Published on July 12th, 2013 | by Apuntes LJ


On Transitions, Climate Change, and the Carbon Market

An interview with Graciela Chichilnisky, Developer of the “Basic Needs” Model of Economic Development and CEO of Global Thermostat

About Graciela Chichilnisky
Graciela Chichilnisky Graciela Chichilnisky, a native of Buenos Aires, Argentina, is a Professor of Economics and Mathematical Statistics at Columbia University. She has two PhDs, one in Mathematics and the other in Economics. Dr. Chichilnisky is the author of the carbon market of the UN Kyoto Protocol that became international law in 2005. She also created the concept of Basic Needs voted by 153 nations at the 1993 UN Earth Summit to be the cornerstone of Sustainable Development, and in 1996 created the formal theory of Sustainable Development that is used worldwide. She has authored 14 books and over 250 articles published in leading academic journals. Her most recent books are Saving Kyoto, published in 2009, and The Economics of Climate Change, published in 2010. Dr. Chichilnisky was ranked as one of the top 10 most influential Latinos in the US by Hispanic Business in 2007.
The mother of two children, Dr. Chichilnisky lives in New York City.

Apuntes: We are going to start with a few personal questions. What were your impressions of the US when you first arrived, back in the 1960s? Any incidents, events, experiences that you still remember?

GC: Yes, coming from Argentina I was impressed . . . I first came to Boston directly from high school and entered a PhD program in Mathematics at MIT . . .

Apuntes: And that was going to be my next question, how was that possible.

GC: Because the universities were closed down by the military in Argentina, and there was a professor, Warren Ambrose, in the Universidad de Buenos Aires, Ciencias Exactas, who took several Argentinian students. He was a professor of graduate students in Mathematics, so he took graduate students. I had not even started my undergraduate education, but I was taking his course and was known to have mathematical abilities, so he thought I should be taken as a special student to be tested, and at the end of a year (a very difficult year) of competing with all-male PhD students, I came at the top of the class even though I never went to college. Because of that they decided to accept me into the PhD program, to study Pure Mathematics. Soon afterwards I got a Masters in Mathematics, then a PhD. Later I earned a second PhD in Economics.

My first impression, what I really liked about MIT, was that people worked very hard. For example, there was a library that was open day and night, 24 hours a day. To me that was paradise, literally, oh my God, I was so happy. People here could work all night; they could even shave there in the morning. I did not have to shave, obviously, but it was set up for men.

Apuntes: The ratio of men to women at MIT back then was about 20 to 1. What was that like?

GC: There were no women in my class. There were a few women in the Computer Sciences Department, and in Engineering, but in Pure Mathematics there were none. It was considered too difficult a field for women. The impression I got was that in the US the competition between men and women was worse than what I remembered from Argentina. The further up you go, the more competitive men get.

What I remember is that at the beginning of that year, when I arrived from Argentina in September, I was treated very well. Everyone was very nice to me. I knew very little English, and people also knew that I had a baby and was not married. So as an unmarried teenager with a baby, I got a lot of sympathy. By the middle of the year, when we were taking the December exams, I was already answering questions that nobody else was able to answer; I was at the top of classes like Algebraic Topology and Functional Analysis. And then nobody wanted to see me, I could not get a date, and no boy would ask me out. So I had to make a choice: do I want to be a great Mathematician or do I want to be popular. I had no choice, really.

Apuntes: Were you living in a dormitory?

GC: No, I rented a room in Cambridge. There was this Russian lady who was renting rooms in her house to survive, and I rented a very nice room there, which I shared with my son. I had a bed, and next to it I set up a mattress on the floor for my son. We had our meals in the kitchen. It was very nice, really.

Apuntes: And what did you do with the baby when you had to go to school? Did the Russian lady help?

GC: No, and this was another first impression: I found people to be extremely kind. I found a family, a faculty wife who had to stay home with her child and took in other children during the day. And they were so nice to my son, and to me. I paid what little I could, and they took very good care of my son.

Apuntes: Do you remember missing home those early years?

GC: Yes, I missed my family and friends. But what I didn’t miss was the chaos, because Argentina was chaos at that time. Those were the Onganía years, a very bloody regime. Everybody was unhappy. And the Professor I mentioned, Warren Ambrose, he was beaten up by the military police. It was an international incident between Argentina and the US. An American was hurt; they broke his hand, for no reason at all. That’s what motivated him to leave and bring a group of students with him. So it was chaos, you couldn’t do anything.

And then you come to the United States and everything is orderly, at least on the surface. It made you want to study.

Apuntes: Even though Cambridge at that time was a bit of a slum.

