Mike Azlen: 0:03

And what's interesting about that decision to decarbonize, I think, Tom, It's strictly based on profit. There is no objective of ESG. There's no objective of regulatory. There's no objective of green. It's simply based on, on that profit maximization objective. And since Europe launched the program in 2005, the European Carbon Market, emissions in Europe have come down one billion tons per year, one gigaton.

Tom Raftery: 0:32

Good morning, good afternoon, or good evening, wherever you are in the world. This is the Climate Confident podcast. The number one podcast, showcasing best practices in climate emission, reductions and removals. And I'm your host, Tom Raftery. Don't forget to click follow on this podcast in your podcast app of choice, to be sure you don't miss any episodes. Hi everyone, welcome to episode 137 of the Climate Confident podcast. My name is Tom Raftery, and before we kick off today's show, I want to take a moment to thank our amazing supporters of this podcast. Your support has been instrumental in keeping the podcast going, and I am really grateful for each and every one of you. If you're not already a supporter, I'd like to encourage you to consider joining our community of like minded individuals who are passionate about climate. Supporting the podcast is easy and affordable, with options starting as low as just three euros or dollars per month. That's less than the cost of a cup of coffee, and your support will make a huge difference in keeping this show going strong. To become a supporter, simply click on the support link in the show notes of this or any episode, or visit tinyurl. com slash climatepod. Now, without further ado, with me on the show today, I have my special guest, Mike. Mike, welcome to the podcast. Would you like to introduce yourself?

Mike Azlen: 1:54

Sure. My name is Mike Azlen. I'm the founder and CEO of Carbon Cap Management, an environmental asset management business. I'm really pleased to be here today, Tom.

Tom Raftery: 2:04

Okay. Tell me a little bit about Carbon Cap Management. Mike, what is that?

Mike Azlen: 2:10

Sure, Carbon Cap Management is an environmental asset management firm whose objective is to raise awareness about climate change and to provide solutions that are directly related to capping and reducing emissions. Our first fund is a very innovative fund. It's called the World Carbon Fund, and the fund invests into multiple liquid and regulated compliance carbon markets. Those are the markets that are run by governments around the world to cap and lower emissions. And the objective of the fund is to provide absolute returns, but also to have a direct impact on climate change. And we do that in a number of ways, but the hardest impact is that 20% of the performance fees for the fund are used to purchase carbon allowance permits in the regulated market and to cancel those, thereby aligning our interests with our investors and with a direct impact on climate and the fund holds article nine status, which is the highest form of impact under the European taxonomy.

Tom Raftery: 3:14

Okay, can you give us a little bit of a 101 on that for people who might not be familiar with the carbon capture markets?

Mike Azlen: 3:23

Yeah, so I think the first thing is to differentiate between, there are, there are effectively three carbon markets. The third market, which I won't go into today because it, it's quite complex, is the market that exists under Article 6 of the United Nations Framework Convention and the Paris Agreement. So we won't talk about that. That market currently is in, in sort of suspended animation until they work out all of the points in the Article 6 rule book. For most people, there are really two carbon markets. Probably the most familiar market is the voluntary market. This is where you might see a project you can click on to offsite, offset the emissions from your flight. Normally these are project based carbon credits and offsets. So, the most notable would be planting trees or avoided deforestation, projects like that. And so someone independently calculates how much carbon is sequestered as the trees grow then a third party company will verify that and they issue carbon credits. That market, I always like to give five key characteristics Tom, of the market. Number one, it is unregulated, which is an issue. Number two, it's a private equity asset, so it's illiquid. Number three, it's quite small in size, and I'll, I'll come back to that in a moment. Number four, it's quite opaque in terms of the calculation methodology. How do they actually calculate how the carbon was sequestered and for how long? Very important, that durability concept. And then number five, in the voluntary market, of course. There is effectively an unlimited supply of these carbon credits and offset. And that's where the term credit and offset is appropriate. If we move to the second market, that's the regulated carbon market. These are the markets that are run by governments. And I'll go through those same five bullets because I do think it's helpful. So number one. It is regulated, run by the government. It's very large and liquid. So the market in the regulated world is about 1, 000 times larger than the voluntary market. So it's not 10 times or 100 times. It's orders of magnitude bigger. It's very liquid. So these markets trade on a daily basis, most of it on exchanges. So trading about 4 billion U. S. dollars per day. So it's a very liquid market. Number four, it's very transparent because it's run by governments. All of the rules are posted on government websites, so it's easy to read the rules and understand. But number five is the most important, Tom. In the regulated market, there is a cap on the number of permits. And that number of permits, and that's the right term, allowance permits, that cap is lowered, creating smaller numbers of permits each year. So in one market there is effectively this unlimited supply, but in the compliance markets there is a capped and declining supply of permits. And, and it's proven to be really probably the most successful mechanism at capping and lowering emissions as a, as a policy tool.

