From Fossil Fuels to Climate Action with Tom Steyer

Published Jan 31, 2024, 8:01 AM

Before Tom Steyer ran for President on a campaign advocating for climate change, Tom Steyer was making money by investing in fossil fuels. But that changed when he realized the natural environment around him was decaying—and the government wasn’t doing anything to stop it. On this episode, Chris and Tom explore Tom’s concept of "movement capitalism," and how businesses can drive positive climate impact.

Show notes from Chris:
According to “Banking on the Climate Chaos”, fossil fuel financing from the world’s 60 largest banks has reached USD $5.5 trillion in the seven years since the Paris Agreement. If you’d like to find out more about who is financing fossil fuel projects around the world check out their website and annual report at https://www.bankingonclimatechaos.org 

If you’d like to learn more about how bringing together economic and social values can help build a better world, former Governor of the Banks of Canada and England, Mark Carney, has written a thought-provoking book called “Value(s)”. You can read a review here.

I know that if we don't do this, we're flirting with disaster. But what I really think we should focus on is we can build the most beautiful future that anyone can imagine too. Yeah, of course we're trying to avoid this huge problem, but really what we're trying to do is build this incredible future better than anybody's ever lived, than humans have ever had it in the history of the planet. That's what we're really trying to create is a fantastic future.

Oh fucked.

Hi.

I'm Chris Turney and this is I'm Fucking the Future, a show about a climate crisis and what we can do about it. The future can sometimes seem bleak, so every episode we'll talk to someone with a big idea for turning things around. I believe it. Together, we really can on fuck this. Let's get started.

We fucking the future.

There are a lot of ways you can fight global heating. You can eat less meat, you can drive an electric car, or you can try to become president of the United States. That's what our guest today decides to do. His name is Tom Steyer.

Here.

He is one of the Democratic primary debates Back in twenty twenty.

Rachel I'm the only person on this stage who will say that climate is the number one priority for me. Vice President Biden wrong say it. Senator Warren won't say it. It's a state of emergency, and I would declare a state of emergency on day one. I've spent a decade fighting and beating oil companies, stopping pipelines, stopping fossil fuel plants, ensuring clean energy across the country.

I know that we have to do this. I also know that we can do this.

Tom doesn't fit a profile of your typical climate activists, because Tom is a wildly successful businessman who made his fortune in part by investing in fossil fuel companies. Here's Tom on CNN talking about his time in the private sector.

Our company invested in every part of the American economy, including oil and gas and coal, and I realized as we were doing it, I basically thought, the American government works. If there's a big problem, the American government will solve it. And somewhere around fourteen or fifteen years ago, I thought, this doesn't seem to be working. There's this huge, unintended consequence of having a fossil fuel economy, which is climate change and I started to do whatever I could to try and solve this problem.

Then the climate crisis is a direct result of industrialization of runaway business development. But Tom has come to believe that one way we can fight against global heating is through the power of business and industry. In twenty twenty one, Tom founded Galvanized Climate Solutions. It's a financial firm but only invests in companies making a positive climate impact. How did Tom go from fossil fuel investor to climate advocate, I asked him. So, I think a lot of people are having their are harr moment, that oh fuck climate change is real moment for me. I remember I was a nerdy teenager. It was back in nineteen eighty seven at the weather station and a hurricane hit London, and just a year later British Prime Minister Margret Factor was given these powerful speeches about climate change and we're going to do something about it. So what is your aha, oh fuck moment?

Basically I had spent a summer when I was twenty four up in Alaska. I had an office job, but I basically spent every weekend out in the woods, climbing, fishing, canoeing, everything I could think of to get as far deep into the woods as I could. Incredible summer. And then I went back with my family, including four kids, to give them the same appreciation that i'd have show them how incredibly fertile and wild America was, you know, the huge fish, the incredible animals, the birds, just how incredibly rich the country is. And basically we got up there and we did see that, But what we also saw inescapably was well, this place is melting.

Okay, let's pause here for a segment we like to call holy fuck.

Fuck.

