(Unedited) Podcast Transcript 442: Pricing the Priceless

This week we’re joined by Paula DiPerna to talk about her book Pricing the Priceless: The Financial Transformation to Value the Planet, Solve the Climate Crisis, and Protect Our Most Precious Assets. We chat about how nature is working for us for free and how we should value those services as well as the financial mechanisms we could use to save the planet. She also shares how she got the Vatican to pledge to go net zero and lessons from working with Jacques Cousteau.

To listen to this episode, visit Streetsblog USA or our hosting archive.

Below is a full AI generated unedited transcript:

Jeff Wood (1m 21s):
Well, Paula DiPerna, welcome to the Talking Headways Podcast.

Paula DiPerna (1m 40s):
Thank you so much. Love the name.

Jeff Wood (1m 42s):
Well, thanks for being here. Before we get started, can you tell us a little bit about yourself?

Paula DiPerna (1m 47s):
Well, I’m a city person. I grew up in New York City and the product of the New York City public schools. I’ve always wanted to be a writer and I can give you the names of my high school, you know, English teachers like many writers can. I did my graduate and undergraduate work at New York University and then I volunteered to work for Jacques Cousteau as a writer, thinking it would be just a very short gig. I was freelancing at that point, writing about public schools and they hired me the next day for a book project and I ended up staying there for 20 years or so and becoming his right hand person for policy and also a film writer.

Paula DiPerna (2m 27s):
And so then I traveled all over the world to many, many cities. You know, I’ve been involved with environmental issues pretty much since then and I’ve seen them from literally coral reefs to carbon markets and now further. And that’s me really. I mean, I’m a writer and that’s not much more to say.

Jeff Wood (2m 44s):
Well, that’s pretty important. How did you get into the environment? You know, usually I ask folks, you know, how they got into city planning or transportation planning, but for you, I think the most apt question is how did you become invested in the environment? And I imagine, you know, being involved with Jacques Cousteau is a major reason why, but before that, were you a kid when you started thinking about these issues?

Paula DiPerna (3m 4s):
Good question. I mean, before that, you know, cities as you know are ecosystems and themselves and before that, and I grew up in the North Bronx, which was, you know, part of New York City, but was on the edge of Westchester County. And so we had a huge public park. And this speaks to the importance of public infrastructure, I think. I mean Palam Bay Park, which when New York was vying for the Olympics, it was able to point out 0.2, a number of preexisting structures and facilities that had been built in New York City long before the bid that were Olympic, literally Olympic in size and stature.

Paula DiPerna (3m 47s):
And one of them was this Palam Bay Park, which is still there. And my parents always took us there, but to picnic and to play baseball, not to sort of be among nature. So nature for me was kind of a scenery really. And I really didn’t have an interest. My favorite aunt had a bungalow in the country, again, a little bit north of Manhattan. We used to go on weekends there. And I learned about her garden and things and birds a little bit, but it still wasn’t integral. And honestly, when I volunteered to work for Cousteau, it was for my own self purpose, which was to learn a little bit more about the environment so I could write about it.

Paula DiPerna (4m 31s):
I still wasn’t animated by any particular passion you could say. And I’m not so sure, even now, I mean now I’m very animated by passion, but I’m still not a big outdoors person. I don’t go camping every weekend, you know, it’s more than the outdoors. I’m not an outdoors mentality type, I’m, I’m much more of an ecosystem systems type. If you see the difference

Jeff Wood (4m 57s):
Of course. And I think that’s really important. You’ve been all over the world and looked at all kinds of different ecosystems. I’m wondering if any of them stand out specifically.

Paula DiPerna (5m 4s):
Well, I have to say I’m not a diver. I never learned to dive, partly cuz I don’t think I have the personality. I think if I got in trouble I would probably bob up to the surface and you know, kill myself, get an embolism cuz I’m not that calm, you know, if something were to happen, even though I know diving is pretty safe, but I did work on Cousteau films a lot and seeing that footage of those coral reefs was mind boggling, you know, I mean, to see the delicacy and the colors and the amazing design back again to, you know, design and urban design. I mean the coral reefs are just breathtaking and unique obviously. And then the other one that stands out really, I have to say was the Amazon.

Paula DiPerna (5m 47s):
You think about trees and animals, but what blew my mind was the water, the way water is really the rainforest, you know, falling water from the, the sky water rising from the flooding. And you know, the, the experience of being in a, in a zodiac with a couple of film guys, you know, rowing and just keeping rowing and then the next thing you know you’re at the top of the trees because you have been carried up by this amazing amount of water in the rivers and you didn’t really understand how the rivers were very high, how high they were. They were as high as almost the top of the trees. And that was mind boggling.

Paula DiPerna (6m 28s):
And I guess the other one that’s stands out is Botswana, where I, in the book I talk about the rhino bond I had about my trip to Botswana and that was also breathtaking. I mean that, you know, while I was a bit of a cliche, but until you’ve seen it and the thing that that stood out really was how huge Africa is and how large the areas are. And when you think you hear, oh, 30,000 elephants, it sounds like a lot. But when you think about whatever remaining populations there are being distributed in these huge areas, you realize it’s just super few animals and when you get to see them, it is also breathtaking.