Tom Raftery: 6:37

And the idea behind lowering them year on year means that you're taking carbon out of the system de facto and also with laws of supply and demand, if you're reducing the supply, then obviously the price is going up over time. Is that the idea?

Mike Azlen: 6:57

Well, the idea is for a cap and trade market, for a regulated market it has two objectives. The first objective is to cap emissions and lower them, which is wonderful. But the second, Tom, is to achieve that reduction at the lowest cost to society. That second objective, achieving emissions reductions at the lowest cost, is a very important, and that's why the mechanism harnesses the free market. So, so, the way it works is any company within Europe, or now we have a carbon market in the UK, or the state of California. Any entity that emits above a threshold, and usually it's quite a high threshold because they want the big emitters, they want to capture most of the emissions with the smallest amount of entities, so those companies are notified by the government and it's mandatory inclusion, they don't have a choice, it means they're audited every year and they must give the government permits, allowance permits based on the amount of emissions. So last year, you emitted 1 million tons, by April of this year you must give the government those 1 million permits. Now, the source of the permits, they come from the government. Most of the source is they're sold at auctions. So the government in California, there's four auctions per year. In the European market, there's an auction every single day, and we participate in that auction. So companies estimate their emissions, and then they buy the permits because they know they have a compliance deadline. So, the CEO, Tom, of each of those companies, and in Europe there's 15,000 approximately large emitters. These are principally power companies burning coal and gas to make electricity, steel, cement, chemicals, glass, and refineries. These are the big emitters. Those CEOs and the board of directors in those companies, what they are looking at every day is two prices. They look at the permit price, which is trading and very liquid currently about 85 euros per ton and, and they also look at their internal cost. When I say their internal cost, I mean, their internal cost of abatement. In other words the CEO asks the head of engineering in the company. At what price can we decarbonize? And of course, we can decarbonize anything if we're willing to pay any price. So if you think about the entire ecosystem of thousands of companies, and if we were to line them up, Tom, in a merit order, for some companies, their abatement cost might be 20 euros a ton. Other companies at the other end might be 200 euros. So when the CEO says, should I buy permits at 85, Or should I actually cut my emissions if the internal cost is 25 or 30 or 50? That's a very easy decision. The CEO says, let's cut the internal emissions. Let's invest in that new low carbon machinery, amortize the cost, and it works out at a 30 or 40 or 50 euro per ton cost. And what's interesting about that decision to decarbonize, I think, Tom, It's strictly based on profit. There is no objective of ESG. There's no objective of regulatory. There's no objective of green. It's simply based on, on that profit maximization objective. And since Europe launched the program in 2005, the European carbon market, emissions in Europe have come down one billion tons per year, one gigaton. Now the carbon market has certainly not been the only reason for that reduction. Regulatory policy, energy efficiency, all kinds of factors. But... most academics and empiricists agree the bulk of that reduction has been because Europe put a price on emissions, and it really does focus the mind of those executives.

Tom Raftery: 10:46

Sure, and that 85 euros per ton that it's trading at roughly today, that's significantly higher than it was 10 years ago. And so that price has only recently started to go up, significantly in the last three, four years, I want to think. What are the factors behind the increasing price?

