#138 Dr. Graciela Chichilnisky, Co-Founder & CEO of Global Thermostat

After the carbon market, human organization is a priority.

Dr. Graciela Chichilnisky is the co-founder and CEO of Global Thermostat and co-creator of a carbon removal technology that can reverse climate change. Under Dr. Chichilnisky’s leadership, the company was awarded a Silver designation on Pepperdine Graziadio Business School’s 2020 Most Fundable Companies List, and its technology was chosen by MIT Technology Review as one of the Ten Breakthrough Technologies of 2019, a list curated by Bill Gates.

In addition to her role at Global Thermostat, Dr. Chichilnisky is a Professor of Economics and Mathematical Statistics at Columbia University, and Director of the Columbia Consortium for Risk Management.

Dr. Chichilnisky acted as the lead U.S. author on the Intergovernmental Panel on Climate Change, which received the 2007 Nobel Prize for its work in deciding world policy with respect to climate change, and she worked extensively on the Kyoto Protocol, creating and designing the carbon market that became international law in 2005.

Dr. Chichilnisky is the author of more than 300 scientific articles and more than 15 books, including the recently published Reversing Climate Change and the award-winning Saving Kyoto, which won the American Library Association’s 2010 Outstanding Academic Title of the Year and the American Geographical Society’s Book of the Month Award in October 2009. She holds two Ph.D. degrees, in Mathematics and Economics, and her graduate studies were at MIT and the University of California, Berkeley..

The Rise of Green Capitalism

We’re hearing a lot about the carbon market these days. But where did it come from?

On episode 138 of Bigger Than Us, Dr. Graciela Chichilnisky explains how and why she created the carbon market, how the race against time led her to co-found Global Thermostat, and why human organization is crucial for solving climate change.

The GDP Doesn’t Account for Carbon

It is our obsession with markets, which are extremely valuable institutions but need to be understood for what they are. They are a very valuable tool to reach economic objectives, but they do not determine the economic objectives.

The current notion of economic progress is to take the sum of all the goods and services that the economy produces are their market prices, and try to maximize that number. That number is called the GDP or the gross value of production of the nation in dollars, or in the local currency. That’s called the GDP. Gross domestic product, GDP.

Now, as it turns out, that when prices are all wrong, because some of the most important assets in the world, which are the assets that allow humans to survive and thrive, and are necessary for our survival. For example, air without which we cannot survive for more than a few minutes, or water, without which we cannot survive for more than a few days, or food, without which we cannot survive for more than a few weeks. Those who have the availability of those goods have no value in the GDP.

Clean air, no value. Clean water, no value. Biodiversity, which is where we get our food, no value.

So the concept of GDP, which is based on economic value, moves in the opposite direction of what humans need for survival because all the things we need for survival have no value. While the GDP maximizes the economic value, we need something totally different to survive. So it became a point where the more efficiently the world economy grows, the worse are the possibility of survival of the human species, because the concept of economic progress moves in an opposite direction from the concept of survival.

Inequality and Climate Change Threaten Basic Needs

There is no way that our society can survive when over 1.3 billion people don’t have enough food to live in the world as it is now and don’t have the basic needs that they need to survive. They’re in the boundary, okay. 1.3 billion people. This is not sustainable. This is the biggest threat to everything we’re talking about here. The way we do economics.

Economics is the use of resources to be distributed for human survival. And we are not using non-producing resources, right. And that’s the environmental problem. And we are not distributing it right. So our economic structure is really primitive, very destructive, has only gotten worse. And the issue of inequality is now recognized to be very destabilizing for the world as a whole.

Basic needs are about the survival of the human species, and the thriving of the human species. So it does consider a harmonious relation with the resources, water, air food positively. And that’s why I introduced it because I had a feeling that humankind was in a course of collision with the ability of humans to survive in the face of enormous economic success. So how could it be?

Basic needs are the way in which humans can grow and develop in a way that is harmonious with the world resources and with each other.

What we’re doing now is in a collision course with human survival, because it maximizes the market value of goods and services that measure something else, not survival and not thriving, of people and their environment. So that’s how we get involved in the notion that global resources were not just something to count, or was not just petroleum or water or whatever, but it was connected to the human organization. Basic needs are the way in which humans can grow and develop in a way that is harmonious with the world resources and with each other.

