1
00:00:00,008 --> 00:00:03,738
All right, well, welcome,

2
00:00:03,738 --> 00:00:10,190
everybody to the training seminar series.

3
00:00:10,190 --> 00:00:14,887
And we're gonna talk about how finance and
metrics and

4
00:00:14,887 --> 00:00:18,910
sustainability all fit together.

5
00:00:18,910 --> 00:00:21,290
So I'd like you to introduce yourself.

6
00:00:21,290 --> 00:00:22,332
You have done a very good job of it.

7
00:00:22,332 --> 00:00:23,293
>> Take it away.

8
00:00:23,293 --> 00:00:25,820
>> Hi, I'm Hank Patton.

9
00:00:25,820 --> 00:00:29,730
Yeah, some of you troublemakers
already know who I am.

10
00:00:29,730 --> 00:00:32,900
I've had the privilege of working with
Michael incessantly in different settings

11
00:00:32,900 --> 00:00:34,770
over long periods of time.

12
00:00:34,770 --> 00:00:37,529
And David has graciously come out and

13
00:00:37,529 --> 00:00:42,341
spoken to us at our wildlife refuge
in the Columbia River Gorge.

14
00:00:42,341 --> 00:00:46,615
And work with a group of teaching colleges
that are attempting to create a landscape

15
00:00:46,615 --> 00:00:51,010
for literally a living classroom for
what we call stewardship learning.

16
00:00:51,010 --> 00:00:56,570
The land is in the drain into
the little wild salmon river and

17
00:00:56,570 --> 00:01:00,320
magic, powerful,
beautiful place permanently protected.

18
00:01:00,320 --> 00:01:05,730
And the first 20 minutes is free, so
you're all welcome to come out and

19
00:01:05,730 --> 00:01:09,810
hang for 20 and
then you've got a shovel governor and

20
00:01:09,810 --> 00:01:14,443
do the other useful things that
farmers and land stewards do.

21
00:01:14,443 --> 00:01:20,053
[LAUGH] So
I'm about to throw one of the most complex

22
00:01:20,053 --> 00:01:25,140
problems that this planet
has ever run into.

23
00:01:25,140 --> 00:01:31,476
Onto a cutting board in a way that allows
you to see a transactional framework

24
00:01:31,476 --> 00:01:38,590
that could turn extremely valuable
actions which are presently unsellable.

25
00:01:38,590 --> 00:01:42,780
Like dealing with climate change,
obviously, an extremely valuable thing to

26
00:01:42,780 --> 00:01:48,170
do, but for which there is presently
no transactional framework.

27
00:01:48,170 --> 00:01:52,977
And I'm gonna do it more with
questions and with the answers.

28
00:01:52,977 --> 00:01:58,087
But what you're going to see
are some very out of the box ways of

29
00:01:58,087 --> 00:02:04,982
using traditional tools in finance and
science, to make markets at system scale.

30
00:02:04,982 --> 00:02:11,519
There's never been a market for, I mean,
how big is the cost of climate change.

31
00:02:11,519 --> 00:02:15,263
I mean, you're talking numbers that
are literally the cost on the margin is

32
00:02:15,263 --> 00:02:16,680
the only known living plan.

33
00:02:17,790 --> 00:02:23,880
That's a big price to pay for making
the kinds of mistakes that are tied up

34
00:02:23,880 --> 00:02:31,460
in short term revenue-oriented investments
to hide the true costs of the book.

35
00:02:31,460 --> 00:02:36,290
So what I'm going to do first
is introduce you to a couple of

36
00:02:36,290 --> 00:02:41,031
maybe turn some of the slide off so
you get a better image.

37
00:02:45,687 --> 00:02:48,654
And my clicker is gonna click, one,

38
00:02:48,654 --> 00:02:53,270
close the closest one right
next to them right at the top.

39
00:02:53,270 --> 00:02:54,005
>> It's got right there.

40
00:02:54,005 --> 00:02:58,657
>> Although [CROSSTALK]
>> God [LAUGH].

41
00:02:58,657 --> 00:03:01,576
>> So here's the place and I have to say

42
00:03:05,470 --> 00:03:08,624
having worked on the protection's
place for 40 years and

43
00:03:08,624 --> 00:03:12,040
hearing people say, well,
that was a really good investment.

44
00:03:13,040 --> 00:03:19,548
We got started on a square
mile with a $500 down payment.

45
00:03:21,581 --> 00:03:26,601
To be really valuable now but
it really hasn't changed the holder.

46
00:03:26,601 --> 00:03:29,800
What's happened is the value of the money
that we used to buy land has gone down.

47
00:03:29,800 --> 00:03:34,400
The land hasn't change at all, so don't
cheat yourself when you think that you

48
00:03:34,400 --> 00:03:38,680
kept your house is more valuable because
suddenly you have more purchasing power.

49
00:03:38,680 --> 00:03:45,206
So let's just say a fun place to begin.

50
00:03:47,787 --> 00:03:51,130
And before I, this is gonna be
a multiple choice question that comes

51
00:03:51,130 --> 00:03:54,665
up during this and what do you get and
I'll give you the trestle second.

52
00:03:54,665 --> 00:03:59,510
But first, I'd like somebody in this room
to give me their favorite definition of

53
00:03:59,510 --> 00:04:02,410
what a system is, action by beckon.

54
00:04:02,410 --> 00:04:06,000
This goes around with
the shock barely commonly but

55
00:04:06,000 --> 00:04:08,100
what is a system, short and clean?

56
00:04:08,100 --> 00:04:11,526
So the question is who is
the bravest in the relationship.

57
00:04:11,526 --> 00:04:15,956
>> [LAUGH]
>> [LAUGH] I can see the ears rolling

58
00:04:15,956 --> 00:04:19,839
back, it's-
>> [LAUGH] Elements with attributes and

59
00:04:19,839 --> 00:04:23,825
relation among elements that
generate some kind of hold

60
00:04:23,825 --> 00:04:28,332
[INAUDIBLE] environment that
interacts with its environment.

61
00:04:28,332 --> 00:04:33,620
>> Okay, there you go, I buy that.

62
00:04:33,620 --> 00:04:35,332
Can somebody do it a little shorter?

63
00:04:35,332 --> 00:04:39,724
>> [LAUGH]
>> You really have naughty words.

64
00:04:42,643 --> 00:04:44,355
>> Elements, relation, and purpose.

65
00:04:44,355 --> 00:04:48,200
Not everything has purpose.

66
00:04:48,200 --> 00:04:52,630
It's something that has orders and
distinct from its environment, and

67
00:04:52,630 --> 00:04:54,619
interact and relates to its environment.

68
00:04:56,400 --> 00:05:02,050
>> Yeah, I like that, and I like
the angst that the question generates.

69
00:05:02,050 --> 00:05:08,031
>> [LAUGH]
>> If you have trouble with that question,

70
00:05:08,031 --> 00:05:10,945
just wait a little ones
that are coming up here.

71
00:05:10,945 --> 00:05:15,347
[LAUGH] Here's the way we think of it is

72
00:05:15,347 --> 00:05:20,181
it's a purpose with a source and a sink.

73
00:05:25,912 --> 00:05:28,849
The purpose of the magnet that
pulls stuff out of the source and

74
00:05:28,849 --> 00:05:32,050
the sink is what happens after
potato chips and throw the bag away.

75
00:05:32,050 --> 00:05:36,898
[LAUGH] The purpose was I
want a potato chip the source

76
00:05:36,898 --> 00:05:39,617
was leaving all that stuff.

77
00:05:39,617 --> 00:05:41,528
The sink is where did the bag go?

78
00:05:41,528 --> 00:05:42,823
Where did the salt go?

79
00:05:42,823 --> 00:05:44,151
Where did the minora go?

80
00:05:44,151 --> 00:05:46,890
The system is all tied
together by the purpose.

81
00:05:46,890 --> 00:05:49,640
But why does our economy not do this?

82
00:05:49,640 --> 00:05:53,230
Okay, so here's a system question,
burn this stuff and what do you get?

83
00:05:55,170 --> 00:05:57,030
I have to give you a choice, don't I?

84
00:05:57,030 --> 00:05:59,785
There you go, one or
the other, what is it?

85
00:05:59,785 --> 00:06:01,950
>> [INAUDIBLE] nox and sox.

86
00:06:03,340 --> 00:06:07,154
>> Nitrogen dioxide or
scoring silver nitrate, NOx and Sox.

87
00:06:07,154 --> 00:06:12,551
You can guess [LAUGH] I've seen this one,

88
00:06:12,551 --> 00:06:17,790
otherwise, why can't make the both,

89
00:06:17,790 --> 00:06:21,810
because of what this is?

90
00:06:21,810 --> 00:06:23,100
>> Well, that's oil right?

91
00:06:24,400 --> 00:06:25,850
>> Somebody's making assumption.

92
00:06:25,850 --> 00:06:27,310
>> What else might it be?

93
00:06:27,310 --> 00:06:31,627
Looks a piece of bamboo.

94
00:06:31,627 --> 00:06:36,350
>> [LAUGH]
>> God, you're so timid.

95
00:06:36,350 --> 00:06:39,970
All you have to do,
it's a 50% chance, I mean what is it?

96
00:06:39,970 --> 00:06:41,270
>> Raspberries.

97
00:06:41,270 --> 00:06:45,505
>> You're right, why, why?

98
00:06:45,505 --> 00:06:48,702
>> Because there's raspberries [INAUDIBLE]
>> Michael why?

99
00:06:48,702 --> 00:06:53,060
>> Because that is honey.

100
00:06:58,424 --> 00:06:59,792
>> Raspberries.

101
00:06:59,792 --> 00:07:03,752
So, if we assume that
the energy source is oil,

102
00:07:03,752 --> 00:07:07,770
we're obviously gonna get Nox and Sox.

103
00:07:07,770 --> 00:07:12,570
If we assume that the solution
to financial problems is money,

104
00:07:12,570 --> 00:07:15,070
we probably made a mistake on day one.

105
00:07:15,070 --> 00:07:20,400
Some of the biggest engineering mistakes
are always made when you make certain

106
00:07:20,400 --> 00:07:26,600
assumptions and then never consider those
assumptions you bring to your discussions.

107
00:07:26,600 --> 00:07:31,030
That we assume that that obviously
looked like these a lot but it wasn't.

108
00:07:32,090 --> 00:07:34,629
So here's where we are.

109
00:07:42,744 --> 00:07:43,979
Here's the problem.

110
00:07:48,512 --> 00:07:53,970
Here's the pattern We call
this the exhaustive model.

111
00:07:55,220 --> 00:07:57,260
You got a business, you build something.

112
00:07:57,260 --> 00:07:57,933
You sell it to somebody.

113
00:07:57,933 --> 00:08:01,598
The regulator just says, I don't,
so you put a filter on it.

114
00:08:01,598 --> 00:08:06,428
>> [LAUGH]
>> You make a lot of externalized costs,

115
00:08:06,428 --> 00:08:10,485
social and environmental,
but you get money.

116
00:08:10,485 --> 00:08:15,473
But essentially, you have accelerating
decline in the resource base in

117
00:08:15,473 --> 00:08:21,080
the ecosystem services, and
in security and health, obviously.

118
00:08:21,080 --> 00:08:21,941
But that's what we do for a living.

119
00:08:21,941 --> 00:08:27,077
Hal Mooney, I'm sure some of
you know of his amazing work,

120
00:08:27,077 --> 00:08:32,115
but he helped create DIVERSITAS and
you'd appreciate his

121
00:08:32,115 --> 00:08:36,977
kind of homely but
incredibly important insight here.

122
00:08:36,977 --> 00:08:44,738
If you can't compare systems, It's
gonna be hard to make a good decision.

123
00:08:44,738 --> 00:08:50,166
And giving us permission to compare
systems is a big psychological problem,

124
00:08:50,166 --> 00:08:55,093
because there's this implicit
conviction that we can't afford to do

125
00:08:55,093 --> 00:08:56,356
the right thing.

126
00:09:00,765 --> 00:09:02,847
Which is a joke because what's
the cost on the margin?

127
00:09:02,847 --> 00:09:05,200
The whole bloody planet?

128
00:09:06,540 --> 00:09:07,180
That's our budget.

129
00:09:08,850 --> 00:09:09,657
That's the cost on the margin.

130
00:09:09,657 --> 00:09:15,389
So let's give ourselves permission to
think of the scale of the problem,

131
00:09:15,389 --> 00:09:18,172
which is of course what the NES did.