Paula DiPerna (7m 9s):
So I guess those would be my three one through film and the other two physical contact.

Jeff Wood (7m 15s):
I love it. And I agree that if you come into contact with something that’s really amazing and you see it, it just really changes your perspective. I know here in California, you know, going to Yosemite is one of those experiences I think for a lot of people, or even just seeing a Sequoia for the first time, the size of a tree can really, you know, leave you breathless to a certain extent.

Paula DiPerna (7m 32s):
Yeah, and I’ve been there too. And certainly Lake Quinalt, you know, in wa in Washington state, Olympic National Forest. I mean these, I remember I took my nephew when he was very young, he was about seven or eight, and we were in the Olympic National Forest outside of Seattle, and there were all these gigantic trees and you know, a couple of them that were broken. And he says to me, how’s that for splinters Aunt Paula? You

Jeff Wood (7m 56s):
Know,

Paula DiPerna (7m 57s):
A splinter that was, you know, three feet long and you realize that’s how a seven year old would see it. And it was unforgettable obviously.

Jeff Wood (8m 7s):
That’s awesome. Well that gets to the point of the book Pricing, the Priceless The Financial Transformation to Value, the Planet Solve, the Climate Crisis and Protect Our Most Precious Assets. I mean, we’re just talking about Precious Assets and Pricelessness to a certain extent. I’m wondering what got you to write this book? Like what was the impetus?

Paula DiPerna (8m 23s):
Well, that does a bit go back to Cousteau because as I mentioned in the preface of the book, you know, when I, I was working with him when the Exxon Valdez ran aground, which of course was a while ago, but at the time was the largest oil spill I think in American history up in Prince William Sound, which was, and I think still is fairly pristine. And there was a, you know, super tragedy of the oil being not only lost from the ship, but also the wildlife. There was so much wildlife up there, unlike Africa, prince William sound very compact. And so otters and seabirds and all this wildlife were just swimming into the oil, or the oil was swimming into them and it was awful, visually awful.

Paula DiPerna (9m 6s):
And full of the news was full of it. And people, you know, crews of people when you think about rescuing human beings at sea and what happens these days with people drowning in ferry boats. But at that time, you know, people by the hundreds went up to Alaska to rescue the wildlife and clean up the wildlife. And Custo didn’t seem personally too responsive to that. He, he didn’t, you know, he was sad about it, but I said, how come you don’t, you know, how come you don’t wanna come up? We’re gonna make a film up there, how come you’re not coming up? And he said, well, John Michel, and you can do it. I don’t have to come. And I said, well, why not? And he said, well, you know, I don’t think the crime, it, it’s very sad, but the crime is really taking the oil out of the ground at today’s price.

Paula DiPerna (9m 51s):
And he was already thinking about oil being, you know, he was very, very early on climate change and, and he knew about fossil fuels intimately well as a problem. And he, you know, he, he was thinking, here’s America digging out the oil of, of a, of Alaska, putting it in a ship, selling it around the whole North American continent through the Panama Canal to what end and at what price. So that kind of put the thing in my head, but honestly the thing, the real impetus for the book was gadgetry, you know, I just became aware that suddenly our society was almost like an a do dad economy where, you know, everybody’s cell phone had to be the next version.

Paula DiPerna (10m 35s):
And, you know, next coffee, you know, I travel a lot, I go to hotels a lot, all I wanna have is a cup of coffee. And it used to be super easy to get a cup of coffee, now it’s next espresso and Koenig and all these different kinds of coffee makers, a huge amount of mechanist plastic metal to get a thimble full of coffee. Crazy. But the thing that really I thought was super crazy was Uber, you know, not that I’m against Uber or have any reason or right to be against anything, it’s just that people were so fascinated with Uber. The first time I saw it was at a hotel in Dublin and this guy was, you know, showing me on his phone, or rather, the first time I heard about it was in Dublin.

Paula DiPerna (11m 16s):
And he, everyone was so excited there was gonna be this new system you could just call and immediately a car would appear. And I thought, well, okay, big deal. So used to be able to get a taxi immediately and what’s, you know, I didn’t see the difference, but suddenly Uber became a company and it became valued and it was, you know, up, up, up like WeWork, all these sort of software, non-tangible companies that are totally dispensable were being valued by Wall Street in the billions of dollars. And by dispensable, I mean we don’t actually need them, you know, people work for them, there is some need of them now, but we could live without them. Whereas the atmosphere, which we cannot live without, we don’t value at all.

Paula DiPerna (11m 59s):
We value it zero. So it suddenly began the dichotomy of this. And I had dabbled a bit in ecosystem services, of course, all through my career with gusto. So I knew that there were these things called externalities. I’d written about that even myself, these, you know, economic factors that influence economic value, but which are not on the books, which are considered external to the, the classic profit and loss. So, so sort of all came together, I would say, during the Paris discussions and when it just became so obvious that we were, we weren’t going anywhere in terms of getting a grip on climate change. And then I was quite involved with carbon markets and that was really the clincher I have to say.

