STEVE CANNANE, PRESENTER: Canadian activist and author Naomi Klein found fame back in the year 2000 with her international best seller, 'No Logo', which attacked consumer culture and globalisation.

Her latest book is 'This Changes Everything: Capitalism Versus the Climate' and I spoke to her earlier from London.

Naomi Klein, thanks for joining us.

NAOMI KLEIN, AUTHOR: Thanks for having me.

STEVE CANNANE: In your book you've looked at why the world has failed to come to an agreement on reducing greenhouse gas emissions. What conclusions have you come to?

NAOMI KLEIN: Well what I found is that what best explains this epic failure, the reason our governments have allowed global emissions to increase by 61 per cent in the very time period when they were negotiating to reduce emissions is really a case of epic bad timing.

That climate change landed on our laps decisively in the late 1980s. 1988 was the first year that governments began meeting towards reducing emission, that was the year the intergovernmental panel on climate change was formed.

That was also the year that the first free trade agreement was signed between the Canada and US. That became the prototype for free trade deals around the world and a year later the Berlin Wall collapsed. So this was the triumphant moment for what Joseph Stiglitz has called "market fundamentalism".

We know the policies at the heart of this revolution they are privatisation, deregulation, keeping corporate taxes low - really just liberating capital to scour the world for the cheapest possible production conditions.

And in every way, that conflicted with what we needed to do to confront the climate crisis because of course we did need to intervene in the market and we did need to act collectively. We needed to tell polluters that they had to stop polluting. And all of this was really ideologically heretical in this period so we tried to solve climate change through these sort of gentle market mechanisms like cap and trade, emission trading, even a gentle carbon tax but not actually forcing the polluters to pay and closing off carbon frontiers.

STEVE CANNANE: But since the end of the Cold War, nations are actually talking to each other more. There are more international forums. We're trading with each other more. Nations like the US and China have more in common than they did before. Isn't there an argument that there's never been a better time to come to an agreement?

NAOMI KLEIN: Well, it's certainly possible for our governments to reach agreements when those agreements are in the interests of international capital.

So the idea that they just can't agree on anything is simply not true, because in the same year... years that they have been failing so spectacularly to come up with binding climate agreements, with real penalties for failing to comply, they built the World Trade Organisation, a robust system guiding the flow of goods and services, and that has real penalties.

But in many ways, these systems conflict with one another.

I have a chapter in the book about how, at the same time as governments go to the UN climate summits and launch accusations at one another about how they aren't doing enough and why should the US do anything about climate change when China isn't and vice versa, at the World Trade Organisation, these same governments have been lodging grievances against each other for subsidising renewable energy.

My country, Canada, or Canadia as it's called over there, was challenged by the European Union and Japan for having a very good green energy program in the province of Ontario, which set bold emission reduction targets, but also had requirements that a certain percentage of solar panels and wind turbines be produced locally so that it created jobs.

This was challenged successfully at the World Trade Organisation.

So yes, they can agree, but they agree when the... when it is in the interests of large trans-national capital so that is really the crux of the issue.

STEVE CANNANE: You believe your economic model is waging war against life on earth and you want that economic system to undergo a radical overhaul. What kind of changes do you want to see made?

NAOMI KLEIN: We need to have a more strategic economy where we contract the areas that are dangerous and we know they're dangerous and that means saying no to new fossil fuel frontiers.

Then we need to expand the parts of the economy that are already low carbon so that means investing in the public sphere like health care and also the parts of our public sphere that we're going to need more than ever as we face extreme weather.

Because we've already locked in a good deal of extreme weather so that means we need more fire-fighters. That means we need more frontline workers.

And we also need huge renewable energy projects, and public transit and all the tools that will get us off fossil fuels.

STEVE CANNANE: Is one of those radical options in your eyes degrowth, a contraction of our economies? Kevin Anderson whose work you rely on in your book has previously argued for planned recessions to reduce emissions. Are you advocating for that?

NAOMI KLEIN: I'm here in London and I've actually had several meetings with Kevin Anderson and Alice Bows-Larkin from the Tyndall Centre specifically about this and they use the word strategic degrowth.

I think just a strategic economy or a deliberate economy is what we're talking about, because they don't think all aspects of our economy should contract. When they say strategic they mean we need to... we need to shrink the parts of our economy that use up the most natural resources that are just based on mindless consumption and we need to expand the parts of our economy that are already low carbon and that are going to get us off fossil fuels.

So I think we can overemphasise degrowth in a sense, because the message that people get is they're going to lose everything and that's not true, because the parts of our economy that are most intimately connected with well-being can be expanded because they're already low carbon.

But are we going to have to consume less? Not everyone, but high consumers like me and I assume you are, are we going to have to consume less? Yes, we are.

STEVE CANNANE: Are you saying that Australia needs to shut down its coal industry?

NAOMI KLEIN: Australia like Canada needs to close off these new carbon frontiers. I'm a board member of a great climate organisation called 350.org and we have a slogan which is "When you're in a hole, stop digging".

There is research out of Stanford University that I quote in the book that tells us that we can get to 100 per cent renewable energy by 2030. So the technology is there. The economics are getting better every day, it's getting cheaper every day. But we're not going to get there if we keep making the problem worse.

When I interviewed Mark Jacobsen who is the author of that pivotal study I said, can we get there without using fracked natural gas because of course we're always told that we need to dig up fossil fuels in the interim.

And what he said is we can get there with the conventionals right now. So Australia absolutely should not be in the middle of a fracking frenzy. It should not be opening new coal mines. It should not be exporting coal as demand for it declines.

And so the key thing here is that if we're serious about a renewable energy transition, we can't be locking in more dirty energy infrastructure.