132
00:09:18,172 --> 00:09:23,013
These incredibly critical functions,
provisioning, supporting, regulating,

133
00:09:23,013 --> 00:09:27,775
cultural, creating all sorts of
beautiful and healthy, wonderful things.

134
00:09:27,775 --> 00:09:30,661
Was your tap absolutely essential,
and what you can't buy for money.

135
00:09:30,661 --> 00:09:36,153
You know what happens to the cost of
a bottle of water on September 11th,

136
00:09:36,153 --> 00:09:39,265
crossing the bridge into Washington DC?

137
00:09:39,265 --> 00:09:44,721
If you bought a bottle of water going
into DC, you would have paid $1 and

138
00:09:44,721 --> 00:09:50,265
if you bought a bottle of water about
three hours later if you could get it,

139
00:09:50,265 --> 00:09:51,977
it cost you 7 to 10.

140
00:09:51,977 --> 00:09:57,400
It's not about money,
it's about something else altogether.

141
00:09:57,400 --> 00:09:59,840
And here's the key idea.

142
00:10:01,070 --> 00:10:07,360
Pardon the semiology here, but the intent
is to make it [LAUGH] very simple.

143
00:10:09,370 --> 00:10:10,702
And this is absolutely fundamental.

144
00:10:10,702 --> 00:10:14,780
You won't understand what I'm describing
to you if you don't hold this firmly in

145
00:10:14,780 --> 00:10:15,382
your head.

146
00:10:15,382 --> 00:10:21,423
The internalized cost life cycle net value
of a system, which is sustaining and

147
00:10:21,423 --> 00:10:27,840
circular, is vastly bigger than what
we're doing, which is exhaustion.

148
00:10:27,840 --> 00:10:32,720
This is bigger than this, which means
we can't afford to get it right,

149
00:10:34,060 --> 00:10:35,870
because the model we're
using doesn't get it right.

150
00:10:35,870 --> 00:10:39,030
And it wastes stuff hand over fist.

151
00:10:39,030 --> 00:10:41,480
And it creates risk hand over fist.

152
00:10:41,480 --> 00:10:43,850
So this is what we call
the foundational idea.

153
00:10:43,850 --> 00:10:49,550
The net whole system value delivered by
a stewardship economy is a vastly richer,

154
00:10:49,550 --> 00:10:51,590
more secure, exciting, beautiful, fun and

155
00:10:51,590 --> 00:10:56,350
profitable enterprise if you can
internalize the system costs.

156
00:10:56,350 --> 00:10:57,440
So that's the question,
how do you do that?

157
00:11:00,478 --> 00:11:01,751
Familiar with mountaintop removal?

158
00:11:01,751 --> 00:11:05,126
You know why they didn't
remove the top of that one?

159
00:11:05,126 --> 00:11:09,374
>> [INAUDIBLE]
>> [LAUGH]

160
00:11:09,374 --> 00:11:10,477
>> Cuz they needed the cell tower there?

161
00:11:10,477 --> 00:11:14,044
>> This is the famous-
>> [LAUGH]

162
00:11:14,044 --> 00:11:15,215
>> There's a system finger there.

163
00:11:15,215 --> 00:11:21,470
[LAUGH] Actually that's
called the general plot.

164
00:11:21,470 --> 00:11:27,206
That was a four generation of mountain
family that had its ancestry buried there.

165
00:11:27,206 --> 00:11:29,308
And they had a clever lawyer.

166
00:11:31,731 --> 00:11:36,291
And they still haven't blown
the top of that mountain because

167
00:11:36,291 --> 00:11:38,049
of the cultural value.

168
00:11:38,049 --> 00:11:41,414
In 11 years, if they went on doing this,

169
00:11:41,414 --> 00:11:47,220
West Virginia which is a huge carbon
sink will become a net carbon export.

170
00:11:49,251 --> 00:11:51,420
That's just the price.

171
00:11:51,420 --> 00:11:53,560
This is of course is what
it looks like in Montana.

172
00:11:54,870 --> 00:11:59,395
This is of course what it looks like when
they finished with the now Living Planet,

173
00:11:59,395 --> 00:12:00,784
picture's worth a lot.

174
00:12:00,784 --> 00:12:05,988
This is one of the externalities
of systems of that kind.

175
00:12:05,988 --> 00:12:08,792
These are classes of cancer, locations for

176
00:12:08,792 --> 00:12:13,660
classes, cancer disability,
life years adjusted for hundred thousand.

177
00:12:14,860 --> 00:12:19,481
Lance it that that is an externalized
cost of inappropriate energy, and

178
00:12:19,481 --> 00:12:22,430
resource management policy.

179
00:12:22,430 --> 00:12:28,197
These are a few of the system boundaries
of famous Johan Rockstrom histogram.

180
00:12:28,197 --> 00:12:32,729
Essentially showing us flashing
lights on the dashboard but,

181
00:12:35,517 --> 00:12:39,830
It's an alarm but
it's not a tool for problem solving.

182
00:12:41,200 --> 00:12:43,430
This is the front end of the tool for

183
00:12:43,430 --> 00:12:46,120
problem solving from our
software called out composer.

184
00:12:46,120 --> 00:12:48,500
It's a suite out composer in any composer.

185
00:12:48,500 --> 00:12:49,245
This is a dummy slide.

186
00:12:49,245 --> 00:12:54,157
The histogram allows you to
look at classes of an outcome,

187
00:12:54,157 --> 00:12:58,367
security water,
if it's inside the threshold,

188
00:12:58,367 --> 00:13:02,592
it turns red meaning it's
a net loss cost or risk.

189
00:13:02,592 --> 00:13:07,213
So it allows you to look at
the Black Mesa Mojave Generating Station

190
00:13:07,213 --> 00:13:11,506
1,500 megawatts and
there's some good stuff going on,

191
00:13:11,506 --> 00:13:15,221
that they have almost
1,600 California homes,

192
00:13:15,221 --> 00:13:19,283
have electricity and
there's a reliable baseline grid.

193
00:13:19,283 --> 00:13:22,783
305 people employed until
I got laid off because,

194
00:13:24,643 --> 00:13:28,736
16,000 acre feet of Colorado River and

195
00:13:28,736 --> 00:13:36,290
40,000 air opacity violations [LAUGH],
I mean, 40,000 violations.

196
00:13:36,290 --> 00:13:40,770
But finally the lawyers stopped them
because they were breaking the law.

197
00:13:40,770 --> 00:13:43,250
>> So I mean, the red is all internal?

198
00:13:43,250 --> 00:13:47,864
>> Everything red is a externalized cost.

199
00:13:47,864 --> 00:13:48,809
>> Externalized cost.

200
00:13:48,809 --> 00:13:51,110
>> And everything green is the good stuff.

201
00:13:51,110 --> 00:13:52,298
So if you just look at the green,

202
00:13:52,298 --> 00:13:54,810
you're looking at the public
relations version of Mojave dinner.

203
00:13:54,810 --> 00:13:57,331
And these are just first order effects.

204
00:13:57,331 --> 00:13:59,064
This is crude.

205
00:13:59,064 --> 00:14:00,628
We did that almost ten years ago.

206
00:14:00,628 --> 00:14:08,850
But what I want you to remember is
that nonlinear change is a real thing.

207
00:14:09,952 --> 00:14:18,310
It's easy not to get pregnant, [LAUGH] up
to a point, and then it's not so easy.

208
00:14:18,310 --> 00:14:21,560
And once you get into a risk point,
there is a moment of escape.

209
00:14:21,560 --> 00:14:23,850
It's easy not to get obese.

210
00:14:23,850 --> 00:14:28,240
It's easy not to pick one, but
as you move along the curve,

211
00:14:28,240 --> 00:14:29,910
the cost and the risk goes up.

212
00:14:29,910 --> 00:14:33,420
If you take that same curve and
address it to obesity,

213
00:14:33,420 --> 00:14:36,462
you've got big prices,
you can't get a job,

214
00:14:36,462 --> 00:14:41,845
quality of life goes way down to the point
where intervention doesn't even work.

215
00:14:41,845 --> 00:14:45,745
But if you catch the child when he's four,
and

216
00:14:45,745 --> 00:14:51,375
the mayor of New York tried to do
when he outlawed Big Gulp, right?

217
00:14:51,375 --> 00:14:56,280
Regulation's a challenging point
to intervene in a system, but

218
00:14:57,540 --> 00:15:01,740
in the absence of other ways, it's
important, but let's look at a new model.

219
00:15:03,600 --> 00:15:06,660
Let's think about the possibility,

220
00:15:06,660 --> 00:15:11,820
that instead of being our victim,
the future might be our client.

221
00:15:13,300 --> 00:15:19,020
What if there was a very
large new class of green bond

222
00:15:19,020 --> 00:15:24,160
that basically was interested in
anything beyond 10 or 15 years.

223
00:15:24,160 --> 00:15:27,270
The government don't worry
about business today, but

224
00:15:27,270 --> 00:15:31,983
they do worry about how business managers
it's gonna affect in the future.

225
00:15:31,983 --> 00:15:37,286
Obviously, you need science
because if you don't have science,

226
00:15:37,286 --> 00:15:41,746
you don't know what these
guys are doing to these guys.

227
00:15:41,746 --> 00:15:46,380
So, that's what the millennium
development goals were all about.

228
00:15:46,380 --> 00:15:50,710
So we can understand the erosion
of ecosystem services.

229
00:15:51,880 --> 00:15:56,880
And metrics you will find is Essentially,
the message that I'm gonna leave you

230
00:15:56,880 --> 00:16:01,840
with the end of the day today, is without
good metrics you cannot make markets.

231
00:16:01,840 --> 00:16:06,362
So this is data today using good metrics,

232
00:16:06,362 --> 00:16:09,728
now suddenly has two clients.

233
00:16:09,728 --> 00:16:13,492
The contemporary client which is us,
potato chip, but

234
00:16:13,492 --> 00:16:18,777
also future generations, to whom we
sell soil conservation having that car,

235
00:16:18,777 --> 00:16:24,062
non genetically, non-DNA pollution
quality of life in rural communities,

236
00:16:24,062 --> 00:16:29,613
that means the schools function the kids
understand what the Constitution says.

237
00:16:29,613 --> 00:16:33,540
So they don't elect people who want to
break the law and other useful functions.

238
00:16:35,230 --> 00:16:37,272
This is what a clean system looks like.

239
00:16:42,550 --> 00:16:44,070
This is Mojave generating station.

240
00:16:45,170 --> 00:16:51,300
At every point with
practically no exceptions,

241
00:16:51,300 --> 00:16:55,970
you have the opportunity
of capturing back.

242
00:16:55,970 --> 00:17:00,210
If we go back, which I should do, because
I want you to see the actual thing again,

243
00:17:00,210 --> 00:17:00,850
it costs.

244
00:17:01,960 --> 00:17:06,604
This is data from the Secretary
of Health in Indiana.

245
00:17:06,604 --> 00:17:13,056
Mental retardation mercury,
over 3,000 bucks a pound per annum,

246
00:17:13,056 --> 00:17:18,554
total of almost a third of
a billion annual, mercury IQ loss,

247
00:17:18,554 --> 00:17:25,940
mercury early male cardiac arrest,
your annual costs almost $4 billion.

248
00:17:25,940 --> 00:17:31,721
These are hidden costs of so
called clean energy, system cost.

249
00:17:31,721 --> 00:17:37,576
So, what happens when you get to the point
where you have a clean alternative,

250
00:17:37,576 --> 00:17:39,360
you can suddenly sell.

251
00:17:41,370 --> 00:17:43,336
Let's see if I can do this correctly.

252
00:17:46,073 --> 00:17:50,554
Excellent, that was the slide I was
gonna move that will look at them.

253
00:17:50,554 --> 00:17:55,172
You can actually sell the delta.

254
00:17:55,172 --> 00:17:59,066
In other words,
it's cheaper for Obamacare or

255
00:17:59,066 --> 00:18:04,129
a health insurance company to
buy the avoided mercury piece of

256
00:18:04,129 --> 00:18:09,109
a clean energy plant than it is
to fix the people who get sick.

257
00:18:09,109 --> 00:18:14,719
In other words, if you can parse or
partition out using science,

258
00:18:14,719 --> 00:18:20,641
the good stuff you deliver to
the future by getting the system right.

259
00:18:20,641 --> 00:18:25,810
You're gonna market and the global
finance community understands that.

260
00:18:25,810 --> 00:18:31,760
Their problem is due to costs at less
than 300 million bucks are too high.

261
00:18:31,760 --> 00:18:34,640
So you've got to be able to
aggregate 300 million bucks

262
00:18:34,640 --> 00:18:39,270
worth of avoided heart attacks
using rigor so that it's not

263
00:18:39,270 --> 00:18:42,890
doesn't become a securitized nightmare
like the subprime housing crisis.

