364: Can the rules keep up?: Lawsuits, LLMs and the looming oil recession
An unprecedented government move to outrun the courts. A country racing to write AI into its constitution. And a global energy crisis that's already moved faster than any possible fix. Are our institutions and the rules they rest on still fit for the world they're supposed to protect?
About this episode
This week, Tom Rivett-Carnac, Christiana Figueres, and Paul Dickinson look at three stories the headlines may be missing.
In New Zealand, the government has moved to retroactively kill a landmark climate lawsuit - before it even reaches trial. Tom shares a voice note from ClientEarth CEO Laura Clarke who gives us the inside scoop on what is actually at stake. If this works, where does it end?
Then Greece, which wants to write a legally binding obligation for human-centred AI into its constitution. But can a national document meaningfully govern a borderless technology? And as we increasingly rely on AI for our information, where do these large language models actually go for their climate science?
Finally, the Strait of Hormuz. Financial markets think the situation is priced in. Geopolitical analysts disagree. We ask which sectors might unexpectedly accelerate the energy transition, why the climate movement seems frozen at exactly the moment it should be loudest, and whether this decade's decisive window is already starting to close.
Learn More:
⚖️ Learn more about ClientEarth and its work
🌿 Read about New Zealand amending its climate law via Inside Climate News
🌐 Catch up on the ICJ case on climate obligations of states
🏛️ Discover more about Greece's constitutional AI proposal via the Washington Post
🛢️ Dive into the Strait of Hormuz disruptions with analysis from UNCTAD
🎤 Leave us your voice notes and questions for upcoming episodes on SpeakPipe
Join the conversation:
Instagram @outrageoptimism LinkedIn @outrageoptimism
Or get in touch with us via this form.
Producer: Ben Weaver-Hincks
Edited by: Miles Martignoni
Planning: Caitlin Hanrahan
Exec Producer: Ellie Clifford
This is a Persephonica production for Global Optimism and is part of the Acast Creator Network.
Full Transcript
Transcript generated by AI. While we aim for accuracy, errors may still occur. Please refer to the episode’s audio for the definitive version
00:00:02.140 --> 00:00:03.640
Tom Rivett-Carnac: Hello, and welcome to Outrage and Optimism. I'm Tom Rivett-Carnac.
00:00:04.640 --> 00:00:05.800
Christiana Figueres: I'm Christiana Figueres.
00:00:05.800 --> 00:00:06.840
Paul Dickinson: And I'm Paul Dickinson.
00:00:06.840 --> 00:00:10.860
Tom Rivett-Carnac: This week, we bring you three stories about what happens when the rules can't keep pace. A government rewrites the law to outrun the courts, a country races to get AI into its constitution, and an energy crisis rushes on ahead of any possible fix. Thanks for being here.
00:00:22.100 --> 00:00:25.500
Christiana Figueres: Wait, Tom, did you say we're going to do three stories today?
00:00:26.040 --> 00:00:27.880
Tom Rivett-Carnac: I was just reading what's here at the top of the page.
00:00:28.200 --> 00:00:32.400
Christiana Figueres: I just want you to know and listeners, that that is really ambitious, but we will try.
00:00:32.400 --> 00:00:32.720
Tom Rivett-Carnac: We can do it.
00:00:32.720 --> 00:00:33.220
Paul Dickinson: We're going to try.
00:00:33.220 --> 00:00:34.200
Tom Rivett-Carnac: All right, we can do it. You know, I genuinely thought you were pulling me up to make a correction there, Christiana.
00:00:39.260 --> 00:00:41.900
Paul Dickinson: Okay, this is like lifting the veil on what really goes on.
00:00:41.940 --> 00:00:43.600
Tom Rivett-Carnac: How Christiana controls us.
00:00:43.600 --> 00:00:47.580
Paul Dickinson: But I have to warn you, Homer Simpson said, trying, you know, we're trying for this. Trying is the first road on the step to failure. That's what Homer Simpson taught me, sir. But we'll have a go.
00:00:51.980 --> 00:00:55.180
Christiana Figueres: Wait, well, trying is the first step on the way to failure.
00:00:55.180 --> 00:00:56.060
Paul Dickinson: On the road to failure. It's technically half the...
00:00:57.860 --> 00:00:58.240
Christiana Figueres: No way. Well, the name of this podcast is Outrage and Optimism. I would say, trying is the first step on the way to success.
00:01:05.740 --> 00:01:06.140
Paul Dickinson: How about that? Much better. I'm not a follower of Homer Simpson.
00:01:07.920 --> 00:01:09.020
Tom Rivett-Carnac: Actually, objectively, both are true.
00:01:09.020 --> 00:01:10.480
Paul Dickinson: I'm not a follower of Homer Simpson.
00:01:10.480 --> 00:01:10.660
Christiana Figueres: Okay. Can we actually get to the three stories, please?
00:01:12.800 --> 00:01:13.240
Tom Rivett-Carnac: Right. So the first thing we're going to do is talk about New Zealand, which has, and this is a real source of outrage, has killed a climate lawsuit mid-trial. And we're going to ask if this is a one-off or if this is a sign of things to come. Actually, my good friend Laura Clarke, who runs ClientEarth, of which I'm very proud to sit on the board, sent me a voice note about how consequential this is when I was going back and forth with her about what we might cover this week. So actually, it's so good that she said, even though it was a personal note, that we could put it on the podcast. So I wonder if we should just play that to help us set up what this is.
