Where is Power Flowing Now?

We explore the intersections of geopolitics, energy markets, business decision-making, and policy, featuring insights from Justin Worland of TIME. After a brief World Cup checkin, we discuss the future of energy, the role of electrification, and how global relationships are evolving amidst uncertainty.

Let us know what you think at podontherise@gmail.com

Resources: 
London Climate Action Week - https://www.londonclimateactionweek.org/
Paris Agreement - https://unfccc.int/process-and-meetings/the-paris-agreement
JP Morgan Report on Climate Tipping Points - https://www.jpmorgan.com/insights/research/climate-tipping-points
BRICS Group - https://en.wikipedia.org/wiki/BRICS
Carbon Border Adjustment Mechanism (CBAM) - https://ec.europa.eu/clima/policies/international/negotiations/cbam_en

Guest links:
Twitter - https://twitter.com/JustinWorland
LinkedIn - https://www.linkedin.com/in/justinworland/

Chapters:
00:58 Introduction to Power in Media and Decision Making
02:45 Understanding Risk and Decision Making Among Leaders
03:33 The Mood Among World Leaders and Strategic Thinking
03:46 World Cup check-in
05:47 Mood in London & Outside N.America
07:49 Attitudes Toward US Abroad
08:43 How US And Russia as Similar from an EU Point of View
11:13 US Energy Dynamics and Global Perceptions
12:04 People Don't Realize US is World's Leading Oil/Gas Exporter
14:59 Manufacturing
17:14 Electrification Trends in Manufacturing and Industry
18:54 What's the Real Appeal in Electrification?
23:31 "Electrification" Is a Very Wonky Word
26:15 Clean Power and Electrification Aint the Same Thing
27:30 Renewables Are Selling Like Mad and So Is Natural Gas
31:31 Energy Become Computer?
33:32 Global Climate Collaboration and Geopolitical Shifts
34:01 How Are Global Relationships Changing?
35:06 Climate Collaboration in Brasil, Russia, India, China, South Africa (BRICS)
38:16 Carney on Xi on Great Powers Climate Collaboration
40:01 Why US/China Climate Collaboration Was Easier Before Clean Energy Competition
41:55 Canada & China Are Trading EVs
43:11 Understanding Climate Risk and Geopolitical Uncertainty
45:56 Using Risk Management Tricks from Finance and Government to Manage Climate Risk
48:32 Incentives, CEOs, and Managing Climate Risk
51:12 Will Bond Markets Save Us?
55:40 Heat Stress and Global Perspectives on Climate Change
57:14 Outro, Thank Yous; Preview of Next Week's Episode with Justin, Music
57:44 Insights on Journalism and Technology

Keywords: energy markets, geopolitics, climate policy, electrification, US energy exports, international relations, climate risk, renewable energy, global trade, climate cooperation

On the Rise is a production of Extempo Media, copyright 2026.

Show Credits:
Vishrudh Sriramprasad, Producer
Claire Davis, Theme Music (Long Gone, Get It Right) | @clairedavismusic

Kheya Patel, Art | https://kheyapatel.com/

Contact: podontherise@gmail.com

Transcript

SPEAKER_01 0:00

The sense generally that I would say in the last year, um, from like an obsession with like what's happening with the US, what is our tariff rate going to be, to I think the vibe now, which is like, you know, of course, the US is important, but like, eh, I like there's another whole other world out there where people are just sort of getting on with what they're getting on with. And I think in the US, we can be very concerned about what's happening in our backyard, which is important. And we can be very concerned with how much gas are we building and what are the policies that are coming out of this administration? What are they doing with the endangerment finding? All this stuff matters, but like get out into the sort of broader scheme of the world, and you're like, oh, actually the US is kind of its own thing, and it's like maybe not as important as we thought. Again, don't want to say the US is not important, but it's like there's a much bigger world out there.

SPEAKER_00 0:58

Hello, my friends. Welcome to the On the Rise podcast. I'm your host, Marcus Extavor. Check us out on YouTube, on Apple Podcasts, on Spotify, wherever you like to get audio podcasts. Also check us out on Substack. Our producer Vish and I are gonna start sharing some personal reflections about making the show and what we've learned along the way. Today we're talking about power. By that I mean the people who make big decisions in media, in business, in finance, in technology, in politics. The voice you just heard was Justin Warland, senior climate correspondent at Time. Justin is a seasoned journalist who focuses mostly on energy and climate topics, and he brings a lens of technology, business, politics, that kind of thing. Justin writes a fantastic weekly newsletter called Future Proof, where he brings this lens to these issues, and I love it because it's bite-sized, it's clear, and easy to read. Now I said we're talking about power today, but if you listen through the episode, it's kind of funny. Justin and I barely even say the word power. We're talking about power, but we're really talking about specific people and specific industries and the kind of choices that they make. I think power ultimately comes down to choices and the ability to decide. So when we think about power, we've got to think about the ability to decide what and who has to live with those decisions. One way to think about all that kind of stuff to do with decision making and power is risk. A few episodes ago, with David Victor, with Tom Chi, with Sabrina, even a little bit, we talked about risk. So if power is about the ability to decide and who decides what, we want to ask what kind of risks are powerful people taking? What kind of bets are they taking? What kind of calculations about risk are they making? And how do we deal with it? Justin is a great person to help us unpack all this because he spends a lot of time with people in power. As a journalist, as an experienced journalist, he's able to get into a lot of conversations and a lot of these spaces. Justin is fresh off of a set of meetings in London and the EU. So he's an American reporter, but he spends a lot of time abroad, and right now he's reporting back to us here in North America from abroad. We covered a whole bunch of stuff, but the conversation centered on three things really. We talked about the mood among world leaders. He gives us a bit of a vibe check among people he's been speaking to and how they're feeling today with so much uncertainty around us. He talked about why a lot of governments and businesses that he interacts with are thinking more and more about strategy and how to bring that kind of information and data and strategy and risk into their decision making and into their stuff, into their thinking. And finally, he talked about the changing perception and the changing role of the United States in the world. One production note for this episode, if you're watching on YouTube, we had a bit of a mix-up with our main camera. So you've got the side angle camera of me a little bit. Don't worry, that's not side-eye, that's just a camera angle. So here comes my conversation with Justin Moreland. Before we dig into it, I want to ask you about the World Cup. Uh I actually got to go to a game recently, which I'll tell you about, but do you still have World Cup plans? Are you following it? Have you gone to a game? Are you going to a game? What's your situation?

