is back at the table talking about her the book "this changes everything". >> the i want to i didn't a book about climate change for those who don't read books about climate change and i really have been struck this issue which affects all of us which is an existential crisis for humanity, we leave it to this very small segment of environment lists and say you deal with it. and really this is a human rights issue,. >> rose: political issue. >> economic development issue, an economic justice issue and yet we barely talk about it. >> rose: osborne and klein next. >> funding for charlie rose is provided by the >> rose: funding for "charlie rose" has been provided by the following: >> rose: additional funding has been provided by: >> and by bloomberg, a provider of multimedia news and information services world wide. captioning sponsored by rose communications from our studios in new york city, this is charlie rose. >> rose: george osborne is here, he is britain's chancellor of the exchequer, the country is currently the fastest growing economy of the g-7, in 2014 it grew by three percent and wall street journal op ed the chancellor said recent experience showed the deficit reduction plan is working, budget cuts have also been a deeply political issue, the next parliamentary elections are in may 2015, polls suggest neither the labor party or the conservatives will be able to achieve a majority, i am pleased to have george osborne back at this table. welcome. >> it is good to be back. >> rose: so why are you here? >> well i am here actually saying to both the americans and to the brits that we don't have to accept as countries secular stagnation, long-term decline, our best days can be ahead of us if we have got clear economic plans to get on top of our debt and back into enterprise and innovation our best days can be ahead of us and really taking on the same pessimist whose said we have to spend our way out of a crisis who now say we have to spend our way out of stagnation, i think that is the right approach. >> their argument is that growth rates is too low, you need more government spending, and my argument is, both in the states, particularly in the uk we have got a bunch of deficit in the uk although it come down by half, our debt to gdp is too high we need to show that we want to be in the front rank of economic nations not just because it raises living standards for our populations but also because if you are going to be able to promote your values around the world if you are not backed by strong economies and countries that have put their houses in order. >> rose: so you are here and promoting that idea, an op ed in the wall street journal this morning about economic pessimism. >> yes. >> rose: you made a speech today to the -- >> i spoke to the economic of new york and i am making the argument if you get all of the cylinders of your economic policy firing at the same time, you have a supportive monetary policy, you have got credible fiscal policy and taking difficult decisions to bring your debt in and then you are backing innovation and you are doing the supply side things that are required, you know, for example let's take a good example, the shared economy on the -- enormously powerful force to change, for change, some countries are banning it in various forms around the world, we are saying we want to see more of that innovation and creativity, so it is a challenge for all of these western democracies, are we prepared to be ambitious, to take the difficult decisions to lead from the front in order to go on having the economic strength to see our values, democracy and freedom promoted around the world, but backed by economic strength. >> rose: is it sustainable? >> yes, i think so. i mean, of course, you know, you don't know when the next cry i see is going to come but that is more reason to get yo your publc finances in order and make sure you can deal with whatever the world is going to throw at you and we know how europe, the rest of europe is very weak, emerging economies are uncertain and of course we always have got these geopolitical issues, you know, whether it is terrible diseases in west africa or terrorism in the middle east, there are all sorts of things going on, at all more reason to build in your resilience. >> rose: and how do you see what you can do with the deficit between now and five years from now. >> you know, britain is still carrying a five step budget deficit, it was double digits, it was forecast to be 11 percent when i became chancellor so we have to eliminate that deficit. >> rose: how do you do that? >> principally by reducing government spending, dealing with costly welfare entitlements. you also have to make sure that wealthy people pay their taxes that are due so we are, you know, unapologetic in dealing with aggressive tax planning, what i don't think you want to be doing is putting up some of our big taxes on businesses or people's incomes that would hit people's cost of living but also make our country uncompetitive. britain thrives by being an open place that is now attracting a huge amount of investment from around the world. >> rose: why is your deficit nearly five percent? >> well, because it has been. >> rose: of gdp. >> even more so than the united states, it was a structural deficit, this was a deficit built up in the good years before the financial crash. we went into that financial crash with a higher structural deficit than any of the other g-7 nations a and for coming out of that crash. >> rose: it is still high? >> yes, it is, and it is half what it was, i mean we have done a lot of hard work in reducing our deficit and we are seen by institutions like the imf to have the most sustained and most effective deficit reduction program, my message and a message in these forthcoming elections is you have got to stay the course, you have to go on dealing with your deficit and bring your debt down as part of a program that says to the world britain has its act together this is the place to be and place to create your business and place to invest, a place to create jobs and we at the moment are creating jobs faster, at a faster rate than any other matrix economy in the world. >> rose: faster than we are? >> yes. and actually, unlike the u.s. the participation rate in the uk is at an almost record high so we are not getting people dropping out of the labor force. i think the u.s. is a strong beacon in the