When Tom says for Alaska is melting, he means literally melting. The average temperature across Alaska has increased by up to six degrees fahrenheit over the last forty years. That's more than three times for warming of the rest of the country. This has led to a dramatic melting of glacier across the state. It's a trend that's set to continue, with at least half of Alaska's remaining ice expected to disappear in the coming years. This matters for two reasons. First, the melting of glaciers in Alaska and across the Arctic are one of the biggest causes of rising sea levels today. Second, this heating is also melting Arctic sea ice, which you can think of as a world's air conditioner. This is a thin layer of the Earth's surface that's totally frozen, and since sea ice is mostly white, it reflects sunlight, which pushes at heat off the Earth's surface and back into space. And if that ice isn't there, then the sunlight gets absorbed into the ocean, warming the waters and melting more ice. It's a vicious cycle, and it's one of those facts that just stops in your tracks and makes you say, holy fuck.

Fuck.

Okay, back to Tom, seeing all this change in Alaska change, what was happening so fast, was shocking to him.

And you know, we had as a family, both my wife's side of the family and my side of the family, hundreds of years of going into the woods in North America. And so it wasn't like going to Disneyland. It was going to this place that Americans have gone, well Native Americans for thousands of years and immigrants like us for hundreds of years to find meaning and spirituality and beauty and incredible natural wealth.

Tom saw how in just one generation, so much of Alaska's landscape had changed, and like a lot of people, Tom at first looked to the government to solve a climate crisis. He supported politicians and causes that were pro climate, and eventually he took a stab at running for office himself. Tom's presidential platform was heavily focused on climate action. Here's one of his ads.

Hi, I'm Tom Steyer. I'm running for president, and I'm committed to creating a sustainable future for all Americans. Our planet is at a crossroads. Wildfires are taking lives and destroying communities. Prolonged heat waves and extreme storms are putting the vulnerable at risk. We can't continue to deny science and roll back environmental protections. We must treat the climate crisis with the urgency it demands. That's why, on day one of my presidency, I will declare the climate crisis a National Emergency.

Tom helped make climate a more central focus in the election, but ultimately he didn't manage to win the presidency, and so he decides to shift gears. Tom had spent a lot of time trying to convince people that fighting the climate crisis was for riving to do, but he thought, what if he could appeal to people more pragmatic interests. What if doing the right thing for the climate was also the right thing for their bank accounts. It's an idea Tom calls movement capitalism.

Well, you know, capitalism scales, profitability scales. It's somewhat cynical of me to say, but unfortunately, I think it's realistic for me to also say altruism doesn't scale.

Right, or it scales less. I mean, we see more and more consumers choosing to buy from climate conscious companies, but it's not moving a needle in the way that would incentivize other companies to do the same.

Right, we need to have these changes be profitable so that people can make the decisions in their own self interest. And so it's not that I think capitalism is by definition good, it's capitalism can be good. Capitalism is basically, we're going to produce what you want, so you pay us money. That's capitalism. Like, you tell us what you want and we'll produce it if you'll pay us for it. Okay, And the idea is okay, So my self interest is to produce something you want yours. You're just going to get whatever you want, you tell me, and I'll make it. And so in this if society decides we need to do things that take into account the cost of pollution, then we're just going to say we're going to produce all the things you want, but we're not going to pollute. And if you think about it, there's nothing wrong with oil. Oil is this incredibly powerful energy source. People did it as a way of moving cars, moving ships, moving planes. They weren't trying to destroy the world. They were basically giving people exactly what they wanted energy. It just turned out there was this unintended consequence that in burning the oil and burning the natural gas and burning the coal, we were going to basically heat up the planet in a way that was going to cause all kinds of problems for human beings and all the other eight million species on the planet Earth. And so all we're saying is, okay, let's give people what they really want, which is all of that capability for them to move around and to fuel the things that they like in a way that doesn't have this unintended consequence that basically burns clean And if we can do that, then we're basically producing what people want. And for that to really happen in a big way, then we need to build big businesses that hire people and paying them competitive wages and really give an incentive for this thing to grow.

Weird fucking the future. Weird fucking the future.

