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Brian Lehrer: Brian Lehrer on WNYC. Now, our Health and Climate Tuesday section of the show, which we do every week, Climate Edition Today. This is a follow-up to our segment last week with Oren Cass, founder of the think tank American Compass and author of the new book The New Conservatives. He's an economics leader on the populist right who very much has the ear of the Trump administration. We're going to replay some of what he said specifically about the economics of climate change and get a response with another point of view from a guest who is an economics leader in the climate change prevention movement.

It's Paula DiPerna, among other things, currently chair of the board of the group Humanity Insured US, which she says works with the wider insurance industry to design affordable, innovative insurance products to help buffer financial risks faced by vulnerable communities worldwide from unpredictable weather extremes. She has previously done many other related things, including seven years as president of the Chicago Climate Exchange, which worked to establish a market-based price for carbon emissions and facilitate investment in new energy technologies.

Paula DiPerna was last on the shelf for her 2023 book, Pricing the Priceless: The Financial Transformation to Value the Planet, Solve the Climate Crisis, and Protect Our Most Precious Assets. Paula, thanks for coming on for this. Welcome back to WNYC.

Paula DiPerna: Thank you, Brian. Always a pleasure to be with you.

Brian Lehrer: I'll start by replaying our first Oren Cass clip. He does acknowledge that climate change is a serious threat, but argues basically the most policies designed to fight it are worse than the problem itself for most American families. In this first clip, he just tries to frame the conversation in terms of it being a trade-off.

Oren Cass: Let's say we didn't have to worry about climate change. Would you still propose a green New Deal? Would you still say, look, we should shut down our industrial economy and fossil fuel energy and replace it with this new thing and spend hundreds of billions, trillions of dollars doing that? Because we think that's actually just good economic policy. The answer is, obviously, of course, you wouldn't. You were accepting costs, you were accepting reduction in economic opportunity because you were concerned about the climate change. If that's the trade-off you're making, that's fine, but don't pretend it's not a trade-off.

Brian Lehrer: Oren Cass here on Friday. We've got two more clips of him to replay. Paula, do you accept just that much of his premise to start out? That society needs to acknowledge that big efforts to shut down the fossil fuel economy come with costs. To be honest, we need to frame discussions about that in terms of trade-offs, not simply as good for humanity's future?

Paula DiPerna: I do and I don't. Obviously, it depends on how you define costs, and we can get into that a little bit more. There are so many hidden costs related to not addressing climate change and so many hidden benefits linked to addressing it that have to do with generating new skills and teaching people about new materials and all kinds of 21st-century imperatives that, in general, I reject that it's a trade-off. I do agree that we have potentially oversimplified the problem at times. Of course, there are trade-offs. It's just easy to opine about trade-offs when you're not the victim.

Brian Lehrer: You mentioned how we define costs in your book, Pricing the Priceless. You asked why we value the indispensable atmosphere at zero, but dispensable production in the trillions. I think Oren Cass might argue that in terms of actual prices, the costs that working families pay for their energy, the income from their jobs, that sort of thing, pricing the atmosphere might seem more like sentiment than hard data on the impact on people's lives. I don't want to put words in his mouth, but how would you respond to Americans who might think something like that? How would you introduce listeners to your concept of valuing the indispensable atmosphere at more than zero?

Paula DiPerna: The atmosphere is 60 miles. It's all that protects us from burning up from solar radiation. We're basically, if you think of it as a cosmic penthouse. We're storing dirty diapers in that penthouse right now, which is the legitimate byproducts of burning fossil fuels. It's true that fossil fuels did generate significant industrialization. If we continue to load the atmosphere with those emissions and dirty diapers, our ability to be insulated from solar radiation is reduced. We live every day with these extreme weather events.

Back to the insurance. Just an interesting stat. According to Swiss Re, which is a major reinsurance firm, $318 billion of losses just in 2024 related to climate change-related events, of which only 43% were insured. The insured number is huge, but the uninsured number is also huge. Where do those costs fall? They fall on the working class. They fall on the person whose house was just washed away in Kentucky. The FEMA doesn't have the budget to help restore them. We really do need to look at these hidden costs as well as the hidden benefits.