00:01:42.020 --> 00:01:43.260
Paul Dickinson: Here from Laura herself.
00:01:43.940 --> 00:01:48.840
Laura Clarke (CEO, ClientEarth — voice note): These amendments would be hugely damaging to climate action in New Zealand. They would shield big polluters from the damage done to the environment and the climate. They would undermine the constitutional role that the courts have to interpret laws set by Parliament. And also, critically important, they would remove the recourse to justice for citizens impacted by the climate crisis. And let's be clear, the climate crisis is hitting New Zealand now. Now, as you know, on the programme, the ICJ has been clear that states have a legal obligation to address climate harm. And it's critical that people are able to test those obligations in court. So our view is really clear. Restricting climate cases in this way, well, it's bad for justice, it's bad for the environment, it's bad for democracy and the rule of law. And perhaps most of all, it's bad for New Zealand and its citizens.
00:02:45.060 --> 00:02:52.420
Tom Rivett-Carnac: I mean, what Laura is referring to here, just to go one click deeper, is a few years ago, the New Zealand Supreme Court ruled unanimously that Smith v. Fonterra had merit to go to Charles. The first time a common law climate liability case had cleared that hurdle anywhere in the world. It was brought by Mike Smith, an Iwi leader against seven of New Zealand's biggest corporate emitters. And the trial was set to go ahead in April, 2027. But just this week, Justice Minister Paul Goldsmith announced an amendment to the Climate Change Response Act that retrospectively prevents the courts from assigning tort liability for greenhouse gas emissions. And as a result, this case is dead. So this is a movement by the government to prevent the courts from holding polluters responsible. This is a huge deal if this goes ahead. And that's why ClientEarth is so up in arms about this. Because actually what this might mean is that it is very difficult, initially in New Zealand, but who knows, maybe in other countries, to start using this very important lever of the law to try to drive change. So how are you both feeling about this?
00:03:49.680 --> 00:03:51.140
Paul Dickinson: I feel terrible about this. There's some kind of spurious commentary that it will help investment. Like essentially it pits business kind of against justice and democracy. Now we all know people who work in business. I worked in business. I do work in business. I don't think it's correct to say that business is sort of in favor of the existential risk of climate change. I do think that certain businesses have got completely terrified, particularly oil and gas companies worried about facing liabilities for climate impacts. And so I think this is an example of where we don't have people fighting climate change, you know, on the merits of doing something about this risk, but actually trying to undermine democracy and the rule of law, which is what we've seen horribly in the United States. You know, vested interests can't really win the public safety argument. So they're just trying to sort of crush the ability of people to have arguments. And that, I think, is heartbreaking. And we're in a battle to defend democracy and justice. And, you know, we've got to understand that the other side are absolutely ferocious. And then there's another part of me wonders if I'm playing the sort of divided, you know, polarised commentator. And I should be somehow more thoughtful about the sensitivities of business. I'm kind of angry, but wondering what you think, Christiana.
00:05:16.420 --> 00:05:30.940
Christiana Figueres: Well, just to put a little political context around this, let's understand because I think we got into the habit of thinking of New Zealand as a very pro-climate government under previous political leadership. But we have to update ourselves and understand that we are now in New Zealand under a center-right coalition government with three parties governing that coalition. And they are actually, all three of them, are right of center that still exists as a category, not just in the executive, but also in the House of Representatives. They have a majority there of the three parties that have a center-right libertarian or nationalist populist leaning. So that is the political setup of this decision. Now, what I think is very concerning is that the politics right now is being shaped by three overlapping tensions. One is, and this is very common, not just in New Zealand, but in many other countries, the cost of living, escalating cost of living, let's think Hormuz and let's get to that in a minute, and economic slowdown, which means that governments are beginning to exercise fiscal restraints, spending cuts, economic growth coming down. Then of course, very particular for New Zealand, we have the pushback against the previous labour error reforms that had to do with, certainly with climate and other issues. But the other thing that is underlying all of this and why it is really, really sensitive is because the case was brought by Mike Smith.
00:07:12.680 --> 00:07:14.200
Tom Rivett-Carnac: Yeah, I think it's such a good point, Christiana. I mean, you know, it's worth pointing out that Mike Smith was never after damages. He wanted to establish this legal principle that corporate emitters can be held responsible in common law for harm. And I think this is clearly a massive story for New Zealand and very consequential. And we should focus on the impacts there. But the bigger question, I think, is you're right. There is certainly a right of centre government that maybe had ideological leanings to behave in this way. But there's right of centre governments in many places around the world. And if this is a model that can be utilised to close out the courts as a pathway by which you can hold emitters to account for big impacts, is this something we're likely to see in other parts of the world as the climate litigation becomes more powerful? We'll find governments just closing the door, saying you can't use the courts in that way, which would be a massive removal of authority.
00:08:00.340 --> 00:08:01.620
Christiana Figueres: Well, yes, exactly. And that is why this is so concerning, because it's not just a New Zealand thing. It is basically a microcosm, a petri dish, right?
00:08:09.920 --> 00:08:10.200
Tom Rivett-Carnac: Yeah.
00:08:10.200 --> 00:08:15.740
Christiana Figueres: Of democratic tensions and the right of law to protect citizens' rights. And I think we're beginning to see in New Zealand, but also elsewhere, what we could, should, perhaps did call market liberalism, versus social cohesion and solidarity. Certainly climate ambition versus cost pressures. Very ironic. And we will talk about that in our next section. In New Zealand, in particular, we have this indigenous inclusion versus nationalist backlash. And overall, in so many countries, we're seeing institutional trust, which we used to adhere to, versus populist frustration. And so we have all of these tendencies, all of these forces pushing against each other, making New Zealand an interesting and actually very scary microcosm of what could be going on in other countries.
