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Small Technologies Can Solve the Planet’s Biggest Problems | Podcast Highlights

Blog Post | Science & Technology

Small Technologies Can Solve the Planet’s Biggest Problems | Podcast Highlights

Todd Myers, a director at the Washington Policy Center, joins Chelsea Follett to discuss how technology empowers individuals to protect the environment without the need for top-down government programs.

Listen to the full podcast episode, in which Chelsea Follett interviews Todd Myers, here.
Below is an abridged transcript featuring some highlights from the interview.

What gave you the idea for this book? 

I’ve worked in environmental policy in Washington State for over two decades. During that time, I saw the government’s limitations and how politicians’ incentives were aligned with making themselves look good rather than helping the environment. They often fall for environmental fads that feel good but don’t work. What’s worse, politicians are disincentivized from acknowledging failure, so when their policies don’t work, they just double down. My new book, Time to Think Small, is about the alternative: shifting power from politicians to people.

Why do you believe small technology and private sector initiatives are the future of environmental stewardship? 

When people want to solve an environmental problem, their minds tend to go to the 1970s, to the creation of the EPA and the Clean Air Act. Those might not have been the optimal approaches, but they worked, and at the time, there were few alternatives to government intervention. But things have changed, not only in terms of technology but also the nature of the problems.

Environmental problems today are distributed. Rather than large, single-point sources like big smokestacks, today’s environmental problems come from many little inputs and require distributed solutions. Technologies like smartphones and the internet enable those solutions by breaking down traditional barriers like transaction and information costs. They allow us to coordinate more efficiently and align financial incentives with the environment.

Take Ocean plastic. It’s a big problem, and it comes from all over the world, mostly developing countries. How do you address it? Well, a group called Plastic Bank hired people to collect plastic that could wash into the water. Because most people now have phones, they can geo-locate the plastic, turn it into collection centers, and get paid on their phones. Plastic Bank then sells the plastic to SC Johnson, and it ends up in your Windex bottle. The technology involved is nothing very special, but because the costs of collaboration have fallen so low, they have been able to collect 3.1 billion plastic bottles that would have washed into the ocean and more than 150 million pounds of plastic.

SC Johnson benefits because they get a market advantage. We saw the same thing with tuna. All tuna cans now have the dolphin-safe label because having that label improves your marketing, and in wealthy countries, consumers have the money and the motivation to pay a little extra for the environment.

That’s a great example. Are there any other examples of private sector innovation you’d like to highlight? 

My current favorite is eWATERservices, a program that provides water pumps to rural African villages. Previously, an NGO, the UN, or a government program would install the pump, but when these pumps eventually broke down, they would sit broken for months since there was no incentive to fix them.

To solve this problem, eWATERservices created internet-connected water pumps. Since over 90% of people in developing countries now have a phone, locals could load an account on their phone with some money and use a key fob to access the pump, which measures the water, creating a financial incentive to conserve. When the pump breaks, eWATERservices is notified immediately and sends a worker to fix it. Pumps that sat broken for months are now fixed within a day. And this is not only good for people, but also for the environment. Without a pump, you have to get water from a river and boil it. One of the major drivers of deforestation in Africa is cutting down trees to boil water and cook food. So, if you have access to clean water, you reduce the pressure on the forests.

Why do you write that transparency in the blockchain can make fish better? 

There is a TV show called Portlandia about the crazy things people in Portland do. There’s one sketch where people order chicken at a restaurant and ask, “Is this organic? Is this Oregon organic? Is it Portland organic?” And the waitress comes back with the papers for the chicken, and she says, “Here’s the chicken, here’s how he was raised. And his name is Colin.” It’s a joke, but we can now do that. And we can actually do more than that.

The blockchain is just a fancy name for a transparent ledger. It is hard to falsify, so when you want to know that your chicken was free range and had a nice life, the blockchain is a good way to do that. In the case of fish, you want to make sure that the fish you’re purchasing wasn’t caught where stocks are low, and now you can follow that fish from the minute they bait the hook and see, yes, the fish that I purchased was caught sustainably.

How can technology enhance our connection with nature? 