world economy at the moment as well, and i think while both of us have managed to achieve is this combination of activist central banks, the fiscal consolidation, although in the u.s.'s case more unintentional than intentional and now we have got to do that supply side reform, other advanced economies have not been able to get those three components working strong together. >> others argue you should be spending more money on infrastructure, you should be spending more money on crucial projects for the future and you are not because, you know, you want to balance your budget by what 2008 teen? >> run a surplus by 2018, yes. >> rose: that is balancing plus. >> balancing plus. >> rose: and, therefore .. that you are cutting things that might very well create jobs and create dethan and do more. >> well, this is the argument that i have faced over these last five years. there are arguments good time, or bad, the argument is spend more government money. >> spend it on roads, infrastructures and, you know, the uk has the biggest road building program in 40 years, and of course here in the u.s. some great republican presidents like eisenhower built the interstate and there is nothing more to say about investing in infrastructure but i would say put that money into your road program but find that money from savings elsewhere in government, don't think you can just borrow more. the same people -- >> rose: are you saying then this is an easy political argument to make i though you have heard it 1,000 times are you taking it on the backs of the poor and those who are least able to afford it in terms of benefits for them in order to support whatever it is you want to do to bring, reduce the deficit and bring a budget into surplus by 2018. we always have gone out of our way to try to protect the poorest and most absolutely initial. >> rose: there is a debate about that. >> throsk is a debate but the debate is this, who are the people who suffer the most when your economy fails? who are the people who suffer most when the deficit is out of control and debt is out of control? it is the poorest in our society and the least protected. >> rose: then why -- why should they be the ones you turn to to find -- >> we don't. >> rose: to reduce. >> i have taken controversial decisions to reduce what you call in the u.s. middle class welfare. >> rose: entitlement based. >> entitlements. i have taken away -- >> rose: do you call it entitlements middle class welfare? >> welfare entitlements are interchangeable worlds in the u.s. and uk debate but we have taken difficult decisions like that and i have said to some of the richest in our country that, you know, people on the top 15 percent, you can't just get the automatic universal child benefit that used to be handed out, that is an example, so i have done this in a way which independent observers say has fallen harder on those in higher incomes than those on lower incomes but what a motivates me is to create an economy where people with who previously were unemployed and people who previously did not have great opportunities in life now have jobs, now have opportunities, and where i do challenge my critics is over this issue of whether it is better to pay people to be out of work or generous entitlements or better to reform those entitlements so there are sharper -- >> rose: but in order to do that you have to go through a number of years of really severe pain. >> well, again this is what was said -- >> rose: the price you have to pay. >> and the truth is we have seen a rapid paul in the number of work less households and a rapid rise in the number of young people getting work, youth unemployment has come down in the uk, compared it on britain to the continent of europe where you have unemployment rates of 20, 30 percent for young people and indeed for other age groups in other countries. this is the price of where economic policy fails and it is the poorest and most vulnerable who pay that price. they are the people on the front line of economic failure. >> rose: do you feel like you are sort of picking up the economic legacy of prime minister thatcher? >> well, you know, i try to do my own thing which is tackle the problems of my age, to confront the entrenched interests which are standing in the way of economic progress, to get our public finances into good shape. >> rose: so to get it to where you want it to be in 2018 f assume you win reelection in may of 2015 what do you have to do and where are you going to find the continued source of reducing costs to fuel the balanced budget? >> we will find those savings in government departments which are going to get more effective and more efficient and make savings in the entitlements, so for example, here is a difficult decision we are prepared to take. we say instead of operating those working age entitlements with inflation we are going to freeze them for two years, and freeze them and cap them so that is a difficult decision, but it saves government money and enables us to invest in the economic infrastructure we have been talking about that is going to create jobs in the future, and it brings up public finances into balance and it is part of a job creating economy that is creating opportunities. >> rose: and help me understand what it is that makes you and david cameron, if you are different in putting an economic house in order. >> you know,, i think in the end, good politics follows from good economics and of course politicians want to get reelected, there is nothing wrong with that, i want to get myself reelected in a few months time but i think publics reward people who clearly have a long-term plan, an idea of where they want to take the country in the future that do not bend and, you know, quaver with every single pressure group or opinion poll that comes their way. you have got to be prepared to take difficult decisions in politics, one thing i have learned in five years doing this job is that some of the most economically essential things are also the most politically difficult things but partly because the public aren't stupid and they can see you are taking a risk with your own reputation, with your party's prospects, you have taken a difficult decision that has been unpopular at the time. >> rose: your popularity has decreased in the country, yes? >> well, my personal -- >> rose: no the party's, the party's. >> actually the conservative party at the moment i think is