Jeff Wood (12m 42s):
That’s really interesting. And I’ll ask you with the pope in a second, but that’s interesting discussion about, you know, people in carbon markets and, and trust if they have it or, or don’t have it. And the idea, I think that I took away from reading the book too, is this idea that people have of air as real estate rather than a Precious resource. And I’m wondering if you could expand a little bit on that idea and why that’s important. Well,

Paula DiPerna (13m 3s):
It’s a paradox, but you know, the atmosphere is about 60 miles above us before, there’s nothing protecting us from solar heat. And so it sounds terribly crass to consider it real estate, but on the other hand it’s an extremely scarce space. And so by Pricing it we’re not Pricing it we’re Pricing, the scarcity really in a cap and trade or a carbon market. And under the laws of supply and demand, you would ar you would assume that the more the supply is limited and the more demand on a limited supply, the higher whatever the price should be. So the argument is made that if you wanna cap greenhouse gas emissions and you keep lowering the amount of emissions that are permitted, you’re essentially restricting the supply of space in the atmosphere that can be polluted.

Paula DiPerna (13m 58s):
And consequently the, the use of that space for people who either want to or must or are corrupt and wanna continue polluting, it’s gonna cost them more and more. And if you don’t have that cost built in there, they will keep polluting because there wouldn’t be any, any reason not to except regulatory control. And obviously the climate change problem has escaped regulatory control. There’s just not enough regulation at the moment. So cap and trade is a supplement to regulation really, and is its own kind of regulation. Most of it is, unless if it’s mandatory, it can work if it’s not mandatory. There’s an open question.

Jeff Wood (14m 37s):
You also mentioned discussing basically climate change as kind of an accounting problem versus a problem with capitalism. I think that’s an interesting frame as well.

Paula DiPerna (14m 46s):
Well, I mean I’m not an apologist for capitalism. You know, capitalism is based on extraction or has been based on extraction and abuse and waste really up to now and other things too. But I’ve kind of come to the conclusion that on the other hand it is the prevailing economic system and we’ve done experiments with other economic systems and for various reasons capitalism is still standing and capitalism is nothing more than a pool of capital. And it can be driven, it can be driven by greed and it can be driven by other things. And so the argument I’m making is that we have to drive it for reasons other than greed and other than profit now profit other than profit alone.

Paula DiPerna (15m 28s):
But profit is not per se bad, you know, especially if it’s not made on the backs of other people and it’s being made on the back of nature. You know, nature is the big unpaid laborer. Nature is the exploited worker. Nature is not an union, you know, nature is the thing that keeps working for us for free. And so if we’re going to write capitalism, let’s say our I G H T, one way to write it is to pay nature for the work it does. And also that’s a structure people understand, you know, there is a structure, there are institutions, there are securities regulations, there are vehicles, bonds, you know, indices. There are tools that could be used for purposes other than the ones that they were created for.

Paula DiPerna (16m 13s):
And so we, we have a toolbox as compared to kind of a cosmic philosophical toolbox that we’ve been trying for 30 years. Do you wanna wake up in the morning and say, oh yeah, climate change, the existential threat that I can’t wait to take on, I can’t wait to get outta this bed and take it on. Nobody feels that. Whereas if you’re an investor and you can put some money into a clean tech fund or some of the new things that I talk about in the book, the forest resilience bond, it’s on. That’s exciting. And so it’s just about shifting capital, I think, from one thing to another. And I’d rather try that than continue to despair and complain really, because there’s just too much money that could be shifted to leave to other people to talk about.

Jeff Wood (16m 57s):
I love it. And, and in reading the book, every chapter has a, has a specific target and I think it was just fascinating to look at all these mechanisms that could be used to maybe fix the issues that we’re dealing with. And so there’s rhino bonds, reef insurance, carbon trading art in a box that explained some of this stuff. Forest bonds and all these are clever financial instruments to try to measure future value and to a certain extent this ecosystem services. I’m wondering though that it’s, it’s still trying to measure something that’s Priceless and I think that that’s, as you point out in the book, that’s really difficult to do. And I’m wondering if you worry these mechanisms are too complicated because of how complicated understanding interconnected ecosystems actually is.

Paula DiPerna (17m 36s):
No, because although everything is interconnected, the way to address preserving the interconnectedness is to sort of disaggregate in a way, and this is what’s the fascinating part. On some level you have to understand environmental issues is ultimately completely integrated and everything is connected. However, that is out of alignment with the way our systems work and the way the physics of the problem work. You know, there’s sectors and even though, you know, what are the, people call them silos now everything is siloed and we keep trying to connect the silos, but you can only go so far with connection before you can’t implement and you know, like take a city, city has to run, it’s, it’s all well and good to talk about recycling, but at the end of the day, somebody has to pick up the recyclables.