Developing the Carbon Market

In the year 1997, I designed and negotiated within the United Nations Framework Convention on Climate Change the concept of the carbon market, in which we essentially change values to address the fact that emissions of carbon are very costly. And that clean technology, clean energy is very valuable, something that did not appear from the conventional markets.

So the number one issue is that the main piece that we need to put in place to resolve climate change, the policy is already proven, has already been successfully demonstrated. It is the carbon market and there is very general agreement now by economists, even by physicists…that that is the solution. Even oil companies such as Exxon are in favor of the carbon market. The carbon market changes prices, making everything which is clean more valuable, everything which is dirty and ruins the atmosphere, and causes climate change, less variable.

The carbon market changes prices, making everything which is clean more valuable, everything which is dirty and ruins the atmosphere, and causes climate change less variable.

That change is the answer to a new system of values for what I call green capitalism. Capitalism, where the more you grow the economy, the more you drive humans towards survival, and thriving, and not to the destruction of the basic resources on which our survival depends.

The carbon market that I designed and negotiated in 1997 then was adopted by 160 nations that voted it as a main concept. And in the year 2005, it became international law. It was created to reduce the carbon concentration in the atmosphere of the planet, which everybody knows now is causing catastrophic climate change.

And the market started trading, the market I designed and I negotiated, and I even wrote into the Kyoto Protocol in 1997, which became international law in 2005, became what is known now as the European Union emission trading system.

And running quickly to the present…were able to document and validate that market that they created in 1997, as implemented by the 27 nations of the European Union…they took 450 million people in the European Union, was able to reduce between 20 and 30% the emissions of CO2 of the European Union despite a very high rate of growth over that period between the year 2005 and 2020. So it works.

That change is the answer to a new system of values for what I call green capitalism.

So the number one issue is that the main piece that we need to put in place to resolve climate change, the policy is already proven, has already been successfully demonstrated. It is the carbon market and there is very general agreement now by economists, even by physicists…that that is the solution. Even oil companies such as Exxon are in favor of the carbon market. The carbon market changes prices, making everything which is clean more valuable, everything which is dirty and ruins the atmosphere, and causes climate change less variable.

That change is the answer to a new system of values for what I call green capitalism. Capitalism, where the more you grow the economy, the more you drive humans towards survival, and thriving, and not to the destruction of the basic resources on which our survival depends.

Recalibrating the Global Thermostat

I think Global Thermostat is not a reflection of the failure of the carbon market. The carbon market is now used by over 25% of humankind. It’s used in China in 14 states in the United States, and in the European Union, as I mentioned, so, it’s been very successful and proven. But the problem is time. Markets and market prices can be used to orient the economy in the right direction. And the carbon market does that. But you can use the market to get there as fast as you need to go, the market is not taking the speed into consideration.

Physicists know that we’re running out of time. That this is a race against time, that now we only have a decade or two, to remove enough CO2 from the atmosphere. Because otherwise, the consequences in climate change with the North and the South Pole melting down, with the seas going up all over the world. With the catastrophic floods, storms, and fires that are observed all over the world, we’re not going to survive that. Not our civilization as we know it today. So we need to do something very quickly.

As I said, the carbon market was able to restore the right pricing system. And it works. But it doesn’t work as fast as we need it. And in fact, it is a physical issue that how fast he has to go. It’s something that depends on the gases on the properties of the atmosphere, not on economics.

I decided that we needed technology that can remove the CO2 from the atmosphere, clean the atmosphere of the planet.

When I found this out…in the year 2006, I decided that this had to be done. And then I thought, again, markets. Markets are a great institution. The carbon market is a market. Very valuable, and it succeeds. So I decided that we need markets to assist and accelerate this process. So I decided that we needed technology that can remove the CO2 from the atmosphere, clean the atmosphere of the planet. So that it stops the growth of climate change, and does so in a way that is profitable in a way that is consistent with markets.

Because I thought, if it is consistent with markets, the profit motive will move it forward. And that’s what we need. Markets like in the case of the carbon market, but this time, a profitable technology that can remove CO2, clean the atmosphere in a way that is profitable creates jobs and grow the economy. That seemed to be impossible. But it was possible, it is possible and it is happening now.

So the creation of Global Thermostat was the creation of a company that would take economic advantage and would make profits from cleaning the atmosphere and reversing climate change.

Global Thermostat has the most advanced lowest-cost technology to remove CO2 from the air and is now a commercial firm and is breaking even.

