Ted Audio Collective HBR presents Hello everyone, you're listening to After Hours.
I'm Felix. I'm Rebecca.
I'm Rowie. Did you guys watch the Oscars?
Wait, when were the Oscars?
Wait, what are the Oscars?
See, I knew we're in good company.
I think no one watched.
Yeah. It must be so disappointing.
It must feel very alarming.
I feel that way as a professor sometimes.
Like, I'm just talking and nobody's here.
Am I teaching? Yes.
Are you a faculty member without an audience?
Maybe not. So we're not going to be a source of inspiration or information for our listeners.
But we did bring topics.
We brought topics. That's the good news.
So I would like to talk about global climate change and the carbon emissions plan of the Biden administration.
I think that's a great topic.
Yeah, absolutely. Did you bring a topic also?
Yeah, that's so important, but I bought soccer.
Ooh. Are we going to call it soccer or football during this episode?
We should just decide now and then stick with it.
Football? Okay, football's fine.
It'll be very confusing to everyone.
Okay, so I bought football because I want to understand what happened with this Super League.
And what's with football in the first place?
That's an important part of the conversation.
That seems very important.
Two fabulous topics.
So President Biden announced that the United States would slash carbon emissions by about 50 percent by 2030.
When you heard the news, what was your first reaction?
My first reaction was, will the rest of the world believe us?
Will we be able to make that kind of long -term commitment given our electoral challenges and our political cycles?
Like, if I were sitting somewhere else, I might think like, oh, yeah, well, we'll see how this sounds in four years or eight years.
That was my first reaction.
How about you, Rebecca?
Were you surprised?
I was surprised and elated.
It's not the answer.
There are all kinds of questions.
It's not going to solve the problems of the world.
But my goodness, as a down payment, it is so exciting.
And to Rawi's point, if we can start turning the flywheel fast enough in four years, it'll be hard to stop.
And there's a lot of evidence that we're kind of moving in that direction.
So I think this is fantastic, really exciting.
What are the most likely actions that the administration is going to take?
Which parts of the plan sound more speculative?
What do you think are the early actions that then will actually stick?
And, you know, hard to get rid of over time.
Well, if you read the plan, the whole thing is a tiny bit vague, Felix.
I did notice. It's like, well, we're going to cut emissions in half by 2030, 2035.
It's going to be great.
We're going to create fantastic jobs.
We're going to remake American industry.
It's going to be fabulous.
So the devil is in the details, but the Biden team has some fantastic people who have thought a lot about these issues.
So if you ask me, what will they really do?
I think they will announce significant subsidies or incentives for building renewable energy at scale.
And I hope they will concentrate on the places where the federal government can really make a difference so that's building a robust grid, because the best place to put wind turbines, for example, is in Texas, but we need some power in Texas, but we need other places to.
I'll swear, yeah. So, you know, building a grid is super important.
I hope they'll focus on the problem of battery storage and backup power, because if we're really going to move the whole grid, you have to take account of the fact that the wind doesn't always blow and the sun doesn't always shine.
And that's a fantastic opportunity for, I think, the federal government to really make a difference.
Education and training, I mean, even before this announcement, a wind technician and solar panel installers were, I think, the number one and two fastest growing occupations in the US over the last five years.
So how do we bring more people into that and make sure those jobs are really good jobs?
And then in transportation, if we're really going to electrify half the fleet, to make the numbers add up, you have to begin buying some of the old cars back.
You have to get these old, cheap, polluting cars off the road, and you have to lay out charging stations.
And again, that's the kind of place where federal money could really accelerate the transformation of the whole space.
So that's what I'm hoping they'll do.
China is actually a great example of just how effective subsidies for electric vehicles can be.
If you look at the up and downs in their market, they're so closely associated with the subsidies that they provided.
When we talked about Tesla, some time ago, I made a complaint about the absence of charging stations for the romantic cross -country trip.
And one of our listeners shared with me, like, actually, we have them and showed me this map of all these charging stations.
And so I think one of the challenges is the transition from one built infrastructure to another built infrastructure.
And to me, one of the most promising elements of the plan is it's an infrastructure plan.
I think the infrastructure element is the most exciting element to me.
Well, it's exciting because one's always worried about federal spending.
It's always, will it run up the debt?