in reasonably good shape for an election in a few months time, we are the incumbents but clearly people say david cameron as the best person to be the prime minister and when it comes to our economic competence people see us ahead of our opponents, so ultimately it is going to be a hard fought election and people are going to have to make their own decisions in britain but i feel confident as we come into the christmas period into the new year and the general election we are well placed to earn the trust of the british public. >> rose: the irony is that two of the principal advisor to barack obama are now heavily involved in both sides of the economic -- of the political debate, jim ma casino on one side and david axelrod on the other side. >> sort of a faceoff. >> rose: that is exactly what it is. >> we have jim, and he is helping us. >> rose: understand what. >> he is a very smart guy and he is helping us understand how the internet and modern communication can help us reach voters and he is very successful hear and bring some of that success to us. he is not a campaign manager and running the overall campaign but he spoke recently to the caucus of conservative mds and i think everyone was extremely impressed by the approach he set out for us. >> rose: are you worried about extreme parties? >> well, if you mean by extreme parties not the mainstream -- look, in our political system, there are the moments panned populist forces, so call populist forces, and i think we just have got to force people as the election approaches to say this is a general election, you are choose ago government, you are choosing your prime minister, you are choosing your economic plan for the future and one of two people in our system that can be the prime minister, one the labor leader is clearly not up to it, david cameron is up to it and has delivered and continues to deliver. and if we force that choice at the election then i am confident that some of those supporters of those other parties -- by the way they may have very -- those supporters may have very legitimate concerns about welfare issues, about immigration, about our relationship with the european union, we don't dismiss those concerns but we say, they are best addressed through a conservative government and david as prime minister. >> what is going to happen with regard to your membership in the european union? >> we want it reformed, we want a reformed party so europe is -- >> rose: and get out -- >> our policy we are aiming to achieve is reform and then a referendum on britain's membership where we would be able to say, we recommend the country stays in the european union. >> rose: -- what can you recommend -- >> we have to achieve this reform and say to our colleagues in europe, a, we have got to be creating more jobs on this continent and too much going on in the european union which is anti-enterprise and not helping us create jobs. b, the united kingdom is not part of the euro zone, we are a big noneuro member, our interests need to be protected in the framework of the european union. third, there are concerns the public has about the entitlements that newly arrived immigrant have, the free labor of work in europe, the publics in many, many european states we are confident w we can achieve that but the ultimate judge is the british people. >> rose: we have had much controversy over the last weak or so about the release of a report about torture during the iraq war and cia detention places. what did the british government do? >> well, this happened under the previous british administration. >> rose: at the time in 2003. >> we looked carefully at what happened and the british worked closely with the u.s. intelligence services and there have been judicial inquiries in our country and parliamentary inquiries and the police have considered whether there is a case for any prosecutions and in all cases, they have not found wrongdoing, so of course there is a debate here in the u.s. i would make a broader observation which is, the security of the british people and the security of the american people depend on some very brave and courageous people in our security and intelligence forces who do not get much public recognition by the very nature of their job, of course they have to operate within the law and they have to uphold the values that we share and we want them to defend for us, but don't forget they are also doing an incredibly difficult job on our behalf. >> how worried are you about the so-called local terrorists, people who either go to fight in syria and come back more radicalized but have a passport and they come back to great britain? >> i think the public in britain have been deeply shocked by the presence on system of those horrific videotapes. >> rose: of british citizens. >> british citizens, people with british act extents and murdering fellow british citizens and american citizens and we know there are significant numbers of people who have traveled to syria, not just from britain but countries like france as well and of course syria is not so far away from europe, and we have got to make sure, a, we keep tabs on that, b we tray to prevent them from traveling where we can and c if they try to return we either stop them or at least keep them under very close supervision on their return and prosecute them. we had a jihad just in the last few weeks, a successful prosecution through our judicial system of people who have been at terrorist training facilities in the middle east in syria, and so that is a informant deterrent as well, the long-term solution of course is getting into these communities and try to understand why they are being radicalized and why they are attracted to -- >> and what are you learning? >> i think they are misled into believing this is somehow a way to address grievances imagined or otherwise that they think their community has. >> rose: a crusade or -- >> well, there is nothing romantic about killing people and being barbaric and of course, you know, the treatment of civilians, the treatment of women, is absolutely barbaric, so if ever -- this reminds us of why we defend the values we defend, and that there is good and bad in this world, it is not all shades of gray. >> rose: to the -- referendum. if you and david cameron hadn't awakened to realize you were in peril, might the vote have gone the other way? >> ultimately it is a decision of the scottish people. whatever i