The video discusses the intricacies of the political economy of environmental sustainability, as explored in a recent conference organized by Stanford University. Participants, including Bill Barnett, Samuel Mine Benzikry, and guest Professor Bart Harstadt, delve into issues such as the complexity of climate change solutions, the economic obstacles like vested interests, and the political dynamics that hinder effective policy implementation. They emphasize the challenges posed by entrenched capital in traditional industries and the potential shift towards sustainable policies with adequate political will.

This is essential viewing for anyone interested in the intersection of environmental science, economics, and policy-making. The video highlights how theoretical knowledge about climate solutions, though understood by economists, often fails to translate into practice due to various political pressures and lobbyist influences. It sheds light on discussions from the conference about the need for policy development that goes beyond GDP, invoking considerations like biodiversity and sustainable resource management.

Main takeaways from the video:

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Key Vocabularies and Common Phrases:

1. political economy [pəˈlɪtɪkəl ɪˈkɒnəmi] - (noun) - The study of production and trade and their links with custom, government, and law; it focuses on understanding how economic theories and policies are shaped by political structures and processes. - Synonyms: (economic policy, public economics, economic systems)

And Bard, along with Professor Partha Dasgupta, ran a conference in our conference series on the political economy of environmental sustainability.

2. free rider problem [fri ˈraɪdər ˈprɒbləm] - (noun) - A situation where individuals or entities can benefit from resources or services without paying for them, which leads to under-provision of those goods or services. - Synonyms: (exploitation, benefit without contribution, unearned advantage)

My main takeaway was that independent of the level of technology needed for climate solutions, you have all these basic economic problems like the free rider problem in place.

3. vested interest [ˈvɛstɪd ˈɪntrɪst] - (noun) - A personal reason for involvement in an undertaking or situation, especially one expecting financial or other benefit. - Synonyms: (personal stake, interest, involvement)

One of them is, for example, what is called vested interest.

4. status quo bias [ˈsteɪtəs kwəʊ ˈbaɪəs] - (noun) - A preference for the current state of affairs, where change is considered a loss more than an opportunity, which often leads to resistance against change. - Synonyms: (conservatism, preference for the current state, resistance to change)

And that is why we often see a so called status quo bias in politics.

5. geoengineering [ˌdʒiːoʊˌɛnʤɪˈnɪərɪŋ] - (noun) - Large-scale intervention in the Earth's climate system to counteract climate change. - Synonyms: (climate intervention, climate engineering, earth modification)

I sometimes didn't think too much about when thinking about solar geoengineering or other technologies as such.

6. catch 22 problem [kæʧ ˈtwɛnti tuː ˈprɒbləm] - (noun) - A paradoxical situation from which an individual cannot escape because of contradictory rules or limitations. - Synonyms: (dilemma, paradox, no-win situation)

Yeah, sometimes one can think about this as like a catch 22 problem or a chicken and egg problem

7. quantitative measurement [ˈkwɒntɪˌteɪtɪv ˈmɛʒərmənt] - (noun) - The process of using numbers and amounts to describe the characteristics of something, important for objective analysis. - Synonyms: (numerical analysis, quantitative evaluation, statistical measurement)

Do we have policy approaches to quantifying and really measuring biodiversity?

8. biodiversity [ˌbaɪoʊdaɪˈvɜːrsɪti] - (noun) - The variety and variability of life on Earth, crucial for maintaining the equilibrium of ecosystems. - Synonyms: (ecological variety, biological diversity, ecosystem diversity)

And that is Merat focusing on the value of biodiversity.

9. natural capital [ˈnæʧrəl ˈkæpɪtl] - (noun) - World's stock of natural resources, including geology, soils, air, water, and all living organisms. - Synonyms: (natural resources, environmental wealth, ecological capital)

Given that we know that many of our natural resources and the stocks of our natural capital are depleting, that would change the calculation of the way we would end up discounting.

10. environmental sustainability [ɪnˌvaɪrənˈmɛntl səˌsteɪnəˈbɪlɪti] - (noun) - The responsible interaction with the environment to avoid depletion or degradation of natural resources and allow for long-term environmental quality. - Synonyms: (ecological sustainability, environmental health, green sustainability)

And Bard, along with Professor Partha Dasgupta, ran a conference in our conference series on the political economy of environmental sustainability

Ep. 34, Political Economics of Environmental Sustainability Conference

Greetings from Stanford University. I'm Bill Barnett, professor at the Stanford Dors School of Sustainability and the Stanford Graduate School of Business. And I'm Samuel Mine Benzikry and I'm a junior studying systems and linguistics. And it's great having you here, Samuel. And we have with us Professor Bart Harstadt from the Stanford Door School of Sustainability and the Stanford Graduate School of Business. And Bard, along with Professor Partha Dasgupta, ran a conference in our conference series on the political economy of environmental sustainability.