Mike Azlen: 11:05

So, what you've, what you've seen in compliance regulated carbon markets since Europe launched in 2005, is we've had multiple phases of development. So, typically they will put in place a five year or sometimes even a ten year phase, where they crystallize the rules during that phase. And what are some of those rules? So one of the most important rules is that linear reduction factor. So if we think about an annual cycle of compliance in Europe. Today, the, the cap, the annual cap is about 1. 4 billion permits, 1. 4 billion tons of emissions. So the government will issue that many permits into the market. At the end of the year, it will audit those companies. Of course, the companies will buy at the auction. They can buy in the secondary market. And if we assume that the total emissions was also 1.4 billion across those thousands of companies, they will give the permits back to the government. The government says, great. You complied. And just to be clear, if you don't, the penalties are very severe. So we have 99. 9 percent compliance in these markets. And these are very big corporates. When the government receives the permits back, they destroy the permits. They tear them up. That year has now completed. The next year 1.3 billion, then 1.2, you tear those up, then 1.1. So you're right, Tom, we create this scarcity, and it ensures that our first objective, environmental integrity of lowering emissions, has been achieved. So, so every year we have this annual compliance cycle and we're creating scarcity. That linear reduction factor, that's what it's called, that's one of the key settings in a carbon market that the government updates infrequently. So in Europe, we have just passed the new Fit for 55 legislation, and that has mandated a 55 percent reduction in European emissions from a 1990 baseline. The previous number was 65%, so that's a, an increase in ambition. They've now recently updated the rules for the European carbon market to align us on that trajectory. And that means that that annual reduction in permits, which was 2.2 percent per year, now is 4.3%. We're really creating that scarcity of the permits. And of course, if, if you again, go back to that marginal abatement cost curve, if we line up all the companies that with their different costs, some are very high cost to abate, some are low. As we lower the number of permits, we climb that marginal abatement cost curve. So the low cost people decarbonize, then we move to the next rung on the ladder, higher cost abatement. Then higher and this is what's wonderful because the price signal the market determines the price of carbon that's widely disseminated so that each of those CEOs knows they know their internal cost and they know the permit price and they can make a smart abatement decision, which of course means their second objective is achieved. We can be quite confident every year when we lower the permits the number of permits in the market It is indeed the low cost companies with the lowest cost of abatement, they choose, of their own volition, to decarbonize. And thus, we have achieved our second objective. We've capped and lowered emissions, but we've allowed the market to find and seek those companies who self select themselves to decarbonize at the lowest cost to society. And that's, that's why I think there's an elegance and power to this mechanism.

Tom Raftery: 14:41

And if I'm a CEO who has estimated that my annual emissions are going to be a million tons, and let's say I get to September, October, and I'm at 900, 000 and I realize I've got a problem, what do I do at that point?

Mike Azlen: 14:59

Yeah, so, these big emitters, and you're quite right, Tom, these are, you know, you have some entities that are emitting 10 million tons a year, 15 million tons, big power utilities in Europe. Many of them have very sophisticated hedging programs, Tom. So, in the case of power companies, which is about 50 percent of the emissions in, in Europe. They will sell their electricity in a forward trade to BMW or Mercedes who want to lock in their long term energy price. Having sold the electricity, the power company then buys the coal and the gas, which is their input, to make that electricity. They buy that in the forward market three years forward, and they also buy the carbon, Tom. So by selling the output, the electricity, and buying the three inputs, coal, gas, and carbon, they then lock in their forward margin. And it's another good example of how, you know, forward futures markets help the economy in terms of price discovery and risk management. So that, most of these big emitters, Tom, they've got quite sophisticated hedging programs. They know what their emissions are going to be. They will have a carbon trader or a team of people who will be then buying in the auctions and accumulating that carbon over the course of the year so that they have those permits when it comes to the compliance deadline. There is always a few companies that are rushing at the last minute to get their permits in. They had a little bit of a cash shortfall. But, but I would say by and large, it's, it's pretty well managed by these big corporates.

Tom Raftery: 17:38

Ok, and that 4 percent reduction year on year that's starting to happen from now out, that means more than likely that that 85 will go to 95 will go to 100 and maybe above in the coming years, right?