SPEAKER_01 4:00

I went to one match uh now like two weeks ago, Sweden Tunisia and Monterey in Mexico. Just like totally, it's not totally random. My so my my dad, uh, his mother was Swedish, and so he roots for Sweden, and he and my brother and I were like, what is what is one match where we all three can make it? So, you know, that was the Sweden Tunisia game in Monterey, Mexico, and and they won uh pretty definitively. So it was a it was a fun, it was a fun game. Um I've been following, you know, like like whenever I can catch a match, and it's uh one of the fun things about the World Cup is like you can just watch a random match and there's a lot of enthusiasm. And it's you know, I was in London last week and and happened to catch uh, you know, uh English team play, and everybody was super excited, and even though it was a boring match. So no, I've been following a little bit, but I'm not like a World Cup head, if if you know what I mean.

SPEAKER_00 4:58

Yeah, okay. I'm glad that you got to go already. I think it's that is pretty cool. I heard somebody explain why World Cup is so great for diaspora communities, or just you know, you can connect with even that whether you've you're connected to the diaspora or not, you can connect with that community. Uh, in the Bay Area, I got to go to a game at uh Levi's Stadium. But it was Jordan versus Algeria. It was amazing, so good. I don't know anything about those teams. Um, but apparently there's a lot of Jordanians in the Bay Area, someone had told me. Thank you, my buddy Samir, for hooking me up with the tickets. I got a ticket he couldn't use. Uh it was so good. I saw it in the Jordan section. Really, really fun. I'm a huge World Cup fan, but sort of an unabashed bandwagon fan of soccer. I'm coaching my kids' team soccer now. I don't really follow a league team though, but I definitely tune in and uh pretend I know things during the World Cup. So I love it. Love it. Well, listen, we're talking about the world. You are in Europe. Uh, you just got off a week in London. I want to start by asking you about sort of the money and the power of it all. I know you're at London Climate Action Week, but one of the reasons I love some of your reporting and your work is you tend to focus on uh political conversations, geopolitics, business, and intersections with those things and other issues. So at the level of sort of money and power and people that are government officials or or heads of organizations or decision makers and those kinds of things, what was the mood at that level, uh, if you could put your hand on it from your experience just being there recently?

SPEAKER_01 6:26

Yeah, it's I mean it's a good question. And I I think it's um I'm still sort of digesting it. I guess I would say it is really mixed. And I think uh, you know, you could be in one quarter where people are really sort of despondent and like things are you know tough. And um, and then in other quarters, people are like, wow, there's so much money flowing into my part of the the bus the you know this ecosystem. So particularly people in you know power sector, um, sort of AI adjacent uh investments, and they're you know actually really enthusiastic, and you could just like hop between these conversations and like had a completely different vibe. Um, I think you know, there's a the US is an interesting sort of um influencer in all of these conversations. I think there's a lot of people who are kind of just done with it. Like we're just like gotta put them aside and just get on with what we're doing. Uh and I think, you know, if you contrast the conversation this year versus last year uh in London, but just I think generally, like in the global conversation, um, there's just a lot of kind of like let's just move on from them. Um, which is not to say that the US isn't influential, but I think there's just like a let's get out of that frame of reference.

SPEAKER_00 7:49

Do you think it's it's let's get out of that frame of reference, meaning let's loosen ties, let's drift away, let's do our own thing, or maybe the related thing of not necessarily drifting away, but let's not wait for them to figure out whatever they're gonna figure out and then react. Let's just make our own plans and then deal with whatever they do. Do you see that distinction?

SPEAKER_01 8:14

Are there Yeah? I mean, I I I see the distinction. I think it's both to be frank. I mean, I think there's look, we have a globally connected economy still, even though there's a pullback from that. And uh, you know, we have energy markets, particularly oil, you know, increasingly gas, um, that are connected. And so I don't think there's any illusion that we're just gonna like completely separate. But I think it's telling that you hear Europeans talk about the US in the same breath and the same sort of vein of thinking that they talk about Russia. You know, they they say, okay, well, they've got this supply that we need, and we're gonna treat it as you know, a necessity, but also as something that we don't fully trust we can rely on. And so that's like a that's just like a little anecdotal thing, but you do hear that. And um, again, like nobody's, I don't think, trying to disconnect because it is a necessity at the moment, but there is like a deep skepticism. Um, and yeah, and so sort of similar in your second sort of framing, I yeah, people I think are just trying to to to you know do their own thing and hope that the US will catch up, but I don't think anybody's waiting on on that.

SPEAKER_00 9:30

That is okay. I really like the way you frame that. It's not exactly maybe what I thought you'd say or how I've been thinking about it. So let me just pick, not in a bad way, but I want to pick a bit more. So, like one of the for me, one of the most important and consequential just facts of the world or the energy world, or the geopolitical world, or the financial world of, I don't know, our generation, our lifetimes, but let's say the last 20 years has been the United States moving from a net importer of oil and gas to a net exporter of oil and gas, and specifically now becoming the world leader in exporting oil and gas. Even despite that, which is something I think about all the time, I hadn't really thought, oh, it's as you said, possible to, if you squint, look at the United States like Russia now, which Europeans and Westerners sort of like an unpredictable country that's maybe not really a friend, but we work with, that also is a major oil and gas supplier. So coming around to the question, I guess, is do you think that the analogy you made with how Europeans might be looking at the United States similar to Russia, do you think that's about the politics and the decision making and the tariffs and the sort of Trump and uncertainty of it all? Or do you think it's more closely connected to the oil and gas supply and export thing? If you have to pick one of those, I would say it's the politics times 10. But is it possible it's actually the energy supply that's driving that hesitation or that conversation?

SPEAKER_01 11:01

That hesitation, when you say the hesitation, what do you mean?

SPEAKER_00 11:03

I mean, I think it's it's maybe like the hesitation to stay closely engaged or to uh try to influence rather than just letting it be and reacting.