There's much more employment being generated right now in renewable energies than in fossil fuels. The oil companies don't even want to drill anymore because price of oil is so low. I think the whole question of what's productivity and what is cost, and what is benefit, is at the heart of this "trade-off". Really, what's invisible is extremely-- It may be invisible to the standard profit and loss statement, but it is not invisible to the average person who perhaps has a house that's uninsurable and therefore subject to a zero wealth factor if the house is washed away, and who cares after that, nobody steps in to help that person.

Brian Lehrer: Listeners, we can take some calls or texts on the economics of climate change versus climate change prevention policy as we follow up on Friday's segment with Oren Cass from the American Compass think tank with Paula DiPerna, author of Pricing the Priceless: The Financial Transformation to Value the Planet, Solve the Climate Crisis, and Protect Our Most Precious Assets. 212-433-WNYC. Call or text, 212-433-9692. Here's our second Oren Cass clip from Friday. He was coming at this from an economics perspective, obviously. In this one, he argues that while climate change is a serious challenge, the actual climate change models don't suggest a very big economic impact.

Oren Cass: I think climate change is a very serious challenge that we're going to have to cope with. If you want to say that you're following the science and you're understanding accurately the predictions, you need to move away from some of the political rhetoric and look at the actual models. The actual models that estimate the economic impact of climate change over a hundred-year period on the United States suggest that the impact is simply not that large on the order of a few percentage points of GDP, not per year, but total.

When you think about the costs in terms of what that means in natural disasters or otherwise, again, there are absolutely real costs there, but they are not at all commensurate with the idea that they are the major challenge facing this country.

Brian Lehrer: I will acknowledge that we didn't pursue that further, like having him cite which economic models he's talking about. We were covering many different economic things from his perspective in that conversation. It's just that the climate piece, which was very little of the segment, actually, Paula, really jumped out. It jumped out at a lot of listeners. That was the biggest thing callers reacted to. It was a big enough thing that Oren himself wrote a newsletter post in his Substack newsletter after the interview about that. That's the piece of the segment that he chose to dwell on, as well as a lot of the pushback of our listeners dwelling on that little piece of what we discussed during that whole segment.

I don't have the particular models to cite, but how much do you agree or disagree with his take on how much economic pain unchecked climate change will cause, or not, according to economic models that you may know?

Paula DiPerna: Thanks for that question. There, I totally and utterly disagree with him. First of all, over 100 years, we are a huge country and we've been able to buffer effects, and in fact, the increase in global temperature has been in the last more or less 50 years. Whatever happened in 1900 and even 1940 to the climate is almost irrelevant. It's a much more recent phenomenon. GDP is notoriously insensitive to "intangible or non-financial costs".

If we're measuring productivity by GDP alone, he might be correct that you don't see in the GDP figures a hit from climate change. Those dollars, those uninsured losses, they don't go away. They go bouncing around, and they land on somebody. They've been landing on three people, three sets of people, the victims themselves, the people whose houses get washed out, the public purse, which would be through FEMA trying to ameliorate the difficulty, and the insurance sector, which has been late to the party but is now waking up to the fact that they are going to own all these losses and they cannot meet those costs.

What about a young couple that want to buy a house and cannot get a mortgage because they can't get insurance to the house, neither flood nor fire insurance. That's not a cost. Why wouldn't you call that a major cost that could destroy the life of that particular couple? It depends if you're looking at gross national product, you might not see a hit. I personally asked Alan Greenspan about this, and he said you're talking about one of the most important issues in econometrics. What are we measuring? What is productivity? What is the GDP leaving out? This is an ongoing discussion. I'm afraid that Mr. Cass's economics are passé.

Brian Lehrer: You even ask in the book, and I'd actually love to get the two of you together on a segment one time and have the two of you hash this out, but you even ask in your book, "What is money for?" You cite reimagining the very purpose of capitalism. I'm curious how you would introduce people to that high-concept thinking in the context of your last answer, if they're mostly concerned with day-to-day affordability.

