The Polycrisis
Tim Sahay and Kate Mackenzie on how geopolitics has been driving a quiet revolution in clean tech, and how the energy transition is in turn reshaping world power.
The Polycrisis
08 | Demand Destruction | Techno-optimism?
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In this final bonus season episode, Kate and Tim reflect on the morality of focusing on the "co-benefits" of war, and whether they are techno-optimists or techno-pessimists.
Hosted by energy and climate finance expert Kate Mackenzie, and Tim Sahay from the Net Zero Industrial Policy Lab at Johns Hopkins University. They co-author The Polycrisis newsletter, which explores connections between energy, geopolitics, climate change, finance and industry.
- Produced by Sarah Allely
- Original music by Russell Stapleton
- Mixed by Bethany Stewart
Contact us at: polycrisispodcast@gmail.com
Links:
Prisoners of the Wrong Dilemma: Why Distributive Conflict, Not Collective Action, Characterizes the Politics of Climate Change - (Global Environmental Politics, Nov 2020 edition)
Chartbook - Adam Tooze on Substack. Tooze has a new book coming out soon, Carbon, which Tim refers to in this episode. Tooze holds the Shelby Cullom Davis chair of History at Columbia University and serves as Director of the European Institute.
Hey, welcome to the Polycrisis, where we look at our interconnected crises, the whole being bigger than the sum of its parts.
SPEAKER_01All the episodes for our first season, Electric World Order, are available, and season two is in development. In the meantime, we have a special bonus season, Demand Destruction.
SPEAKER_00This episode, we wanted to pull apart some of our reflections, you know, a few months into this war and crisis, and think about the intellectual and the morals of thinking of techno optimism, which is an acceleration of clean energy in the course of a horrible war. And we'll discuss how both of our perspectives on this have shifted. I'm Tim Sahai. I'm with Johns Hopkins University in the US, where I co-directed SNETZero Industrial Policy Lab. I'm speaking to you from my home in New York City.
SPEAKER_01And I'm Kate McKenzie, a Sydney-based energy and climate finance expert. So, Tim, I know we've been talking a bit about the significance of a shock, you know, the attacks on Iran, the closure of the trade for Moose, US and Israel launching attacks in the across other parts of the region too, like Lebanon. What is your thinking now about how we've been kind of mostly talking about this war as a trigger for energy transition when, you know, it's still actually been this terrible event?
SPEAKER_00Yeah, and I think it's this thing that's been kind of bothering me right from the start of the war, which is, you know, this terrible human catastrophe, this destruction of sort of ancient places in Iran, a war that is like now bombing in almost 18 different countries, caused so much pain and suffering. And, you know, we seem to be thinking mostly about the clean energy technological acceleration that this war is going to produce. And there's this kind of like icky feeling for me that, you know, you know, for so many people, this is just a terrible tragedy. And we seem to be thinking about uh about it mostly from this optimistic perspective of clean energy and climate, which might be true for everyone else who's not in the region, but you know, my family is from um northern India, you know, we belong to the Indo-Iranian sort of world where pretty much everyone in my family sort of spoke Parsi until my dad's generation. And I just find it like an incredibly painful, um, painful human catastrophe. Um, and in the course of it, um, you know, I've been reflecting a lot on the morality of thinking about technology and clean energy.
SPEAKER_01Yeah, it's it's pretty confronting, isn't it? It's like, you know, do we just look at it in this kind of utilitarian way? It it does just seem really, you know, really cold and and and detached and kind of definitely morally problematic. And and and yet we're still looking at it the way we're looking at it, right? Mostly about energy and geopolitics, maybe.
SPEAKER_00Yeah, and and I think the ironic outcome of the war is something that I've been interested in. Like out of some terrible, horrible catastrophe, can something good emerge? And we have clearly latched onto something that we both think is actually happening. It is accurate to say that there is an acceleration and a clean energy shift happening. We can see it in consumer sales, we can see it in government policies, and and so that is undeniably true, but at the same time, there's this ironic outcome, right? Like a catastrophe can produce something, something good. And that is morally, philosophically an interesting thing. Like, when do when do we ever even get intended outcomes? Or do we just live in a world where we get unintended outcomes all the time?
