As the nation anticipates a “climate friendly” State of the Union speech from President Obama Tuesday, let’s take a look at what one of Silicon Valley’s most successful innovators and job creators has to say about the government’s role in climate change and innovation.
Last month, I interviewed Tesla Motors and SpaceX CEO, Elon Musk at the Computer History Museum in Silicon Valley and asked him what specifically President Obama can do to stimulate the economy. He acknowledges that presidents can only do so much, saying,”You’re actually like the captain of a very huge ship and have a small rudder.”
Musk argues that too much government regulation can stand in the way of innovation, especially in the auto industry; and is generally in favor of minimal government intervention in the economy. On climate change, however, he was forceful and described our oil based, carbon intensive economy as creating a “crazy chemical experiment on the atmosphere” with likely catastrophic consequences. He concludes that taxing carbon is vital.
Elon Musk: Well sometimes…I don’t think the government tends to stand in the way of innovation but it can over-regulate industries to the point where innovation becomes very difficult. The auto industry used to be a great hotbed of innovation at the beginning of the 20th Century. But now there are so many regulations that are intended to protect consumers…I mean the body of regulation for cars could fill this room. It’s just crazy how much regulation there is. Down to what the headlamps are supposed to be like. They even specify some of the elements of the user interface on the dashboard…some of these are completely anachronistic because they’re related back to the days when you had a little light that would illuminate an image. So we had to reserve space on the instrument panel of the Model S for where all of the indicators…that a car would have…you know you’ve got these little lights…
Alison van Diggelen: Check engine or whatever…
Elon Musk: Yeah…all these little things. There is a whole bunch of them. ‘We can’t have anything else in that space. ‘ But how about we have one space and render a different graphic? ‘Oh no, because people are expecting to see them in this space.’ Nobody is expecting to see them in that space.
Alison van Diggelen: So you can’t argue with these regulations?
Elon Musk: Well you can argue with them, but not with much success. (laughter). You can actually get these things changed, but it takes ages. Like one of the things we’re trying to get is: why should you have side mirrors if you could have say, tiny video cameras and have them display the image inside the car? But there are all these regulations saying you have to have side mirrors. I went and met with the Secretary of Transport and like, can you change this regulation…? Still nothing has happened and that was two years ago.
Alison van Diggelen: So you’re banging your head against the wall…
Elon Musk: We need to get these regulations changed.
Alison van Diggelen: So talking of government, President Obama is obviously trying to do what he can…if you had five minutes with President Obama, what would you advise him for one: stimulating the economy and entrepreneurship and (two) creating jobs. Is there one thing if he could successfully get through that would be a big stimulus?
Elon Musk: I think actually…the reality of being president is that you’re actually like the captain of a very huge ship and have a small rudder (laughter). If there was a button that a president could push that said ‘economic prosperity,’ they’d be hitting that button real fast…
Alison van Diggelen: Full steam ahead.
Elon Musk: You can imagine…the speed of light, how fast they’d be pressing that button. That’s called the re-election button. I’m not sure how much the president can really do. I’m generally a fan of minimal government interference in the economy. The government should be the referee but not the player. And there shouldn’t be too many referees. But there is an exception, which is when there’s an un-priced externality, such as the CO2 capacity of the oceans and atmosphere. So, when you have an un-priced externality, then the normal market mechanisms don’t work and then it’s the government’s role to intervene in a way that’s sensible. The best way to intervene is to assign a proper price to the common good that is being consumed.
Alison van Diggelen: So you’re saying there should be a tax on gas?
Elon Musk: There should be a tax on carbon. If the bad thing is carbon accumulation in the atmosphere, then there needs to be a tax on that. And then you can get rid of all subsidies and all, everything else. It seems logical that there should be a tax on things that are most likely to be bad. That’s why we tax cigarettes and alcohol. These are probably bad for you, certainly cigarettes are (laughter). So you want to err on the side of taxing things that are probably bad. And not tax things that are good. Given that there is a need to gather tax to pay for federal government…We should shift the tax burden to bad things and then adjust the tax on bad things according to whatever’s going to result in behavior that we think is beneficial for the future.