Mike Azlen: 17:52

So it's really, really interesting because you know, as I said, if you, if you line up today, the cost of abatement across all these industries from low to high, probably the high, hard to abate industries such as steel and cement and chemicals are in the 150 to 300 euro range, with today's technology, Tom, with today's technology. And here is the really interesting thing about carbon markets. So one might say, well, gee, as we keep lowering the supply, the carbon price is going to have to reach those levels in order for those companies to choose to abate. Because if it's below that, they just buy the permit, right? Why, why would I decarbonize if it cost me 200 when I can just buy the permit at 85? But the interesting thing is, you've got, while the supply is coming down, so is demand and technology is bringing down those abatement costs from 250 to 200 to 175. And therefore, this is, this is where our research is really interesting because what we're trying to gauge is on balance, where actually is the supply and demand. So in the power sector, as you know very well solar and wind are coming on gangbusters. And as solar and wind get connected to the grid, they push coal and gas off the grid, lower emissions, and we're seeing in the first half of this year, in 2023, we've seen a marked reduction in emissions from coal and gas burn as more solar and wind have come on the grid. So, the answer to your question is, not necessarily. I think there is a general, a general expectation that carbon prices will rise over time, and our, our seminal research paper is called the carbon risk premium, and we put forward the argument that carbon should appreciate at around five to seven percent per year over the next decade to take into account that lowering supply and higher abatement costs, but certainly there's no guarantee of that. There's a lot of variables in the, in this equation.

Tom Raftery: 19:53

Okay. And I mean, you've mentioned Europe and California. Are they the only two markets or are there, are there more and are there more coming or, you know, where do we fall there? Because it's, it's a global issue. It's not just happening in California and Europe.

Mike Azlen: 20:08

Yeah, absolutely. So Europe was the pioneer and it, and Europe, interestingly, built on the success of the cap and trade markets that were initiated for sulfur dioxide emissions under the Bush administration in the 1990s, which I might add was really successful. That's what prompted Europe to launch the world's largest carbon market. That success in Europe of that reduction in emissions of about one gigaton has really prompted many countries now who have made net zero pledges themselves to look at, well, actually, this is a mechanism we should look at. One other thing I like about the mechanism is when the government sells those permits Tom, those are permits to pollute of course, that raises billions of revenues for the government. And in Europe, for instance, but it's true in most markets all of that revenue, 100 percent of the revenue from selling those carbon permits must be reinvested in energy efficiency and low carbon initiatives. So there's another tertiary, primary cap emissions, secondary, achieve it at the lowest cost, tertiary, recycle that auction money into energy efficiency initiatives. So, countries have looked at all the different policies, and certainly I studied this at the at the LSE's Economics and Governance program of Climate Change. This has been really the only policy that has bent the emissions curve downwards. And so, currently today, we are invested in five regulated markets, I'll just name them. It's the European market number one, the UK market number two, after Brexit was formed. Number three is California. Number four is the Regi carbon market on the east coast of the United States. This is a carbon market that consists of 11 states together on the east coast. And the fifth market is the New Zealand market. So these are the five today, but I'm really pleased to tell you, Tom, many, many more countries are launching. So China and South Korea have already launched. Those markets are not open to international investment yet, but they're both quite large. But the really exciting news is all the other new countries. So Japan announced about two months ago that by 2026, they want a full emission trading system. This is the fifth biggest emitter in the world, a Western democracy, so I think it'll be a high quality carbon market. Other countries, Mexico has completed its pilot program over the last two years. They should be launching later this year. The Asian Tigers, Indonesia, Philippines, Malaysia, the new Thai government has announced they want a full carbon market and there's many others. So I think we're moving to a world where a mandatory carbon price is spreading. The asset class itself was trading half a billion per day when I began my research four years ago. Now we're trading four billion per day, so it's become much bigger and more liquid, and we believe it will be 10 to 20 billion per day in, five years or so, overtaking eventually crude oil as the most liquid commodity on the planet.

Tom Raftery: 23:15

Pun intended. Okay. And what's, what's happening in the world of carbon removal projects?