What We Need Now

In the year 2020, it has become clear that all pieces are in place. As I said, clean technology is enough to replace all fossil fuels. And it’s very inexpensive, the most inexpensive in the world in producing electricity, the carbon market as a policy, and the removal of CO2 from the atmosphere directly from air direct air capture, which is what global thermostat does. Those three pieces fell into place in 2020. Extraordinary year, in many ways.

What is needed now, and what’s missing now is human organization to deploy all this in approximately a decade, maybe 15 years beyond wage, it would be too late.

As I said before, markets are very good at what they do. But they don’t take into consideration the speed that these requirements for physical and chemical reasons.

So markets now are driving this equation, but not at the speed that is needed. So the piece that is needed is the human organization to accelerate this process so that we can do it before it is too late before the catastrophes are here before they destroy this civilization we have.

The Full Transcript

This transcript has been lightly edited.

Host Raj Daniels 02:00

How does one earn two PhDs without an undergraduate degree?

Dr. Graciela Chichilnisky 02:06

Not easily. It happened to me by necessity, because I left Argentina when I was born, after finishing high school, just finishing high school, when the universities had been closed by a military coup d’etat that made it impossible to continue studying there. And I came to MIT in Boston to continue my studies. And it turned out when they tested me for over a year or so they decided that even though I hadn’t done college, I qualified because of my performance, to do a Ph.D. in mathematics, which I did.

Host Raj Daniels 02:53

And then subsequently, you earned a second Ph.D.

Dr. Graciela Chichilnisky 02:56

That’s correct. I wanted not just to do mathematics, which I love, but also to participate in some of the most important problems of human organization, which I consider the area where humans are really behind. And I chose economics for that reason. So I went to UC Berkeley, and I did a second Ph.D. there.

Host Raj Daniels 03:23

I admire that tremendously. I had a great pleasure recently of interviewing Dr. Ralph Chami from the IMF, who also studied economics. He has a Ph.D. in economics. And I find that you know, specifically in the area of climate change and climate tech, we are finding more and more professional economists involved in this sector. What drew you to the sector?

Dr. Graciela Chichilnisky 03:47

In Argentina, there was a group of very prominent scientists from several disciplines who were trying to answer MIT’s limits to growth, a computerized model of the world economy that showed that we were starting to run out of resources. And implying through the Club of Rome, that many developing nations should not try to develop because they will exhaust the natural resources if they did.

So, very prominent scientists and politicians decided to organize and create the Latin American world economic model that was created by me actually, from the economic and mathematical point of view. But with very prominent scientist have a number of disciplines biology, geology, meteorology, etc. And that model was able to show that if we focus on basic needs instead of maximizing GDP, which is what we do now, then it is possible for the developing nations to reach their objective without depleting the global resources that come into the basic needs is something I created.

And in the year 1992, at the Earth Summit of Rio de Janeiro, the United Nations summit, it was voted by 150 nations, as the most important concept of economic development, I mean, became the foundation of the concept of sustainable development, which is now adopted by the group of 20 as the leading concept for economics in the world.

Host Raj Daniels 05:51

So I’d like to double click on that for a minute, can you share some of that framework regarding the basic needs? I’m very interested?

Dr. Graciela Chichilnisky 05:58

The current notion of economic progress is to take the sum of all the goods and services that the economy produces are their market prices, and try to maximize that number. That number is called the GDP or the gross value of production of the nation in dollars, or in the local currency. That’s called the GDP. Gross domestic product, GDP.

Now, as it turns out, that when prices are all wrong, because some of the most important assets in the world, which are the assets that allow humans to survive and thrive, and are necessary for our survival. For example, air without which we cannot survive for more than a few minutes, or water, without which we cannot survive for more than a few days, or food, without which we cannot survive for more than a few weeks. Those who have the availability of those goods have no value in the GDP.

Clean air, no value. Clean water, no value. Biodiversity, which is where we get our food, no value.

So the concept of GDP, which is based on economic value, moves in the opposite direction of what humans need for survival because all the things we need for survival have no value. While the GDP maximizes the economic value, we need something totally different to survive. So it became a point where the more efficiently the world economy grows, the worse are the possibility of survival of the human species, because the concept of economic progress moves in an opposite direction from the concept of survival.

Basic needs try to address that problem.