All of these are multibillion dollar projects and when fossil fuel companies whether they're coal companies or Tarsan companies or gas companies, build a massive new export terminal or a massive new coal mine or a massive new pipeline, whatever it is, they are planning for this infrastructure to be around for between 25 and 40 years.

We need to be off fossil fuels by mid century. And this is why the International Energy Agency says we are in this very narrow window and they actually talk about 2017 which is a very scary year, because they say it's after that year that the infrastructure, the dirty energy infrastructure, becomes locked in.

Because once the investment is made, it becomes very, very difficult to convince companies to abandon those investments, right, because they've amortised the value of those investments over decades.

I guess the short answer is yeah I think Australia as well as other governments in the industrialised world need to close off new carbon frontiers.

STEVE CANNANE: But how do you sell that to the people? In Australia the former government couldn't even sell a carbon tax that cost the average household four dollars a week on their energy bills. How do you go about convincing people that they should shut down an industry that generates growth, jobs and wealth?

NAOMI KLEIN: Well, this is about whether or not you put in new infrastructure and open new minds.

As far as existing jobs and existing infrastructure, it should be managed for wind-down, which means that you have to have a just transition.

I mean the good news is that many of the jobs working in the fossil fuel sector are transferable to working in the renewable energy sector. They're many of the same skills and those workers if properly trained will be the beneficiaries in the next economy.

But once again, it comes down to whether you have governments with vision or whether you have governments in the pockets of the fossil fuel lobby that are just wanting to take the path of least resistance, and the most campaign contributions.

As far as the carbon tax, I think Australia, like many other countries, have designed climate policies that have not been based on a polluter-pays principle and have offloaded too much of the burden onto consumers.

People reject policies like that especially during times of economic crisis, when they see that it's simply not adding up. On the one hand they feel like they're paying more for their energy and on the other hand they see that nobody is saying no to the fossil fuel companies. They're in the middle of a boom and it flies in the face of justice.

STEVE CANNANE: But isn't it inevitable that with any polluter pays system, that it ends up getting passed on to the consumers through price rises?

NAOMI KLEIN: I don't think it is inevitable. I think that a carbon tax is a particular way where it's guaranteed to be passed on to the consumer. You could have... there's a proposal right now for what's being called climate risk bonds. Where at the point of extraction, the companies would have to put a specific amount of money into a fund for us to fight climate change.

And they by the way can be forbidden from passing these costs on to consumers. That too can be regulated. I think we've all been indoctrinated in this idea that our governments are helpless in the face of market forces when in fact we know when they want to intervene in the market, when it is in the interests of large corporations they can and do intervene. We certainly saw that during the banking crisis.

So it's a particular ideology that has guided the way we've responded and that is this belief that we have to design policies in a way that will get the polluters on board from the beginning.

STEVE CANNANE: What about the divestment movement? Last month the Rockefeller family decided to withdraw its funds from fossil fuel investments. The Australian National University is dumping its coal mining stocks. Will the divestment movement make any difference?

NAOMI KLEIN: I think there's been a lot of movement on fossil fuel divestment just in the past few weeks. Glasgow University just a couple of days ago announced that they were divesting from fossil fuels. The first university in Europe to do so.

Stanford University, a huge endowment, has announced its divesting from coal.

Most significantly perhaps the Rockefeller family and its foundation a name absolutely synonymous with oil, the founders of Standard Oil, which later came Mobil which is now Exxon Mobil have announced that they're divesting their holdings.

And I think the Rockefeller case is particularly interesting. Because when they made this announcement, Valerie Rockefeller said that it's precisely because her family's money comes from fossil fuels that she feels a moral responsibility to fund the transition. And essentially she was articulating that polluter pays principle.

But the real trick is to get at Exxon's $45 billion in profits in a single year which remains the highest profit ever reported by a single company. So it has to be about more than divestment, but I think what divestment does is, it's starting to delegitimatise the sector.

I mean we also had news just this week that Lego is severing its relationship with Shell, a long-time relationship, because it was targeted by Greenpeace with the message that we don't want our kids being advertised to with fossil fuels.

So those fossil fuel companies are becoming not just... they were already toxic but now they are becoming toxic politically.

STEVE CANNANE: Many climate change sceptics believe that climate science has been exaggerated by people that they referred to disparagingly as watermelons, people who are green on the outside but red on the inside. Will the fact that you, a long-term critic of the capitalist system, have now written this book, will that just give the sceptics further ammunition to doubt the science?

NAOMI KLEIN: I don't think we need to worry too much about the climate deniers to be honest. I think they're pretty dug in. They believe this because they understand that if climate change is real, and I have spent a lot of time with the climate deniers, I have a chapter about them in the book. I have interviewed many of the most prominent members of this particular clique.

And they're really honest that they first understood that if the science was true, and this was said to me by the head of the Heartland Institute, the premier climate change denier institution, Joseph Bast, said that he realised if the science was true on climate change, then it would mean that leftists would be able to do whatever they wanted. This is what he said to me. And so - he said - so I took another look at the science. In order to find holes in it.

In other words, the political implications of the science were unacceptable to him. Because if it is true that industrialisation is destabilising our planet's life support systems, then obviously you need to regulate, obviously you need to intervene. Obviously the idea that greed is good and it is the best way to deliver the best possible outcomes for the most number of people, well that cannot stand up to what our climate scientists are telling us.

So it's created a crisis on the far right. And it really doesn't matter what I say, because they believe this already. And I actually think they understand something about climate change that a lot of liberals still are themselves denying. Which is that responding to this crisis requires an ideological transformation.

STEVE CANNANE: Naomi Klein, we've run out of time. Thanks very much for joining us.

NAOMI KLEIN: Thank you.