Mike Azlen: 23:24

Yeah. So, carbon removal is really interesting. I mean, again, when we talk about removals as it, as it relates to to credits that's in under the first market, the voluntary market. Probably, you know, maybe one tenth of 1 percent of the voluntary carbon market is related to carbon removal credits and a removal credit really is something that has the following characteristics. You must demonstrate from the beginning to the end of that life cycle, whatever that process is that you've actually removed CO2 from the atmosphere. That's quite different than many voluntary carbon projects, which are, you know, net neutral over a time period. But the other really important aspect, Tom, is durability of the storage. So trees are wonderful they sequester carbon. Many people are not aware that a fully mature rainforest... is in a really state of equilibrium, and it's not sequestering additional carbon, perhaps 1 to 2 percent per year. Most of the carbon is already locked up in that forest, but trees die. As they die, they decompose, they release their carbon back into the atmosphere. And new trees grow, and the forest is in a state of equilibrium. What we're recognizing with all these massive increases in temperatures, and the forecast, of drier and hotter weather, is the durability of carbon storage in a forest has now come under question, and I think probably rightfully so we must protect our precious forests. We must plant as much as we can. But when you're thinking about long term carbon storage, unfortunately, as we're seeing with the Canadian wildfires, I'm a Canadian, a lot of that will burn. We need more durable and in carbon removal, we're seeing a bit of a shift to more durable storage. And the best example would be companies like Climeworks or Carbon Engineering, where they remove CO2 from the atmosphere using a chemical process. It's very dilute in the atmosphere, but it can be removed. They then liquefy it, transport it. Inject it deep underground where it either calcifies back into rock or it's stored permanently below an impervious layer where oil originated from, right, and you cap that well. So that gives you long life storage of carbon as opposed to a forest which could burn down, it could be chopped down, pests could have impacted, a storm could knock trees down. There are many variabilities for risk of reversal. And really I think people are starting to think slow carbon cycle and fast carbon cycle. And fast carbon cycle areas is probably not the best the best area with too high risk of reversal.

Tom Raftery: 26:07

Okay. And where does Carbon Cap figure into all of this? Because, I mean, you've explained the markets in detail and thank you for that, because it was, you know, really interesting, but what are you guys doing there? You're, you have a fund, the World Carbon Fund. What does that do?

Mike Azlen: 26:29

So the World Carbon Fund has those dual objectives. So over a rolling 12 month window, we always want to be positive. So we have an absolute return focus. To give you an example, last year carbon was down. These, the carbon markets after a big growth phase in 2021 with massive price appreciation. Carbon actually was, was down in 2022, our fund was up. This year, carbon is also negative on the year. The five markets that we invest in are down about 12 percent this year. And again, the fund is up. So we have this absolute return focus Tom where we can go both long carbon or short carbon, if that's a a word that you're familiar with. We can position in either direction to protect and, and enhance investor capital. And then that second objective, as I said, 20 percent of our performance fee is used to buy carbon allowance permits in the regulated market. And then we cancel those. So we've now over a three and a half year track record the fund has grown to 250 million in assets under management, and the total performance is up about 90 percent net of all fees and costs. So we've crystallized three years worth of performance fees in each of the last three calendar years, and we've taken 20 percent of our fees in each year, purchased carbon allowance permits and canceled those. So there's a complete audit trail if investors are interested in. We're, to be honest, Tom, that impact piece, we're only now seeing several institutional investors being interested in investing in the fund. Really focused on the impact piece. We have over 80 investors in the fund. Most are not focused to be honest with you on the impact. It's a nice to have for them. Most of them are interested in low correlation, monthly liquidity, you know, and generating returns. And of course, you know, perhaps that is the way it should be. But now we're seeing a trickle of new institutional interest in the fund where the Article Nine status, the high impact is becoming for them a key factor.

Tom Raftery: 28:32

Okay, cool, and just to dig into it a little deeper, who are typical investors in your fund? Is it kind of mom and pop investment houses or is it the big Blackrocks or is it a combination or somewhere in between?

Mike Azlen: 28:47

I would say it's somewhere in between. It, it began with high net worth individuals and family offices. It took us about maybe nine months before our first institutional investor came in. And then it's been a year after that, the second institution, a year after that, the third. But only in the last five months, two additional significant institutions have come on board. And our pipeline now is much more institutional focused, I would say. So it's you know, I think things are looking quite optimistic for, for future growth and onboarding of more institutional clients.