For years, a big obstacle in getting people to switch to renewable energy sources was cost. Solar and wind was just too expensive compared to oil and coal. But in the past few years that's all changed. Clean energy is now far cheaper than fossil fuels. Fa'st creates a lot of demand, and that in turn is to an explosion of investment by the private sector. It's one example of a positive alignment of business interests and climate interests.

Well, a ton of things have changed in terms of making it possible for the private sector and step up. If you just look at the amount of money that's being invested in climate solutions, that's being invested in clean energy versus fossil fuel for the first time. Last year, I think more money was invested in clean energy to possi fuels. So there's no question that relatively the private sector is stepping up. I think the costs have crossed in terms of electricity generation, whether it be solar or wind or batteries. I think the costs of evs electrical vehicles, Yeah, yeah, are going to be a lot lower, both in terms of how much it cost to buy, but how much it cost to maintained much it cost to fill up than internal combustion engines. You know, we're seeing really the tipping points in multiple technologies where basically you're not asking someone to make a sacrifice, that we're in this place where it's like, this is just the smart thing to do. And you know, as we see that those really rapid adoptions around the world, we're going to see that be the dominant technologies and that really we're going to see the end of the fossil fuel layer.

Oh no, I can't wait for that. I mean, that's just an amazing headline, isn't it. The amount of investment in this space is extraordinary, and just seeing the changing costs. But why things got so much cheaper, Tom, I mean, what's actually driving out change?

If you think about when I first went to work forty years ago, the computer that would fill a room now would have a tiny fraction of the capability of your iPhone because that multiplication of capabilities every single year. And so we see that kind of technological advancement, which is increasing productivity and reduced cost in every one of these technologies, whether it's solar or wind, or batteries or evs. So, for instance, in solar, I think the way that people think about it is that every doubling of solar capacity in the world leads to a twenty four percent drop in price for the equivalent amount of energy. So as that goes on, it's like it just goes down inexorably. And so if you're selling oil and gas, like there's no doubt next year your competitor is going to be a lot cheaper, and the year after that, by the way, they're going to be a lot cheaper.

A game change, isn't it.

And so that's not true of fossil fuels. You know, fossil fue mules become harder to find, more remote, more difficult to reach. The price of oil has gone up about two percent a year, you know, forever. So in fact, you've got one technology that's going up very gradually but continuously, and one that's going down very steeply. If you look at the cost of a kilowatt hour of energy, and whether you look at coal or natural gas or wind or solar wind and solar by farther too.

Cheapness, fast, incredible change for world, and you see it happen. This speed is scale, that's just amazing.

You know, China is the biggest car market in the world. China is scheduled to have eighty percent car sales be evs by twenty thirty. Eighty percent eight zero percent. Those cars do not need to fill up. So when this happens, Once the sales move like that, then the percentages of the fleet just in egg changed and you can see the end of the fossil fuel era.

We're already seeing this happening around the world. Here's a news clip from a recent cast show in China.

Foreign automakers, including American brands, are now playing attention to Chinese players like bud It's number one in China and the competition is now so intense it sparked an EV price war. Here.

From a climate perspective, an EV price war is exactly what we want to see. As EV's become more affordable to buy, it incentivizes consumers to buy greener cars, which in turn incentivizes companies to build more and better electric vehicles. It's the power of capitalism.

I drive electric Mustang and so you know, did I buy it because I wanted to have no emissions? Yeah? I really only considered an electric car last time time before I a plug in hybrid. But honestly, it has amazing pickup. It has way better pickup than any car I've ever done drive. I mean, it's like being in a rocket, you know. I think we're going to see this is going to enable a lot of things where you go. It's not just that we have clean air, safe water, normal temperatures, normal seasons. It's also a great ribe.

In twenty twenty one, Tom took this concept of movement capitalism a step further. He found in a business called Galvanized Climate Solutions. It's an investment firm with two goals. Make a positive climate impact and make investors a lot of money. So you're helping investors find those opportunities, those amazing opportunities to decarbonize economy, builviss and our cities, our communities. But I'm curioused to know are they really aware of what they're doing? I mean, are the investors aware of the rest of economic system if they don't take action on global heating and is that a motivator for them.