Will it crowd out private spending?
Will it be badly spent?
But as we think about what are the kinds of investments that really pay off for the long term?
Well, let's see, investment in basic R &D, very high returns, investments in education, very high returns, and so much data, investments in the right kinds of brick and mortar that really leave us assets that keep generating returns for the long term.
And building a clean power sector, you guys probably know this, but I'm still blown away by this.
You know that when we emit greenhouse gases, it's causing climate damage.
And so that's floods and famines and fires.
But did you know that the health damages from burning fossil fuels are about equal to the climate damages?
No, I didn't know that.
Absolutely. Cleaning up the air would have immediate tangible effects on the health of Americans right away.
So you get a dividend, like, right away.
And by the way, we addressed the long term problem of climate change.
Such a great point.
Maybe the most surprising thing about the plan was the absence of a big role for carbon taxes.
When I saw the plan, when I saw that, oh, my God, 50 percent reduction, I was so sure that there would be a big role for carbon taxes.
Why do you think that was left out?
I wonder if it has something to do with marketing.
Like, here's our plan, and we are going to put taxes as part of our plan.
I wonder if just it's even the language of it that's just not going to work right now.
And so they have to go in a different direction, even if that's a sensible idea.
Well, and what's odd about this is it's an idea supported by those Republicans who support action on climate change.
That's right. Yes. So you think if you were trying to build a bipartisan coalition that you would actually include this.
I mean, I love the carbon tax, but Ravi, I think your intuition is exactly spot on.
The word tax is death in the current political environment.
And it's also the case.
I mean, we're not seeing a bunch of research that attacks alone certainly can't get us where we need to go.
The kind of infrastructure investments we've been talking about are super important and can really make a difference.
And maybe we'll see as these roll out and we begin to see the effects, maybe there'll be space for a carbon tax.
So maybe it's a phasing.
Progressives really don't support carbon taxes.
If you look at anyone who is a prominent voice in the progressive camp, they are dead serious about doing something about climate change.
But carbon taxes are not on the list of desirable instruments and it's mostly for their distributional consequences.
The idea is, as always, as a fraction of its disposable income, lower income households will be hit harder by a tax that is uniform as a function of the gallon of gas that you use.
And what is left out and where I was a little disappointed about the administration because the comeback is to say, these are not additional revenues for the government.
These are revenues for the government that we will redistribute.
And if we do the redistribution in a smart way, we can actually target the very population groups that would suffer from a carbon tax.
So it seems almost like too good to be true.
You could do something really fabulous for the environment and you could redistribute in a way that is politically desirable.
But somehow it didn't happen.
We know that everyone in the Biden administration understands this.
Of course. Because if you say carbon tax, the next thing in the sentence has got to be and dividend.
You have to send it back because otherwise it's massively regressive.
But if you send it back, it actually transfers wealth to people who need it, people who have lower incomes.
There's a net transfer.
Politicians, I think, are loved for action.
If you can say, here's my plan and my plan does 25 different things and each of these proposals will create jobs.
That feels very different from a marketing perspective as opposed to saying, oh, I'm going to do this one really elegant thing.
A ton of carbon is going to cost $23 as of tomorrow in California where there is a carbon tax or in the Northeast compound.
Politicians actually undermine the effectiveness of the carbon tax because they have a carbon tax.
And then on top of that, there are additional regulations, additional initiatives and additional activities.
When in fact what you should do is provide the public goods, obviously the infrastructure, and then just let the market do its work.
But politically speaking, I think that must be not really appealing because you want to show that you're in the fight.
What about the rest of the world?
What about the other big emitters?
Is this going to be a way to come toward a new arrangement with the countries that matter most?
Is this going to make a big difference for that?
Let me try optimism and then Felix, maybe you can try the other.
I could be the pessimist here.
So here's the hopeful case because, Raul, you're of course completely right.
We could take emissions in the US and Europe to zero.
And if India and China and Africa keep emitting on their current path, we have massive problems.
So what's the big deal?
It feels to me there might be two big deals.
One is we could see these investments really drive down the cost of addressing climate change.
So if the US invests at scale, the price of batteries could go further down.
We could build grids.
They could be much cheaper.
Charging stations, like, everything could go down a learning curve.