Basic needs are about the survival of the human species, and the thriving of the human species. So it does consider a harmonious relation with the resources, water, air food positively. And that’s why I introduced it because I had a feeling that humankind was in a course of collision with the ability of humans to survive in the face of enormous economic success. So how could it be?

That’s crazy, and not only crazy, but it’s dangerous, and it’s catastrophic. So we actually published a book that became very well known, translated to 11 languages called Catastrophe or New Society? And pointed out that society has to focus on basic needs in order for humankind to survive, which is what I just said before. And then what we’re doing now is in a collision course with human survival, because it maximizes the market value of goods and services that measure something else, not survival and not thriving, of people and their environment.

So that’s how we get involved in the notion that global resources were not just something to count, or was not just petroleum or water or whatever, but it was connected to the human organization and basic needs are the way in which human can grow and develop in a way that is harmonious with the world resources and with each other.

Host Raj Daniels 10:12

So do you know how we landed on this concept of GDP and driving towards efficiency and not basic needs?

Dr. Graciela Chichilnisky 10:20

Yes. This is a concept that emerged earlier on, but it became very widely accepted in the last century and became more or less single-minded, the objective of all the economies. Particularly when the Bretton Woods Institutions were created and globalization grew cold after the Second World War. Started before, but it is then that he became absolutely single focus for the world economy, even in nations that had other purposes.

Even in nations like China, or the Soviet Union that were supposedly preoccupied with other social models. And yet, that is the process that is used now.

It is our obsession with markets, which are extremely valuable institutions but need to be understood for what they are. They are a very valuable tool to reach economic objectives, but they do not determine the economic objectives.

So at this point, I think humans are starting to realize we need to redress the price system, the value system. We have to change our values, which are currently given by market values. And the way to do that, almost paradoxically, which is very successful is by creating markets for basic environmental goods such as clean air.

So following the idea I just told you, in the year 1997, I designed and negotiated within the United Nations Framework Convention on Climate Change the concept of the carbon market, in which we essentially change values to address the fact that emissions of carbon are very costly. And that clean technology, clean energy is very valuable, something that did not appear from the conventional markets.

The carbon market that I design and negotiate that 1997 then was adopted by 160 nations that voted it as a main concept. And in the year 2005, it became international law. It was created to reduce the carbon concentration in the atmosphere of the planet, which everybody knows now is causing catastrophic climate change.

And the market started trading, the market I designed and I negotiated, and I even wrote into the Kyoto Protocol in 1997, which became international law in 2005, became what is known now as the European Union emission trading system.

And running quickly to the present, in the year 2020 a physicist in a magazine, for example, called Physica Today, we’re able to document validate that that market that they created in 1997, as implemented by the 27 nations of the European Union, and they took 450 million people in the European Union, was able to reduce between 20 and 30% the emissions of CO2 of the European Union despite a very high rate of growth over that period between the year 2005 and 2020. So it works.

So the number one issue is that the main piece that we need to put in place to resolve climate change, the policy is already proven, has already been successfully demonstrated. It is the carbon market and there is very general agreement now by economists, even by physicists as I said, that that is the solution.

Even oil companies such as Exxon are in favor of the carbon market. The carbon market changes prices, making everything which is clean, more valuable, everything which is dirty and ruins the atmosphere, and causes climate change, less variable. And that change is the answer to a new system of values for what I call green capitalism. Capitalism, where the more you grow the economy, the more you drive humans towards survival, and thriving, and not to the destruction of the basic resources on which our survival depends.

Host Raj Daniels 15:39

So that’s a very amazing story. But in my research, I found that you thought the carbon markets were not doing enough, which led you to start Global Thermostat. So can you share with the audience what exactly Global Thermostat is and your role at your organization?

Dr. Graciela Chichilnisky 15:58

I think Global Thermostat is not a reflection of the failure of the carbon market. The carbon market is now used by over 25% of humankind. It’s used in China in 14 states in the United States, and in the European Union, as I mentioned, so, it’s been very successful and proven. But the problem is time. Markets and market prices can be used to orient the economy in the right direction. And the carbon market does that. But you can use the market to get there as fast as you need to go, the market is not taking the speed into consideration.

Physicists know that we’re running out of time. That this is a race against time, that now we only have a decade or two, to remove enough CO2 from the atmosphere. Because otherwise, the consequences in climate change with the North and the South Pole melting down, with the seas going up all over the world. With the catastrophic floods, storms, and fires that are observed all over the world, we’re not going to survive that. Not our civilization as we know it today. So we need to do something very quickly.