264
00:18:42,890 --> 00:18:47,070
Just to clarify yourself-
>> The transaction costs are high.

265
00:18:47,070 --> 00:18:50,805
>> Yeah, well then what happens
is they call it story box and

266
00:18:50,805 --> 00:18:54,490
I'm probably not the expertise
in this community but

267
00:18:54,490 --> 00:18:58,275
in global finance,
they really like sure things.

268
00:18:58,275 --> 00:18:59,383
>> [LAUGH]
>> And

269
00:18:59,383 --> 00:19:05,330
a sure thing is in certain
classes is quite easy to prove.

270
00:19:05,330 --> 00:19:11,484
In other classes, it's very difficult but
a sovereign contract.

271
00:19:11,484 --> 00:19:15,235
For others if Obamacare said we will buy
50 years worth of avoided heart attacks,

272
00:19:15,235 --> 00:19:18,235
because we know that when you take
mercury out of energy plants, so

273
00:19:18,235 --> 00:19:20,020
it's hard to actually kind of go away.

274
00:19:21,160 --> 00:19:24,890
Nashville finances crushing it goes into
that spreadsheet and they said that's

275
00:19:24,890 --> 00:19:32,580
a contract for 50 years from a triple
A rating agency and there are others.

276
00:19:32,580 --> 00:19:38,090
And what that does is it begins
to push up the yield on large

277
00:19:38,090 --> 00:19:41,550
scale financial instruments, I'll show you
the transactional framework in a moment.

278
00:19:41,550 --> 00:19:43,741
So you can see the implications of that.

279
00:19:43,741 --> 00:19:48,614
But what I don't know how many
of you have read through the 17

280
00:19:48,614 --> 00:19:52,644
SDGs that were approved
in September of 2015,

281
00:19:52,644 --> 00:19:56,410
just before the climate
conference last year.

282
00:19:57,900 --> 00:19:59,327
But that's a lot.

283
00:19:59,327 --> 00:20:05,800
That's 17 goals and
they're very political and complicated.

284
00:20:07,200 --> 00:20:11,450
Goal 10, reducing inequality
is the goal within and among.

285
00:20:11,450 --> 00:20:14,305
I mean, that is an incredibly
complicated thing to do.

286
00:20:14,305 --> 00:20:19,790
What we need to remember
when we look at large social

287
00:20:19,790 --> 00:20:25,030
policy commitments at
global scale is that,

288
00:20:25,030 --> 00:20:29,520
it's in the individual elements.

289
00:20:31,200 --> 00:20:35,360
We just take one of these, health.

290
00:20:35,360 --> 00:20:37,010
Another classic in here.

291
00:20:38,470 --> 00:20:42,150
Gender equity is a classic resilience.

292
00:20:42,150 --> 00:20:48,363
These are lovely words with huge,
complex system implications and

293
00:20:48,363 --> 00:20:53,595
to expect sovereign states on
narrow budgets to go out and

294
00:20:53,595 --> 00:20:59,591
get this stuff in any meaningful
way is a pretty bold assumption.

295
00:20:59,591 --> 00:21:02,665
Particularly when they don't have
budgets to do what they're doing now,

296
00:21:02,665 --> 00:21:04,244
let alone doing something like this.

297
00:21:04,244 --> 00:21:10,403
But the value of getting healthy lives
right is huge from an intergenerational

298
00:21:10,403 --> 00:21:15,162
perspective, the value of sending
women to school girls and

299
00:21:15,162 --> 00:21:18,880
giving them a safe way to walk to school.

300
00:21:18,880 --> 00:21:23,090
It's an unbelievable
household asset to the plan.

301
00:21:25,100 --> 00:21:28,040
Suddenly, they get elected President, so

302
00:21:28,040 --> 00:21:33,760
what we can anticipate in this is,
as we see in habitat tree and

303
00:21:33,760 --> 00:21:38,745
as we see obviously in count 21,
is some kind of a science based.

304
00:21:39,940 --> 00:21:45,070
That allows the $100 trillion
of available capital that is

305
00:21:46,260 --> 00:21:51,280
being used right now for some fairly
silly things, overnight currency

306
00:21:51,280 --> 00:21:56,980
speculation, and huge amounts of capital
sloshing around the planet because.

307
00:21:56,980 --> 00:22:02,870
If you can capture 0.001 and
you put $5 billion into that overnight,

308
00:22:02,870 --> 00:22:06,010
you can make some money,
but that's not real.

309
00:22:06,010 --> 00:22:07,260
That's not real.

310
00:22:07,260 --> 00:22:12,370
What is real is that we have a new
paradigm emerging right now.

311
00:22:13,650 --> 00:22:15,580
And it's characterized by it.

312
00:22:15,580 --> 00:22:19,580
I think what all of us in the room
would recognize that stewardship is

313
00:22:19,580 --> 00:22:22,060
an attractive word trusteeship,

314
00:22:22,060 --> 00:22:25,180
the sense of we need to act
as though the future matter.

315
00:22:25,180 --> 00:22:26,330
We know that's happening.

316
00:22:27,530 --> 00:22:31,000
Thanks to people like Amory Lovins and
Hazel Henderson.

317
00:22:31,000 --> 00:22:35,100
The idea of the demand side,
not using something.

318
00:22:35,100 --> 00:22:42,070
Maybe it's valuable and it required Dr.
Boyd in the conservation law foundation

319
00:22:42,070 --> 00:22:47,630
years to sue the state of Massachusetts
before you could build a conservation

320
00:22:47,630 --> 00:22:52,620
power plant that could compete with
a bricks and mortar power plant.

321
00:22:52,620 --> 00:22:56,770
Even though the kilowatt hour coming out
of the plug, the exact same kilowatt hour.

322
00:22:58,080 --> 00:23:01,305
This battle was talking to electric
utility here in Oregon and I have-

323
00:23:01,305 --> 00:23:01,818
>> All the time.

324
00:23:01,818 --> 00:23:02,370
>> Yeah.

325
00:23:02,370 --> 00:23:06,881
[INAUDIBLE] actually, and
you have to be a system thinker.

326
00:23:06,881 --> 00:23:12,180
Yeah, you have to be a system thinker
to understand what a nega gallon is.

327
00:23:13,550 --> 00:23:17,430
A nega gallon is,
that's a complicated thought.

328
00:23:17,430 --> 00:23:18,040
Can you drink it?

329
00:23:18,040 --> 00:23:19,540
Of course you can.

330
00:23:19,540 --> 00:23:24,290
In California, when they started to

331
00:23:24,290 --> 00:23:30,850
require developers to go get water
by conserving it in the community

332
00:23:30,850 --> 00:23:35,415
before this assistance problem here.

333
00:23:35,415 --> 00:23:38,245
So here comes the Bilberry
knocks on the door and

334
00:23:38,245 --> 00:23:41,225
says, ma'am, you have a low flow toilet?

335
00:23:41,225 --> 00:23:44,145
And she says, no I don't, he says,
well look at under your fridge,

336
00:23:44,145 --> 00:23:48,775
she says, I hear you guys need water,
what's it worth to you?

337
00:23:48,775 --> 00:23:51,775
>> [LAUGH]
>> You could wind up writing a check for

338
00:23:51,775 --> 00:23:58,030
$100 to give the lady because in the
system of consequences Your money ahead.

339
00:23:58,030 --> 00:23:58,880
I mean,

340
00:23:58,880 --> 00:24:03,100
you can't build the place without giving
away the $100 because you need that water.

341
00:24:03,100 --> 00:24:05,620
These markets that avoid the outcomes,
very interesting, and

342
00:24:05,620 --> 00:24:08,180
we call those intergenerational service.

343
00:24:09,330 --> 00:24:12,160
Obviously, we're seeing
international policy mandates, but

344
00:24:12,160 --> 00:24:13,140
we got a huge problem.

345
00:24:14,310 --> 00:24:18,350
And it's not just a problem,
it's a set, it's a fabric of problem.

346
00:24:18,350 --> 00:24:22,140
Most of the thinking that's being
done is subsystem in scale,

347
00:24:22,140 --> 00:24:24,900
meaning it's just not as
big as what's going on.

348
00:24:26,570 --> 00:24:28,750
Solutions tend to be end of pipe.

349
00:24:28,750 --> 00:24:34,120
Meaning, you, can we put a filter
on cold combustions or carbon cola,

350
00:24:34,120 --> 00:24:39,310
that CCS, Carbon capture and storage.

351
00:24:39,310 --> 00:24:39,810
My God.

352
00:24:41,050 --> 00:24:44,044
I mean, any system analyst just laughs.

353
00:24:44,044 --> 00:24:47,134
There's very little incentive for

354
00:24:47,134 --> 00:24:51,666
you to spend more money to
make your product better,

355
00:24:51,666 --> 00:24:55,892
unless you can get a real
public relations crew.

356
00:24:55,892 --> 00:25:00,457
But if the guy across the street is
selling potato chips with conflict,

357
00:25:00,457 --> 00:25:02,967
palm oil, and the people don't care,

358
00:25:02,967 --> 00:25:07,375
why would you pay twice as much for
your palm oil if you want to sell it,

359
00:25:07,375 --> 00:25:11,900
I mean the incentive to internalize
conflict in palm oil purchasing.

360
00:25:11,900 --> 00:25:15,110
We know that there's a community,
particularly in this town,

361
00:25:15,110 --> 00:25:19,230
which is a foodie town that might actually
buy the more expensive potato chip, but

362
00:25:19,230 --> 00:25:23,770
the point is in the largest
business world,

363
00:25:23,770 --> 00:25:28,610
internalizing cost, building a life
cycle clean product is expensive, and

364
00:25:28,610 --> 00:25:31,970
your competitor is probably
not gonna do it to you.

365
00:25:31,970 --> 00:25:35,150
It's if you could sell
the system consequences.

366
00:25:36,150 --> 00:25:37,200
This is the implication.

367
00:25:37,200 --> 00:25:40,310
So what I said to you earlier,
that's a different deal.

368
00:25:42,900 --> 00:25:44,860
There is, this is huge.

369
00:25:44,860 --> 00:25:47,790
If you own a petroleum refinery,
what are your choices?

370
00:25:48,790 --> 00:25:52,417
You're just, say, Dad,
you shouldn't do this.

371
00:25:52,417 --> 00:25:58,366
Dad'll reply, well, so on Thursday
afternoon are you gonna shut it down?

372
00:25:58,366 --> 00:26:02,851
Or you're gonna hire a political action
committee to prevent carbon taxes,

373
00:26:02,851 --> 00:26:04,770
is more likely.

374
00:26:04,770 --> 00:26:06,200
But what are your other choices?

375
00:26:06,200 --> 00:26:10,870
And so politics is locked up,
because there's no mechanism for this,

376
00:26:10,870 --> 00:26:17,270
these huge trillions of assets that
are stuck in old infrastructure.

377
00:26:17,270 --> 00:26:18,890
Just to give you one example,

378
00:26:18,890 --> 00:26:23,310
Prince Charles chairs the climate
wise reinsurance alliance,

379
00:26:23,310 --> 00:26:27,340
run by John Coomber who used to be
the head of Swiss Re insurance.

380
00:26:28,860 --> 00:26:32,970
They should call it Durban, which I
mentioned in the summary of the seminar,

381
00:26:32,970 --> 00:26:38,250
in which they pointed out
their actuaries could see that

382
00:26:38,250 --> 00:26:41,840
the fixed assets that they own,
over three and a half trillion, were

383
00:26:41,840 --> 00:26:46,090
causing the climate change and the super
storms that they're gonna have to fix.

384
00:26:46,090 --> 00:26:52,080
Other words, they have a actuaries
themselves saying we have a train wreck.

385
00:26:52,080 --> 00:26:54,700
We're causing the storms
that our assets are supposed

386
00:26:55,970 --> 00:26:59,280
to be owned to generate revenue to attack.

387
00:26:59,280 --> 00:27:02,370
So, that's called the trifectory problem.

388
00:27:02,370 --> 00:27:03,150
And yes sir?

389
00:27:03,150 --> 00:27:05,610
>> Does that touch on the,

390
00:27:05,610 --> 00:27:10,470
there's also been some speculative report
saying that some of those assets are so

391
00:27:10,470 --> 00:27:15,380
far out, and the uncertainty of
climate change that far out.

392
00:27:15,380 --> 00:27:19,010
Meaning that some of those assets
might actually be stranded and

393
00:27:19,010 --> 00:27:22,220
not accessible at all, or
vulnerable if they were accessible.