And good old American know -how, if we really put it to work addressing these problems, I'm very hopeful we might actually get somewhere.
And for me in the long run, the only long -term solution to persuading India -Africa to decarbonize is handing them technology and saying, look, it's cheaper.
That's realistically the only way it's going to happen.
So how do we make the technology cheaper?
We work at it. So that's one reason to potentially be optimistic.
The other, but this is much more your field than mine, is the fact that the US hasn't wanted to play ball at all with respect to climate has given everyone an out.
Why should any other country seek to reduce its emissions?
And if the US really steps up and really is serious and to your earlier point, it's more than just a flash in the pan and it continues for a while, could that be really helpful in trying to build some of the global cooperation that we need so badly?
Yeah. If we walk the walk, it would make perhaps a big difference.
The Chinese perspective, I think, is twofold.
Yes, of course, they're really big.
But if you look at it from a per capita perspective, China is ranked 13th.
India is ranked 23rd.
If you look at it historically, given that climate change and the accumulation of greenhouse gases, it's the stock of greenhouse gases that of course matters.
Given the relatively recent industrialization of these really big countries, their overall contribution to the stock of greenhouse gases is just not so significant.
And so I'm with you, Rebecca, on we can't do it without China and without India.
But given the per capita considerations and given the history, I think we absolutely have to be in a leadership role.
So, for instance, I was surprised when I looked at per capita statistics that country number six is South Korea.
We never talk about South Korea in a climate change context, and yet their contribution per capita is really significant.
And so because the international project is a combination of technology transfer and moral suasion, I think taking seriously that we're in debt here.
And if we don't go first, it's just not very reasonable to expect China and India to go before us.
So on a scale from one to 10, how optimistic are you that this is actually going to happen, this will actually make a difference?
Putting us on the spot.
I like it. You have been teaching for a long time.
That's a great way to put it.
I like an eight on this.
I'm feeling good. But I think for what it might mean for the geopolitical context, this could be a 10.
And in a way, I think that's more important.
Like I'd love to see the United States make the progress on these goals.
I think the self -sustaining elements that Rebecca mentions are so important.
But what a difference it would make for the conversation if we really in the United States were serious about this and could be part of leadership, sure, but also just not being hypocritical, just being like real about the whole thing.
So I gave you two numbers and I didn't play your game exactly.
Good. I'll take the average.
I want to take you on one of those.
How about you, Rebecca?
Oh, Felix, I'm at a 10.
Given the current moment, given what could be expected, I think this is fabulous and might really make a huge difference.
I mean, we might look back and say that was a major turning point.
I think we really could.
OK, fantastic. Love nothing better than an optimistic episode.
Thank you both. All right, Rebecca, now to a really serious issue after just talking about climate change.
Football. Football.
And more precisely, the European Super League.
So some days ago, a group of owners of the richest football clubs in the world announced that they were going to form a Super League.
And in the Super League, the top 20 clubs would play each other midweek and there would be some opportunity for other clubs to join.
So I think it was the top 15 clubs and there would be competition for the other five spots and they would sign amazing TV deals because the football would be so much better and so exciting.
And they said this was going to be great for the sport.
And two days later, the entire thing collapsed in shambles.
Yeah. So my first question is, is was it a bad idea in the first place?
Can I just admit that I have very, very, very strong feelings about all of this and I'm having a hard time disentangling my feelings about the sport and my feelings about the business.
But I hate this idea.
I hate it. I think it's the worst idea in the history of ideas.
That's the sporting side.
But the business side, I think, is complicated and I think it's still a bad idea on the business side.
This is like an alternative to a different organization, the Champions League, which is a different midweek tournament for big clubs that do well in their domestic leagues.
And so this was definitely from a business perspective an effort to displace a different business, which is the UF as Champions League.
And I think that the organizers of the Super League underestimated both the business element of it and the sporting element of it.
I'm so glad it's dead.
Like what a nightmare that would have been.
But Rowie, why? I mean, for someone like myself who isn't a huge football fan, I'm like, well, they needed the revenue.
You'd have good players playing together.
What's the harm? What's the big deal?
Well, I'd love to hear Felix's point of view about this.
And I just should translate for everybody.
I'm talking with two Europeans about this.
And so the translation of football is soccer.
Just for all of the Americans, we're talking about soccer, just so you know, if you tuned in late.