I think currently that what we’re doing right now, which is mining and burning trillions of tons of hydrocarbons that used to be buried very deep underground, and now we’re sticking them in the atmosphere and running this crazy chemical experiment on the atmosphere. And then we’ve got the oil and gas companies that have ungodly amounts of money. You can’t expect them to roll over and die. They don’t do that. What they much prefer to do is spend enormous amounts of money lobbying and running bogus ad campaigns to preserve their situation.
It’s a lot like tobacco companies in the old days. They used to run these ad campaigns with doctors, guys pretending they were doctors, essentially implying that smoking is good for you, and having pregnant mothers on ads, smoking.
Alison van Diggelen: Do you have a message for the climate change skeptics and the big oil people?
Elon Musk: Well, as far as climate change skeptics…I believe in the scientific method and one should have a healthy skepticism of things in general…if you pursue things from a scientific standpoint, you always look at things probabilistically and not definitively…so a lot of times if someone is a skeptic in the science community, what they’re saying is that they’re they’re not sure that it’s 100% certain that this is the case. But that’s not the point. The point is, to look at it from the other side. To say: What’s the percentage chance that this could be catastrophic for some meaningful percentage of earth’s population? Is it greater than 1%? Is it even 1%? If it is even 1%, why are we running this experiment?
Alison van Diggelen: You’ve called it Russian roulette. We’re playing Russian roulette with the atmosphere…
Elon Musk: We’re playing Russian roulette and as each year goes by we’re loading more rounds in the chamber. It’s not wise. And what makes it super insane is that we’re going to run out of oil anyway. It’s not like there’s some infinite oil supply. We are going to run out of it. We know we have to get to a sustainable means of transportation, no matter what. So why even run the experiment? It’s the world’s dumbest experiment (applause).
Read more Transcript Excerpts from our 2013 interview:
“Joining the group was not meant to be an endorsement of the President or his agenda but unfortunately it has been misinterpreted to be exactly that,” wrote Kalanick to his staff.
Musk faced a barrage of similar criticism, with some saying he’s a crony capitalist and others claiming to have cancelled their orders for Tesla Model 3.
Last week, I joined the BBC’s Fergus Nicholl on the BBC World Service program, Business Matters. We discussed Silicon Valley tech’s furious reaction to the Trump travel ban and Elon Musk’s high pressure predicament.
Listen to the podcast excerpt below (it includes commentary from the always provocative Lucy Kellaway):
Here’s a transcript of our conversation (edited for length and clarity):
Fergus Nicoll: Elon Musk has run into Twitter trouble…when he spoke to Mr. Trump in person and when he was seen having a drink with Steve Bannon in the White House, a lot of people said: “What on earth are you thinking?” And he came up with a fairly strong defense…
Alison van Diggelen: His key message is: “Activists should be pushing for more moderates like him, to advise the president not fewer.” And he asks, “How could having only extremists advise him possibly be good?”
Alison van Diggelen: He’s faced a lot of criticism, people even saying they’re cancelling their orders for the next generation of cars, the Tesla Model 3. He is under this pressure, but he is a powerful influencer, a poster child for Donald Trump’s manufacturing jobs being in the U.S. Musk is an idealist, he wants to save the planet. He’s bringing his message of climate change and green jobs, almost as a Trojan horse, into Trump’s meeting rooms. I think a lot of people who think about this deeply deeply, are not having this knee jerk reaction and saying don’t associate with Trump. Instead they’re saying this might be a good conduit for Trump hearing this green point of view.
Here is some of the pushback Elon Musk received on Twitter and his responses:
Yet the biography is already courting controversy. Today Musk said one passage about his attitude to employees and childbirth was “total BS and hurtful.” He addedthat Vance’s book was “not independently fact-checked” and should be taken “[with] a grain of salt.”