394
00:27:22,220 --> 00:27:25,679
>> Yeah, this is exactly
the problem that an idiot is-

395
00:27:25,679 --> 00:27:27,326
>> Treating value today and

396
00:27:27,326 --> 00:27:29,750
selling it on market.

397
00:27:29,750 --> 00:27:32,590
It's like-
>> That's a very insightful question and

398
00:27:32,590 --> 00:27:35,530
it's arguably why the Saudis
continue to move so

399
00:27:35,530 --> 00:27:39,220
much farther, because at any price
today is a lot better than never.

400
00:27:40,610 --> 00:27:47,580
And I think that that is an example of a
purging that will occur if an orderly and

401
00:27:47,580 --> 00:27:51,710
profitable relocation mechanism is
not brought into public policy and

402
00:27:51,710 --> 00:27:55,200
financial policy, which is what
I'm about to describe to you.

403
00:27:55,200 --> 00:27:59,370
And there is no biddable
set of metrics for

404
00:27:59,370 --> 00:28:04,765
that histogram of consequences that
we showed you in a draft form.

405
00:28:04,765 --> 00:28:11,202
Biddable names, if I want to avoid
health problems in the state of Indiana,

406
00:28:11,202 --> 00:28:18,145
and we invite proposals to redevelop
energy facilities ignore make people sick,

407
00:28:18,145 --> 00:28:23,074
asthma, PM 10 as the policy lead,
whatever, you bid to

408
00:28:23,074 --> 00:28:27,629
deliver as a part of your energy package-
>> Are they competitive or?

409
00:28:27,629 --> 00:28:33,494
Well, you will see how big, thank you for,
actually I appreciate the question,

410
00:28:33,494 --> 00:28:38,260
because as I present the mechanism to you,
biddable is a key word.

411
00:28:38,260 --> 00:28:42,080
So, because what we're going to
show is it the future comes.

412
00:28:42,080 --> 00:28:44,170
Remember that a three
part in a transaction?

413
00:28:44,170 --> 00:28:48,100
If future comes into the market,
with trillions of capital

414
00:28:48,100 --> 00:28:52,000
through a long bond structure,
they are gonna want those health outcomes.

415
00:28:53,070 --> 00:28:56,740
They've been up there and I want to
shut down coal power plants and oil,

416
00:28:56,740 --> 00:29:01,590
petroleum refineries, pipelines as quickly
as possible, the faster the better.

417
00:29:01,590 --> 00:29:03,425
Fast is a biddable outcome.

418
00:29:03,425 --> 00:29:05,562
No mercury is a biddable outcome.

419
00:29:05,562 --> 00:29:10,540
Redevelop council capacity in the Indian
Reservation where the power plant was,

420
00:29:10,540 --> 00:29:11,990
is a biddable outcome.

421
00:29:13,520 --> 00:29:17,710
So, that's why I said I'm gonna
land on metrics because how you,

422
00:29:17,710 --> 00:29:23,240
know developing those metrics is an
unbelievably sophisticated, a challenge,

423
00:29:23,240 --> 00:29:27,850
and it's a huge privilege that
future that understands to me

424
00:29:27,850 --> 00:29:32,170
that is contemplating a process for
doing precisely that.

425
00:29:32,170 --> 00:29:38,140
So, this is all by itself is a humongous
set but here, check this out.

426
00:29:38,140 --> 00:29:40,360
There's no compensation structure for

427
00:29:40,360 --> 00:29:43,570
the good stuff that we could do for
the future.

428
00:29:43,570 --> 00:29:45,600
You're a volunteer, pretty much,

429
00:29:45,600 --> 00:29:49,490
and you're competing against
people who are not volunteer, and

430
00:29:49,490 --> 00:29:53,670
selling products that have a lot of
salt and sugar are very attractive.

431
00:29:53,670 --> 00:29:58,330
So these kinds of outcomes,
avoided risk, system efficiency.

432
00:29:59,620 --> 00:30:03,780
The structural challenge
of resource circularity,

433
00:30:03,780 --> 00:30:07,550
whatever make up your mind now,
did not worry about taking back.

434
00:30:09,110 --> 00:30:10,840
That is a system problem.

435
00:30:10,840 --> 00:30:14,930
When you make a table, there's a lot
of stuff in there that sooner or

436
00:30:14,930 --> 00:30:18,950
later, I'll be back in the resource pool.

437
00:30:18,950 --> 00:30:20,690
You don't do that with
a filter at the back end.

438
00:30:23,230 --> 00:30:27,660
Forests, soils, water ecosystem services,
wellness, security, community resilience,

439
00:30:27,660 --> 00:30:31,570
employment, family wage earner.

440
00:30:31,570 --> 00:30:35,680
Who rewards you for doing that stuff,
even though it's incredibly valuable?

441
00:30:35,680 --> 00:30:40,380
So there's no compensation structure for
intergenerational services.

442
00:30:40,380 --> 00:30:41,930
But what was the foundation idea?

443
00:30:43,840 --> 00:30:44,670
Write the product.

444
00:30:45,860 --> 00:30:46,555
>> This is a pop quiz.

445
00:30:46,555 --> 00:30:47,338
>> Wrap it.

446
00:30:47,338 --> 00:30:54,820
>> [LAUGH]
>> Regarding the assumptions you make.

447
00:30:54,820 --> 00:30:55,610
>> Yeah, that's true.

448
00:30:55,610 --> 00:30:57,630
Well, what's the, remember that.

449
00:30:57,630 --> 00:31:01,520
Tight little formula is a big one and
a small one in the center.

450
00:31:01,520 --> 00:31:04,410
Managing resources as other future matter,

451
00:31:04,410 --> 00:31:07,330
creates more wealth than
the model we're using.

452
00:31:08,560 --> 00:31:10,650
So it's not that we can't afford it.

453
00:31:10,650 --> 00:31:13,218
It's that we haven't got
a transactional framework for awarding

454
00:31:13,218 --> 00:31:15,360
>> Yeah it makes you more wealth overall,

455
00:31:15,360 --> 00:31:18,700
but it doesn't make more well for
the already very well.

456
00:31:18,700 --> 00:31:23,490
>> Well they already that's,
well now, that's true.

457
00:31:23,490 --> 00:31:29,280
But, what if you could retire legal dirty
assets and get credit for the avoided bet?

458
00:31:30,950 --> 00:31:31,470
I'm not kidding.

459
00:31:31,470 --> 00:31:35,568
You know, not poisoning the water
is a very valuable thing not to do.

460
00:31:35,568 --> 00:31:39,280
And there are people who have illegal
permits that have poisoned the water.

461
00:31:42,488 --> 00:31:47,992
So, the bottom line, there is no market
for system outcomes, but there could be.

462
00:31:47,992 --> 00:31:53,460
So, here's a new slide that

463
00:31:53,460 --> 00:31:57,280
I want you to hold with that underlined-
>> We need a buyer.

464
00:31:58,450 --> 00:31:59,070
Well, that's it.

465
00:31:59,070 --> 00:32:03,910
And we're bringing the future in
the market as a buyer, with through the-

466
00:32:03,910 --> 00:32:05,650
>> Snoozing on your buyer.

467
00:32:05,650 --> 00:32:08,907
>> Thank you, there we go, and-
>> [LAUGH]

468
00:32:08,907 --> 00:32:10,661
>> Somebody help me with the three

469
00:32:10,661 --> 00:32:12,690
irresistible G's on the planet.

470
00:32:12,690 --> 00:32:13,190
What are they?

471
00:32:14,760 --> 00:32:15,465
There's one of them.

472
00:32:18,194 --> 00:32:18,840
There's another one.

473
00:32:19,950 --> 00:32:21,505
It's a living planet, what's the third?

474
00:32:23,667 --> 00:32:24,489
How about that one?

475
00:32:24,489 --> 00:32:27,372
>> [LAUGH]
>> We've got another word for it.

476
00:32:27,372 --> 00:32:34,570
>> [LAUGH]
>> So here's the status quo.

477
00:32:34,570 --> 00:32:38,120
And these are what we call the seven
domains of intergenerational service.

478
00:32:39,600 --> 00:32:44,945
As you use your buyer,
somebody proposes scenario,

479
00:32:44,945 --> 00:32:53,036
a, will take whatever my school garages
with hydrogen fuel cell battery packs.

480
00:32:53,036 --> 00:32:57,790
And somebody proposes this one,
which is via gas, whatever.

481
00:32:57,790 --> 00:33:01,670
And you need to compare the two of them,
some of the wellness outcomes and

482
00:33:01,670 --> 00:33:04,860
this one is fatter, so I mean,
better, well, less outcome.

483
00:33:04,860 --> 00:33:09,232
This one's skinnier, and you go
through and look at the seven domains.

484
00:33:09,232 --> 00:33:14,034
You have to compare these possibilities
from a market perspective that

485
00:33:14,034 --> 00:33:15,600
not doing that.

486
00:33:15,600 --> 00:33:21,300
Presently, is not illegal,
not a particularly good idea.

487
00:33:21,300 --> 00:33:25,230
Doing that is, looks clean, expensive.

488
00:33:26,430 --> 00:33:28,456
That's the one, that's the other.

489
00:33:28,456 --> 00:33:36,980
Here's the buyer, so, you take
the dirty system and the clean system.

490
00:33:36,980 --> 00:33:42,510
And at each Delta,
you have a contract metric,

491
00:33:42,510 --> 00:33:46,470
the cost on the margin for
cardiovascular disease in Indiana.

492
00:33:46,470 --> 00:33:47,608
This is real data.

493
00:33:47,608 --> 00:33:52,641
Annual US is $34,000 a pound.

494
00:33:52,641 --> 00:33:55,381
That's the cost we're paying.

495
00:33:55,381 --> 00:33:56,380
>> Annual costs.

496
00:33:56,380 --> 00:33:58,875
>> Annually, and that's just one.

497
00:33:58,875 --> 00:34:02,498
We've got other versions of mercury.

498
00:34:02,498 --> 00:34:09,370
I chew off, what's the value of a child
who doesn't mind talking about it?

499
00:34:09,370 --> 00:34:11,470
A disservice to the future.

500
00:34:11,470 --> 00:34:14,360
Of composer allows you to use
the history of histogram,

501
00:34:14,360 --> 00:34:19,090
to capture these specific classes of
outcome and developing those classes,

502
00:34:19,090 --> 00:34:21,680
is what we're discussing
the future advisedly.

503
00:34:21,680 --> 00:34:25,100
Revenuizing is to turn
the outcome into revenue.

504
00:34:25,100 --> 00:34:29,700
And this is the income poser sheet that
drops off with the outcome poser diagram.

505
00:34:29,700 --> 00:34:36,464
And these are specific outcomes,
minimal, that wind up being purchasable,

506
00:34:36,464 --> 00:34:40,573
because the deal size
is about 300 million.

507
00:34:40,573 --> 00:34:45,518
And the betting on the outcome has
sufficient rigor that you can capture

508
00:34:45,518 --> 00:34:50,540
the triple A, that a global
finance committee would require.

509
00:34:50,540 --> 00:34:54,400
And the because of the rigor
in the science, and

510
00:34:54,400 --> 00:34:58,289
the fact that many of the buyers will
be sovereigns national governments.

511
00:34:59,740 --> 00:35:01,210
This becomes what we call,

512
00:35:01,210 --> 00:35:06,440
adjunct revenue to the traditional
revenues of a bar, which is very small.

513
00:35:06,440 --> 00:35:10,790
If you can build a spray,
this is a really important idea.

514
00:35:10,790 --> 00:35:15,140
If you could fill the spread between
the present yield of a bond,

515
00:35:15,140 --> 00:35:19,400
which is low, typically a high rated bond.

516
00:35:19,400 --> 00:35:23,022
And what the Pension industry and

517
00:35:23,022 --> 00:35:28,850
the investor community wants very high,
5 to 7%.

518
00:35:28,850 --> 00:35:33,653
You can still add with these
kinds of agile revenues,

519
00:35:33,653 --> 00:35:37,290
including qualities like resilience.

520
00:35:39,000 --> 00:35:44,440
Which are purchasable avoided
unemployment purchasing or purchasing

521
00:35:45,600 --> 00:35:50,800
security issues lead in
the school system issues.

522
00:35:51,850 --> 00:35:55,910
Obviously, purchasable that you might also
put solar collectors on schools, right?

523
00:35:55,910 --> 00:35:59,016
Both food and have a biomass digester, and

524
00:35:59,016 --> 00:36:03,849
those purchasable outcomes allow
you to use Sovereign capacity,

525
00:36:03,849 --> 00:36:07,657
including what's called,
quantitative easing.