I'll just say two quick things.
One is there's a funny thing about European sports leagues, which is that they are spectacularly hyper capitalist.
The rich get richer almost always.
There's a little bit of profit sharing, but basically you can buy your way in to extraordinary results with some exceptions.
And the exceptions are really important, and I want to come back to those.
And that's unlike the United States sports leagues, which are not hyper capitalist.
They're the opposite.
They're kind of communist.
They're designed to prevent dynasties.
Now you're pushing it.
But what about the Yankees?
If you think about especially the NBA and the NFL, they're designed to prevent prolonged dominance of any one team because there are so many restrictions on spending money and how the money is shared.
And most of the restrictions that exist in the NBA and the NFL, they don't exist in Europe.
But the other part that offends me, and this is on the sporting side, which is that and Pep Guardiola, the legendary coach, put it best.
It's not a sport if it doesn't matter whether you win or lose.
Having a permanent set of 14 or 15 clubs in the Super League who could be doing terribly in their domestic league, but they always know they're going to get the revenue from being in the Super Fancy League, even if they're terrible, that's just not sporting.
I think the reaction has more to do with the big money that is dictating the sport.
It's the super rich owners that come up with ever new schemes.
Oligarchs. Yes, that are terrible for the sport.
And so what I find really interesting is when Aniele, one of the oligarchs, was in support of expanding the number of teams in the Champions League.
There was a firestorm of opposition.
That was a terrible idea.
Now that they propose to take down the number of teams, there is a firestorm of opposition.
This is a terrible idea.
And I think the almost automatic response to any proposal is that it's really going to destroy the sport that we love.
So, Felix, you're pointing to something that I found almost the most puzzling aspect of this whole affair, which is it appears to have been the case that the Super League was proposed without anyone mentioning it to the players.
Oh, yeah, it was secrets.
The managers, the sponsors.
How is this being run?
I mean, from a business point of view, this seemed crazy that you wouldn't talk to other people about what they wanted and where the sport might go.
It seemed insane. I think one difficulty you see in the reaction.
So, WAVA in particular, one of their first responses on the player level is, so maybe you're not allowed to play in a world championship if you join one of these other leagues.
So, this is essentially a power struggle between the richest clubs and the WAVA organization as it exists today.
I think there's room for thinking about what does an ideal tournament look like?
And I think it needs to have two things.
It needs to have this uncertainty where we think, is the champion going to make it or is the champion not going to make it?
So, Porto eliminated Juventus in March.
Really amazing. Oh, my God, who would have thought?
But it can't have a totally dominant team that has almost a day off because the opponent team just has no chance whatsoever.
And so the intuition, maybe we get more excitement by tightening and by having really successful teams play each other more often.
You know, nothing more exciting than watching Madrid against Barcelona or watching Milan against Juventus.
And so if you get more of those, that's actually, I think, very nice.
And, Felix, why not implement Ravi's solution?
Why not even out the players across the teams so that the average match is much more interesting and much more balanced?
If you create a way for the top teams to be even more successful, but they don't have to share, that, of course, makes the national leagues more uneven.
And in a sport where there's too much unevenness to begin with, then that's not a good thing.
So you should find a compensating mechanism.
But the way the compensating mechanism works in Europe is that it all goes into player salaries, right?
So take the most successful club in Europe, Barcelona, now a billion euro in revenue, or I think maybe a billion dollars, I forget.
And 75 % of their costs are salaries.
You know how we sometimes complain that people do really amazing work and everything flows to investors?
Soccer is not like that.
Football is not like that.
It all flows to talent.
So you have the best people who have a pretty vested interest in keeping things the way they are.
Now, can we talk a little bit about the fans' reaction?
The six UK teams pulled out within 24 hours.
They were the first ones to pull out of this league, and they just apologized, got on their knees and said, like, we're sorry, we're sorry, we're sorry.
We didn't mean it. It was a mistake.
Please forgive us. And that came very much from the reaction of the fan base.
Who are these fans?
Are they the stakeholders in these organizations that are the clubs?
I think that is a fascinating question.
There's a part of stakeholder theory which simply says the best way to make money is to talk to the people you have to work with.
Connect to your employees and your customers and your investors, and not to talk to them is a mistake.