As I said, the carbon market was able to restore the right pricing system. And it works. But it doesn’t work as fast as we need it. And in fact, it is a physical issue that how fast he has to go. It’s something that depends on the gases on the properties of the atmosphere, not on economics. So I decided I was then the lead US author of the Intergovernmental Panel of Climate Change (IPCC).

That was the year 2006 and 2007. That’s when the IPCC, this organization, was given the Nobel prize today together with Al Gore, then the Vice President for his work on climate change. And I found out through the work of the thousands and thousands of scientists from all over the world that belong to the IPCC, Intergovernmental Panel on Climate Change, that it was no longer sufficient to reduce emissions because we had delayed doing so long, that now we had overshot. And we had to remove the legacy CO2 that was in the atmosphere.

When I found this out. There was, as I said, in the year 2006, I decided that this had to be done. And then I thought, again, markets. Markets are a great institution. The carbon market is a market. Very valuable, and it succeeds. So I decided that we need markets to assist and accelerate this process. So I decided that we needed technology that can remove the CO2 from the atmosphere, clean the atmosphere of the planet. So that it stops the growth of climate change, and does so in a way that is profitable in a way that is consistent with markets.

Because I thought, if it is consistent with markets, the profit motive will move it forward. And that’s what we need. Markets like in the case of the carbon market, but this time, a profitable technology that can remove CO2, clean the atmosphere in a way that is profitable creates jobs and grow the economy. That seemed to be impossible. But it was possible, it is possible and it is happening now.

So the creation of Global Thermostat was the creation of a company that would take economic advantage and would make profits from cleaning the atmosphere and reversing climate change.

My last book published about six months ago, called Reversing Climate Change, explains the whole process, explains how I created Global Thermostat, with my incredible partners very impressive, and how we co-invented the technology that removes CO2 from the atmosphere. How to make money by taking that CO2 and converting it into synthetic fuels, like clean gasoline that comes from air and water, or disseminated water that comes from the ocean and is what we need humans need to drink, or polymers that are clean, or beverages, foods, etc. So cement, other building materials, carbon fibers, etc, etc.

So all of that is a new type of economy. An economy that instead of being based on petroleum, is based on the CO2 that we take from air. The technologies called direct air capture. Global Thermostat has the most advanced lowest-cost technology to remove CO2 from the air and is now a commercial firm and is breaking even. And growing very impressively. There are other two firms in the same area.

So we are now creating a small industry worldwide. And it is now accepted, for example, by the MIT Technology Review, that technology I’m talking about is which is called a breakthrough that is among the 10 breakthrough technologies in the world, was identified by MIT Technology Review and by Bill Gates, as the as I said, top 10 breakthrough technologies in the world economy. So that was last year, that’s where we are today. And it is now accepted by the current government, President Biden, that that is the technology that has to be implemented now, right now.

And, you know, starting from a situation where everybody thought we were crazy, trying to clean the atmosphere, we now have the support of some of the leading members of the current administration for the purpose of cleaning the atmosphere in a way that creates jobs, increases exports, and grows the economy. Everything fits together, everything moving in the right direction. So that is why I created Global Thermostat.

And I must say it was the right thing to do. It was very difficult, but it was the right thing to do.

Host Raj Daniels 23:18

So how many facilities do you currently have? And what are the plans look like?

Dr. Graciela Chichilnisky 23:23

The plans look like little buildings, the one that is perhaps better known because it’s more accessible, and anybody can visit is the Stanford Research Institute in the middle of Silicon Valley. It removes about 1000 tons a year is a relatively small unit. And it looks very nice. I think he’s really handsome. But now we have three plants that were were built.

And we are in the process of transforming those into 10s and 1000s of plants, for the purposes of producing, as I said, synthetic gasoline which is identical to gasoline, but instead of being produced from petroleum is produced from air and water. We’re doing that for automobile companies. We’re doing that with the top engineering companies in the world. There is a project in Chile called me that is produced with Siemens and we’re working with them to produce all the synthetic gasoline that an automobile firm like Porsche can use. And that means that you can run automobiles without changing anything. No changing the engine, nothing, no infrastructure change. Or you can run automobiles that burn gasoline but do not increase the CO2 concentration in the atmosphere. Because the CO2 that the user is using the production of the gasoline comes from here. So it’s a closed cycle.