526
00:36:07,657 --> 00:36:10,850
Which has hundreds of first
of all qualitative easing.

527
00:36:10,850 --> 00:36:13,328
That means printing money [LAUGH] but

528
00:36:13,328 --> 00:36:16,467
instead of just throwing
out a helicopters,

529
00:36:16,467 --> 00:36:21,024
you would buy intergenerational
services based on the science.

530
00:36:21,024 --> 00:36:27,850
And once you push that from 1% to 5,
6, 7%, you don't have to worry.

531
00:36:27,850 --> 00:36:31,050
Because the global finance community
can't afford to do this stuff.

532
00:36:31,050 --> 00:36:32,715
They just can't afford
to lose their shirt.

533
00:36:32,715 --> 00:36:36,750
>> Not a lot of post
Keynesian monetary term.

534
00:36:36,750 --> 00:36:37,970
>> Sir?

535
00:36:37,970 --> 00:36:42,659
Post Keynesian monetary theory
says your sovereign buyers have

536
00:36:42,659 --> 00:36:44,842
an infinite capacity to buy.

537
00:36:44,842 --> 00:36:46,230
It's a testable hypothesis.

538
00:36:46,230 --> 00:36:51,340
[LAUGH] so if I understand that
maybe I should wait for the Q and A,

539
00:36:51,340 --> 00:36:56,720
but you're saying make the good stuff more
valuable, don't penalize the bad stuff.

540
00:36:56,720 --> 00:36:58,790
I'm saying, they're making a market for
the whole bloody system.

541
00:36:58,790 --> 00:37:02,920
So here, let's just walk through
the mechanics of it here.

542
00:37:02,920 --> 00:37:07,560
And I pushed your brains, are probably all
kinda flopping around in pain right now,

543
00:37:07,560 --> 00:37:10,150
but here's the basic status quo.

544
00:37:11,390 --> 00:37:13,690
We own this stuff already, it's built.

545
00:37:14,890 --> 00:37:17,050
Built around expensive,
you don't want to do that.

546
00:37:18,240 --> 00:37:25,000
If somebody comes to your restaurant, a
lot of people have had glass here in town.

547
00:37:25,000 --> 00:37:27,780
When the person showed up
at the air quality test,

548
00:37:27,780 --> 00:37:32,280
the owner of that business was probably
not thrilled, you can pretty much presume.

549
00:37:32,280 --> 00:37:36,360
So information is unwelcome.

550
00:37:36,360 --> 00:37:38,030
It's not valuable, it's expensive and

551
00:37:38,030 --> 00:37:41,660
could threaten Johnson drug,
that this is the status quo.

552
00:37:41,660 --> 00:37:43,980
There's a lot of uncertainty,
is it gonna be taxed?

553
00:37:43,980 --> 00:37:45,370
Is it gonna be regulated?

554
00:37:45,370 --> 00:37:49,820
So, get on with it, raise the price for
your cash, milk, and especially in Canada.

555
00:37:50,920 --> 00:37:54,112
All the monitorings right now,
present essentially indicators,

556
00:37:54,112 --> 00:37:56,040
which are retrospective.

557
00:37:56,040 --> 00:38:00,300
As opposed to biddable metrics prospector,
there's little capital or

558
00:38:00,300 --> 00:38:03,470
profit in long term stuff.

559
00:38:03,470 --> 00:38:05,870
It's the quarterly report,
this is the way it's run right now.

560
00:38:05,870 --> 00:38:09,970
So Jupiter has absolutely no agency,
they're not in the market as a buyer.

561
00:38:09,970 --> 00:38:14,990
Contrast the new option,
you get credit for voluntarily retiring,

562
00:38:14,990 --> 00:38:18,180
a dumb, toxic, but legal asset.

563
00:38:19,740 --> 00:38:23,961
So information, certainly not that
information something valuable.

564
00:38:23,961 --> 00:38:29,850
Hey boy, do I have a voice [INAUDIBLE]
>> [LAUGH]

565
00:38:29,850 --> 00:38:31,830
>> So, we call it prepared

566
00:38:31,830 --> 00:38:35,300
early retirement,
replacement of legal dirty assets.

567
00:38:35,300 --> 00:38:38,700
You're looking at net lease costs for
all of the integrated outcomes.

568
00:38:38,700 --> 00:38:40,780
It's radically efficient by design.

569
00:38:40,780 --> 00:38:44,030
Accurate information is valuable,
and therefore, encouraged.

570
00:38:44,030 --> 00:38:48,124
Associated with the fund
that makes that possible,

571
00:38:48,124 --> 00:38:53,624
are these long-term irrevocable
contracts before those outcomes.

572
00:38:53,624 --> 00:38:57,055
For the wellness outcomes,
the employment outcomes.

573
00:38:57,055 --> 00:38:58,120
You go down the list.

574
00:38:59,930 --> 00:39:03,820
The investors have contract
certainty in a uniquely large and

575
00:39:03,820 --> 00:39:07,990
stable global market for measurable
outcomes and intergenerational service.

576
00:39:07,990 --> 00:39:10,810
The standards are engineered, so

577
00:39:10,810 --> 00:39:15,930
they're third party vetted, ended
a premise capitalization system scale.

578
00:39:15,930 --> 00:39:17,880
Have you ever talked about that?

579
00:39:17,880 --> 00:39:24,890
And suddenly, you're looking at investors
willing to move into these whole systems.

580
00:39:24,890 --> 00:39:30,760
It's not subsystem scale, you replace it
you're taking a big dirty asset, getting

581
00:39:30,760 --> 00:39:34,260
credit for retiring it, and replacing
it with a life cycle clean system.

582
00:39:34,260 --> 00:39:39,840
It's a huge employment opportunity for
people to work.

583
00:39:39,840 --> 00:39:45,330
And it's based on, this is not just
throwing money out of helicopters.

584
00:39:45,330 --> 00:39:47,900
So, now you're looking at
a redevelopment historic model,

585
00:39:47,900 --> 00:39:51,940
the community is a healthy
part of the ecosystem.

586
00:39:51,940 --> 00:39:55,810
It's competitive, it's transparent, you
got both primary and secondary markets for

587
00:39:55,810 --> 00:39:56,358
social.

588
00:39:56,358 --> 00:40:00,448
Environmental outcomes, and the future
is now in the present with a checkbook.

589
00:40:02,163 --> 00:40:06,413
So this, Michael will remember,

590
00:40:06,413 --> 00:40:11,843
we did at PSU, in what year was that, 12?

591
00:40:11,843 --> 00:40:12,751
>> I think it was 11.

592
00:40:12,751 --> 00:40:14,100
>> 11 or 12, yeah.

593
00:40:14,100 --> 00:40:19,139
So the puzzle we put forward is,
here's a laundromat and here's and here

594
00:40:19,139 --> 00:40:25,600
a greenhouse, not too far from each other,
classic externalized waste and so forth.

595
00:40:25,600 --> 00:40:29,960
Purchased carbon, purchased carbon,
transported, I mean all those stuff.

596
00:40:29,960 --> 00:40:32,484
What can you do with
that as a system puzzle?

597
00:40:32,484 --> 00:40:33,544
And here's what the kids came up with.

598
00:40:36,774 --> 00:40:41,054
And this is the kind of redevelopment
that could be funded by

599
00:40:41,054 --> 00:40:45,430
an intergenerational partnership
with the future, okay?

600
00:40:47,930 --> 00:40:49,730
All right, so
laundromat has dryers that create heat.

601
00:40:49,730 --> 00:40:53,800
[LAUGH] There's more,
I don't want to wear you all out.

602
00:40:53,800 --> 00:40:56,480
The basic insight is that

603
00:40:56,480 --> 00:40:59,370
this is a little bag of money that
we're using around the world.

604
00:40:59,370 --> 00:41:01,600
And this is what we're
leaving on the table.

605
00:41:01,600 --> 00:41:06,570
The partnership of the future is
a vastly richer, more secure, resilient,

606
00:41:06,570 --> 00:41:10,402
more fun, it's more beautiful
than the one we're using.

607
00:41:10,402 --> 00:41:14,186
And the reason why we do that instead of
this is because we don't have a way of

608
00:41:14,186 --> 00:41:15,390
partnering.

609
00:41:15,390 --> 00:41:19,525
We don't have a transactional
frame [INAUDIBLE].

610
00:41:19,525 --> 00:41:23,580
Are there any questions [COUGH]?

611
00:41:23,580 --> 00:41:26,012
>> [LAUGH]
>> But

612
00:41:26,012 --> 00:41:30,536
after you tell us the politics,
they love it.

613
00:41:30,536 --> 00:41:35,048
>> [LAUGH]
>> Well, because this is not tax and

614
00:41:35,048 --> 00:41:35,898
spend.

615
00:41:35,898 --> 00:41:38,760
This is an opportunity for

616
00:41:38,760 --> 00:41:43,950
the private sector to move and
to deliver valuable services.

617
00:41:43,950 --> 00:41:48,715
It's a way of lowering the cost of
running schools and public facilities.

618
00:41:48,715 --> 00:41:53,720
IGF can be used to bid
increases in efficiency.

619
00:41:53,720 --> 00:41:58,603
So you could actually, the University
could use an IGF instrument to solicit

620
00:41:58,603 --> 00:42:03,334
proposals from tables like this, for
ways the institution can rebuild and

621
00:42:03,334 --> 00:42:06,565
redesign and create efficiencies,
avoid waste,

622
00:42:06,565 --> 00:42:12,240
certain resource management,
committed resilience, health issues.

623
00:42:12,240 --> 00:42:14,680
And because the metrics are common,

624
00:42:14,680 --> 00:42:19,410
the University doesn't get stuck with
a cost they sell off to a global or

625
00:42:19,410 --> 00:42:24,840
a regional or national buyer,
the system outcomes, that are presently

626
00:42:24,840 --> 00:42:30,130
posed as total outcomes by the STGs or
top 21.

627
00:42:30,130 --> 00:42:33,207
But it's local control,
global standards, but

628
00:42:33,207 --> 00:42:36,510
it would be up to teams of
students to propose to do it.

629
00:42:38,830 --> 00:42:43,551
The chairman of the Washington State
Senate Energy Committee wants to put

630
00:42:43,551 --> 00:42:46,901
a pioneer redevelopment
district in his district,

631
00:42:46,901 --> 00:42:50,951
because she can have more fun
talking about than tax and spend.

632
00:42:50,951 --> 00:42:52,770
Nobody wants to hear tax and spend.

633
00:42:52,770 --> 00:42:55,403
But they love to hear that
the future has arrived in town and

634
00:42:55,403 --> 00:42:58,307
wants to build cleaner, smarter,
more beautiful things, and

635
00:42:58,307 --> 00:43:01,463
make sure that kids are educated
properly and they're eating well.

636
00:43:01,463 --> 00:43:03,405
You have to give credit to the buyer.

637
00:43:03,405 --> 00:43:08,640
When you say sovereign buyer, I know
enough about post Keynesian money theory,

638
00:43:08,640 --> 00:43:13,580
so I know that's a plausible answer.

639
00:43:13,580 --> 00:43:17,170
But I'm trying to think about,
sometimes you talk about it and

640
00:43:17,170 --> 00:43:19,410
we could apply it at a local level.

641
00:43:19,410 --> 00:43:25,480
So we've got all these public schools in
Portland, that have lead in the pipes,

642
00:43:25,480 --> 00:43:30,910
and it costs a certain amount to do
the whole reconstruction of that.

643
00:43:30,910 --> 00:43:33,340
It's gonna totally bankrupt
the school system.

644
00:43:33,340 --> 00:43:38,065
>> And if it's just lead,
that is a sub system.

645
00:43:38,065 --> 00:43:43,155
>> They've got a shorthand way of saying,
it's a big expensive problem.

646
00:43:43,155 --> 00:43:46,180
It's an expensive problem to fix.

647
00:43:46,180 --> 00:43:53,350
The long term benefits of fixing it
far outweigh even the large expense.

648
00:43:53,350 --> 00:43:58,216
But I'm not quite sure where, the City of

649
00:43:58,216 --> 00:44:06,040
Portland's problem is they have to
somehow raise that money to pay for that.

650
00:44:06,040 --> 00:44:10,790
Even though in the very, very long run,
it's certainly practical.

651
00:44:10,790 --> 00:44:17,040
>> So I mean, I'm a long scholar
of the work of AB Levinson.

652
00:44:17,040 --> 00:44:19,740
And he classically says,
you're stuck in the box.