So I think that our investor have two motivations. One is they want to get and we must deliver good returns. Market returns are better. Our goal is to have the highest returns in the world. And we believe that the need for this change is a really huge demand generator revenue generator for these businesses. But I think everybody who's investing explicitly in galvanized climate solutions knows we will only invest in things that have positive climate impact.

So what kind of investments can actually have a positive climate impact. We're going to spend a few minutes talking about free areas where Toms's opportunity, real estate, information technology, and something called sequestration. Let's start with the first one, real estate. How can investing in real estate have a climate impact?

We're doing a fund to do net zero real estate and basically what is mean? That means generating electricity differently reskinning the building using heat pumps, and to do this in a way that gets better returns. And why is it important to do this? Eighty percent of the buildings in the US that exist right now will still be in use in twenty fifty.

Those buildings are carbon super producers. A lot of the infrastructure around us today was built at a time when sustainable architecture wasn't at the top of people's minds. The result is pretty astounding. Across the world, buildings makeup as staggering thirty nine percent of all greenhouse gas emissions thirty nine percent. Most of that comes from what we do in those buildings, think heating and cooling the units we live and work in. So yes, some of it is due to how much energy we used to build them, but these emissions could be greatly reduced if we made small changes to how we run them. So all of that is to say, of these buildings are powered matters a lot in our fights to combat the climate crisis.

We have to reformat these buildings, and we have to do it in a way that makes the landlord's richer, because if that isn't true, they ain't going to do it. So we have to do it and prove it and develop the kind of you know, the recipe to do it, so everybody goes like wall, Chris is doing it. If Chris is doing it, I can do it.

For Tom and his partners. It's not just enough to find companies that have an innovative business plan or a cool new technology, it has to be something that works in the real world. Sometimes when we imagine a green future, we think of a world in which all the old polluting technology has been wiped away and replaced with something shiny and new. But real estate is a perfect example of why that doesn't work. We can't tear down every home in the world and replace it with a most climate friendly alternative. It would take decades and cost an absolute fortune, not to mention, of course, construction itself has a climate impact.

I mean, two of the things I'd say about this are one is we're not going to be able to rebuild all the industry, the industrial plants, manufacturing plants either one of the questions, and this is a real question for technology. Let's say you have a cool technology, but it means we have to rebuild every plant in the world. Okay, sorry, We're going to have to take your technology and figure out how to do it within the footprints of the existing plants in a way that makes those owners richer, because that's why they're going to do it. And you know, we're looking at some technologies which just from an efficiency standpoint, if they had no CO two impact at all, make people multiples of their money in the first year. That's what we need.

That's a complete noe brainer.

Isn't it. Yees. So it's like you sit here and go like, Okay, I'll do that. I'm glad it does the CO two thing, but I'm doing it for the money. That's one thing that's really true is within the footprint of the existing building or situation.

Okay, let's move on to Tom's second big investment opportunity, information technology. As he sees it, one of the big challenges in creating a cleaner future is that we don't actually know how much we're actually polluting.

And when we think about how we're going to solve this problem, people think about all of these gadgets, solar wind batteries, electric vehicles, things you can touch. But if you're going to manage that, you have to know the information. If you're going to change your carbon footprint, you have to know what your carbon footprint is, you have to know where it's going to come from. So I always say to people, Okay, what's the carbon footprint of my sweater? I don't know, and neither does anyone else. But until the people making the sweater know, and until I know, how are we going to change our carbon foot right? How do I not buy the sweater that's made the wrong way if I don't know how they're made. So a lot of this is going to be about information, transparency and holding people accountable to what they're doing.

Do you know the climate impact of all the choices you make? Can you tell if one sweater is better for the environment than another? In most cases, the answer is probably no, And that's in part because measure the climate impact of something is a lot more complicated than you might think. It brings us to a concept known as scope free and a segment we like to call what the fuck are you talking about?

What the fuck are you talking about?