GC: Yes, it was a slum, but a nice slum. I remember, years later, after I got my second PhD and went to Harvard to teach, it was still a slum. I was working in the Economics Department at Harvard and had a wonderful, large office in the basement. I was working with the Nobel laureate who had hired me, Kenneth Arrow, and I loved it. Every day, in the middle of the day, I would go to Kendall Square, where they had just the best food in the world. I would walk the 15 blocks and eat at Legal Sea Foods, then go back to the office and work, and work, and work.

I did my best research there, although perhaps not as good as what I am doing now, because then I was concerned about doing “weird” things. I thought I had to fit in.

Apuntes: After your first PhD you moved to Berkeley, California. What motivated that move?

GC: I went to Berkeley because my son’s father, I was separated from him, wanted us to try again to be together, to be a family. He was not admitted to MIT, but he was accepted at Berkeley. So I decided to move to Berkeley, to be with him and try again. But it didn’t work. And it was a very bad time in Berkeley.

Apuntes: Those were the days of the hippies, a lot of social upheaval.

GC: It was a little bit after the heyday, but there was still the People’s Park, and there were still incidents of tear gas, of police hurting people. They even killed somebody in Berkeley. So I thought to myself, do I need this? That was what I had escaped from. I did not like it; it was chaos again. So I left and took the job at Harvard.

Apuntes: But not before you got your second PhD.

GC: Yes, I worked with another Nobel laureate called Gérard Debreu. I did that pretty fast; it only took me two years.

Apuntes: So your impressions of Berkeley and San Francisco were not as positive as those of Boston and Cambridge.

GC: No, my impression of Berkeley was one of chaos. I mean, I am in favor of creativity, and I do my own things, which are different. But I can’t live in a place where if you don’t smoke marijuana they consider you a weirdo. It was like “what is wrong with you, you don’t want marijuana?” And I would say, no, I need to work. And they would go “What? Why are you so uptight!” The social pressure was enormous. I wanted to get along with my friends, but I just didn’t want to take drugs. Everyone was using marijuana, and there was also LSD and another one, TSP. I just wouldn’t take them, and people would ask why not, and I’d say, because I have work to do. That was it. I became very unpopular. I was criticized for that. I’m still criticized for that. People still wonder why I work so hard.

Apuntes: And when did you have your second child?

GC: When I was working in London, even though she was born in New York. My kids were born 18 years apart. She (my daughter) is now a very young twenty-something PhD student at Yale in Political Economy. Before that she went to Columbia, and she also spent two years working in Mongolia doing clean energy projects, in one of the poorest countries in the world. I am very proud of her, she is amazing. And my son, he is famous! He is coming to Stanford to do work on the brain. As it happens, my father was a neurologist, a professor of Neurology at the University of Buenos Aires. He would have been so proud of his grandson. My son studied at Princeton and at Stanford, then went to the Salk Institute and developed, essentially, artificial eyes. He has discovered how to make eyes. That same kid who slept on the mattress on the floor in Cambridge, he is famous now.

Apuntes: You alluded to the issue of having to do well as a woman. Some say that a woman has to do twice as well as a man to be considered half as good . . .

GC: That is incorrect. It is at least three times as well.

Apuntes: How were you able to balance your professional life with raising kids. It must have been tough.

GC: It was incredibly tough. Because you can sacrifice your personal life, work all night when necessary, as I did at MIT, but with a child, you can’t sacrifice a child. So that was difficult. But actually, the most difficult part was men. Because men are even more demanding of attention than children. I just couldn’t do both, so I never got married, and the children that I have are my own children. I raised them, Eduardo José and Natasha.

And the conflict is that the children, they are so wonderful, they are the best thing in life. And therefore, it is “Oh my God, I have to spend all this time on the children.” But you want to, because they are so wonderful. They are unbelievable! Here, I’ll show you some pictures . . . and I have three texts from my son asking me to do things for him. I am such a Jewish mother!

Apuntes: Now that you bring it up, did being Jewish ever present a problem?

GC: It was worse in Argentina. I think the struggles of the Jewish community in the United States (where there is still a lot of anti-Semitism) were already resolved in the academic setting by the time I arrived. In Argentina my father was treated terribly; he was the first Jewish tenured professor at the University of Buenos Aires. But being female has been a greater challenge than being Jewish.

I was the first female tenured professor at Columbia. And when I started teaching at Columbia, women were not accepted there as students. When I was teaching at Harvard, I was going to have lunch at the faculty club with Professor Arrow, and no women were allowed in. The following year, women were finally allowed in. But to me it was like “What? I must be missing something here.”

