In this episode, David Doniger of the Natural Resources Defense Council explains what the Chevron doctrine is, why the federal judiciary has traditionally been deferential to agencies’ regulatory reasoning, and the potential fallout in the very real chance that the current Supreme Court does away with the doctrine entirely. Get full access to Volts at www.volts.wtf/subscribe

In this episode, Chairman Marisa Gillett of Connecticut’s Public Utilities Regulatory Authority (PURA) talks about her aim to reform the cozy regulatory environment enjoyed by the state’s big utilities, PURA’s new Equitable Modern Grid Initiative, and how ratepayers benefit from a shakeup of the status quo. Get full access to Volts at www.volts.wtf/subscribe

Contemplate, will if you will, the California State University system. It is the largest public-university system in the country — by some accounts, the largest in the world — with more than a half-million students and some 55,000 faculty and staff, spread across a sprawling network of 23 campuses, from the top of the state to the bottom.What if I told you that it was your job to decarbonize that entire system — the buildings, the energy infrastructure, the transportation, the food, the construction materials, all of it — and you had just over 20 years to do it. Would you panic? Possibly short circuit? I'm pretty sure I would.As it happens, though, that is someone's job. Her name is Lindsey Rowell and she is the Chief of Energy, Sustainability, and Transportation at the Chancellor’s Office. She is on the hook for developing and implementing a plan to make the entire CSU system carbon neutral by 2045, with minimal use of offsets.You might think, to accomplish something so vast, she would have a team of dozens and a budget of billions. But this is a public university system, so of course she doesn't — instead it's duct tape, baling wire, and ingenuity. I had a great time talking with her about how to approach this unwieldy project. I think you will find her pragmatism and good humor refreshing.Every policy or regulation ultimately must be implemented by someone on the ground. This is what that looks like. Get full access to Volts at www.volts.wtf/subscribe

Of all the so-called “difficult to decarbonize” sectors, cement is among the most vexing. Making cement produces CO2 not merely through fuel combustion (in kilns that reach temperatures of up to 1400 C), but also through chemical processes that split CO2 off from other molecules. It is responsible for roughly 8 percent of total global carbon emissions.Most gestures at decarbonizing cement to date are fairly desultory — things like adding special additives or injecting a little CO2 when the cement is mixed into concrete. The only widely available method that could theoretically produce no- or low-carbon cement is post-combustion carbon capture and sequestration. And there are plenty of people who would question whether that's actually viable at all, much less widely available, given that it would roughly double operational costs for a cement plant.There are lots of startups out there attempting to solve this problem (as reported by Canary last month). Perhaps the most intriguing is Sublime Systems, a team that has developed something truly new and exciting: a system for manufacturing cement that requires no high heat (thus no combustion emissions) and uses inputs that contain no carbon (thus no chemical emissions). That makes the cement, at least potentially, not just low-carbon but zero-carbon. What’s more, the company says that, in form and performance, its product is a perfect drop-in substitute for traditional Portland cement, so it wouldn't even require any changes in the construction industry.A carbon-free drop-in cement substitute — at scale and at competitive cost — would be genuinely transformative. I contacted Sublime CEO Leah Ellis to talk about cement chemistry, the company’s process, and the plan for reaching megaton scale. This one was truly fascinating and educational for me; I think you will really like it. Get full access to Volts at www.volts.wtf/subscribe

Building the machines and batteries needed to decarbonize the economy will require enormous amounts of a few key minerals. The proven reserves of those minerals, sitting in mines now operating, are nowhere close to enough to satisfy what is expected to be skyrocketing demand.Without the minerals, we can’t make the clean-energy economy. And we don't know where the minerals are going to come from.What's worse, exploring for new mineral deposits has been getting less and less efficient over the last several decades, as the amount of investment needed per successful discovery has risen. We seem to be getting worse at finding this stuff right when we badly need to be getting better.That state of affairs has drawn in several new startups that endeavor to use machine learning and artificial intelligence to improve mining’s hit rate. The most talked-about is KoBold Metals. With financial backing from Bill Gates, Jeff Bezos, and other big-name investors, KoBold is now exploring for minerals on four continents.To get a better handle on mining and how we can improve at it, I contacted KoBold CEO Kurt House. We talked about the projected gap between supply and demand, the somewhat primitive way current exploration works, the massive data-gathering and coordination project the company has undertaken, and the role of justice and equity in this AI-accelerated future of mining. Get full access to Volts at www.volts.wtf/subscribe

Last week, for the first time ever, a commercial offshore wind farm delivered power to the US grid. It was an important milestone — and also the rare bit of good news for an otherwise beleaguered industry. Everywhere else, costs are up, contracts are being renegotiated, and projects are getting canceled. It all sounds pretty bad, especially for a sector that barely even exists yet. What’s going on? How much of this turmoil is temporary and how much reflects lasting structural changes? Is the US offshore wind industry going to die before it even leaves its crib? To gain a little clarity on these questions, I contacted Samantha Woodworth, a senior wind industry analyst at Wood Mackenzie. We talked about the converging difficulties facing the industry right now, efforts to renegotiate contracts that were signed in the Before Times, the odd role that ships play in the whole mess, and the industry's prospects in coming years and decades. Get full access to Volts at www.volts.wtf/subscribe

To hit its climate targets, the US must build an enormous amount of new clean energy infrastructure. Much of that infrastructure is going to be built in rural communities, and the resistance of those communities to that infrastructure is one of the greatest threats to the clean energy transition.I've done a couple of pods on this subject and will probably do more. Today, we're going to get something of an international perspective. When I was in Australia, I interacted with a broad network of scholars and activists who are thinking seriously about the social mechanics of community buy-in. One of those scholars and activists is Jarra Hicks, who got her PhD at the University of New South Wales with a dissertation on community-owned wind farms in rural (or as they call them in Australia, “regional”) communities. She now runs the Community Power Agency, a nonprofit organization that is working to ensure a “faster and fairer transition to clean energy.”Among other things, Hicks has co-authored a benefit-sharing guide and runs an online benefit-sharing course, both meant to help renewable energy developers better navigate this tricky territory.I've been meaning catch up with Hicks ever since I returned from Australia. Last week I finally got the chance — we talked about the problem of rural resistance, the balance between community engagement and speed, and the many varieties of benefit sharing. I think it will be clear to everyone how this knowledge transfers into the US context. I enjoyed it immensely and hope you do too. Get full access to Volts at www.volts.wtf/subscribe

As longtime subscribers know — indeed, as the name makes plain — Volts is primarily focused on the energy side the climate fight. I haven't paid much attention to agriculture over the years. I understand that agriculture is a huge piece of the puzzle, both for decarbonization and for sustainability more generally. It's just not really been my jam.However! The Farm Bill — which requires reauthorization every five years — is likely to pass in coming months, and it is arguably the most important climate bill Congress will address this session.To talk me through the agriculture/climate nexus and discuss opportunities in the upcoming Farm Bill, I contacted Peter Lehner. He is the head of Earthjustice’s food and farming sustainability program, and the author of Farming for Our Future: The Science, Law, and Policy of Climate-Neutral Agriculture.We talked about how US agriculture has evaded environmental laws and become the source of 30 percent of US greenhouse gas emissions, ways that the upcoming Farm Bill can be tweaked to better fight climate change, and what's next for agriculture decarbonization. Get full access to Volts at www.volts.wtf/subscribe

The first Volts post went up on Dec. 7, 2020. Believe it or not, that was almost three years ago. I want to mark Volts’ third birthday with a few reflections, a couple of fun announcements, and a request. I hope you will indulge me. Volts is subscriber-supportedThere have been a lot of new subscribers since the last time I sent out one of these notes and it occurs to me that some of you more recent arrivals — or some of you who have only heard the pod through Apple or Spotify or whatever — might not know what the basic deal is around here. So here’s the short version. I left Vox to start Volts three years ago with three goals in mind. First, I want to be useful. Clean energy is getting tons of attention these days and lots of people are curious about it, or want to get involved, or are involved and are curious what’s going on in other parts of it. I want to arm those folks with ideas and information. I’ve read and seen enough dire warnings about climate change; I want to show what people are doing about it, and by proxy, all the things you can do about it. The clean-energy transition is a vast puzzle made of many, many smaller puzzles, and they all need people working on them. Second, I want to keep myself (and my subscribers) from spiraling into climate doom, and I’ve found that the No. 1 best way to do that is to highlight all the clever, thoughtful, ambitious, good-hearted people out there trying to help. It’s like Mr. Rogers said: when you’re feeling down about looming fascism and climate chaos, look for the helpers. And third, I want to remain independent, to do this work without being obligated to or constrained by any big media organization, or the hedge-fund bros who own so many of the media organizations, or advertisers, or think tanks, or NGOs, or wealthy patrons. I don’t want to owe anything to anyone except you, the readers and listeners. So I don’t take advertising and I have no sponsors. Volts operates, and I survive, entirely thanks to the income I receive from paid subscribers. This is, I have been reliably informed more than once, a bonkers way to do things from a financial perspective, but I’m a stubborn old Gen Xer and this is how I wanna do it. But I’ll be honest: while the number of Volts subscribers has risen with gratifying consistency — there are more than 53,000 of you now and I love each and every one of you as individuals! — the number of paid subscribers not kept pace.So this is my once-annual direct ask to everyone reading or listening: if Volts has helped inform or inspire you over the last three years, consider paying to support it, and me, so that it can continue. A subscription is $6 a month or $60 a year (or you can make a one-time donation). For the price of one night out with your family or friends, I’ll give you a whole year’s worth of podcasts! It’s like a dollar a podcast! That’s an amazing price for a free podcast. Why should you pay to subscribe? The main reason is simple: pay if you find the work valuable, you want me to be able to continue doing it, and you’re in a financial position to do so. Pay so that those who aren’t in a position to pay can still benefit from it, so the ideas and information can reach the broadest audience.But just to sweeten the pot a bit, let’s discuss some changes in the works!Ch-ch-ch-changesWe’re giving Volts a few little upgrades in the coming year. Why do I say “we”? Because I’ve brought on Sam — a longtime Volts subscriber and climate professional — to advise and help with these upgrades so I can continue to focus on the main work. You’ll be seeing his name around in the comments and on emails coming from Volts. Be nice to him!I mentioned looking for the helpers. We also want the helpers to find one another. So we’re going to do more to help subscribers connect with, learn from, and collaborate with one another.We also want to add some benefits for paid subscribers. I’m pretty militant about all the pods and essays being free to everyone — as I said, I want to be as useful as possible — but that doesn’t mean we can’t have some goodies for my beloved inner circle. So what does all this mean in practice?All subscribers, paid and free, will receive the following upgrades:🔓 We’re opening up the comment sections to all subscribers. I know first-hand that subscribers have a ton of knowledge and insight to share. Moving forward, each new podcast will be an opportunity for all of you to share with one another. 🤝 In the same vein, there will be monthly community threads in which subscribers can share what they’re working on or particular challenges they’re facing. I’m always getting questions from subscribers that I can’t answer but I suspect someone else in the Volts audience can. I want to get y’all connected to one another.⚡ For newcomers, we’re developing a Jumpstart series. If you want to quickly get up to speed on transmission, or thermal storage, or state-level energy politics, we’ll gather all the podcasts and writing you need in one place.Paid subscribers will receive the following upgrades:💌 We’re starting monthly mailbag pods for paid subscribers only. You ask questions, I attempt to answer them. Ask about energy stuff, or political stuff, or how I work, or why I own so many damn jackets. Anything is fair game.🎟️ When Volts attends and/or hosts an event, we’ll offer a handful of free or discounted tickets to paid subscribers whenever possible.➕ Other paid upgrades to come …These are all subscriber-requested changes. As we get going, we may add other things — revisiting past content in other ways, contests, maybe some merch. Who knows what could happen! (We’ll be asking you soon what you’d like to see.)Sign up as a paid subscriber, become a legendSo that’s my yearly plea. If you would like to help me keep doing this work, you can help in any of the following ways:* Sign up for a monthly or yearly subscription. * Substack subscriptions auto-renew unless you tell them not to. Some people really don’t like that! Those folks may make a one-time donation here, outside the Substack system. For those who donate $60 or more, Sam will hook you up with a year’s subscription. * You can also give a Volts subscription to a friend or loved one as a green holiday gift. Why, it would make anyone merry!* And finally, even if you don’t pay, you can rate and review Volts on Apple or whatever podcast platform you use — there’s a reason every podcaster says this; it’s enormously helpful — or you can just mention Volts to friends or colleagues. Word of mouth is how we’ve grown so far!Finally, I want to conclue by expressing my endless, unbounded gratitude. Volts is the work of a lifetime for me, not only the best job I’ve ever had but the best one I can imagine. And it’s only possible because of you. So to everyone who has read it, listened to it, or otherwise engaged with or supported it: thank you, thank you, thank you. Get full access to Volts at www.volts.wtf/subscribe

Jenny Chase went to work for the London-based startup New Energy Finance in 2005, straight out of university in Cambridge. She founded its solar analysis team and helped establish some of the first reliable indexes of prices in the solar supply chain, as well as some of the first serious industry models and projections. The solar power industry barely existed then. Now solar is the cheapest source of new power in most markets and the International Energy Agency expects it to dominate global electricity by 2050. Throughout that heady transition, Chase has run and grown the solar analysis team, even after the company was bought by Bloomberg and became Bloomberg NEF in 2009. It has become one of the most respected teams in the business and a widely cited arbiter of industry data.In 2019, Chase wrote a book summarizing what she learned over her years analyzing the industry. It is called Solar Power Finance Without the Jargon, but the title is somewhat misleading — it covers solar power finance but also solar power history, technology, and policy. It is leavened here and there with droll bits of biography or advice from Chase and contains an incredible amount of information in a highly compact and readable package, just over 200 pages. A heavily updated second edition was released this month. Also this month came Chase's yearly “opinions about solar” Twitter thread, which is highly anticipated among a certain kind of energy dork [waves].I figured it would be fun to have Chase on the pod to talk about the current state of the solar industry, whether anything but standard-issue solar PV is ever going to flourish, and what the world needs to help balance out increasing penetrations of solar. Get full access to Volts at www.volts.wtf/subscribe

One of my favorite things I ever wrote was a 2018 piece for Vox on grid architecture — the basic structure of the electricity transmission and distribution networks. It was about how a top-down system, with one-way power delivery from big power plants to passive consumers, might evolve into a bottom-up system, driven by local distributed energy resources. Thanks to all-star illustrator Javier Zarracina, it even has awesome animated illustrations. One person who read that piece was Astrid Atkinson, who at the time was a senior software engineer at Google. She had managed a team that shifted Google search from a top-down system to a massively distributed system, back before the term “the cloud” existed and there was no template available. She and her team had to develop the principles and best practices of getting reliable performance out of millions of unreliable, loosely coordinated machines. By doing so, they radically expanded the scale and speed of what search could do.She thought, wouldn’t it be cool if the power grid could make the same shift? Unlike some people, though, she didn’t just blog about it — in 2019, she left Google to co-found and run Camus Energy, a software company that helps utilities see, track, and coordinate the distributed energy resources in their territories. The company calls what it does “grid orchestration.”Atkinson has been a thought leader in pushing for a new grid architecture. (See Camus’ white-paper series on “the rise of local grid management.”) So I was super-excited to geek out with her on this stuff. We talked about the conceptual shift from centralized to distributed and the drivers making that shift inevitable, plus getting more out of the grid we’ve already built through coordination and efficiency, and how the utility sector can evolve to better manage local resources. I really loved this one. Get full access to Volts at www.volts.wtf/subscribe

By now, it’s fairly well understood that the US badly needs more electricity transmission lines to keep up with the changing generation mix and growth in demand that will come with clean electrification. But new lines, especially the much-needed longer-distance regional lines, are being built at a snail’s pace. If the US is to hit its mid-century climate goals, transmission capacity expansion must radically accelerate.Congress helped a little with money in the infrastructure bill, and the Biden administration helped by establishing a Grid Deployment Office inside the Department of Energy, but arguably the biggest opportunity for progress comes in the form of an upcoming rule by the Federal Energy Regulatory Commission (FERC). It will beef up the commission’s existing rules on regional transmission planning, but exactly how much it will strengthen them depends on the final rule, expected early next year. Transmission advocates are urging FERC to pass a rule with reel teeth — including Senate Majority Leader Chuck Schumer, who sent the commission a letter with encouragement and suggestions in July. Nobody knows more about grid policy than Rob Gramlich, founder and president of Grid Strategies, a policy analysis and strategy firm. He is executive director of the WATT Coalition, co-founded and used to run Americans for a Clean Energy Grid, serves as a board advisor to a half-dozen other groups, and has a long history in the industry, including a stint at FERC in the early 2000s. I talked with Rob about the current state of affairs in transmission policy, the scope of FERC’s authority, and the details that matter in the coming rule. Don’t let the technical-sounding subject scare you off — this was a fun one, and incredibly clarifying. Get full access to Volts at www.volts.wtf/subscribe

As I previewed for Volts subscribers a few weeks ago, I attended the third annual Yale Clean Energy Conference last week. It was a blast! It’s always energizing (pardon the pun) to be surrounded by so many young people doing so much cool stuff. It gives this crusty old blogger some hope.While I was there, I recorded a podcast — live on stage! — with Sonia Aggarwal.Sonia is well-known in Energy World. She co-founded (with previous Volts guest Hal Harvey) the energy policy think tank Energy Innovation, where she worked for years before heading into the Biden administration as the (deep breath) special assistant to the president for climate policy, innovation, and deployment.She recently reemerged from the belly of that beast and is now back running Energy Innovation. I chatted with her about her experiences in the administration, what policymaking looks like close up, what she’s proud of getting into law, and what gaps remain in US energy policy. It was super-fun.Thanks to Sonia, thanks to the kind folks at Yale, and thanks to all of y’all for listening. Enjoy. Get full access to Volts at www.volts.wtf/subscribe

The idea behind the Icelandic company Carbfix is simple: pack water full of carbon dioxide (literally carbonate it, like a SodaStream) and inject it deep underground into Iceland’s porous basaltic rock. Minerals in the rock dissolve in the water, where they react with the CO2 to become calcium carbonates. The carbon effectively becomes rock, which it will remain, for all intents and purposes, permanently. Or at least thousands and thousands of years. It is as long-term as carbon sequestration gets.The idea dates back to 2006, but pilot injections didn’t begin until 2013 and it wasn’t until 2016 that a study published in Science confirmed that 95 percent of the CO2 in the water was mineralizing within two years — far faster than most had assumed possible. Since it started, Carbfix has sequestered almost 100,000 metric tons of CO2 at its original site, but that is just a drop in the bucket compared to what it believes is possible. It has plans to make Iceland a major international carbon-burial hub and to replicate its technology in other geographies, maybe even in the shallow ocean. When I visited the Carbfix operation in October and saw it in action, I was extremely intrigued and had a million more questions, so last week I got in touch with Ólafur Teitur Guðnason, Carbfix’s head of communications, to talk about where the company gets the CO2 it buries, where it plans to get it in the future, whether burial can work in other kinds of rocks and geographies, and exactly how much carbon Iceland can store. Get full access to Volts at www.volts.wtf/subscribe

Of the handful of forces that have the potential to stymie the clean-energy transition in the US, perhaps the most immediate and dangerous is rural NIMBYism. Rural communities will, by necessity, host most of the wind and solar farms the US needs to decarbonize, but rural resistance is already responsible for dozens of canceled projects and growing delays.What do rural Americans think about renewable energy? Where are they getting their information and what sorts of arguments are getting through? There’s been weirdly little research on this question, despite the growing severity of the problem.Into that breach comes a new poll done by Embold Research, which surveyed thousands of rural residents to uncover their opinions on climate change, wind and solar power, and the promises of energy developers. The poll was commissioned by the clean-energy PR firm Tigercomm, which also interviewed community engagement staff at energy developers to find out what they’ve been hearing in the field.I contacted Mike Casey, the president of Tigercomm, and Robin Pressman, the head of Embold Research, to discuss what the poll found and what it means for clean energy developers engaging these communities. Get full access to Volts at www.volts.wtf/subscribe

If you listen to Volts, you probably also listen to — or at the very least, should also be listening to — Catalyst, the Canary Media podcast hosted by veteran cleantech investor Shayle Kann. Like Volts, it features fairly nerdy deep-dive interviews, though they are mercifully shorter, and they’re more focused on cleantech, less likely to drift into politics and activism. (Shayle is a partner at Energy Impact Partners, where he assesses and funds cleantech companies for a living, so unlike me he brings some expertise to the table!)Anyway, our pods have been mutual admirers for a while now and we thought it would be fun to do something together. So the following episode features Shayle and I discussing a few technologies and trends we think are overhyped, and a few we think are underhyped. We get into electric stoves, interest rates, thermal batteries, and much more. It was just as fun and enlightening as I expected — especially where we disagreed — so I hope you enjoy it as much as I did. Get full access to Volts at www.volts.wtf/subscribe

If you’ve spent much time discussing clean energy on the internet, you’ve probably come across a disturbing piece of information: the sun, it seems, is not always shining. What’s worse, the wind is not always blowing! It’s crazy, I know. Unlike coal or natural gas or nuclear — “dispatchable” power plants that we can turn on or off at will, when we need them — we do not control solar power and wind power. They come and go with the weather and the rotation of heavenly bodies. They are, to use the term of art, “variable.” Many people, bringing to bear varying levels of good faith, conclude from this fact that we shouldn’t or can’t shift to an electricity system that is based around wind and solar, at least not without occasionally shivering in the cold. Is that true? Do we know how to balance out the variability of wind and solar enough that we can fully decarbonize the grid with them? This is probably the number one question I hear about renewable energy, the number one reservation people have about it, so I decided it’s time to tackle it head on.To help, I called on longtime Friend of Volts, Princeton professor and energy modeler extraordinaire Jesse Jenkins. We walked through the basic shape of the problem, the different time scales on which variability operates, and the solutions that we either have or anticipate having to deal with it. This one is long and occasionally gets a bit complex, but if you’ve ever wondered how we’re going to build an energy system around wind and solar, this is the pod you’ve been waiting for. Get full access to Volts at www.volts.wtf/subscribe

District energy is one of the oldest concepts in all of energy, dating back at least to the ancient Romans. It simply refers to connecting multiple buildings to a common source of heating and cooling — a furnace, heat pump, geothermal well, or what have you — and distributing the heat via water or steam flowing through underground pipes. There are hundreds of district energy systems in operation, in every country in the world. (Virtually all of the buildings in Iceland, which I visited recently, are heated by district energy systems running on geothermal.)However, fossil fuel heat has been so cheap for so long that district energy has never quite become the default — it’s just been too easy to stick a natural gas furnace in every building. There hasn’t been much pressure to share heat.But with the climate crisis and the clean energy transition, that’s changing. These days, lots of people are looking for cleaner sources of heat and more efficient ways to share it, so district energy is becoming sexy again. Among other things, it’s a great way for cities to meet their carbon goals without overburdening their electrical grids.With all that in mind, I contacted Rob Thornton, the head of the International District Energy Association, to chat about the clever new sources district energy systems are drawing on (everything from sewage to deepwater lakes), the infrastructure they can integrate with, and the other services they can provide. Get full access to Volts at www.volts.wtf/subscribe

Iceland is an island just south of the Arctic Circle, perched directly atop a rift where two tectonic plates are drifting apart, exposing the magma below. It is a small country (physically about the size of Kentucky, with a population a little larger than Cleveland, Ohio’s), but what it lacks in size it makes up for in drama. It is a land of glaciers and volcanos, ice and fire, wind and rain and snow — and deep heat that makes them bearable. I was there for four days last week, meeting with sustainability-related businesses, hearing about everything from micro-algae to grid monitoring to carbon recycling to using 100 percent of the fish. There’s an incredible amount of innovation going on there, and to my unending delight, a great deal of that innovation is in some way or another in a symbiotic relationship with geothermal, the heat and power that Icelanders pull from underground. Iceland’s electricity is entirely carbon-free — roughly 70 percent hydropower and 30 percent geothermal — and so is its heating, 90 percent of which is geothermal. Overall, 85 percent of its energy consumption is carbon-free, and it is aiming for 100 percent by 2040.To hear more about all this, I visited the Reykjavik office of Halla Hrund Logadóttir, who runs Iceland’s National Energy Authority, overseeing the country’s electricity system. She used to teach at the Iceland School of Energy at Reykjavik University and now teaches at the Harvard Kennedy School, where she co-founded the Arctic Initiative and founded the Arctic Innovation Lab. There’s no one with a better sense of the overall state of Iceland’s energy situation. We talked about the country’s history with geothermal, its current energy mix and policies, and its race to become the world’s first fully carbon-neutral nation. Get full access to Volts at www.volts.wtf/subscribe