00:09:16.860 --> 00:09:19.900
Paul Dickinson: But at just one point, Tom, you said it closed the door. And I'm sure if this legislation passes, it will close the door temporarily. And the reason I say temporarily is because it's a well-established parliamentary principle. No parliament can bind its successors, right? So we have to remember that this is a sort of nasty pushback, but it is incumbent upon us to change it back again, because no part of the economy should be allowed to damage people without having recourse to justice and law.
00:09:46.180 --> 00:09:46.280
Tom Rivett-Carnac: 100%. But the challenge is if this becomes a political football, and then you end up going into a court under certain administrations, then it all gets changed when you go the other way. Then you just get delay tactics. The whole thing becomes much more difficult to implement. But you're, I mean, it should be above politics, but you're totally right. It would need to be changed back.
00:10:01.400 --> 00:10:02.800
Christiana Figueres: And it's such a setback.
00:10:02.800 --> 00:10:03.940
Tom Rivett-Carnac: Such a setback, yeah.
00:10:03.940 --> 00:10:13.180
Christiana Figueres: Such a setback, because we have been seeing climate litigation advance consistently for years, I would actually say for a decade. And we've seen climate litigation, climate regulation, all of these cases advance slowly but surely. And this is a huge setback, precisely in the moment in which we're expecting the ICJ actually to step up to its next.
00:10:31.760 --> 00:10:34.360
Paul Dickinson: The International Court of Justice, Christiana.
00:10:34.360 --> 00:10:36.800
Tom Rivett-Carnac: Yeah, every listener to Outrage and Optimism knows that actually.
00:10:36.800 --> 00:10:37.460
Paul Dickinson: All of them. If you don't, write in and I can win an argument with Christiana and Tom. Sorry, just a small point. Okay.
00:10:43.480 --> 00:10:43.940
Tom Rivett-Carnac: All right. Should we move on? This is definitely something we have to come back to on what's happened in New Zealand and tracking whether it spreads.
00:10:48.740 --> 00:10:49.100
Paul Dickinson: Yeah. No treason by fossil fuel industry against democracy itself. We must have these debates. Tom, what's next?
00:10:56.000 --> 00:10:56.280
Tom Rivett-Carnac: Okay. So short interlude before we get to another big topic on the Strait of Hormuz. Something very interesting happened this week, which is that Greece came out and said that they are beginning to write AI into their constitution and the link to climate will become clear to this in just a minute. Greece is revising its constitution and it's going to put in or proposing to put in, none of this has passed yet, artificial intelligence shall serve the freedom of the individual and the prosperity of society, ensuring that risks are mitigated and the advantages it provides are fully realized. Very good stuff, right? Trying to think about how do we develop this new technology for the benefit of humanity and the planet. When I saw this, I started to think about some conversations I'd had recently with friends who work in tech on the West Coast about where AI gets its information from. And I think this is fundamental because if AI is going to serve the needs of humanity, then it needs to be based on the common sources of knowledge in humanity which at this point in human history is science and is the best available science. But when you look into it, you learn that there is a structural problem with the way that large language models are trained and the way that they pull information. Now, primarily they draw information from the easiest to access data on the internet. And this is where this point about whether AI can be for the benefit of humanity connects with climate. Because when you look at what constitutes most large language model background on climate, it is YouTube transcripts, Reddit posts, Wikipedia entries, peer-reviewed scientific literature, which is often locked in PDFs, is structurally de-prioritized by the speed by which they try and get that information. Of course, they can read them, but in the speed of trying to respond to multiple different requests, often they are not represented. I actually, before this conversation, I went to Claude and I asked it to give me the latest climate science, and it did and did a beautiful job. And then I said, can you tell me where you got that information from afterwards? And I asked it to give it to me in lists of how often it cited it. So number one was Wikipedia, Climate Articles. Number two was General News Explainers from the BBC, New York Times and CNN. Number three was a YouTube channel called Climate Adam. Number four was Stockholm Resilience Center. Number five was the IPCC. So those are all good sites. I mean, there's nothing wrong in that. That's not sort of taking it from complete disinformation, but it's not going to-
00:13:18.700 --> 00:13:21.440
Christiana Figueres: But IPCC should not be number five.
00:13:21.440 --> 00:13:22.140
Tom Rivett-Carnac: Shouldn't be number five. And certainly, I mean, I actually think that Climate Adam is a great YouTube channel, and he's, you know, he's good on the science, but they're taking it from a YouTube transcript before they go to the IPCC. And I think this is a topic that we can only touch the beginnings of now, but I'm curious, particularly, Paul, for your point of view, I know you're a big fan of AI, because I think this actually risks undermining a lot, because as we rely on it more and more to help us understand the world, we're not getting real science through it. How can it truly be to the benefit of humanity?
00:13:47.680 --> 00:13:48.040
Christiana Figueres: Paul?