Tom Raftery: 29:22

Okay. And I mean, I know you've addressed this partially already, but are they interested in your fund for being able to say to, you know, their investors, Oh, we were investing in this really green stuff over here. Or is it, you know, for profit? Or is it a combination? Or where do you fall there?

Mike Azlen: 29:42

Yeah. So I, as I said, I think that the bulk of investors, certainly out of the, you know, 85 investors we have in the fund the bulk would be interested in the fact that carbon has is an asset class with a low correlation. Carbon is an asset class with a tailwind. And it's a liquid, asset class. So, you know, investors are seeking things with a positive rate of return and a low correlation to the other investments in their portfolio. And carbon really does, from an asset class perspective, it does tick the box there. So I would say that's the bulk of the driver. However, just in, in March of this year, a very large, well known institution who made a significant investment with us after tracking the fund for two and a half years they invested, and for them, the article nine status, the impact piece was of paramount importance. And I mentioned there's, there's several others that are coming on the horizon now where that impact piece is very important to them. The other thing just to mention these institutions Tom, given the, some of the uncertainties in the voluntary carbon market, our approach, which most consider to be quite unorthodox in terms of, you know, buying compliance carbon, paying 70, 80 more euros or dollars per ton, and then canceling those permits when you could buy a voluntary credit for 5 dollars or 1 dollar. That was seen as quite unorthodox. Of course, the reason we chose to do that is because we believe there's real veracity there. But, but interestingly, two institutions have now contacted us and have said, could we help them buy and cancel compliance carbon as part of their corporate net zero objectives? And I, I think that's very interesting. Wow. To see how that will develop.

Tom Raftery: 31:31

Okay, and just help me out here, because I know very little about finance and investments. How do you actually make the money? How does that work? I mean, I know, is it, is it like day trading where you're just buying when the price goes down and then selling when it goes up? Is it as simple as that or how does it work?

Mike Azlen: 31:49

There, there is an element that is as simple as that. Our process is actually quite quantitative and systematic. So our head of research is a climate policy expert and an economist by training. And what we have done is we've built very detailed supply and demand models for carbon. Of course, the government announces the total annual supply of permits. As I said, it's very transparent, so we don't have to do a lot of work on the supply of permits. Where our research focuses, Tom, is on demand. And demand means, what are the emissions? What are the actual projected emissions of these big emitters? And we use a lot of automated technology, Python scripts to scrape data in order to put a, put together a picture of supply versus demand. I mentioned the background to the company was after selling my previous asset management business, I had an earn out period and then I had some time out. That is when I became deeply involved in climate research, nothing to do with carbon. That, that concern from reading the academic literature, particularly in the area of feedback mechanisms, convinced me that this was an acute problem. I then enrolled at the LSE. In their Economics and Governance of Climate Change program, and that's where I learned about these carbon markets, but no one had done comprehensive research on the asset class, Tom, so I hired a PhD in 2018, and we collected the data on these carbon markets. They're liquid. They were trading half a billion a day, and we did all that research, analyzed the data, and that has been published last year in the Journal of Alternative Investments. I would encourage people to read that paper if they're interested in carbon as a liquid asset class. And one of those conclusions in that paper was that if you can the carbon price is, is most mainly influenced by that intersection of supply and demand. So, you know, if, if all of a sudden we have a recession, Tom, a deep recession in Europe, like we saw in Covid, industrial production will fall. Mm-hmm, steel cement, chemicals, the emissions goes down, less demand for permits and the carbon price falls. Which if you think about it as a mechanism, that's not a bad thing. In a time of recession when people are tightening their belts. The carbon price being imposed on these struggling companies is lower. Once we come out of recession, emissions pick up, the demand for the permits, of course, picks up, the price picks up, and there's a higher carbon price, but now, hopefully, the companies can afford to pay that price. So the mechanism has a self adjusting methodology, and certainly carbon should be seen as pro cyclical even though it has a very low correlation. We always explain to clients in a global recession we would expect prices to fall and then, you know, rise in a global boom. So it's a, it's a fascinating area.

