The world is becoming wealthier. Is that a good thing? Or should we be looking to simpler and less material lives? How does a middle class global population affect climate change, for good or ill?
On today's show, Dr. Homi Kharas, a senior fellow at The Brookings Institution and author of The Rise of the Global Middle Class: How the Search for the Good Life Can Change the World, elaborates on what it means to be middle class, emphasizing the relevance of choice as a defining characteristic. People drop the concept all the time, but it isn't really clear what is meant by it. Is it about per capita earnings? Security? The type of labor done? Something else?
He explores how the middle class's values and choices intersect with issues like climate change and government policy. Dr. Kharas sheds light on the evolution of capitalism, arguing that it has always adapted to societal changes, and suggests that this continued evolution is optimism-inspiring.
He counters the narrative of a trade-off between material prosperity and carbon emissions, asserting that technology can and should allow for both!
Tune in today to get a dose of history and economics!
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The Rise of the Middle Class: How the Search for the Good Life Can Change the World
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Full Transcript
Ross Kenyon: You’re listening to the Reversing Climate Change podcast by the team at Nori, the carbon removal marketplace. This is a show about the innovators and entrepreneurs developing solutions to climate change. Hello and welcome to the Reversing Climate Change podcast with Nori. I’m Ross Kenyon. I’m one of the co-founders of Nori and the Director of Creative and Marketing here. Today I have with me Dr. Homi Kharas, Senior Fellow at the Brookings Institution. He is the author of The Rise of the Global Middle Class: How the Search for the Good Life Can Change the World. Thanks for being here, Homi.
Homi Kharas: Great pleasure.
Ross Kenyon: I think people take the middle class for granted. I think for many people listening, they may not be able to even see it, presumably because they’re a part of it. But what does it even mean to be middle class?
Homi Kharas: I think to be middle class is really to have choices. So I think for many people — I’m an economist, so I tend to look at things a little bit from an economist’s perspective. And for many people, you know, if you’re poor, you’re really struggling to get by. You’re not making many choices. You’ve got a very limited amount of money. You need to buy some basic necessities just to live and survive. You’re not really making that many choices. At the other end, if you’re already rich, when you want something, you get it. You’re not making a choice, you’re just doing whatever you want.
People in the middle class are making choices. They’re constantly making choices. They have budgets that they have to worry about. So if they choose to buy something, that means they’re not going to be able to afford something else. They’re looking at prices, and, you know, they enjoy a reasonably comfortable standard of living, so they can afford to choose different things. And being in the middle class means that you can exercise some of those choices.
Ross Kenyon: I associate this type of definition with Amartya Sen’s focus on capabilities. Is that something that you think is a true way of understanding a standard of development — the ability to choose in that way?
Homi Kharas: I think there’s a lot of similarity there, and I think that — I might just say — Amartya Sen also talks about, of course, developing your own capabilities to the maximum extent. And in fact, as I explain in the book, a lot of what the middle class is about is people trying to improve their own lives and their families’. Education plays a big part in it, you know, just as does taking personal responsibility and working hard.
Ross Kenyon: I think if someone listening to this, when they heard me ask that question, they assumed that you were going to give an economistic answer about how much income someone might have to qualify as being middle class. And that’s one way to answer it. But you almost went — you said there’s an ability to make choices, and then also there’s a values portion of this too. It’s almost a way of thinking as much as anything else. Am I reading you correctly?
Homi Kharas: I think that’s right. And the sort of slight distinction I would make is that it’s one thing to talk about, this is how you define something, but then if you really want to analyze it, you often need to measure it. And when it comes to the measurement of the size of the middle class, who’s in and who’s out, that’s where I think you’ll find my economist background coming much more to the fore. And I do tend to use spending ability as the metric. And this has been quite useful, I think, when you think about the middle class in different countries and the middle class over time, both of which I try to explore in the book.
Ross Kenyon: People tend to speak more about poverty and, on the other side, of inequality and just wealth and extremes of wealth. Why spend time writing a book that is threading the needle between those two frankly more saleable book topics?