00:13:48.040 --> 00:13:49.840
Paul Dickinson: It's very funny you call me a big fan of AI. You know, you might as well say that, you know, I'm a big fan of the Vulcans from the planet Vulcan. I mean, I'm intimidated by it, and I'm amazed by it. It's not quite the same thing as being a fan. I think that on the point you make, there are issues here, you know, this super intelligence that we use all the time that blows all of our minds. There are issues of parenting here. You know, if you told your child, you go and be a very good and clever person, by the way, I'm going to put you on YouTube, you know, and you can learn from there. It's like, well, what about school, you know? So there are obligations on us to try and ensure that we kind of give this super intelligence, the super intelligence we've got, and not some kind of low cost, low rent version of it that it can scrape. And generally, I mean, trying to make artificial intelligence do things like support the goals of the Greek government. Quite interesting. I've invented a law, Dickinson's law. You can have super intelligence or you can have obedience in AI, but you probably can't have both. But this will all emerge quite quickly, because the last thing I'll say is, in all my years of studying technology, a year is a very long time in AI and we're only three years in. Think about it.
00:14:58.800 --> 00:15:01.520
Christiana Figueres: So I have a very different question about it. I agree with everything that you've both said, but here's my question. How can Greece, albeit in its constitution, have any impact on what AI is going to do? Can I just read again the sentence that Tom has read for us? So the proposal is that the Constitution of Greece be revised and the following sentence be included. Artificial intelligence shall, now Tom, you and I know the difference between shall and shall.
Load More00:15:39.240 --> 00:15:40.500
Paul Dickinson: Shall means quite a lot.
00:15:40.500 --> 00:15:43.820
Christiana Figueres: Shall means legally binding, okay? So legally binding, okay? So now we're in Greece saying that AI is going to do something that is legally binding. What is it going to do? It's going to serve the freedom of the individual and the prosperity of society. Now who is going to enforce the legally binding nature of that? What is the freedom of the individual? And particularly, AI is fundamentally, does not respect any national boundary. AI is global, takes its information from everywhere and nowhere, as Tom has pointed out. And so how can you say that AI, where in Greece, shall legally binding serve the freedom of the individual and the prosperity of society? You get my point. It's a very, it's a good intent. And perhaps Paul, this is where your opening salvo today comes in. This is a first step, but is it a step toward success or toward failure? Because yes, we need AI being regulated for sure. We've been talking about that for a decade and a half or two. But it doesn't seem to me that a national constitution is the place to go and regulate AI and make AI for good the common use of AI.
00:17:12.980 --> 00:17:16.640
Tom Rivett-Carnac: But is it not, I mean, they're not, it's not about regulating AI. It's about a principle about human first AI.
00:17:20.760 --> 00:17:23.900
Christiana Figueres: Yes, but why in a national constitution, Tom?
00:17:23.940 --> 00:17:25.460
Paul Dickinson: There is a reason, Christiana.
00:17:25.720 --> 00:17:27.260
Tom Rivett-Carnac: Well, tell us Paul, what's the reason?
00:17:27.260 --> 00:17:31.320
Paul Dickinson: Have you ever heard about the drunk person who's looking for their car keys and they're looking under a streetlamp? And somebody says, why are you looking under a streetlamp? Did you drop your car keys there and say, no, but this is where the light is. So it's a bit the same. They're using the constitution because that's all they can do. It's a sort of cry for help, Christiana. It's kind of sweet and sad.
00:17:45.840 --> 00:17:48.220
Tom Rivett-Carnac: I mean, I think I would think about it slightly differently. I think it's about how AI, you're totally right, nobody knows how to regulate this stuff. And there's different legal mechanisms for thinking about how we do it. Of course, people have tried to think about global treaties. And the US, of course, is not remotely interested. The UK famously tried when Rishi Sunak was in power. And there was recently a big summit in India to think about the same thing. But very little progress is being made. And there's very little will to pull that together and have any kind of regulation. So a little bit, I agree with you, Paul, in the face of that, what does a country do? Because if jobs are going to be destroyed, and this is a big conversation we have to go into, in Greece, for example, but the US is fundamentally opposed to anyone systemically taxing its institutions, which have created the AI, that means that the money that is lost from all of the employment in Greece goes to US corporations in the form of receipts. So it's a massive suck of wealth from all these different countries where jobs and employment get lost towards one country which has innovated this AI, which is in the US. So if you then at least... Or China. If you at least put it into your constitution, it may not mean that you can change it, it may not mean you can keep up, but it means that as you try to craft policy, you look at it through a certain lens that thinks about is this going to benefit the people or is it going to benefit the corporations?
00:19:11.440 --> 00:19:12.900
Christiana Figueres: Yeah, okay, fair enough. And what I will admit is that there is no international AI police, right? So who do you go to? Is there any institution that would have right now the mandate to regulate AI? The answer is definitely no. So that countries try to start this process by doing it domestically within the boundaries of their own country makes sense. It's heartbreaking to me, honestly, is what it is. Because if this were, I don't know, a UN statement, right? Not that even statements tend to be enforced. But you see what I mean? We do need a cohesive, comprehensive agreement of all countries about how we're going to use AI and where AI is going to get its information from. And so I see this as a very courageous, frankly, first step, but it doesn't reach the objective that it wants to reach because AI in Greece does not depend on AI information coming out of this.
00:20:27.080 --> 00:20:30.200
Paul Dickinson: It's a brave gesture, but just one more sort of meta theme.
00:20:30.300 --> 00:20:31.240
Christiana Figueres: It's a gesture. Thank you. That's the word.
00:20:32.160 --> 00:20:35.440
Paul Dickinson: Everyone is talking about how stock markets are so high. And if you actually look at the AI and also the kind of robotics and machines and AI together, you know, value in the world is moving away from labor towards corporations. And it is one of the most frightening and profound changes I've seen in my life. So here we go.
