The Environment, Capitalism, and Technology — a review

This is a review of the a16z Podcast with Marc Andreesen and Sonal Chokshi interviewing Andrew McAfee.

This podcast starts out talking about the Industrial Revolution and Capitalism. It then wends its way to a heart-breaking story about the death of thousands of whales in the 1950's, followed by some brilliant ideas for solving pollution in emerging economies. Finally it explains why everything you know about GMO, and about nuclear power, is wrong.

These widely disparate ideas are actually closely linked, and while I can’t dissect the whole podcast, I’ll cover the following:

  • the Industrial Revolution that hurt the earth
  • what Capitalism is, and what it isn’t
  • the different types of energy we could be using
  • why the crazy is winning on GMO’s
  • how to manage the global environment
  • how to make something from (practically) nothing
  • let free trade happen

The Industrial Revolution that hurt the earth

The Industrial Revolution produced amazing human growth, but we increased our growth at the expense of the earth. Our GDP increased at a rapid rate, and so did our energy consumption. But something happened between 1970 & 1980 and we hit the point where we no longer consume energy and resources at such a high rate. We’ve divorced energy use from growing the economy. And this leads us to a discussion about Capitalism.

What is and isn’t Capitalism?

McAfee explains how Capitalism has lead to depletion of some species on one hand and on the other, it’s created policies to drop pollution in the U.S. by one-fifth over 10 years. He believes it’s the best method of government, providing more benefits, less downsides, and is the best for our environment.

What Capitalism is:

  • it’s getting goods and services into the hands of the people
  • it’s private companies who are primarily responsible for producing these goods and services
  • it means prices are not centrally controlled
  • it’s the voluntary exchange of people, goods and services

What Capitalism isn’t:

  • it’s not responsible for damage to the environment
  • it doesn’t stop people getting left behind
  • it doesn’t prevent inequality
  • it doesn’t prevent pollution
  • it doesn’t prevent species being lost to the earth

However that doesn’t mean that other forms of government are better. McAfee chooses to cite the heart-breaking story about the Communist Soviet whaling industry who signed and then ignored the treaty against killing whales. They killed thousands of whales in line with Stalin’s 5 year plan to grow the fishing industry. Whales are big, they weigh more than fish, so killing whales grew the fishing industry. They didn’t eat the meat or use the oil or the blubber, they did it because it was in the plan. Apparently the person who orchestrated this devastation said “Our descendants will not be the ones to fire me from my job”.

Communism can keep making mistakes under cover of darkness for no good reason

People do rail against capitalism, and others want a mix of socialism or communism — but McAfee believes that the West dealt with their pollution problems first e.g. The Clean Water Act and The Clean Air Act. They created a market system for trading pollution, and caused pollution level to drop to one fifth of their previous levels in the U.S.

So, is there a trade-off between improving the human condition and improving the state of the world? While we were increasing our growth at the expense of the planet, it’s not so true anymore. It’s in the rear view mirror. We’re bringing animals back from near extinction, we’re polluting less, and introducing renewable energy.

What types of energy should we be using?

We have one source of scalable energy — nuclear -and we’re running away from it

Why are people so vehemently opposed to nuclear energy?

McAfee suggests it’s because of Hiroshima, Nagasaki, Chernobyl , 3-mile island, and Fukushima, not to mention apocalyptic movies. However, if we take a closer look at the harm from all power sources, we find that nuclear comes nowhere near the deaths that have come from coal (and coal dust). Our fear of nuclear is not based on evidence. We’re getting this wrong. Bill Gates believes his nuclear power technology TerraPower, is viable, but due to issues between the China and the U.S., he’s facing an uphill battle.

McAfee suggests an international patent to make it viable and cheaper to create nuclear reactors, even for lower income countries.

