someday we'll get the dot com, but right now dot 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 may be say that. Thank you.