Homi Kharas: I think that the answer is twofold. First, by my calculations, probably more people are in the middle class than in either the ranks of the poor or the ranks of the rich combined. So what I’m talking about is most of the world. I think that’s, you know, one good reason. And then a second reason is that, as you said, there’s a lot that’s written on poverty and a lot that’s written on the rich. But if you start to think about what politicians really care about, how policy is made, etcetera, it’s almost always about how is this going to help us strengthen the middle class. And certainly today in most Western democracies, but now increasingly in other places as well, including places like China, the real concern of policy leaders is how is this going to affect the middle class?
Ross Kenyon: Why do you think they have concerns like that rather than a focus exclusively on the poor?
Homi Kharas: Just because of the sheer weight of numbers. It’s because now the number of people in the middle class is really high. In some cases where you have, you know, elections, quite often the poor don’t vote as much. The middle class tends to be very urbanized. And so the people who those in power care about are people in cities. They’re also the people who, when they’re unhappy, they can put together a mass protest in a very visible and easy way. So they get a lot of attention paid to them.
Ross Kenyon: Wow. So you think it’s politicians responding to voting? They know that middle class voters are potentially more politically active than other classes, and therefore their needs get responded to first. And also there’s just perhaps a greater class of people, and therefore just the weight of those votes is so heavy.
Homi Kharas: Exactly, just bigger number. Just bigger number.
Ross Kenyon: Wow. I associate the middle class as being politically active since the beginning. I think of, in America, I think of the temperance movements as being a middle class sort of concern. I think a lot of — I mean, there’s downsides to this too. I don’t know if this is true, but I think of workhouses in Victorian England as potentially a middle-class-like work hard, reform effort for poverty. I think with a little more thought I could probably think of some that come from other classes. But is this an okay stereotype to work with?
Homi Kharas: Well, I think what’s happened is that the middle class has made that into the — they are into the stereotype. So if you go back to Victorian England, there was no middle class. And one of the first things that the middle class did was essentially push hard to expand the franchise, because even though there were growing numbers of people, they weren’t allowed to vote. And the way in which the British system was set up, with what we’ll call rotten boroughs and things like that — even with more people, the distribution of those votes, which was in this instance in Britain very heavily weighted to rural areas in terms of the election of the members of Parliament, while the middle class were concentrating in cities, which is where the factories and the jobs were, meant that the middle class representation wasn’t that big.
And then of course, women weren’t allowed to vote in those days, and it was the middle class that pushed very hard to get women to be allowed to vote. So in many ways, the emergence of the middle class and the expansion of the voting franchise are two things that have gone together in history over the last 200 years or so.
Ross Kenyon: In England, that was referred to as the Chartist movement, right? Am I correct on that, of like universal suffrage in the UK?
Homi Kharas: That’s right. In the turn of the 19th to the 20th century, yeah.
Ross Kenyon: Was that not — I associate that as more of a working class phenomenon, but is that not the case? Is that actually also a middle class effort?
Homi Kharas: You know, it’s really a middle class effort. All of the leaders were coming from the middle class, and, you know, a lot of it was driven actually by reasonably well — you know, again, more educated people who were coming from the middle class. It’s worth bearing in mind that poor people, as I said at the outset, really don’t have the luxury of making choices. So they didn’t have the luxury of being, you know, politically active, trying to do things. They had to work. So, you know, they’d be servants in rich households. There’d be still a lot of people working on farms and then of course moving into factories.
So it was only with the middle class, with people becoming slightly more educated, taking jobs that allowed them a certain amount of time — you know, as they became teachers and nurses and later on telephone operators and things like that, where lots of women tended to work, secretaries later on — that provided them the opportunity to also become more politically active.