I’ve known political journalist Brian Beutler for a long time. We met back in the late 2000s in DC, in the heady days leading up to Obama’s victory, and have kept in touch fitfully ever since.Brian, one of the smartest and most insightful political analysts writing today, has published in a wide variety of outlets, but this month he followed me into the wilderness — left his job at Crooked Media to launch his own newsletter, Off Message. He’s already written some great stuff and made some cool videos — check them out. I figured I would take the occasion to catch up with him, wax nostalgic about politics past, discuss partisan journalism, and muse about how opponents of authoritarianism might show a little more vigor. Please enjoy this long and somewhat indulgent ramble down memory lane. Get full access to Volts at www.volts.wtf/subscribe

Back in March, I did a podcast on the possibility of using wind and solar electricity to decarbonize industrial heat, which represents fully a quarter of all human final energy consumption. The trick is to transform the variable energy from wind and solar into a steady, predictable stream of heat by using some form of heat battery. The idea is that heat batteries will charge when renewables are cheap or negatively priced, around midday when all the solar is online, and then use the stored heat to displace natural gas boilers and other fossil fuel heat sources in industrial facilities.Among other things, this vision represents a huge opportunity for renewable energy developers — industrial heat is effectively a brand new trillion-dollar market for them to play in. And they can often enter that market without waiting in long interconnection queues to connect to the grid. Anyway, that episode, which I highly encourage you to listen to at some point, was with the CEO of a thermal battery company call Rondo. In it, I mentioned another thermal storage company whose technology caught my eye: Antora Energy. Like Rondo, Antora is part of the broad “box of rocks” category, but its tech can do some things that, for the time being, no other thermal battery can do.I don’t want to say much more here — discovery is half the fun — but I will say I’m as geeked about this technology as I have been about anything in ages. I’ve been thinking about it ever since I first heard about it three or four years ago. Now the company has launched its first commercial-scale system! So I’ve brought Antora co-founder and CEO Andrew Ponec on the pod to talk through how it works, what it can do, and how it could transform industrial heat markets. Get full access to Volts at www.volts.wtf/subscribe

In 2022, Democrats narrowly won a trifecta in Minnesota — House, Senate, and governor — whereupon they launched into an absolute frenzy of activity, passing bills on everything from abortion to paid leave to gun control to free school lunch to clean energy. Vanity Fair called it a “tour de force for progressive legislation.”I covered the state’s new clean-energy law on a previous pod, but I also wanted to take a closer look at the big transportation bill that was signed in May. It passed somewhat under the radar, but it’s got some very cool stuff in it. One key feature is that it requires both state and municipal transportation-planning agencies to take the state’s climate goals into account when assessing new projects — to hold themselves accountable to those goals. As obvious as that may seem, it’s not something any other state has done. To discuss the significance of this and some other provisions of the bill, I contacted one of its primary authors, first-term state Representative Larry Kraft (D). We talked about what these changes mean for transportation planners, the kinds of transportation projects that can reduce emissions, the new money the state will raise for public transit, and the state’s new e-bike incentive (!).By the way, if you enjoy this conversation, you should know that Kraft co-hosts a podcast of his own, on climate policy in small and mid-sized cities. It’s called City Climate Corner, with co-host Abby Finis. Check it out. Get full access to Volts at www.volts.wtf/subscribe

Maine’s two big investor-owned power utilities — Central Maine Power and Versant Power — are not very popular. In fact, they boast among the lowest customer satisfaction scores of any utilities in the country, perhaps because their customers face some of the nation’s highest rates, suffer more and longer outages than average Americans, and pay more to connect rooftop solar than ratepayers in almost any other state. This November, Mainers will vote on a radical alternative: a ballot measure to replace the two for-profit utilities with a single nonprofit utility that would be called Pine Tree Power. Maine and many other states already have lots of small nonprofit municipal utilities, but this would mark the first time a whole state with existing private utilities decided to make them public en masse.Naturally the utilities are opposed and have dumped $27 million and counting into a campaign to crush the measure; supporters have mustered just under $1 million. To discuss this David vs. Goliath fight, I contacted one of its champions, Democratic state Senator Nicole Grohoski. We discussed why she thinks a public utility would perform better, what it would do for clean energy, how it would be governed, and what other states can learn from the effort. Get full access to Volts at www.volts.wtf/subscribe

It is a much-discussed fact that the environmental movement cut its teeth blocking things — mines, pipelines, power plants, and what have you. It is structured around blocking things. Habituated to it.However, what we need to do today is build, build, build — new renewable energy, batteries, transmission lines, and all the rest of the infrastructure of the net-zero economy. Green groups are as often an impediment to that as they are a help. So how can the green movement help things get built? How can it organize around saying yes?Recently, the activist organization 350.org hired Jeff Ordower, a 30-year veteran organizer with the labor and queer movements, in part to help figure these questions out. As director of North America for 350, Ordower will help lead a campaign focused on utilities standing in the way of clean energy. I talked with him about organizing around building instead of blocking, the right way to go after utilities, the role green groups can play in connecting vulnerable communities with IRA money, and what it means to focus on power. Get full access to Volts at www.volts.wtf/subscribe

In Australia, one out of three households has solar panels on the roof. In the US, it’s one out of 25. That probably has something to do with the fact that in the US, rooftop solar is twice as expensive, twice the hassle, and takes twice as long to get installed.Why is the process so broken? And what could be done to make it smoother and faster?To discuss these and related matters, I went to the source: Mary Powell, the CEO of Sunrun, the nation’s largest residential rooftop solar company — or more accurately, the nation’s largest residential electrification company.Before taking the top spot at Sunrun, Powell spent more than 20 years in leadership at Green Mountain Power, Vermont’s largest power utility and a nationally recognized pioneer in clean energy. Sunrun brought her on to help the company move into products — batteries, EV chargers, virtual power plants — that were once thought the province of utilities.I talked with her about how to speed up the rooftop solar interconnection process, the role of net metering, Sunrun’s move into vehicle charging and VPPs, and the future of distributed energy. Get full access to Volts at www.volts.wtf/subscribe

One of the primary threats to the clean energy buildout spurred by the Inflation Reduction Act is a lack of transmission. Models show that hitting our Paris climate targets would involve building two to three times our current transmission capacity, yet new lines are desperately slow to come online. Meanwhile, existing lines are congested and hundreds of gigawatts of new clean energy sits waiting in interconnection queues.Wouldn’t it be cool if there were some relatively cheap and speedy ways to get more capacity out of the transmission infrastructure we’ve already built? To ease some of that congestion and get more clean energy online while we wait for new lines to be completed?As it happens, there are. They are called grid-enhancing technologies, or GETs, and they can improve the performance of existing transmission lines by as much as 40 percent. It’s just that, in the US at least, utilities aren’t deploying them. They’ve been tested and deployed all over the world, but the US system has resisted using them at scale. I contacted Julia Selker, head of the Working for Advanced Transmission Technologies (WATT) Coalition, a GETs trade group, to discuss exactly what these technologies are, their enormous potential to ease grid congestion, why utilities still resist them, and what kinds of policies can help move them along. Get full access to Volts at www.volts.wtf/subscribe

It is widely understood that decarbonizing the grid will require a large amount of energy storage. What is much less widely understood is that batteries on the grid today are generally not reducing carbon emissions — indeed, their day-to-day operation often has the effect of increasing them.Yes, you heard me right: most batteries on today's grid are responsible for net positive carbon emissions.I was quite disturbed when I first found out about this, mostly through the research of Eric Hittinger at the Rochester Institute of Technology, and I wrote a piece on it on Vox way back in 2018.Contemporary research suggests that nothing has changed in the ensuing five years — most batteries still behave in a way that increases emissions. But a new startup called Tierra Climate is trying to change that. It wants to incentivize emission-reducing behavior in batteries by making it an eligible carbon offset. Just as a renewable energy producers can make extra money through the sale of renewable energy credits (RECs), battery operators could make extra money through the sale of carbon offsets on the voluntary market — but only if they change the way they operate.It’s an intriguing idea and the only real solution I’ve seen proposed to a problem that no one else is even talking about. So I wanted to chat with founders Jacob Mansfield and Emma Konet about why batteries increase emissions today, what incentive they would need to change their behavior, and what’s required to set up an offset product. And yes, I recall that Volts recently featured an episode extremely critical of carbon offsets — we’ll get into that too. Get full access to Volts at www.volts.wtf/subscribe

To achieve its Paris climate targets, the US is going to have to build out an enormous amount of clean energy and clean-energy infrastructure in coming years. But that buildout is going slowly — painfully, excruciatingly slowly — relative to the pace that is necessary.This has given rise to considerable debate on the left over what, exactly, is slowing things down. Much of that debate has come to focus on permitting, and more specifically, on permitting under the National Environmental Protection Act, or NEPA.A deal that would have put some restrictions on NEPA in exchange for reforms to transmission planning was effectively killed by progressives toward the end of the last congressional session, leading many people inside and outside the climate movement to accuse progressives of being The Problem. They are so attached to slowing down fossil fuel development with NEPA, the accusation goes, that they are willing to live with it slowing clean energy. And that’s a bad trade.Progressives, not surprisingly, disagree! Their take on the whole permitting debate is summarized in a new paper from the Roosevelt Institute and the Climate and Community Project: “A Progressive Vision for Permitting Reform.”The title is slightly misleading, since one of the central points of the paper is that permitting under NEPA is only a small piece of the puzzle — there are many other factors that play a role in slowing clean energy, and many other reforms that could do more to speed it up. I called up one of the paper’s co-authors, Johanna Bozuwa of the Climate and Community Project, to ask her about those other reforms, the larger political debate, and the progressive community’s take on speed. Get full access to Volts at www.volts.wtf/subscribe

While I was down under in Australia, I appeared on a show called A Rational Fear, a pod about climate change which is, I’m told, the winner of Australia’s Best Comedy Podcast. More specifically, I appeared on a spinoff show they’re doing called [ahem] The Greatest Moral Podcast Of Our Generation, a series of interviews with climate types hosted by comedian and journalist Dan Ilic.It was short, and fun, so I figured, why not share it with the Volts audience? Enjoy, and do check out A Rational Fear some time — it’s quite delightful. Get full access to Volts at www.volts.wtf/subscribe

If you are a Volts subscriber, you are almost certainly familiar with Saul Griffith. I've been following him and his work for years, and I think I can say without hyperbole that he is the smartest person I have ever met. An Australian by birth and an MIT PhD by training, he got his start as a tinkerer, inventor, and entrepreneur, responsible for, among other things, the kite-based wind power company Makani and the innovation incubator Otherlab.A few years ago, alarmed by the lack of progress on climate change, he turned his attention to public advocacy, authoring the book Electrify and co-founding Rewiring America. That organization has, in relatively little time, become incredibly influential among US thought leaders and policy makers. It played a key role in the passage of the Inflation Reduction Act.In 2021, Griffith and his family moved back to Australia, where he helped found Rewiring Australia, and sure enough, it has already become as or more influential than its American counterpart. As Volties know, I am currently down in Australia. I was scheduled to do a public event with Griffith, so I thought it would be fun to meet up a little beforehand to record a pod.Neither of us had particularly prepared for said pod, but it will not surprise you to hear that Griffith was nonetheless as fascinating and articulate as always, on subjects ranging from IRA to Australian rooftop solar to green steel. Enjoy. Get full access to Volts at www.volts.wtf/subscribe

G’day mates! As you all know, I’m in Australia at the moment, on a whirlwind speaking/listening tour regarding this country’s response to the Inflation Reduction Act.I’ve been learning a ton about Australia’s history with climate policy, its clean-energy resources, and its current politics. It’s all much more complex and interesting than I appreciated before coming, so I thought it would be cool to record a podcast “in the field,” while I’m here, with someone who could provide an overview of all that stuff. To my great delight, I was joined — live! in studio! — by Miriam Lyons. Lyons’ resume is … daunting. She founded a progressive think tank called the Centre for Policy Development and led it for seven years; she led the climate justice campaign at GetUp, the Australian equivalent of Moveon.org; she has written or co-written two books on economics and the clean-energy transition; and currently, she is director of the Australian Economic Transformation program at the Sunrise Project, which works to scale social movements and accelerate the transition.Needless to say, she is quite familiar with the ins and outs of Australian climate politics! We had a fascinating and wide-ranging discussion. Enjoy. Get full access to Volts at www.volts.wtf/subscribe

By now, you’ve probably heard that tons of new renewable energy projects are “stuck in the interconnection queues,” unable to connect to the grid and produce electricity until grid operators get around to approving them, which can take up to five years in some areas. And you might have heard that FERC recently implemented some reforms of the interconnection queue process in hopes of speeding it up.It all seems like a pretty big deal. But as I think about it, it occurs to me that I don’t really know what an interconnection queue is or why they work the way they do. So I’m going to talk to an expert — Chaz Teplin, who works on carbon-free grids with RMI — to get the lowdown.We’re going to talk through the basics of interconnection queues, why they’re so slow, what RTOs and FERC are doing to reform them, and what remains to be done (namely some friggin’ regional transmission planning). Get full access to Volts at www.volts.wtf/subscribe

Carbon offsets — whereby one party pays another party to reduce carbon emissions — are an extremely convenient thing to have for people, businesses, and institutions that have money to spend, want to do something green, and either won't or can't reduce their own emissions.So offset markets have flourished for decades, even in the face of investigation after investigation, exposé after exposé, showing that the emissions reductions they represent are dubious or outright fraudulent.Things may be coming to a head, though, especially as it slowly sinks in that the Paris Agreement in many ways renders the entire enterprise of offsets moot. If everyone is trying to get as close as possible to zero emissions by 2050, what is gained by trading those reductions back and forth?A white paper digging deep into these subjects was recently published by none other than Joe Romm. Romm has a PhD in physics from MIT and worked at the Department of Energy in the 1990s, but most people in my world know him as one of the earliest and most influential climate bloggers. He’s also authored numerous books on climate solutions.As of earlier this year, he is now a senior research fellow at the University of Pennsylvania Center for Science, Sustainability, and the Media, being run by climate scientist Michael Mann. His first report is on offsets, and it’s a doozy. I called to talk with him about the role offsets have played in the past, the reforms the UN is attempting to make to them, and their future in a post-Paris world. Get full access to Volts at www.volts.wtf/subscribe

Traditional geothermal power, which has been around for over a century, exploits naturally occurring fissures underground, pushing water through them to gather heat and run a turbine. Unfortunately, those fissures only occur naturally in particular geographies, limiting geothermal’s reach. For decades, engineers and entrepreneurs have dreamed of creating their own fissures in the underground rock, which would allow them to drill geothermal wells almost anywhere.These kind of enhanced geothermal systems (EGS) have been attempted again and again since the 1970s, with no luck getting costs down low enough to be competitive. Despite dozens of attempts, there has never been a working commercial enhanced geothermal power plant.Until now.Last week, the geothermal developer Fervo Energy announced that its first full-scale power plant passed its production test phase with flying colors. With that, Fervo has, at long last, made it through all the various tests and certifications needed to prove out its technology. It now has a working, fully licensed power plant, selling electricity on the wholesale market, and enough power purchase agreements (PPAs) with eager customers to build many more. EGS is now a real thing — the first new entrant into the power production game in many decades.Here at Volts we are unabashed geothermal nerds, so naturally I was excited to discuss this news with Fervo co-founder and CEO Tim Latimer, an ex-oil-and-gas engineer who moved into geothermal a decade ago with a vision of how to make it work: he would borrow the latest technologies from the oil and gas sector. Ten years later, he’s pulled it off. I talked with Latimer about how EGS works, the current geographical and size limitations, how he plans to get his technology on a rapid learning curve to bring down costs, the value of clean firm power, the future of flexible geothermal, and much more. This is a juicy one. Get full access to Volts at www.volts.wtf/subscribe

As I previewed a few weeks back, on Wednesday, June 28, Canary Media held a live event in the downtown Seattle home space of beloved local independent radio station KEXP. It’s a gorgeous space, with a coffee shop and a small vinyl store, well worth a visit if you make it up this way.In addition to a lively panel about the IRA and plenty of mixing and mingling with a fascinating, diverse crowd of energy nerds, the event featured a conversation between me and energy analyst/guru Ramez Naam.We had a wide-ranging discussion covering everything from hydrogen to space-based solar power to geoengineering. Then we opened it up to Q&A and got a bunch of geeky questions about grid-enhancing technologies and performance-based ratemaking. It was so fun!As promised, it was recorded for all you wonderful Volts subscribers. Enjoy. Get full access to Volts at www.volts.wtf/subscribe

For the last few years, the fastest growing segment of the global financial services industry has been ESG (environmental, social, and governance) funds.Here’s how it works: one of several ratings firms uses its own proprietary formula to rate how well a company is responding to environmental, social, and governance risks. An environmental risk might be: will the county where you’re locating your data centers have sufficient water supply in coming years? A governance risk might be: have you filed all the proper disclosures?Fund managers like BlackRock then gather highly rated companies into ESG funds, which are sold to investors as socially responsible. Hundreds of billions of dollars flow into ESG funds every year.Note that there’s a bit of a shell game at the heart of the enterprise. What customers and investors generally think is that a company gets high ESG ratings because it goes above and beyond in those areas, that it is trying to “do well by doing good.” But in reality, high ESG ratings simply mean that a company is responding to material risks — maximizing its profits, as public companies are bound by law to do. So Tesla gets no ESG credit for accelerating the electric vehicle market, but it can pull a low ESG rating (and fall out of ESG funds) over vulnerability to lawsuits over working conditions. (This is why Elon calls ESG “the devil incarnate.”) McDonald’s loses no ESG points for the enormous carbon impact of its supply chain, but it gains points for reducing plastic in its packaging, because regulations against plastic packaging are imminent in Europe. So investors get to feel like do-gooders and big companies are rewarded for carrying out their legal obligation to assess risks to their business. There’s not much social benefit to the whole thing, but everyone feels good and green and happy.Except now there’s a problem: Republicans bought it. The whole sales pitch — they believe it. They believe that companies in ESG funds are going out of their way to do social and environmental good … and they’re furious about it. Over the past year or two, an enormous, billionaire-funded backlash against ESG has consumed the GOP, leading to multiple congressional hearings, hundreds of proposed state bills, and red-state treasurers vowing never to do business with woke lefty activist funds like [checks notes] BlackRock. It is stupid almost beyond reckoning. And I’m just brushing the surface. To dig into the deep layers of dumb and where it all might go, I called Kelly Mitchell. She’s a senior analyst at the journalistic watchdog group Documented, which uncovered emails and other communications between the architects of the anti-ESG campaign that led to a New York Times exposé. Get full access to Volts at www.volts.wtf/subscribe

As you might have noticed, the world is in the midst of a massive wave of hype about artificial intelligence (AI) and machine learning (ML) — hype tinged with no small amount of terror. Here at Volts, though, we’re less worried about theoretical machines that gain sentience and decide to wipe out humanity than we are with the actually existing apocalypse of climate change. Are AI and ML helping in the climate fight, or hurting? Are they generating substantial greenhouse gas emissions on their own? Are they helping to discover and exploit more fossil fuels? Are they unlocking fantastic capabilities that might one day revolutionize climate models or the electricity grid?Yes! They are doing all those things. To try to wrap my head around the extent of their current carbon emissions, the ways they are hurting and helping the climate fight, and how policy might channel them in a positive direction, I contact Priya Donti, an assistant professor at MIT and executive director of Climate Change AI, a nonprofit that investigates these very questions. Get full access to Volts at www.volts.wtf/subscribe

Anthony Wang, a mechanical engineer by training, spent years as a researcher on hydrogen technologies. He worked with governments to develop policy and infrastructure plans — he was project manager on the EU's big hydrogen backbone project — and with private companies like Total and Shell to develop hydrogen technology roadmaps. He has authored or co-authored several industry-defining reports on hydrogen and been cited in countless publications.A few years ago, he decided to throw his hat in the ring and try to actually build hydrogen projects in the real world. All his research and contacts in the energy world led him to a very specific — and, to me, extremely intriguing — business model.ETFuels, the company he co-founded, develops projects that couple giant off-grid renewable energy installations with hydrogen electrolyzers; it then uses the resulting green hydrogen to synthesize carbon-neutral liquid fuels. (First up is methanol for shipping, but the company plans to branch out into other e-fuels.)This model somehow manages to implicate half the stuff I’m interested in these days — green hydrogen, markets for hydrogen fuels, off-grid renewables, coupling renewables directly with industrial loads — so I was eager to talk with Wang about it. We dug into the limits of “electrify everything,” the difficulty of transporting hydrogen, and the economics of e-fuels, among other things.This one gets fairly deep in the weeds, but if you find the real-world challenges of developing clean-energy projects interesting, you don’t want to miss it. Get full access to Volts at www.volts.wtf/subscribe

In about half the country, power utilities have turned over administration of their electrical transmission systems to regional transmission organizations (RTOs), or what amounts to the same thing, independent system operators (ISOs). RTOs and ISOs oversee wholesale electricity markets and do regional transmission planning, which increases system efficiency and reduces costs for ratepayers.The power utilities in the 11 western US states are not joined together in an RTO. California has its own ISO, but it only covers that one state. In the rest of the region, utilities are islands — they each maintain their own reserves and do their own transmission planning within their own territories. It leads to enormous duplicated efforts and inefficiencies.For years, there has been discussion of creating a western RTO, to bring the western states together to share resources and coordinate transmission planning. Analysts have found that an RTO could save the region’s ratepayers billions of dollars a year.Recently the discussion has begun to heat up again. A regionalization bill in California was tabled this year but promises to return next session. Governor Gavin Newsom expressed his support for the idea. Nonetheless, numerous sticky technical and political issues remain to be hashed out.To explore the promise and risks of a western RTO, I contacted Michael Wara, director of the Climate and Energy Policy Program at the Stanford Woods Institute for the Environment. We discussed the political forces pushing for and against an RTO, the way the west's electrical system has changed since the last time this discussion came up, and incremental steps that can be taken in the direction of greater regional cooperation. Get full access to Volts at www.volts.wtf/subscribe

Now that the Inflation Reduction Act has lit a fire under the clean-energy transition, a new worry has begun to emerge: can the US create the workforce it needs to build all of this stuff? And can it care for the fossil fuel workers who are displaced in the process?Across the trades that will be necessary to build out clean energy — electricians, plumbers, construction — industries are reporting worker shortages. Meanwhile, entire communities are being disrupted and displaced by the closure of refineries and other fossil fuel facilities.What can the government do to help growing industries create the job pipelines they need? And what can it do to help cushion the blow to fossil fuel communities?To get to the bottom of these questions, I contacted Betony Jones, the director of the Office of Energy Jobs at the Department of Energy. She has spent years thinking about clean-energy workforce issues and working with industries to create shared job training and apprenticeship programs. We talked about the jobs that are coming, the jobs that are going away, and the need for an active hand in smoothing the transition. Get full access to Volts at www.volts.wtf/subscribe

If there is one thing upon which almost everyone in US politics agrees, it is that Democrats suck at messaging. They constantly find themselves on the back foot, struggling to respond on culture war issues that make them uncomfortable. Biden's approval rating remains abysmally low and the enormous accomplishments he and congressional Democrats have secured despite the barest of majorities remain almost entirely unknown to most of the public.But why? What exactly is the problem with Democratic messaging? That is where the agreement breaks down.Is it too liberal or not liberal enough? Has a young vanguard distorted the party's perspective and alienated it from swing voters or is an old guard holding back a diverse new coalition? Is Democratic messaging using the wrong words and phrases, or is the problem that it simply doesn't control enough media to ensure its messages are heard?To dig into some of these questions, I wanted to talk to Jenifer Fernandez Ancona, the co-founder, vice president, and chief strategy officer for Way to Win, a Democratic research, analysis, organizing, and fundraising group that came together in the wake of the 2016 election to make sure its mistakes were not repeated.Way to Win just released its final report on the 2022 midterm elections, digging into who exactly bought advertisements, where they ran, and what they said, as well as how they performed with various demographics. I’m excited to talk to Ancona about what Democrats are saying, what they’re not saying, who’s hearing it, and how they can do better. Get full access to Volts at www.volts.wtf/subscribe

Hey Voltrons! I’ve got no guest today, just a couple of little announcements.First: At long last, we have gotten serious about transcripts around here. I hired a company called Fanfare and they are methodically going back through the Volts catalogue and transcribing everything. I believe they’re back to May 2022. Before too long, every pod will have transcripts. Also, they are transcribing new episodes quickly — usually within a day or two of posting.Each transcript comes in three forms. The first is full text on the episode page; the second is a downloadable PDF, in case you want to print it out or send it to someone; and the third is an “active transcript,” where you can play the sound file and it will follow along in the text for you. The active transcripts are really cool, especially for hearing-challenged subscribers; I encourage you to check them out.(As an example, here's the geothermal pod: text transcript; PDF; active transcript. Once transcripts are done, I add links to the different versions at the top of each episode page.)I considered making the active transcripts available to paid subscribers only, but ultimately, I came back around to the same reasoning I've used thus far: I want this content to be as available to as many people as possible. So they are free to everyonelWhich I guess is a good time to remind everyone that the only way I can keep doing this, keep adding features like this, is through the generosity of my paid subscribers. My gratitude to each and every one of you remains unbounded. (If you’d like to make a one-time donation, you can do so here.)The other thing I wanted to note is for listeners in the Seattle area. On June 28th, Canary Media will be holding a live event in Seattle, at the headquarters of the radio station KEXP. In addition to some other speakers and some mixing and mingling, the main event will be my onstage discussion with Ramez Naam, a well-known clean energy analyst, about the state of the clean energy industry.For those who can't make it, the conversation will be recorded and released as a podcast. But if you are in the area, I encourage you to drop by and say hi. Tickets are $49, which will help raise money for Canary, the best thing to happen to clean energy journalism in ages.I’m cooking up some other cool stuff here in the Volts kitchen, but that’s probably enough for now. As always, to all you listeners, paid and unpaid, thank you so much for your time and attention. I know there's lots of content out there, new outlets clamoring for your subscription dollars, so rest assured that I never take that time for granted.Onward and upward. Get full access to Volts at www.volts.wtf/subscribe