SPEAKER_01Yeah, and you know, look, it's like genuinely hard to know what like what to say about that. Like, how can you address all of these things together? Um But if we're going and looking at what is the effect, what are the what are the effects of shocks generally? And you know, one of one of our big arguments has been that it is shocks that really change uh things like energy, right? Like, you know, the energy systems, it's it's such a big thing. Um, it's not really politics, it's not science, it's not global agreements, international diplomacy. Um, it's really shocks that kind of cause governments and populations around the world to to make these like big shifts.
SPEAKER_00I'm kind of sensing on that notion of big catastrophes and shocks causing big shifts. I mean, this is what a lot of people in the climate movement do think, right? They do think that there will be some terrible climate disaster, some terrible hurricane, some terrible heat wave that kills millions of people. And then we will come to our senses and make a huge shift, right? So a lot of people have this like shocks will drive positive change. Some terrible disaster will drive positive change. So I don't think we are we we are sort of you know unique. It's just that we think that a different kind of a shock, in this case, an energy shock and geopolitical shock, is going to drive massive technological change, which is going to sort of, you know, accelerate the electric world order. So I don't think we are coming at it like completely crazily. Like this is how a lot of people think shocks can drive bad things can drive good, positive changes.
SPEAKER_01Yeah, it's just a like a qualitatively and and like morally different kind of shock, isn't it? You know, it's that ministry, like what like what you're articulating there as the Ministry for the Future view, which I think, yeah, you're right. Like it is it is pretty prevalent, somewhat prevalent at least in the climate world, this idea that, you know, like things will just get so bad that um you know there'll be massive mobilization to cut emissions from energy and agriculture because so many people will suffer. And and yet actually, you know, when you really look at like how the world has been going, we've had decades of completely different levels of access to health and safety, just like basic health and safety in different parts of the world for, you know, well, for forever, of course, but there's been very high awareness of that for decades and decades now. And it it hasn't really hasn't really changed anything. And I think that's why for me, looking at climate change from a north-south, you know, glob global north, global south perspective really changed that assumption. To me, it just doesn't make any sense, right, to think now that, oh, you know, some crisis that affects lots of people will spur a bigger, a bigger shift. Um, like sadly, it just it just doesn't seem to happen. You know, I'm here in a very rich country that has some really bad climate disasters, like incredible the you know, the fires um six years ago everyone would have heard of. Um, you know, still didn't really like fundamentally change the politics here. Um and I think the same is true of of the rest of the world. And and and yet this this shock to security, like to national this this shock that is challenging national security um and the the kind of electability and like viability of governments, right? Like that's I guess that's the thing that that these sort of supply shocks and price shocks have this very broad, potentially very broad sort of population-wide effects. And that we think is gonna prove more motivating or is proving more motivating to change energy than Yeah.
SPEAKER_00I mean, they happen, they affect everybody, right? Like a massive energy shock and shoots up prices and affects everybody everybody in a way that a climate disaster never would, because it would be highly localized, you know. It's like a fifth of Australia got burnt, but not the whole world. Um, whereas something like uh energy uh geopolitical driven energy shock ends up affecting everybody in every corner of the planet.
SPEAKER_01I mean, you could argue climate is climate disasters do affect everyone really broadly as well. It's just there's something, you know, that that there's clearly something different about it, right? You know, like you can have heat, you know, you can have very widespread heat waves in rich countries. We're seeing them right, you know, this summer in uh in Europe. Um and I think, you know, lots lots of places. And and yet again, you know, somehow the you know, pump price of petrol, electricity bills, um, and that like threat to sovereignty, those seem to be like the bigger, the the the more powerful motivations. And I don't know, I feel like there's something about agency in there, but not sure really.
SPEAKER_00I mean, I and I and I think like this notion that like the shock cannot replace the work of politics, right? Like it still requires agents in countries, political agents, economic agents, consumers, etc., to actually make something of it and demand a different kind of shift. So, in other words, like like the reason why we are optimistic about the energy transition after this war is because we think that people are going to act too differently, governments are gonna act differently, consumers are gonna act differently. And that's what I mean by like the shock in and of itself, or the climate disaster in and of itself, doesn't do anything. It requires people to actually change their action.