So this is one example. And there are many. McKinsey validates the market for using CO2 from air conventionally is approximately a trillion dollars this decade. And nevertheless, despite all his work, that we succeeded, and we’re succeeding, we still need to go faster now, because human organization is perhaps what we are worst at.

And we need to accelerate this process or they will be too late. So we are now in a race against time to accelerate the process and produce 10s of 1000s of these units to serve all the markets I mentioned. Synthetic gasoline, beverages, and food, materials for construction all over the world. So that is what we’re doing now. And it has to be accelerated so that within the next 10 or 15 years, we should be removing 40 gigatons of CO2, legacy CO2, CO2 that is already in the atmosphere every year, and that will do the process of reversing climate change, cleaning Ghana’s fear.

That’s what we’re trying to do. And it’s very demanding. But it has to be done. It is the vaccine against global climate change.

Host Raj Daniels 26:48

So between all the new technologies and the carbon markets, it sounds like all the pieces are now in place. But can you tell me what’s missing?

Dr. Graciela Chichilnisky 26:59

Yes. First, I’ll tell you there is another extremely important piece which the Kyoto Protocol, carbon market facilitated, extremely important revolutionary, that also came together in 2020. Like the carbon market demonstrated success, like the technology I just mentioned. That piece is the fact that solar energy is now the least expensive, the most efficient, least expensive form of producing power all over the world for the first time in history.

That became well known this last year 2020. An unbelievable year in so many ways, but it led to this extraordinary piece in the puzzle that you described, which is a long-term technology that is not going to destroy the environment. And it has enough power to substitute for all fossil fuels, including coal, natural gas, and petroleum in the production of energy. Energy Production is an activity that is about 60 trillion dollars in the world economy and is critical for economic growth. And now it can be done from the sun, using solar photovoltaic technology that was partly subsidized, if you wish, with liquidity that was offered by the clean development mechanism of the Kyoto Protocol. So this is the third piece and you are right.

In the year 2020, it has become clear that all pieces are in place. As I said, clean technology is enough to replace all fossil fuels. And it’s very inexpensive, the most inexpensive in the world in producing electricity, the carbon market as a policy, and the removal of CO2 from the atmosphere directly from air direct air capture, which is what global thermostat does. Those three pieces fell into place in 2020. Extraordinary year, in many ways.

What is needed now, and what’s missing now is human organization to deploy all this in approximately a decade, maybe 15 years beyond wage, it would be too late.

As I said before, markets are very good at what they do. But they don’t take into consideration the speed that these requirements for physical and chemical reasons. So markets now are driving this equation, but not at the speed that is needed. So the piece that is needed is the human organization to accelerate this process so that we can do it before it is too late before the catastrophes are here before they destroy this civilization we have.

So that is the challenge now, and it is possible to accelerate this process using financial markets. And that’s what I’m writing on now, financial instruments that bring the level of capital and liquidity to this private and successful profitable activity, of cleaning the atmosphere and using the CO2 for economic growth, for the creation of jobs, for exports.

Generally speaking, the economic progress of humankind. So that is what I’m involved in doing now. Create help creating, and I have patented now, as I patented the global thermostat technology, it has 70 patents, I now have a patent pending for the type of financial instrument that can attract a lot of resources, financial resources to accelerate the process of infrastructure that has to be needed. Tens of thousands of the plans were talking about, and they had to be profitable. So everybody’s engaged, it cannot be done by one firm, it has to be done by everybody, everybody in the planet, like solar energy will be used by everybody. Energy is a global activity. It’s a production that, you know, has is done in by the trillions in financial terms all over the world.

So that’s what we need to do now, we should see some economic transformation. And it’s starting to happen. But it needs to be accelerated through the production of financial instruments that are similar to so-called mortgage-backed security instruments that are trillions of dollars worth. And they were used for a basic need, which is to solve a problem and solve some of the worst problems in the housing market, which is a basic human need. Even the Conservative government of Margaret Thatcher was helping with these type of financial institutions to make the housing industry benefit from financial instruments like mortgages and the securities that are backed by mortgages, in order to grow the stock of real estate that is needed for a basic human need.

Now, we need to do something similar to that. And that’s what I’m working on. I can explain.