Ross Kenyon: Yeah, I suppose if you’re a woman in this time, I think maybe a good illustration of this is I think of, like, the Seneca Falls Convention and its 1848 white women who have the time, where they’re traveling and they’re going to a convention and they’re discoursing about abstract ideas. Clearly that’s a group of people that is not working, you know, six days a week potentially, plus, in a factory job. They have time for education and more abstract pursuits. So that makes — I mean, I think about tracts. It’s at least from my anecdotal way of seeing that.
Homi Kharas: Exactly. And I think that’s exactly right.
Ross Kenyon: Within climate circles, there’s a concern about a rising standard of living, at least in material terms, that it will lead to greater material throughput, that more people having access to material goods will result in more emissions and more waste. I think that’s part of the story, but surely it’s not the totality of the story with regard to the global growing middle class and climate change. What might you like to say to people who hold a perspective like that?
Homi Kharas: So the first thing that I would say is that it turns out that the link between climate emissions and your material standard of living is actually quite weak. So much depends on government policy and government regulations. So in this country, in the United States, for example, roughly speaking, people are emitting something like 18 tons of greenhouse gas per person per year. If you were to go to a country in Europe like France or Sweden or Switzerland, something with, you know, a material standard of living maybe on average slightly lower than the US, but you’d be talking about emissions in the range of seven tons per person, so well under half.
If you were to look at rich countries and say, well, imagine we have the same standards as in each industry. So imagine we could produce electricity at the same emissions intensity as the French do. And imagine we had a transport system at the same efficiency intensity as the Dutch, very efficient in this. Or we had building standards at the same emissions intensity as the Swedes. You have very efficient things and you just go through that. You would reduce emissions intensity in the United States from 18 tons to five tons per capita. So the point I’m making is that it’s not just linked to your level of well-being and prosperity. It’s the path that you took to get there.
And then there’s just so much in the economy today which is the legacy of how we have gotten here, that today, with this new awareness, needs to be essentially retrofitted. So from that point of view, when you have a new middle class emerging, as long as they’re emerging with the right technologies, they’re not adding as much to global emissions. And what they are doing is they’re generating a huge amount of additional resources that can be used to tackle the problem.
So I actually think that it’s quite misguided to think about this as being a trade-off between material prosperity and carbon emissions. I think that we need to have both. And increasingly what we’re seeing is that technology is giving us the option and the opportunity to have both. We’re not entirely there yet. There are still some sectors and industries where it’s very hard. You can’t have a plane which flies on electric power because the weight of the battery is so heavy it would never get off the ground. And you can’t make steel based on electric power because the temperatures that are needed are so high. Cement is very intensive. But these are comparatively small — comparatively meaning when you think about global emissions as we know it today.
Ross Kenyon: Seems that if activism comes primarily from middle class people, and being middle class has a strong element of choice about it, then people becoming middle class might choose to exercise more. Climate activism is another part of this puzzle, I think, as well.
Homi Kharas: I think one of the strongest elements of this is that it is because we now have such a large middle class in most of the important countries of the world. To me, that gives us some hope for thinking that governments might choose to do things, not because together, not because they’re trying to, quote unquote, save the planet, but because each one is responding to their own middle class, and their own middle class is demanding some activism on these fronts. And that’s largely driven, incidentally, by policy on air as much as it is driven by issues of global warming.
So if you go to China, for example, nobody’s going to say that China is an economic success story if they can’t go outside and breathe the air and if their children are all suffering from asthma. So cleaning up the air, which had the side benefit of reducing carbon emissions really significantly — but it’s literally not the carbon emissions in this case, it was, it’s the sort, it’s particulate matter which is associated with carbon emissions. That’s what led the Chinese to clean up, you know, coal-fired stations around Beijing, etcetera, rather than the quote unquote saving the planet.
And so when that’s replicated in China and India and Europe and the US, etcetera, then suddenly you start to have this global movement which is actually moving in the right direction. Whereas otherwise, can you imagine sitting down and trying to hammer out a deal between all of these countries and the negotiations? It would be impossible between the US and China right now. They’re not going to agree to cooperate on this stuff, except for the fact that both know they have to do something about it, because their middle classes are independently demanding it.