Apuntes: You are an Economist, a Mathematician, and a Statistician. Is there a preferred order?

GC: More than anything, I am a thinker, then a Mathematician. And then what I do in Economics and Statistics is really a creation of my Mathematics. But I have always been very concerned about doing things with my own hands. That is why I have created and sold two firms. For the first one, I hired Jeff Bezos, who is now the CEO of Amazon, as my Chief Technology Officer; he worked with me for three years. That was Fitel, a telecommunications company that I sold in Japan. I am now the CEO of my third company, Global Thermostat. Now, if you look in Silicon Valley, or even better, across the United States, less than three percent of the CEOs are women. What is going on? There are attempts to change that, but change comes so slowly.

Apuntes: When you entered Economics it was a relatively new science.

GC: It was recognized as a science, I think, in the 1950s, with the work of Kenneth Arrow and Gérard Debreu. They defined the equations for the competitive equilibrium model, which is a set of simultaneous non-linear equations for which they received a Nobel Prize. And I was fortunate enough to work with both of them. Gérard Debreu was a little strange (I use the past tense because he died). Kenneth Arrow is wonderful. He is my friend, lives here in Stanford, where he is a professor, and in fact I see him all the time. He and his wife are wonderful, wonderful people.

I have worked with the best people. I can’t tell you how grateful I am, from that point of view, to the United States. The access to knowledge and to the most wonderful people, starting with the people who helped take care of my baby at MIT; Professor Ambrose, who brought me over and believed that I could compete with PhD students when I didn’t even have a college education; then Professor Debreu at Berkeley; and Kenneth Arrow at Harvard. And then I was invited to take a position at Columbia and was given tenure almost immediately, a year after I arrived, by Ed Phelps and Robert Mundell, who are also Nobel laureates. I tell you, my life has been littered, literally, by the most wonderful people who have been incredibly generous and important to me..

Apuntes: Do you still teach?

GC: I do teach. I am teaching two courses, one a Masters course on Globalization and Development, where I explain the transformation of colonialism, the enormous export of resources from poor nations that leads to the global environmental disasters that we have today (biodiversity, water scarcity, the oceans, climate change). The other course I teach is a first-year, compulsory PhD course about what economics has contributed as a science to the disasters that we have. I teach that course together with two colleagues who share my perspective: one is a Nobel laureate, Joe Stiglitz; the other one is a well-known economist, Jeff Sachs.

Apuntes: You are involved with university women’s groups. What is the motivation there?

GC: They reach out to me because they say that my life, and the two lawsuits for discrimination that I have won against Columbia University, inspire them. And the reason is that university women face tremendous discrimination, of a type that is very brutal, not dissimilar to the type of discrimination women face in the Armed Forces. You have heard about the recent scandal about rapes in the military. Well, believe it or not, something very similar occurs in academia.

Some university women have their lives destroyed by discrimination. And they don’t know why this is happening to them. And nobody seems to know that universities are so terrible. So they reach out to me because I tell them “you are not inventing this, it is real, and it is not your fault.”

As you know, women who have been raped feel almost guilty; they feel dirty, they wonder “what have I done?” So it is very important for women who have gone through those situations to hear that it is not their fault, to know they have done everything right.

When I finished my two PhDs, in each case, there were rumors that a man had written the dissertations, that I had used sexual favors to obtain them. Now that I publish more than most academics such arguments sound silly, but back then when I was a young woman, those rumors were like academic rape. They were destroying my reputation. And things like these happen all the time to university women.

Therefore, the fact that I have won against Columbia twice, and that each time they have had to pay me lots of money, motivates university women’s groups to ask me to speak at their functions. I do that for them as a present, and I think it is very healing for them.

Apuntes: Are you still confronting a “glass ceiling”?

GC:  You are never accomplished enough to get past it. At this point I am the CEO of this company [Global Thermostat], and even people who love me question whether I can do what I am already doing. It’s amazing. I have a hard time explaining it. These are the people I work with, people who admire me, who know I work very hard. And yet there are moments they are afraid I won’t be able to deliver. They undermine me, and they compete with me. It’s almost as if men feel offended that I can do something they feel they can’t do.

Apuntes: When did your involvement in climate change get started?

GC:  Yes, that is a very important topic. When I finished my PhD in Mathematics, in the early 1970s, I was invited by a multi-disciplinary group in Bariloche, Patagonia, in the south of Argentina, to develop a model of the world economy that would compete with the “limits to growth” model developed at MIT.  So I went to Argentina while I was doing my PhD in Economics and devised a model of the world economy. That’s where I used “basic needs” as an alternative way to look at economic development and extended that to sustainable development, which is development that meets the needs of the present without compromising the ability of future generations to meet their own needs. 