Paula DiPerna (18m 21s):
That’s a, that’s a driver, that’s a vehicle that’s, you know, segmented function. Nature has segmented functions. And what we’re Pricing really are those functions, those benefits that accrue from nature’s work. So I’m not saying nature is worth x, I’m saying the benefits that nature provides can be quantified and the ultimate result is pricelessness. But you can break it down into quantifiable numbers. And so for example, back to using tools that everyone’s familiar with, and I mean by that everyone who, you know, manages money regulates banks and so on profit and loss statement, even I don’t have a big company, but I know my red ink and my black ink.

Paula DiPerna (19m 5s):
And so Puma, which is everybody I think recognizes that brand. It’s sneakers and soft and sportswear. The company was run at it for a certain time by quite visionary guy named Jokin, Zeitz, Z E I T Z, who among other things, endowed a contemporary art museum in Cape Town. And I met him in New York a number of years ago and I could tell that he had something, you know, going, he was talking about this environmental profit and loss statement that he was trying to develop for his company. And he did it. And it was in exactly the format of a normal profit and loss that you would report to your shareholders or to your, your securities regulators.

Paula DiPerna (19m 45s):
And listed all the ways the company made money. I believe that the revenue they, they projected in the, in the standard profit and l was, I can check that figure, but it’s certainly above 200 million euro that year. Then he instructed his team and they hired an environmental consulting firm at that time called Sustainalytics, a guy named Richard Madison, who was still very active in this and was kind of ahead of his time on these things to figure out if they had to pay for the emissions that they emitted in the production of their products in a carbon market based on X price. And they used an average price at the time in the European Union system.

Paula DiPerna (20m 26s):
They figured out, okay, if they had to pay, what would be the, the value of the land if they were paying for the use of land of the, of the animals that were grazing, who provided the leather, let’s say, what would that be? What’s the disposal charges? What would the water be? So they started adding all the inputs as if they would’ve had to pay for them if they had been controlled in some way. And he called that, you know, negative profit and that would’ve been what they would owe nature. And that was a almost 145, I think it was 145 euro. So if they had been paying actually the real costs to nature for the input that they needed and the impacts they were having, negative impacts, their profit would’ve been significantly reduced.

Paula DiPerna (21m 15s):
And at which point the company would be exposed as kind of falsely subsidized and you know, the shareholders would’ve freaked out. I mean, what happened to your profit? Oh my goodness, we owe that to nature. Well what, what does that mean? So, you know, if if every company did that, even if it was just as an educational tool for the company, eyes would open and people, one waste would be reduced. I mean waste is one of our biggest problems, you know, we go after everything else but waste we’re not really focused on. And that would be, you know, energy efficiency. There’s ne you can never have enough. Cities are for example, great places to really get to a hundred percent efficiency.

Paula DiPerna (21m 55s):
But we don’t because so difficult to retrofit and reorganize cities. But in theory, cities should be the most efficient places on earth to live in terms of certainly energy use.

Jeff Wood (22m 6s):
I think that’s a really fascinating idea, making land kind of understood as an asset, as capital, not something that’s just raw material and extracted. And I think you mentioned this in the book, but I think that that’s a really important distinction and how you can actually price some of these quote unquote externalities that businesses might see and actually, you know, give a way to, you know, value these places.

Paula DiPerna (22m 29s):
Yeah, I mean I think it’s a simple switch from, you know, infrastructure, infrastructure is the word that nature is an indispensable bit of infrastructure. And if you did total up all the contributions it makes to the world economy, the range of estimates is, is the low ball of 44 trillion per year. And the high ball that I know of 125 trillion a year, which is more, if you consider the today’s G D P for the world, it call it around 110 trillion a year, nature is at least worth half of, is at least responsible for half or comparable in value to half of that. So it can’t just be that these are raw materials because raw materials get exhausted.

Paula DiPerna (23m 9s):
So if you’re, if you’re getting that kind of subsidy every year, you’re exhausting the things you’re, you’re, you know, you’re eating, you’re young and that just can’t go on. And Partha de Gupta has called it, he is a renowned economist, wrote the economics of biodiversity report it, we’re in a state of environmental depreciation, you know, so if you think of nature as infrastructure, it’s an asset and it’s depreciating and we’re not doing anything to maintain it or arrest that depreciation. I mean infrastructure is deteriorating in the United States and we’re freaking out. We just put trillions of dollars into the infrastructure bill to try to fix roads and bridges, which are crumbling. They have fallen down and nature we’re not looking at from the point of view of infrastructure.

Paula DiPerna (23m 54s):
So if we just kind of shifted our thinking, just a few words, this is not a cost center, this is an asset and booked it as an asset. You know, bookkeeping’s very important in here. You know, that enlightened me because you know, you think about bookkeeping and carbon accounting, you know, people who are looking for jobs, carbon accounting is like one of the most exciting fields you can go into right now for precisely this reason that we’re talking about what is a ton of carbon worth and how do you prove it, how do you back it up? And by a ton of carbon, I mean an occupancy fee for one ton of carbon to be emitted into this extremely scarce space.