Ross Kenyon: Oh, there’s so much there to think about and consider. I like the examples that you chose in the book and what you just laid out. Now, I go back and forth on how much trust I should place in the average voter. I also like Amartya Sen’s thinking on this too, that democracy is good at avoiding great bads more than it is at selecting goods. And who’s to say that the middle class, as they become more educated, have more room for choice in their lives, don’t become fixated on politics in a dysfunctional way, or a way that doesn’t have a Whiggish view of history, that we’re all pulling towards this greater climate-change-addressing future? Am I out to lunch on that one, or is that a possibility?
Homi Kharas: So I give a few examples in the book of how the middle class have actually espoused some really bad ideas. So it’s not that they’ve always been, you know, progressive on these. And probably the best example of this is that fascism originated from and was backed by the middle class, and took on board many of the things that I’ve just discussed as being the heart of middle class politics in those countries. And the kinds of things that the fascists promised were things that had great appeal to the middle class of that time. So, and that’s not the only example. So there are a few of those things that are out there.
I think that with climate change, so far at least, we have seen the middle class largely being on the side of pushing their governments towards appropriate action. They don’t always have full information or the best information. And there are very strong forces of, you know, the vested interests of let’s continue to do things the way we’re currently doing it because we’re all making good profits out of this and, you know, let’s not change and rock the boat. So that notion of stability is also a powerful notion for many people that would avoid change.
And that would be problematic if the middle class basically said, yeah, we like things just the way they are. And it’s problematic because things won’t change if you don’t change policy. It’s not that the outcomes will change. And I think we now have enough science to be able to say that. But still there are many people who don’t necessarily see it that way.
Ross Kenyon: If you describe at least partially fascism as a middle class ideology — which I’m not sure that you would say it as strongly as that — but what are the ideas that make up the middle class here that might lend themselves, potentially, hopefully misapplied, to fascism? But what is the core of the middle class ethos as you see it?
Homi Kharas: Well, the middle class ethos is very often being self-determination and self-responsibility. And that sometimes has meant that the middle class hates paying taxes, for example. They’ve always pushed to, you know, not to pay taxes. That means small government. Some of the problems that we currently have might be better resolved by a more active government involvement. So there can be some trade-offs in these kinds of issues. But against that, for example, the middle class tends to really not like pollution.
And whether it’s air pollution or the pollution caused by plastic bags or the destruction of nature — in what I would call environmentalists, but, you know, more, I would say, people who just take pleasure in living in harmony with our natural surroundings — that’s increasingly a middle class phenomenon and issue. So the middle class will fight to protect that: clean water, clean air. These are very much things that the middle class values and treasures.
Ross Kenyon: Strikes me as broadly accurate. I think also there’s such a strong desire for — and maybe this is American and maybe it’s not this broad globally — but depending if you view the middle class as a good or a bad thing, stability is either something that is a great good that we’re striving for, or is sort of aesthetic death in the suburbs of a people that, you know, go to Little League games and watch bad sitcoms on television or not participating in the arts and culture of their country. Of course, not having to worry about stability to the same extent is a mark of great privilege. Not every place in the world, of course, has had that, and we take it for granted at our own peril, I think.
But is that a part of it too? Just a desire for, hey, I have a chance to have the good life, mostly leave me alone. I have my house, I have my family. I am a member of the Elks Lodge, and I go to church, and I’m kind of taken care of at this point. Like, don’t mess it up. Is that sort of a preservationist, conservative kind of set of beliefs there? Am I on to something with that?
Homi Kharas: I think that is very much part of the middle class ethos. And as I said, it’s all about making choices. I think what we’re starting to see is that people are starting to make different kinds of choices now because they’re realizing that some of the choices that they traditionally made don’t necessarily bring them happiness. So the choice of, let’s say, going shopping and having multiple pairs of jeans, sneakers, whatever you want — some people still enjoy that. Many others are saying, really, do I really need this? It just generates, it generates clutter and stuff. It’s not actually making me happy.