Graciela Chichilnisky

In 1992, at the United Nations’ Earth Summit, 150 nations declared that model to be the most important concept of economic development and voted its adoption into law. Then it was enshrined by the Brundtland Report as the core of sustainable development.

The model was implemented in several places. For example, Fernando Henrique Cardoso was one of my co-workers in Bariloche. When he became President of Brazil, he implemented the basic needs model, and it was very successful.

But back in 1992, I was very anxious. We had developed this great concept, and it was becoming international law, but nothing was happening. So I thought I had better take the bull by the horns and create a market-oriented structure that implemented basic needs. It was then that I designed the carbon market. I started working with the International Monetary Fund, the World Bank, the Organization for Economic Co-operation and Development, and especially with the UN Institute of Trading and Research. At that point I had the UNESCO Chair, and I was the director of research at the United Nations, along with my duties at Columbia.

In creating a carbon market I worked with the Argentinian ambassador, Raúl Estrada-Oyuela, who was the lead negotiator for the Kyoto Protocol. By 1996, I had developed the carbon market model at Columbia. I took the model to Kyoto, where the lead negotiator was failing to bring about agreement on greenhouse emissions limits. I told him that if I introduced the carbon market, they would sign, because it would give them the flexibility they were looking for. He was initially opposed, but he needed a signed agreement. So I worked with him and wrote the words that became the carbon market into the protocol, which was signed by most UN members.

Apuntes: A friend of mine asked me to ask you this question: how does the carbon market reduce CO2 emissions if what you are doing is trading credits among those who emit more and those who emit less?

GC: Yes. That is a general misunderstanding. That is what Estrada-Oyuela thought and why he was against it. I explained to him that in order to have a carbon market, you need carbon emission limits. Without those limits, there can be no trade. Limits are stronger than carbon taxes. Limits are set at a level that is lower than existing emissions levels. That is what many people do not understand.

Some people fail to understand that the carbon market is not a standard market. It is a market for trading the patrimony of humanity. The limits are only on the rich countries by design, because it is more efficient that way. And we need to extend this concept to water and bio-diversity and thus change capitalism forever, for the better.

Apuntes: You are the CEO of Global Thermostat, which is developing a way to extract CO2 from the air. I was reading that Robert Socolow, a professor at Princeton, believes that direct air capture (DAC) has a very limited role in reducing emissions. What do you say to people like Socolow?

GC:  Socolow was hired by Peter Eisenberger, who now works with me at Global Thermostat. When he was at Princeton, Peter hired Socolow for the institute of Materials. He is a very nice guy, Socolow. He believes in the [Global Thermostat] technology, he does, he knows the truth. What happened is that the American Physical Society commissioned a study, which included, aside from Socolow, a number of people from MIT who believe that DAC is too expensive. They quote hundreds of dollars per ton of CO2; but our costs are significantly lower. They did not use our data in their study because we wanted them to sign a non-disclosure agreement guarding our proprietary technology.

Apuntes: Let me now ask you a few questions about basic economic issues. Stocks just hit a new high in the US. Is that rise sustainable?

GC: The economy is doing well because the administration has put in place the strategy that I pushed and recommended to President Obama through our Chairman: renegotiate mortgages. The renegotiation of mortgages is like a lever that lifts the whole economy. Mortgages are critical not only to the financial sector but to other sectors of the economy as well. So the strategy is working, but without appropriate safeguards. The government needs to control what financial institutions can do.

Apuntes: Does the financial sector have too much influence on economic policy?

GC: Yes, and they don’t know what they are doing. It’s not that they are trying to destroy the world. They are simply trying to make money. And the problem is that the way we measure economic success today is by Gross Domestic Product, GDP.  And that is destroying the world. Not because people are mean and want to destroy it, but because markets are not assigning proper valuations.

Apuntes: There is a better way of valuing resources?

GC: Yes. The way they are valued in the carbon market, and in equivalent markets for bio-diversity and water that I have already recommended to the United Nations. If we create those markets, we change the definition of economic progress: a country or state that destroys the environment loses money, so the notion of making or losing money will be changed if we change the market structure. That is why the carbon market is so critical. It changes the entire global economy.

When someone in the financial sector says, “Hey, I just want to make money,” with the carbon market in place he can make money without damaging the environment. Without the carbon market he can make money while destroying the environment. Not because he is a bad guy, simply because of the way resources are valued and economic success is measured.

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