SPEAKER_01 11:13

Oh, that's an that's also that's an interesting that's it, yeah, that's interesting that you take it that way. I think I think it's I think it's the opposite. I think it's the supply that keeps them engaged, right? I mean, I think it's the supply that keeps them from saying, you know, screw these guys, because actually they, you know, particularly on gas. Oil, you know, we have it's it's more of a global market, but with gas, it's like, no, we actually do need this supply. Um, I mean, and and and you know, there's uh LNG exports will grow, and that's like they they they do need it in the short term. And so I think that keeps them engaged. I think um and I and I yeah, I mean, I think you can look at the some of the conversations from you know gatherings of EU council of ministers, energy ministers on this, and then they talk about it this way. So um, but it is a it is an interest, it's interesting to parse that. Yeah.

SPEAKER_00 12:04

Yeah. Okay, cool. I mean, that'll I'll just I think it's forever fascinating. And I don't think I'm curious what you think. I don't think it's well known in energy circles, I'm sure it is, and in maybe diplomatic circles or trade circles, but maybe I'm not sure, but I'm not sure that the average person inside the United States, out outside the United States that follows the news is aware that the United States is the gas station in that way. Like I think the idea that let's say Saudi Arabia is an oil, major oil producer, that is sort of part of world culture. People know this. But I don't think people think about the United States that way. Do you think that's true? It doesn't really matter. I'm just curious what you think.

SPEAKER_01 12:46

No, I mean I I think it I think it does matter. I think it's a really important question. I mean, I think it would I would say it cuts to the core of how I sorry, this is not so optimistic, but like about how I think about what the future of US energy and climate policy is. Like we have a we have immense hydrocarbon resources, and uh we also have a diversified economy, you know, a service-oriented economy, and that's where most of the wealth comes from. Um so people think don't necessarily think about our oil economy in the same way they think about Saudi, where their money comes from oil. Um, but it is, it's it's huge. It is like a huge weight on our politics, on our policy making. And, you know, people like to talk about the sort of malign influence of the fossil fuel industry and the, you know, all of the um sort of nefarious ways that they get involved in politics. And I don't discount that. But at the same time, you know, it is also just an enormous economic sector. It's an they they have enormous geopolitical weight. I mean, it it is it is a real thing that the US has. And I yeah, people don't, I I I don't think people grapple with that.

SPEAKER_00 14:01

Yeah. Well, I I'm hearing what you say that two things. One, the United States' particular position. I think it's really that's a key point you made, that it's the oil and gas or fossil fuel industry uh and related industries aren't uh they don't dominate the economy, even though they are enormous and the economy is so diversified here. Um but also second to that, um, the idea that the United States is such a powerhouse in gas production, export, and it's not brand new, but this has sort of been a huge story developed developing, continuing over the last 20-ish years or so, fracking price of gas, now gas exports, now liquefied natural gas, et cetera. So anyway, endlessly, endlessly interesting, I think. Um something, one of the most important uses of gas, as you know, and uh one of the most um reasons people like to buy gas, it's not just for electricity, it's not just for heating, it also goes into manufacturing. Manufacturing is an issue that I know is really important in Europe. It sort of comes up around Brexit. It's important in the United States. Certainly the current administration wants to redo it manufacturing. Majority manufacturing actually happens in Asia, depending on the kind of thing you're talking about. How much was manufacturing on your mind or on some of the conversations you were in just over the last week? I'm I'm curious. Whether it's connected to the gas or oil issue or not, just manufacturing generally.

SPEAKER_01 15:24

Well, I mean, I think the way that I it came up is in connection with energy prices. And, you know, I mean, the reason why the US, well, not the US, the reason why Europe has lost a lot of its manufacturing base, and and this is particularly the case in the UK, is because prices, energy prices are higher, uh, particularly um, you know, gas prices. And so I think, you know, you see this conversation around the politics in the UK, and this was this came up last week, is it's just like, you know, what needs to happen to make manufacturing come back? And the answer is like lower energy prices. Um whether that's achievable is another question. But I yeah, that's I think that is the that is one of the biggest the biggest topics, I think, in Europe uh uh these days, uh just in terms of rebuilding an industrial base.

SPEAKER_00 16:17

Do you think anyone believes that the path to cheaper industrial electricity prices and let's say thermal fuel prices like liquid fuels, so gasoline, diesel, natural gas, methane, and then electricity, whether the electricity comes from natural gas or not, but lower energy prices. Some people argue that, okay, well, we want low electricity prices or you want low energy prices. There's two ways to do it. You make cheap electricity or cheap liquid fuels. Cheap liquid fuels are largely a function of minerals and the earth. Can you do you have them or can you get them? Yeah. But electricity is more flexible. Okay, so I'm telling you things you know, but the point is some people argue if you want to bring manufacturing back or you just want cheap energy for whatever reason, you should look to cheaper or thing uh forms of energy that are cheapening, like renewables and storage, and that that can be a path to manufacturing. Other people say, nah no, no, you still have to go through natural gas. Maybe eventually you can substitute with electrified industry. Did you hear any of the conversation of the first one? The second one is sort of what sensible adults say. You can't go straight to renewables, we're probably going to go through gas and then maybe something else after it, or maybe not. But renewables advocates will argue, now we can go straight. Did you hear much of that in London?

SPEAKER_01 17:34

Well, um, I mean, I think I guess I would say beyond beyond London, and I think just more generally these days, I feel like the zeitgeist has turned away from sort of bucket one. Uh, and and and I mean, just the truth is that like while it might be technically feasible, it's like, you know, it's it's it's harder because we haven't been doing it that way. So it's a harder thing.

SPEAKER_00 17:59

It'd be a new thing with the change.

SPEAKER_01 18:01

And that requires money. And so that's like the vibe. Having said that, like, you know, I think the sense is that electrification and the electrification of industrial processes um is is happening. Um, it's happening because a lot of capital is flowing into it, uh, particularly like the technologies um that enable electrification. And now whether that will get to some of the like harder to uh harder to address industrial processes, like that's a different question. But like it is, it is there is a general trend in that direction. And I think that's the vibe that I I get. I um, you know, but there's a lot that's like a that's a general statement. And then if you go into the specifics, it's much, it's much more complicated. I mean, I'm curious what what you think. This is like this is up your alley.