Jeff Wood (24m 30s):
Another thing about the book that was really interesting to me was the history, the process of thinking about Pricing and politically how things have happened over the many years that have taken us one way or another. And I’m wondering, you know, a lot of the, the things that happened through the two thousands and early 2010s kind of changed the trajectory of where we were going versus where we are now. And I’m wondering, you know, how much of a sliding doors moment was the death of Waxman Markey in 2010? Because I feel like in the book it’s mentioned a number of times, if this would’ve happened then maybe the Chinese would’ve been more active if this would’ve happened, your Chicago exchange might not have gone to the wayside and other things would’ve happened. And so I’m wondering kind of how that tipping point kind of related to where we are now.

Jeff Wood (25m 14s):
Yeah,

Paula DiPerna (25m 14s):
I would say that was a pivotal moment and unfortunately one of the biggest steps backward on a number of fronts. I mean one at the political level getting Waxman Markey across the line in the house was a triumph of bipartisanship. And you know, you had a democratic president and a Vice president, but you had, and you had a Democratic Congress. But, well I was lobbying every single day. Everybody understood there would be a potential upside for a carbon price. And we worked the issue and Waxman and Markie worked the issue. So politically it was a moment of very important bipartisan moment that then fell backward when, when it didn’t get into the Senate and didn’t pass.

Paula DiPerna (25m 59s):
Also you had momentum for a carbon price coming from every sector. You had big agricultural interest farmers who wanted a carbon price, they wanted a carbon price because they could sell offsets into it. Midwestern farmers who today don’t get much at all for, you know, the climate mitigation services they’re doing. And politically you had at that time, again, you can never have everything at the same time. But at that time you had a situation in China, I just heard today that China has more solar power, energy capacity than any other country in the world. I mean they are leading every single green energy green technology sector there is. And then however, they weren’t leading and they had a reason to compromise and a reason to work with the United States cuz ultimately they wanted to learn and mimic.

Paula DiPerna (26m 47s):
And I could see that in the carbon market experience that I had when we started doing, when we launched it was the first carbon market in China, the gene climate exchange in 2008, based on the idea that Waxman Markey would be coming in, we would go to meetings. And I talk about this in the book, it was so fascinating. We’d go to meetings and there’d be, we’d be negotiating a contract, there’d be five of us or four of us on one side of the table. The Chinese officials, corporate officials working with us were on the other side of the table and behind them were like 20 or 30 people sitting there. And I always wondered, who are they? They can’t all be like, who are these people? And I realize now they were students and young professionals who worked in Petro China, the largest oil company nominally in China at that time by market cap, one of the world’s biggest oil companies.

Paula DiPerna (27m 36s):
And what are they doing trying to set up a carbon market? Well, to learn and behind the, the, the c e O was 20 or 30 people that, that he wanted to learn. One, how to deal with westerners, two, what’s carbon markets, three, how to do a contract negotiation, et cetera, et cetera. And all those people are now running carbon markets in China, you know, whereas we are in, in deficit, we don’t have a generation of people who are thinking about carbon accounting necessarily the way they do. So the, the failure of Waxman marque really meant that that China and the United States were locked into competition rather than collaboration. And we lost a decade at the very least in terms of not only Pricing carbon, but getting the purpose of Pricing carbon is also to incentivize and even I forget to mention this, to incentivize alternatives to fossil fuels to make it so expensive to keep using fossil fuels, that there was an incentive to do the other otherwise.

Paula DiPerna (28m 35s):
And without that national carbon price, you don’t have as much incentive. And even the infrastructure bill and the IRA focused on carrots that don’t come along with any downside in the sense of a, of a price. So it’s a direct subsidy as compared to, you know, a kind of choice. And it’s very important to have people making choices and making decisions because that means that they’re paying attention.

Jeff Wood (29m 1s):
That was the frustrating part I think for all of us that were paying attention to the infrastructure bill was just the lack of thought on that front. I think because for us we wanted them to do fix it first. We wanted them to focus on reducing V M T, thinking about ways to reduce the impacts of climate change. And instead there’s just, you know, money going to state dots that are continually expanding roads. And this was a fight that was happening politically. I mean Caputo and West Virginia and even Mitch McConnell were pushing back when folks in the F H W A were writing memos saying that, you know, we need to focus on reducing emissions from our highway expansion. So how is that political part get into this as well? I mean we just talked about the change and, and not being able to get it over Waxman marque over the hill, but that change politically that’s been happening as well in terms of people, how they see carbon markets, how they see E S G, the back and forth that continues, it seems to be hindering some of the advancements that we’ve made.