Maryland was one of the first states in the US to see the potential of offshore wind energy. It passed its first offshore wind bill in 2013, and another supportive bill in 2019, but a few weeks ago, the Maryland General Assembly passed, and newly elected Democratic Governor Wes Moore signed, a bill that dwarfs both of those predecessors.Whereas the state’s previous target was 2.5 gigawatts of offshore wind energy, the Promoting Offshore Wind Energy Resources (POWER) Act targets 8.5 gigawatts.But that is just the headline. Underneath that target are clever new policy innovations that promise to make the funding and development of offshore wind energy more politically resilient and economically just for the long term, and to bring thousands of offshore-wind supply-chain jobs to the state. And the whole process is going to be turbocharged by the tax credits in the Inflation Reduction Act.I love me some clever policy innovations, so I was eager to talk to the bill’s author and primary sponsor, Delegate Lorig Charkoudian, about who will pay for the new offshore wind, the transmission backbone that can help accelerate development, and the high-paying union jobs that will be created by the industry. Get full access to Volts at www.volts.wtf/subscribe

The pandemic was devastating to America's transit systems — not only the lockdowns, but the enduring shift to working from home that followed. It has left transit systems everywhere desperate for riders and funding.Nowhere is that more true than California. The state’s transit systems find themselves at the edge of a fiscal cliff. If they do not receive some new funding from the state in this year's budget — which will be decided and finalized by June 15 — they are going to be forced to implement dramatic cutbacks in service. Bay Area Rapid Transit (BART) could eliminate weekend service! It’s grim.As anyone familiar with municipal transit systems can tell you, once routes and service are cut, it is extremely difficult to bring them back. And without transit, it will be that much more difficult to build infill housing, get people out of cars, or revive flagging downtown districts.It’s a looming catastrophe — for climate, for social justice, for the state’s reputation. So where is the governor? Where is the urgency in the legislature to prevent this? The deadline is rapidly approaching and the escalating urgency of transit activists has largely been met with silence or indifference.To discuss the crisis, I contacted Nick Josefowitz. He’s the chief policy officer at SPUR, a California nonprofit focused on sustainable cities that has been one of the most prominent voices raising alarm about the situation. And to avoid total doom and gloom, I also contacted Beth Osborne, the director of DC-based Transportation for America, so she could share some stories about states that aren’t screwing up their transit systems. Get full access to Volts at www.volts.wtf/subscribe

Hello Volts listeners! I thought I would start this episode with what I suppose is a disclaimer of sorts. I suspect most of you already understand what I’m about to say, but I think it’s worthwhile being clear.Every so often on this show, like today, I interview a representative from a particular company, often a startup operating in a dynamic, emerging market. It should go without saying that my choice of an interviewee does not amount to an endorsement of their company, a prediction of its future success, or, God forbid, investment advice. If you are coming to me for investment advice, you have serious problems. I make no predictions, provide no warranties.The fact is, in dynamic emerging markets, failure is the norm, not the exception. My entire career is littered with the corpses of startups that I thought had clever, promising products — many of whom I interviewed and enthused about! Business is hard. In most of these markets, a few big winners will emerge, but it will take time, and in the process most promising startups will die. Such is the creative destruction of capitalism. I'm not dumb enough to try to predict any of it.More broadly, I am not a business reporter. I do not have much interest in funding rounds, the new VP, or the latest earnings report. (Please, PR people, quit pitching me business stories.) I do not know or particularly care exactly which companies will end up on top. I am interested in clever ideas and innovations and the smart, driven individuals trying to drag them into the real world. I am interested in people trying to solve problems, not business as such.Anyway, enough about that.Today I bring you one of those clever ideas, in the form of a company called Emrgy, which plops small hydropower generators down into canals.Now I can hear you saying, Dave, plopping generators into canals does not seem all that clever or exciting, but there’s a lot more to the idea than appears at first blush. For one thing, there are lots more canals than you probably think there are, and they are a lot closer to electrical loads than you think.So I’m geeked to talk to Emily Morris, founder and CEO of Emrgy, about the promise of small-scale hydropower, the economics of distributed energy, the ways that small-scale hydro can replicate the modularity and scalability of solar PV, and ways that smart power infrastructure can help enable smarter water management. Get full access to Volts at www.volts.wtf/subscribe

Over the course of the 2010s, the term “net-zero carbon emissions” migrated from climate science to climate modeling to climate politics. Today, it is ubiquitous in the climate world — hundreds upon hundreds of nations, cities, institutions, businesses, and individuals have pledged to reach net-zero emissions by 2050. No one ever formally decided to make net zero the common target of global climate efforts — it just happened.The term has become so common that we barely hear it anymore, which is a shame, because there are lots of buried assumptions and value judgments in the net-zero narrative that we are, perhaps unwittingly, accepting when we adopt it.Holly Jean Buck has a lot to say about that. An environmental social scientist who teaches at the University at Buffalo, Buck has spent years exploring the nuances and limitations of the net-zero framework, leading to a 2021 book — Ending Fossil Fuels: Why Net Zero Is Not Enough — and more recently some new research in Nature Climate Change on residual emissions.Buck is a perceptive commentator on the social dynamics of climate change and a sharp critic of emissions-focused climate policy, so I'm eager to talk to her about the limitations of net zero, what we know and don't know about how to get there, and what a more satisfying climate narrative might include. Get full access to Volts at www.volts.wtf/subscribe

States are central to climate and energy policy. After the failure of the Waxman-Markey climate bill in 2010, states carried the torch of climate policy during the long decade that Democrats were locked out of majority power in Washington, DC. Now that Dems have actually passed some federal policy — and they are unlikely to pass any more anytime soon — states are once again in the spotlight, tasked with implementing that legislation to maximize its effect.This raises the obvious question of whether states have the administrative capacity — the people, institutions, time, and money — necessary to implement ambitious federal legislation competently.They do not, says Sam Ricketts, but they could, and there are federal programs that can help them get there.Nobody is better positioned than Ricketts to address the issue of state readiness. He played a key role in Jay Inslee's pathbreaking presidential campaign, which was built off of successful policies in Washington and other states. Then, as senior strategist for Evergreen Action, a nonprofit he founded with other Inslee veterans, he helped shape the ambitious trio of bills the Democrats have passed in the last year and a half: the Infrastructure Investment and Jobs Act, the CHIPS act, and the Inflation Reduction Act (or as advocates fondly refer to them, Uncles Bill, Chip, and Ira). Now he’s working with Evergreen and the Center for American Progress to educate and prepare state and local lawmakers for the post-IRA world.I've known Ricketts for years, and there's nobody who better balances detailed knowledge of policy with a practical head for advocacy and activism. I'm excited to talk to him about the crucial role states will play in coming years, the kind of administrative capacity they will need, and the types of federal programs that can fund their capacity building. Get full access to Volts at www.volts.wtf/subscribe

A great deal of confused and misleading information is circulating about the land-use requirements of the energy transition. Everyone agrees that building the amount of clean energy necessary to reach net zero carbon emissions by 2050 will require an enormous amount of land.But is there enough land? Will the transition require industrializing green fields and virgin forests and other environmentally or culturally sensitive lands? Can the energy transition be done big enough and fast enough while still remaining respectful of natural resources and other species? What mix of technologies will go most lightly on the environment?To provide a definitive answer to these questions, The Nature Conservancy launched its Power of Place project — first in California, then for the greater American West, and now, this week, for the entire nation.Using various metrics related to wildlife, ecosystems, cultural resources, and protected natural areas, the Power of Place project attempts to comprehensively map out sensitive land areas. It then tallies up the amount of clean energy required to reach net zero by 2050 and tries to match those needs to the available lands, to see if there is a pathway to net zero that protects them.The good news is that, with some wise planning, the amount of environmentally sensitive land impacted by a business-as-usual clean-energy transition can be substantially reduced at relatively low cost. To discuss this and other findings of the report, I contacted Jessica Wilkinson (Power of Place project manager) and Nels Johnson (the project’s science and technology lead) of The Nature Conservancy. We discussed the technology shifts that will enable a lighter footprint, the policies that could help encourage them, and the best ways to avoid community resistance. Get full access to Volts at www.volts.wtf/subscribe

After decades of effort by urbanists, which often felt like the work of Sisyphus, housing has arrived as a political issue. Big environmental groups have come around to the idea that dense housing is a crucial climate strategy, support is growing from unions worried that their members can’t afford to live where they work, and polls show that the public is increasingly convinced that there is a housing crisis. Over the last five years, a wave of good housing legislation has been building on the West Coast, spreading from California to Oregon and now to Washington state. In this last legislative session, some 50 housing bills were put forward in the Washington legislature and more than a half dozen passed, any one of which would have been historic.One of the most significant bills that passed this session — and one of the biggest surprises — was House Bill 1110, which legalized so-called “missing middle” housing statewide. Every lot in the state will now be permitted to build at least two units of housing, four units when located near transit, and up to six units if some portion are set aside for low-income homeowners.And that's just one bill. Other bills would legalize accessory dwelling units (ADUs) on all lots in the state, require municipalities to integrate climate change into their growth plans, sharply restrict local design review, and ease permitting of multi-unit residential housing. It's a feast.The lead sponsor of HB 1110 is Rep. Jessica Bateman, who represents the capital city of Olympia. She was elected in 2021 and quickly established herself as a champion of equitable housing and a tireless organizer. Through sheer force of will, she brought together a broad coalition that was able to push the bill over the finish line, defying predictions.Like Washington state Rep. Joe Fitzgibbon, who I interviewed for Volts back in 2021, Bateman is widely seen as a rising star in the legislature. I was excited to talk to her about her bill, the wave of other housing bills this session, and the broader politics of housing at the state level. Get full access to Volts at www.volts.wtf/subscribe

For all its explosive growth in recent years, rooftop solar is far less frequently installed by low- and middle-income households than by wealthy ones. Though that disparity is diminishing somewhat over time, it remains large.The barriers keeping lower-income consumers from solar go well beyond the financial (though financial barriers are substantial), ranging from credit histories to low-quality and poorly insulated buildings to lack of supportive policy.State policymakers, foundations, and non-profit groups have been trying for years to overcome this problem. Finally, the pieces are beginning to fall in place and it is becoming clearer which kinds of interventions work and which kinds don’t.No one knows more about the history, design, and successes of these programs than Vero Bourg-Meyer of the Clean Energy States Alliance. She has been analyzing and advocating for these policies for years (she just came out with a report on how foundations can help), so I was eager to talk to her about the rationale for low-income solar programs, the features that make them work, what's in the Inflation Reduction Act that can help, and what further policies are needed. Get full access to Volts at www.volts.wtf/subscribe

For all that has been written about the Inflation Reduction Act, the most salient fact about it remains widely underappreciated. What is significant about the bill is not just that it sends an enormous amount of money toward climate solutions, but that the money is almost entirely uncapped.The total amount of federal money that will be spent on climate solutions via the IRA will be determined not by any preset limit, but by demand for the tax credits. The more qualified applicants that seek them, the more will be spent. The Congressional Budget Office estimated the bill’s spending at $391 billion, but a report last year from Credit Suisse put the number at $800 billion and a more recent Goldman Sachs report put it closer to $1.2 trillion.Big companies will have teams of lawyers to tell them when they qualify for the tax credits, but there are also billions of dollars in the IRA that are meant to be spent on vulnerable and underserved communities. Those communities do not typically have teams of lawyers.Who will work to enable them to take full advantage available of the money? Getting that done will require campaigns, relationships, and grassroots mobilization. It will require movement infrastructure.A relatively new grant-making coalition called Mosaic is attempting to help build that infrastructure by dispersing money to the frontline organizations that comprise it. Mosaic is a cooperative effort among large national environmental groups like NRDC, big foundations, and various smaller regional, often BIPOC-led groups.It has pooled philanthropic money and thus far given almost $11 million of it to dozens of relatively small groups and campaigns — 85 percent of them BIPOC-led, 87 percent of them female-led — selected by a governing committee from well over a thousand applicants. The governing committee contains a super-majority of representatives from frontline communities; the foundations have a super-minority.To discuss the need for movement infrastructure, the Mosaic effort, and the possibilities IRA offers for frontline communities, I contacted Dr. Hahrie Han, a professor of political science at Johns Hopkins University, and David Beckman, one of the founders of Mosaic and the current president of the Pisces Foundation. We talked about what movement infrastructure is, the failure of the climate movement to build enough of it, and Mosaic’s theory of change. Get full access to Volts at www.volts.wtf/subscribe

When President Biden first took office, his administration released a series of "Day One executive actions." Among them was reforming the way federal regulations are developed and evaluated. This is not exactly something the public was clamoring for, or even aware of, but it is foundational to the administration's ability to achieve its other goals.The agency in charge of reviewing proposed federal regulations is called the Office of Information and Regulatory Affairs, or OIRA, which sits inside the Office of Management and Budget (OMB). It is a fairly obscure corner of the federal bureaucracy that doesn't come in for much public scrutiny, but as the gateway through which all federal regulations must pass, it is immensely powerful in shaping the space of possibilities for any administration.A few weeks ago, OIRA answered Biden's call by issuing updated versions of two crucial documents: circular A4 and circular A94. The former contains guidance for agencies on how OIRA will evaluate regulations; the latter contains guidance for how it will evaluate public investments.These guidance documents have not been updated in over 20 years, so this development is long overdue. The new circulars contain some fairly technical updates to the way OIRA does cost-benefit analysis — and the goals toward which it deploys cost-benefit analysis — but they are incredibly important, evidence of a generational philosophical shift.To unpack these changes, I talked with Sabeel Rahman of Brooklyn Law School, who served as acting administrator of OIRA last year while its current leader was being confirmed by the Senate. Rahman was intimately involved in designing the updated guidance, so I was eager to talk to him about the new approach, how it was developed, how it reflects Biden's priorities, and what it means for the future of climate and other regulations.I know this sounds wonky, but it is worth your time. I promise you will come out of it excited about cost-benefit analysis. Get full access to Volts at www.volts.wtf/subscribe

For decades, hydropower has been most common source of renewable electricity in the world. (In the US, it was passed by wind a few years ago.) Pumped hydro — large hydropower facilities in which water is pumped up and run down hill to store energy — remains the most common form of energy storage, both in the US and in the world.Even as the vast majority of media attention in the clean-energy world goes to wind and solar power, hydropower continues churning away in the background, generating and storing vast amounts of renewable energy.Hydro has a long and storied past, but does it have a future? What's going on with hydropower these days? Is there any prospect of building new dams or of finding more power in existing dams? What's going on with small hydropower, on rivers, streams, and reservoirs? And is ocean energy ever going to be a real thing?I've taken hydropower for granted for a long time, so I decided it was finally time to dig into these questions. To do so, I contacted Jennifer Garson, head of the Department of Energy’s Water Power Technologies Office (WPTO). The WPTO oversees a sprawling network of prizes and grants meant to encourage hydro and marine energy projects. I talked with Garson about the future of large dams in the US, the promise of small-scale hydro for local communities, and the uncertain future of marine energy. Get full access to Volts at www.volts.wtf/subscribe

A couple of weeks ago, the policy analysts at the Rhodium Group put out a new report showing that the Biden administration's legislative achievements are not quite enough to get it to its Paris climate goals. But those goals could be reached if the legislation is supplemented with smart executive action.Some of the most important upcoming executive actions are EPA's greenhouse gas standards for new and existing power plants. The Supreme Court famously struck down Obama's Clean Power Plan — his attempt to address existing power plants — judging it impermissibly expansive. So now EPA has to figure out what to ask of individual plants.The agency's decisions will help shape the future of the US power sector and determine whether the Biden administration gets on track for its climate goals. To talk through those decisions in more detail, I contacted Lissa Lynch, who runs the Federal Legal Group at the NRDC’s Climate & Clean Energy Program. We discussed the options before the EPA, the viability of carbon capture and hydrogen as systems of pollution reduction, and whether Biden will have time to complete all the regulatory work that remains. Get full access to Volts at www.volts.wtf/subscribe

My fellow olds will recall that, back in the 2000s, biofuels were an extremely big deal in the clean-energy world, one of a tiny handful of decarbonization solutions that seemed viable. Biofuels — and the many advanced versions thereof allegedly on the horizon — dominated discussions of climate change policy.Much has changed since then. Principally, it has become clear that electrification is the cheapest path to decarbonization for most sectors, including the transportation sector. The Biden administration has explicitly put electrification at the center of its transportation decarbonization strategy.Biofuels, in the meantime, have gone exactly nowhere. Advanced biofuels remain almost entirely notional, old-fashioned corn ethanol remains as wasteful as ever, and new scientific evidence suggests that the carbon costs of biofuels are much larger than previously appreciated.It's not clear if anyone has told the EPA. For the first time in 15 years, the agency is on the verge of updating biofuels production mandates first established by the Energy Independence and Security Act of 2007, and its proposed standards do not appear cognizant of these recent developments, or of the administration's larger transportation strategy.To discuss the latest developments in biofuels and the EPA's puzzling blind spot, I talked to Dan Lashof, director of the World Resources Institute. We discussed how biofuels have developed since the early 2000s, the lack of progress in advanced biofuels, and the stakes of EPA's coming decisions. Get full access to Volts at www.volts.wtf/subscribe