SPEAKER_01Yeah, what's interesting to me, you know, now is that even whether that is happening or the extent to which that's happening is being contested. Like there's been several months now of like massive disruption to this massive channel for for oil and uh LNG, right? And and fertilizer. And because some of the most watched crude oil benchmark prices, um the futures contracts didn't go as high as a lot of energy experts were predicting. You know, I'm seeing some sentiment around now that, oh, you know, things didn't get that bad. There's actually a lot more flex in the system than we saw, you know, the there's a lot of flexibility on the demand side that we weren't aware of because of, you know, China's uh strategic petroleum reserves and and other reserves elsewhere and you know various other bits of sort of tinkering on the demand side that could happen, some of which are temporary. And so I still think though, I think that the ramifications of what's been happening are are going to be downplayed in the kind of discourse, but those ramifications will still be really big. We just one of the challenging things, one of the really frustrating things I'm finding right now is that it's really hard to determine exactly what those effects are going to be, right? Um so I know like RiceDad, this energy consultancy recently had a webinar where they said, oh, the effects of the 1970s oil shocks were were under predicted. Um, you know, it wasn't it wasn't until later on that the the full kind of effect on oil consumption became clear. Um and it was, you know, it was bigger than was expected at the time. And I suspect well not suspect, you know, I I I think that's what's gonna, that's what's gonna happen now because you can't change demand really quickly. Um, you know, obviously you can do SPR releases of strategic reserves quickly, but um a lot of demand side stuff doesn't change quickly, but those decisions, you know, there's there's like lumpy decisions, right? It's decisions about what infrastructure to focus on if you're a government or like what investments to make if you're companies or investments and uh companies or investors rather. And and that's gonna take a while to play out.
SPEAKER_00I mean, is is that the idea that, you know, instead of a blip, there's this structural shift that's been happening, you know, for many decades now, the shift towards clean energy, and and that's kind of like a technological wave. It's like this oceanic current that we are moving ahead. So, you know, a temporary blip, sure, like um it may or may not like be apparent now, but there's this wave that is pushing us ahead, uh, which is, I guess, the techno techno-optimist view that we have, right? That there's this big structural shift towards clean energy and electrification that most people in most countries find very attractive. And that's that's the wave that we are on. And, you know, one war in Ukraine and another war in Iran is just going to accelerate that, but we are just moving on this big, big shift.
SPEAKER_01Yeah, and I think that like the reason that we think that's gonna happen is because it's now technologically possible in a way that it hasn't been in past energy shocks. You know, it just wasn't viable to really kind of switch out lots of your energy generation and to electrify lots of the demand side. But now that's you know, that's not only kind of feasible, it's it's actually really appealing in lots of ways, um, especially when you consider energy security, um, when you when you kind of put that in the mix. Uh and for me, this is really surprising because it means that, you know, basically I'm now a techno-optimist in a sense, and that's something that I have not been at all when it comes to energy. Um, when I first started writing about energy in the late 2000s, I was very anti-techno optimism for for lots of reasons. And I think, but I think you were different, Tim, right? You were you you have been um you've been more optimistic in the past.
SPEAKER_00Yeah, I think we've come at it from very different places, but ended up in the same place, right? So I used to be like super technological optimist because I worked in technology, I worked in science, and I saw the massive improvements that we were making in every field that I worked in, right? Like I worked on biotech, I worked on microscopes, uh, you know, I uh I worked on improving telescopes and in everything that we we worked on, we saw massive technological change because lots of clever people were working on technical solutions and getting and learning from each other and becoming better at the things. So I just came at it from uh technology is the motor of human progress and makes all of our lives better. And sure, there's politics and economics, but you know, it'll all sort of sort itself out as long as we come up with good ideas. And that was my very naive techno-optimistic view for for most of my life.
SPEAKER_01So, how did that change for you? Like what like what were the things that you were confronted with that made that seem naive?
SPEAKER_00I mean, mainly that we scientists had been warning about climate change for like well over 50 years, and you know, we had all of the scientific reports coming out from the IPCC from you know the 1990s onwards. Um, but had there been any shift uh in in CO2? Had there been big political economic shifts towards clean energy in the 2000s when I was in university? And the answer was obviously no. So that really shook my confidence in that naive picture of techno optimism.