And so there is this desire to figure out what are the choices that will make me happy. And people are increasingly thinking of choices, for example, that they might make a choice to manage their mental health rather than the stress of a truly driven work, [unclear] week kind of thing, so that I get my money to buy more jeans. Those are the kinds of choices, I think, that now we’re being faced with. AI is both giving us more choices and taking away some choices. So the kinds of choices are constantly shifting.
And I think that what you’re going to see is that many of the old traditional choices will actually be made differently. To me, that’s all okay as long as it’s the middle class individual families then continuing to make those choices. And they should feel free to, you know, they’ll make some choices that are bad and then hopefully they will change and make better choices. And as they do that, I think that’ll keep pushing our societies towards better and better outcomes.
The downside of that kind of approach is whether it will generate change at the speed that science might require us to do. And that is to some extent the heart of the conundrum right now with climate change. Because with climate change we have a time schedule. And if we don’t abide by that time schedule, then the choices become more and more limited and worse and worse. And it’s difficult for individuals to stick to that time schedule because they have to coordinate. And that’s why in some sense you now have this issue that, on the one hand, the sort of the broad direction of change I think is one that more and more people are subscribing to. But the speed of change is something that’s still very difficult to put in place.
Ross Kenyon: I think that’s right. At least it maps to my experience of this, in this space. I’ve seen everything from sincere grievance from my peers, and especially those who are younger. I’m a so-called elder millennial, my mid 30s at this point, and the people that I know will either have those sincere moments, or I’ve seen plenty of memes about this too, that people feel that they will be unlikely to afford a house. I know very few families with children among my peers — they’re there, but not everyone is even striving for that, and it’s at least partially economic. I had a close friend of mine recently said that they’d like to have a second child, but just paying for childcare alone means that they can’t do it right now.
Is the middle class shrinking? Is it being pinched? I know this is a common narrative, yet people say that the actual numbers macroeconomically under the Biden administration are pretty healthy. But sentimentally, from what people say to me, they don’t feel this way. It just seems that they don’t feel like they can get ahead, and that maybe some of the middle class dreams is vanishing. For some, it’s hard to know which of those things are illusory and which of those things are actually baked into the data. What do you think about that?
Homi Kharas: I think that it used to be the case that the expectations of the middle class was that every generation would have a significantly better living standard than their parents. That part of the middle class, if you will, dream may need to be revisited. The pace of growth has clearly slowed, and the pace of expansion of the middle class and, as you said, of population expansion has slowed.
I also think that there are — because we’re living in an economy where there is so much change, from manufacturing to services, from, you know, hopefully from fossil fuels to renewables — that many people who made choices thinking this is going to now, you know, serve me well throughout my life, realizing later in life that they might have made bad choices and it’s too late to rectify it. So for example, when you think about the middle class in the United States, there’s a part of it which is college educated, and very crudely, you know, when the economy ran into difficulties and when we had lockdowns and things like that, they emerged quite well out of that.
And then there was another part that did not have college level education, and they were hit much, much, much more, and their choices are more limited and so they’re more dissatisfied. And it’s not so easy — you know, it’s very difficult to go back to college after you’ve had, you know, a gap of a long period of time. So things are changing very rapidly. We don’t really know in what way. The old idea that you had a straightforward ticket — you know, you go to law school or you become a doctor or whatever — all of those, what I would call traditional ladders, are looking a bit creaky. There are some new ladders maybe in tech and some other things, but now we’ve got AI. People don’t even know what that looks like.
I mean, you know, maybe AI will do all the coding for us and we won’t have need for coders any longer. So there’s much more uncertainty about the nature of the global economy, and that uncertainty creates worry and concern. So I think it’s that potential for volatility that’s at the heart of people’s concerns and worries, rather than the absolute standard of living of, you know, where they are. And one way I think you can say — I mean, take the example you gave of housing. Yes, it’s absolutely true that a lot of young people today can’t afford a house. On the other hand, we have a quote unquote problem with gentrification, which in essence means that you’ve got a whole bunch of people who are fixing up their houses, and the quality of the housing stock is improving dramatically, and large numbers of people have much better housing.