In this episode, Project InnerSpace founder and executive director Jamie Beard, who has been instrumental in influencing oil and gas personnel to move into the geothermal industry, discusses exciting recent developments in geothermal and the opportunities ahead.(PDF transcript)(Active transcript)Text transcript:David RobertsThings are starting to come together for geothermal. Political awareness has seen an uptick. Investment is flowing in. Startups, many staffed by veterans of the oil and gas industry, are swarming to take advantage of existing geothermal opportunities and expand those opportunities. New technologies and techniques are reaching the demonstration phase.It’s an exciting time. At the center of it all is Jamie Beard, who for more than a decade now has served as a kind of pied piper luring people out of oil and gas and into geothermal. (Here’s her 2021 TED Talk.) A one-time energy and regulatory lawyer, Beard founded the Geothermal Entrepreneurship Organization, dedicated to educating and training oil and gas personnel to move into geothermal. (GEO recently helped launch the Texas Geothermal Institute to expand that work.) She is also the founder and executive director of Project InnerSpace, a nonprofit dedicated to advancing the geothermal industry. It recently launched an initiative to build a Global Heat Flow Database, which would help map subsurface resources across the globe. It also plans to invest in new geothermal technology companies that are ready to launch first-of-a-kind demonstration projects.Beard has been my go-to resource on geothermal for years, so I was thrilled to bring her on the pod to discuss the current state of the industry, the migration of personnel and expertise from oil and gas to geothermal, and the path to global scale for the industry.All right then. Jamie Beard of Project InnerSpace. Welcome to Volts. Thank you so much for coming.Jamie BeardOh, my gosh. David Roberts. Hello. It's nice to see you again.David RobertsYeah, it's been a while since we talked. You know, when I was working on a piece on geothermal for Vox a few years ago, I don't know how many years ago, my family makes fun of me because everything pre pandemic is about five years ago. Yeah, I guess it was 2020. And my sense then around geothermal was that there was this sort of kind of a surge of interest, call it ten to 15 years ago, and a surge of investment. And then that kind of tailed off, kind of the air went out of that balloon a little bit lost steam.There you go. That's the pun I was looking for. And then my sense was that as we were talking back in 2020, a bunch of strands trends were just starting to come together for a new big resurgence, a renaissance of geothermal. I want to talk about the future of geothermal, the immediate future, the near term future, the midterm future. But first, I would like to just start with a snapshot of, like, what is happening in the industry now? Is it still the case that only conventional geothermal wells are actually being dug and operating? What's the kind of snapshot of the industry?Jamie BeardWell, no, it's no longer just the case that conventional is being dug, which is really cool. And that's actually a difference between now and 2020. So when we talked back in the day, you're right to use renaissance, we were just about at the beginning of one, right? So it was like there's all this stuff that was very buzzy, but there wasn't really a whole lot in the ground. There were some teams that were kind of thinking about it, but nobody was really doing it yet. So there are some teams that have gotten out and done stuff in the last couple of years, and that means demonstrations, and that means that wells have been drilled, and that means that demonstrations and pilots have been done.And that's also meant that the oil and gas industry has gotten increasingly excited and started investing. So the landscape has changed quite a bit in the last three years in terms of momentum and also investment dollars, which is really cool, I guess, to start with.David RobertsI should have done this at the very beginning, but I shouldn't assume that listeners read that piece on geothermal.Jamie BeardWell, everybody in the world has.David RobertsI would like to think so, but just in case there's a few out there who have it, I just want to make a very basic distinction. Geothermal to date, mostly, almost exclusively has been what's called hydrothermal, which is you go find places where there are natural riffs and reservoirs of thermal activity, and then you go down there and exploit that heat. So that's what geothermal has been from like the dawn of time up until about five minutes ago. You go find these areas where the heat already exists, that's conventional geothermal, and you stick a straw down and get the steam up and make electricity.Then there is coming what's called advanced geothermal, whereas you go make your own reservoir, you dig down and you crack the rock to create basically an artificial or a human made fracture, which then the hot water comes, fills the cracks, then you stick a straw down, et cetera. You make your own reservoir. And then there are sort of beyond that, kind of like what you might call cutting edge. I don't know what the exact term is. Cutting edge technology research where people are trying to do things like closed loop geothermal, where instead of just having the heat be dispersed in this natural reservoir, you're just tubing water down, letting it heat up and tubing it back up.Jamie BeardThese are very accurate terms.David RobertsI hope everybody's keeping up. And then there's wacky cutting edge drilling technology, like using lasers and plasma sound waves, plasma millimeter waves, god knows what else. That's the cutting edge. That's just like the landscape, just in case people don't know. So most of what's happened to date in the history of geothermal has been conventional geothermal. And as far as I know, in terms of commercial operating geothermal plants, they're still almost all conventional hydrothermal, are they not?Jamie BeardYeah, that's right. There are a few commercial egs plants in the world, but they are very few. And the rest is the Iceland kind of geothermal, the geothermal that we see on the surface. So it's the traditional stuff, but even that there's not much of it in the world. Right?David RobertsRight.Jamie BeardIt's still quite small, but anyway, yeah, so you caught everybody up to 2020 with your article. So everybody that's listening, go read David's article from 2020. It'll catch you up to then, and then we'll cover the last three years.David RobertsNow, right now what I want to know is, is there still interest in conventional hydrothermal? Are people still trying to dig those wells? Is that still like a going concern? Or is everyone turning their attention now to egs, which is enhanced geothermal systems, which is this make your own reservoir thing, scalable geothermal? Is everybody going in that direction now?Jamie BeardNo, not everybody, and I don't think everybody should. When it comes down to it, there's a whole lot of conventional geothermal in the world that has not been developed. There a lot. Even though conventional geothermal, or hydrothermal as it's called, is geographically limited, there's still a whole lot of it out there that we could be leveraging. Right.So if you look at the oil and gas industry and how they're engaging in geothermal, about half of the entities are going to dip their toe in to geothermal by pursuing conventional hydrothermal projects first and then the other. Half is looking and thinking, well, we'll just skip over that and go for the gold. Go for the stuff that we can scale and do anywhere. Right. And so there definitely a split in the community on that. But I think when it comes down to it, we're going to, over the next ten years or so, develop a whole lot of hydrothermal before we end up in scalable stuff.David RobertsMy impression of hydrothermal was always that there are a couple of places where the sort of activity is intense enough to give you the heat you need to really make electricity efficiently, but there wasn't a ton of it because it couldn't compete kind of with wind and solar. Have there been developments in conventional hydrothermal geothermal that make it more attractive for investment? Like have costs come down, has permitting or siting gotten easier? What's the kind of state of play?Jamie BeardSadly, that's not the case with we're going to get into that. Yeah. No, there's not been much by the way, of regulatory, unfortunately. But I think your question about costs coming down yes, a lot of that has happened because of technology transfer from the oil and gas industry over the past years that have helped revitalize, for instance, underperforming wells for hydrothermal. The heat is not usually the problem. The problem is having sufficient water naturally occurring underground in your reservoir to sustain your output. So you need to have enough water coming up out of the ground to run your power plant.And if you don't have enough, or if your well declines, over time, which does happen with hydrothermal. Eventually you start running out of water and wells decline. There are ways to revitalize old wells, and that's being tried. There are ways to enhance the fracture network in hydrothermal systems and that's being tried, right? Yes. And quite frankly, hydrothermal is a really nice 24/7 baseload source of clean energy. And so what we're finding in terms of cost is that there are markets that will sustain a premium for baseload simply because there's so much solar and wind. Right?David RobertsYeah, that's what I've been thinking about, is just that the value of dispatchability in and of itself is rising. So I thought that might be sort of affecting the economics of geothermal.Jamie BeardThat's right.David RobertsActually, let's pause here to talk about permitting and siting. You hear a lot of complaints, really from everyone about this subject, from every industry. But the geothermal people complain that it's very difficult to get a well started, even relative to oil and gas wells.Jamie BeardYes.David RobertsSo maybe just tell us quickly. These permitting and siting problems, I assume, face all kinds of geothermal, the hydrothermal and the advanced stuff. So what's the problem now? And is there any solution on the horizon?Jamie BeardAll right, so in a nutshell, so we don't put everybody to sleep. In the United States, most of the really low hanging fruit for geothermal development exists on Bureau of Land Management land, federal land that is subject to the National Environmental Policy Act, or NEPA. And it's an extensive set of environmental regulations that require a lot of review before doing a project on federal land. And geothermal projects are subject to NEPA. What that means, essentially, is that for the multiple phases of a project, in order to get a project developed on federal land, you're looking at a permitting timeline of six or eight or even ten years to get a project off the ground, which is completely ridiculous.You can't get projects funded under that scenario.David RobertsIs that also true for oil and gas well? Is that true for everything, or is there unique barriers?Jamie BeardSo here's the thing. This is what I was just about to point that out, which is oil and gas drilling on federal land has been excluded from this process through a categorical exemption.David RobertsWhat? Isn't that nice for them?Jamie BeardWell, that's whether they lobbied for it. And here's the problem. Geothermal doesn't have a lobby. And so what we end up with here is a scenario where you can get an oil and gas well drilled on federal land in no time, very quick, in a geothermal well, which is clean energy. And the same process as drilling the oil and gas well is going to take you a decade. It kills projects. This kills projects, right? When you ask what's the solution, I am loathed to say politics, because who knows, right? And are we going to wait around for that?My personal opinion is no. Let's go around it so that's why I've been focusing all my efforts on state and private land, because we're just not going to do the federal you're.David RobertsJust going to throw your hands up about federal land and go to other.Jamie BeardAnd that's how we go fast. And that's why most of these demonstrations are in Texas.David RobertsInteresting. That's hilarious. And are there state permitting and siting issues or are things generally better at the state level?Jamie BeardWell, look, if you focus on oil and gas states that have streamlined permitting for oil and gas and that have friendly regulatory environments to oil and gas, no, you got no problems. Right. I think the trend is going to be and quite frankly, this is the way it should happen if we're not going to sit around and wait for politics, we need to be focused on deploying pilot geothermal projects in states that are used to oil and gas permitting. Right. Those are going to be the oil and gas states. And they just so happen, many of them, to have excellent geothermal resources so we can get projects permitted in twelve months or less instead of a decade.And we've seen that happen with one of the projects in Texas. They were off to the races in a matter of months to do their pilot. Yeah,David RobertsTexas.Jamie BeardGo go drill, baby drill.David RobertsDoes have its merits.Jamie BeardRight.David RobertsSince you sort of brought up oil and gas, let's talk about a little bit about how in the last ten years, techniques developed and perfected by the oil and gas industry are coming to geothermal. I think people know, once again, assuming they read my article.Jamie BeardRead the article.David RobertsThey know that fracking is part of that, but it's bigger than just that. So what is the sort of knowledge transfer that's been happening?Jamie BeardYeah. So it's all of the learnings of the shale boom. Let's back up on the shale boom. So all of a sudden, 20 or so years ago, global geopolitics got rearranged by natural gas. And I think a lot of folks kind of skip over why that happened. Right, it happened, and we all realize it happened. But why? Why is the reason geothermal is now a thing? Because it was this gigantic flourish of technological development that came out of the oil and gas industry and 10 or 15 years of massive leapfrogs in what we can do when we're drilling and engineering the subsurface.And that includes fracking, but it also includes a lot of other cool things.David RobertsWhen we say fracking, we mean fracturing rock to create natural gaps that are then filled, in natural gas's case by natural gas, in this case by ...Fluid.Hot water. But that's what we are referring to, by fracking. I just didn't want to assume people knew.Jamie BeardYeah, right. So hydraulic fracturing, so the process of applying pressure to a well bore in order to enhance or create new fractures or pore space in rock. And that process can be used for more than one thing. Like right now, we use it to produce more gas than we normally could from a reservoir. But it just so happens that that technique in creating or enhancing fractures and rock is really helpful if we want to engineer the subsurface to create a geothermal reservoir. Right. So it's a really good example of kind of a bad word that comes out of the oil and gas. Really polarizing word, right?David RobertsYeah.Jamie BeardThat can kind of be repurposed into a really interesting and big opportunity for the future of clean energy.David RobertsKind of a side thing. But I wanted to ask in the industry, what is the sort of state of thinking on how to tiptoe around that?Jamie BeardOh my gosh.David RobertsDo they want to just address it full on and say it's fracking but it's different? Or do they want to just come up with a different word for it? What's the kind of state of play?Jamie BeardWhat a good question. David, I love talking to you. This is an excellent question. So it's super controversial what you just asked and nobody really wants to talk about it. Right?So this is the way I see it going. You've got geothermal entities and the government tiptoeing around it, so they're trying to call it something else because they don't want to get mixed up with oil and gas and all that. Right.So let's keep it nice and simple and let's call it other stuff. So they've called it things like hydro-shearing and hydro-fracking just to try to avoid the word fracking.David RobertsCome up with a boring enough term and everybody will just slide right past it.Jamie BeardRight, right. Like nobody's going to notice kind of thing. Right. The oil and gas industry, by and large, adopts the opinion, "well, that hell, we just spent the last 20 years perfecting this amazing technique that rearranged geopolitics and can revolutionize the future of geothermal. We're going to call it what it's called, damn it." Right. Then you have some entities saying, yeah, but it might be easier from a community relations standpoint to not dive right in there. So you do have some controversy in oil and gas. My personal opinion is we need to call a spade a spade. Right.And I think there's going to be some intellectual work that we need to do as human beings to get over polarized and loaded terms. But we need to be honest with one another about what we're doing. And if we rename something that is what we are doing a technique for geothermal. It's not producing oil and gas, it's producing clean energy. That's awesome. But we are doing a technique that's called a thing.David RobertsYeah, it looks a little shady when you ...Jamie BeardWell, it doesn't build trust. Right. If we start trying to call it something else, that's not a trust building exercise. And I think that's a lot of what we need to be doing for geothermal is trust building.David RobertsWell, let's briefly address here then, the kinds of concerns people might have when they hear the word "fracking". So I think people have a lot of muddled ideas in their head about what the dangers of natural gas fracking are. But tell us why this is different and why people shouldn't worry, or if they should worry a little bit, how much should they worry?Jamie BeardWell, okay, you're going to get the direct story from me, David. This is the no bullshit answer here, which is the way hydraulic fracturing has been utilized by the geothermal industry so far has been a very simple version. It's been very low tech. So they're just trying to apply pressure and enhance existing fractures. But it's a very basic method of hydraulic fracturing that's been used. And I think when it comes down to it, when you're fracturing to enhance a reservoir to circulate water or another fluid, like, we can get to this later, but like, supercritical CO2 is the new cool trend to use as your working fluid for geothermal systems.And it's a really cool idea, but if you are enhancing the subsurface to make that clean energy system work better, why not? As long as you're doing it safely and responsibly and leveraging the learnings of the last 20 years about how we do that safely and responsibly. I think when you start thinking about hydraulic fracturing in the oil and gas context, the types of images that come to mind are lighting your faucet on fire kind of these very polarizing and upsetting images. Right?And I do think that that is a result of ten or 15 years of bad blood. Mistrust and bad blood between oil and gas and environmental and climate activists. And I'll just go ahead and say, just for full disclosure, I am an environmentalist and a climate activist. I am not in or from the oil and gas industry. In fact, quite the opposite. So I understand all of those sentiments. I grew up wanting to oil and gas be damned. I mean, I was going to bring them down kind of thing. So I get all that. The differences, though, between the way geothermal wells are fractured and oil and gas wells are fractured.There are some in oil and gas. They're using a variety of chemicals to enable that process.David RobertsYeah, this is what I emphasize to people, is most of what you associate with the damages of natural gas fracking have to do with the fluids being injected and leaking into the groundwater and etcetera. And geothermal just doesn't use those same fluids.Jamie BeardThat's right. Well, right now, let's pause for a second and say, yes, there are a lot of differences in techniques and fluids used and also where natural gas is located, you oftentimes have to drill through water tables to produce and get to natural gas reservoirs. And when you have those sorts of close in geographical distance between water tables and oil and gas resources, you have the potential to have problems, particularly if you're fracturing the subsurface. Geothermal is different. Right. So because in the case of hydrothermal, you're in a hydrothermal reservoir, you're in the water table, it's a reservoir that's full of water, and your intent is producing that water to the surface.Right. So it's a different kind of game in geothermal. Just off the bat, but I'll say part of the excitement, this is where we need to do some intellectual work, in bringing people together and not fighting about this. But but we're going to have to think about this. A lot of the benefit that we will see over the coming years, coming out of the oil and gas industry into geothermal, is actually adapting some of those more complex techniques that they use in hydraulic fracturing and oil and gas and adopting them into geothermal, applying them to make the geothermal reservoirs function properly.Does that mean we need to transfer the chemicals and these ... no, not necessarily. But what we do want to do is transfer the really cool, cutting edge stuff like multistage fracturing, where you're actually engineering the reservoir in really specific ways to where they're parallel structures that you're fracking to connect with one another, and therefore you can predict how the fluids will flow amongst them. They're more complicated engineered subsurface reservoirs. And if we can do that like we're doing it for natural gas. Now in the geothermal context, EGS in particular, what we're saying is engineered or enhanced geothermal systems, they will work better.And what that means is they will have better output. What that means is they will be cheaper to build. Right. So some of that transfer we do want and we should support, but I think we need to figure out how to separate the good from the bad when we think about fracking or the "f" word. So we call it.David RobertsAnd also the other question that I get constantly, I'm sure you get it several times a day, is about earthquakes. People have this real fixation on the idea that geothermal digging is going to cause earthquakes. Was there ever anything to that? Is there currently anything to that? Is that a real worry or is that kind of a myth?Jamie BeardNo, it's a real worry. Absolutely. It's something that we should absolutely be focused on and considering. Here's the thing. The cases in the world where seismicity, or I'll back up induced seismicity, so geothermal systems have natural seismicity associated with them all the time. It just happens. What we don't want is to be causing that seismicity by our actions. So we are interfering with the subsurface in a way that causes seismicity, particularly seismicity that is detectable by humans. Right. So seismicity that is above a level that becomes noticeable. And there have been cases where geothermal systems, particularly EGS projects, where they're going in and fracking these reservoirs, have caused induced seismicity and some of them have been significant.They not only detectable, but damage causing induced seismicity. And I will say there is kind of an obsession in media, right, about geothermal. It's like, oh, there's all this awesome stuff happening, but earthquakes, it's always this thing. It's kind of the boogeyman. And I would say in those situations where there has been induced seismicity related to an EGS project, in 100% of the cases, that was because the system lubricated an existing fault that was underneath the system. Therefore, that system should have never been located or sited where it was being developed. And there's a reason this is happening, which is the geothermal industry is so fractured and regional.It's kind of a mom and pop shop kind of industry. You've got entities out there just kind of developing projects, but not really sharing best practices and standardization, developing protocols that everyone is following, et cetera. And in those types of situations, you'll have mistakes and some of the mistakes end up on international news, right? And that's what you have for geothermal. And that's also David, kind of, and I think this is going to be ironic to probably some of your listeners that I'll say this, but standardization and establishment of protocols and data sharing and getting things like this under control at scale, the oil and gas industry is really great at that.David RobertsWell, we're going to get back to that, but that's a great segue to my next question, which is tell us about what Project InnerSpace is. Project InnerSpace is nonprofit. You have to advance geothermal. The plans have two phases, which I would like to talk about in turn. The first phase, what you're trying to do now, what just got launched and is underway, is basically, as far as I can tell, an attempt to map and better understand what's beneath the surface. So just tell us a little bit about InnerSpace and what this phase one looks like.Jamie BeardAwesome. Thank you for asking this. We kind of forgot about that part right at the beginning. Hello, I'm Jamie Beard. I run Project InnerSpace. Project InnerSpace is a nonprofit that I founded this last May. So it's a newly launched entity. The purpose of InnerSpace is to address two major barriers that are standing in the way currently of geothermal reaching exponential scale in growth. And essentially what we're trying to do at InnerSpace is put ourselves out of business by 2030. So we're trying to run a sprint and make ourselves completely irrelevant by the end of this decade.First is phase one, which you mentioned, which is building a global, high resolution, global map of where the geothermal resources are and how deep they are so we can understand the low hanging fruit.David RobertsAnd this doesn't exist. Imagination, like in some library somewhere that seems like that should be happening already.Jamie BeardYou'd think, amazingly, it doesn't exist. Some places in the world have done a better job than others at estimating we have some maps of the United States that were done by Southern Methodist University in the early 2000s. We did a little poking around on that, actually, with SMU a couple of years ago to see how accurate those maps were. And it turned out the maps are a little bit inaccurate on the wrong side for geothermal. So it's actually a rosier picture for geothermal than those maps show, which could interfere. And frankly, since so many projects are on the margin economically, having maps that are even 10% off matters.It matters, right. So we need to get this stuff right. We need to know where the resources are, how deep the resources are, and what temperature they are before we start siting projects.David RobertsSo right now a geothermal company just wanders out into the landscape and starts digging.Jamie BeardThat's exactly right. Yeah. I mean, they do the best they can, but there's a lot of money that goes into subsurface exploration. Oil and gas spends billions of dollars doing subsurface exploration for oil and gas.David RobertsI'm surprised some of that isn't transferable, they would know enough.Jamie BeardThat's what InnerSpace phase one is. Right?So it's like, all right, oil and gas industry, y'all have a lot of data and we would like to use that to build a really high resolution, detailed global map that's interactive and free for the world so that everybody can use it, including governments, but also startups and everybody in between.David RobertsSo this will just save a lot of exploration costs. It will help startups skip some of that exploration stage and just know where to go.Jamie BeardThat pre-project risk. Yeah.David RobertsAnd it will give us a better global sense of what the resource is.Jamie BeardThat's right. So it's not going to be high resolution enough to say this is the exact spot we want to put our plant. We can't do all that. That's a little bit too much for a map of this size. But what we can say is these are the regions in the developing world where there's a lot of low hanging fruit for geothermal and there are huge population centers here and wow, this country is poised to be adding a lot of coal capacity over the coming decades. So, wow, let's just slip geothermal in here instead.David RobertsIs this about sort of like rationalizing and checking and ordering existing data? Or does this involve people going out into the field and I don't know what it would look like digging holes ...Jamie BeardDrilling a hole.David RobertsDrilling holes and testing.Jamie BeardWe will not be drilling any holes in phase one. Thankfully. Phase one is a fast sprint too. So we're going to publish in 24 months. What we're doing is we're grabbing all the data that's out there that's imperfect. And most heat flow data in the world that's out there is imperfect, meaning it's not cleaned, it's not organized. It needs to be QC'd before it can be utilized and relied on. So. We're going to take all the data that's out there, clean it and get it in really good shape. Then we're going to collect as much oil and gas data as we can.So this is data that the oil and gas industry has from the millions and millions of wells they've drilled globally. So they know ...David RobertsIt's not proprietary, they're willing to share it?Jamie BeardSome of it is, but they're willing to share the pieces that we are able to clean to keep proprietary. So we can do that. So we'll have a subset of data that's never been used for the purpose of geothermal exploration before, which is going to be really helpful because it turns out when they drill for oil and gas wells, they take the temperature of the well as they drill all the way down to the bottom. And that's really helpful in predicting how hot it will be deeper and also in like formations in other places in the world. So what we'll do after we get all this data is add in some AI.So we're going to do some predictive analytics on it, right? So we'll be able to predict more accurately than we do currently places in the world where we don't have a lot of existing data, what to expect in those formations in terms of depth and quality of the geothermal resources.David RobertsInteresting. And then phase two will be investing in sort of demonstration projects, first of a kind projects helping a lot of these new technologies, these new startups, establish the fact that they are possible ...Jamie BeardGame changers.David RobertsThis is what I want to talk about is we discussed earlier there's Egs, which is just sort of fracking making your own reservoir, but then there's