Paula DiPerna (29m 58s):
Yeah, well I mean everything now is tainted one way or another. Everything is either red or blue and you know, that is extremely dangerous for political reasons but also for environmental reasons because just take e S G, you know, one in $3 is screened for an E S G impact now, which it used to be higher but it’s only looks like a downturn because they changed some of the, the labeling. But one in $3 is roughly screened for an E S G component and who’s screening it Investors, it’s not a do good group of people. They’re screening it because they need to understand what the money is doing relative to environmental risk is social risks and and governance risks or boards paying because there are liabilities now and disruptions of supply chains and things from weather.

Paula DiPerna (30m 46s):
So company boards and investors are paying attention. So it’s kind of insane that officials in government would try to prohibit the free market from choosing where to invest. And so prohibiting say in Florida that pension funds can look at E S G even is a bit counterproductive to the whole idea of capitalism and highly politicized and really inconsistent with reality because in Florida you can’t even get flood insurance now. And so how does that make sense that you would prohibit the Florida Pension Fund from investing or looking into investing in companies or technologies that bear the E S G label when in your state your citizens can’t get flood insurance anymore and put would be benefiting from better building standards, better materials and all the things that E S G is trying to, to advance even allowing for some greenwashing and, and nothing’s perfect, right?

Paula DiPerna (31m 44s):
So I think the political situation today is very, very dangerous for the environment for those reasons. But also I think we’ve overcomplicated it in many ways ourselves. I say that, you know, environmental movement, we have not put jobs creation at the front of the story, which it should have been as of 25 years ago for sure. When you think about it, I remember having many conversations with colleagues saying, well you know, if we talk about jobs it makes it sort of, you know, every day in pedestrian nature is, you know, this big metaphysical thing and we should preserve it for its own sake. Well that was a luxury position and you know, in fact the really extraordinary power of of nature is that it is also to protect, it is a job, it’s a jobs creator.

Paula DiPerna (32m 28s):
And today that would be everything from smartware new materials. I read this amazing piece about the two cans beak, you know, that the structure of the two cans beak was so incredible that, you know, it was almost totally bulletproof. People were studying the cellular structure of the two cans beak to develop materials that would mimic that strength and be very light. Obviously Tucan has to fly, so how heavy can the beak be? Right? And so we failed to kind of excite people about the career and blue collar, white collar. And I think that was a political error too because all well and good to say well shut down the coal plants and coal mines, but we’ve seen the politics of that where West Virginia people had a right to be feeling insulted.

Paula DiPerna (33m 15s):
I’m not saying the politics are all correct, I’m just saying that if you don’t put people first, you don’t get political support. Bottom line and environmental movement has not broadened its political support. And I think the way to do that is to put jobs first. Now what has happened? You, you, you’ve got more concern, you’ve got more worry. But one of the things I learned from Cousteau is people protect what they love and not much more. They don’t act out of concern, they act out of love and they act out of empathy and they act out of appreciation and beauty. And the people who act out of concern, usually the people who are officially in are required to act out of concern like a firefighter or a mayor or somebody whose job it is to act.

Paula DiPerna (33m 58s):
But the ordinary person doesn’t really do much out of fear. It’s not a good motivator.

Jeff Wood (34m 4s):
Now you had a disagreement with the Pope, it’s something that I heard my mom say a few times my my Italian Irish mom say a few times when I was younger. But what did you disagree with him on initially?

Paula DiPerna (34m 14s):
Huh? So that was, that was during the Paris conversation. So back to your question about Waxman Markey, you know, turning points. So Paris was, I knew going to be a turning point, it was cop 21, the 21st year after the first five years of the, after the 1992 framework Convention on Climate change, which is the international agreement that holds all of the un negotiations together. It’s the fundamental document. So for 25 or so or 30 years we’ve been talking about dealing with climate change at the political level and there were these turning points and Paris was gonna be the next big one because the science was such and there was an attempt being made and I knew the people involved to get every single country to put into the Paris agreement a commitment that they would act and that they would take on a commitment to climate change.

Paula DiPerna (35m 6s):
Which prior to that the developing countries were given an exemption. And then the developed countries back to Waxman Markey said, well we are not gonna act if every other country’s not acting. So there was an impasse. So Paris was gonna break this impasse by getting universal acceptance of agreements from every country in the un. And so what happens, the Pope puts out this encyclical lato si our common home about, which makes the case very eloquently that the atmosphere and all of of the attributes of nature belong. He didn’t say belong are common heritage and really need to be protected. And it was pleading with more or less the governments to actually do something at the intended that document to add the weight of his voice to the political process.

Paula DiPerna (35m 54s):
However, within the document there were a couple of paragraphs that condemned really carbon markets and I felt that carbon Pricing was essential to breaking this impasse, getting countries to make a commitment because of the upside and downside that weve been talking about. And in fact at that point, I think over 50 of the, what were then those the, they were called nationally determined contributions and before the agreement was signed, they were called intended national contributions. So I think a significant number above 50 or had already talked about using carbon Pricing and carbon markets to meet the commitment they were intending to make at Paris. So I thought if the Pope is condemning this carbon market and, and all these countries are interested in using them, we’re gonna set the thing back.