said and david cameron said. >> rose: but both of you went there and argued strongly for staying -- >> yes, we did. >> rose: -- it was said it was trending faster than you had comprehended, a vote against you, against -- for independence. >> i think it is a great tribute to a mature democracy you can have a referendum on the separation of parts of the country and it can be conducted in an open and democratic way and on television shows and equivalent of this in the uk and then everyone respect it is results. i thought it was a great exercise in democracy we have an incredibly high turnout, close to nine out of ten voters turned up to vote. much higher than our general election. second, it comes to an earlier point we made in this interview. it was a difficult decision to say we are going to have a refer dumb and confront this issue, all my adult life separatism in scotland had been on the rise and in the end, david cameron, ourselves, the labor party, cross party effort said we were going to confront this and say come on let's make a decision for our generation, and of course it is a risk when you do that, the risk you get the result you don't want but ultimately once people heard the issues, economic issue, the emotional issues, the patriotic issues, the people of scotland, and i am very grateful and thankful decided they wanted to stay in the uk, what is interesting is it wasn't just a debate in scotland, i think people in the rest of uk and people in england and wails and all of that who felt as they heard the debate they wanted scotland to stay as well. so he think we emerged stronger for it and again for the first time in my adult lifetime the march of separatism has been checked and it is a great example of political courage, taking the difficult decision and confronting the issue rather than running away from the issue. >> rose: let me take the time also to talk about, because you are so close to the prime minister, not only as a political person with him, and long time friend, and not only as chancellor exchequer you are an advisor to him, where do you stand in terms of the coalition and the efforts against isis? what is britain prepared to do? >> we are already in iraq fighting alongside the u.s. in air strikes against isis targets, training the kurdish military, supporting the democratic elected government of iraq. of course this is very different from a decade ago we have been invited in by the people of iraq, we are doing that, we are helping train the opposition in syria, and that is a helpful and useful exercise. our parliament did not want us to take military action in syria a year ago by the recommendation of myself, david cameron and others, and that is the reality of living in a democracy, so we live -- >> rose: why was that? >> well, ultimately you would have to ask those who voted against it, they thought it was a wrong, i thought it was a wrong decision myself, too much of the debate was about what happened in 2003, not what was happening in 2013 or 2014. the iraq war, which i supported as a member of parliament ten years ago cast a very long shadow over the british political debate and people felt, although as i say i think it was a very different case that getting involved in a military way in terms of air strikes and the like in syria was the same as getting involved in iraq in 2003. i didn't agree. i felt again strongly if you leave a vacuum, if you are not prepared to stand up for your values then problems emerge, and we all know the costs of intervention, many very brave american and british servicemen paid with their lives for intervention in afghanistan and iraq over the last decade. but sometimes we don't focus on the cost of nonintervention and there is a price to be paid for that as well. and thankfully the u.s. are involved in degrading isis operations in syria and thankfully we alongside people like the australians are helping the americans check, the iraqi population check the advance of this horrific terrorist organization. >> rose: and what is it about then that created this kind of worldwide attention and in many cases surprising support, second question, do you think the tide has been turned against them because of many people in the islamic world waking up, especially sunni muslims to say, enough, you know, you can't go and advance like this with the ideas you have and the tactics you have in the name of islam? >> well, of course, the form of horrific brutality has attracted some supporters. that doesn't 19 we should in any way retreat from it. we should confront it. i think there is an issue. we spec about the uk rather than u.s. i think we have to confront islamic extremists, it is not just the violence, it is the climate in which that violence is allowed to take place. and in our -- in our schools, in our universities we have not been strong enough in saying look these values of example banning women from attending, you know, a college lecture are not values we share and they are not acceptable in our country. and so, you know, confronting that extremism as well as confronting the violence that flows from it is, i think, the way forward. >> rose: it is great to have you here. george osborne, chancellor of the exchequer in great britain. back in a moment, stay with us. >> rose: naomi klein is here, she is a writer, an activist and taken on the impact of the global economic system in previous books, no logo and shock doctrine, this book is called "this changes everything". it is a sweeping take on climate change which challenges conventional thinking on that topic. she does not think carbon is the main problem but. >> but capitalism as we know it "time" magazine says this may be the truly first honest book about climate change. i am pleased to have naomi klein back at this table. welcome. >> thank you. >> rose: good to see you. this is the hardest book you have ever had to write? >> it was. anybody who really delves deep epiinto the climate science and just the state of this threat, it is easy to get overwhelmed by the scale of it and because the book is not just looking at climate science but looking at this tension between our economic model which is built to pursue short-term growth. >> rose: right. >> and our planetary system which needs us to contract our use of finite resources, particularly fossil fuels, it was -- you know, it was overwhelming and it became easier to write as there started to be more of