When businesses want to measure their environmental impact, they use something called the Greenhouse Gas Protocol. This piffy title is an international standard for how we classify where emissions are coming from, and, confusingly, these classifications are known as scopes. Scope one emissions are the direct pollution produced by a company. To stick with Tom's sweater example, imagine you run a sweater making factory. The emissions from your company vehicles transporting the sweaters are scope one Scope two emissions are created by the power your factory uses, So these are the emissions from a secondary source. The power plant that supplies your electricity is your sweater factory run by a coal powered plant or by a wind farm. And finally, scope free emissions are all the other pollution linked with a company's activities. Your sweater factory uses yarn that you bought from somewhere. How much pollution did the yarn factory create? Your employees are commuting to work each day? Are they driving bicycles or monster trucks? When you try to add all these up, enough to make your head spin. And it's why scope free emissions are the hardest to measure and why they're almost always for biggest source of emissions for a business. But if we really want to understand our climate impact, we have to be able to measure scope free emissions. And this is something that Tom can help with by investing in information technology. And that's what the fuck we're talking about? What the fuck? Okay, back to Tom. You'll be shocked to hear most businesses hate the idea of measuring scope free emissions. It shows that their products are much dirtier. But if they just measured scopes one and two.

You know, the Chamber of Commerce is dramatically opposed to it would be a huge problem for companies, and I believe once people know what's going on, that's going to put immense pressure on those companies to get their emissions under control. As long as you don't know what you're doing, you have plausible deniability and you can't be expected your honor. I had no idea it was true. As soon as I found out it was true, I acted on it. So the longer I don't know it's true, the longer I have plausible deniability and you know, and no one can really come after you. So that's why the truth in this and the measurement of this is so important, because basically, people are polluting for free and they love it because, you know what, who wants to pay for their pollution? Nobody. So they're like, we've never paid for it, it's free. Why should we suddenly have to pay for our pollution just because that pollution might ruin the world. It's like, well, that seems like a pretty good reason.

Given all of this, why would any business measure its scope free emissions? Simply put, the government is going to make them do it. They have are multiple laws and policies being debated as we speak that would have this effect. The big business is it's already allure in California. So if every company is suddenly required to measure their scope free emissions and you are in the technology that does for measurement, that seems like a pretty good business to me. But besides being a cool business idea, Tom thinks the environmental impact could be huge because given the choice, people prefer to buy stuff that doesn't destroy the planet.

That's been polled just you know, Chris, if you go around the world, seventy six percent of consumer's claim that they would take environmentalism into account when making consumer decisions. Now, do I believe that mostly No, Most people by the cheapest best thing they can find, regardless of how it was produced. But in the United States of America, the estimate is from also detailed polling data that's something like eighteen to twenty percent the people really will take it into account? I would, but I believe if twenty percent of Americans are willing to take it into account in making their purchase decisions, that is a huge companies.

We're fucking the future. We're fucking the future.

That brings us to Tom's third and final investment idea for today. It's something called sequestration.

One of the big verticals which is going to be a trillion dollar industry that doesn't exist right now is sequestration. And sequestration is simply somehow taking CO two or methane out of the atmosphere and somehow sequestering it or sticking at someplace where it's going to stay.

Obviously, the reason we have global heating is burning a lot of dirty fossil fuels, and the emissions are floating around in our atmosphere. Sequestration companies pull the carbon out of the air and pump it underground or store it somewhere. And here's the thing, it doesn't matter where you store it, as long as that carbon is out of the atmosphere. And that's where Tom sees big opportunity.

One of the points that's true about that is a ton of CO two sequestered in Kenya is worth every bit as much as a ton of two that's sequestered in Brisbane or Berlin or Iowa. And so if it can be done less expensively, in Kenya, and if the money that's paid for it is exactly the same as in any of those other three spots around the world, but that money means a lot more relative to the annual average income in Kenya than it does in Germany, Australia or the US, then that's a gigantic opportunity for the people of the world. It's a gigantic opportunity for the people of Kenya, and it's a real way to redistribute and build capability around the world and reallocate money to the tune of at least a trillion dollars year.

At trillion dollars.

Wow.

So these are some of the opportunities that Tom believes are out there. We're doing the right thing for the climate can be big business.

I mean, if we're producing goods and services that are cheaper, better, faster and cleaner, they're going to get adopted. I mean, for hundreds of years, new technologies have come in and replaced old technologies, and they've done it in the form of an s where that takes a long time to develop them, the costs finally change and then there's rapid adoption over a period of time. So that's happened. I mean, I doubt Chris that you've been using that much whale oil recently.