Ross Kenyon: I recognize that none of these questions are simple to answer. They all have about a thousand different ways to answer them. Unfortunately, I have another one just like that for you lined up. Do you think that the institutions of capitalist democracy are fundamentally sound? Do you think we should proceed broadly as we have so far, or do you think there needs to be a more major revision?
Homi Kharas: I think capitalism has always evolved, and I think that it continues to evolve. I think it is far and away the best system that we have for addressing some of the big problems that we’re faced with. But, you know, just think about the following. It used to be the case that people said it would be a disaster for capitalism if we permitted the state to tell us that we couldn’t make children work. We used to have child labour. It was thought of as being a cornerstone of the low wages that were required to keep a capitalist system functioning. Guess what — we’ve discovered we can have a capitalist system without child labour perfectly well.
There were protests about the introduction of new technologies into our capitalism: it’s going to destroy the system, it’s going to put people out of work, we can’t have that. We’ve had 200 years of some of the most tremendous advances in technology known to man. So my point is that capitalism is evolving. And what’s interesting today is that there are many leaders of some of the greatest companies in this country — almost all of them are taking a broader view of what their company can and should be doing, and are reporting not just in terms of financial statements but also what they call material non-financial disclosures.
The Securities and Exchange Commission has a set of standards and guidance that they’ve put out for public comment of what these things should look like. In Europe, for example, it’s become mandatory under a European sustainability reporting system. So capitalism is evolving and capitalist institutions are evolving. And I think that what that will do is it will provide the right incentives for the system to continue to generate the kind of technological solutions that ultimately will allow us to manage and handle this issue. And that’s where the optimism lies.
And if you look at many of the big industries — you look at the way in which the garment industry is now approaching recycling, you look at new techniques in building construction, you look at what is happening with the bunker fuels and the ocean-going liners — industry by industry, they’re all thinking about and developing these kinds of solutions. So again, I think the direction of change is right, and the big question is speed. And that’s something right now it’s difficult to, you know, things are still very new and it’s very difficult to know how fast these things are going to take off.
We’ve just seen examples in this country of electric vehicles: it looked like it was going to go gangbusters. Now suddenly everybody’s saying that first phase of early adopters is slowing down and that the momentum is slowing, at some later stage it’s going to pick up again. Speed is very difficult to predict.
Ross Kenyon: I think your answer is interesting because it’s more common — and maybe this is just how media, especially social media, work — that very loud opinionated thoughts generate the most heat. But I’ve seen people say that if you care about climate change, we essentially need to adopt a degrowth mentality and turn our backs on industrialization and the quest for more. Or I’ve seen people say that we essentially need to embrace a much more thoroughgoing free market way of being, because the government is slowing down technological progress, which is going to be the thing that saves us. So the government should get out of the way as much as possible so that we can adapt more easily.
And it seems to put you in a tough rhetorical spot, where you are, in my understanding, defending the institutions that broadly exist, but to keep tweaking them and changing them so that the changes can be made more quickly, but that the system broadly works as is, in the mixed economy system that we have. Is that a correct read of what you’re saying?
Homi Kharas: I think that’s exactly right. I think that’s exactly right. Most people in companies are saying we’re happy to do this, but we want it to be regulated so that everyone is doing it that way. We’ll all be on a common level playing field. The great worry, especially many multinational corporations that act both here and abroad, is that there’s going to be multiple different standards. Imagine you’ve got a different standard for, let’s say, carbon emissions in Europe than you do in the US than you do in a developing country or Japan or whatever. And companies have to have multiple standards for all of that. It would be really costly for them to be able to do their business.