So, I’m not a botanist. I’m very bad at identifying plants. But now there are technologies that do that. iNaturalist is an app that identifies organisms using your phone camera and an artificial intelligence trained with other pictures people have taken. So, when I take a picture of a plant when I’m hiking, it’ll say, “This is Oregon grape.” It’s incredible. So that has allowed me to connect with nature in a deeper way than just hiking and enjoying its beauty. And this technology is not just a tool to connect to the environment, but it also provides opportunities for conservation. iNaturalist has created a gigantic database of wildlife sightings that has enabled numerous scientific studies.

eBird is another app that identifies birds. Thanks to birders using eBird, there are now millions of recorded bird sightings. In California, The Nature Conservancy wanted to create habitat for migratory seabirds, so they used this data to find the specific parcels of land that migratory seabirds passed through. They asked the landowners, “How much would we have to pay you to flood your fields for these seabirds?” They negotiated a price, flooded their fields, and created the habitat.

The way the Endangered Species Act currently works is if you have good habitat or you have species on your land, the government comes in and says, “You can’t use your land in the way you want.” That means endangered species are a liability. eBird and The Nature Conservancy are turning endangered species into an asset.

Bees are another good example of the market helping protect species. There’s a lot of concern about honeybees dying out, and we do see higher hive mortality than in the past. It used to be about 15% to 20% of hives died each year. Now it can be 40% or 50%.

However, the highest rates of hive mortality are among hobbyists, people like me, who are not that experienced and don’t have much money to spend keeping their bees healthy. The lowest rates of hive mortality, about 20%, very close to typical, are among commercial beekeepers. Why? Because they have a strong financial incentive to keep their hives safe. And in fact, the number of hives in the United States is now close to a 20-year high precisely because commercial beekeepers have the financial incentive to keep their hives safe and to replace them when they die.

What do you mean by democratizing environmentalism? 

Democratizing environmentalism means giving people the information they need to make better decisions for themselves and the environment. When we outsource the environment to politicians, we lose that connection to the environment and to results. In one of the sequels to The Hitchhiker’s Guide to the Galaxy, there’s a funny example where they found that it was too difficult to make something invisible, but what they could do was make something somebody else’s problem. And by making it somebody else’s problem, it was as good as invisible.

That is what we have done with a lot of environmental issues. We have said that politicians will solve this, so I don’t have to worry about it. By doing that, we’ve made those problems invisible to ourselves without achieving the desired results.

Authors

  • Todd Myers is a member of the Puget Sound Salmon Recovery Council and a former member of the executive team at the Washington State Department of Natural Resources. With more than two decades in environmental policy, his experience includes work on a range of environmental issues, including climate policy, forest health, old-growth forests, and salmon recovery.

  • Chelsea Follett is the managing editor of HumanProgress.org, a policy analyst in the Cato Institute’s Center for Global Liberty and Prosperity, and author of the book Centers of Progress: 40 Cities That Changed the World (2023).

Our World in Data | Financial Market Development

Mobile Money Accounts Are Surging Globally

“Mobile phones and the Internet have enabled the growth of mobile money accounts in regions with limited banking infrastructure. These accounts provide simple financial services like deposits, transfers, and payments to hundreds of millions of people.

As this chart shows, the number of active mobile money accounts globally has grown from 13 million in 2010 to more than 640 million in 2023. This is based on data published by the GSM Association.

While the adoption of mobile banking was almost exclusive to Sub-Saharan Africa in the early 2010s, Asian countries have seen significant growth in recent years.”

From Our World in Data.

Blog Post | Financial Market Development

The Democratization of Investment | Podcast Highlights

Chelsea Follett interviews Jennifer Schulp about how technology and regulation are shaping the future of investment.

Listen to the podcast or read the full transcript here.

Tell me about some hopeful trends or progress we are seeing in the financial industry.

One of the most hopeful trends in the financial industry is broader access to financial investment. Traditionally, investment in the stock market has been limited to the wealthy. Investing in the stock market is really important because, over the past decades, the S&P 500 has returned approximately 8 percent per year, which is way more than other non-equity investments.