Paula DiPerna: Affordability is also prevention. What is money for? Money is for social prosperity and public health, and civilization. Otherwise, it's just a lubricant. We all like to have enough of it. It's basically, in my opinion, a lubricant for civilization. You can hoard it if you want, or you can use it. If people are concerned about affordability, I go back to the example of buying a house, or we want to use the money to allow that couple to make an investment and have a stake in the economy. If we're not going to use the money to make it affordable for them to get a mortgage or even possible to get a mortgage, then they're going to be on the deficit side of the ledger.

The other thing that people don't realize, and this is a higher concept even, but not so hard to understand, we all know about bees, we all know about wind. Nature is an unpaid worker. Nature is probably the most exploited worker in the history of the world. All the work nature does for us, buffering coasts, filtering water in a swamp, bees pollinating, we all know bee colonies have been crashing. All of those are related to climate change. Those costs do not show up necessarily in standard econometrics.

Imagine if you were running a company and you did not have to pay your workers, how profitable would you look? It would just be all labor would be free to you. You'd be a pretty successful company. Our GDP is totally inflated from that point of view because we are not paying nature for its work. This idea of, how would you pay nature? There's all kinds of financial instruments that are trying to do that now, but at least one should include the costs of nature failing. Bee crash, bee colony crashes, is a very vivid example. Take coastal buffering. The distribution of wave energy on a coast through wetlands and mangroves, which are disappearing worldwide.

The United States, back to Mr. Cass, has to some extent been insulated because of our size and the fact that we have four seasons, and we have growing seasons everywhere in the country, practically. Now we're beginning to have a shortfall on that. We're losing our topsoil. Water is a problem. These data centers are frantically talking about how they're going to meet their energy demand, but they have no answer for how they're going to cool those data centers because of water shortages. These costs are everywhere, and it's not intelligent to not recognize them.

Brian Lehrer: Here's our third and final Oren Cass clip from Friday. This one argues a specific piece of the economic impact of a large-scale transition away from fossil fuels. As you'll hear, he says it would especially hurt people with good jobs who don't generally live on the East or West Coasts.

Oren Cass: You are replacing an existing very strong, robust energy sector and industrial economy that provides a lot of very good jobs, particularly in rural parts of the country away from the coasts. You're trying to supplant that with an alternative. You're not creating anything new. In fact, in general, the jobs in the newer green version of the industry tend to be much less productive, don't pay as well. This was a huge problem leading to the UAW strike, was that when you say you want to replace conventional vehicles with electric vehicles, what that means for the supply chains, what that means for the quality of the jobs in the auto industry, it goes down.

Brian Lehrer: Oren Cass here on Friday. Paula DiPerna with us now, chair of the board of the group Humanity Insured US and author of Pricing the Priceless: The Financial Transformation to Value the Planet, Solve the Climate Crisis, and Protect Our Most Precious Assets in our Health and Climate Tuesday section of the show. Paula, he cites the recent United Auto Workers strike as being driven in part by the transition to electric vehicles, meaning fewer and worse-paying jobs than workers have had making gasoline-powered cars. Did you watch that strike unfold or otherwise have a take on the impact of a large-scale transition to electric vehicles on that part of the workforce?

Paula DiPerna: The strike is a complicated thing, and clearly there are all kinds of factors involved with striking, not the least of which is arguments over health care and benefits and so on. To some extent, again, it is true that the rollout of electric vehicles, I think we would all have to agree, has been spotty at best. The charger stations. We haven't really realized that dream. Personally, I think hybrid vehicles, we should have made a bigger investment up front on hybrids because I think the 100% electric is a big step if you don't have the infrastructure.

What I don't agree with is that moving away from combustion fuel engines is a chiller on employment. In fact, LinkedIn, for those people who are interested, did an amazing report last year called the Global Green Skills Report, which breaks down all of the new skills that people are learning with regard to some of these new fields. The UAW is very involved in training, trying to train its members for these new skill areas.

Hydrogen, for example, burns without a flame. A skill, if you're going to talk about using hydrogen as a fuel, very clean. If you can master it, how do you handle hydrogen? How do you manage transmission of hydrogen? That's a very high-level skill that people can learn. An interesting stat from this LinkedIn report, which even I didn't know, is that hiring in the renewable energy sector has outpaced fossil fuel hiring. Is now 120% higher than fossil fuels. Now, the salary differentiation-- Hello.

Brian Lehrer: Yes, go ahead.