deeper and deeper and deeper stuff people are pushing towards. And that super deep stuff is where you get into really mind blowing, game changing type of stuff. We're basically like super-efficient, super-hot, always on available anywhere, this kind of stuff.So the second phase for Project InnerSpace is investing in some of these first of a kinds. And what I am curious about is sort of of all those technologies that I wrote about and that people are passing back and forth and some of them sound quite Sci-Fi. Who is ready to go start digging. Like what are the advanced geothermal technologies that are to the point that they're ready to start producing. When you start investing in these first of a kinds, what are they going to look like? Like first of a kind, what?Jamie BeardSo phase two is a fund. It's a billion dollar fund and it will invest in up to 20 1st-of-a-kind pilot projects in different places in the world. And phase one will help inform where we put them right. So we're going to use that data to help inform that process. But the portfolio will be broad. So geothermal is vastly underfunded in every possible way across every single concept to be honest. And so we're going to cast as broad a net as we can to have as high an impact as we can in terms of proving out scalable geothermal concepts.And so geothermal, I don't think that we should look at geothermal as a one size fits all type of thing, where if we can just make this one kind of system work, it could be applicable anywhere in the world. That's probably not going to be the case because the subsurface in different places in the world looks really different. There's different types of rock, there's different types of heat flow, right? So different types of geothermal systems will excel in different types of subsurface reservoirs. And so I think we need to cast a really wide net on the types of concepts that we'll fund with phase two.And so that will include EGS, but it will also include closed-loop. It will include EGS and closed-loop hybrids. So systems that mix both so they'll go down and they will directionally drill this radiator style, radiator style system into the rock, but they will also fracture around that to enhance heat flow going to that well bore, right? So that's pretty cool because what you do in a hybrid kind of system is you eliminate the risk of fracture evolution over time. You're not pressurizing the fractures and trying to circulate fluid through them and then making them change over time.They're static, right? They're just sitting there.David RobertsYou fracture the one time and then it does the rest of the work for you. And closed-loop is so, I mean, I'm the farthest thing from a technical person in the world, but it's intuitively appealing because it's just so much more contained. Like your fluid is exactly you know, exactly what the fluid is, exactly how much it is, how fast it's moving.Jamie BeardAnd you get out what you put in. Right? And also closed loops are really cool because you can use non-water working fluids that work better than water in closed loop. And that's where supercritical CO2 comes in. It heats up faster than water. We have a lot of CO2 laying around. Let's use it, right? It's cool. And the turbines on the surface can be redesigned to actually run directly off of supercritical CO2. So direct drive by CO2, which is very promising and very cool. So the fund is going to cast a wide net on these things, right?We're looking at power production projects with Cogeneration of industrial heat. So looking at industrial heat decarbonization with some of the concepts, a coal plant conversion might be possible.David RobertsWhat about the lasers? What are ...Jamie BeardThe drilling concepts? Yeah.David RobertsAre those real enough that they're ready to start digging?Jamie BeardWell, I don't imagine that we will be deploying one of these next gen drilling concepts in phase two, because we are deploying phase two starting in a year and a half or two years. So those concepts are not quite ready for commercial deployment, and these are commercial pilots. So we're going out and building power plants with this money. And we'll have 20 power plants when we're done. They're not quite ready, but that's not to say they won't be. Right.So these cool, we're going to vaporize rock kind of concepts, they're sexy enough for venture capital and they're well funded. Right. So they're running a sprint. And we may see some of these concepts deployed in the near term, but probably not near enough term for phase two. Let's see, definitely by the end of the decade, we'll see one in the field, my guess.David RobertsAnd this is all basically different ways of bringing up heat that you use to boil water and create steam and run a turbine. Right. I mean, this is all ...Jamie BeardVery simply yes.David RobertsJust about getting heat.Jamie BeardThat's right. We're just trying to harvest heat so we can harvest heat for heat, so we can harvest it to use in an industrial process so we don't have to burn fossil fuels to produce that heat, which I think is a no brainer for geothermal, but we can also use the heat to produce electricity. And we're focused on that as well.David RobertsSince you mentioned it. I wanted to ask about this, too. A lot of this is another thing that I feel like has sort of captured public interest, maybe slightly out of scale with its reality. But how big of a piece of the geothermal pie is going to be repowering fossil fuel facilities? Because people really love that idea.Jamie BeardYou mean converting existing plants to geothermal?David RobertsYes, like a coal plant. Instead of getting the heat to run the turbine from coal, you just get it from underground. But the turbine already exists. The power plant already exists. The ...Jamie BeardTransmission structure.David RobertsTransmission to and from already exists. So it's a great idea. I just wonder great idea. How big of a deal is that going to be?Jamie BeardWell, so there are a couple of things about geothermal right now that are really good at catching headlines because they sound so cute. Right? And that's one of them. And another one is oil and gas well reuse. You hear that one all the time, right? Yeah. Oh, let's just reuse. All right. Okay.David RobertsBoth those I wanted to ask about. The second one I'm super skeptical about, just for obvious ...Jamie BeardWhich one the coal plant?David RobertsReusing wells.Jamie BeardYeah.David RobertsYou're drilling in different places, looking for different.Jamie BeardYes, Right. And you're not looking for heat when you're drilling for oil and gas. You're looking for oil and gas. You're avoiding oftentimes. Yes, that's true. All right, so let's look at coal first. I really like the idea. In fact, InnerSpace has just funded a coal plant conversion study. Right.So we are studying the top 20 candidates for coal plant conversion in the United States to geothermal. We're going to prioritize them by economics and subsurface characterization and we'll get a good picture of that. I like the idea. Could we go and do a megawatt to megawatt coal plant conversion today on the existing footprint of the plant with geothermal? Maybe ... Maybe in a really hot place, a hot subsurface. Hot in the subsurface, right. So say we go to Nevada, where you've got really attractive geothermal gradients and you try your very best. So we get the best in oil and gas to drill this well as cheaply as they can.And by the way, it's not one well, it's many wells to do it. Megawatt for megawatt. We could probably technologically do it. It's feasible to do it. The problem becomes this, though. It's not economically feasible to do it. Not right now.David RobertsIt all just comes down to how deep you can get. Right? I mean, ultimately it all just comes down to getting deeper. Getting deeper, cheaper.Jamie BeardWell, yes. So it depends. This is all about energy density, essentially. So if you want to look at it like energy density, the deeper you go, the more energy dense your output for geothermal. Right?So if you're drilling to 600 degrees Celsius and you're producing at the surface 600 degrees Celsius fluids, that's awesome. I mean, that is natural gas power plant style enthalpy. And that's pretty awesome. And then you can start talking about plants that are gigawatts, right? Big plants, like coal plants. But right now, what we're calling that in geothermal land is super-hot. So super-hot rock or SHR, my favorite.David RobertsFinally the energy world comes up with a cool term, finally, right?Jamie BeardExactly. Just add super to it and that makes it cool. Right. So those systems are theoretical right now, not super well understood. How we would fracture in, for instance, you've gone so hot that the rock is now plastic. It's not hard anymore. It's soft. So how do you fracture that and have the fractures not closeDavid RobertsAnd have your drilling equipment not melt?Jamie BeardIt'll melt. But that's the thing. That's why all these kind of cool new drilling methods are being researched and produced, because they are relying on materials that actually just melt and vaporize the rock instead of drilling them. There may be a situation where we can actually drill into 600 degrees Celsius semiplastic rock in the future. I think what this comes down to, though, is economic feasibility. We can probably do it now, like I was mentioning with the coal plant conversion, right? We could get the best in class to go drill those wells, and they've done it.Like oil and gas has drilled 300 Celsius offshore, no problem. We could do it. But do we have the $500 million to do it? No, we don't. No, we don't, actually. Right. And that makes it economically infeasible right now. So the question really will become for these kind of cool, sexy, super deep systems, is can we get the cost down? Or is something so dramatic going to happen over the next decades in terms of our energy markets, that we're going to be able to afford to develop these systems. And I'm hoping yes. Right. That's my hope.David RobertsWhat you want to do just in terms of broad, big picture for the industry is get the low hanging fruit first. Build a bunch of plants, get the learning, bring the cost down.Jamie BeardLearning curve.David RobertsAnd it's not necessarily the case that the places the coal plants are, are where the low hanging fruit is.Jamie BeardRight, exactly. Though some of them are.David RobertsNo reason to start there.Jamie BeardYes. And we're going to find the ones that are, because some of them are, but not all of them are. And you are exactly right. That where we start is baby steps. And that is exactly, David, how shale happened. Right. We ended up with a little bit, a little bit, a little bit more, uhoh, this is a lot, a lot, a lot, bam. Change the world. Right. And it was just like this was about taking baby steps. And so for geothermal, it'll be the same. Right? Let's go and find the easiest stuff to do first. That's probably going to be in sedimentary basins, because they're soft, the rock is soft, and oil and gas, for instance, understands how to do it because they've been doing it for shale.David RobertsWell, let me ask this, because I had a pod recently on learning curves and on what kinds of technologies do and don't get on them. And a big piece of what gets on a learning curve is technologies that are more modular, more factory produced, and not so kind of bespoke to each individual location. So I'm curious sort of in the current state of play for geothermal, how bespoke is it in an individual location? How modularized is it? And what room is there to sort of modularize it in a way that will accelerate that learning?Jamie BeardIt is the perfect example of getting on a learning curve and particularly transferrin from oil and gas to geothermal. I think, David, you saw it recently we published a report called The Future of Geothermal in Texas. And there was a chapter in that report that dealt with transferable learnings from oil and gas and learning curves. And the outcome of that report was essentially, well, hell, if we just transferred what we've already got, let's not even talk about what we need to develop or what we could. Let's just talk about what we've already got in oil and gas and let's transfer that into geothermal.How much do we reduce cost off the top? Just transfer what they already do in oil and gas into geothermal. And yeah, modular, the way they do oil and gas, David, is called pad drilling. It's manufacturing. It is ultra-modular. I mean, they literally stamp out oil and gas wells, 200ft from one another in a line. Right. It's manufactured. Right. It's the definition of modular. But if we grabbed all of that technology and just transferred it in wholesale to geothermal. No innovations required. We've got 43% cost reduction off the top for geothermal. That's huge, right? I mean, that is not considering new stuff.That is what we've already got. That is a huge opportunity. Huge opportunity.David RobertsThis is another good segue then, because I want to talk about this larger sort of relationship between oil and gas and geothermal. This is of course your bailiwick, your sweet spot. This is your bag. So this is another one of these sort of like folktales about geothermal going around. Oil and gas, You can just transfer to geothermal. Same skills. It's great. It's going to cause this flow.Jamie BeardIt's becoming a headline too. Yeah, it's another cute headline.David RobertsYeah. I'm just curious, to what extent is that a reality? Number one, to what extent are the skills really transferable? And number two, to what extent is it happening? The geothermal industry is so tiny compared to oil and gas, so it's not like leakage to geothermal is going to show up in the statistics of oil and gas employment, I think, anytime soon. In a major way. I mean, tell me if I'm wrong.Jamie BeardBut no, you're not wrong.David RobertsWhat is the nature of that? How much of that is reality and how much of that is acute headline?Jamie BeardSo I think the headlines get it a little bit wrong, but I think we need to look at it differently. So we need to adjust what we're thinking here. So skills transfer and all that? Yes, I mean, almost 100%. It is so synergistic in terms of skill set, transferring from oil and gas to geothermal that we're talking about minimal training certificate level, let's just get you up to speed kind of thing, but otherwise go.David RobertsInteresting, so drilling really is just drilling then.Jamie BeardIt is drilling. Drilling is drilling. You're either drilling for oil, you're drilling for heat, you're drilling for water. It doesn't matter, you're drilling.David RobertsRight.Jamie BeardSo when it comes down to it, awesome. So you've got this highly skilled workforce of millions globally. Let's go, right? We don't have to build that for geothermal. It's there. So how do we transfer it? Right, well, this is my opinion. We transfer it not by taking people out of oil and gas and putting them in this nascent and tiny industry we call geothermal. We do that by turning the geothermal industry into oil and gas or vice versa. Right, so we get the oil and gas industry to look at geothermal as a viable and exciting future business model where they themselves, the oil and gas entities, then become massive geothermal developers and producers using their own workforce.David RobertsRight?Jamie BeardAnd we've started to see that already. We're starting to see the very beginning of that trend where you've got Chevron that's about to develop a geothermal project in California.David RobertsIs there a big major, is there an oil major with like a full fledged geothermal ...Jamie BeardTeam!David RobertsDepartment, team, whatever.Jamie BeardThey all have them now, all of them. And David, in 2020, when you did your article, none of them had them.David RobertsInteresting.Jamie BeardThat's how fast this is happening. Every single oil major has a dedicated geothermal person. Some of them have like VP of geothermal. We've got executives in geothermal now with whole funded teams. Some of them have a portfolio of geothermal companies that they've invested in. I mean, this has all happened in the last three years. So we're talking about traction. Like, read David's article first to get a 2020, but then between 2000 and 2023, there has been so much that's happened within the oil and gas industry for geothermal.David RobertsAnd in terms of their motivations, the oil and gas majors motivations, how much of this is hedging against us being in what is possibly a dying industry and we need something else to do versus geothermal actually being like remunerative to the point that it would actually attract their attention regardless.Jamie BeardAll right, both I think if you're an oilfield service company or a drilling contractor, so you're the one with the skilled labor and the rigs. You're looking at geothermal and thinking, okay, there's our future business, right? They need rigs, they need drillers. That's what we should do. Right? So you have some very fast movers in that space and they are leading the pack in oil and gas. So you have like Baker Hughes is out there kicking butt. They're one of the ones that has a geothermal team and they're out there really pushing another one Neighbors Drilling contractor, just really pushing hard and getting out there and making investments.That's awesome. But you have the operators, the majors, like the Chevron, Shells, BPs of the world who are also looking at geothermal and thinking, where in the world is this most relevant for us in terms of where we own assets, where we operate assets? How can we pull geothermal in as a value add into a portfolio and eventually, maybe, build it into a massive, globally scalable opportunity where we're drilling millions of projects, right? And so you look at geothermal in terms of scale. If we were drilling at the scale of oil and gas, if we're drilling geothermal at the scale of oil and gas, we solve energy.That's it. We solve energy by 2050. Right? And that's the opportunity for oil and gas.David RobertsSo you genuinely think it's not a PR play for the big oil and gas?Jamie BeardNo, I mean, you can't greenwash with geothermal, right? It's core competency. I'll be the first one to say it. You go on any majors website and they've got wind turbines splashed all over the place.David RobertsAlgae. They used to have algae.Jamie BeardYeah, algae, whatever. Solar panels. I mean, you'd think you were at a solar manufacturer or whatever. You're on oil majors website, it's all crap, right? I mean, that is greenwashing. Absolutely. If you look at the scale of their renewables investments versus the scale of their investment and their core competencies. Note, core competencies meaning subsurface. So what do we do with that? Well, we grab that core competency and we turn it to something that is future facing, right? Which is like, fine, stay subsurface experts. Awesome. Do CCUS, geothermal, and mining because we need lithium and we need clean, baseload power, right?And we need to store a whole lot of carbon. So you all are the subsurface experts. Go. And that is really working. And I don't think you can really shake a stick at that in terms of greenwashing because it's core competency. They're doing what they know how to do.David RobertsAnd I have to believe that there are as a card carrying greeny, I have a deep and abiding hostility toward oil and gas companies. But I have to believe there are people in there who are good people and want to do good things. And this is an actual I know you share this sentiment. This whole notion that they were ever going to get into renewable energy in a big way I thought was always kind of silly. It's just a different just a completely different business.Jamie BeardNot the same business model.But this, I have to believe that psychologically, there are a lot of people, oil and gas, who are gratified by this and excited by this because it's a real exit. It's a real exit out of the past into the future, not just BS hand waving.Yeah, you are absolutely right. Over the past three years in some of the majors. The way this has happened and built into what it is is through grassroots movements in the employees. They start beating down the doors of executives and having roundtables about geothermal and all of a sudden it builds into this thing. And all of a sudden they're presenting it to the board and the C suite and then they've got a program. I mean, that's awesome. And I can absolutely attest to oil and gas as a villain industry. It's not so easy to look at an individual across the table that works in the oil and gas industry and be like, you villain.That's not the case. Right. It's just not. I mean, these are people that love the environment and have families and are really freaking skilled at what they do. And they're humans, right? And you sit across the table from these guys and they know how to drill. Good Lord. Y'all go drill. Let's just change what you're drilling for.David RobertsYou made a point. I heard in another interview, which I found really interesting and you sort of implied it or talked around it a little bit so far. But I want to get straight at it, which is the question of how to scale geothermal up so that it's more than a niche, kind of extra. I was looking at the new electricity capacity installed sort of graph that the EIA just came out with and I was sort of gratified that you can actually see geothermal with the naked eye now.Jamie BeardOh, yeah, really? So it's like 1%.David RobertsYeah, it's like a tiny little stripe at the top. You can see it, but so we all want the idea is to scale it up so that it's a big player to rival wind and solar. Your sort of argument is that the way wind and solar got to where they are was by all kinds of policy help and subsidies over the course of decades, basically. And so if we want geothermal to follow that route, it will also take decades. And we don't have decades. So your theory, how do we scale it up quickly? And you have an answer to that, so that's what I like to hear.Jamie BeardYeah, I mean the answer to that is the oil and gas industry, right? So we can sit here and wait 20 years and fund startups to grow into giants and fund RnD and hope for the best. Or we can convince an incredibly capable and skilled industry that there's a market based approach here and that they can do what they know how to do and also solve energy and climate. And we're talking about the type of scale here that we start drilling for geothermal like we drill for oil and gas between 2030 and 2050. That exceeds world energy demand, I mean future world energy demand.David RobertsDo you mean if the scale of geothermal drilling were equal to the scale of oil and gas drilling?Jamie BeardCorrect. In number of wells per year, yes. So we're talking about if we did that, I'm talking about with conservative estimates too. So 70,000 wells a year globally, 10 megawatts a pop, which is pretty damn low for a geothermal project. We end up at 146% of future global energy demand by 2050, and that's for heat and for electricity, 77%. Bam.David RobertsInteresting. I mean, that's not going to happen, is it? That's like a theoretical boundary. But how realistic do you think it is to get to that scale that quickly? Like it would be? Not many industries have ever done that.Jamie BeardWell, oil and gas did it with shale, let's just do it again.David RobertsJust do it again. Is there as much money in geothermal as there was in shale, though?Jamie BeardWell, so, look, I think you have to ... you can't compare geothermal to oil and gas in that way, right? Because geothermal is never going to make for oil and gas companies what oil and gas makes for oil and gas companies. But you also have these companies trying to build offshore wind farms and struggling with single digit returns. Geothermal is going to be higher than that, right? So there's going to have to be a little bit of a shift where you look at geothermal as an oil and gas entity and you say, "Ha, we're probably going to max out at about 15% return, but hell, we can drill a million of them. That sounds pretty good. Let's go." Right, so there's going to be a little shift. It's going to be a lot of wells for less returns than oil and gas. And I think if you compare geothermal with wind and solar, it looks pretty darn good to an oil and gas company.David RobertsYeah. And of course, what the rate of return is, is somewhat affected by policy. So policy could get in there and at least tweak the incentives.Jamie BeardYou can keep having hope for this, David, you keep hoping for the politics and whatever. We'll just go drill in Texas or what ... you know.David RobertsIRA happened. Well, let's conclude here then, and let's just talk because I'm a policy guy. And I have to ...Jamie BeardI know you do that. You keep doing that, David. I love it. Somebody's got to work on it.David RobertsSo, two questions by way of wrapping up. One is, was there anything in IRA in the Inflation Reduction Act or the Infrastructure Act or CHIPS, now that I think about it, in the legislation that Democrats just passed, was there anything for geothermal? And did you feel like in all the frenzy of activity leading to that stuff, that geothermal had a voice up there in those circles? Like, does it yet have a voice? That's my first question. The second question is just what policy, if you were less cynical about policy and still had policy hopes, what would those hopes be for?Jamie BeardOh, good, these are great questions. Okay, so, yes, there was lip service to geothermal in the IRA, unfortunately not well fitted. So it's ITC and PTC, they're meant to apply now across all types of renewables with a longer time frame to benefit from them. The problem, though, with geothermal, particularly on federal land, is the development and the permitting. Time frame is so darn long that you almost can't even make it even with the extended window under the IRA. Your second question was, well, did geothermal have a voice? Clearly no, because we ended up in the same spot.Right. Where it's like, well, we're trying to fit geothermal, which is pretty darn unique, under a one size fits all policy to fit and solar and wind that are very streamlined in terms of permitting and much more predictable with very little ... no subsurface risk. Right, so it's like no, essentially no. Is it better than it was? Yes. But is it going to fix anything? No, probably not. So that's my answer there. I have hope for the future, though. I think when it comes down to geothermal, we're probably going to need to build a lot of individual state alliances that then go and build a coalition that go after federal.Right. So it's like when we get a bunch of states and governors and state legislatures involved and motivated and feeling like that geothermal could be a really viable future economy in those states. And this is what. We're doing right now in Texas, if we can build that across other states that would really benefit from geothermal in the future, we may have a shot at getting geothermal a more impactful voice on the federal level.David RobertsBut if that coalition came together, pressured the feds, and the feds did something, would that just be under the general heading of permitting reform, the kind of permitting reform that everybody is clamoring for now, or is there something more unique?Jamie BeardNo that's so boring. Yeah, you told me I could pick just whatever, right? In terms of what the federal government could do, that would be really cool and impactful. And if you're going to let me have that leash, I will just take it and say, yeah, sure, fix permitting. Yes, please. But that's easy. If we want to really accelerate geothermal in a way that it catches geothermal up with other renewables, that geothermal has been substantially underfunded comparatively. Right. If we really want to catch geothermal up, then we need to say make an office of subsurface energy, put geothermal CCUS and lithium in it, and build it ARPA-E style.Interesting, right? So we've got high risk, high reward type, big investments going toward trying to figure out how to do all these three things really well.David RobertsDOE has got the Earthshot, right? I mean, it's putting some money toward that kind of stuff.Jamie BeardYeah, but David, we're talking about like $200 million here, $100 million there, and we're comparing that for geothermal with a billion here and a billion, right? And so it's like, what are we doing? You all right? What are we doing here? So I would put the billions in the office of subsurface energy, put an industry advisory board, engage with that, and go, that would be ARPA-E style, high risk, high reward. How do we build this fast? Go, if I was in charge, that's what I would do.David RobertsSo the game plan then the strategy here is get oil and gas interested, get them moving, get them funding startups, get them interested, get states interested and on board via oil and gas being interested. And then take your coalition of states and oil and gas industry to the federal level and move the Feds on permitting and just general more attention and money to Geothermal. That's the game plan.Jamie BeardThat's the game plan. InnerSpace is launching ten more. So we did the future of geothermal in Texas. We just published that a couple of months ago. We're launching ten more states this year.David RobertsOh, interesting.Jamie BeardWe're building the coalition.David RobertsIs Washington just at a ...Jamie BeardNo sorryDavid RobertsNo geothermal activity in Washington?Jamie BeardNo, it's not that. Washington is great. You've got awesome geothermal resources. We're focused though, on oil and gas state, traditional energy states, oil and gas states, right. So we're really focused on states that have a real interest in their current oil and gas economies and focused on getting them excited about building that into a geothermal economy.David RobertsI got to say, if you manage to navigate the red-blue divide with an energy source without getting Hoovered into culture war on either side, that's going to be a real historical accomplishment.Jamie BeardYeah, that's something to keep eyes on. More on that later. We'll talk about that one. We'll come back in a couple of years, David. We'll see. How that's going.David RobertsAwesome. Well, the pace things are going, I'd love to have you back in three years. I'm sure it'll be transformed. Exactly. We'll be on to some other use for lasers. All right, Jamie Beard of InnerSpace, thank you so much. I've been meaning to have you on forever. This is beautiful. This is exactly what I wanted. Thank you so much for coming on.Jamie BeardAwesome, David. Thanks so much. This is fun.David RobertsThank you for listening to the Volts podcast. It is ad-free, powered entirely by listeners like you. If you value conversations like this, please consider becoming a paid Volts subscriber at volts.wtf. Yes, that's Volts.wtf so that I can continue doing this work. Thank you so much, and I'll see you next time. Get full access to Volts at www.volts.wtf/subscribe