Financial access has improved tremendously over the last 50 years. In the mid-70s, to make a stock trade, you had to call your broker on the phone and tell them what you wanted to trade, and they would charge you something like $50. So, you didn’t want to place a trade unless you were placing a large trade because otherwise, the fee would overwhelm the trade. And you didn’t want to trade very often. All of it made it very difficult for regular people to invest in the stock market. Over the course of decades, those fees came down as there was additional competition brought into the brokerage space.

In the 1990s, we saw the rise of internet trading, which allowed you to place trades on your own. In 2015, Robinhood started offering no-commission trading on a phone app, which allows people to trade regularly without worrying about fees eating into their profits or adding to their losses. People can now take some money from each paycheck and put it in the stock market. That’s been huge. The entire brokerage industry is now moving towards phone access for easy, cheap trading, and that’s made a huge difference in the number and type of people accessing investment in the stock market.

In 2020, during the pandemic, we saw a massive rise in retail trading that many wrote off to people being bored while they were stuck in their homes. However, a lot of those investors have remained in the market, so what might have started as a pandemic-induced interest in the stock market has become part of a long-term trend towards additional retail trading that has brought in more racial minorities, more low-income people, and more young people.

Easy and cheap trading has also allowed people to experiment with the stock market and learn by doing. There was a study that came out not too long ago by FINRA and NORC at the University of Chicago that looked at the investors who opened accounts in 2020. And they found that those who stayed in the market showed an increase in their financial literacy. Having this access helped them allocate their capital better. So, we have more people invested in the larger economy, and they are getting smarter about it. The benefits will compound over time.

What are some of those potential benefits?

Certainly better personal financial outcomes. Of course, some people are going to make poor decisions. You can’t say, “Because you put money in the market, you’ll be better off.” But for people looking for long-term investment options, the stock market is the greatest wealth generator we’ve ever seen.

I think this could also drive economic growth for a couple of reasons. One, investment gives people a stake in society and the economy, and that itself can drive growth. Two, having retail investors put money that might otherwise be under the mattress or in a low-interest savings account into businesses allows those businesses to flourish.

Are there any benefits for those who are trying to start businesses?

That brings up a new set of questions. What we’ve been talking about so far has been retail investment in public equities markets. But the stock market doesn’t generally provide startup capital. You have to be a mature company to want to bring an initial public offering that gets you listed on the stock exchange. Private market investing is where startup investing happens. And in the United States, far more money is raised in private markets than in public markets. The average person is not allowed to partake in private investment in the United States, as well as in most economies across the world. In the US, you need to be what’s known as an accredited investor, which essentially means you make more than $200,000 a year or you have a net worth of over a million dollars.

This is a very arbitrary standard. You could win the lottery tomorrow and suddenly become an accredited investor, and that doesn’t make you any smarter at investing than you were the day before. It doesn’t make you any more of a capable investor than someone who, say, studied startup investing in their MBA program but isn’t yet making enough money to be allowed to invest themselves. And all of this is a problem because it means the government is standing in the investor’s shoes and making decisions for them. Are they smart enough? Are they rich enough? Is this a good idea for them?

Let’s talk about entrepreneurs, as you asked. People trying to start businesses tend to turn to their community. They tend to raise money from the people that they know best. But if you are a minority or live in a rural or low-income area, you likely don’t know many people who meet that accredited investor standard. You’re already at a disadvantage in raising money and getting your business off the ground. That hurts entrepreneurs in less wealthy communities, the economy as a whole, and potential investors who don’t have the opportunity to share in the growth of that business.

The house recently passed three bills looking to reform the accredited investor definition; two have codified an SEC modification to the rule allowing people who have passed certain securities tests, such as brokers or investment advisors, to qualify as accredited investors, even if they’re not wealthy enough. The third bill is a bit broader; it opens up the testing concept to allow, if passed by the Senate and signed by the President, anyone who passes a test to be able to invest as an accredited investor. There will be costs associated with the testing, and it doesn’t get at the underlying paternalism, but it is a step in the right direction.

Could you talk about ESG?

ESG is actually two distinct concepts, and it’s important to identify which one we’re talking about. It can be broken down into a dichotomy that I’ve borrowed, which is value versus values investing.