00:20:52.160 --> 00:20:54.180
Christiana Figueres: Interesting terms. Say one more sentence about that.
00:20:55.480 --> 00:20:58.160
Paul Dickinson: Well, essentially, you know, the essentially, let's average it out. Let's say that the bill for 50% of the cost of every company in the world for the last 100 years has been labor. That's going down to 40%. It's going down to 30%. It's going down to 20%. And that means money is moving away. The value of the world is moving away from labor, from people to corporations that are the midwives and the delivery systems for these technologies. And it is super profound.
00:21:23.320 --> 00:21:26.780
Tom Rivett-Carnac: Which is a recipe for enormous social disruption, right? I mean, I think that if you follow that thread through, I was looking at this a while ago, throughout most of human history, you got roughly 70, of all the money made in an economy, roughly 70% was a reward for work and 30% was a reward for capital at risk.
00:21:41.740 --> 00:21:42.580
Paul Dickinson: Not anymore.
00:21:43.960 --> 00:21:58.020
Tom Rivett-Carnac: Now, it's like 90% capital at risk, 10% work, which is why you can be like a nurse or whatever else or a teacher, work every single hour and still not afford a house, because most of the money is being provided as a return for capital. Now, with AI, I mean, I was listening to something the other day, someone was saying, we're what, 10 years away from there being a trillionaire who runs a global company with no employees, because it's just all delivered by AI, and why would you need employees in a massive company? And that's a theoretical future.
00:22:12.760 --> 00:22:14.180
Paul Dickinson: There's one mistake with that.
00:22:14.180 --> 00:22:15.120
Christiana Figueres: Maybe not.
00:22:15.300 --> 00:22:17.200
Paul Dickinson: Why do you think there's going to be one human running it? Why wouldn't the shareholders just be happy with the whole thing being run by AI? Just a thought.
00:22:21.860 --> 00:22:23.560
Tom Rivett-Carnac: I mean, well, that's a great question. Okay, now.
00:22:24.760 --> 00:22:29.020
Paul Dickinson: Having gone from progressively larger and larger topics, we're now going to approach the big one.
00:22:30.240 --> 00:22:35.200
Tom Rivett-Carnac: I don't know if this is bigger than AI taking over everything in the world and pulling all capital to itself.
00:22:35.540 --> 00:22:36.460
Paul Dickinson: It's not bigger. It's more current. There's one of those management concern two by twos with sort of big and current. And this is sort of somewhere in the top right of big and current, which essentially is where we are with Iran, right?
00:22:50.660 --> 00:22:52.200
Tom Rivett-Carnac: Is someone going to say something?
00:22:56.340 --> 00:23:02.240
Christiana Figueres: I'm here holding my breath, waiting for Tom to introduce the subject before I jump in. And then Tom is like waiting, holding his breath.
00:23:06.440 --> 00:23:07.640
Paul Dickinson: It's a meticulous preparation business. We plan and plan and plan and then we get it completely wrong.
00:23:10.960 --> 00:23:15.840
Christiana Figueres: Okay, well, we're back to our favorite topic of the Strait of Hormuz. Now, I'm still laughing about the fact that US Treasury Secretary Scott Besant spoke about the Strait of Vermouth in a press briefing in April of 2026. I mean, that was just last month.
00:23:32.540 --> 00:23:34.680
Tom Rivett-Carnac: That's a cultural signifier right there.
00:23:35.140 --> 00:23:41.080
Christiana Figueres: Yeah, you would think that, you know, by then, he would have figured out what the name of this is.
00:23:42.340 --> 00:23:50.920
Paul Dickinson: Okay, so I just think that what's completely, I mean, we all know it's on the front page of the media all the time and everyone's talking, although it slips off, interestingly, and I'm surprised. But generally speaking, you know, it's 20% of the world's oil supply allegedly was passing through the Straits of Hormuz. Now, probably maybe 10% is still getting out through pipelines. But we've kind of lost about 10% of global oil and gas supply. And the ships are sort of the last ships. There were lots of ships at sea. There were lots of stores, but people have been running down their petroleum reserves and, you know, the ships have been docking and emptying out. And we're at a point now where the crunch is coming. And we're going to have to kind of drive out 10% of petroleum and gas supplies in the whole world using the price mechanism. Now, that means people in rich economies are going to experience higher prices and inflation. It means people already in lower-income economies, millions and millions of people can't cook anymore because they haven't got gas to cook with. It means that there are far less cars operating. For example, in the Philippines, it means that civil servants around the world are being told to sort of operate at, I think, 27 degrees or something at centigrade, which is pretty hot for indoors in Thailand, for example. And there's never really been an oil shaft like this without a recession following it. So I wanted to set it up just by kind of sort of saying, you know, people talk about TACO, Trump and which chickens out. I see tree here, T-R-E-E-E. Trump ruins everything everywhere. We are about on the edge of the precipice of a global recession caused entirely by this crazy fossil fuel promoting lunatic Donald Trump. And I just think we have to think about how this moment plays out for us. But Christiana, you've been thinking about this.