SPEAKER_01Yeah, so it was like when you came out of this bubble of like scientific research, like the primacy of science, and and then kind of saw what's going on. It's yeah, it's interesting because I my my techno-pessimism um really emerged when, like I said, you know, starting to write about energy at the Financial Times in the late 2000s um and looking through all of the different kind of sources of energy generation at that time and you know, obviously on the demand side as well. But for one thing, I think when you when you start getting really interested in energy, the first thing that strikes most people, many people, I think, is just like how fundamental fossil fuels have been to a lot of the way that the world's developed in the last couple of centuries. And and then, you know, it's very kind of difficult to imagine how that could change at the speed that's required. And I think that's again, you know, that's where I'm kind of similar to you, where you know, you're looking at wow, this the the scale of change that's required is is just so huge. Um and yet it seemed that renewable energy sources were either you know promising but a bit expensive, um, like solar and wind. This is, you know, I'm talking like 15, 20 years ago, um, or they just weren't really that promising at all, which is things like um tidal power, which is amazing, but you can only do it in very specific locations, or um wave power, which sounds really cool because there's lots of waves, but it's you know, just in the engineering kind of challenges of it are just make it really difficult. Though it it it's interesting though that our like our experience of techno optimism in the past was like very different. Like yours was more from the research side, I guess, and mine was like more on the more on the commercial side. And I think you know, there was a lot of like optimistic stuff from the tech or sort of tech sector adjacent stuff in the you know, 2010s, late late 2000s and so forth about like, oh, you know, we'll have smart meters everywhere and this will make energy use, you know, energy efficiency really great. This this will improve energy efficiency dramatically, and everyone will be interested in how much energy they're using, and uh um, you know, there'll be some kind of amazing breakthrough and everyone will suddenly, you know, we'll have these really futuristic fuel cells everywhere that will cut fossil fuel consumption to a tiny fraction. Um, then you know, there's also you know the nuclear stuff. So I don't know where were you where where were you on all of those things and and where are you like compared to like what we think about now when we think about technology is quite different, isn't it?
SPEAKER_00Yeah, I mean I I I always like as I was saying, like I was fairly naive about about um you know clever ideas getting out into the world eventually. And I and I still think that way, you know. I mean it is it is it is actually difficult for me to do all of the politics and geopolitics that we that we write about because I think at my heart I perhaps I'm still have that kind of naive kind of picture, which is generally speaking, like uh there's a you know, people's lifespans have been getting better, right? Like if I look at any country, like lifespans have been improving. Why have they been improving? Well, because we have better treatments, better drugs, better basic healthcare available for most people. And in general, that's just coming from scientific learning or medical learning. Um, you know, and you think about energy, why have we had this big shift? Well, because you know, we did a shit ton of research on clean energy over the last 50 years, and now all of those fruits are uh all of those things are bearing fruit. Um, and so maybe like, you know, all of the bad things that the news tends to focus upon, which is, you know, whatever, disasters and wars and financial crises and what have you, but that's still just the temporary blip and just uh, you know, steady improvement in in in human lives and fortunes. Um and that that to me, you know, feels right, even though anyone hearing it is just like, oh wow, that is that is incredibly naive.
SPEAKER_01Yeah, I I think for for both of us, right, looking at the geopolitics, but also just the domestic political economies of different countries and how that's affected their energy decisions. Um, there there was this really important paper in the in the sort of climate politics world, I think six years ago maybe, called Prisoners of the Wrong Dilemma, which was kind of saying like it's you know domestic um veto powers and distributive conflicts that really determine what how how countries make decisions or what can what decisions countries make that change their their emissions that ultimately change their emissions. And I think what we've sort of seen what what's become like really apparent in the last few years is it's the it's like the economic models that countries choose and are and are able to choose, right? And now I'm gonna obviously like steer us towards China um and China's, you know, green developmentalism, green industrial policy elements that have or already are having this really big effect on um on energy system choices and electrification, um, not just you know in China itself, but i in the rest of the world. And it's it is you know, it it it's like getting back to what you're saying earlier about irony, it's kind of ironic because as we've said, all of the manufacturing of cheap solar panels, cheap batteries, um, even you know, wind turbine equipment, a lot of that, these are just these are just sort of side effects of China pursuing what uh most people would say is a really very uneven economic model where it's can very heavily reliant on exports. It's um, you know, wanting to become more and more self sufficient, uh, you know, be maintain this like growing trade surplus and and currently and you know broader current account surplus in you know, more on the on the financial side. Um and that in turn You know, increasingly we've been writing the last few months about the effects of that in other parts of the world, right? Like that's actually creating triggering all of these, you know, like political tensions is China Shock 2.0. And so I think there's another like moral question there. I mean, it's not not as dramatic as your like, you know, your point is about you know seeing the upsides from a from a war, but it's definitely it's definitely kind of there's some there's some ambivalence there, right?