a grass roots response, more of a climate movement that emerged, the book came out the same week the huge protests in new york happened during the u.n. climate summit so that made it easier to write when i started to see a response. for a few years it took five years to write the first couple of years, i certainly struggled with just the sense of hopelessness, but that has changed. >> rose: because the problem was so to have been you and nobody was doing anything about it that would make a difference in the long run? >> well the problem is clear, since our governments have been negotiating to lower emissions, the process that began in the early nineties, global emissions have gone up by 61 percent, and our climate scientists but also our most established institutions like the world bank tell us that if we stay on the road we are on that takes us to four to six degrees celsius of warming. that is catastrophic, i mean, this is, we are talking ante high end 14 degrees fahrenheit and they describe this as a business as usual. so, you know, i think anybody who really looks hard at these numbers knows that we are in trouble and the longer we wait, the more that the response challenges our economic system because we need so cut so much and so deeply. >> rose: what was the question you asked yourself as you set off to write this book? >> well, i think, it came out of, my last book, the last time i talked to you, the shock doctrine, was about how we are -- the way in which we are responding to disasters, whether economic crises or natural disasters, like hurricane katrina is increasingly building a highly unequal society that these crises are hear messed to push through, very unpopular, very divisive policies and so in a way the question i started with was how can we prevent climate change there being another opportunity to use the shock doctrine, because that is how i ended that book. it was new orleans. it was hurricane katrina, it was this glimpse into the future that we are creating as we see more and more heavy weather and that heavy weather collides with weak infrastructure, very segregated societies, very unequal societies, and we -- when i was covering katrina, i had the feeling of, this is a glimpse into the future if we don't change our course. so it is not just about the weather getting hotter, it is about building a society that is more brutal. >> rose: it is not so much you presenting new evidence about the threat of climate change, you are asking the question, why have we not responded? if we clearly understand the consequences? >> exactly. and in fact, you know, i really wanted to write a book about climate change for people who don't read books about chiement changes. my previous books have been about our economic system, our labor system and i really have e been struck that there is -- this issue which affects all of us which is an existential crisis for humanity, we leave it to this very small segment of environmentalists and say you deal with it, and really this is a human rights issue,. >> rose: political issue. economic development issue, an economic justice issue and yet we barely talk about it. and so i want to write a book that just was not about the sciences but actually a few pages at the beginning that says okay this is where we are at and then ask that question, why have we failed to respond? and what i -- what -- you know, i looked at the various, you know, rationales for that in action, that gets floated, it is human nature, we think too short term, you know, we hear that a lot. or we are told that it is because it is too complicated and the u.n., you know, it is too unwieldy an institution but testing these various theories it really didn't hold up for me because we do know we human beings as flawed as we are have responded to other crises with tremendous solidarity and sacrifice, i mean if we think about the responses to both world wars or we think about how this country came together in the aftermath of the market crash in 1929, so we have responded to crises before, why not this one? >> rose: did we come together in the response to 9/11, do you think? >> well -- >> rose: we have been talking about that today in the news. >> well, i think that the way in which you had this very decisive government response to 9/11, i mean certainly people did come together and also came apart, it wasn't monolithic, but there was -- there was definitely a sense at the very top, this is a crisis and we are going to respond as such. it meant a huge marshaling of resources. and you know, what i say at the is start of this book is, climate change has never truly received the crisis treatment from our leaders. you know, we hear words like, you know,ing, we will hear i don't know kerry talk about how climate change is equivalent to weapons of mass destruction, but they are not acting like it, they don't act like it -- is. >> rose: there is no action plan? >> not in that sense of mobile lieding resources. i mean, mobilizing resources, i mean the amounts that have been marshaled, for instance to assist developing countries to leapfrog over fossil fuels in response to climate change. are piddly in comparison to for instance the amount of resources marshaled to bail out the banks. so, you know, it is not that -- we know it is a crisis but i think this is actually why so many people turn away from climate change because it is so hard to reconcile this -- these very alarming scientific reports we get from the government -- >> rose: are your arguments say than the well-known arguments of al gore? >> well, yeah, because when i try to answer this question of why haven't we responded? right? i mean we often hear it is just a lack of political will. my diagnosis is quite different. >> rose: and it is -- it is part of the saying? the economic system and the same political system you have been writing about that are themes of earlier books? >> yes and i think having done that research earlier definitely informed when i turned my attention to climate change, how i saw the unfolding of events, because the central argument of the book is that the reason why we haven't responded is because climate change struck us at the worst possible moment in human history and that moment was the late 1980s, that this crisis has suffered from a case of epic bad timing, so this -- >> rose: late 1980s was bad timing because? >> late 1980s was a moment when we lost all plausible