“Value investing” in the form of ESG just refers to using environmental, social, or governance factors to analyze whether a company faces risks that might affect its financial performance. Where ESG sounds a little bit different is when we think about it as “values investing.” That kind of ESG is about sacrificing financial return to reach a certain outcome with your investment, like lowering carbon emissions. Of course, investors should be free to invest their money as they see fit. If they want to invest in saving the whales, they should have that opportunity. But it gets trickier when a company or asset management firm makes those decisions about what to do with their investors’ money without being upfront with them. That’s a question of disclosure and whether or not the funds are being clear with investors.

Government mandates are the key place to focus on here because, ultimately, the market should decide whether investing in ESG is the right way to go. Europe has decided, writ large, that the way to tackle climate change is to centrally plan how money will flow through the financial system to choke off funds for non-green investment. Supporting that is a host of European directives on sustainable finance that include a lot of disclosure by companies about how they, too, will meet net-zero goals. Europe has what we in the securities industry refer to as a “double materiality standard,” where European companies are not only supposed to disclose information that might impact the company’s financial performance but also how their company impacts society and the environment. All of this comes with pretty heavy costs.

The United States is now considering how far to follow Europe down that line. The Securities and Exchange Commission (SEC) has proposed a sweeping climate risk disclosure framework. It’s different from the European framework in that the SEC at least recognizes that they don’t get double materiality; the SEC is only allowed to require companies to disclose information that investors might find useful in deciding whether to invest in the company. However, the SEC’s climate risk disclosure rule goes well beyond that. It would require all US public companies to disclose an awful lot of information about climate risk, including scope one, scope two, and, for many companies, scope three, greenhouse gas emissions. What’s important here is that this type of disclosure is not a small undertaking. It’s going to be a massive drag on public companies.

You also oppose government rules that would restrict voluntary ESG-related disclosures. Can you tell me about that?

Sure. There’s been some legislation introduced, some of it passed, from state-level Republican legislatures that prohibits the use of ESG in investment. But this broad prohibition is also not the right answer. In fact, it is itself values-based and seeks to impose an ideology onto investing.

In addition, there are real costs to blanket prohibitions of ESG. One is that ESG as value investing can sometimes yield better returns. Pensions in some states that have introduced legislation to prohibit the consideration of ESG factors have released analyses showing that over the course of 10 years, the pensions might be losing billions of dollars in returns by having their investment pool artificially limited.

Another example is Texas, which prohibits localities from doing business with financial firms that are, quote, “boycotting the fossil fuel industry.” A study done not too long ago showed that the cost of municipal borrowing has gone up in Texas because many firms exited the market, meaning taxpayers in Texas are now paying more for municipal building projects. We shouldn’t forget that narrowing the scope of investment opportunities also narrows the opportunities for growth.

Could you speak about the potential impact of AI on investment and the financial industry?

Many people don’t understand how much AI is already part of the investment industry. For example, AI is already involved with investment research, predicting stock value, and portfolio management. That’s all going on behind the scenes.

I think that there’s real potential with respect to financial advice. AI could make investment advice as accessible as trading on your phone is today. For a long time, we’ve had what are known as robo-advisors, which are essentially chatbots with a narrow tree of advice based on a set of questions. More sophisticated large language models could give individualized investment advice that considers all sorts of circumstances at a very low cost. In the future, you may be able to go on your computer or phone and tell the LLM, here’s what my investments look like; what should I do next? That’s powerful stuff, assuming that the regulators allow something like that to happen.

The Human Progress Podcast | Ep. 50

Jennifer Schulp: The Democratization of Investment

Jennifer Schulp, the director of financial regulation studies at the Cato Institute’s Center for Monetary and Financial Alternatives, joins Chelsea Follett to discuss how technology and regulation are shaping the future of investment.

CNBC | Health Systems

Ro Launches GLP-1 Supply Tracker to Mitigate Shortages

“Telehealth company Ro on Wednesday launched a new tracker to help patients find a popular class of weight loss and diabetes drugs called GLP-1s amid shortages of those treatments in the U.S.

The supply tracker could be a valuable tool for many Americans scrambling to get their hands on GLP-1s, such as Novo Nordisk’s weight loss injection Wegovy and diabetes drug Ozempic.”

From CNBC.