SPEAKER_00 18:53

Uh it's definitely up my alley. I mean, both of our alleys, right? The idea of industrial electrification. Just for the audience, I'll say, you know, so some of the harder to address things that you mentioned from an electrification perspective, um, for people listening, and a lot of our industrial processes rev involve generating energy or heat. And if you're generating heat or, or sorry, electricity, you're almost always using some fossil fuel. That's just how we do things now. But increasingly people are finding, and I don't I don't mean things like uh an electric car or you know, charge a reading light. I mean run a blast furnace that makes steel or that processes aluminum, which actually consumes a huge amount of electricity or makes plastics or makes alternatives to plastics. Electrifying the huge machines that go into those things, that's a big area of investment and and conversation. Um to your to your question, Justin, I think I see the signals of cost just loud and clear. So I when whenever somebody tells me they want to electrify a thing, I'm always interested in, well, why? And I'm interested in what's the I have it reasons I could think of. Maybe reduced to you know carbon emissions. Great, but not everybody cares about that. But everybody does care about things like saving money, operational efficiency, running equipment longer, better predictable cost and running your business, blah, blah, blah. So I see a lot of people interested in electrification where those things are obvious and make sense. Um, so for instance, uh aluminum is one of just to get nerdy for a second, aluminum is a metal that's extremely valuable to us. It's light, it's strong, you can recycle it. We use it all kinds of, we make airplanes out of it, we make cans that we throw away out of it. We use it all over the place. You need a ton of electricity to make aluminum. And um if you can save a bit on cost, you on electricity, you're really ahead because it's so, so energy intensive. That is a great candidate maybe for electrification as well. And tons of people are working on that. And that'll be a huge home run business win as that, if it can really get to develop. Other areas I think are harder to think about, like aviation. That's something people talk about, electrification of aviation, and there it's it's not as obvious. So if you put the let's say the motivated reasoning aside and whatever the motivation is, and just ask money, cost, even before you ask about politics, um, those are the those are the signals that I think are fairly clear. And then a lot of the discussion is well, how can it be extended elsewhere? Where does it technically make sense? Does it ever politically make sense? And where? Um, and how do we go that way? So to be always, always interesting, but also complex. There's a whole group of people that think just about electrifying heavy industry. It's not the sexiest topic, but it's a topic that's very closely connected to the money and the power, because those are huge core industries of different nations manufacturing, agriculture, energy, transportation, stuff like that.

SPEAKER_01 21:54

I think there's a yeah, it's I think there's uh you know, sort of at a at a to zoom out one level. I think it's an interesting moment, right, to ask whether the volatility in in um energy prices leads to more interest in electrification, not just the you know, higher prices in and of themselves, but also just the you know the volatility and whether that makes uh companies say, well, maybe it would be better to spend the capex on electric on electrifying the process and then have a stable uh price rather than have to deal with the sort of madness that we're experiencing now. Um the other thing that I just find really interesting is, I mean, and it depends, electrification is like an oddly broad term, you know, and and and then so if you look at some plays, you know, some businesses, um, they'll say like electrification is just gangbustered, right? So you look at GE Vernova, Schneider Electric, these companies are doing crazy business largely due to AI uh and adjacent technologies. Um and that will have medium-term ripple effects, right? Like if you invest in growing that category, those uh that equipment like costs will come down, uh, there will be other uses. And so I think like, you know, rather than say, like, what does it look like today? I I just I feel like the the train is moving in that direction um at a at a very broad level.

SPEAKER_00 23:30

Sometimes I wonder, this is just a weird aside, but I think sometimes I wonder if electrification is gonna become one of those terms that in five years or three years we think, why are we using this word again? So it doesn't mean it doesn't mean anything. It's like a very technical word, and it doesn't really answer the question of why do you care about this again? Right? Like only energy nerds care that you're where you're getting the energy from. Um I don't know. That's just an interesting aside.

SPEAKER_01 23:53

No, I mean, because it's right, it's it's it sounds very technical. It also has you can take it in a lot of different directions. Yeah. I also think like look, this was a thing in London. I mean, there was a huge electrification like moment where the UN Secretary General came and spoke about electrification, and business leaders signed like a pledge for electrification. And and just to be frank, you know, it's because that feels safe right now. That feels like a safe way. But really, what they're trying to say is I mean, to be clear, they they understand what electrification is and they've got like sort of specific asks, but really this is just an alternative to saying clean power. You know, it's like like what they want to say is like we want to we want to have clean power, and this is a way that they feel is safe.

SPEAKER_00 24:33

Exactly right. Okay, so that's that's where I wanted to get to, right? Like, um, exactly as you've said, clean power and electrification are sometimes synonymous. But there are other reasons you might want to pursue electrification. So we're at a moment now where oil markets are volatile, gasoline prices are extremely expensive, electricity prices are going up, and we have a huge new voracious customer for electricity called AI, AI data centers. So I think in the AI thing, they are electrical devices, they're they're driving many countries now to say, hey, maybe we need to expand our energy grids in a very practical way. Canada has just said we want to double the size of the electricity grid, like the watts, the gigawatts, by 2050. So that's 20 years from now. Um United States is projecting similar increases. Are they going to happen? We'll see. But I think in that environment, a lot of other people that may or may not care about clean power are also wondering: hey, is this electricity or sorry, is this oil market craziness just too much for us now? And do we separate ourselves from that whole dynamic, not having to care about the Strait of Hormuz, not having to care about the volatility of oil prices, not having to care about who's invading whom, and just run all of our stuff off electricity, which is more controllable to us. Um, I guess my I'm very interested in that second dynamic, if it exists, if people are looking towards industrial electrification of stuff, metals, manufacturing, whatever, because it seems more predictable and controllable, in addition or separate from the argument about clean power. What do you think about that? I want to believe the first thing is real, but I'm a little skeptical and I'm looking for evidence. Do you see any evidence of it?

SPEAKER_01 26:14

Yeah, I mean, that's it's a great question. I don't, I don't know. I mean, I think that the you know, an area where I've spent a lot of time, I guess where my head goes for this question, this sort of theme is is that you know, electrification and clean power are not necessarily synonymous. And in the US, and this gets back to our earlier discussion about energy markets in the US, where natural gas is cheap uh and you know is not necessarily affected all that much by the straight-of-for moves because you know, uh gas is not a global market in the same way oil is.