00:25:27.960 --> 00:25:50.680
Christiana Figueres: I mean, we've talked about this a lot on the podcast, but honestly, we can't address it enough because the impacts of this are so profound and so overarching that I just think we're just beginning to scratch the surface of the consequences of this craziness. I love your new acronym TREE, Paul. One of the things that is very ironic about this is that this crisis was caused by a military intervention. And it may actually be that it is the military or military doctrine that will shift us toward renewables and renewable energy. You know, it could be that that industry may become a major accelerator of decentralizing energy and synthetic fuels and batteries and microgrids and et cetera, et cetera. And we've mentioned that before, but we haven't really seen the military come forward as the moving force here. So, you know, just putting it out there as one possibility. The other sector that I'm sort of watching from afar is what's the insurance sector going to be doing about this? What is shipping insurance doing right now? Infrastructure insurance, sovereign risk pricing. Big train. Can you hear? Yeah, can you hear my train? So what is the insurance industry doing about this right now? We've said many times here that the insurance industry, they are the gurus of risk and risk management. Can you imagine what's happening with shipping insurance right now? With infrastructure insurance, with even manufacturing insurance, because most manufacturing are not getting the supply lines certainty that they expected. I can imagine that insurance is really having a very dramatic come to Jesus moment if you believe in Jesus. And I wonder whether insurance companies will also be one of the sectors that pull us forward into the energy transition, because very often insurance companies tend to move before governments do, and their risk that they are managing and handling is becoming unpriceable very quickly, not just because of rising sea levels and homes and buildings and infrastructure that can no longer stand the test of climate change. But now, transport, chipping, supply line, delivery, et cetera, it could be that they are reaching the point when they go like, well, we just can't price this risk in. And they might be the ones to shift the system very quickly. So I'm looking for, in addition to Trump, that is shifting things very quickly, what other industries are actually at the fore of the transition?
00:28:52.360 --> 00:29:10.760
Paul Dickinson: Can I just make one tiny point on that, Christiana, which is I think you could argue that the Strait of Hormuz was actually closed by the insurance industry and not by the Iranians, because there were various plans to try and get ships through and the US Navy was saying it would protect them, but the insurance companies were like, we got nothing to do with this and the ship owners wouldn't send the ships without insurance, but sorry Tom.
00:29:11.440 --> 00:29:26.000
Tom Rivett-Carnac: I mean, it sort of reminds me, did you ever see that cartoon, you know, that's in The Economist, like where they have the image and it's two dinosaurs talking to each other and there's the meteor in the background that destroys their life coming through the sky in the background and one dinosaur is saying to the other one, don't worry, it's priced in. Like you get to a point where you sort of think there's been a really interesting set of pieces of analysis, of course, the price of oil has gone up, of course, there have been various impacts on the markets around the world. But actually, if you look at the scale of the impact, it doesn't really reflect what we're talking about here. There is an assumption... Not yet, not yet, not yet, Tom. So there is a big assumption in the markets around a series of quite, I would say, volatile conclusions, which is basically that there will be a substantial partial reopening under military escort relatively soon. And I think the markets and people I've known, I know who work in finance, are sort of proceeding along that assumption. But if you talk to geopolitical analysts, they don't share that analysis. So there's this weird gap between those in finance who are sort of saying, you know what, it's fine, it's priced in, everything will be all right. We've already had the downside. And the geopolitical analysts who are saying, this could be really bad and this could be close for a long time. We could have a major recession. So those two things make it feel a bit like a phony war. And it's a bit difficult to know sort of what's going to happen as a result of that. I would say, best case scenario, there is an opening that is sufficient to avoid widespread economic disaster, which would of course be bad for people's livelihoods, but sufficiently restricted to keep energy prices much higher for much longer, which will facilitate the transition. That's what we need for the transition. We need energy prices to be 50 to 60% higher than they are now forever. And everything else, that changes all of the economics. What we don't need is suddenly energy prices massively spike and then come back down to normal. That would be hugely disruptive and very painful for lots of people. If we could arrange that, please.
00:31:12.460 --> 00:31:12.960
Christiana Figueres: Okay. Well, just, you know, I'll sign on the dotted line for you to find my drone.
00:31:18.080 --> 00:31:26.240
Paul Dickinson: But you know, I think, Christiana, your point about the military, you know, military, obviously, we know the military for sort of kind of fighting wars or whatever. That's what they do. But actually, most of the time, the military do planning around national security and national security is super related to energy and energy security. And, you know, that one of the really lasting outcomes of this is that the Gulf States, you know, may have permanently lost their reputation as a reliable source of energy. So actually, you're getting that national security, energy security calculation meeting the reality of such epic uncertainty regarding the oil and gas industry, which is so huge, so integrated. And so many people are dependent upon in so many different ways. And I think that that's got to be incredibly good for the plans that I know we and most of our listeners have to accelerate the decarbonization of energy systems. So it's to me, it's like there's this just this enormous wave, which we can't really do anything about. But how do the sort of right thinking, the climate change movement put its kind of surfboard on top of that wave to make sure that we travel fast and effectively to where we want to go?
00:32:32.260 --> 00:32:43.560
Christiana Figueres: Tom, I've been sitting here with your with your analysis of the difference between geopolitical assessment right now and the financial world assessment. And here is, here's a trial balloon that you can all puncture and throw in the garbage can. And there is a huge chasm between the evaluation of both of those sectors or industries. I wonder if it has a little bit to do with the fact that in the 20th century, out of which we are slowly coming out, wealth was in no small measure based on producing fossil fuels, right? Think of the number of countries that came out of poverty into excessive wealth because of the production of fossil fuels. And think of the companies, the large companies that own the production of fossil fuels and how they have become some of the largest companies in the world. So, that to me represents the financial assessment. And underlying that is the fact, which is a fact, that if we wanted to, we could continue producing fossil fuels because there is, you know, what, 50 years of reserves of fossil fuels still under our surface. So, fundamentally, we're not panicked about the existence of fossil fuels. Conversely, power in the 20th century was based, in no small measure, on controlling fuel flows, transport flows, contracts, et cetera. And that is a very different situational dynamic with respect to the fossil fuels. Because while it is true that we can continue extracting and producing, transporting them, selling them, getting them to the markets has become much more difficult and much more dangerous. And so I'm wondering when... And that is not a financial consideration. That is a geopolitical consideration that has to do with political power and economic power. I mean, I'm really stretching here the difference between the two, but I'm just trying to understand why do we have these two realities that seem to be contradicting each other? And if that is in any way somewhat true, then could it be that in the 21st century, we're going to increasingly equate security with reducing dependence on the vulnerable flows of fossil fuels more than on the production of fossil fuels? Hmm.