And the fan event I read about was in Chelsea, right?
They got, like, 6 ,000 fans.
It was all over the place.
But Chelsea, yeah, absolutely.
Yeah, Chelsea was a really big one, and I'm just deeply puzzled.
Did the clubs, like, not think they didn't run it by their customers?
This doesn't feel to me like a stakeholder issue.
This feels to me like a bad business decision issue.
But let me see if I can wrap up the conversation about football.
What you have both succeeded in persuading me is that the European football, thought of as a business, might be majorly dysfunctional.
Like, the whole way it's structured.
And that this incidence was kind of symptomatic of some really deeper problems.
And I think that the record should be set such that all of the listeners know that Rebecca has been looking at me and Felix getting worked up and sweaty about this with a mix of puzzlement and disbelief.
I thought I knew you two, and all of a sudden you're, like, yelling into your microphones about what is honestly a game with grown men running around in shorts kicking their ball.
But I would just like to share one more thought, which is connecting the business of it to the romance of it is, I think, the whole thing.
And the biggest problem with this league is that there was nothing romantic about it.
This is always fun to watch big clubs with extraordinary players play each other.
But you know what's way more fun?
When Lester won the Premier League in 2016 for the first time ever.
And maybe they'll never win it again.
It doesn't matter. It was this extraordinary run and they beat all the big clubs.
And if you lose the sense of romance that, like, on any given day who knows what's going to happen and maybe somebody's going to bring down the giant, the business is the romance.
And so what's most interesting to me is that this was a business idea without the romance of what the sport is about.
And that was, I think, the business mistake.
So they should fix the business aspects because the romance sounds really important.
To save the romance.
Beautifully said. So we want to pick Ravi, what do you have for us?
So given all this time we've spent talking about football and including the Premier League, on Saturday, May 8, Chelsea will play Manchester City.
Always an exciting match between two of the biggest clubs, but these are also two of the clubs.
That were for at least 24 hours planning to be in the super league.
And I'm really curious to see what the fans will be like, what the coverage will be like.
Here we go. A couple of the giants who wanted to get away from all of the riff -raff in the rest of the league and just play each other over and over in some other club.
So I'm going to tune in and see, like, how are people feeling about these oligarchs proposing to take their clubs away?
And now they're playing each other.
Interesting. Interesting.
So I have a composer I'm in love with, a guy called Josquin de Prey from the 15th century.
It's some of the most complicated vocal music ever written.
And when I say complicated, you're going to think, oh my God.
But what that means is it is totally ethereal and incredibly interesting.
And this moment of spring where you get the feeling that life is opening up, more and more people are getting vaccinated, there's a kind of opening.
And you want, at least I want, music that isn't saccharine, but is truly joyous and truly beautiful.
And you haven't heard a million times.
So it's all kind of new to the ear.
Josquin de Prey. And if you want to start with a particular disc, there's a wonderful new recording out by a group called Musica Sacra.
But really, all of it is amazing.
I'm just totally hooked.
I've been listening to nothing else for a couple of weeks.
How did you discover it?
My brother sent me a recommendation.
He's super serious about music and sings in a chorus.
So he's like, Rebecca, you have to listen to this.
And I was instantly hooked.
And he was right. Wonderful.
That's a great recommendation.
Mine is an episode of Radiolab, the podcast.
And the episode that I truly enjoyed is called Red Herring.
It's a story that takes place during the Cold War when Sweden discovers Soviet submarines.
Dangerously close to the Swedish coast.
And for more than a decade, they build up defenses.
They try to locate the submarines with the help of microphones.
They would analyze the sounds that had many puzzling aspects to them.
And after the Cold War, at some point in time, it turns out what they were listening to had nothing to do with it.
The Soviet Union had nothing to do with submarines.
I'm not going to give away the story.
It's fabulous how they actually discovered what it was.
And it's an interesting story that makes you think about data that you have and that you're trying to interpret.
And the response that you then build based on that interpretation and how that can sometimes lead you astray.
So the episode is called Red Herring.
It's on the podcast Radiolab.
That sounds great. So this is it.
Thank you for listening.
If you thought our sound was really fantastic, as always, this is thanks to the wonderful work of Peter Linane.
This is After Hours from the HBR Podcast Network.
And I'll see you next time.