SPEAKER_00 26:49

We can buy gas here that comes that needs to be shipped through the straight-of-for moves per se.

SPEAKER_01 26:53

Exactly. And when we and we've got a ton of it. And uh, you know, and so the the resource as we're building all of these data centers, you know, we're also building a bunch of gas to power them through electricity. I mean, and so I you know, it's it's this there is a way in which we could electrify and still be more reliant on on gas. And that's that's where my my head goes. So it's not like one or the other. Um what was but what is what is your thought? Like on the industrial side, like what is your thought?

SPEAKER_00 27:30

Um yeah, great question. I think I think you're in in the North American context, it's hard or it's very easy to see a future that is dramatically oversimplifying, where we have a bigger, we have more electricity. Most of the electricity is made from natural gas power stations, which people know very well how to build. They run great. The gas thing is great. Um it certainly has advantages over all oil and coal, if you care about emissions and all kinds of other things. It has disadvantages too. And more stuff is electrified because this electricity is available, and there'll be many other things in the mix. There'll be way more renewables. A quarter of electricity in the United States is uh renewables now, or solar and wind and nuclear, I think, combined. Um so it's pretty big. Actually, sorry, I think that's just solar and wind and geothermal. I'll check the data again, but it's pretty big, bigger than people think. So we could have more electrified stuff and more lock-in of dependence on fossil fuels, specifically gas. And that it's easy to see that picture happening in this part of the world, but in other parts of the world where there's even more manufacturing now, specifically Asia, where they aren't sitting on a gigantic bubble of natural gas, and where I know that the natural gas prices are higher, because natural gas is not, even oil is not traded at the same price everywhere equally, as you know. You report on those prices, but that's not what everyone pays. Is it possible that the price pinch of natural gas in Asia or Africa and other places that are continuing to develop manufacturing, Europe as well, will that push people towards electrification just for cost reasons or volatility reasons, or will it not? Question mark. And then meanwhile, from the other side, things like batteries and electric control of power systems, ritual power plants, that suite of technologies is also racing to try to eat that market share. I think they are I think they actually probably have the better long-term economic pitch. There's more money, there's more social stability, there's more political opportunity in that side of things. It's just my view. Um even in this part of the world, but in the medium term, the gas story still seems pretty compelling. I'm not saying it'll happen. It's not saying I want to happen, but if I just try to be objective, that's those those are the easiest stories for me to connect to. Does that make sense to you?

SPEAKER_01 29:52

Yeah, I think so. And I mean, I think, I mean, I think it's one reason, you know, again, going back to the beginning of the conversation, I think the US story is like such uh dominated by fossil because it's just it makes sense from a sort of a in a sort of a very narrow-minded like what is the resource that we have, and and if we're just doing this on cost and what we know how to do. I think I think the industrial processes story is probably different in in Asia, but I think the real area where where it's different is, I mean, just in the in the power sector, when you, as you said, there isn't as much gas in Asia, most parts of Asia. There's um there's a lot of coal in some places, but coal is dirty and people actually don't like having their cities uh choke choking in their cities in the on the air.

SPEAKER_00 30:45

Nobody likes polluted air anywhere, any culture, anytime. That's pretty universal.

SPEAKER_01 30:50

Exactly. And so like the the incentive really is for for um renewables. Uh and and and so and and you've seen that. You've seen like policymakers in Indonesia, um, you know, and elsewhere in Asia in the last few months sort of double down. How can we accelerate um uh deployment of renewables in the power sector? Um now, yeah, I don't know getting over the sort of hurdles for actually industrializing processes. I think that's a different question. And frankly, I just don't actually know um how that's changed. But I think in transport and I think in the power sector, like there's definitely a push.

SPEAKER_00 31:31

Yeah, I see that too. And I mean, despite what I said about the ease of seeing, well, in addition to what I said about the ease of picturing that natural gas story, it's in this part of the world, it's what we have, it's what's in place now. It's already being extended dramatically. The AI thing is helping with that. Um, there's two things I think. One, the AI thing, I think, may warp if it if these data centers are built the way they're even partially projected now, it will significantly change the dynamics. Um and you know, this is a little oversimplified, but those folks are computer people. They're electricity people, they're chips people, they're high-tech people. Those are things that they understand. Of course, they can under they can have lots of people that understand all kinds of things, huge organizations. But like this old phrase and then like that things slowly, slowly start to look at more and more like computers as computers take over, more like chips, more like that kind of thing, which blends itself very well to electricity, even renewable electricity because of DC power and from solar and things like that. I wonder if that will change the economics. I don't know, but I just wonder. Um, the other thing I think about is um uh renewables are actually expanding dramatically. They're expanding much more quickly in terms of speed to power all over the world, not necessarily for these applications, not necessarily the United States, although there's a ton. So that's just an interesting trend as well. We could see just more of everything if we had this conversation in five years. There'll be way more renewables and perhaps way more gas and how things net out, I'm not sure, but that's what makes it fun, I think.

SPEAKER_01 33:02

Yeah, I mean, uh I mean a hundred percent. Like there's no question that that clean power is growing globally. It's just like how fast and how's it compared to gas? I also think like, yeah, the US picture is is its own picture. And you look at ship shipments of solar panels from China sub to Sub-Saharan Africa and across Asia, like these they're they're shipping this stuff at record numbers and in a way that like the modeling hasn't quite captured yet because it's just like it's happened so fast. Um, so anyway, it's a it's an interesting story to follow.

SPEAKER_00 33:35

Okay. I love uh we probably went a little further down the electricity market dynamics rabbit hole than I wanted to, but I took us there because I love it uh and I think it's interesting. But I want to pull you back up to some of the conversations you're having at London. I love reading your stuff because you have a great way of interviewing people and writing about it, but you also get into the so-called rooms and places or heads of or conversations with folks that I think are involved in a lot of these interesting conversations and decisions. Yeah. With that context, some of the other big dynamics that I see are okay, we're living in terrace land, we're living in trade disturbance, there are several wars happening that are disastrous and reshaping relationships. Many nations are reconsidering their friends and allies and making new trading blocks. Um, did you see any evidence of this sort of this kind of nation-to-nation or even industry to industry reorganizing? Um, or amidst that kind of stuff? I want to take us to a place where we can talk not just about the competition between nations, but collaboration between nations, even if there are new um partnerships evolving. So I guess the first simple question is do you think it's true that there is a lot of reorganizing of relationships between nations or between companies or organizations inside nations looking to form new blocks, drop out of this coalition, join that one? Or is it maybe more of a sense of just everyone's looking around and doing risk analysis, but not a lot of stuff is actually moving and changing yet?