00:35:25.460 --> 00:35:26.420
Tom Rivett-Carnac: That's interesting. I mean, I think that long term, I think that shift is definitely taking place. And I think two other things that I would add into that. One is the 20th century basically lived on the back of having a global policeman being prepared to keep places like the Strait of Hormuz open. And if the US is really going to become much more America first, then you just can't have an international trade of that type. The world's too unstable for that to happen in a way that creates collective wealth. So I think that creates, interestingly, another place where Trump has actually maybe accelerated the shift to a clean energy future. I wonder whether part of the difference that you're pointing to is that the markets overestimate Trump's ability to actually exert power in the region. I think geopolitical analysts, security analysts know that he can't just solve the problem. But I think the markets sort of think Trump will do whatever it takes to keep that open. And so therefore we can price it at zero, because we can sort of say he wants that to happen. And I think that it might be that to...
00:36:23.480 --> 00:36:29.060
Christiana Figueres: Or maybe it's not Trump, but sort of the global effort will rearrange itself.
00:36:29.320 --> 00:36:31.600
Tom Rivett-Carnac: Yeah, I mean, no one's going to let the Strait of Hormuz close. That's just unacceptable from Western powers perspective. So someone will do something and it will be fine. And I think that kind of thinking is not very popular in security analytical worlds, because the world does change, right? And suddenly, you can't exert power to the point where you can just push force through and make stuff happen. If the Iranians are really dependent, they can really make it very difficult for a long time to stop this flow of oil and gas through the Strait of Hormuz.
00:36:58.320 --> 00:37:02.120
Christiana Figueres: The flow, it's the flow that has really come to the fore now. Well, in any event, I agree with that, Tom, in any event, I actually have a sense that the, what I could call the cultural contract with fossil fuels, which was the 20th century, that that is very quickly eroding in front of our eyes.
00:37:18.360 --> 00:37:20.100
Tom Rivett-Carnac: Yeah, I agree with that.
00:37:20.100 --> 00:37:23.920
Christiana Figueres: Because, you know, for decades, what did fossil fuel represent? Let's think industrial revolution, modernity, mobility, prosperity, reliability, you know, development, you know, all of this. And the repeated crises that we are having had in what, the past 10, 20 years, are slowly reversing that cultural association with fossil fuels. It is no, fossil fuels are no longer on the altar of economic and political power.
00:37:54.880 --> 00:38:09.460
Tom Rivett-Carnac: So one thing I would add to that, if I may, is that when fossil fuel prices, when gas prices were jumping at the pump and Republicans were trying to get in when Biden was in, do you remember they went around all the pumps in the US and put Biden did this stickers on all the public, right?
00:38:09.460 --> 00:38:10.520
Paul Dickinson: Yes, Biden pointing at it.
00:38:10.520 --> 00:38:12.100
Tom Rivett-Carnac: Yeah, I did this, a picture of Biden. What the hell are we doing? Why right now don't we have climate stickers and money flowing into this to sort of say, look at this volatility, look at this uncertainty of energy price, look at the lack of productivity and competitiveness as a result of these energy prices, the spiking, we need a transition now. This is the moment at which donors, philanthropists, organizations need to be, and I know some are doing it, but it needs to be like 20 times bigger than it is now. This is a unique opportunity to step in and actually shift that narrative, because what you're describing will not happen on its own. It will happen for some people, but unless we double down with all of that other narrative, it won't land for people.
00:38:49.600 --> 00:39:06.620
Christiana Figueres: 100% and I think the problem is that this volatility and the war exposure and the inflation, et cetera, et cetera, is actually being experienced as deep anxiety, helplessness, hopelessness, and basically we're freezing. We are freezing under our chairs and just saying, oh my God, what the hell, the world is going to hell in a handbasket. And we're not stepping out of that anxiety to point to the very clear reasons and culprits of this and then do something about it. We're in freeze mode. Honestly, the climate community, but beyond the climate community. As a society, we're in freeze mode because the train is interrupting me again.
00:39:40.080 --> 00:39:41.240
Paul Dickinson: The train is not in freeze mode.
00:39:41.240 --> 00:39:43.080
Christiana Figueres: It went to the station and is coming back.
00:39:43.080 --> 00:39:45.740
Tom Rivett-Carnac: People will enjoy a train going through San Jose.
00:39:45.800 --> 00:39:46.940
Christiana Figueres: Okay, okay, okay. We're in freeze mode because prices of everything are going up. And because most people just cannot afford their basic education, heating, cooling, food, transport, right? And so we are frozen into the harsh reality of the here and now without really being able to raise our gaze on to and therefore what should we do about it?