deniability when james hanson testifies on capital hills, so this is a moment -- >> yes -- it is when gush. >> rose: the canary in the mine. >> but also when governments first .. began negotiating to lower emissions, and it was the year of the first intergovernmental panel, first intergovernmental conference on climate change and it was the year that the intergovernmental panel on climate change was formed, the scientific body, so what else was happening in 1988 well, it was the year before the berlin wall collapsed, it was this triumphant moment for what joseph sigalet called market fundamentalism this idea that we need to remove all boundaries to multinational corporations, crack the world market wide open, dereg -- deregulation. >> rose: 1988 was the second term of the reagan administration? reagan ran first in 1980 and then ran again in 1984 so it is it was the end of the reagan administration and the start of the bush 41, in -- >> yes so this is definitely been bay partisan in terms of the response,. >> rose: or lack of response? >> or lack of response and so here we have this collective crisis that requires collective action, it crosses all borders and it requires cooperation, and it hits us at this moment when we are being told that there is really something wrong with collective action, and something wrong with regulates corporations, so the way in which we should have responded, which is by regulating polluters and putting strict rules in place and having them be legally binding was just sort of unthinkable. >> rose: would cap and trade, if it had passed in the beginning of the obama administration, how would you have characterized that? as a weak response or as a good step forward? >> well, i think it would have been a profoundly inadequate response. we know this because the european union went down that road. the european union did pass legislation that introduced emission trading. they created a market in carbon, rather than have strict regulations and penalties, and it became a bubble and it became a boondoggle and it attract add huge amount of fraud so i think cap and trade was not the right way to respond to climate change. >> rose: and would a carbon tax be the right way? >> it is certainly a more direct way, it depends how high the tax is and depend how fairly it is implemented because i think part of why people turn away from this crisis is because there is this sense and we hear this messaging from republicans all the time, that this is just about your bills going up, your utility bills going up, higher prices at the pump, and there is this sense of real injustice, i mean people are under a huge amount of economic stress, and the model that has been proposed has mainly passed the bill on to consumers as opposed to go after polluters on a polluter pays model, so for instance increasing royalty rates for fossil fuel extraction, and making sure that it was actually the oil and gas and coal companies that paid the price and not consumers. so i think a tax would have been more direct but it has to be a progressive carbon tax because people are under tremendous economic stress and if you think about moments where people have come together i mentioned the second world war for instance it was enormously important that people felt that everybody was being asked to sacrifice, that it wasn't just the poor that even the very rich, even celebrities had to make due with less. and you think about something like the california drought, right? and people are told, you know, take shorter showers, but then they hook at the golf courses and they look at the private swimming pools and they say wait a minute something doesn't add up or fracking which takes a huge amount of water and this has been the political truism since carter's infamous speech where he said, you know, we are all going to -- we will have to wear sweaters and ever since, you know, you haven't had politician whose have been willing to say okay they are going to have to have sacrifices but it is interesting because i talk about that infamous speech in the book and it is interesting because actually his numbers didn't go down immediately, people liked the speech at first and then there was this campaign against it but i quote christopher latch one of the people who advised the president on that speech and he said, you know, carter didn't take my industries and he didn't take my entire industries because i told him, if he wants to ask americans to sacrifice he has to say that it is going to be a system that is just and it isn't going to -- this isn't just going to be passed on to the poorest people, that the people who are most responsible are going to also have to sacrifice, and that was missing from the speech, and -- >> rose: why didn't he do that? >> well, it comes down to, you know, a very old story about the fact that it is -- you know, it is hard to take on the most powerful forces in society, i mean certainly if we are talking about fossil fuel companies we are talking about the richest companies in the history of money, exxon-mobil made $45 billion in a single year, that is more than any company has ever made, so, you know, it is easier to ask individuals to take shorter showers and put on sweaters than it is to try to gain control over a company that can run attack ads against you and can, you know, can make your life really hard, and so it has been a theory of the low hanging fruit let's go after the easy stuff and the easy stuff actually is passing on the bill to the people who can least afford to pay and will at the time powerfuls to are forces off the hook and that has to change. >> rose: and pass it on to them in what way? >> through higher costs, through. >> rose: through -- >> but i think even more than that, even more than the economic stresses, is a real sense that inequality is out of control. >> rose: there is a sense of that clearly. >> yes. >> rose: there is a sense of that even among people whose solution to inequality you wouldn't particular he like. there is a sense it is out of control. >> yes. >> rose: on the right and the lefted. >> there is. >> rose: the difference is what is the answer to somehow eliminating it. >> so the argument i am making in the book is that if we respond to climate change through a justice lens, what is called climate justice then we actually have a chance to tackle inequality in climate change at the same time, and that is -- i mean, there