The exact definition of “clean” hydrogen, interconnected with the definition of “clean” electricity, has enormous implications for the distribution of federal tax credits to boost the industry. In this episode, hydrogen expert Rachel Fakhry of the Natural Resources Defense Council discusses what’s at stake.(PDF transcript)(Active transcript)Text transcript:David RobertsVolts subscribers understand that a decarbonized energy system will require lots and lots of hydrogen, to store energy and to serve as a fuel in applications that are otherwise difficult to decarbonize. They also understand that while 95 percent of the world's hydrogen is currently produced using fossil fuels, there is a carbon-free way to produce hydrogen.It involves running electrical current through an electrolyzer, which splits hydrogen out of water. (Volts listeners heard all about electrolyzers a few episodes ago.) But the resulting hydrogen is clean only if the electricity that is run through the electrolyzer is clean. That's the recipe for clean hydrogen: clean electricity plus electrolyzers.Democrats also understand the need for clean hydrogen to scale up quickly, and they included tax credits for clean hydrogen production in the Inflation Reduction Act. And therein lies the rub. The IRS is currently in the process of determining exactly how those tax credits will be structured and to whom they will be available. At issue is a question that sounds simple but turns out to be devilishly complex: what exactly counts as clean hydrogen? More specifically, what exactly counts as clean electricity?The details matter enormously — up to $100 billion worth of subsidies are on the line. Big companies from BP to NextEra are lining up to try to make the standards as lax as possible, to maximize their short-term profits. But lax standards could perversely end up increasing greenhouse gas emissions, as electrolyzers come online, gobble up the available clean energy, and push grid managers to start up fossil fuel plants. (For more, read Canary Media’s deep-dive series on the hydrogen tax-credit battle.)To get to the bottom of all this, I’m excited to talk with Rachel Fakhry, who runs the hydrogen and energy innovation portfolio at the Natural Resources Defense Council, about the technical details of this fight, the ability of the industry to meet higher standards, and the enormous stakes involved, for the industry and the larger project of decarbonization, in getting it right.So with no further ado, Rachel Fakhry. Welcome to Volts. Thank you so much for coming.Rachel FakhryThanks so much for having me Dave.David RobertsYou're brave to come on and address this subject. It is big and complex and hairy. There's a lot of ins and outs, "a lot of strands in the Duder's head." So let's start. So we get we need a bunch of hydrogen. We get we need it to be clean. We get basically what clean hydrogen is, sort of. So let's just start first by talking about what are these tax credits? What does the Inflation Reduction Act contain for clean hydrogen?Rachel FakhrySo the IRA offers one of the largest subsidies for clean hydrogen in the world. It is a production tax credit which ranges between $0.6 to up to $3 per kilogram of each hydrogen produced. And the three kilogram, as I'm sure we'll talk, is kind of the big prize that all the projects are gunning for. It is a technology-neutral credit. So there's no colors green, blue, pink, any of that. It all depends and is tied to the life cycle greenhouse gas emissions of hydrogen. That top prize of $3 can only be eligible for clean hydrogen that achieves zero point 45 kilogram of carbon per kilogram of hydrogen relative to today's status quo hydrogen that's gas derived uncontrolled, which is roughly around ten.So to get that top rise, you have to reduce emissions from status quo by 95%, which is a lot.David RobertsRight.Rachel FakhryYou have to be very clean to get that. And it's a very long list credit. It lasts for ten years for each project that gets it, and projects that commence construction as late as early 2033 would still be eligible. So what this means is that by 2045, you could still have hydrogen projects that are getting taxpayers dollars. Even if we think the technology is going to improve and drop in price and so on, there are going to be projects still heavily subsidized.David RobertsYeah, it's a lot of money. One thing I would add, just in case listeners are not familiar ... listeners have probably heard production tax credit and investment tax credit, PTC and ITC, tossed around just for anybody who doesn't know a production credit, you get a certain amount of money per quantity of the subsidized thing produced. So, in other words, this is you get the subsidy per ton or per kilogram of hydrogen produced versus the investment tax credit, which subsidizes capital costs of building the thing in the first place. And these have somewhat different dynamics, which I think we can return to later.But this is specifically, it's the production of hydrogen per kilogram that gets the subsidy. And you note the subsidy for the lowest, for the cleanest hydrogen, is $3 a kilogram, which is huge. What's the next tier like? What do you get if you don't quite reach that threshold?Rachel FakhryIt's a big cliff. You drop from three to one dollars per kilogram.David RobertsWhat?Rachel FakhryYeah. And this is, I think, an excellent indicator of the type of hydrogen Congress really wanted to incense. They really wanted to incent the cleanest of the cleanest.David RobertsYeah. So this is actually an important background fact about these subsidies, is they're non-linear. They don't scale up linearly with the cleanness. There's, as you say, a big cliff like the jump from not meeting that top threshold to meeting it gets you from one dollar per kilogram to $3 per kilogram, which is a huge increment. So all of which is to say, how you define how exactly you structure who is in that top tier matters enormously. There's an enormous amount of money on the line.Rachel FakhryAbsolutely, we'll get to that. But it all hinges on how treasury guidelines will look like for determining the life cycle greenhouse gas emissions, which in turn will determine whether you get the top prize or something much more reduced. But since you mentioned that it's a lot of money indeed, this is an uncapped credit. It depends on how much hydrogen you actually produce, but we think this could be more than $100 billion. Our colleagues at Energy Innovation have produced a really useful number, essentially taking one of the larger hydrogen projects being announced in Texas between AES-Air Products, large electrolyzer powered by wind and solar on-site.They estimate that between the hydrogen tax credits and the renewable tax credits, it could be a $30 billion subsidy for just one project.David RobertsHoly shit. So I just want to flesh that elbow just to make that clear for listeners. You have a big sort of solar and wind renewable energy installation attached to an electrolyzer in this Texas project and you're getting the tax credits for wind and solar and you're getting the tax credits for producing the hydrogen. That just means like, as you say, $13 billion. That's a huge ...Rachel FakhryIt's a $30, actually 3-0.David Roberts$30 billion in subsidy. Criminy, yeah. So the point is, as a background for all the rest of this discussion, we are dumping a ton of money on clean hydrogen specifically, all of which is to say this fight over how to define it, over what counts and what doesn't is not an arcane technical matter here.There are billions and billions and billions of dollars of subsidies on the line depending how we answer these questions that we're going to get into.Rachel FakhryThat's absolutely right, Dave. Yeah.David RobertsSo NRDC and a coalition of partners has put forward what they call the three pillars of clean hydrogen. Did that originate with you? Where did the three pillars framework come from?Rachel FakhryI'm happy to say we had nothing to do with the origination. Also very happy to claim credit. The three pillars are decidedly not new. They're already at the heart of a debate around the effectiveness of voluntary renewable corporate procurement. So these are not new dynamics we're bringing to the hydrogen debate. We're actually having the hydrogen debate ride the broader issues within the market like any other energy resource.David RobertsSo these three pillars are the idea is if you meet these three criteria, then you count as truly clean hydrogen. And every one of these criteria is controversial. Every one of these is being fought out now between industry that wants lax standards and your coalition that wants strict standards. So let's go through the three pillars.Rachel FakhryGreat.David RobertsThe first one is additionality, which I think people probably have some vague familiarity with. But let's spell out what it means in this context.Rachel FakhryBefore we do that actually, just to step back on a couple of things. Yes, you're right. There's a lot of contention around at least two of the three pillars. But it's funny because everyone is kind of picking and choosing what they like and don't like. So you have folks who are fine with hourly matching others who are okay with additionality. So everyone will get to it. But within the opposition, we're seeing this kind of like cherry picking within the bouquet of pillars, what works and what doesn't work. But let's start with why do we even need the pillars? And as you noted, the pillars are additionality, deliverability, and hourly matching.So why do we even need those pillars? As you've alluded to, the credits entirely hinges on how the lifecycle of hydrogen or lifecycle emissions of hydrogen are determined, which means that the Biden administration treasury, in collaboration with the OE, EPA, and the White House, will essentially determine how this credit will impact our energy system. But calculating life cycle greenhouse gas emissions can be quite tricky, and the complexity really varies from project configuration to another. So, for example, if you have an AES-Air Products-like project where you have a big electrolyzer not connected to the grids, only powered by renewable energy on-site, easy, that's a zero emissions rate.However, when you move to a different configuration of electrolyzers that are grid-connected, drawing grid power and buying credits or offsets to net out those emissions, it becomes really complicated. And this is the classic kind of complexity of offset systems.David RobertsYes, anybody familiar with the arguments over offsets will be somewhat familiar with these concepts.Rachel FakhryExactly. So we need some parameters and rules around how these offsets are accounted for since there's so much money at stake and so much emissions at stake. And this is especially true for electrolysis. Now, electrolysis is an energy-hungry process, which means that even if it draws small shares of fossil fuel electricity, that would have significant emissions. So, for example, an electrolyzer that is powered by the average grid today would have twice the emissions of status quo hydrogen and 40 times the threshold of 0.45 threshold to be eligible for the $3 per kilogram.David RobertsYes. That's so wild that I just want to put an exclamation point next to it. So everybody understands our starting point here is if you just make your electrolyzed hydrogen with the average grid electricity, with the sort of average mix of sources that we have on the US grid. Not only will you be 40 times more carbon intensive than the threshold for the subsidy, you'll be twice as carbon-intensive as making the hydrogen directly from fossil fuel. So the difference between drawing on, as you say, this project in Texas has its own renewable energy installation next to it. so right, it's very clear where that's getting energy.The difference between that getting clearly clean energy and getting average grid energy is not a small increment of greenhouse gases. The average grid electricity is vastly more carbon intensive than what we're aiming for here. So all of which is just to say you can't just build an electrolyzer and plug it into the grid and call it clean because you're not getting clean power. Basically.Rachel FakhryThat's absolutely right. So if we are subsidizing projects that have twice the emissions of today's status quo hydrogen, then that's going to increase your emissions of the system as a whole. And now this is inarguable, what we're seeing coming out of Princeton. An upcoming study by Energy Innovation, a recent study by Rhodium Group, all agree that absent the three pillars which we'll discuss, emissions will increase in this decade, completely contrary to where we need to go and subsidized by what is a climate bill.David RobertsYes, it would be wild to spend $100 billion of public money to substantially raise carbon emissions. That would be a perverse outcome, let's just say.Rachel FakhryAbsolutely an awful story. Let's now dig into the pillars. You can think of them as parameters around those offsets that will be used, that are the only ones that will ensure that the offsets are effective at truly netting out all the emissions being driven by electrolysis. Happy to dig into it some more, but I should note from the outset that after a thorough legal analysis, I can announce with confidence that the three pillars are legally necessary and that treasury has all the authority it needs to implement them rigorously.David RobertsAnd I want to get into this a little bit later after we go through them, but my question is, can they not are they legally allowed not to use them? Because the industry is encouraging. But we'll get into that in a minute. First, we've been talking around the three pillars. Let's go through them. The first one is additionality, which people, I think energy aware people understand is if you just plug your electrolyzer into the grid, you're getting grid power, which is dirty. If you plug your electrolyzer into the grid and specifically consume renewable energy from the grid, the way that where you can just buy renewable energy certificates RECs, and say, I consumed this much and I bought this many RECs to offset it.If you're doing that, you're not necessarily using clean energy because you're drawing from existing renewable energy, which means whoever else was using that existing renewable energy now gets bumped to something else, et cetera, et cetera. Bump, bump, bump down the line until the last person in the line is using whatever gets turned on when demand exceeds supply, which is generally fossil fuels. So all of which is just to say you're not using clean energy unless you're using new clean energy that you are bringing online to power your project. Is that roughly the sum of it?Rachel FakhryThat's absolutely correct. If you're going to bring new load on the system as an electrolyzer, you have to support new clean supply or additionality, although we're starting to move more towards new clean supply, which is going to be a more intelligible term for a lot of people. As you said, if you add demand to the grid, you don't bring new supply with it. As you say, the marginal generators will turn on to supply the added demand, and this will be gas. So you're going to end up having highly emitting hydrogen without supporting nuclear supply. And I always like to use this kind of visual of a world where additionality or new clean supply are not required.This means that technically all existing nuclear generator in the US can sell their credits for hydrogen production because there's absolutely no requirement for the credits that will be used to offset emissions to come from new resources. They can come from existing resources which could be nuclear generators. There is enough nuclear generation to supply enough nuclear credits to dwarf even a high estimate of hydrogen production between now and 2030. So what this means is hydrogen production between now and 2030 where hydrogen electrolyzers could plug to the grid, do absolutely nothing, draw on grid power, have high emissions and purchase these cheap nuclear credits without really doing anything to the grids to really net out their emissions.David RobertsRight? And just to reiterate, all that power that is going to the electrolyzers from the nuclear used to be going somewhere else. So whoever was using that power before that's now additional demand on the system. And again, when demand exceeds supply, the marginal generator gets turned on and that's fossil fuels. So all those electrolyzers coming online and simply claiming that nuclear power, you'd get the truly perverse outcome of the electrolyzers claiming to be clean, but total emissions on that grid going up substantially.Rachel FakhryThat's correct. Absolutely. This is becoming, I think, inarguable in many sense that additionality is fundamental for the system to remotely work. And again, this is corroborated by all the studies that we're seeing here princeton Energy Innovation, Rhodium, and many, many EU studies which we can glean a lot of things from.David RobertsBut you say it's clear and fundamental nonetheless. There are industry players specifically saying that the additionality, I mean, the additionality pillar is sort of the main axis of dispute here. This is precisely what big utilities don't want, an additionality requirement. And they have a lot of arguments for why. But one of the things they say, one of the arguments they had, which struck me as at least semi-plausible, is their sort of thing is you're doing these models like Princeton modeled all these electric ledgers coming online without the additionality requirement showing that it raised substantially raised grid emissions.The industry's counter is, well, we have all these broad emission reduction policies. We got like cap-and-trade in Washington and California. We got the EPA coming out with standards on power plants and we got blah, blah, blah. So it's just not plausible that emissions overall are going to go up. It's the broader economy-wide emission reductions that are going to take care of emission reductions that shouldn't be our responsibility, basically, like we should just be able to use the existing clean energy.Rachel FakhryLet's address that because we always hear this argument, right? Like why are you adding all these rules when the grid is getting cleaner and everything's going to be merry and great and we don't need to think about it? Let's take the IRA because it's always posited as the reason why we know the grid is going to get cleaner, so we don't have to worry about anything. The IRA is historic, right, and we're all very excited about it. And it has the potential to be a game-changer for the market. However, it's mostly carrots, very little sticks, so the outcome of it remains really not guaranteed.We have a lot of work to do to make sure it's implemented in a way that actually delivers on all its potential. That's one, two, no matter how clean the grid gets in the next seven, eight years, you're still going to have the issue of marginal emissions. Right. Because marginal generators for the foreseeable futures will still be gas. So even if the grid is getting on the whole cleaner, and your electrolyzers are still running during those evening hours when the sun isn't shining, the wind isn't great, turning on marginal emissions or marginal generators, that would still be, on the whole, a very dirty hydrogen resource.So essentially basing loosening up rules based on the hubris that everything is going to become clean. So when I have to worry about it, it's just demonstrably false.David RobertsYes. It seems premature to be making policy premised on the notion that we're going to succeed in this long term thing of reducing emissions. It's a little early for that.Rachel FakhryExactly. And actually, right before I came in, I was doing a quick back of the napkin envelope calculation. Even if the grid were to be 80 plus percent cleaner than today, by 2030, you really still don't have a lot of margin to use grid power. No more than 10-20%. Again, electrolysis is power hungry, so even the smallest amount of fossil fuels will blow you right out of the IRA threshold.David RobertsRight. And I'll pause to say this, and I might repeat it a couple of times throughout the pod. This is not to say that an electrolyzer can't plug into the grid and start making hydrogen. It's just to say you're not going to get $3 per kilogram of subsidy if you do that. Right. These are not like harsh restrictions. We're talking about whether we're going to give you tens of billions of dollars. That's not the mean parent.Rachel FakhryExactly.David RobertsIt's just some basic rules. We don't want to subsidize increased emissions. So it sounds simple, right? Like, if I'm I'm going to bring an electrolyzer online, I just bring a solar farm along with it. I use the solar farm's energy to run my electrolyzer. That's clearly additional, right. If I'm building on site renewable energy next to my electrolyzer at the same time, that's clearly additional. It's not as clear in some other fuzzy cases. So, like, let's say I come online and I sign a PPA for power with a solar and wind farm that was built a year and a half ago.Right. So it's new-ish, but it's also the case that maybe if my electrolyzer hadn't come online, that clean power would be going to someone else, so I'm just displacing existing clean energy. So what exactly in these edge cases? What are we defining as new and additional? Is there some sort of threshold like the renewable energy must be built within six months, or how do we get specific there?Rachel FakhryYeah, that's a great question. There are several schools of thoughts. We haven't settled it. I think everyone agrees that this has to be the most straightforward way for developers, because, believe it or not, we're not in the business of suffocating this industry, Dave. We just want to make sure it's actually clean and in line with what we need. So you have a school of thought that says, look, simplify, just say anything after the IRA, or anything built after the IRA will count as new.David RobertsFor ten years.Rachel FakhryYes, exactly. Yes. Pro. It's very easy to administer. I'm not a big fan of it because you put it well, this would have been built anyway. So by adding demand to a system that was being built not for me, something else will turn on the system, and that will likely be at least a mix of fossil fuels. You have another school of thought that wants to mirror what the EU did, the Europeans did. So they adopted a moving vintage, as opposed to that fixed vintage, and said, okay, additionality counts as a PPA signed with a new window solar farm that comes online within 36 months of the electrolyzer.That is interesting. It's not perfect, but we have to be able to administer the system. I like this moving vintage. You can add the condition that additionality could be met by showing, say, in signing the PPA, that the electrolyzer accounts for much of the financial risk or helps secure the funding. You could add more conditions, but I like the moving vintage a lot more than the fixed vintage. And then you can layer on some PPA conditions to carve out the incremental financial effect of adding electrolyzer on the grid to window solar farm.David RobertsRight. And we should acknowledge in the end, there's some element of the arbitrary here because there is no absolute metaphysical correct answer in a lot of these cases. Right. Like, these are all about counterfactuals. Would the renewable energy have been built in the absence of this electrolyzer? And like any counterfactual, there's no definitive ... there's no way of being definitive. Right. You're just using heuristics in the end, you have to define some thresholds somewhere. But this is not an area where sort of precision and certainty are really possible.Rachel FakhryThat's correct. A system that works well, that is rigorous enough to minimize against the worst, I think, is good enough for us.David RobertsAnd the last thing about additionality is, of course, the big argument from industry is this will substantially raise costs, it will wipe out the cost advantage we have against existing gray hydrogen and it will strangle the industry in the crib and it will never get going. And in some sense, this is all too about a counterfactual. We're all arguing about what would happen if we did x and so no one can really definitively say, but what evidence do we have that that's wrong?Rachel FakhryThe dead on arrival claims obviously are being branded right that we are going to say ...David RobertsYes, dead on arrival.Rachel FakhryAbsolutely. So I would love to talk about the costs for the three pillars as a package because I think this is the really interesting one.David RobertsOkay, but yeah, let's put the cost off tour through the pillars then. That's a good idea. The second pillar is much more simple, we can get through it pretty quick. So the first pillar is additional. For your electrolyzer to be clean, it has to be drawing from new renewable energy. The second is regionality, which means your electrolyzer has to be drawing new clean electricity from the grid you're on, from the regional grid you're consuming on. So you can't just buy like if you're on a super dirty grid and you're buying clean energy, that's made in California, right?Like clean energy in California is not displacing nearly as much carbon as clean energy on your dirty grid where you're operating would. So grids are not equivalent right, in terms of carbon emissions. So you need to be displacing carbon on your grid. And that's pretty straightforward. And as far as I can tell, most everybody agrees roughly with this idea. I think insofar as there's any controversy, it's just sort of like where do you draw the line? What is the same grid? Is there controversies there worth getting into?Rachel FakhryYou're right, this is one of the least contentious pillars. Everyone agrees that there has to be some geographic bound to the clean energy you claim is netting out your effect.David RobertsRight.Rachel FakhryIn terms of how do you define the boundaries, there are several options that could work. We're still considering which one makes the most sense. The simplest one is to say, look, as long as the electrolyzer and the new clean supply are located in the same load balancing authority, that's good enough for us. That's very simple. However, it could have some issues because some load-balancing authorities are very large and streaked with a lot of congestion. Like for example, MISO is an excellent one, it's the one load-balancing authority and yet there's a big transmission constraint between MISO North and MISO south.Meanwhile, under that system you could still locate your electrolyzer and your new supply anywhere you want with disregard to the actual congestion and whether you're actually netting out your emissions with this clean energy project that you supported or not. So the other approach, which is a hybrid, quite interesting, and I'm leaning towards that one. It says, okay, let's break it out between RTO regions and non-RTO regions. Within RTO regions like PJM, MISO, ERCOT, so on. We have to look at the LMPS, which are a good proxy for congestion, locational, marginal prices, right?David RobertsAnd those are set around a particular node on the grid. And the node on the grid is what just is there a clear definition of what counts as a node? Is it just where there's a transformer or what?Rachel FakhryThat's a good question. I mean, usually, it's going to be the place that sets the price. I don't know how to explain it in engineering terms, unfortunately.David RobertsWell, just say it's the atomic unit. Let's say if you're looking at grids, sort of like a grid is made up of nodes.Rachel FakhryCorrect. And it's the excellent, kind of the best proxy. We have to understand the supply and demand dynamics around a granular piece of the grid. So I like this because RTOs already report LMPs they already report them and collect them and so on. So the notion is that electrolyzers and the clean energy supply that is netting out their emissions need to be located within a region where the LMP differential is not bigger than X.David RobertsRight?Rachel FakhryThat is a very good proxy for okay, there's no congestion between the two that's roughly deliverable or mostly deliverable projects. Developers already hedge against LMPS and signing contracts. This is not new to look at forecast of LMPS. So we think this is a familiar tool.David RobertsRight, so the data and information is there to make these calculations. Now, we wouldn't have to produce any new data, right?Rachel FakhryBut to continue that for non-RTO regions like the Southeast, where utilities don't necessarily report those, we're fine keeping it to the LBA or the load balancing authority because anyway, those tend to fit nicely with state boundaries. So congestion will not be unmanageable there.David RobertsOkay, so that's additionality got a new clean energy, regionality it has to be in some definition, local clean energy. And then the third pillar is another controversial one. This is temporal granularity, which to put it in a more human-normal way is just you need to match your consumption to production of renewable energy or clean energy on an hourly basis rather than the more conventional yearly basis. So again, Volts listeners who have been paying attention will be familiar with this general notion. There are lots of corporate players now like Google. Google wants to go zero energy.And the easiest low-impact way to do that is just say we consume X a year, we're going to go buy renewable energy certificates for X amount. Boom, we offset our use, we're clean. That's sort of like step one. But Google realizes that's not really accurately, that's not accurately about your emissions and how much you're offsetting. So Google wants to move to an hourly system where it's measuring how much its consumption is matching up to renewable energy production on an hour-by-hour basis, so that it can truly be zero carbon, so that it can truly offset its actual emissions in the actual world, not just as an accounting practice, right?So this notion is out there. So the idea here is that electrolyzers that want to be counted as clean should be required to do that. They should be clean on an hourly basis. This is extremely controversial for a bunch of reasons, but let's start what industry wants, or what the constellation or next era the utilities want is just they're like, look, we have this system of yearly renewable energy certificates, yearly RECs, it works perfectly well. Why can't we just offset our energy on a yearly basis like everyone else does? Why are you making us do this bespoke granular thing?So just what's wrong with yearly offsetting?Rachel FakhryYou've already teed it up really well. This is not a new dynamic, right? This is where there's much more demand for granular tracking to really effectively claim that you are powered by clean energy. Annual matching is just no longer seen as an effective way of reducing emissions and still sends a signal that fossil fuels are needed. And this exact same thing applies to hydrogen, right? So suppose there's a Dave Roberts electrolyzer contracted with a new solar power project, but you run this electrolyzer at night or both when the sun is shining, when there's no sun, turning on the marginal generator and producing very high emissions.However, you have the sufficient volumetric amount of solar RECs that were produced from the solar project you contracted with that are enough to on paper.David RobertsRight. So on an accounting basis ...Rachel FakhryCorrect.David RobertsI have offset my emissions. But in the real world, the solar is producing the energy during the day, I'm consuming energy during night. So in the real world, I consumed dirty power almost that entire time.Rachel FakhryAnd there's something perverse here, which is the cleaner the grid gets, the less your solar power will likely start abating emissions during the day because you'll have more solar on the system. And when you turn on at night as an electrolyzer for the foreseeable future, gas will always be the marginal resource. So on the whole, you'll be producing a lot more emissions than you're actually reducing. So it's an interesting perverse effect that may happen with a cleaner grid. All this to say that hourly matching is necessary to meet statutory requirements to meet the IRA threshold of 0.45 kilogram per kilogram to get the $3 per kilogram.And this is corroborated by, again, Princeton, upcoming Energy Innovation study, even Rhodium study, which was not very friendly to hourly launching in near term, found that without hourly matching, emissions could increase cumulatively by roughly 100 million metric tons this decade. Enormous, right?David RobertsWe spent $100 billion to raise emissions. 100 million tons.Rachel FakhryThere we go. That's the US scarce system for you. This is why we absolutely need this. It's corroborated by studies, you cannot reach the IRA threshold without tracking your consumption on an hourly basis with the clean energy project that you procured with.David RobertsRight. So there's two big objections to this from industry. The first is from industry and also is shared by some other analysts, which is just that the system of hourly matching, basically producing hourly RECs rather than yearly RECs is just not mature. It's just not ready. There's not enough people doing it. And forcing the industry to wait on that, getting stood up and sophisticated enough to work would delay the industry in these crucial first few years. So a lot of the argument is just over. How baked is hourly matching? How ready is it?Rachel FakhryYeah. I find this to be a little bit of a lazy argument because it clearly does not look at the state of play on the ground nor what the experts say could happen within less than two years. So I think now even for folks who are out there saying this is not doable in the near term, it needs time. Even those folks agree that there are no technical challenges to doing this. This is really not rocket science. Generation is already metered. Consumption is already metered. You just need a REC in the middle that can capture the hourly variations.David RobertsAnd people are doing it. It's not just that it's doable now, but people are doing it.Rachel FakhryExactly. The two biggest registries in the US. M-RETS and PJM are now offering hourly tracking. M-RETS has been doing this for three years, even in places where M-RETS and PJM, I mean PJM is new. But even in places where M-RETS does not track, there are third-party tracking mechanisms. There are utilities that are not sophisticated, necessarily smaller, kind of like Madison Gas and Electric, for instance, in Wisconsin offering 24/7 tariffs that require hourly matching. The momentum is in this direction. The Biden administration put out an executive order now requiring that the federal government by 2030 hourly amount.David RobertsThe federal government's going to have to start accounting for hourly ...Rachel FakhryIf the Feds can do it anyone can do it.David RobertsYeah. And let's just pause and stress here that PJM is a big Midwestern wholesale power market and balancing area that has developed and implemented hourly matching just in the last year. So this is like a big industry player. These are not like little startups or whatever that are doing this.Rachel FakhryAnd they did that because of customer demand. Right. Again, everyone tries to blame the pillars on hydrogen. The market is heading in this direction anyway. This is just about meeting what the law requires and making sure we're actually consistent with the direction of the market. So it's already being done. M-RETS has said multiple times, look, we're willing to track anywhere in the US or roughly anywhere in the US. But if registries want to scale themselves from annual to hourly, experts say, look, you can scale very fast because there are no technical issues here. You could scale within 12 to 18 months.That is much less than what electrolyzers will need to scale. Right. They'll need two years plus. So again, I always say it's a lazy argument because it doesn't take into account what's already happening, how long it took for it to happen, and how fast things can scale if everyone else wants to do it as well.David RobertsYes, and one thing I also point out is right now the big companies that don't want to mess with it, don't want to mess with hourly matching are whinging and whining about it. But if you put it on paper and made it a requirement, all of a sudden they would be advocates for it and boosters of it and would be accelerating it. This is the thing. It's like if there's $100 billion pot at the end of the rainbow, of course, utilities are going to figure out how to hourly match. Like utilities will do a lot of things for $100 billion, you know what I mean?So this whole idea that like, oh, thanks for offering the $100 billion, but it's such a hassle, come on guys, if there was $100 billion on the line, I'm pretty sure you all could figure out how to do this.Rachel FakhryAbsolutely. I mean, Hydrogen Europe in the European context was a big trade group for hydrogen companies and so on, who fought the European Commission tooth and nail for two years against hourly branding messages that this is not doable it's. Impossible after the passage of the European rules requiring hourly starting in 2030 but with no grandfathering. Which means project have to start doing hourly really effectively today. Anyway, they came out to say, yeah, this is doable, singing the same song. It's going to be more expensive, but hey, it's going to be doable. So it's a really interesting sneak peek into what you were saying of when there's such a big prize at the end of the tunnel and something already happening with all the technical elements already in place, we should not be worried, it should not happen, it can't happen, it will happen and it can't happen.David RobertsRight. Like you say, this whole fight went down in Europe and got settled and now they're doing it. So it's doable. So you're confident that if this was made a requirement by the time the first electrolyzers started coming online, which would be two or three years out at least, just to get them built, hourly matching could be ready. You're confident of that?Rachel FakhryYes, and I'm definitely not the expert about that. I have listened to the big experts who have done this, who are the ones who have the biggest stake in doing this. They all agree this could be done in a very short period of time and it's already being done. So technically, M-RETS, again, I have to repeat, can do it almost everywhere in the country. If there needs to be some nationwide harmonization between various regions and so on. This could be done really fast.David RobertsRight. So the other thing that sometimes comes up in the context of this hourly idea is that if you are really only going to be operating your electrolyzer in the actual hours where clean energy is producing, you are by necessity going to be starting and stopping your electrolyzer. You're going to be cranking it up when the clean power comes online and cranking it back down when the clean power goes offline because there's no point in producing if you're not getting that big fat subsidy. And the sort of conventional wisdom is, I think that electrolyzers are one of these big industrial applications where the finances, the business case depends on it running constantly and that if you force it to ramp up and down to matched coming and going power, you're going to ruin the economics and people won't build them.What do you say about that flexibility question of electrolyzers?Rachel FakhryGreat, let's address that and then definitely want to get to the cost because the jury is no longer out as to whether it's doable. Hourly margin is doable. Now the jury is out as to, wow, is it going to be super costly and suffocate the industry. So I would love to get to the cost piece, but on the flexibility, false period. Electrolyzers are designed for intermittency, specifically PEM electrolyzers. And I know you've had that great conversation with Electric Hydrogen and Raffi Garabedian. They're one of the foremost PEM manufacturers. They're designed for intermittency, so they can absolutely handle that. Now, this is where kind of okay, from a technical standpoint, there's nothing that stops electrolyzers from ramping up and down.Let's get to the cost piece, which is the real big one here. I think the first question we need to ask is what are the operational parameters that will make electrolyzer pencil out? Is it running 24/7 or something less than that? And what we're seeing is that they don't need to run 24/7 to achieve cost-competitive economics. It's somewhere closer to 50% to 70%. And the reason is that the more you operate, that's okay for your CapEx, that's good, but you're going to start capturing higher and higher power prices. Electricity prices are the biggest cost component of electrolyzer.So at some point you're going to start having diminishing returns with higher and higher operations. And that is not at all kind of new information. We've known this for a while. The IEA, IRENA, even Hydrogen Europe. Again, that industry trade group I mentioned have all agreed that or shown that really optimal operations are between 50% to 70%. So we've established it. We don't need 24/7 operations. We need somewhere between 50% and 70%.David RobertsAnd 70% capacity factor, what they call running 50% to 70% of the time.Rachel FakhryCorrect. Absolutely. The good news is what we're seeing from a range of analyses being done by developers, OEMs, independent research groups, is that with hourly matching. You can achieve those levels in many places in the US. And the winning strategy is to oversize a wind and solar hybrid in a region with decent wind and solar, it doesn't have to be best in class and you can achieve those levels of operation and be very cost competitive.David RobertsRight, just to flesh out that picture you just painted, because I think it's really interesting. So we were talking about how if you build an electrolysis and you build say, a wind and solar hybrid power plant next to it, attached to it, not even attached to the grid, just attached to it, obviously the resulting hydrogen is clean, right? That's the unambiguous case. Then there's a second option which is also unambiguously clean, which is building the same arrangement, connecting it to the grid, but never drawing power from the grid. Right. Only using the locally produced