00:40:19.600 --> 00:40:26.360
Paul Dickinson: Last thought for me is that we want to kind of, I don't know, somehow mix the rational with the emotional. And what I mean by that is Trump is this crazy person who's done so much damage on climate change and he's now kind of blown up the whole world economy and we can try and hang that on him and make sure that, in your words, Christiana, when this whole crazy pro-fossil fuel political takeover falls, the power, the political power of fossil fuels falls with it and we don't suffer from this again. And, against my own argument, one of the biggest problems widely regarded in the little country of the UK is that we left the European Union. And right now, the most popular politician is the one that took us out of the European Union. So there is a lack of rationality in politics and I think what we should be looking for is a way to try and weave together rationality and a sort of an emotional confidence, which so often the left is kind of lacking. It's always kind of opposing and it's never supporting or pioneering or in favour. So yeah, let's try and get that free energy world narrative kind of nailed down at this time because the world needs it.
00:41:28.500 --> 00:41:33.000
Tom Rivett-Carnac: I think that what this points to is that we know that there's a crisis coming in the Strait of Hormuz. I mean, who knows? No one can see the future. Maybe Trump will manage to exert power to keep it open, but there is a moment of vulnerability for the status quo right now. And I think it is, we have not always taken advantage of moments of infection in the past in the movement of people that we count ourselves to be part of trying to make the future a cleaner, healthier, safer, better place. And now is an opportunity for us to collectively step up and do that. And I agree that we're frozen and I agree that there's cost of living issues, but actually there are plenty of people out there with money, with determination, with networks to really try and do this. And this is the moment to do it because year or two straight off, I mean, who knows what happens. Maybe it does reopen, maybe the prices come back down, everyone forgets about it. We fall back to sleep for another five years. We've got to get better at grabbing these moments.
00:42:20.360 --> 00:42:32.500
Christiana Figueres: Do you remember at the beginning of this decade, how we were talking about the decisive decade, because we knew we had to either continue the rise of emissions or get to a plateau and drop. And little did we know six years ago that it would be such a decisive decade. I think now the decisiveness of path one versus path two is so flagrantly exposed to us, as you have just said, Tom. And honestly, to be very honest, at the bottom, at the pit of my stomach, I am harboring a painful nervousness that we may miss this opportunity in this decade again.
00:43:11.240 --> 00:43:12.840
Tom Rivett-Carnac: Christiana, how do we not miss it? Because that's an appropriate fear, but how do we not do that?
00:43:15.660 --> 00:43:17.980
Christiana Figueres: I mean, what, you know, what a key question. How do we not do it? To me, to me, it still is the, you know, apparently permanent conundrum that we're in of the immediate term versus the medium and long term. And as long as we continue to think and act as though those two things are separable, that you can do something in the short term that does not have mid and long term effects, and that you can wait until the midterm is now the short term in order to do something about it, then you've actually missed the opportunity. So I don't know how we get out of that conundrum. And I acknowledge with humility that it is a huge challenge for humanity and as a whole for us to understand. And so it's, you know, it's because we do it as individuals, then that's why we do it as a society. And that to me is the crux of the matter, to understand that there is no such thing as doing something today that does not have a mid and long term consequence.
00:44:37.060 --> 00:44:39.140
Tom Rivett-Carnac: Well, it was, I believe it was St. Augustine who said, Dear Lord, make me pure, but not yet. I was about to quote that.
00:44:44.060 --> 00:44:44.760
Paul Dickinson: I thought it was St. Paul. Tom, how do you answer your own question?
00:44:47.880 --> 00:44:49.880
Tom Rivett-Carnac: Well, I think it's different levels of the system, isn't it? I think on Christiana's, I mean, I wouldn't want to bet against the human ability to put off the good thing till tomorrow, the thing you need to do till tomorrow. That will always be the case, right? And we'll solve this problem with that impulse intact, because that will be what humans are like and we will do our best to transcend it, but we'll be messy and complicated. And I think that the answer to the question is, how can that not stop us? And I think that we have, we want humans to rise above that, but not stopping that involves changing some of the incentives. And right now the incentives have been changed. We talked about the fact that this is a cost of living crisis. The solutions really are much cheaper now. We can solve big problems and help people be wealthier and healthier by solving the issue. And I think that, but if you talk to people, nobody really understands that. And those who do understand it don't really believe it. So I think we've got a really big job to grab the moment. And that's on all of us, but it's particularly on us, on Outrage and Optimism listeners, and on a limited number of people who can really put significant resources into this and try and change the narrative. So I think it is about a human scale evolution. I totally agree with you on that. And there's also work to be done right now.
00:45:58.500 --> 00:46:12.120
Paul Dickinson: Can I give the last word to the Mayor of New York, Mamdami, he said, just recently, I think last week, he said, Reagan famously said the nine most terrifying words in the English language are, I'm from the government and I'm here to help. It's a good quote, but I disagree. I think the nine more terrifying words are actually, I worked all day and I can't feed my family.
00:46:22.880 --> 00:46:23.960
Christiana Figueres: A hundred percent.
00:46:25.420 --> 00:46:26.900
Tom Rivett-Carnac: Okay, so I think we're going to leave it there. This is a very interesting discussion. It took us to lots of different places we didn't expect. Lovely to chat to you all. It felt like an old style episode of Outrage and Optimism. Maybe we should do more of them. And see everybody next week.
00:46:37.340 --> 00:46:38.020
Christiana Figueres: Look forward to it.
00:46:38.020 --> 00:46:38.540
Paul Dickinson: Bye for now.