Host Raj Daniels 32:57

So speaking of basic needs, I want to get to the crux of our conversation, which is the why and what drives you. But I would like to go all the way back to you know when you first started thinking about basic needs back in Argentina? What drew that to your attention? And what motivated you to move in the direction of trying to solve that? What is your why?

Dr. Graciela Chichilnisky 33:19

Well, Argentina is not a poor country. But there is a lot of poverty in Latin America as a whole. And you couldn’t avoid seeing it. And although my family was middle class, and we were in many ways privileged, the fact is that humankind cannot survive the type of inequality that we have all over the world, which has only increased from 1945 by 200% or 300%. So that you know, the inequality between the rich and the poor nations.

That inequality is very disturbing because it is destabilizing. There is no way that our society can survive when over 1.3 billion people don’t have enough food to live in the world as it is now and don’t have the basic needs that they need to survive. They’re in the boundary, okay. 1.3 billion people. This is not sustainable. This is the biggest threat to everything we’re talking about here. The way we do economics.

Economics is the use of resources to be distributed for human survival. And we are not using non-producing resources, right. And that’s the environmental problem. And we are not distributing it right. So our economic structure is really primitive, very destructive, has only gotten worse. And the issue of inequality is now recognized to be very destabilizing for the world as a whole.

It’s not me saying it, but it’s probably one of the most current topics in economics. The reason why we have only a huge increase in inequality in the years since the Second World War, which is eighty years ago, which is a period where the world economy grew by leaps and bounds, and our scientific ability and economic ability increase enormously. Yet, poverty and inequality have only become worse. That’s also true in the United States. This has been a topic that became very well known and frequently quoted in economics today. But nobody has advanced a way to resolve it.

And so I wanted to say, I believe there is a way to resolve it. And it is connected to everything I said before because the inequality in the way humans distribute the resources in the economy is connected to the unsustainable use of natural resources.

And I can explain why what happened in the year 2020 is really a ray of hope, for a new economy, in which these inequalities are resolved. They don’t have you don’t need everybody to be equal, okay? I mean, not everybody has to consume the same, but it is not reasonable. And it is unacceptable. It is tragic, beyond any imagination to have the number of people below the consumption of basic needs, and on the verge of survival in the world economy that we have now is just not sustainable. It’s not something that the human species can live with.

So we now have, because of the fight against climate change, and the three pieces that I just mentioned, we now have all the elements for a more equal society for a new economy, which I call green capitalism, where the most basic source of economic growth which is energy, for the first time in the history of humankind, is most efficiently obtained from the sun. Because the sun is equally distributed, it shines the same all over the world. And it’s equally distributed all over the nations generally speaking, and it, therefore, encourages a form of growth, because growth is energy that is more egalitarian than it was possible with fossil fuels, which is how the industrial economy prospered over the last few hundred years.

So, now we have an egalitarian input source of energy, which is the sun. And what I said before, which is that we have also the air as a source of materials, food, energy, like synthetic gasoline, as I mentioned before, disseminated water, the production, the biofertilizers, the production of beverages, and food, etc, all coming from the air, because, from the air, you can remove CO2.

CO2 is really the basic molecule of life because it has carbon. Carbon is the molecule of life. So the same way that the carbon molecule in petroleum was critical for the enormous success of the Industrial Revolution. Now, the carbon molecule that is in the atmosphere, because we burned all those fossil fuels and all that petroleum, we can bring down that carbon molecule and create materials, food, the very stuff of life. So that now from the air and from the sun, we can run the entire world of the economy in a way that is, therefore, more egalitarian than was ever possible before and all of this is new.

This only turned around in the year 2020 approximately, for example, they are solar photovoltaic energy, that decreased in cost 80% in the ad in the, in the 12 years leading to 2020, making solar photovoltaic energy, lower cost than all forms of fossil fuels. So that now not only we can use energy from the sun, which is available to all, but also produce materials from the air, and food and beverages, and synthetic fuels, etc.

So, this is the first time in human history where we can derive the entire economy from the sun and the air, which are equally distributed for everybody on Earth. So, it’s a very unusual moment in human evolution. And it all came together in the year 2020. So I wanted to point out that this is happening right now. It hasn’t finished, it’s only starting now.

Host Raj Daniels 41:12

So I appreciate the observation regarding inequality and the economic structural problems. But I’m going to come back to this question and ask you why you Graciella, you said you grew up in a middle-class household, you seem to be pretty comfortable growing up? Why did you decide to pursue this big problem?