653
00:44:21,040 --> 00:44:25,570
In order for us to think of a solution
that can afford to capture that,

654
00:44:25,570 --> 00:44:26,330
you have to get out of box.

655
00:44:26,330 --> 00:44:29,993
The reality is,
there's absolutely no reason for

656
00:44:29,993 --> 00:44:32,740
there to be lead in the school pipes.

657
00:44:32,740 --> 00:44:34,930
It's a free good,
you get the design right.

658
00:44:34,930 --> 00:44:36,590
So the trick is,

659
00:44:36,590 --> 00:44:41,910
it's a co benefit of getting other
outcomes right at the same time.

660
00:44:41,910 --> 00:44:46,558
So there's obviously a short-term issue,

661
00:44:46,558 --> 00:44:53,418
which is that kids cannot be allowed
to drink water with lead in it.

662
00:44:53,418 --> 00:44:55,084
>> [CROSSTALK] plastic water bottles.

663
00:44:55,084 --> 00:44:58,037
>> There you go, and
another system problem.

664
00:44:58,037 --> 00:45:01,654
>> [LAUGH]
>> [INAUDIBLE] to send a reusable

665
00:45:01,654 --> 00:45:05,420
water bottle with your child to school.

666
00:45:05,420 --> 00:45:08,545
>> [CROSSTALK]
>> So

667
00:45:08,545 --> 00:45:12,772
part of the box here is that kids-
>> When we

668
00:45:12,772 --> 00:45:16,920
were talking about the problems with
the assumptions we make on day one,

669
00:45:16,920 --> 00:45:21,900
one of them is that schools work,
I don't think they work very well.

670
00:45:21,900 --> 00:45:28,030
Washington state has a 7000 teacher
shortage, 7000 teacher shortage.

671
00:45:28,030 --> 00:45:33,225
And the reason why, David, we had six
universities, teacher colleges out of

672
00:45:33,225 --> 00:45:38,420
the land trust, really looking at how
you can redesign the learning process,

673
00:45:38,420 --> 00:45:43,643
is because teachers don't want to teach
what they're being forced to teach.

674
00:45:43,643 --> 00:45:46,430
And the kids don't want to learn
what they're being forced to learn.

675
00:45:46,430 --> 00:45:50,010
There is no connectivity to the landscapes
upon which everything depends.

676
00:45:50,010 --> 00:45:54,231
>> We get the house birds, I would agree.

677
00:45:54,231 --> 00:45:58,511
>> [LAUGH] [CROSSTALK]
[LAUGH]

678
00:45:58,511 --> 00:46:01,100
>> Give me a second, I'm getting there.

679
00:46:01,100 --> 00:46:06,400
So that the issue really is, what kind of

680
00:46:06,400 --> 00:46:12,280
a school environment produces both
healthy water and healthy kids?

681
00:46:12,280 --> 00:46:17,600
That is resilient, that provides
excitement and cultural riches and

682
00:46:17,600 --> 00:46:23,335
that is a much bigger value creation
proposition than just fixing a pipe.

683
00:46:23,335 --> 00:46:27,510
So busing, tanking the water,
getting a big stainless tank and

684
00:46:27,510 --> 00:46:30,698
putting it on the top of every
school with a lead problem, and

685
00:46:30,698 --> 00:46:35,820
filling it once a month or
once a week is a cost associated with

686
00:46:35,820 --> 00:46:39,590
the larger issue,
which is how do we redesign a school?

687
00:46:39,590 --> 00:46:44,944
So that they're joyful, rich,
multilingual, inclusive, gender equal,

688
00:46:44,944 --> 00:46:50,376
full of fabulous food and putting these
kids who want to work on these problems,

689
00:46:50,376 --> 00:46:52,342
giving permission to do it.

690
00:46:52,342 --> 00:46:56,957
We had Andrea at Spencer building,
and we sent around,

691
00:46:56,957 --> 00:46:59,615
this is before your time, Michael.

692
00:46:59,615 --> 00:47:03,929
But we sent around to the schools
a challenge, give us a system for

693
00:47:03,929 --> 00:47:08,480
your school that would make it a richer,
more fun, more beautiful,

694
00:47:08,480 --> 00:47:10,760
productive wonderful place.

695
00:47:10,760 --> 00:47:13,291
Then we had Avery give the prize here.

696
00:47:13,291 --> 00:47:18,291
And this beautiful little nine year
old girl, she's getting her prize.

697
00:47:18,291 --> 00:47:22,598
She designed this incredible organic
garden with the cafeteria, and

698
00:47:22,598 --> 00:47:26,450
the compost system,
a really elegant thing that she did.

699
00:47:26,450 --> 00:47:31,366
But what was cool, the reason why
I mentioned that is, ask the kids.

700
00:47:31,366 --> 00:47:33,680
They were part of the challenge.

701
00:47:33,680 --> 00:47:37,265
How do we make this school healthy,
clean, more fun?

702
00:47:37,265 --> 00:47:40,872
Give them engineering tools.

703
00:47:40,872 --> 00:47:46,046
Show them that math is useful when
you're designing really fun places

704
00:47:46,046 --> 00:47:50,970
to study music and science, and
allow them to begin to propose.

705
00:47:50,970 --> 00:47:53,450
I think we discovered
that you could double it.

706
00:47:53,450 --> 00:47:58,440
I know we, cuz we won a prize for
it back when I was in the Portland system.

707
00:48:00,120 --> 00:48:02,900
Just taking the time to figure
out what kids are interested in.

708
00:48:04,270 --> 00:48:09,558
And feeding them the skills that you want
them to get through the personal window

709
00:48:09,558 --> 00:48:15,300
on enthusiasm was doubled and
tripled the test of life span.

710
00:48:15,300 --> 00:48:19,239
And made all of this little problems go
away because Marvin wanted to learn math

711
00:48:19,239 --> 00:48:21,130
with rattlesnakes.

712
00:48:21,130 --> 00:48:26,390
And Darla wanted to learn math with barns,
it doesn't matter.

713
00:48:26,390 --> 00:48:28,290
That was what they wanted to do.

714
00:48:28,290 --> 00:48:31,049
They got so excited about it and
they have ownership, and

715
00:48:31,049 --> 00:48:34,105
I think we should ask the kids
what the school should look like.

716
00:48:34,105 --> 00:48:38,424
Meanwhile, there's gonna be contract
metrics that allow you to sell

717
00:48:38,424 --> 00:48:41,290
the co-benefits that those designs get.

718
00:48:41,290 --> 00:48:42,890
And the kids are gonna
look at those metrics and

719
00:48:42,890 --> 00:48:47,550
realize that, my goodness, if I hit
that one, I can create this value.

720
00:48:47,550 --> 00:48:51,400
And if I hit that one, so
it's a net carbon or net energy positive,

721
00:48:51,400 --> 00:48:53,620
I can go get that one.

722
00:48:53,620 --> 00:48:55,415
And it goes on from there.

723
00:48:55,415 --> 00:48:59,790
>> Yeah, I think maybe again,
part of the, we're missing a mark in the,

724
00:48:59,790 --> 00:49:04,580
we mentioned like retiring assets,
like industrial assets.

725
00:49:04,580 --> 00:49:06,317
And I immediately think, built systems,

726
00:49:06,317 --> 00:49:08,910
but I think there's policies
that need to be retired, too.

727
00:49:08,910 --> 00:49:13,200
>> Good idea.
>> And so like the whole teaching a test

728
00:49:13,200 --> 00:49:19,347
for public schools, like that is dictating
how the classrooms are set, right?

729
00:49:20,550 --> 00:49:21,691
But looking at,

730
00:49:21,691 --> 00:49:26,675
back to the lead issue like that was
a building thing at one point in time.

731
00:49:26,675 --> 00:49:33,370
And now, I don't know, I just see
that those things are tied together.

732
00:49:33,370 --> 00:49:38,395
And I don't know that
retiring large assets without

733
00:49:38,395 --> 00:49:46,173
requiring certain policies like your
producer take back policies, we don't.

734
00:49:46,173 --> 00:49:47,603
>> I think you're right.

735
00:49:47,603 --> 00:49:52,417
But what we've done with this system
is to recognize that assets, or

736
00:49:52,417 --> 00:49:56,940
fixed assets are a huge piece
of the way capitalism works.

737
00:49:56,940 --> 00:49:58,904
>> Yeah.
>> That's where you get your rents, and

738
00:49:58,904 --> 00:50:04,400
regulations procedure is
a threat to revenue and

739
00:50:04,400 --> 00:50:07,570
fixed asset ownership.

740
00:50:07,570 --> 00:50:11,823
So creating a way of reload,
what will be call the orderly,

741
00:50:11,823 --> 00:50:14,820
profitable early retirement.

742
00:50:14,820 --> 00:50:16,270
Opens up a real opportunity.

743
00:50:16,270 --> 00:50:21,200
The same mechanism applies to policy,
and good, so

744
00:50:21,200 --> 00:50:23,210
I think it's perfectly reasonable.

745
00:50:23,210 --> 00:50:27,750
For example, everyone in your
homes will have hot water heaters.

746
00:50:27,750 --> 00:50:30,400
You will notice that even
though it's insulated well,

747
00:50:30,400 --> 00:50:33,630
they don't put insulation on the pot cozy.

748
00:50:33,630 --> 00:50:37,350
They are the brass thing.

749
00:50:37,350 --> 00:50:41,620
If you look at your water heater
with an infrared scanner,

750
00:50:41,620 --> 00:50:45,370
it's like a flame on top of your water,
and it's just radiating heat.

751
00:50:45,370 --> 00:50:49,956
And the reason is, you don't want to cover
that because if the tank overheats, it's

752
00:50:49,956 --> 00:50:54,240
gonna blow that valve and you don't want
it to be trapped inside the container.

753
00:50:54,240 --> 00:51:00,996
Well, that's a reasonable regulation
policy, but it's not immutable.

754
00:51:00,996 --> 00:51:05,820
And there's ways to get around it,
but nobody touches because of it.

755
00:51:05,820 --> 00:51:09,830
It's embedded in a bureaucracy or
a policymakers.

756
00:51:09,830 --> 00:51:14,800
So I think the issue you raised
is very interesting one,

757
00:51:14,800 --> 00:51:18,520
it's harder than some of the other ones.

758
00:51:18,520 --> 00:51:23,581
But if you can invite a bureaucracy
to turn its wisdom about how

759
00:51:23,581 --> 00:51:30,760
bureaucracies work inward on itself,
so that you can redeem inefficiencies.

760
00:51:30,760 --> 00:51:34,920
And by the way, you don't want to get
your tire slashed out in the parking lot

761
00:51:34,920 --> 00:51:36,560
by putting a lot of your
friends out of work.

762
00:51:37,660 --> 00:51:41,160
So there's feedback loops and
systems, and that's one.

763
00:51:41,160 --> 00:51:45,020
So if you can put somebody's job out of

764
00:51:45,020 --> 00:51:48,160
work without putting
the person out of work.

765
00:51:48,160 --> 00:51:49,150
And by the way,

766
00:51:49,150 --> 00:51:53,785
the associated people who might be at
risk when something dumb stops happening.

767
00:51:53,785 --> 00:51:58,310
[LAUGH] Because there's no shortage
of work to do in the world.

768
00:51:58,310 --> 00:51:59,320
>> I know that.

769
00:51:59,320 --> 00:52:01,917
>> But the mechanism that you're
pointing at I think is really important.

770
00:52:01,917 --> 00:52:02,698
You had a question.

771
00:52:02,698 --> 00:52:07,600
>> Yes, I have this question, and

772
00:52:07,600 --> 00:52:13,776
example where you solved your [INAUDIBLE]

773
00:52:13,776 --> 00:52:18,679
addressed as a problem like that

774
00:52:18,679 --> 00:52:23,417
[INAUDIBLE] problem like that.

775
00:52:23,417 --> 00:52:25,770
>> Like the scope problem?

776
00:52:25,770 --> 00:52:28,920
>> Yeah, the water is that,
and that is also the problem.

777
00:52:30,280 --> 00:52:35,560
>> We have a group that is working
actually presently in Kenya.

778
00:52:35,560 --> 00:52:39,250
>> That is a very intense and more

779
00:52:41,200 --> 00:52:45,660
in Ghana also,
where issues related to water supply and

780
00:52:45,660 --> 00:52:50,920
water quality are really high risk.

781
00:52:50,920 --> 00:52:56,016
And it represent a gigantic health and
wellness, and security issue.

782
00:52:56,016 --> 00:53:00,211
And it's all tied together because
infrastructure sets are not as large

783
00:53:00,211 --> 00:53:02,156
institution, of course.