SPEAKER_00Because now I mean there's definitely ambivalence about like, you know, a Leninist autocracy like China that is like responsible for the single greatest technological revolution of our lives, right? This clean technology revolution where you know the technologies were initially developed in the West, but they are in China where they have really dramatically used industrial policy to bring the costs down and export this technology to the whole world and basically solve our climate problem um in a serious way. And and and I definitely feel fairly ambivalent about that. But you know, that's that's some of the ironies of history that we kind of have to have to come to terms with. Yeah, so Adam Toos has has, you know, in his new book, he's really resting with this idea of like the Chinese leading this technological revolution and what does it mean for us liberals and democrats in the West to know that, you know, an anti-liberal autocratic party in China is firmly responsible for shepherding humanity through the climate catastrophe towards some clean, green future. And, you know, we shouldn't be too too um blasé about that, right? Like we should genuinely come to terms with the powerful communist party producing clean technologies that we need to transform our fossil fuel civilization.
SPEAKER_01Yeah, no, it's I mean, look, it's just really challenging to reconcile all of these things sometimes, I think. Um, yeah, and it does it does remind me a bit of these um, you know, kind of facile, I think sometimes um propositions around about, you know, is tackling climate change really compatible with democracy? Um, which yeah, always uh I find yeah, pretty distasteful question. Um so are we are we techno-optimists?
SPEAKER_00I mean, I I think technology is something like different uh in the sense that like the the the kind of the there's there's one way in which I'm not a techno optimist, right? Like I don't believe in an escape hatch to Mars or the moon, right? Which is what a lot of Silicon Valley technological optimists will be like Well, we've hit a bunch of planetary boundaries, we've destroyed the Earth, well, we need a new Earth, and let's get off into space and and and solve our problems that way. I I find that quite distasteful. Absolutely. Um there's a bunch of people who are you know techno optimists about things like a new energy technology, maybe fusion, maybe nuclear, you know, which is gonna create limitless abundance and we'll never have any problems ever again. And again, I'm like, well, have we done that? You know, nuclear is always like nuclear fusion is always like 30 years away, and and you know, it's not gonna solve uh the problem of getting us off fossil fuels um if it's gonna take another 30 years to come to fruition. And then the last bit that I guess makes me more much more of a techno-optimist is like, I do believe we are in a genuine technological revolution, and genuine technological revolution, as Marx would say, is like the forces, the technological forces outrun the capacity of our societies and our politics to actually make them real. So the relations of production hold us back. And I think that's basically what's happening now, right? Like the Chinese are able to actually make clean energy and develop it and make it accessible because their entrenched interests are being collapsed and being transformed in a way that our entrenched interests of the fossil fuel order are are, you know, we don't have the political power to change them. And so, in that sense, like a technological revolution um is not being allowed to take place in the West, or at least in the United States. Um, and that's simply because of politics. And and that is my current view of techno optimism is is the forces of technology are really powerful, but the relations um in society are holding us back.
SPEAKER_01Yeah, there's a lot there, isn't there, when you consider also that um, you know, data centers and the AI sector, tech sector boom is just really consequential for energy and emissions, and it kind of goes in one direction, right? Where you've got that sector affecting how we do energy and how we do emissions, but it doesn't really that the relationship doesn't really go the other way. Um and and also, you know, it's so striking just the the finance, the the terms and the type of finance that's available to, you know, one of these, um, one of these categories of tech versus the other. Um and yeah, like there's obviously like so many, so many reasons for that that are that are institutional and um very very political. And that's something we're gonna look at a bit more in our next podcast season.
SPEAKER_00It's exactly what we would have wanted for clean tech, right? Like a big, powerful, rich government in the West, like invests like hundreds of millions of dollars year after year for like a decade, brings the costs down and transforms the entire world with it, right? And and it turns out that we don't want to do that. We want to do that for AI. We don't want to do that for clean tech.
SPEAKER_01And then there's that contrast again with China. All right, you've been listening to episode five of our bonus season of the polycrisis. I'm Kate McKenzie.
SPEAKER_00And I'm Tim Sahi.
SPEAKER_01We published a newsletter about the political economy of climate change, among other things. You can sign up for it and find out more about us at thepolycrisis.org or in our show notes. And please help us spread the word about this podcast. Share it around with people you think might appreciate it.
SPEAKER_00And our producer is Sarah Allery, Russell Stapleton composed of fabulous music, Bethany Stewart is our sound engineer, and Sarah is also our executive producer.