is this sort of -- there is this logjam when it comes to responding to this crisis and that has to do with the fact you have on one side of the issue forces with a tremendous amount to lose if we get serious about climate change a and we need to cut our emissions to quickly that it actually represents a threat to the business model of the fossil fuel sector, which always needs to have as much in reserve as it has in production so they are very afraid of climate talks like the one -- >> rose: and force them to make alternative decisions? >> so they fight like they mean it, they fight hard against climate progress and we have seen a series of reports, "the new york times" had an incredible investigation recently about how attorneys, attorney general of the state level are working very, very closely with energy companies and basically acting as their lobbyists, sending letters to the epa, sending letters to the president, complaining about regulations that were written by coal companies and oil and gas companies and just putting it on their letterhead this is what the latest set of documents have revealed. so they are fighting really hard, and on the other side of this issue, you have a lot of liberals who sort of care about climate change but not that much. i think what is starting to happen is that a climate movement is emerging that is -- that is made up of communities that are directly impacting by fossil fall extraction and combustion so people who have refineries in their backyards, whose kids have very high rates of asthma who are concerned about their water, if there is fracking in their communities, so it is a very different kind of climate movement. it is not a movement of slick ngos but a movement of impacted communities and that i think can tip the balance. >> rose: if you are looking for a perfect model or a food model where they have made the effort in climate change, a country, who how have they done that? >> well the model that seems to work in terms of rolling out renewable energy very quickly we can see in germany and also in denmark, which is what is called a feet in tariff that encourages communities to switch to renewable energy because they are able to peed into the grid and if they produce more energy than they need then they actually benefit economically from that, it pays back to them, and so the reason why this has been really, really popular in europe right now is europe, as you know is dealing with, you know, economic crises, austerity, so wha what has works policies that don't just bring clean energy, because people do want clean energy but they also want money to pay for services, they want money to pay for schools and libraries and all of that so the jerry than recipe has encouraged hundreds of cities and towns to take back control over their energy grids, and keep those profits within their communities to pay for other services. so now germany has 25, 25 percent of its energy from renewable energy, from wind and stow larks much decentralized many new energy cooperatives so that model works. >> no nuclear? >> well they are moving away from nuclear. the flip side is that germany has not done a good enough job of saying no to very powerful coal lobby, dogs not enough to just put these incentive in, incentive in, incentives in place. in germany it shows you can move quickly. this happened over a decade and a half and if you compare that number, that 25 percent number to the u.s., in the u.s. that number is around four percent so that is really impressive and i think it is important for americans to look to, you know, highly industrialized economy lake germany, very powerful economy and say look if they can do it and it is a dark country doesn't have neverly as good conditions for renewable energy as the united states does, then this could happen in the united states, there is research out of stanford that says we can get to 100 percent renew financial energy in the united states by 2030, the tex, tex following is there, but what technology is there. >> but you have to say no to the fossil fuel company as you say yes to renewable energy, because in germany they are continuing to dig up dirty coal, lignite coal, brown coal and as demand drops in germany they are able to export it and this is also happening in the u.s. >> but what is happening in china where they have a known pollution problem of a significant impact. >> yes. >> rose: and at the same time they are saying to many in the world community, you had a chance to march into industrialization and we need to do that now. at the same time because of their own economic wealth, it seems to me are making a significant investment into looking for alternatives, but right now, they are building coal plants. >> well, they are building both and it is quite extraordinary, in we made a documentary film to go with this become that comes out in a couple of months, and i think the most powerful image in the film is this image of just a sea of solar panels the likes of which you would never see in this country, and i it just sees to go on forever, but it is coded -- the sky is is filled with so much smog that the sun can barely pierce through the smog to get through to the solar panels. so this is the contradiction of china, yes on the one hand they are rolling out renewable energy very, very rapidly and spent more, on renewable energy last year than the european union combined, but because it is such a large economic, such a fast growing economy they are going down these two roads simultaneously and one cancels the other out. so what gives me hope about what is happening in china is that the chinese government is facing enormous pressure fro from belo, from political movements in china, i mean, the deit into the fact it is not a democracy -- >> rose: urban and rural. >> there has been this social tension between urban and rural. >> rose: right. >> where it really has been the countryside that paid the price for prosperity in the cities, the difference with air pollution is that it affects even the winners or even it affects especially the winners in the cities, right, so there is always the sense of okay we can sacrifice the country side for the city, and there will be losers but there will be these winners, but now the winners are afraid to let their kids go to school without pollution masks, they are afraid to let their kids play outside because pollution levels are so high, and so that