Paula DiPerna: Sorry, I thought I lost you there. The salary differentials have probably nothing to do with whether it's a fossil fuel job or a renewable energy job, has more to do with whose entry level and other aspects of salary differentiation. Once again, I think tremendous oversimplification. I do return to the fact that we also have, to some extent-- The climate change advocacy community, has to some extent oversimplified, but not to the extent that Mr. Cass is talking about.

This is the future, this is an opportunity. It's also an infrastructure issue, Brian. Look around us. The whole country's infrastructure, it's crumbling. Climate change requires resilience. Resilience implies rebuilding, redesigning, rehabbing, reinventing almost all of our infrastructure. Look at Penn Station. What is that all about? That's about infrastructure that's been failing. I was just in an Amtrak train in the tunnel where the wall looked like the inside of a toaster. We had to stop in the tunnel, and I thought, "We're going to burn to death."

There was all this red ignition on the wall in the tunnel. You could actually see. Now, renovating that tunnel and making train travel into Penn Station much more livable. Is that an infrastructure challenge, or is that a climate change challenge? It's both. If you use climate change as a driver for invention and innovation, and building, it's extremely exciting. One of the problems with his analysis is he turns it into like a punition. It's like a punitive thing. "Oh, we have to eat this pill." It's not a pill. It's a key to the future.

Brian Lehrer: It's a pill for some people, is what he's arguing. The larger point in the clip that we played is that many good fossil fuels-related jobs are threatened, mostly in the middle of the country. The implication, I guess, is that, A, it's a disproportionate economic impact on working-class non-coastal elite Americans, and B, by implication, no wonder so many working-class Americans tended toward Trump.

Paula DiPerna: I don't know about that. Texas is very, very big in wind energy. Native Americans are fully invested in the western plains states in renewable energy. I think that's again, a cheap shot at the coasts because there are elites everywhere, and there's poor people everywhere. It's also oversimplifying every state in this country, Montana, Wyoming, as I say, Texas, they're all investing in renewable energy. Also, it's common knowledge that drill, baby, drill, the oil companies themselves don't want to increase production because the price is too low.

The fossil fuel industry is cognizant of the fact that its days are somewhat numbered. We may not ever get off of fossil fuels entirely because they're highly efficient. We haven't solved the problem of how you heat home with other than fossil fuels all year long, especially in areas where wind is intermittent and solar doesn't work, and costs of installation are still, to some extent, too high. We can always mean test things. One of the things that probably needs to be looked at is-- This was a problem in France with the Gilets Jaunes and the riots in Paris. The carbon tax should not have fallen on the truck drivers.

The truck industry should have been exempted for the first two or three years. Why should they indeed have carried the burden for the whole of Europe? They could have been exempted, and they were told they had to drive at 55 miles per hour, and that cut significantly into their own personal income because they could not deliver as quickly. The company didn't take that burden. The individual truck driver had to own that loss. No wonder they rioted. I'm not excusing riots and violence. I'm just saying that we can have policy tools that insulate people from these transitions. There, I would say, we have failed, probably, but that doesn't mean we can't improve.

Brian Lehrer: Here's Sheldon in Forest Hills, Queen, calling about the EV, electric vehicle, part of what you in the previous clip were talking about. Sheldon, you're on WNYC. Hello.

Sheldon: Good morning. The point I agree entirely with your guest, I think Oren Cass has deliberately downplayed the technological advances that are going to stem from this whole new industry. It is much like what happened at the beginning of the Second World War, what happened, and trajectory at the end of it, all these new things that came about. Granted that climate change is not a war, but it is a huge sociological change just like that. I believe that we're going to see things technological advances that we haven't even thought about. Yes, the EV industry has produced a product that is not at its apogee yet, that will be immensely more important than the gasoline engine.

Brian Lehrer: Sheldon, thank you very much. That's an interesting hypothesis. I don't know if you have data to back up his argument or refute it, but part of Sheldon's argument there, especially at the end of the call, is that just as fossil fuels perhaps and so many other things were technological developments that then drove economic change, it's not just government policy that's driving change toward electric vehicles. They are genuine technological innovation that would overtake the gasoline-powered car eventually anyway. I'm curious if you agree with that.