So is there a definitive guide to Musk’s remarkable life? One that doesn’t need fact checked or taken with a grain of salt? You could start with a description of his life from the man himself.
As far as I know, this is the first time Elon Musk has shared his whole life story, so candidly, even tearfully, in front of a live audience.
Watch the video or read the transcript, as Musk takes us on a journey from the suburban streets of South Africa to the tech mecca of Silicon Valley…and beyond. He tells us about his teenage “existential crisis” and his bookish quest for the meaning of life; how the retirement of NASA’s space shuttle both upset him and inspired his space transport startup SpaceX; and why he became the reluctant CEO of electric car company Tesla Motors.
Interview highlights and key turning points in his career:
The Rebellious Child: Musk grew up in South Africa. At age 6, he desperately wanted to attend his cousin’s birthday party, but was grounded for some long-forgotten transgression. How did he get there? (This was probably the first of his many rule-breaking adventures.)
“It was clear across town, 10 or 12 miles away, further than I realized actually, but I just started walking…I think it took me about four hours…My mother freaked out.”
The Iron Man Inspiration: He was a huge fan of comics and read Iron Man comics. Did he ever imagine he’d be the inspiration for Robert Downey Jr’s movie character, Tony Stark?
“I did not. I would have said zero percent chance…I wasn’t all that much of a loner…at least not willingly. I was very very bookish.”
The Hitchhikers Guide to the Galaxy: How did the novel fire his imagination?
“I was around 12 or 15…I had an existential crisis, and I was reading various books on trying to figure out the meaning of life and what does it all mean? …I read Hitchhikers Guide to the Galaxy and it highlighted an important point which is that a lot of times the question is harder than the answer. And if you can properly phrase the question, then the answer is the easy part. To the degree that we can better understand the universe, then we can better know what questions to ask. Then whatever the question is that most approximates: what’s the meaning of life? That’s the question we can ultimately get closer to understanding. And so I thought to the degree that we can expand the scope and scale of consciousness and knowledge, then that would be a good thing.”
Why was Silicon Valley his mecca at age 17?
“Whenever I read about cool technology, it would tend to be in the United States…I wanted to be where the cutting edge technology was and of course, Silicon Valley is where the heart of things is…it sounded like some mythical place.”
Why did his startup X.com (the precursor to PayPal) come close to dying in 2000?
“The growth in the company was pretty crazy…by the end of the first four or five weeks we had a hundred thousand customers and it wasn’t all good…we had some bugs in the software…Various financial regulatory agencies were trying to shut us down, Visa and Mastercard were trying to shut us down, eBay…the FTC…there were a lot of battles there. (But) we had a really talented group of people at PayPal…It worked out better than we expected.”
After making over $150M from PayPal, why not just buy an island and relax?
“The idea of lying on a beach as my main thing sounds horrible to me…I would go bonkers. I’d have to be on serious drugs…I’d be super duper bored…I like high intensity.”
On the seeds of SpaceX
“I always thought that we’d make much more progress in space…and it just didn’t happen…it was really disappointing, so I was really quite bothered by it. So when we went to the moon, we were supposed to have a base on the moon, we were supposed to send people to Mars and that stuff just didn’t happen. We went backwards. I thought, well maybe it’s a question of there not being enough intention or ‘will’ to do this. This was a wrong assumption. That’s the reason for the greenhouse idea…if there could be a small philanthropic mission to Mars…a small greenhouse with seeds and dehydrated nutrients, you’d have this great shot of a little greenhouse with little green plants on a red background. I thought that would get people excited…you have to imagine the money shot. I thought this would result in a bigger budget for NASA and then we could resume the journey…”
On negotiations with the Russian military to buy two ICBMs
“They just thought I was crazy…I had three quite interesting trips to Russia to try to negotiate purchase of two Russian ICBMs…minus the nukes…I slightly got the feeling that was on the table, which was very alarming. Those were very weird meetings with the Russian military…’remarkably capitalist’ was my impression (of the Russians).”