So we both need to have standards, we need them to be interoperable with each other, and we need it to be introduced in multiple jurisdictions, or at least the major jurisdictions of the world. Interestingly, that’s happening. But sometimes people don’t like the fact that that’s happening simultaneously in different places, because then they say, well, but then we don’t make our own standards, and why shouldn’t we care about anybody else? And part of the answer to that is we are in a global economy and we need to have some global rules of the game. And we started to develop those in trade and now we are increasingly developing them in other areas as well. And we’ve developed them in capital. Most people report financial statements according to pretty much common accounting standards, and that’s proven to be a very useful thing.
Ross Kenyon: A lot of those just happened through market competition in the realm of ideas and reporting to people. Call it the Brussels effect when it comes out of Europe, but something that’s really powerful in Europe, you can influence countries far outside of it just because it’s simpler to go along with the system rather than challenge it — having to hire compliance people at your company to make sure everything lines up depending on which jurisdiction you’re in. Companies don’t really want to do that, and sometimes it’s simpler to just go along rather than fight it. That can be a way that standards work themselves out without it being imposed from the World Trade Organization or something like that, even though there’s plenty of stuff happening at that level too. But a lot of stuff doesn’t happen at that level, and it can happen in a distributed fashion.
Homi Kharas: So I think that with accounting standards, to take one example, you know, we had decades where we had multiple different standards, and over time companies kind of got together and they slowly converged, and now we’ve basically got two standards in the world, but they’re so similar that they by and large don’t cause much difficulties in both operating at the same time. And I think exactly the same thing is now happening with many other kinds of material non-financial disclosures, and companies are starting to take seriously what their footprint is on the global economy — whether that’s climate, whether it’s on nature, on water, clean water, biodiversity, all of these kinds of things that we’re now recognizing are important elements of the way in which we can continue to sustain our prosperity.
Ross Kenyon: Are you optimistic about the course we’re heading in right now?
Homi Kharas: I think that, you know, as I said, the real uncertainty in my mind is speed of change. You know, if you think, there was a huge conference at Rio in the early 1990s. We’re now 30 years on from that. If you think about the way in which environmentalists were seen by the corporate world then and compare it to today, you would think that you were operating in a completely different system. The system has evolved. The issue is speed, and that speed will depend a lot on, as I said, on technologies and technological change and innovation.
And some of that has been very, very promising. No one predicted that we would have the expansion of renewable energy at the rate that we have had. That’s a huge advance. There is now no question that in most places in the world the least cost option for energy is a renewable, either solar or onshore wind. So that’s a radical, dramatic change. And of course we have to deal with the phasing out of existing assets, etcetera. But I think that’s happened much more rapidly than anybody anticipated. So we need to work, you know, constantly see how the price points of these various different things change.
So I’m optimistic, not because I have very solid evidence to be optimistic, but I’m optimistic because I see many things happening that offer us rays of hope. And so I’m inclined to think hard about things that I can possibly change and not worry about those things that cannot be changed. And so let’s keep pushing forward as hard as we can on as many fronts as we can in these areas. And that’s why I’m hoping that, you know, with things like my book, I can debunk some of these what I would call quite loose narratives that, oh, we can’t solve both growth and prosperity at the same time; that, you know, to save the planet, we have to degrow. A serious look at those kinds of narratives reveals that that’s just taking something to the extreme in a way that isn’t terribly useful.
Ross Kenyon: Well, I really enjoyed your book. If you’re listening and you enjoyed the timbre of this conversation, you should definitely pick up The Rise of the Global Middle Class: How the Search for the Good Life Can Change the World. Homi, thanks for spending time with me. I really enjoyed speaking with you.
Homi Kharas: Thank you so much for having me on. And let me say, the target audience for the book, all of what this is about, are the people in their mid 30s and younger who are going to inherit the somewhat messed up world that my generation is leaving for you to do something with. So I hope that we’ve changed course in time for you to be able to have as good a life as some of us have had. So thank you.
Ross Kenyon: All right, listen up, elder millennials. Thank you so much for listening. If you could please subscribe and give us a great rating and review on Apple Podcasts or a rating on Spotify, that’d be much appreciated. It helps us get our content out to more people. You can sign up for our newsletter at nori.com. Follow us on social media. We will catch you next time.