Paula DiPerna: I'm not an expert in automotive timelines, but I tend to agree with that because history does show that one invention does surpass and supplant another. I do know that the UAW is very interested in upskilling people relative to the robotics and all of the things that go along with developing a reliable all-electric vehicle. I would tend to agree. Again, back to what timeline are we talking about? Election cycle is every two years. The science of climate change runs on a endless timeline. It doesn't line up with necessarily either the political cycle or the financial cycles.

We're getting a lot of information about climate change that then we're trying to translate into economic planning at the level of a car company. It's a bit difficult to keep those two things in alignment. In general, it's true that new technologies tend to throw off all kinds of new skills and new opportunities for learning. New materials, people are working on all kinds of things. The Chinese CATL, the largest battery producer in the world, and we didn't talk about that. China, if we want to talk about competition, China owns all of these new industries right now.

By that I mean they are experimenting, they are developing, they are putting it out into the Public, they do demonstrations. They're working on batteries that don't require some of these rare earths like cobalt and lithium, which are very dangerous to mine. Here we are to tear the bottom of the sea. Undersea mining for what? For these manganese nodules that are basically called batteries in a rock, where you get four of these rare minerals in the same piece of rock, and we have no structure to decide, okay, one, is that good for the ocean? Two, what are we going to do with these minerals? Just create more doodad iPhones. We get an iPhone 16 and not an iPhone 15.

It's true that we have to figure out how we're going to use these new technologies for broader public purpose and not just commercial benefit. I think that's the conflict, Brian. I don't think it's about left and right anymore. I think the Titanic battle is between public purpose and private purpose.

Brian Lehrer: Last question.

Paula DiPerna: If everything only-- Sorry, go ahead.

Brian Lehrer: Go ahead. Did you want to finish the thought?

Paula DiPerna: Just that I think if everything exists for purely commercial gain and there's no public purpose guardrail, then it's lost. Profit is an important driver, but if that's the only goal, then we go back to priceless things. What about public health? Are we really going to just say that only profitable health services are worth delivering? We have to maintain a public purpose. I think that, as I said, is really the debate we should be having, is not between left and right, and God knows not even between Democrat and Republican, but what's it for? What's government for? What's money for? What are we here for? These are cosmic questions, but I think we're all struggling with them right now.

Brian Lehrer: Last question, therefore, to your role as chair of the board of the group Humanity Insured US, which works with the insurance industry. Sharon in Livingston, New Jersey, writes, "Can your guest please point out the wicked irony that insurance companies are underwriting most of the fossil fuel projects like pipelines, mining, factory, farming. Yet insurance companies are now insuring or denying victims of climate change. Insurance companies must stop supporting fossil fuels."

What do you think about that wrinkle on it? Certainly, we talked earlier about how insurance costs are going up for almost everybody because they're having to pay more climate change-related outlays. What about the fact that they're at the same time underwriting the fossil fuel projects?

Paula DiPerna: Ironies are everywhere, and that's not an insignificant one. On the other hand, we've been depending on fossil fuels, and they also underwrite a lot of things that are necessary. I definitely think there's room for public policy to rein in the insurance companies and rein in these increases. There again, the facts of the matter are that these weather extremes are going to continue. If the insurance sector cannot meet those costs, then somebody else has to step up, namely the taxpayer.

She's completely correct that there's a lot of contradiction in the insurance sector. They have started to move. What we, I think, have to be alert to is just looking for quota bailout. The insurance sector could turn to the government and say-- and therefore us. We have to remember the government is us. It's our tax money. If the insurance sector were to turn to the taxpayers and say you have to help bail out the sector because the costs are too high, that's where, again, you look into, what is productivity and what is government for? Why should the individual person suffer and bear all that cost alone? That's really not acceptable.

Brian Lehrer: Paula DiPerna, besides her work with the group Humanity Insured US, she is the author of the 2023 book, Pricing the Priceless: The Financial Transformation to Value the Planet, Solve the Climate Crisis, and Protect Our Most Precious Assets.. Thanks so much for coming on with us on this, Paula. Thank you.

Paula DiPerna: Thank you, Brian. Always good. As I say, take care. Bye-bye.

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