Why he chose to create his own rocket company, SpaceX
“I came to the conclusion that my initial premise was wrong that in fact that there’s a great deal of will, there’s not such a shortage. But people don’t think there’s a way. And if people thought there was a way or something that wouldn’t break the federal budget, then people would support it. The United States is a distillation of the human spirit of exploration. People came here from other places…people need to believe that it’s possible, so I thought it’s a question of showing people that there’s a way…There wasn’t really a good reason for rockets to be so expensive. If one could make them reusable, like airplanes then the cost of rocketry (and space travel) would drop dramatically.”
How did the vigils for the death of the EV 1 help inspire Tesla Motors?
“It’s crazy. When was the last time you heard about any company, customers holding a candlelight vigil for the demise of that product? Particularly a GM product? I mean, what bigger wake-up call do you need? Like hello, the customers are really upset about this…that kind of blew my mind.”
“I tried really hard not to be the CEO of two startups at the same time…It’s not appealing and shouldn’t be appealing if anyone thinks that’s a good idea. It’s a terrible idea.”
On the idea for SolarCity
“Solar is the obvious primary means of sustainable energy generation…in fact, the earth is almost entirely solar powered today. The only reason we’re not a frozen ice-ball at 3 degrees Kelvin is because of the sun…”
Check back soon for more from Musk on:
where his inspiration strikes (hint: not just Burning Man)
how to build, motivate and retain an excellent team
TESLA factory upgrades are in process: creating “most advanced auto paint shop in the world” says elonmusk
On Tesla Motors in China
Demand for Tesla Model S in China is “off the charts” says elonmusk
China’s policy re charging stations specs and EV incentives not a problem “We expect to fit within sales tax exemptions” says elonmusk(Previously analysts speculated that Tesla’s cars, made in the US would not qualify for sales tax exemptions, so this is big news.)
It’s been a stellar year at Fresh Dialogues. Here are our top ten green interviews: from Tesla’s Elon Musk to Google’s Rick Needham. Most are exclusive Fresh Dialogues interviews, but some were special assignments for NPR’s KQED, The Computer History Museum, The Commonwealth Club and The Churchill Club (2013).
1.Elon Musk on burning oil, climate change and electric vehicles
“It’s the world’s dumbest experiment. We’re playing Russian roulette and as each year goes by we’re loading more rounds in the chamber. It’s not wise… We know we have to get to a sustainable means of transportation, no matter what.” Tesla CEO, Elon Musk. Read more/ see video
“I want to see a standard that could bring this country back to international prominence in terms of leaning in to a low carbon green growth strategy, so that we can dramatically change the way we produce and consume energy and lead the world.”Gavin Newsom, Lt. Governor of California. Read more/ see video
7. Steven Chu on climate change deniers
“I’d put them in the same category as people who said, in the 60′s and 70′s, that you haven’t proved to me that smoking causes cancer. This is a real issue. We have to do something about it!” Former Energy Secretary, Steven Chu. Read more/see video
8. GM’s Pam Fletcher on electric vehicle adoption
“We need a lot of customers excited about great products. I want to keep people focused on all the good things that moving to electrified transportation can do for customers and for the country.” GM’s Chief of Electrified Vehicles, Pam Fletcher. Read more/ see video
9. Laurie Yoler on why Tesla is succeeding, despite the odds
“You know you’re on to something good when everyone you talk to is a naysayer. It takes a huge amount of courage and tenacity to continue going forth.” Qualcomm executive and founding board member of Tesla Motors, Laurie Yoler. Read more/see video at 11:20
10. Rick Needham on self driving cars, car sharing and Google’s electric car fleet
“It’s not just the car that’s underutilized; it’s the infrastructure, the roads…There’s an enormous opportunity…on the environmental side, on the human safety side, on utilization of infrastructure side.” Google’s Rick Needham. Read more/see video