power, but then overbuilding that wind and solar power so that it's producing more than you need.And then exporting the extra to the grid as another income stream. So you get a couple of things from that. One, wind and solar tend to be anti-correlated, right? So like one's on when the other is not. So you're going to cover more of your get your capacity factor up and you get extra money from selling your extra renewable energy to the grid so that's the completely off-grid and then the sort of one-way connection to the grid. Both those are viable options where you're only consuming the local clean energy you generate. But in the second case, you're also selling excess clean energy, which is improving your economics.Rachel FakhryAbsolutely. And it could be good for the grid too because you're probably only going to sell that power during high grid hours or high grid prices.David RobertsRight.Rachel FakhryWhich means that the grid really needs it, right? So you could actually be helpful. You don't need to sell that much excess, right, because some folks are saying, well, what if you don't have that ability to sell your excess? The economics will still work. Oversizing a wind and solar hybrid seems to be a really interesting case for those early electrolyzers that need to run more than a certain share because they're so expensive.David RobertsSo you oversize your wind and solar to the point that you get your electrolyzer up to the capacity factor that you need it to be economic. And then if you just curtail the rest of that wind and solar waste, it basically still the economics work out you say.Rachel FakhryWhat we're seeing, yes, it would still work. The credits are rich enough to make things work. And let's translate the credit from a dollar per kilogram to a dollar per megawatt hour because folks kind of understand the dollar per megawatt hour a little bit more.David RobertsRight.Rachel FakhryAt the current efficiency of electrolyzers, you can generally produce about 20 kilograms hydrogen per megawatt hour of power you consume. You're getting $3 per kilogram for every kilogram of hydrogen you're producing. So that's a total of roughly $60 per megawatt hour of subsidy, which means that you're willing to pay power price of up to $60 per megawatt hour and the PTC is still going to kind of make you whole. Now, things are a little bit more complicated than that, but this shows you just the significance of this subsidy in terms of how much it could reduce the input costs to your system.David RobertsRight. Coming back again to the enormous size of this subsidy relative to the industry. So the industry's sort of complaint, as is familiar with the proposal for any new regulation of any kind, is that this regulation will cripple the industry. It's too much, too restrictive, too much hassle. It's going to strangle the industry in the crib. It's not affordable. And just to throw a specific worry in there amidst that, one of the sort of concrete worries is that if these restrictions raise the price of green hydrogen in the short term, one perverse effect might be that more of the market turns to blue hydrogen, which is hydrogen made with fossil fuels, but then with carbon capture and storage attached to it.And that carbon capture and storage is also going to get a big fat subsidy out of the inflation reduction act. So the worry here that I've heard articulated is you make truly clean hydrogen more expensive. You're just going to shift the whole market to blue hydrogen and then they're going to get sort of locked in. You're going to get path dependence, you're going to get blue hydrogen sort of making itself a place in the market, even though everybody knows in the long, long term we need it all to be green.Rachel FakhryRight.David RobertsDo you think there's anything to those worries?Rachel FakhryI would love to say one more thing before we close up on the pillars because it kind of is related to this argument that oh, we're going to suffocate the market so much that blue is going to win. What is really interesting in what we're seeing from opposition to the pillars is something I alluded to earlier, which is we're now seeing the opposition sort of splitting. And you have renewable developers that do not like any of that starting to come around to additionality or new supply because it's like, hey, I could sell more wind turbines.David RobertsRight. Why on earth would they be opposed to this? This is a requirement that a bunch more renewable energy get built.Rachel FakhryExactly. This is where the hourly matching piece comes in. Right. So you have a next era in Florida that has very little access to wind, if any. Well, maybe it can't do hourly matching because it's going to be pretty low utilization of its electrolyzer if it's only following solar. Today that may not work. Now, in a few years, as electrolyzer prices drop and you can run your electrolyzer much less, hey, let the market be the market. Right? But today what we're subsidizing, we want to make sure they're actually clean projects. NextEra may not be able to do that.So now you have NextEra kind of saying, "Maybe additionality is fine, hourly matching is out of the picture." Meanwhile, you have Constellation, the nuclear giant, right? Would love to talk more about their plans because they're truly incredible. They're fiercely fighting additionality or new supply because it doesn't allow them to utilize a lot of their existing nuclear plants. But they love hourly because nuclear generates 24/7.David RobertsHourly is nothing to nuclear.Rachel FakhryNothing to nuclear, right? They come on top compared to any other resource. So you have Constellation fiercely supporting hourly, fiercely opposing additionality. So it's kind of a bouquet where everyone just chooses whatever maximizes their own.David RobertsWhatever is going to work best for their short-term profits. Let's just say.Rachel FakhryEmissions be damned. Right. But let's get to the blue hydrogen question because this is a new argument that I'm truly fascinated by. I don't see any evidence of that. So the 45Q carbon capture and storage tax credits are indeed generous and in some pockets of the US. Yes, indeed. We expect that blue hydrogen could be competitive and be deployed by utilizing the 45Q credits. But we're not seeing blue hydrogen projects' levelized cost of hydrogen dropping to less than $1, which is kind of the threshold for today's hydrogen, or dropping to even zero and negative, which we're seeing in some places in the US.Where renewables are particularly great. We're hovering around zero, right? So I don't see the huge subsidy that we're seeing in some pockets for electrolytic hydrogen. And blue deals with its own challenges. Right. You need to be close to a carbon storage basin. You may need carbon pipelines.David RobertsWell, you need carbon capture.Rachel FakhryCorrect.David RobertsThat works, which is itself. It's not something that's been shown in the US.Rachel FakhryExactly. Blue hasn't had a merry, or CCS hasn't had a merry trajectory so far. I don't know why blue hydrogen is going to just mushroom all over the place. If you take the one blue hydrogen project that's been proposed in Louisiana by Air Products, that's been held up in public opposition for months now. So besides the fact that CCS has not been easy to deploy, you have to be close to a carbon storage basin. You may need pipelines. Public opposition is a real thing here for more gas infrastructure. So it's one of these illusory scare tactics being branded that if you actually unpack dynamics, I don't see any evidence of that.David RobertsSo no worry about blue hydrogen. And I kind of agree. Everybody keeps deploying CCS in these theoretical model ways and I keep kind of thinking like somebody needs to actually go build a couple of these things and show that they work. Before we continue any of these conversations.Rachel FakhryBuild a couple that work. First yeah.David RobertsOne way to address the sort of notion that these three pillars raise costs too much is to point out that there are existing projects being built that will meet the three pillars that are penciling out. Talk a little bit about what we're seeing happen now.Rachel FakhrySure. The AES-Air Products project that we discussed, that's one of the bigger projects in the US. That's going to be three-pillar compliance.David RobertsAre they building on-site? They're entirely on-site renewables?Rachel FakhryI believe so, yes. Fully hourly matched. So it will go up and down with the production of wind and solar. Intersect Power, historically, big solar developer moving into hydrogen. They have a bunch of projects in the pipeline that are three pillars compliant. They're one of the best voices out there demonstrating this is doable. Right. And I do want to point that I know we've joked around and there's a lot of industry players that are trying to steer billions of dollars to maximize their profits. But there's a subset of industry players have been just excellent. Right.Intersect Power, Electric Hydrogen, whom you met with, Synergetic, others have been really just fantastic at showing that this is absolutely feasible. And if you look at Europe and the rest of the world, these three pillars compliant projects are popping up everywhere.David RobertsAnd the European hydrogen, whatever, body that has more or less came out and said, "We've looked into this, we believe the three pillars are doable."Rachel FakhryAbsolutely. I mean, everyone keeps pointing to and happy to speak to the EU case, but everyone keeps saying, look, they pushed their hourly matching to 2030. That's not doable. It's a wildly different context. First of all, if you look at, there's no grandfathering. So projects can start monthly, that's fine, but they have to switch to hourly by 2030. They sign long-term contracts. No one's going to sign a contract for 15-20 years based on first monthly matching and then hourly, they're going to set themselves up from the outset to be able to hourly match that's one.Two, the Europeans have a regulatory barrier to implementing hourly matching that we don't. They have to pass a federal law first, have it translated to 27 member state laws.David RobertsYeah.Rachel FakhryThat was one of the reasons why the delayed hourly matching, again, without allowing grandfathering, we don't have any of that. Right. So just the EU context keeps getting branded left and right, but the devil is in the details and we can glean a lot from that. And I'm hoping we can get back to that because it's an important example.David RobertsOne of the things you hear industry say is if you force us to make the hydrogen in close physical proximity to the renewable energy, we're going to end up like renewable energy far away from load. And that will mean we'll have to transport the hydrogen, we make long distances to where it needs to be used and that transport, the building of that transport infrastructure is going to sort of offset whatever emission gains you think you're making by forcing us to be near the renewable energy. You're not taking hydrogen, the transport of the produced hydrogen into account. So how do you think about that?Rachel FakhryWell, first of all, no one's opposed to grid-connected projects. So I don't know where this hypothesis comes from that we're forcing projects to be very close to renewables.David RobertsHey, if you well, at least in the region, right? The same region.Rachel FakhryCorrect. If you can do your three pillars and connect to the grids and produce your hydrogen closer to your load, that's great. We support that as long as you do your pillars. The second kind of comment I have to this is if you look at the map of where hydrogen demand is today, it's going to be in areas where there's a good resource of renewable energy. So it's mostly Texas and the Gulf, but also in the Great Plains midwest region for ammonia and refineries. And we know that those existing customers will likely be the biggest source of demand in this decade for clean hydrogen because they already have existing supply chains, and so onDavid RobertsMaking clean fuels.Rachel FakhryYeah, replacing existing status quo hydrogen with cleaner hydrogen. Let's put it this way. Yeah, that's going to be the bulk of demand in this decade. Which means that if you look at the map, you're not far off from sources of good within solar. Which means that this transport thing looks pretty manageable. If you consider where the sources of clean hydrogen in this decade will likely be, they're in pretty good resource regions. The third piece that I think is key to keep in mind is that the 45V tax credits are not the only subsidy on the table.Right? They can't solve every single industry problem. This is where it becomes kind of part of a menu of subsidies. So the DOE Hydrogen hubs, money biggest DOE demonstration project in its history, is going to help address a lot of these ecosystem issues.David RobertsYeah, the idea is to build these hubs where you're sort of like you've got the renewable energy and the electrolysis and the hydrogen consuming end use basically being built next to one another. So you eliminate ...Rachel FakhryAbsolutely. You have other stuff that you have the hubs. The Doe hydrogen shot is also spending a lot of money to create a hydrogen ecosystem. States are now passing and contemplating hydrogen-specific tax credits for end uses. So all this to say that we can't burden the tax credits with solving every single industry question, we can't gut them just because we want to think about all these things.David RobertsAnd also I'm inclined to say, like, look, guys, we're like we're subsidizing the crap out of the renewable energy, we're subsidizing the crap out of the electrolysis to the point that some of these projects basically the US government is going to be paying you to do this. You guys can maybe cover transport. It doesn't seem like a huge ask.Rachel FakhryI have a feeling they'll figure that one out. This feels to me like a grasping-at-straws kind of thing, but the transport is going to be impossible. There are options. Do grid connections just meet your pillars? Essentially.David RobertsLet's go back to Constellation for a minute because this is just a gripe, but I feel like I want to cover it. Constellation is a utility that is benefiting from recently passed subsidies designed to keep existing nuclear plants open. Right? There's a whole separate debate in the energy world. People are familiar with it. Should we let them close on schedule? Should we pay to keep them open? A couple of states have passed these huge subsidies to keep them open, and Constellation is currently wallowing in those subsidies. And it's worth noting a lot of the people who it is now criticizing and fighting against in this hydrogen debate are some of the very people who went to bat for it to get it those nuclear subsidies, right?Like it's now badmouthing Princeton's modeling. But of course, that crew at Princeton has been laying itself on the railroad tracks trying to get these existing nuclear plants subsidized. So just to say, like, we're wallowing in nuclear subsidies and now we want to turn around and be allowed to just plug electrolyzers into our existing nuclear plants and layer on a whole new giant subsidy is just like I don't know what the right word is. It's greedy. It seems crude and greedy if I'm being totally honest. Maybe you have nicer words.Rachel FakhrySadly, don't. Well, yeah, of course, they're not very happy with the Princeton folks who are kind of standing between them and enormous profits above and beyond what they were already doing. So fully agree with you. First of all, I think Constellation is basking in subsidies at this point. They're very well taken care of. Actually, right before this podcast, I was speaking to a nuclear lawyer, NRDC, and kind of asking her, hey, could you just remind me of all the subsidies that the nuclear can now tap into? She actually had to take a couple of seconds just to see where she could where to start because there are so many buckets.David RobertsGet the calculator out.Rachel FakhryExactly. So Constellation, as I alluded to earlier, is fiercely fighting and loving policymakers against requiring additionality or new clean supply because that would not allow them to utilize their existing nuclear plants for hydrogen production and maximum profits. No new clean supply or no additionality would be an absolute gold mine for Constellation.Yeah.They have two very lucrative options. One is to divert their existing nuclear power to hydrogen projects. So essentially collocate electrolyzer with their nuclear plant and divert a share of the output of that nuclear plant to hydrogen production. And this seems to be Constellation's main plan.As I mentioned earlier, the tax credits, the hydrogen tax credits are roughly equivalent to $60 per megawatt hour. Constellation is not getting that at the market. On the market, power prices are way lower than that. Maybe 2022 was an off-year, but generally, they're way lower than that. So they're like, "Light bulb. There's a huge lucrative opportunity for us to divert our power away from the grid and utilize this very lucrative opportunity to produce hydrogen with our power."David RobertsBasically changing nothing else, right, like just harvesting a giant new set of subsidies, having changed operationally almost nothing.Rachel FakhryAbsolutely. And that would be terrible for emissions. Could you imagine megawatts and gigawatts of diverted nuclear energy from the grid? That would be terrible for emissions, result in nefarious grid impacts in terms of prices, reliability, and emissions be damned. Actually, this is playing out in Illinois right now. This is Constellation's powerhouse where they have a lot of their nuclear capacity. They have plans to divert their power away from the grid. We estimate that emissions in Illinois could increase by 7% somewhere up to 45%, depending on how much of the output you're actually diverting and completely torpedoing over the state's clean energy goals.David RobertsYeah, basically wiping out the gains of their big, hard-fought, complex clean energy legislation, which they just passed.Which, by the way, supported Constellation, even if they're not getting a lot of money from it for multiple reasons. But it supported Constellation because supposedly it was helping support that decarbonization. So it's a perilous terrain that's, number one, it's divert our power, get $60 per megawatt hour. We're not getting on the market. Hugely lucrative option number two is just sell large volumes of credits, kind of like Rex, but for nuclear from their existing nukes, because there's currently no market for those credits outside of a few states. And this is a huge volume of credits. Right. As I mentioned to earlier, there's enough potential nuclear credits to completely cover all hydrogen production that we could expect between now and 2030.Rachel FakhrySo this is the same thing, is you're doing nothing on the grid, getting paid for generation already very heavily subsidized by the US taxpayer, and allowing electrolyzers to just plug on the grid, purchase credits that mean nothing, and increase emissions, right? So to sum up, this is a gold mine for Constellation without doing anything.David RobertsI mean, it's a gold mine for them, whichever way it turns out. That's kind of the rub here. Like they're awash in subsidy money no matter what they do. They're just trying to stack it now.Rachel FakhryAbsolutely. And again, emissions, impacts on the grid, so on and so forth, to be damned. So it is, unfortunately, blatant greed. And they're out there claiming that nuclear is getting left out and that this is unlawful. And the best part is that no one wants to outlaw the use of nuclear for hydrogen. There are options, right? For instance, if you operate your nuclear plant that can count as nuclear supply, you could do that. They refuse that, not lucrative enough.David RobertsYou could build new nuclear. Everybody keeps saying how great nuclear is, but why didn't build some new on it and hook that up to electrolyzer?Rachel FakhryWe even gave them the option of, hey, look at what the Europeans did. They said during low-priced hours, which are a good proxy for clean grid, we can relax hourly requirements and sell your credits during those low-priced hours because it's a proxy for some generator curtailing somewhere. So this kind of can count as nuclear supply if you spur that generator. Not enough hours for us. So we are not in the business of suffocating nuclear. We're in the business of making sure it meets the same requirements as everyone else.David RobertsRight. Or they could just make the hydrogen and not get a giant subsidy. There's no one telling them they can't do that. Again, nothing's being prohibited here.Rachel FakhryCorrect.David RobertsIt's just like if we're going to give you a bunch of money, we'd like to have a few conditions on it.Rachel FakhryAbsolutely. That's absolutely right.David RobertsSo just to review where we've been so far, there's these three pillars that characterize truly clean hydrogen. It's additional. It comes from new energy, comes from energy that's on the same grid you're on and it is matched up hourly with your consumption. Europe has more or less embraced these conditions. It's different timing on the hourly for various reasons. But the European Commission has said these are absolutely doable. This will not strangle the industry in the crib. So I have two questions about this. One is one argument you hear is it just stands to reason that more requirements and tighter requirements are going to slow the pace of development relative to no requirements.Right. We'd build more electrolyzers if we could get the subsidy for any damn thing we do. So it's going to slow the industry. And what's most important here, and this is the argument I think appeals to a lot of people and this is the argument Rhodium uses, I'm sure you're familiar. Their whole thing is, yes, slightly looser additionality requirements would potentially raise greenhouse gas emissions in the near term. But that is worth it because you're radically accelerating the scaling up of electrolyzers and the scaling up of green hydrogen, which is going to reduce way more emissions in the long term than whatever this short-term surge is.So basically like the short-term surge is worth it because you're buying huge long-term reductions. So what do you make of that trade-off is my first question.Rachel FakhryFirst of all, increasing emissions is against statutory requirements.David RobertsI want to get back to that. But first, on the merits.Yeah, you're blatantly flouting the law, right? The IRA is meant to be given to projects that reduce emissions by 95% relative to today's hydrogen. You are subsidizing projects that have twice as much. So if you're already flouting statutory requirements by adopting some sort of a phase-in or transition periods like what Rhodium suggests. That's one. Two, I have full respect for Rhodium and we have worked with them a ton, but fully disagree with this notion of a trade-off. Right. As I mentioned earlier, what we're seeing from financial analyses, from projects already being kind of doing the three pillars.Rachel FakhryThe three pillars will not harm scale. They will ensure healthy, durable scale. NRDC has been one of the first big enviros to come out in support of hydrogen three years ago and say, look, this is an important tool in the toolbox, we should scale it. However, this doesn't mean we have to scale it recklessly. Right. We have to make sure it's actually being done right. So I fully disagree with this notion of a trade-off between near-term emission increases against the law and scaling the industry. You could do both. The third piece, which people tend to forget, what will slow down this industry is public opposition.Could you imagine if the US taxpayer knows that they're subsidizing increased emissions? That's not going to be pretty. And hydrogen is already a very contentious resource.David RobertsYeah, it's contentious, but also it's still a little bit kind of undefined, a little bit it's a little bit fuzzy. So like, these next few years and how it gets treated and how it gets introduced to the broader public is very important. Right.Rachel FakhryThat is the first touch point. I fully agree with you and I love one of the quotes by Paul Wilkins, I think is the vice president of Electric Hydrogen in Washington Post. He said, look, if in five years this tax credit shows that this industry is increasing emissions, that's going to be terrible for our industry. So that will slow down scale. It's not the and that always gets just glossed over.David RobertsRight.Rachel FakhryLove to discuss this EU approach because I know that Rhodium ended up recommending that, but keeping it quite open ended.David RobertsYeah, and I think Rhodium endorsed the idea is just that you start with yearly accounting and work your way up to hourly. You start with sort of broad regional requirements and then work your way up to more specific. It's same like you start with I think they want to start with monthly RECs and work their way, this idea of phasing in, so you can get started quickly and then phase in tighter requirements over time. What do you think is wrong with that approach?Rachel FakhryIt's trying to mirror the EU, and I think this is very misguided. Right. Because the EU has a wildly different context. First of all, the EU has sticks. They have their emissions trading system which will help climb down and really minimize any emissions increases from loose rules in the near term. We don't have that. That's one. Two, the EU does not have a production tax credit like we do. All of their subsidies are more on the demand side. So creating demand signals. That means that there's going to be a rush to the cheapest supply. Cheapest supply generally means that you want to operate during low-priced hours as an electrolyzer because that's the biggest cost for you.And this generally means you're going to hover around the cleaner hours. We don't have that. We have a production tax credit that is worth $60 per megawatt hour that will incentivize electrolyzers to keep running as much as they can because ...David RobertsThey're going to run maximal. When you're paid not for your sort of CapEx to build, but for your output, you obviously are incentivized to output as much as possible, as many hours as possible.Rachel FakhryAbsolutely. And then the third piece, which I alluded to earlier, the hourly matching phase in wildly different contexts in the EU, again, they have a regulatory barrier we don't, which is one of the reasons why they delayed it. We don't need to do that. Wildly different context. We should not be blindly mirroring the EU. So I think we're open to discuss what a rigorous phase-in period could look like for the US, but it should not be mirroring the EU.David RobertsRight, well, energy Innovation, and by the way, I should just say a lot of what I learned about this, I learned by listening to Chris Nelder's Energy Transition Show where he interviewed Eric Gimon from Energy Innovation. If you want, like the super nerdy technical dive into all this, if this isn't giving you enough, whatever freaks out there who still don't feel like they got enough from this, there's plenty more there. But one of the things energy innovation is recommending is a phase-in but sort of different starting strict but crude, not relying on sort of sophisticated hourly matching at the beginning but just starting with sort of rough and ready but relatively strict guidelines. And then evolving over time to something that's a little bit more granular and precise and a little bit looser.Because Eric's point, which makes sense to me, is you don't often see industry passively agreeing to standards that they've gotten used to getting tighter. Right. But every industry would welcome standards that they're getting used to getting looser. Right. So his sort of thing is like, we don't have the sophistication to do it precisely. Now let's be strict and crude and then evolve toward slightly looser and smart. What do you make of that?Rachel FakhryYeah, I think this is more related to the point they made in their comments that the most precise way of calculating life cycle greenhouse gas emissions of hydrogen projects is to adopt the marginal emissions approach, which I know you hate that term, Dave, but emissionality essentially you net out. You have to have a very granular way of accounting for what you're inducing on the grid and what you're netting out by locating somewhere and kind of going that way. I know that they're slightly moving away from that because it's not easily implementable that's something we flirted with as well a few months ago. And what we're hearing is like this is elegant and nice, but from a developer standpoint this may not be very workable.So the three pillars are very good proxy right, for ensuring that your emissions are close to zero.David RobertsRight. The ideal here is a sort of shimmering ideal in the distance is that for any given hour of power consumption, you know, in the end eventually you're going to be able to know specifically which generators provided it and specifically how much greenhouse gas were involved. Like just as you can precisely know how much power you're using, you're eventually going to be able to precisely know how many greenhouse gases you're producing or displacing or avoiding. Right? That's all going to be sort of available in one giant transparent registry and everybody's going to agree how to calculate it and we're going to be able to base a lot of policy on that.I mean, it's going to solve a lot of tricky kind of short-term accounting and tracking and policy puzzles are going to be solved once all that information is transparent and available. But as you say, that's a ways off.Rachel FakhryAbsolutely. We strongly support this move to more granularity to give really the more accurate signals for what to invest in. I don't think it's necessary for this credit. The three pillars are straightforward enough for developers. They're rigorous enough to meet the IOA requirements. I'm supportive of just retaining that. Now one can create a little bit of exceptions or derogations like what the EU did. So for example, if the grid gets really clean, like 90-95% clean, then maybe we can relax the additionality required. Or if LMPS are extremely low, which indicates renewable energy curtailment for instance, then maybe we can relax hourly matching.We're open to that as long as the rigor of the system is maintained. So I don't think we need to completely overhaul to a marginal emissions approach to bake in a little bit more precisions for the outer years.David RobertsRight. And presumably, there'll be a lot of learning as we do this, how to make it work better. So this might be a dumb question but so say you're treasury and you read the Rhodium report and for whatever reason, it strikes you as highly compelling and you're thinking, yeah, let's set some relatively loose additionality requirements. Even though we'll get a little bit more greenhouse gas emissions in the short term, we'll get a lot more reductions in the long term. My thing is which, as you said, that's just against the law. The law says very clearly 0.45 threshold for greenhouse life cycle emissions is very clear.So I guess my question is just isn't some of this kind of an academic debate? Like the IRS can't just contravene the clear written intent of the law. It's got to hold whatever details it puts in, it's got to result in that threshold, or else it doesn't meet the law. Right. So is a lot of this just an academic debate? Like, what am I missing? They don't seem to have the latitude that industry is acting like they have.Rachel FakhryAbsolutely fully agree with that. And the treasury has been pretty tight-lipped about all this, so it's really hard to see where they're landing. But you're spot on. Weak rules that clearly flout statutory requirements would be both unlawful and a complete abdication of responsibility. So I wouldn't be surprised at all if many groups end up suing, should the rules be very weak. But let's talk about this legal piece. We have been doing a bunch of legal analyses with other groups, and look, the case for the pillars is ironclad, right? Because the way lifecycle emissions are defined in the law requires that they account for emissions that projects induce on the system.So if I'm an electrolyzer and I'm purchasing cheap credits from the existing nuke or renewable or so on and driving more gas on the system.Right, you induce that grid operator to turn on that extra gas.Correct. There is virtually no project in the US that today will qualify under this boundary of emissions. If they're not driving nuclear supply that is hourly match and deliverable, it's impossible for them to comply with 0.45 without these three pillars.David RobertsRight.Rachel FakhryIf you want to make this credit workable, those need to be in. If you want no projects to qualify unless they're colocated with a new source of supply, then you can do that. But I don't think that's the intent of the law. I don't think developers will be happy with that if it's only the behind-the-meter projects are able to qualify. So the three pillars are absolutely necessary, and if they're flouted so blatantly then that's just unlawful in a sense.David RobertsAll this feels a little bit pointless to me because the law is super clear and if they come out with standards that allow higher threshold they're just going to get sued by a bunch of environmental groups. I mean that would be a crappy outcome to have to wait. We don't have a lot of time to wait and mess around with lawsuits. But surely treasury knows it doesn't have as much latitude as industry seems to frame it as having.Rachel FakhryHopefully, Dave, let's send them this little excerpt.David RobertsYou don't have to; it's crazy. I'm not a lawyer, but the law is so clearly written that there just doesn't seem to be a lot of fuzziness here. But who knows what our beloved Supreme Court could find if it ever finds its way up there. It's just a small side question in terms of projects built entirely off-grid, right? One and then projects built with a one-way connection to the grid. Two and then projects that are just grid connected that just contract to have new solar and wind added to that grid. Do you have any sense of what the balance will be like right now?There's some off-grid projects being built. Right. So clearly, those are workable. Are people going to gravitate toward grid-connected over the long term because it's cheaper, or do you have any sense of what kinds of projects are most likely to get built?Rachel FakhryYeah, that's very unclear. What we're seeing is most of the projects moving now are behind a meter. Indeed.David RobertsDo you know why? Is there a clear answer to why?Rachel FakhryIf I had to speculate, there's so much less risk.David RobertsYeah, everything's much cleaner. Every answer is much clearer.Rachel FakhryExactly. There's less risk overall, which I'm sure is very great for your rate of capital and so on.David RobertsYeah, right.Rachel FakhryBut the level of fierce opposition we're seeing for the grid-connected kind of three-pillar system tells me, oh, there's a lot of interest in connecting to the grid at some point soon. So we're seeing mostly behind the meter. But I expect that the grid-connected projects will certainly start popping up soon.David RobertsBe really interesting to see how that plays out. Okay, final question, and God bless all you listeners for your extraordinary patience. This is a complicated one. There was really no way to boil this one down. But final question. This is like everything in IRA. This is a carrot, right? A big subsidy, a big payout, and specifically, it's a supply-side subsidy. This is literally a per kilogram of output subsidy. So it's all about supply. If you are taking a step back and thinking about, in the long term, how to construct a robust and effective market for hydrogen in the clean energy system, are there demand-side policies that you think would work well to complement this really giant battering ram of a supply-side subsidy?What should we be doing on the demand side? Or is supply side is the battering ram enough?Rachel FakhryGreat question. And this really gets to the core of, look, the tax credits are a big prize. They're not the only one, right? So we can't burden them and loosen the crap out of them because we're worried that the industry won't scale otherwise. I disagree with that. I think there's a good analogy to the renewable energy growth. The wind and solar tax credits obviously were a big driver of deployment. They were not the only driver. Right. State RTS has played an important role, corporate voluntary procurements played a really big role.David RobertsYeah, demand side was huge all along.Rachel FakhryAbsolutely. So that's exactly the same case here. There's this giant, generous supply side push. It has to be and already is coupled by subsidies on the other side. What we're seeing globally, and this applies to the US, is one of the main barriers of getting hydrogen projects built is the lack of end uses. It's the lack of demand. Right. That's why only a very small share of projects go from announcement to FID.David RobertsAnd just to be clear, this is not lack of demand for hydrogen. There's lots of hydrogen used. It's lack of specifically demand for the still slightly, somewhat more expensive clean hydrogen.Rachel FakhryCorrect. No longer in many places. Yes, spurring end-use is going to be important, especially since we didn't speak of that, but maybe that's another episode. Hydrogen should not be used everywhere. Right. This is a resource that is energy intensive. It has its place in some important hard-to-electrify sectors like steel and maybe shipping and so on. Not widespread in the economy. So focus demand side policies could be really interesting here to really divert the market to the, quote unquote, "good uses." Right. So the hydrogen hubs are going to be really interesting. And again, this is a big subsidy we keep forgetting.David RobertsYeah. Have they talked about what end uses qualify or what they're going to put in those hubs as end uses?Rachel FakhryIt's very unclear. But the DOE's hydrogen roadmap, which kind of sets the vision for the department, for how they will go about their hydrogen deployment, is pretty damn good. It's all focused on deploying hydrogen in hard-to-electrify applications where it's actually needed and doesn't have better alternatives. So if they were to make good on that roadmap, and I really hope they do, they will select the hubs that actually have the high-value end uses and not the low-value end uses like blending in pipes.David RobertsYes. Let's just say when we talk about low value, like the idea of blending hydrogen into natural gas pipelines to marginally reduce the climate impact of natural gas just seems to me like the lowest possible use of what is effectively like champagne. Be like dumping champagne in your water supply or something. I don't know what the right analogy is. You want to save champagne, it's expensive and you want to save it for the best highest uses of it. And this is a big fight with the natural gas industry, of course, because they want their natural gas pipelines to stay up and running as long as possible.They want all that infrastructure, they want themselves to survive. And so the idea that they could mix in a little hydrogen and go on, they love it. But as you say, that's a whole separate fight, a whole separate pod about hydrogen end uses.Rachel FakhryAbsolutely. And this has a real implication on the production because if we recklessly open the floodgates of supply in this decade with very loose rules, then where is this hydrogen all going to go? Right. The end uses that are the most primed to go, unfortunately, today are the ... Barring, replacing existing hydrogen with cleaner, which is good. It's all these other bad end-uses, including blending, because steel and other good end uses aren't quite commercially viable just yet. So all this to say the hubs are going to be a big end-use driver. Public procurement tools are really interesting.So the federal government is one of the largest buyers, for instance, of steel for public infrastructure projects. There's a lot of money in the IRA now for the federal government to clean up some of their cement and steel and so on that they purchase. If there is a procurement for green steel that is hydrogen derived, then that's really interesting. Right. You're trying to create a very strong, stable demand signal, and we're seeing some states like Colorado, Illinois, Pennsylvania starting to contemplate state-specific tax credits focused on using hydrogen in specific end uses. I'm not going to get behind those proposals.They're not great, but I think it's the right kind of thinking, right? Let's start trying to be more targeted with where we're driving this resource in the economy.David RobertsRight. So you're saying if we're going to sort of jam an enormous amount of supply into the system really quickly, we should also implement some demand-side policies to guide the hydrogen thusly produced to its highest and best uses?Rachel FakhryAbsolutely. We have to be very cautious about where we're using it and divert it to the right places, for sure.David RobertsOkay. Goodness, that's a lot. It just goes to show in the energy world, you're like, clean hydrogen. Let's do that. And then so many devils in the details.Rachel FakhryI'm hoping this was less wonky than Eric Gimon, whom I have utmost respect to, but even my mind was turned into a pretzel listening to that episode.David RobertsYeah, I think we hit a nice, good middle spot. This is like the 301 class. More than the 101, but less than the grad seminar. That's my aspiration.Rachel FakhryThat's where students either drop or ...David RobertsThe ones who can get past this pod. They're definitely headed for expert expertise. Rachel Fakhry of NRDC, thank you so much for coming on and talking through this all so plainly and simply and clearly. I super appreciate it.Rachel FakhryThanks so much, Dave.David RobertsThank you for listening to the Volts podcast. It is ad-free, powered entirely by listeners like you. If you value conversations like this, please consider becoming a paid Volts subscriber at volts.wtf. Yes, that's volts.wtf, so that I can continue doing this work. Thank you so much, and I'll see you next time. Get full access to Volts at www.volts.wtf/subscribe