SPEAKER_01 35:06

Well, I mean, I think a lot is changing. And I think, I mean, I would go back to a conversation I had with the Brazilian finance minister. This was last year, actually. So, you know, not London, but but it was, it was, it was telling to me because I asked him sort of a a question about the BRICS. The BRICS were meeting like maybe the next week or something, and I said, Well, you know, like, do you see new avenues for climate cooperation with the BRICS or something? I don't know, something like that.

SPEAKER_00 35:31

Brazil, Russia, India, China, South Africa?

SPEAKER_01 35:34

Yeah, exactly. That's those are the BRIC countries. Um, and he was like, BRICS are very important. We're this is an important engagement for us. Climate collaboration is gonna happen through a bunch of different coalitions that are um completely new that you haven't thought about. And we're still gonna be in the bricks, even though Russia is not exactly climate champion, even though you know India and China have their own positions. We're gonna do something different on climate with a different group that meets our needs and that area, and we're gonna do this other thing too, and those two things are gonna live beside each other. And I think a lot of people, you know, are kind of like looking for a new sort of structure that is as easily identifiable as the structures that we have thought about historically. And I think it's just gonna be much messier and much more complicated. Um, so you know, to go back to the Brazil example, I mean, one of the interesting things that's developed uh, you know, sort of after the EU has created this, as you know, uh carb carbon border adjustment mechanism, CBAM, uh, you know, imposing a fee on certain sectors for emissions from outside the EU. Um so Brazil, they complained a bunch, and then they created their own sort of sort of similar uh, well, they created an uh uh uh a scheme, a carbon sort of uh scheme to be able to fit into the mechanism that that they have in uh in Europe in Europe, and all of a sudden you start to see this like sort of coalition of of countries that are thinking in the same way and enacting policy in the same way. Um and that's kind of the way I think it'll happen. It's it's like a little bit, it's it's a little messy. Uh it it doesn't happen overnight. Um so I yeah, I think I think it's it's it's a question of trying to figure out where those shoots are uh and and seeing how they evolve. But I it's like it's it's it's not something that we're gonna just see like that. Does that make sense?

SPEAKER_00 37:41

It does make sense. So uh building on that, uh we've got a question about. So I'm imagining this conversation with the leader of Brazil saying, you know, climate collaboration is gonna happen in these structures that we haven't necessarily thought of yet. I could I interpret that immediately as one of two things. It could be uh verbatim, what that person said. Or it could mean um, yeah, you know, we'll get to it. Snooze button, or like, yeah, you know, get just gonna get get out of here. Uh we'll talk about it later. And I'm not trying to put words in that person's mouth, but I that's those are two things I wonder. So, and here's another thing that makes me wonder along those lines. I was listening to this uh speech that uh Prime Minister Mark Carney of Canada made. So I'm um he or his speechwriters are good, so I I like their remarks. And he told a little story. This maybe two months ago I saw it. He was at some event giving a speech. And we'll sit-down chat afterwards. He tells a story of a meeting he had with Xi from China a year past. And he says, Carney says, that she said in that meeting that the way to maintain good relations between, in Xi's case, China and the United States, even as they are in conflict on many areas, they should maintain some cordial uh areas of cooperation. And that here are Xi's criteria for how to identify things that are safe to collaborate on with, I guess, an enemy in the great power frame. And so according to Xi, through Kearney, it's things that you are very good at inside your country, uh, things that have broad social benefit, and uh they should not really be connected to things like the military, economics, or cultural competition, but you should go with things that are about broad social benefit where you also have excellent strengths. And Kearney brought this up because he said he and she maybe believe that climate, whatever that means, electrification, whatever, is one of those areas. Yeah. Do you believe that? Do you believe that climate, broadly defined, and we can get into what that could even mean: decarbonization, clean energy, some other thing, um could be an area of cooperation between China and United States, or rivals within the BRICS or BRICS and other groups, if it's quite far from some of these other topics. What do you think about that?

SPEAKER_01 40:01

Well, I mean, there's a lot to say there. I mean, so I guess the first thing I would say is I I think, you know, climate was an area of collaboration between the US and China for exactly those reasons, right? So the Kearney playbook was the, in some ways, the Obama playbook. So they there were tensions between the US and China, you know, with Xi and Obama, and one area where they could agree was was climate. And so when you know Obama had Xi to the White House, they made a big uh sort of statement that led into the Paris Agreement. And um, and you could talk to diplomats, uh, you know, US diplomats in China, and they would say that was always the thing that when they wanted to get a meeting and you know, and to have good vibes in the meeting, they would talk about climate. And and so, you know, obviously with this current administration, that's not the case. But I think totally, that totally makes sense, and it made sense then. I think the big difference, of course, is that China, um, you know, beginning in say 2008, post-uh Great Recession, said, Oh, there's this climate thing, we've got this air pollution problem. Uh, let's build some of the technologies we need to address it. They did. They were really aggressive about it, and now they have, you know, uh control over the uh supply chains for some of these key technologies. And so if you're the US, like that becomes a competitive uh threat rather than sort of an area of collaboration. The US is sort of unique because for most other places, Europe is complicated, but for most other places, this is actually an asset. This is actually like, oh, well, we can do business with you. You'll give us your cheap stuff, your cheap solar panels, your cheap EVs, that'll be great for us. We'll do business with you in other ways, and now we've got a great partnership. But in the US, like a that that dynamic doesn't work anymore. It's interesting, like Carney uh, you know, he went to China in in January and signed an agreement to cut the tariffs on EVs. Uh uh, and you know, China Canada has a uh domestic auto manufacturing industry intertwined with the US. And clearly he made the calculation that that partnership and that collaboration uh related to climate is is um is sort of worth sort of sacrificing perhaps a little bit of domestic industry. So yeah, I mean I think it's it's it's super interesting. Um uh and I there is area for partnership. I think it's complicated for the US and and Europe as well. But um, but I I I didn't I didn't hear that interview clip, and I think it's fascinating that he said it that way.