And Sam, you were at the conference. What are your takeaways? I think my main takeaway is the complexity of how nations are going to deal with climate in this century and how new technologies or conventional diplomacy apply in a theoretical framework to climate future. My main takeaway was that independent of the level of technology needed for climate solutions, you have all these basic economic problems like the free rider problem in place. I found that that was something that I sometimes didn't think too much about when thinking about solar geoengineering or other technologies as such.

That's interesting. What's your reaction to Sam's comment? Bard yeah, I think that's very typical reaction to those who are first kind of learning about the political economy of sustainability, that there are so much, not only economics and environmental economics, but there are so much politics and so many aspects of policies that are important for decisions that we many times are forgetting. And in fact, when I was a student too, I was thinking we know what the solution is to environmental problems. We know like we should tax pollution, for example. But partly because of that, I was motivated to study the political economy because then you really understand why things are maybe screwed up, like why we don't see the ideal policies in place. And there are so many different political aspects of that.

And we could see that from the conference that they were covering so many different dimensions of politics that can, from each of their angles, shed light on why policies are not always efficient, but also on how we can maybe move to a better world where we can see policies that are not only effective but also possible to implement in a political setting. And that of course is the ultimate goal. You know, Bart, as I hear you talking, I remember a conversation I had about maybe about a year ago with a super famous economist. And I'm going to leave his name out because his story, well, you'll see why we ran into each other in the hallway and he said, ah, and he looked at me, he said, yeah, sustainability, he says it's a solved problem. And I thought solved problem. And of course, I've thought about that a lot since.

And I, and I get what he was getting at. And I want to say this to you listeners, especially if you haven't studied a lot of economics. We actually, in theory, really do understand why our economy is producing massive amounts of carbon dioxide. I mean, we actually understand the economics of this. We have since, since I was young. But Bart, there's these other things that stop us from acting on what we know. What are a few of those things?

Yeah, that's a great question. And that is also not only a great question for this podcast, but also for your research and continued studies. Because many economists think that, yes, we know what the solution is. And the next question, next question is, why don't we see those fantastic solutions implemented in practice? And there are several political obstacles and some of them were discussed in the conference. One of them is, for example, what is called vested interest. vested interest is that many capitalists and firm owners and industries have a vested interest in the sense that they have already invested a lot and they are capital that are being sunked into dirty and polluting industries.

And given that, that they are basically tied up to those sectors and they cannot easily run away. They have a strong incentive and motivation to lobby the government and to make sure that they are getting policies that are supporting their continued existence and they are willing to spend a lot of resources also on supporting policymakers that are supporting basically their existence going on. And that is why we often see a so called status quo bias in politics. It's hard to get things moving because there are so many stakeholders that have a strong interest in keeping things as they are. And that is just one of several things. And then you could ask the question, what about the counter lobby? Shouldn't there be green industries and you know, investors, renewable energy?

Shouldn't they lobby against like for new policies? But no, they are not there yet. Right. So that's the thing about up and coming industries, that those owners might be there, hopefully to a larger number in the future, but right now they are not vested interest. That's striking. Yeah, yeah, that's striking because especially so, Samuel, you know, when you and I first met, it was in your home country in Brazil. Yes. And we were talking about, we were up, if I remember, up in Manaus. Yes. And we were talking about innovations, we were talking about new organizations, you know, doing agroforestry.

Back to you, Bard. Those organizations are the revolutionaries, but they're not represented in public policy. Right. They don't have the same material and financial Interest or capacity to influence policies to the same extent as for example, oil industry is having. Right. So that is why policemakers and policies are distorted. In a way it ties up to those things that were profitable and has been profitable for many decades. And it's difficult to make a change. You know, it's so interesting. It's so interesting because it's difficult for the policymakers to change. Yes. But then it's also difficult for the firms to change. Even we look at, you guys probably saw the announcement that BP is reversing its very forward looking business strategies from just a few years ago.

And it's doing that because it has to answer for its financial performance. But that financial performance is tied to fossil fuels because our regulatory system is set up in such a way that if BP would just stay as a fossil fuel company, things would go better for it. Yeah, sometimes one can think about this as like a catch 22 problem or a chicken and egg problem. Like firms, they don't have this motivation to go green and to disinvest in brown and go invest in renewables unless there is a supporting policy in place. But the policy in place will not be there as long as the firms have not already invested because there they are supporting the old policies. So it's a bit like one could think about. And the bad news about this is that it's difficult to make a change because firms doesn't want to change given the policy. You cannot change the policy given what the firms have invested in. But the good news about this kind of logic is that it's also another world is possible. Right? Another equilibrium is possible. That if it's expected and credible that the policies will change, maybe not today, but in a few years, then if that is credible, then firms will find it profitable to invest in green, environment friendly technologies.

And then at that point in time they will also support that type of policies. So it's possible. And that's the good news from these stories. I mean, the alternatives already exist. The big question is getting the current owners of material, of infrastructure, material and people running government and doing these larger scale investments to transition towards these alternatives. So that's basically a rundown of what we all discussed. I agree. So I think that to some extent you're saying that we know that technology exists, we know the solutions to some extent, at least some of the solutions, both at the technology level and economic level. And now we have to go to the political economy of all this to understand how can we move there not only technologically and economically, but also Politically.