Dr. Graciela Chichilnisky 41:36

For a simple reason, when trying to decide what I wanted to do. And I love music, and I love mathematics, I thought I should do what is most important. That was a simple observation that became very clear to me, I should try to do what’s important, what’s most important, that’s what I should do. What’s most important.

And what else is most important, what can be most important than ensuring the survival of humankind? That’s in our genes. In our genes, we have the instinct for survival. That’s what evolution is all about. So I was just following the theory of evolution without knowing it at a personal level, saying, this is what’s most important.

So if you ask me today, what do you want to do next year, or in the next five years or 10 years? What do you want to do? I think I will close my eyes and say I want to do what’s most important, and I come back to this. It’s in your genes. It’s in my genes. It’s in everybody’s genes for the human species to survive. That why I’m doing it.

Host Raj Daniels 42:52

Love the idea of looking into the future. This leads me to my next question is 10 years out 2030 ish? What does the future hold for Global Thermostat? What do you see?

Dr. Graciela Chichilnisky 43:13

Our firm should be increasing in size. Very large, but not as large as other firms. But it should be starting to penetrate and distribute each technology and each philosophy of using the sun and the air, particularly the air as the source of economic progress all over the world. This technology removes CO2 from the air the carbon molecule, which is so critical for human survival. So I think we are going to become a public company, reasonable reason. We are making critical connections and partnerships with the biggest engineering companies in the world right now.

We already have some of those. And we are building the plants that are going to feed, for example, a company like Coca Cola uses a lot of CO2. They are truly the biggest consumer of CO2 in the world. Then, it is important that the CO2 they use instead of coming from burning fossil fuels and ruining the atmosphere comes from cleaning the atmosphere. So that’s an example. Same thing for cement. Same thing for synthetic gasoline. So the automobile companies are using clean gasoline.

So all of that that I’m telling you is starting now. In 10 years, it will be in full swing. And we will have distributed our technology through licenses, partnerships, and successful contracts all over the economy and all over the world. Not as much as it will be in 15 and 20 years, by which time everything I’m telling you will be commonplace. Everybody will know, in 10 years, it will still not be commonplace. But they will be sufficiently distributed, that they will have the momentum to transform the world economy.

Yes, by the year 2030, we will have commenced changing the world economy the way I’m explaining now, and we will hopefully bring with it and we should, and more egalitarian, as well as the most successful economy. Successful in the sense of being conducive to human survival and not the other way around.

Host Raj Daniels 45:58

Can you give some advice to those that are listening that might be academics on how you transitioned from being an academic to an entrepreneur?

Dr. Graciela Chichilnisky 46:06

Well, not really, because I am still a professor. And I’m teaching at Columbia University. A couple of years ago, I was teaching at Stanford, and I’ve been teaching all these years. And I continue to teach. So I have not completely transitioned. And I don’t want to transition. Because being a professor is perhaps the highest honor, because you have contact with the future. And you can transmit your ideas, and you can learn from the students. So as I said, I don’t know about the transition. But I do know that you have to believe in yourself, and whatever you want to do. If you believe in yourself, and you have a clear idea, go and do it. That’s what I think.

Host Raj Daniels 46:59

Well, Graciela, that fulfills both questions. I really appreciate your time today. Is there anything else you’d like to share? Before we go?

Dr. Graciela Chichilnisky 47:07

Yes, I wanted to say that Global Thermostat is great. And environmental sustainability is critical. And the world economy is being changed and has to be changed. All of that is true. But your listeners are the critical element in all this. So what’s important is for people like you to transmit what’s possible and to light those lights that need to be lit in order for the transformation, to be real, to happen, take place, be distributed, and lead to a harmonious future for the human species. Harmonious with the planet and not against the planet. So it is not what I’m saying that is important, although I believe it is important. But what your listeners and whoever it is here, listening and participating with us to do it. Am I wrong?

Host Raj Daniels 48:15

No, you’re absolutely right. I’ll continue transmitting possibilities. You can continue doing possibility and together will change the world.

Dr. Graciela Chichilnisky 48:23

Thank you.

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www.globalthermostat.com

Before we go, I’m excited to share that we’ve launched the Bigger Than Us comic strip, The Adventures of Mira and Nexi.

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