SPEAKER_00 42:40

Yeah, it was I think it's fascinating. I'll dig it up and send it to you. I think it's fascinating that he was reporting out on a private meeting, and that's why I was watching it because he's sitting, he was like, listen, I was in a private meeting and we're sitting around the table, and then she says this, and I was just like, oh, you know, this is juicy. I never I never hear these kinds of things. Not that I'm digging for it all the time, but um okay, hey, I have one sort of thing, I want to try to tie some of these things we've been talking about towards uh uh a different type of risk. We've talked a lot about directly and indirectly trade relationships, changing cultural zeitgeist, uh, all the stuff that's going on in the world. Even before we got on before camera, we were talking about, you know, how does it feel to answer a question like how's it going? Sometimes you have to put an Ask nest to like, well, given all the stuff that's flying around, here's how I feel. I have been wondering if the kind of uncertainty and volatility and risk that we see in trade relationships, politics, domestic and international conflicts, uh, where manufacturing is going to be, jobs, immigration, so many of the things that make life tricky on a day-to-day basis, or when we're thinking about big decisions. They're nonlinear. The effects can be delayed in time, they're hard to predict, you have imperfect information, it's very uncomfortable. Here's the question. I think climate risk has a lot of those characteristics. We have a hard time linking cause and effect. There's local action versus other action. It's confusing about what I'm supposed to do versus what the group is supposed to do. Do you think there's something in this analogy between geopolitical uncertainty and the kind of nonlinear risk we see there? And climate risk. And if they are linked, does that help us deal with climate risk? Because maybe we can learn from how we deal with these other risks, or maybe we don't deal with them well, and that's a bad thing. What do you think? First of all, do you think there's an analogy here or am I making this up?

SPEAKER_01 44:35

I mean, a hundred percent. I think that's like a that's a great analogy. And I think it would, I wouldn't just, I mean, I'm not just saying that. I think it's the conversation that's happening in boardrooms and among corporates right now, where uh there's a lot of folks who, I mean, well, for one up one thing I would say a lot of companies have have tried to bring in geopolitical expertise, risk expertise. I mean, of course, they're always thinking about risk, but risk in this particular way to try to grapple with the world as it is. Uh, and that has a lot of the people who think in those ways are also, you know, at least informed or thoughtful about climate risk. And so I think there's like a very concrete real conversation that's happening um uh, you know, at companies at the highest levels that connect those two dots. Um and um yeah, I mean, I so I I I have no notes. That's that's you said it so well.

SPEAKER_00 45:31

Well, okay. I mean, uh I'm happy to. Maybe I'll write it down or something. I think I'm very curious. I used to work for a chief risk officer. I was a kind of financial energy type of job, but several bosses up for me was a person called chief risk officer. And look, I always thought that was fascinating because I think risk is interesting and probability and trying to predict the future, making decisions. I think all those things are interesting. I do you think that the tools that we use to grapple with geopolitical risk actually can succeed in helping us deal with climate risk? My the I think the counter-argument for me would be climate struggles to be taken, climate risk struggle to be con perceived at the level of other risks, the level of materiality, financial risk, economic risk, risk to my person. And you know, maybe that sometimes they are, sometimes they are not. They're easily dismissed. So is it true that tools and you know the traditional C-suite of chief risk officers can apply to climate, or is there some other barrier that will prevent that from happening, even if we see parallels? I'm thinking like in practice, do you think this can happen?

SPEAKER_01 46:36

The question is what are you trying to accomplish, right? Like if you're trying to safeguard your business from the sort of base case of climate, like you know, absolutely there are a lot of tools you can understand, like what's likely to happen and how do I harden my, you know, my facility, how do I like ensure supply chain diversity? And those conversations, like that's all happening, right? Like companies, you know, particularly large companies are not stupid. Like they see what's happening. I think it gets harder with tail-end risk, you know, tipping points. Um it's just hard to sort of do the financial modeling in part because we just don't really know exactly what this will look like. Um so there's a great report that JP Morgan did about tipping points, which I would recommend anyone who's interested in this and looking at, and just how do we, how do we just like, how do we, how do we put some real financial modeling around these questions? And I think the biggest issue to my mind that comes out of this report, but it also is reflected in my conversations, is that is that the the the remit of a um CEO or of an executive is inherently sort of short-sighted. And I don't mean that as a slight. I just mean that, you know, if you're a CEO and you're gonna be around the average CEO is around seven years, like, you know, you're you're the the financial calculation about whether to invest to avoid the risk that comes from a tipping point, like the math maybe doesn't add up in the way that it that it should. Um and again, let me just take one more step back. And this this is like about protecting the company from risk. It's not about like investing in decarbonization or any of these other things that we really need. It's just about like tactics to deal with risk, maybe exactly.

SPEAKER_00 48:32

No, I I I I like that you took it to the level of what is the problem you're trying to solve and the short-sightedness, you know, lowercase letters, not trying to be critical of um the corporate CEO or the, you know, especially if you're in the public markets, you know, and you have to respond to share prices or analysts and that kind of thing. But just generally, you know, I said to somebody else, you don't you don't become the CEO by saying, here's my 25-year plan. You know, you have to manage things now for the near term. And all this risk stuff is not abstract, by the way. It's about the other really important job of any chief executive, which is how do you spend money? You have one dollar, do you put 50 cents here or 50 cents there? Allocation of capital, risk, and how do you allocate capital towards a possible tail end risk? So, to cut the jargon, like these are extremely severe, extremely low probability events. Sometimes people call them black swan events, you know, like the child the idea that there could be a not just a flood, but a terrible flood or a cascading event of a few risks at once. Those are hard to predict. There are many extremely clever financial and modelers and mathematical models that can try to get your mind around that. But how do you do you put 10 cents towards that today? Do you put one cent? Do you put nothing? The capital allocation problem, I think, is really hard. So I I think it's difficult for CEOs. Um feeling sorry for CEOs is probably not like the most popular take, but I think it is a challenge to allocate capital effectively given those risks. Probably easier to ignore them. But if you're gonna be serious, you're not gonna ignore them, you're gonna try to deal with them. So I I think it's interesting, but also very difficult. And I sort of have sympathy for that challenge.