784
00:53:02,156 --> 00:53:08,900
So, I think when you look at,
like the water and

785
00:53:08,900 --> 00:53:15,280
gender security and education elements
in the sustainable development goals.

786
00:53:15,280 --> 00:53:22,471
And the fabric of outcomes that
are common to any village that

787
00:53:22,471 --> 00:53:27,547
are being turned into biddable outcomes.

788
00:53:27,547 --> 00:53:32,516
I think you will probably be
better than I because you're

789
00:53:32,516 --> 00:53:38,108
probably thinking about a place
in your own mind where if capital

790
00:53:38,108 --> 00:53:43,402
were available,
then solutions would become achievable.

791
00:53:43,402 --> 00:53:49,295
What I mean, and one of the challenges
here, and it's on that gender equity

792
00:53:49,295 --> 00:53:54,471
line in many rural development
communities, the micro banking.

793
00:53:54,471 --> 00:53:58,746
People have discovered that loaning
money to men is a really bad idea,

794
00:53:58,746 --> 00:54:03,900
that loaning money to women works really
well, with incredibly high return rates.

795
00:54:03,900 --> 00:54:05,605
I mean, 99.9.

796
00:54:05,605 --> 00:54:10,773
So, also paying in cash is a challenge,

797
00:54:10,773 --> 00:54:15,333
building materials harder turning

798
00:54:15,333 --> 00:54:20,051
into alcohol [LAUGH] rapidly anyway.

799
00:54:20,051 --> 00:54:23,974
[LAUGH] I don't know what your
national heritage is, but

800
00:54:23,974 --> 00:54:28,815
you're probably are thinking about
some places specific that could

801
00:54:28,815 --> 00:54:33,090
use development capital, and
I'd love to talk about that.

802
00:54:33,090 --> 00:54:36,940
>> Well, it's easier to implement

803
00:54:36,940 --> 00:54:40,760
this type of system when [INAUDIBLE]
systems are not very complex.

804
00:54:40,760 --> 00:54:43,108
>> Yeah.
>> But I was thinking,

805
00:54:43,108 --> 00:54:49,152
solving problems like that in the US,
in Kenya it would be easy.

806
00:54:49,152 --> 00:54:50,127
>> Yeah.

807
00:54:50,127 --> 00:54:55,560
>> [INAUDIBLE] You don't
have a mature infrastructure

808
00:54:55,560 --> 00:55:00,108
[INAUDIBLE] I believe
the environment is not

809
00:55:00,108 --> 00:55:04,970
very complex there, people can change.

810
00:55:04,970 --> 00:55:06,330
But here.

811
00:55:06,330 --> 00:55:12,926
>> Yeah.
>> [INAUDIBLE]

812
00:55:12,926 --> 00:55:14,382
>> Well, thank you.

813
00:55:14,382 --> 00:55:17,329
I mentioned,
I didn't actually point that, but

814
00:55:17,329 --> 00:55:22,320
I mentioned in the summary that we're
working with the Grand Canyon trust.

815
00:55:22,320 --> 00:55:28,032
And a group of analysts,
specializing in air quality and

816
00:55:28,032 --> 00:55:35,294
the quality of customer life on
the Navajo generating station.

817
00:55:35,294 --> 00:55:40,171
Which employs now about 280,
Indians, or people,

818
00:55:40,171 --> 00:55:44,746
in the plant itself,
another 500 in a coal mine.

819
00:55:44,746 --> 00:55:47,643
And they culturally,

820
00:55:47,643 --> 00:55:52,828
mining coal is not something that Navajo

821
00:55:52,828 --> 00:55:57,714
have done until about 50 years ago.

822
00:55:57,714 --> 00:56:02,890
But because that is the best job available
in that reservation There's a lot of

823
00:56:02,890 --> 00:56:08,097
opposition from the native
community to shutting down Navajo.

824
00:56:08,097 --> 00:56:13,600
And therefore,
this mechanism of early retirement,

825
00:56:13,600 --> 00:56:16,790
where it's not just a question
of shutting down and

826
00:56:16,790 --> 00:56:20,090
letting the people fall where they fall.

827
00:56:20,090 --> 00:56:24,892
Bad luck, you've lost your job,
which is not politically okay or

828
00:56:24,892 --> 00:56:29,458
ethically okay because those
people needed that kind of work.

829
00:56:29,458 --> 00:56:34,767
So the early retirement of the dirty
asset, Navajo, and its replacement with

830
00:56:34,767 --> 00:56:39,996
a culturally sophisticated alternative
that has got a hospitality engine,

831
00:56:39,996 --> 00:56:44,582
draws on the amazing artistic
heritage of the indigenous people and

832
00:56:44,582 --> 00:56:47,655
their many tribes in
that Four Corners area.

833
00:56:47,655 --> 00:56:52,451
Has a huge initiative around
water efficiency, and which,

834
00:56:52,451 --> 00:56:58,000
of course, with the Colorado project and
the Bureau of Reclamation,

835
00:56:58,000 --> 00:57:01,292
massive crisis coming down on Arizona and

836
00:57:01,292 --> 00:57:06,955
other places because of the fact that
the water system is just failing.

837
00:57:06,955 --> 00:57:11,914
So there are a lot of reasons why,
and by the way, the decision to extend

838
00:57:11,914 --> 00:57:16,811
that gigantic power plant,
it's gonna be made by the new president.

839
00:57:16,811 --> 00:57:22,901
Probably her biggest
decision in her first year,

840
00:57:22,901 --> 00:57:26,534
assuming it's not delayed.

841
00:57:26,534 --> 00:57:31,569
And she needs, in fact,
one of her top in the transition team,

842
00:57:31,569 --> 00:57:36,604
Brian Dese, has asked privately for
implementation briefs,

843
00:57:36,604 --> 00:57:42,969
how this toolbox could be made available
to communities like Light Mountaintop

844
00:57:42,969 --> 00:57:47,909
communities and
First People communities in the southwest,

845
00:57:47,909 --> 00:57:53,440
need something bigger than just shut
me down and sell all the carbon.

846
00:57:53,440 --> 00:57:59,130
And it's very interesting
cuz a solar power plant,

847
00:57:59,130 --> 00:58:01,040
you cannot just swap one for the other.

848
00:58:02,300 --> 00:58:06,110
Yeah, people are gonna go around polishing
mirrors and wiping the dust off of PVs,

849
00:58:06,110 --> 00:58:07,260
but not 500 of them.

850
00:58:09,520 --> 00:58:13,730
So you need to push out the boundary
condition of the replacement.

851
00:58:14,840 --> 00:58:20,160
So that you really do relocate
the trapped equity in human capital,

852
00:58:20,160 --> 00:58:22,647
not just industrial capital.

853
00:58:23,930 --> 00:58:27,177
And if you're interested
in following that,

854
00:58:27,177 --> 00:58:32,672
it's happening in real time because we
have to file, we've been intervening

855
00:58:32,672 --> 00:58:37,607
with the EPA assessing the request
to extend the permit of that plant.

856
00:58:37,607 --> 00:58:40,940
We don't think it should be extended.

857
00:58:40,940 --> 00:58:44,610
And I'd be happy to, but that's a big one.

858
00:58:44,610 --> 00:58:52,450
We're talking probably it's multiple
billions, it's not a modest undertaking.

859
00:58:52,450 --> 00:58:55,486
>> Before you take the next question,
I would like to sort of say thanks.

860
00:58:55,486 --> 00:58:57,580
Cuz some people reminded me
to get the audience going.

861
00:58:57,580 --> 00:58:58,712
Thanks very much.

862
00:58:58,712 --> 00:59:04,885
[APPLAUSE] [LAUGH] I'm
actually gonna stay,

863
00:59:04,885 --> 00:59:11,578
and I do want people to
know that we [INAUDIBLE].

864
00:59:11,578 --> 00:59:15,319
>> We don't mind if you have to get on
with other things on this beautiful

865
00:59:15,319 --> 00:59:16,038
afternoon.

866
00:59:16,038 --> 00:59:22,461
>> [LAUGH]
>> [CROSSTALK]

867
00:59:22,461 --> 00:59:23,131
>> Did you have a question?

868
00:59:23,131 --> 00:59:24,101
>> Who me?

869
00:59:24,101 --> 00:59:34,295
>> Yeah.

870
00:59:34,295 --> 00:59:35,280
>> [INAUDIBLE]
>> [INAUDIBLE]

871
00:59:35,280 --> 00:59:39,008
>> Yeah, just kind of the same question

872
00:59:39,008 --> 00:59:43,430
about the buyer.

873
00:59:43,430 --> 00:59:50,150
>> [CROSSTALK]
>> What

874
00:59:50,150 --> 00:59:54,850
is being proposed is a branding
classic green bonds company.

875
00:59:54,850 --> 00:59:58,076
And it will be dedicated
to the contract methods.

876
00:59:58,076 --> 01:00:03,531
In other words, you can't use the capital
without using the contract or

877
01:00:03,531 --> 01:00:04,970
biddable method.

878
01:00:04,970 --> 01:00:10,113
And it will be a release
that we are hoping

879
01:00:10,113 --> 01:00:15,713
that the biggest common
issue in the history

880
01:00:15,713 --> 01:00:22,692
of humanity at the divide
2020 we're [INAUDIBLE].

881
01:00:22,692 --> 01:00:32,692
>> [CROSSTALK]

882
01:00:42,964 --> 01:00:47,429
>> Classically a town like Oregon,
which has a decent bond rating,

883
01:00:47,429 --> 01:00:52,311
can move ahead to create redevelopment
districts that use this model.

884
01:00:52,311 --> 01:00:57,330
Portland has eco-districts.

885
01:00:57,330 --> 01:01:01,741
The challenge specifically with
green bonds is that the metrics

886
01:01:01,741 --> 01:01:05,705
are voluntary and
its subsystem's failing [INAUDIBLE].

887
01:01:05,705 --> 01:01:14,641
>> [CROSSTALK]
>> The buyers of the bonds

888
01:01:14,641 --> 01:01:18,820
would be any institution invested who
wanted a long term [INAUDIBLE] return.

889
01:01:18,820 --> 01:01:22,180
The bonds are then invested
locally using the metrics, and

890
01:01:22,180 --> 01:01:26,589
the local districts would
solicit proposal issues.

891
01:01:28,210 --> 01:01:32,760
Projects which get built, and
then the consequences of the projects

892
01:01:32,760 --> 01:01:36,960
like avoiding carbon would be bundled and
sold in secondary markets.

893
01:01:36,960 --> 01:01:41,740
So, it's a global network of redevelopment
districts that are voluntary.

894
01:01:41,740 --> 01:01:46,870
All the participation is voluntary, which
I just emphasized as much as [INAUDIBLE].

895
01:01:46,870 --> 01:01:48,225
>> [INAUDIBLE]
>> Lots of money.

896
01:01:48,225 --> 01:01:50,115
[CROSSTALK]
>> [LAUGH]

897
01:01:50,115 --> 01:01:51,073
>> No government involvement.

898
01:01:51,073 --> 01:02:01,073
>> [INAUDIBLE]

899
01:02:07,060 --> 01:02:07,890
>> You got that.

900
01:02:07,890 --> 01:02:13,927
>> But then system itself is [INAUDIBLE]
transaction of the money, right?

901
01:02:13,927 --> 01:02:19,115
[INAUDIBLE]
>> I didn't catch the way she [INAUDIBLE].

902
01:02:19,115 --> 01:02:24,580
>> [INAUDIBLE] the system
[INAUDIBLE] computer model,

903
01:02:24,580 --> 01:02:30,184
and then [INAUDIBLE] making
those software to sell.

904
01:02:30,184 --> 01:02:35,053
>> Well I'd love to sit with you and
show you how the software

905
01:02:35,053 --> 01:02:39,112
actually works, if you're interested that,

906
01:02:39,112 --> 01:02:42,490
because part of what-
>> Certainly.

907
01:02:42,490 --> 01:02:45,350
The software is set up to assess

908
01:02:45,350 --> 01:02:46,780
scenarios-
>> Yeah.

909
01:02:46,780 --> 01:02:50,800
>> So that you can compare,
point for point what the different

910
01:02:50,800 --> 01:02:55,680
outcomes might be, which is really one of
the fundamental, most challenging issues.

911
01:02:55,680 --> 01:02:57,430
I mean, you folks are systems people, so

912
01:02:57,430 --> 01:03:01,540
you know that not all good
ideas are a good idea, right?

913
01:03:01,540 --> 01:03:07,752
The rule, the sorts of problems and
solutions, right?