No, that is true.

But if private sector can prove that doing the right thing is cheaper and easy to adopt, than governments can do other things to support it and make it ubiquitous. Yeah. Absolutely, So it's this interactive thing of Okay, we need to do this. How can we make it possible for the private sector to do it and to scale? Okay, now that they've proved it's cheaper and better, how do we make it not a good solution but basically ubiquitous solution, so that we just move all the way. If you miss this, you're missing the boat.

It's so important for people to have that vision that's positive for the future, something that's actually really empowering.

Look, I think that this is just a huge tailwind for companies that are are behind this change, and it's going to be that if you go back and look over the last ten or twenty years, people have dramatically underestimated the speed and size of this change, and they are going to continue to underestimate it.

I'm completely inspired. I'm sure our listeners are too.

Thanks so much, Chris, Thank you very much, really enjoyed it so much fun.

I have to say I didn't expect to feel so inspired by a conversation about real estate investing. But Tom is pointing a way towards something we in the environmental community we often overlook. We sometimes think about businesses and corporations as our adversaries. I mean, after all, industrialization is what has caused this climate crisis, but harnessed in the right way, these same forces can also be our partners in the fight against global heating. And the truth is, if we're going to unfucked things, we're really going to need their help. So in this episode, we've talked a lot about climate friendly investments, but what can you do if you're not a venture capitalist? To answer that question, I'd like to bring in my friend Maggie bed for a final segment this week, something we call what the fuck can I Do?

What the fuck can I do?

Hey, Maggie, Well, Tom Stad's interview was all about using a power of capitalism to fight global heating, but not all of us are billionaire venture capitalists, So what can we do?

Well, you may not be a billionaire yet, but you might have, say a savings account, maybe you have a retirement account through your work or something, and so one thing you can do is make sure that whatever money you have, it's not going to support the burning.

Of fossil fuels.

It's a strategy that is known as devestment. So make sure that you don't own any stocks in fossil fuel companies, either directly or through any mutual funds or other funds you might have in a retirement account or or something similar. And there are lots of funds from big banks like Fidelity that anyone can invest in instead that are specifically pro climate. So check with your financial advisor or whomever you really trust for financial advice, but tell them that this matters to you. And lastly, make sure that your bank is climate friendly. We've put a link in the show notes to a site that has great lists of pro climate banks. Take a look and make sure your bank isn't propping up fossil fuel companies.

Thanks Maggie, that is so important, isn't it.

Thank you?

And for everyone listening out there. That's what the fuck you can do to help?

What fuck can I do?

Oh? We're fucked.

That's all for this episode. Next time on the Fucking the Future, psychologist, doctor Lisa van Susteren will talk to us about how climate is impacting our mental health and what we can do about it.

Oh, it's even desirable, frankly to be outraged and angry. Many studies show that that is the prelude to taking action, that it is protective to be angry and outraged. They are healthy emotions to an unhealthy.

Condition until then, I'm Chris Turney signing off from Sydney, Australia. Thanks for joining me in I'm Fucking the Future.

Weird Fucking the Future.

I'm Fucking the Future is produced by Imagine Audio and Awfully Nice for iHeart Podcasts and hosted by me Chris Turney. The show is written by Meredith Bryan. I'm Fucking the Future is produced by Amber von Schassen and Rene Colvert. Ron Howard, Brian Grazer, Carl Welker and Nathan Chloke are the executive producers from Imagine Audio. Jesse Burton and Katie Hodges are the executive producers from Awfully Nice. Sound design and mixing by Evan Arnette, original music by Lily Hayden and producing services by Peter McGuigan. Sam Swinnerton wrote our theme, and all those fun jingles. If you enjoyed this episode, be sure to rate and review Unfucking the Future on Apple Podcasts or whether you get your podcasts

Unf*cking the Future

Unfucking the Future takes us on an environmental journey with our knowledgeable guide, scientist Ch 
Social links
Follow podcast
Recent clips
Browse 13 clip(s)