McAfee bets that in 10 years, we’ll use less total energy in the US than we do now

The crazy is winning on GMO’s

Like nuclear, there are misconceptions around Genetically Modified Organisms (GMO’s). Many governments and even the EU itself have banned GMO’s. And yet people and organisations like the Royal Society state that after reviewing the evidence, there is no reason not to eat GMO . Look at the example of The Golden Rice Project which is adding Vitamin A to rice. Vitamin A deficiency is a leading cause of preventable blindness and death for millions of children world-wide. To feed the global community, we need to manage the food that we eat. But how do we manage to keep our ground and water clean to feed our crops?

How to manage the global environment

McAfee explains how India, China and Bangladesh will get to their peak GDP without polluting as much as others have. They will go through the resource transition more quickly than those of us in the West. There are people in China demanding and getting a better environment. The Chinese government took action to clean the air because people were leaving the cities.

The Chinese reduced particulate in the atmosphere by 30% in 4 years. The U.S. took 12 years to achieve the same thing.

We need a very different approach in our foreign policies for global emission growth, we can’t force them to reduce their carbon emissions. But we can encourage them financially, to make better decisions.

Carbon dividends

William Nordhouse, was given a Nobel prize for creating a carbon dividend. Let’s take his idea and look at the imports into the U.S. If they are sourced from a high carbon-emission country, you tax them more — it’s a good incentive for developing countries to start cleaning up their act.

Let’s make pollution expensive

Let’s allow companies to buy and sell the right to pollute. This was put into practice in Reagan’s administration, and now U.S. skies are 90% cleaner since these systems began. The cost of doing turned out to be a fraction of the original estimate.

Make it cheaper for them to be green. We need to help the currently low income world, get rich on a lower carbon trajectory than they are now.

Why not mandate this via governmental policies? It worked to reduce CFC’s in our atmosphere. Put environmental policies into the market, and you’ll get better results faster. Increase a business’s costs and they’ll move faster to change.

Making something from nothing

Buckminster Fuller, in the 1920’s came up with this idea of Ephemeralization.

Ephemeralization: Making more & more with less & less, until we make everything with nothing

We now call this dematerialisation:

  • swapping out one resource for another as rare earth metals disappear, we use something else
  • optimising our use of resources so everything runs more efficiently
  • evaporating a resource and replace it by nothing e.g. no need to print out maps or emails when you can use your phone for that.

How close can we get to making something with nothing? Can we use 3d printers to create everything we need, from everything we don’t need and can recycle? McAfee believes we can and that eventually we’ll be able to feed everyone on the planet, using a smaller acreage. Our footprint per person will be much smaller.

Let free trade happen

In 2005–2007 companies were given tax credits for clean tech. Then the 2008 financial crisis happened, along with rapidly dropping prices of natural gas. There was no longer any incentive to go green. This also happened in Germany. While solar and wind have a place — they are intermittent renewables (there isn’t always sun and there isn’t always wind). But if we struggle with wind and solar, and then decommission nuclear, carbon emissions will remain high, and energy costs will still be high.

In 2010, there was a big push for solar energy that tracked the sun. But the technology to track the sun, is more expensive than using conventional static solar panels. Solar was taken up by the Chinese, who were able to undercut the cost of U.S. built solar panels, but after the U.S. put a tariff on the cheaper Chinese panels, they became too expensive to buy in the US.

Prosperity comes from free trade.

Let free trade happen

We have the answers, but regulators and governments get in the way. The reason we aren’t doing better is because some things (like managing Carbon emissions) are just more politically difficult. They’re not technologically difficult.

We started with the Industrial Revolution that started out increasing GDP at the cost

The solution then, according to McAfee includes feeding the world using GMO’s. Providing them all with clean energy using nuclear power. Then we encourage environmentally-friendly manufacturing practices by making polluting the environment too costly for countries and businesses to bear. Next, we instigate free-trade practices to encourage the sharing of technology across borders. Until finally, we’re able to produce something out of (practically) nothing.

Started reading at 4, haven’t stopped yet

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