is really what is creating a crisis for the chinese government, is that even the winners are saying, hold on a minute, this system of just uncontrolled economic growth, the price is too high, so that pushback, that tension is created a situation where we can no longer just point the finger at china and say well what does it matter what we co? china is just opening a coal plant a week or a month, china is changing, and they are also close ago lot of coal plants. and there are things -- >> rose: so you are optimistic about what they are doing to cure their problem? >> i think we need to look at that, we need to stop scapegoating china and think, okay, there are these two tensions and these two streams in this country, you know, there are the people who just want to open more and more cheap coal fired plants and there is this growing grass roots movement of people who want clean energy, there are things that happen in this country and in other wealthy countries that affect which side of that debate is going to win, is going to carry the day, the more we shirk our own responsibilities in wealthy countries, in the countries that have been burning fossil fuels for a couple of hundred years and clearly have a greater responsibility when we -- when we don't lead and live up to our responsibility then that strengthens the hand of the forces in china that just say well it is our turn now, right? if we want to strengthen the force, the hand of the forces in china say we want to leapfrog over fossil fuels the price is too high then we need to transition ourselves, because that makes their argument stronger. >> rose: so what do you make of this new deal between china and the united states, when the president was in china? >> well, we are coming up, we are in a really critical time for these negotiations after these talks in lima, the next negotiation in paris has to produce a deal, and it is important that going into this process, the u.s. and china are not pointing fingers at each other but shaking hand and saying we are cooperating. that is a big difference to what happened in the last time there was a big high stakes climate summit in copenhagen that ended with u.s. and china pointing fingers pointing at each other of why it collapsed. >> the he in addition reductions in that deal keep us on a road to four to six degrees warming but from a political perspective i think it creates a fram framek where progress is possible but only going to be possible if there is a much stronger push from below from them and around the world. >> rose: if you are going to change the economic system, would you, for the most part, eliminate the impact of money on politics? or would you do something having to do with the fundamental structure of our economic and political system? >> well, i think it is a bit of a chicken and egg thing because the argument about getting money out of politics is that needs to happen before any of those structural changes can take place and i think that, you know, we saw that so dramatically after the financial collapse in 2008 where it was so clear that there needed to be a strong reregulation of the banking sector and not nearly enough happened, because of the political influence of "money and politics" and the ability of the banking sector to block regulation. that is happening in the context of climate change with the fossil fuel companies blocking systematically the kind of regulations we need. so we need to do it before we can get the structural changes that are necessary before we can get those bold policies .. that will -- >> rose: suppose you can do that what would be the structural changes? >> the reason i talk about bad timing is that we are not going to do what we need to do to respond to this crisis unless we are willing to talk about the failures of the ideology of that market fundamentalist ideology in delivering the types of policies we need. we do need to regulates pollute polluters and cannot pass a bill on this crisis on to working people we have to ask the polluters and demand the polluters pay, so we need those types of policies, we need to be closing off new fossil fuel frontiers, it is madness that in this moment when we need to be radically reducing our emissions we are opening up whole new fossil fuel frontiers, whether in the arctic, whether it is fracking, new territories for fracking, whether it is the alberta tar sands and building new pipe lanes so one of the things -- >> rose: so the is not a savior. >> the as fossil fuel and we need to get off fossil fuels so when you are in a hole one of the things you need to do is stop digging, we need to stop making things worse and roll up as politicians to make things better and fundamentally we need to get over the idea that planning our economies is a dirty word. we aren't going to do this without real planning and that means deciding the types -- the types of industries that we want to encouraging and actively encourage, discourage the ones that we don't, and i do think that at this late stage in the crisis we have to talk about consumption. some people, many people in this world have a right to consume more but there are many people be in the world who are consuming way too much, so i don't think that our current levels of out of control consumption in this country and in other industrialized countries, in chin as well are in any way sustainable with what we need to do to tack until crisis and need to start being honest about this. >> rose: thank you for coming. thank you as always. >> thank you. >> rose: the book is "this changes everything", naomi klein. the sub title is capitalism versus the climate. thank you for joining us. see you next time. for more about this program and early episodes visit us online at pbs.org and charlierose.com. >> captioning sponsored by rose communications captioned by media access group at wgbh access.wgbh.org this is "nightly business report" with tyler mathisen and susie gharib. funded in part by -- thestreet.com and action alerts plus where jim cramer and fellow portfolio manager stephanie link share their investment strategies, stock picks and market insights. you can learn more at thestreet.com/nbr. chutes and ladders. the dow gives up 250 point gain and ends up down, triple digits. what was behind the wild swings one day before the federal reserve wraps up its final meeting of the year? 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