So, Bard, we were fortunate to have visiting here at Stanford during the conference as your co chair, Professor Partha Dasgupta, who of course is very famous and accomplished and has done so much. And I thought maybe we could just take a minute and let you just sort of comment on his work for our audience who really wouldn't be familiar with it. I realize that's a big ask, so you don't have to. This could go on for an hour and a half, but maybe just give our audience a little quick introduction to Professor Dasgupta. Yeah, I would love to. So, Partha Dasgupta, he was actually a professor here in the start of his career, but he moved back to Cambridge and he's been at Cambridge a long time.

But he has many co authors and collaborators in the US and when I was a student and I learned resource economics for the first time, we were reading his textbook with Jeff Hill from 1979. And that amazing book in resource economics from 79 is still used in many courses today. And it contains novel material. And you know, sometimes Das Gupta is mentioned as a candidate for the Nobel Prize in economics if environmental economics will be given attention next time sometime. And some of the research of Dasgipta so has been very much like deep into, for example, what is the value of nature? How can you think about not only GDP as a measure of wealth, but but also you have to take into account how resource stocks, such as natural resource stocks, might be depleted over time. And that should be taken into account when you measure, for example, wealth. So GDP by far is not enough.

You have to take into account how the stocks are changing and maybe diminishing and then the picture might not be so rosy. So partner Skipta, he was also the lead author of famous report in the UK, which is called the Dasgupta Review. And that is Merat focusing on the value of biodiversity. So it was wonderful to have him here and he is still, after all these decades, still working very hard and really on the top of things. So it had been wonderful to have him here also on the podcast. But we were so lucky to get him for the conference. No, absolutely. You know, and this, this issue just for our audience at home to understand how very important this insight is, there is a reality that when, when we as humanity are making our kind of collective decisions about whether to, whether to have more economic activity or less economic activity, we're really making a trade off.

And that trade off is often against the future. Folks at home may have studied the idea of discounting over time and whether we like it or not, that is what we do. We trade off today against the future and so forth. But given that we know that many of our natural resources and the stocks of our natural capital are depleting, that would change the calculation of the way we would end up discounting. And that can have real effects on policy and real effects on decision making. It's great that that was represented. Sam, let's come back to you. Any other reactions to this topic? Yeah, I had a lot of questions about how, I mean, kind of connected to, to some of the talks and to what you just said, Bart, about the Scopeda's research.

I wonder how to convince current political agents about the alternatives, the tangibility of living in another world and considering measurements beyond GDP or more surface level economic activity. I wonder how to manage those, to direct the political discourse to consider these things and to enact policy and enact change. I wonder what are some strategies that should be considered when thinking about this? Can I ask for clarification on that, Sam? So you mean to get into more qualitative measures, quality of life, something beyond, I wouldn't say even quality of life. I think that those are important to. These are part of the bundle. But even some quantitative ones like biodiversity, you can quantify those things.

Or for example, economic activity through biodiversity. I mean, that's a big. I think we talked about that concerning my region in the past, how biodiversity leads to research in material science and pharmaceutics and other areas that are economically relevant. Yeah, no, I remember that. In fact, you took me onto your family farm there or that acreage with the tremendous biodiversity. And I remember that one area where everything was edible. Yes, that's my. You know, when I was raised, you weren't supposed to just eat plants, but we were walking around eating everything. It was amazing. It was an amazing. So Bart, let's take Sam's question to you.

Do we have policy approaches to quantifying and really measuring biodiversity? Yeah, that's a great question. In fact, this Dasgupta review is talking a little bit about this. And it's easier for some resources than for others. Right. For example, some of my research regards tropical deforestation. And for forest cover you have satellite monitoring. In fact, Brazil has a great satellite who can give objective, verifiable data on the forest cover. Of course, you cannot measure the biodiversity so easily and especially the role of biodiversity for other species. That's a much more complicated question.

I think that that should maybe inspire some of the listeners to really study and do research on these topics because there's so much important work that remains to be done, not only to help like policymakers to get a better estimate for what they ought to measure instead of gdp, but also I think how to persuade voters and citizens and something we have seen the last few months in the US Is that the challenge of a political economy is not only to convince the policymakers about what they should do or what they can do and still be re elected, but we also need to reach out to the voters and citizens. Right? And we have to understand what are driving their behavior at the voting booth. And I think that that is also some questions there that we really need to do learn more about do more research about why are many stakeholders, for example in the US Voting against what you would believe is against their material interests? They are supporting policies which is a bit hard to understand how that can be beneficial for their given the situation work wise for example they are in. But there are things there that we don't understand and that is important to study that more to see what type of policies that can also be acceptable at the grassroots level. Wow. So Bard Harstadt, thank you so much for running this great conference and for speaking to our audience today. Sam, look forward to talking to you at the next podcast and to our audience from Stanford University. Until next time, the Stanford Initiative on Business and environmental sustainability Podcast series is sponsored by the Stanford Graduate School School of Business and the Stanford Dorr School of Sustainability.

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