Buy your green bonds.
Tom Rand Well, I think it's different every year and I'm certainly in good company--it was quite an honour to be asked. But I think with me, what's unique is being adept at business yet speaking in very stark and honest terms about the kind of trouble we're in. I don't see a lot of my peers in the business community doing that.
A\J During your acceptance speech for the Earth Day Canada award you provided a useful image: We don't have to be like the frog, we can wake the fuck up. Can you expand on that thought?
TR Everyone's heard of the story of the frog in the pot of water on the stove, right? This is the childhood story--you put a frog in a pot of water and you heat it up, and the frog won't leave because he becomes paralyzed with the warming water and is unable to act by the time it's too hot. So the poor little bugger boils to death. That's actually a myth, it's not true, but it's a very powerful metaphor.
I'm asking, are we that frog? Are we paralyzed into inaction to the point that we're actually going to kill ourselves? I think climate change is civilization's end game and it is appropriate to ask that question. But I'm doing more than stating the stakes of the game. I'm asking about the systemic reasons behind our paralysis.
If you read the business pages about the amount of funds still going into fossil fuel construction and you look at carbon counts, we are clearly paralyzed in the face of climate change, in the face of rising temperatures and superstorms. It's happening and we're still not doing anything.
A\J So are you trying to be an economist or a psychologist?
TR I'm asking questions about rules of the game, as opposed to simply pointing out bad actors, because it goes deeper than that. Why are the Koch brothers so effective at blocking action when [climate change] is clearly happening and the public is beginning to accept it's happening? Even if we believe it and research says it's true, even if we're not an active denier saying it's not true, we live our lives as if nothing is happening. That's another kind of denial. I'm interested in the reasons why we're not doing anything.
It can be psychology, as you say. There are cognitive biases that keep us from really grasping the depth of the trouble we're in. There are also rules of the economic games that we play--economic models that we use to do cost-benefit analysis of climate policy, for example, or our addiction to the free market ... Particularly here in North America, we're allergic to the kind of market intervention that is required to stop this juggernaut. And there are social rules around business leaders--what you do and don't say when you represent the brand of a large international company. You simply can't talk turkey about climate change.
AU You're involved in clean tech as an investor and consultant. Where should everyday people be putting their time and money? TR Insulating their attic, not eating red meat, the usual top 10 things you do to reduce your carbon. I think that's what the public should be doing, but more than that. Rather than looking for investment opportunities--because the public is not going to do due diligence on companies, no one expects them to--I think they can ask that their governments set up an economic system that allows them to just live their lives. If the price of carbon is baked into every good and service in the country, people will live a low-carbon lifestyle and they don't have to think about it. Then they just make their decisions and the economic machine will work fine. And they'll get richer because you can return the money back to the general public. That's the only way it's going to fly anyway--a revenue-neutral price on carbon.
Until that occurs, I think green bonds are something to consider, but attracting capital to invest as low-cost debt into renewable energy projects requires the government to get involved.
The everyday Joe can also help by talking about this stuff. I mean, it feels crazy today to wonder, "Am I nuts for thinking the world's coming to an end?" Well, guess what--it is coming to an end unless we get our act together. So if you're a civic leader, if you're a pastor, talk. Talk at the PTA meeting, to your kids, talk about it with your neighbour. I don't care if you argue about it. I don't care if you don't believe it's true. But talk about it because you're eventually going to come to a consensus that something's happening.
My gardener and I were talking about putting plants in my backyard because she's going to come in and fix my horrible mess back there, and she mentioned climate change. She said, "Everyone seems to notice that the plants are getting weird, but no one's talking about it. Is it true?" I said, what do you think? And she said, "Well, I think it's getting a little weird." So I asked: Do you think it's even weirder that no one is talking about it? And this look passed over her face like she suddenly felt sane again.
A\J Tell us more about green bonds, a program you were involved in starting. What is it and how has it been doing?
TR It's a very simple idea. The government backs a bond, like a Victory Bond or a Canada Savings Bond, the public buys them and the money is deployed as low-cost debt for renewable energy infrastructure. The cost to government is minimal because you put the money into projects that generate revenue that pays the cost of the bond. I think the private sector should do the due diligence--place the funds, choose the projects and technologies based on market principles, for example. But the core idea is you're generating a lot of low-cost capital for renewable energy projects, whose primary cost is the cost of capital.
The proposal has been adopted by a few parties in opposition in Canada, but no one in power as of yet. In Europe, green bonds have been sold for years.
A\J So, for example, what would happen if I invested $500 in green bonds?
TR It would go into a pool of money, along with a lot of other people's $500, and that money would be loaned to someone who is building, say, a high-voltage direct-current line up to Hudson Bay to open it for wind development, for example. The abundance of wind power that gets developed in Hudson Bay could beat coal hands down, but it needs a way to get to market. So the developers would pay to put that power down that high-voltage line and the payments they make for that line would pay the bond holders like you.
A\J So it's like a government-backed loan.
TR It's a government-backed loan at its core.
AU Your previous book, Kick the Fossil Fuel Habit, was about what we could be doing with our money if we developed investments using a tool such as government-backed bonds. What is Waking the Frog about? Is it part two?
TR Kick is an optimistic expression of the possible. Waking the Frog is an articulation of our inaction. So it's a much more pessimistic book--there are not pretty pictures in this one. It's a much more serious book.
We need to ask some very hard questions about who we are, what kinds of political and economic systems we've built and what are the responsibilities of our business community. There are difficult answers to those questions, I think because they are not positive answers. We're frozen, we're locked for lots of reasons. But I think in asking those questions we gain an understanding of why we're paralyzed. Why can't the CEOs of our biggest companies talk about climate change in public? Why can't our fossil fuel sector publically acknowledge climate change?
I think anybody who's read the International Energy Agency's reports or the Pentagon reports on climate change as a national security issue, all these people know what's up. And so why aren't we saying anything? Why aren't we having an adult conversation about climate change? We need to ask those questions, look at ourselves hard in the mirror and wake the fuck up.
Daryn Caister interviewed Tom Rand. Watch AV's full-length video interview with Rand--about practical sustainability, Canadian clean tech and apocalyptic language--at alternativesjournal.ca/396.
Learn more about Rand's work, writing and ideas at tomrand.net and greenbonds.ca. ECW Press will release Waking the Frog in April 2014. ecwpress.com/frog
Check out Earth Day Canada's past Outstanding Commitment to the Environment award winners at earthday.ca/pub/oc.php.
The 2013 Earth Day Canada Outstanding Commitment to the Environment award went to Tom Rand, one of the country's top thinkers, investors and advisors. He is a trailblazer in the realm of clean energy technology and co-developer of the lauded low-carbon Planet Traveler hostel in downtown Toronto. This fall he followed up his first hook, Kick the Fossil Fuel Habit: 10 Clean Technologies to Save Our World, with a darker, more critical one called Waking the Frog. A\J contributing editor Daryn Caister interviewed Rand in Toronto in September
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|Title Annotation:||Tom Rand|
|Date:||Nov 1, 2013|
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