914
01:03:07,752 --> 01:03:14,210
So if you're not able to

915
01:03:14,210 --> 01:03:18,210
look at look the first order consequences
of an investment, you might wind up.

916
01:03:18,210 --> 01:03:21,840
I mean,
nuclear energy is not the solution.

917
01:03:21,840 --> 01:03:24,343
>> Anything with long tail
risks that's that expensive,

918
01:03:24,343 --> 01:03:27,790
takes that long to build,
that has that many hazards and security.

919
01:03:27,790 --> 01:03:32,540
There's no way it's a solution, but it's
still being pushed by some constituencies

920
01:03:32,540 --> 01:03:35,958
because there's not an adequate
amount of system thinking going on.

921
01:03:35,958 --> 01:03:44,200
Though clear versions are only really
understood if you have a software or

922
01:03:44,200 --> 01:03:50,523
a fairly sophisticated analytical tool
allows you to pick the superior scenario.

923
01:03:50,523 --> 01:03:53,910
>> [INAUDIBLE],
right?

924
01:03:53,910 --> 01:03:54,770
You can sell it.

925
01:03:54,770 --> 01:03:55,610
>> Yeah, exactly.

926
01:03:55,610 --> 01:04:02,483
And once once you have a vetted Set of
metrics that allow you to demonstrably

927
01:04:02,483 --> 01:04:09,060
prove that a design is going to
consistently meet a superior opportunity.

928
01:04:09,060 --> 01:04:14,570
Then as it comes with contracts for
outcomes, then the investor community

929
01:04:14,570 --> 01:04:19,651
can move on that, and the investing
community wants to move on that.

930
01:04:19,651 --> 01:04:27,798
That 3.5 trillion I mentioned, the 95%
of their assets have to be rebuilt.

931
01:04:27,798 --> 01:04:33,190
So they are actively seeking ways to
move their capital into cleaner systems,

932
01:04:33,190 --> 01:04:35,930
and they have bottomless credit.

933
01:04:35,930 --> 01:04:38,730
But they don't have
a transactional framework,

934
01:04:38,730 --> 01:04:40,990
because the future is not
in the market as a buyer.

935
01:04:40,990 --> 01:04:43,500
This mechanism breaks the future
in the market supplier.

936
01:04:44,640 --> 01:04:49,538
>> How does this compare with just
the basic idea of taking things that

937
01:04:49,538 --> 01:04:54,530
are costs, that are externalities
today and internalizing them?

938
01:04:54,530 --> 01:05:00,813
Making it so that you will you do
a project, when you price your product,

939
01:05:00,813 --> 01:05:06,787
your highrise, whatever the hell it is,
you actually have to pay for

940
01:05:06,787 --> 01:05:12,976
all the externalities, one of the words
that we use to talk about that.

941
01:05:12,976 --> 01:05:19,050
You kind of talked about that using a much
more sophisticated financial discussion.

942
01:05:19,050 --> 01:05:21,900
>> But he isn't talking about
a regulatory model, though.

943
01:05:21,900 --> 01:05:22,820
>> Well, that's the problem.

944
01:05:22,820 --> 01:05:24,260
Is that what that has to be, then?

945
01:05:24,260 --> 01:05:29,340
>> Well, I'm saying if you work on
that third G, the business one, and

946
01:05:29,340 --> 01:05:36,530
it's profitable to go get that externality
because there's now a buyer at the design

947
01:05:36,530 --> 01:05:41,970
stage for the avoided cost,
cuz that's the chief point of image.

948
01:05:41,970 --> 01:05:45,581
If the schools that are making
people sick have leaden pipe,

949
01:05:45,581 --> 01:05:48,400
the solution is a school that doesn't
make people sick with leaden pipes.

950
01:05:48,400 --> 01:05:51,182
But it's not just the leaden
pipes that you wanna change,

951
01:05:51,182 --> 01:05:54,470
you wanna get the solar orientation right,
you need to have the greenery in there.

952
01:05:54,470 --> 01:05:58,752
The kids, you need the cafeteria design so
that the organics are moving, flowing or

953
01:05:58,752 --> 01:05:59,910
are sourced locally.

954
01:05:59,910 --> 01:06:02,861
All these good things, so
the kids want to design it themselves.

955
01:06:02,861 --> 01:06:07,322
So the externalized cost of
the health effect in this model,

956
01:06:07,322 --> 01:06:13,455
because it's a market for a whole system,
not a market part of the system.

957
01:06:13,455 --> 01:06:14,145
>> Yeah, yeah.

958
01:06:14,145 --> 01:06:17,370
>> Yeah, the cheapest possible point.

959
01:06:17,370 --> 01:06:21,210
I mean, Dana Meadows said this famously,
then Ella.

960
01:06:21,210 --> 01:06:26,150
She said that the most cost effective
place to intervene is between the ears of

961
01:06:26,150 --> 01:06:27,146
the designer.

962
01:06:27,146 --> 01:06:31,118
>> [LAUGH]
>> We got a couple of comments from

963
01:06:31,118 --> 01:06:32,530
the crowd on the internet.

964
01:06:32,530 --> 01:06:33,260
>> Okay.

965
01:06:33,260 --> 01:06:36,340
>> Jonathan Scroles said thank you so
much for the talk.

966
01:06:36,340 --> 01:06:39,865
I love this idea of making students aware
and active stakeholders of their own

967
01:06:39,865 --> 01:06:42,800
community's health, which reminds
me of the growing practice of

968
01:06:42,800 --> 01:06:46,670
participatory action research
many social science studies.

969
01:06:46,670 --> 01:06:51,430
It seems like a logical next
step to existing initiatives,

970
01:06:51,430 --> 01:06:54,050
such as those in some Portland
schools that have kids

971
01:06:54,050 --> 01:06:57,110
growing some food that gets
served in their cafeteria.

972
01:06:57,110 --> 01:06:59,949
He also goes on to say I may need
to spend additional time wrapping

973
01:06:59,949 --> 01:07:03,383
my head around the idea of this extended
service economy you're proposing.

974
01:07:03,383 --> 01:07:06,296
Since I tend to think that
post employment economy for

975
01:07:06,296 --> 01:07:09,466
a large percentage of people
in the future is inevitable,

976
01:07:09,466 --> 01:07:13,495
as we can provision far more goods and
services with fewer human workers.

977
01:07:13,495 --> 01:07:19,291
And that came from Jonathan Scroles
if you wanna comment on that.

978
01:07:19,291 --> 01:07:20,413
>> I will, I'll quickly comment.

979
01:07:20,413 --> 01:07:25,734
I think there's a huge self-esteem
problem and a culture that doesn't

980
01:07:25,734 --> 01:07:31,250
have meaningful work,
self-esteem problems cause sickness.

981
01:07:31,250 --> 01:07:38,710
I think the idea of not thinking through
the system implementations of presuming

982
01:07:38,710 --> 01:07:41,860
that people can just sit around consuming
all day and be healthy and happy.

983
01:07:41,860 --> 01:07:45,130
I just don't buy it, and
there's no shortage of work to do.

984
01:07:45,130 --> 01:07:51,890
This planet has a huge need, and
meaningful work is a privilege.

985
01:07:51,890 --> 01:07:55,240
And the fact that our money economy has
not been able to produce meaningful work

986
01:07:55,240 --> 01:07:59,240
is one of our great bankruptcies.

987
01:07:59,240 --> 01:08:03,795
And the idea that somehow meaningful
work is tied to money is bull,

988
01:08:03,795 --> 01:08:07,820
cuz more than half of the work
going on is not tied to money.

989
01:08:07,820 --> 01:08:11,850
It's being done by people who care,
women, mostly, who are just

990
01:08:11,850 --> 01:08:15,000
taking care of everybody and doing
the work that has to be done every day.

991
01:08:15,000 --> 01:08:18,020
Because by the time the day is over,
it has to be done again and and

992
01:08:18,020 --> 01:08:19,250
not getting paid for.

993
01:08:19,250 --> 01:08:22,760
So that that I think is a misconstruction.

994
01:08:22,760 --> 01:08:27,480
I think his insight about the school
system is quite appropriate, and

995
01:08:27,480 --> 01:08:30,880
I'd if he had wanted to keep up with that,
if he's still online,

996
01:08:30,880 --> 01:08:34,360
I'd be delighted the correspond with him.

997
01:08:34,360 --> 01:08:35,000
>> Okay.

998
01:08:35,000 --> 01:08:37,200
>> No shortage of work to do,
I have a one-liner.

999
01:08:39,060 --> 01:08:42,250
>> Identifying the need for purpose and

1000
01:08:42,250 --> 01:08:47,170
the need for subsistence
are both legitimate human needs

1001
01:08:47,170 --> 01:08:51,310
that don't necessarily need to
be conditioned one on the other.

1002
01:08:52,790 --> 01:08:53,830
>> Yeah.

1003
01:08:53,830 --> 01:08:57,507
>> Even if we had basic income and

1004
01:08:57,507 --> 01:09:03,550
everyone could just sort of subsist
on their social security check,

1005
01:09:03,550 --> 01:09:07,910
that doesn't mean that we would no longer
wanna go out and find some meaningful

1006
01:09:07,910 --> 01:09:11,895
work to do, but it wouldn't be a job for
pay in the same sense.

1007
01:09:11,895 --> 01:09:12,640
>> Well, exactly.

1008
01:09:12,640 --> 01:09:17,160
And David,
my good fortune that out of this house,

1009
01:09:17,160 --> 01:09:22,170
some really brilliant students who
have been working in our land trust.

1010
01:09:22,170 --> 01:09:25,380
And Ilona, who some of you may know,

1011
01:09:25,380 --> 01:09:28,540
one of the hardest working
people I've ever met.

1012
01:09:28,540 --> 01:09:33,100
Also a brilliant intellectual,
extremely competent, ethical person.

1013
01:09:33,100 --> 01:09:38,125
She made the cheese that I had for
breakfast and baked the bread that I ate.

1014
01:09:38,125 --> 01:09:43,090
>> [LAUGH]
>> Yeah, and she is working full time,

1015
01:09:43,090 --> 01:09:47,465
and her compensation is
access to the tools,

1016
01:09:47,465 --> 01:09:50,790
the classrooms, the capacity,
the landscape, the gardens.

1017
01:09:50,790 --> 01:09:55,040
She's buying a permanent
residential with labor, not cash.

1018
01:09:55,040 --> 01:10:02,280
So it is possible to run a wholesome local
economy with pure goodwill and hard work.

1019
01:10:02,280 --> 01:10:05,791
And I think the harder times get,
the more attractive that model becomes.

1020
01:10:05,791 --> 01:10:06,817
What do you really need?

1021
01:10:06,817 --> 01:10:10,024
Water, food, shelter and meaningful work.

1022
01:10:10,024 --> 01:10:10,803
>> Companionship.

1023
01:10:10,803 --> 01:10:11,644
>> Uh-huh.
>> Yeah.

1024
01:10:11,644 --> 01:10:13,698
>> I thought I'd just add that in there.

1025
01:10:13,698 --> 01:10:18,527
>> [CROSSTALK]
[LAUGH]

1026
01:10:18,527 --> 01:10:19,477
>> Jonathan

1027
01:10:19,477 --> 01:10:23,402
replies that absolutely I think you
should seek purposeful things to do,

1028
01:10:23,402 --> 01:10:27,510
perhaps even more so
in the absence of economic necessity.

1029
01:10:27,510 --> 01:10:30,410
Then there's another short comment
from John Maxwell he says thank

1030
01:10:30,410 --> 01:10:31,580
you for the talk.

1031
01:10:31,580 --> 01:10:35,706
This was a very fascinating subject and
I would love to keep up with the research.

1032
01:10:35,706 --> 01:10:36,209
>> Thank you.

1033
01:10:36,209 --> 01:10:37,596
>> Cool.

1034
01:10:37,596 --> 01:10:39,832
Yeah.
>> Okay, that's all from online for

1035
01:10:39,832 --> 01:10:41,310
the moment.

1036
01:10:41,310 --> 01:10:42,090
>> So we're good?

1037
01:10:42,090 --> 01:10:43,497
>> We're good.
>> All right, very cool.

1038
01:10:43,497 --> 01:10:44,376
>> Thanks once again.

1039
01:10:44,376 --> 01:10:45,398
Really talented.

1040
01:10:45,398 --> 01:10:52,319
>> [APPLAUSE]
>> Great group.

1041
01:10:52,319 --> 01:10:54,588
>> Great group.

1042
01:10:54,588 --> 01:10:58,800
[CROSSTALK]