Paula DiPerna (36m 41s):
So I decided to see if I could change his mind on that and see if I could get the Pope to unsay what he said even though I knew that first of all it was published. And secondly the pope’s supposed to be infallible and so how can he say unsay what he just said? So I figured out a way to work it and I tell that story in the book, but the, the main thing was to, I kind of continued and continued. I wrote the Pope and I met his top cardinal of Cardinal Turkson. He said more or less what I just said, well you know, we can’t really change what the I hear you. I mean they understood that Cardinal Turkson heard what I was saying. He said, but you know, it’s done, it’s done.

Paula DiPerna (37m 23s):
And I said, well nothing’s ever really done. You know, you have an newspaper, you have the observatory Romano, you could write an editorial that kind of adds to what the Pope said or somehow expands on what the Pope said. So it’s not such a condemnation but opens the door to some acceptance and in the end that’s kind of what happened. The pope did embrace the idea of carbon Pricing, you know, as a principle that was not only me but other people who, who, who spoke about it including big oil companies. And then the Pope declared the Vatican would become carbon neutral, which was, that was my suggestion, which a number of other people put forward. And so we were able to kind of compliment the Lato Sea with other indications that carbon markets were not as bad as originally the Pope had said.

Paula DiPerna (38m 12s):
So it was kind of a victory and you know, everybody can learn so, and it, it was quite an experience to meet the Pope I have to say. So I feel happy I did that.

Jeff Wood (38m 22s):
I was impressed. We talk about the atmosphere at Pricing Carbon and I think one of the really important parts of the book too is thinking about the oceans and making sure that we include them in our discussions. And so I’m wondering how important it is to include the oceans because we do talk about the atmosphere a lot, we talk about breathing air and the different emissions, CO2 et cetera, methane. But we don’t necessarily talk about how the oceans take that in and how that plays into the climate as a whole. I’m wondering why the oceans are are also an important part of the discussion.

Paula DiPerna (38m 56s):
Yeah, and you’re right and even I, you know, didn’t emphasize enough the role of the oceans and you know, as a philanthropy foundation executive, I remember, you know, we had a lot of grantees coming in talking about land-based issues and not that many coming in talking about the oceans. And if you talk to ocean advocates, they will say that they’ve always felt left out of the climate discussion. But I think that’s changed. I mean obviously the number one reason is that the ocean absorbs all this heat. So if imagine if the ocean wasn’t absorbing the heat is, I think it’s a very high percentage, it might even be as much as 90% of the heat of the earth is somehow absorbed by the ocean. And consequently we all know ocean temperature is rising.

Paula DiPerna (39m 36s):
That is a beyond debate. No one can debate that. And so what do you have is what we’re having, which is these very extreme storms and coral reef bleaching, which is widespread and dying coral reefs, you know, half the coral reefs really are dead. It’s just tragic to think about. So what can we do about any of that? It’s a bit of a mystery. I mean you can’t really uncoil the ocean. I don’t know where we’re gonna go with that. The ocean is acidifying constantly. Coral reefs are dying and there’s back to the coral reef insurance, part of that is about buying time so that new coral reef can breed if, I guess that’s the word or horticultural eyes in laboratories that are grown to withstand, have genetic components that can withstand this higher heat.

Paula DiPerna (40m 23s):
But that’s gonna take time. So on one level it’s kind of, I won’t say over for the oceans, but mitigating what is going on with regard to climate change in the oceans is very complicated. But what we can do now is rethink our fisheries practices. You know, most fisheries are under threat. Many of them are basically point of no return. So stronger regulation of fishing fisheries. And again, you have to watch out. You can’t just put people out of work. You have to be able to essentially reverse this negative subsidy understanding so that we’re actually subsidizing workers who probably shouldn’t be fishing and countries that shouldn’t be fishing.

Paula DiPerna (41m 7s):
And so this gets into the chapter of off limits. It’s the same as asking the Congo not to cut the trees down because the rest of the world needs the trees to sequester the carbon or not to burn the oil that’s in the ground. Why would they, I mean it’s one thing to sacrifice a little bit, but that’s a very poor country. And why wouldn’t we just say the oil in the ground is worth a hundred dollars a ton and we’re gonna pay you for that a hundred dollars a ton for a mission that that’s sort of reversing lending. Many of these countries are lending to the north, it’s not, and they’re the the creditor country, we should be in debt to them. But finally on the oceans, the really big test and back to E S G is gonna be deep sea mining where you have these manganese nodules.

Paula DiPerna (41m 54s):
And back to Cousteau, I think I wrote an article about manganese nodules in that first book that I worked on, which was the late eighties. We knew then that there were these amazing things underwater that were called manganese nodules that have like four very important metals. The lithium, cobalt, manganese, and I forget the fourth all in one rock. And they’re sitting down there and they’ve been, it’s taken thousands of years for them to form, but they’re at the very deepest part of the ocean and in the farthest south, north, south Pacific around Naru and elsewhere. And they’ve been there all these thousands of years. And now suddenly people wanna dig into the ocean, scrape the bottoms, shoot the water up to the surface of a ship, sort out the dirt, take the nodules, dump the water back in the ocean, convince everybody else that that won’t have a negative impact.