SPEAKER_01 50:08

I mean, it's just the the at a fundamental level, the way that their incentives are to grow, right? To grow. And of course, you need to minimize risks that are um imminent, that are, that are likely to occur. But capital markets, you know, the market doesn't reward um, you know, avoiding tail-end risks. It it you know, equity prices are based off of how much a company will, you know, it's based off of future returns, and you invest on the prospect of growth. You don't address, you don't invest off of like risk avoidance. And so the CEO's job is like to grow as big as you can and to take, you know, taking into account the risk. And so like you could one could argue that those tail-end risks are priced in and they're like small, and like, but the company is like is priced for growth. And that's so that's how that's the CEO mindset. I don't know what the fix is.

SPEAKER_00 51:12

I don't know what the fix is for the problem you describe, which is if the equity is based on a future projection, uh, like many companies are, I usually think about it, that's you could argue that they're priced in. I think the counterweight to that, and now here I'm gonna say things where I'm kind of getting out of my depth because I don't really understand this stuff, but I try to understand it better, is the other other parts of different markets, for instance, bond markets. Yeah. I think these are the part of the financial system at least that are supposed to really care about longer-term horizons and risk over the long term. I think other people work on this and maybe we can get some folks on the show, but you know, maybe that's where it ends up, is where does it does it show up in bond markets or other types of markets that are looking for um longer-term risk instability?

SPEAKER_01 51:59

My understanding, and like I didn't, you know, I would want to prepare before getting into this in depth, but is that there are most sectors, like these questions are not priced into credit risk. So, you know, there are some, like I know utilities, for example, they they consider what is the risk of like a catastrophic wildfire that you cause. Like, yeah, we're gonna we're gonna factor that in. But for most industries, they don't like credit risk, they don't even think about this. And so a big question is like, how can you start addressing these risks, you know, in credit? And that and that would and that would change things, right? If you have to pay more to borrow money, that's that would that would change things.

SPEAKER_00 52:36

Well, I'll I'll I'll uh get out of my soapbox and kind of just share my opinion. But maybe you can tell from my questions, but I I do believe climate effects are maybe not best, but very well it's a great framework to understand them is through risk. So I believe that risk is a great framework through risk to understand climate. I think that estimating and calculating those risks in great detail is very valuable for our economic well-being and for allocation of capital. Even if you don't care about mitigating climate effects or avoiding the risk, understanding risks to other things, disease, migration, conflict, property damage, storms, et cetera, I think is crucial. I don't think we're great at doing this in general. And it's not just because people don't want to. I think it's sometimes just genuinely difficult, right? You know, it's easy to critique climate models, even though they're incredible. They're not perfect, right? They're boxes that predict the future and they're very sophisticated, but they still have limitations. But trying to squeeze that uncertainty as much as we can and figure out how to spend money today, that's just not not for me. I think that's important, but also it's a nice way to relate to the climate topic without having to get into uh as much of the politics or the morality of it, which are important, but not always everyone's cup of tea.

SPEAKER_01 53:56

Can I just say one thing? And I because I just I agree with everything you said. I I I there's one point I thought was interesting because you talked about it. I mean, well, I don't, it's not it's not even that I disagree, but I think it's worth just lingering on it because you know you mentioned the different risks, the you know, property loss, you know, migration. I think you said migration, or you know, sort of geopolitical instability. And there are some things where the modeling is I mean, none of it is like, you know, very precise, and and and they don't it's hard to it's hard to get it entirely right. But there's some areas that are further along, like we can model, you know, property loss, uh, you know, uh heat stress and how that affects economic output. There are other areas, the second-order effects, things like migration, political instability, which then makes it harder to operate a business, and sort of general economic conditions that are much harder to model. And one thing that I find sort of challenging is that a lot of the economists who do this will say, oh, well, you know, because of heat stress, this, you know, economy in Florida, this county is gonna have, you know, this many more days that are really hot, and therefore productivity is going to decline, and here's what the number is. And you say, okay, well, what about the fact that like half the people are gonna leave and like there might be some people trying to get over to Florida from the Caribbean and like, oh, well, we can't model that, so we just it's not part of it. And so there's this false sense of precision that I think sometimes happens with this modeling that underestimates how severe some of these problems are. And so that's my only, I agree with everything. It's a great baseline, but we have to expand our thinking a little bit sometimes to how broad some of these problems might be.

SPEAKER_00 55:40

Last question. As we close, uh, you're an American person, you think about things abroad, you're abroad now. What are some things that items, ideas, topics that people in the United States probably should know or maybe think about or might be interested to know about from outside of the United States on these topics, but maybe aren't aware of? Any come to mind in anything that we've talked about today that you'd really like to highlight for a more North American audience? What do we need to know?

SPEAKER_01 56:07

Yeah, I mean, I think I mean I think the main thing, and and and I so I do spend a lot of time abroad, like uh, and so I get a sense of how things are changing. Of course, the world is really big, so I don't know everything. But the sense generally that I would say in the last year, um, from like an obsession with like what's happening with the US, what is our tariff rate going to be, to I think the vibe now, which is like, you know, of course, the US is important, but like, uh, I like there's another, there's a whole other world out there where people are just sort of getting on with what they're getting on with. And I think in the US, we can be very concerned about what's happening in our backyard, which is important. And we can be very concerned with how much gas are we building and how much, you know, and and you know, what is the what are the policies that are coming out of this administration? What are they doing with the endangerment finding? All this stuff matters, but like get out into the sort of broader scheme of the world and you're like, oh, actually the US is kind of its own thing, and it's like maybe not as important as we thought. Again, don't want to say the US is not important, but it's like there's a much bigger world out there.

SPEAKER_00 57:14

That's the end of part one of my conversation with Justin Warland. Now, we always love hearing from you and we want to know what you think. Please email us at podontherize at gmail.com. That's podontherise gmail.com. If you love this episode, there is a part two. In the second part with Justin Warland coming out next week, we talk a little bit more about his path into journalism and the craft of journalism. We ask him and he talks about how his approach to journalism has changed over the years as he's got more experience, but also as technology has changed around him. If you love this episode, you're not gonna want to miss that. Thanks everybody for tuning in today. Thanks to our producer Vish, and here is the music of the great Claire Davis to play us out more soon, y'all. If you want to see the better catch a pack, come on, I'm gonna go.