Tom Raftery: 34:47

Ok, you mentioned the Fit for 30, is it? Fit for 55. Fit for 55, right, okay. So that, that's the requirement of all 27 nations of the EU to reduce their emissions, as you said, 55 percent versus the 1990 baseline. Correct. How likely do you think we are to achieve that?

Mike Azlen: 35:10

Well, before we change the linear reduction factor, Right. So when, when, if you look at the annual, we're in a, in the, in the fourth phase of the European carbon market. So they've already announced how much supply of permits will come out every single year. So you can, you know, that if those permits come out, that's what can be emitted. So you can add up all those permits out to 2030 and basically you can calculate what will the total emissions be. So it's once they aligned the emissions cap in the carbon market with the 50 Fit for 55 legislation, I became much more confident that we will achieve those objectives. So I feel before they pass the legislation somewhat questionable. Now, I think I think there's a really, really good chance of that being achieved.

Tom Raftery: 35:58

Impressive. Amazing. Amazing. Because I was not confident at all, I have to be honest. Okay, that's good. That's good to hear. We're coming towards the end of the podcast now, Mike. Is there any question I haven't asked that you wish I had? Or any aspect of this we haven't covered that you think it's important to highlight?

Mike Azlen: 36:17

No, I guess I would just say that If people are following Climate closely, and I really enjoy your podcast you know, it's excellent. If you're following things closely, I guess it's important to take a step back and say where are we in this struggle. Since Paris was signed, of course, in 2015, which was a miraculous achievement, 194 countries, but of course, in 2016, we then had a record year of emissions, 2017 record, 18 record, 19 record, 2020, we had COVID, and so there was a 7 percent fall, but 2021, a new record, and 2022, a new record, so very important to be realistic about all of the development, but recognizing that the planet doesn't watch TV or read the newspaper, because if you do, you think we're doing wonderful on this issue, but in fact, we're emitting more and more CO2. And this is why I think carbon removal is going to become an enormously important aspect for us to get to grips with because without that, we are risking triggering many tipping points and therefore runaway climate change. And as I mentioned, one of the areas of research I focus on is climate feedback mechanisms. I think the research is nascent. I think there's also a reluctance on the part of academics in that area to perhaps be vociferous about what they're finding because academics are conservative. They want to achieve, you know, more evidence, more evidence, but we're running out of time. Just recently we saw the carbon budget for 1. 5 degrees. Of course, we've already warmed the planet by between 1.1 and 1.2. So we have this very small remaining temperature budget. And when we translate that into how much we can emit, it's currently about six years of our run rate. Our run rate is 40 billion tons per year. And, and therefore I think that's what I'd like to leave people with is, is the scope and scale of the problem is enormous. Carbon removal will have to play a role. But my hope is it's a combination of more countries adopting a cap and trade market to cap and lower emissions. That's got to be the first focus. And then in concert with carbon removal at, at big scale. So, our website is open, there's lots of research on our, our website carbon-cap. com, and, and I know you'll put it in the show notes, but there's lots of research, educational videos, webinars, and papers, and so it would invite people to have a look.

Tom Raftery: 38:52

Okay, that was going to be my next question. Where would you have people go to? Is that paper you mentioned that you, you authored is, is that available as well on your website or where would people go to find that?

Mike Azlen: 39:03

I don't think, I don't think the academic paper is available on the website. I think there's some issues with just distribution rights, but if anyone emails me or connects with me on LinkedIn, I'd be very happy to send you the paper.

Tom Raftery: 39:16

Perfect. And I'll put a link to your LinkedIn profile in the show notes as well for people to find. Super. Mike, that's been fascinating. Thanks a million for coming on the podcast today.

Mike Azlen: 39:25

Thank you, Tom. I really enjoyed it and best of luck with the podcast.

Tom Raftery: 39:30

Okay, we've come to the end of the show. Thanks everyone for listening. If you'd like to know more about the Climate Confident podcast, feel free to drop me an email to Tom raftery@outlook.com. Or message me on LinkedIn or Twitter. If you like the show, please, don't forget to click follow on it in your podcast application of choice to get new episodes as soon as they're published. Also, please don't forget to rate and review the podcast. It really does help new people to find the show. Thanks, catch you all next time.