Paula DiPerna (42m 47s):
Because what are we gonna use the manganese nodules for batteries And we have to electrify our economy. No doubt we have to. But why don’t we deal with waste on land first, number one. Number two, are we figuring the costs properly? And number three, do we need all these gadgets? I mean it’s one thing to take manganese nodules and electrify a city. It’s another to take manganese nodules from the ocean and and give me an iPad that is, you know, marginally faster and has two hours more battery capacity than the one I had yet last year. And that’s insane. I selfish.

Jeff Wood (43m 25s):
Yeah, I often get depressed cuz my job is to pull information and share it with my subscribers and listeners and, and the sheer volume of doom and gloom every day is a bit much. I’ve often resorted to skipping articles in my National Geographic cuz I’m just like, I know this is gonna be bad and I don’t wanna know about it. And so I’m wondering how you deal with kind of that onslaught of information about sadness.

Paula DiPerna (43m 47s):
Yeah, well I would encourage you not to skip things that have beauty in there. You know, beauty is the thing to get up in the morning for, but that’s kind of what I take some hits about this capitalism angle. But it’s what I said earlier, we have the answers, we don’t have all the answers and we don’t have the answer, but we don’t have to be, you know, prisoners hostage by these problems. We have the institutions and the systems and the money to address them. And so it’s really a matter of how you choose to use your time and also how you choose to use your money. And I think it’s kind of empowering to think, you know, when you buy something, anything, to really just take a step back and ask yourself, is this priced properly?

Paula DiPerna (44m 27s):
Am I getting the value for myself from what I’m paying for this? Why do I willingly pay close to $5 for a kind bar when I’m on the highway compared to $1 in the supermarket? Just that like $4 I’m paying for the convenience of being able to eat this thing now. And is that a good use of $4? You know? And so just start training your mind to ask yourself what is, what is your money really worth? And then what is it doing? You know? And it’s not guilt money, it’s like is what I’m spending this on or what I’m my bank is lending to, I give my bank whatever, a thousand dollars for my checking account, what do they do with that thousand?

Paula DiPerna (45m 14s):
It’s sort of empowering to kind of think about it in terms of money cuz it’s something you understand. And that helps dilute for me a little bit the fear because I feel there’s some tool in my hands that means something. And then the other thing is to believe in decision making. And also, I guess the other thing I try to do is think in terms of a couple of years, you know, Christo, when we went to the Rio Conference and sustainable development was the term of art at the time, sustainable. He would always say, and he said it right to the face of every president and right to the face of Butra Galley and everybody else. Sustainable. For how long do you mean forever? Nothing is forever. You know, nobody can give you a definition now of what sustainable meant even then and let alone now and what is sustainable.

Paula DiPerna (46m 1s):
And a sustainable thing is something that’s in your control for a few years. So five years, what’s that? The tenure of A C E O. The time it takes for somebody to move up in a decision making structure, a board seat tenure, roughly maybe 10 years. But to think we’re gonna solve this problem and I’m gonna be net zero by 2050, that’s, that makes me sad that our goals are so far out that goals have to be within your control and once things are in your control, then you feel better. At least that’s how I look at it.

Jeff Wood (46m 31s):
Yeah, I think people like having control over things. They understand it. It’s why I think a lot of people don’t like flying. Right? They’re not actually flying themselves. They have to Right. Depend on somebody else, right?

Paula DiPerna (46m 42s):
You have to choose who you’re dependent on. I like to depend on pilots, but you know, that’s why I go back to cities. Cities are a really fascinating organism because you know, they have to function. That’s the truth. Test. You know, the mayor or the head of the city or the city council has to function and people can see if it’s functioning or not. It’s a really very interesting cause and effect kind of set up I think.

Jeff Wood (47m 7s):
Well the book is Pricing. the Priceless The Financial. Transformation to Value. the Planet Solve, the Climate Crisis and Protect. Our Most. Precious Assets. Where can folks find the book if they want a copy?

Paula DiPerna (47m 16s):
Well, I like to think it’s in every bookstore. If you want it, ask in your local bookstore. Certainly the big chains have it, but the independents probably have it. I hope to. And it’s available online through Amazon and all the book sellers online. And Wiley, you can also order it from them. It’s out there, so ask for it and I’d be happy to hear from people about it too.

Jeff Wood (47m 36s):
Awesome. I really enjoyed reading the book. I go through a number of books and I like them all obviously, but it’s something a little bit different than our usual because of the way that we focus on cities and transportation usually. But there were a number of moments when I was reading this and I was like, oh, I need to send this to this person, or I need to send this to this person. I need to share this with other people. So I hope folks read it and I hope they share it with their networks so that we can kind of cross pollinate to a certain extent on some of these issues. Paula, thanks so much for joining us. We really appreciate your time.

Paula DiPerna (48m 5s):
Thank you so much and thanks for what you said. I appreciate it.