A full quarter of global energy use goes toward heat that powers industrial processes. To provide clean industrial heat but avoid the variability often associated with renewable energy, a company called Rondo makes a thermal battery, storing renewable-energy heat in bricks. In this episode, Rondo CEO John O’Donnell talks about this breakthrough technology and the opportunities that thermal storage promises to open.(PDF transcript)(Active transcript)Text transcript:David RobertsElectricity gets the bulk of the attention in clean-energy discourse (this newsletter is, after all, called Volts) but half of global final energy consumption comes in the form not of electricity, but of heat. When it comes to reaching net zero emissions, heat is half the problem.Roughly half of heat is used for space and water heating, which I have covered on other pods. The other half — a quarter of all energy humans use — is found in high-temperature industrial processes, everything from manufacturing dog food to making steel or cement. The vast bulk of industrial heat today is provided by fossil fuels, usually natural gas or specialized forms of coal. Conventional wisdom has had it that these sectors are “difficult to decarbonize” because alternatives are either more expensive or nowhere to be found. Indeed, when I covered an exhaustive report on industrial heat back in 2019, the conclusion was that the cheapest decarbonization option was probably CCS, capturing carbon post-combustion and burying it.A lot has changed in the last few years. Most notably, renewable energy has gotten extremely cheap, which makes it an attractive source of heat. However, it is variable, while industrial processes cannot afford to start and stop. Enter the thermal battery, a way to store clean electricity as heat until it is needed.A new class of battery — “rocks in a box” — stores renewable energy as heat in a variety of different materials from sand to graphite, delivering a steady supply to various end uses. One of the more promising companies in this area is Rondo, which makes a battery that stores heat in bricks.I talked with Rondo CEO John O'Donnell about the importance of heat in the clean-energy discussion, the technological changes that have made thermal storage viable, and the enormous future opportunities for clean heat and a renewables-based grid to grow together.All right, John O'Donnell of Rondo. Welcome to Volts. Thank you for coming.John O'DonnellThank you. It's a great pleasure.David RobertsI am so excited to talk to you. I've been geeking out about thermal storage for over a year now, just wanting to do something on it, and there's so much there. And I find that unlike a lot of electricity topics which I cover, there's just not a lot of baseline familiarity out there among, let's say, normal people. So there's a ton to cover from the ground up. So I want to start at the highest possible level, which is to say, let's just talk about heat. Like in the clean energy world, electrical power gets a lot of attention, a lot of discussion, a lot of technological development.Everybody's got their favorites, everybody knows what's going on. But then there's also heat, which is the sort of weirdly ignored not so much anymore, but up till pretty recently ignored. So maybe just start with an explanation of why heat is important if you care about clean energy, why you should care about heat?John O'DonnellThank you. Sure. That's a great question. And that context you just provided is, of course, dead on. There's a really simple answer. Heat. Industrial heat is 26% of total world final energy consumption. Whether you are making baby food, or fuel, or cement, or steel, the manufacturing processes vastly predominantly use energy in the form of heat, not electricity. Globally, it's three quarters of all the energy used by industry is in the form of heat. Again, whether you're pasteurizing milk or melting steel. And the DOE has just created a new office focused on this topic. We're thrilled about it.Their assessment is that industrial heat is 11%, I think, of all total US CO2 I'm in California. Here in California, we burn more natural gas for industrial process heat than we do for electric power generation. And to a first approximation, as you just mentioned, no one knows that.David RobertsRight. So heat is a huge portion of final energy consumption. It's a huge portion of global CO2 emissions. So maybe give a sense of like, what percentage of total heat final consumption is industry, like how's the total heat-pie divided up.John O'DonnellSo when I said 26% of world — that's industrial heat, right. So that's not buildings, that's not other heating sources.David RobertsRight. Heat is a bigger category than that.John O'DonnellI mean, if you take actually heat for buildings and heat for industry, together they're like 60% of all the natural gas used in Europe. But within industrial heat, people sort it out by a couple of different things. One of them is the temperature. There's a lot of heat in cooking processes. That's around 150°C in the form of steam all the way up to the highest temperature heat in making cement, that's around 1800°C. About 95% of total heat is used in processes that need it below 1500°C, about maybe half to two thirds of industrial heat is below about 400°C.There's a fairly steep curve. About half of all industrial heat, something like that, is delivered as steam.David RobertsRight. Steam is the lower end of the temperature spectrum. I recall looking at these charts of sort of what industries use, what levels of heat. Up at the super high heat, you have pretty singular industries, like steel's up there and concrete's up there. But down in the lower heat registers, where you're using just steam, there's a bunch of little industries clustered up there. Most of the industries are using that.John O'DonnellThat's right. All of these have been things that people say are hard to decarbonize because across many of these industries, they're making commodities, whether it's steel or tomato paste that are relatively low margin and for which the cost of heat is a very significant portion of the total cost of production. So this is a sector where all these processes use heat in somewhat different ways. The cost of that energy is really critical to the competitiveness of that industry and what commodities cost consumers. And there have not been great solutions until recently that could provide decarbonized heat at the same or lower cost.David RobertsSo the situation is there's a huge chunk of our energy that goes toward heat, a huge chunk of that goes toward industrial heat. And there's been comparatively little work on finding zero carbon versions of that heat. That's the problem we discussed the last time we talked, probably three or four, five years ago. Everything pre-pandemic is a haze. But I think it was around five years ago I covered this big comprehensive report on industrial heat options, like, what can we do about industrial heat? And it went through the options, and basically the conclusion was that continuing to do it with fossil fuels and just capturing the emissions post combustion was the cheapest option for a lot of these heat uses.And I dutifully reported that. But I didn't like it. I didn't like the idea that that's the best we can do is create these Rube Goldberg machines where we're digging up carbon, burning it, capturing the carbon, burying the carbon again, et cetera. I was like, surely that's not the best we could do. But things have changed a lot, since then. So maybe just run through what are the low carbon heat alternatives and which ones have emerged recently, and what has changed that has helped them emerge?John O'DonnellYeah. Thank you. You said for a long time there hasn't been much work on this. I would say partly there hasn't been so much success on it. I've been working on for 15 years.David RobertsNo offense, John.John O'DonnellAnd in two previous solar companies we wound — who are a lot of the team here at Rondo worked with me there — we wound up delivering more than half of all the solar industrial heat that's running worldwide right now. But to say that's a drop in the bucket is oversizing a drop you asked exactly the right question. What are the options? Because the world has really changed.There has always been the option of burning biomass, which is more or less sustainable, but very high cost, high air pollution, and very, very limited availability. Other kinds of biofuels, like renewable natural gas, if we take it to a giant scale, it might power as much as 1% of our industrial heat. And it's easy to laugh about, but it's true. The thing that has profoundly changed is what the wind and solar PV industries have accomplished over the last 15 years. The 95% reduction in cost means that intermittent electricity is becoming — has become — the cheapest form of energy that humans have ever known.And it's now cheaper than burning stuff as a source of heat, but it's intermittent. So how do we take that intermittent electricity and use it to deliver the continuous heat? I mean, you turn on a smelter or a factory or even a tomato paste plant, you run it for months or a year on end, it has to have continuous heat or it will be damaged.David RobertsIt's worth just pausing to emphasize this. The vast majority of industrial processes are continuous. They cannot run intermittently. They cannot stop and start with the sun and the wind. It just would be wildly uneconomic.John O'DonnellThat's a beautiful and concise way of saying it. Like there are processes where if they get a half second interruption in their energy supply, it takes a week to restart the process. Reliability is a very big deal. So what are the tools we have for that? Intermittent electricity, which is becoming plentiful. And in places right now, you can have essentially unlimited amounts briefly every day at prices far below fuel prices. We have hydrogen, electrolytic hydrogen, make hydrogen, compress it, store it, and then combust it. That works. Although electrolyzers are today expensive, they're coming down in cost.But the laws of physics bite you in that you get about one unit of heat for every two units of electricity because of the chemical steps involved.David RobertsRight. All the conversions.John O'DonnellYes.David RobertsBut can you just dump hydrogen into existing boilers and kilns? Like, is existing equipment hydrogen ready, as they say?John O'DonnellNot exactly. It's hydrogen ready for a few percentage of hydrogen. But when you look at a boiler, 95% of its lifetime cost is the fuel, not the boiler. So upgrading boilers to run that other fuel, that's something that you would do if the economics of that fuel were sensible.David RobertsGot it.John O'DonnellRight? Now at taxpayer expense. We're creating a period where hydrogen, electrolytic hydrogen is going to get down to the same cost as fossil fuel in the US with tax credits. But again, intermittent electricity by itself today is cheaper than fossil fuel. Doesn't need tax credits to get it to that point. And now there is this emerging class of electric thermal energy storage systems that don't do chemistry. They just convert electricity to heat directly and then store the heat. Because heat storage, another thing you could do I skipped over is you could, of course, store electricity in a battery.Right.Which would be the most expensive thing.But if you have a coffee thermos on your desk, it's storing energy as it happens. The energy stored in your coffee thermos is more energy than the energy stored in your laptop battery, and it's a bit cheaper than your laptop battery. Storing heat is cheap right now in the thermos. What do you have? You have hot water, which stores a lot of energy per degree, and an insulation thing around it, depending on how good the insulation is, that'll tell you how long that thing will store energy. All those things have been around for a long time, and suddenly, okay, how are we going to heat these things electrically?How are we going to use simple technology? Because most people who are working on electric thermal storage are doing simple things. There are some exotic things using conductive materials, liquid metal things, but there are simple things that people are doing also.David RobertsYou're hitting directly on something. That is why I love this area so much, why it sort of kind of caught my imagination so much. Like, you really have a situation here where electricity was just more expensive than fossil fuels for these purposes up until like five minutes ago.John O'DonnellExactly.David RobertsIn terms of looking for opportunities for just storing. Now that electricity is cheap, we're looking for ways to store it and use it as heat in a lot of ways for the first time. And what that means is there's like, very simple low hanging fruit all over the place. The way I think about it is, like, my generation maybe like younger people than me, when we think of technology or advanced technology, we generally think digital, and that generally means opaque. Like, we don't know what's going on in there. Even cars these days. Like, so little of it is mechanical anymore and so much of it is digital and computerized.It just seems opaque to us. And these technologies of storing electricity as heat are so delightfully simple. Like, you're literally just heating up a rock and that's, like, you might say that heating up a rock is literally the oldest energy transfer mechanism that humans have available to them. It's probably the very first way we moved energy ever, literally. So it's just fun to me in that it's almost like a childlike sense of discovery to it. Anyway, that's just my that's completely off topic, but ...John O'DonnellOne of the electric thermal energy storage technologies actually uses rock. And on the outside of the pilot it says, welcome to the new Stone Age. And there's a mastodon as the mascot. So, yes, it's a well understood thing.David RobertsSo just to sort of summarize where we've been so far, you need all this heat. Up until very recently, it was overwhelmingly cheaper to do it by combusting fossil fuels. A lot of the alternatives to fossil fuels are more expensive than fossil fuels. But now recently, along comes renewable wind and solar electricity, which are cheaper than anything. So now the challenge is, well, how do you get the heat from the wind and solar electricity? As you say, the applications are running around the clock. Wind and solar come and go. So in between the wind and solar and the applications, you need something that's going to store that wind and solar that can release it in a steady flow.John O'DonnellExactly.David RobertsSo that's the new thermal storage technologies that are emerging now are sitting right in that space, including Rondo. So if you're talking about something sitting in that space, what do you need out of it? What are the sort of metrics by which you judge the performance of that thing that's sitting in between the renewables and the application?John O'DonnellGreat question. So obviously you need safety, efficiency, cost, temperature at which the heat can be delivered.Right.Some other things as well. One of them is the faster that you can charge the system and deliver energy continuously. If you can charge it, if it takes you typical batteries, they charge and discharge at the same rate. But here we'd like to charge perhaps during the solar day in six or 8 hours and deliver for 24 hours continuous. If you could charge in about 4 hours, we find that's even more valuable. The periods of curtailment and the periods of zero and negative electricity prices in electricity grids are short.So the ideal thermal storage can charge very rapidly. You can control its charging like other batteries, it could participate in providing grid services and it can run continuously, shut it down once a year for inspection and when the factory that it's connected to is shut down and just sit there and require low O and M, operating and maintenance, costs.David RobertsYeah, and I presume low losses too.John O'DonnellYeah, that's right.David RobertsBut I want to pause and just emphasize the first point you made just so people get it. We have these wind and solar all come online at the same time because they're all using the same wind and sun. So what you have are these periods of oversupply. I think people are familiar with this. You get oversupply more than the grid can use and today that just goes to waste. It's curtailed. That energy is not used. And so what you're doing is proposing to come along and use it. But if that's your economic sweet spot, those couple of hours of curtailed energy, you need your battery to charge as much as possible during those couple of hours.In other words, charge really quickly because the amount of energy available in those curtailed hours, especially in coming years, is going to be potentially huge. Right. So you need to stuff a lot of energy in your heat battery really quickly.John O'DonnellThat's right. Now the early deployments of heat batteries will use what is curtailed today. One of the things that we see that's uniquely pretty cool about this class of electric thermal storage is the total amount of energy that industrial heat needs is really large for scale. I think we had a 52 gigawatt system peak in California not long ago. We've got about 20 gigawatts of PV in the state. Just repowering the boilers and furnaces that we have right now in California needs 100 gigawatts of new generation to replace those fuel BTUs, about 40 of those gigawatts can actually be built without any connection to an electricity grid.One of the things that's great about ETES powering industry is we're headed for a world where industrial electrification is not creating more problems for the grid, but we'll get there. But this matter of fast charging rate means that new generation projects that are serving the grid, the best ones, the cheapest ones, will be built selling part of their power to thermal storage. Like during the peak and curtailed hours and then delivering those broader shoulder renewable power to the electricity grid. And we're seeing again and again that that's a formula for low energy prices for the industrial and for lower prices to the grid.There's an interesting synergy.David RobertsYeah, we're going to get into that synergy in just a second, but I want to focus on how we're evaluating the heat battery. So we want it to absorb a bunch of energy quickly.John O'DonnellFast, charge. Yeah.David RobertsAnd then we want it to hold that energy with very little losses. And this is the other fact about thermal storage that blew my mind that I do not think is widely appreciated, which is the incredibly low losses here. People are accustomed to, I think if you want to store energy in hydrogen, you're losing about 50% of your energy through all the convergence. Like a 50% efficiency ish yes, batteries, lithium-ion, depending, you're getting up to don't know what the standard average is, but just heating up a rock, you get 90% to 95% of that heat back out of that rock.That is wild to me.John O'DonnellThat's right. Yeah. The least efficient of the thermal energy storage systems are around 90%. We happen to be 98%.David RobertsThat's just crazy. So the heat just sits there in the rock and doesn't go anywhere?John O'DonnellWell, fill up your thermos with hot coffee, take the thermos and wrap it in a couple of blankets, open it up, three days later the coffee is still hot. It's not like a chemical system where there's self discharge or something. The only place energy can go is either lost to the environment through insulation or delivered to the target. So it's a lot easier than it sounds. A lot of people think, "Oh, this efficiency couldn't be possibly the case." It really is almost embarrassingly simple.David RobertsAnd now my question though is when we say 95-98%, what are the time horizons of that? Like if I fully charge your thermal battery and we're going to get into the guts of your thermal battery here in a second, but if I fully charge a Rondo battery and then just don't do anything to it, how long would it take for all that heat to be lost? Like what is the time horizons we're discussing here?John O'DonnellAgain, the use case that we're considering that we're targeting, is it's discharging continuously?David RobertsRight. It doesn't need to hold it that long. Theoretically, I'm wondering.John O'DonnellTheoretically that's right, because the one place where you are holding energy, we've got a food factory that runs shift work. They operate one shift five days a week. So yeah, you're storing some energy and you got more energy on Monday than you did on Friday afternoon. The short answer is we lose about 2%, 2.5% per day. So if you were holding energy multiple days, there would be self discharge. But that's because we were designing for a particular use case. Again, you could decide the rate at which your thermos loses heat by if you wrap it in a blanket ... you could make it store energy for months on end.Then the question is, is that valuable? If you really want to store energy for months on end? If you want to move energy from July to January, chemical storage is a great thing because it doesn't have self discharge.David RobertsRight.John O'DonnellIf you are in a place where you can have a salt cavern and you can make hydrogen in July and pull out in January, okay, that's great.David RobertsRight? Because the hydrogen you pull out in January contains the exact same amount of energy ...John O'DonnellExactly.David Roberts... as you put in the hydrogen.John O'DonnellAs long as it didn't leak out. But yes.David RobertsSo in the hours today's, maybe multiple days, rarely a week time horizon that you're working in, you're getting 98% efficiency. 98% of the energy that goes in comes back out to the application.John O'DonnellYes. In that use case. That's right.David RobertsI think now that we're focused in here on the heat battery, let's just discuss what the Rondo heat battery is, and maybe while you're telling us, tell us what some of the other options in this space are. I know people are heating up. You're heating up bricks. Some people are heating up giant chunks of graphite. I think sand is on the table. I don't even know what all the options are. But what are people trying in that space?John O'DonnellThe one technology that's been at scale for quite a while, that's been used by the solar industry since the 1980s is using nitrate salts, which melt at around 250 degrees. Salts? That's right. They're stable up to about 600°C. And so you can have a big tank of cold salt, which is something like 600 degrees Fahrenheit. It looks like a transparent liquid, but stay away from it. And a tank of hot salt, and you heat by pumping from one to the other and pull the heat out going the other way. I built my first molten salt test facility back in 2008 at a national lab.David RobertsI remember there was a hype cycle around molten salts that has kind of faded. Why has it faded? Like, why are rocks preferable?John O'DonnellThe more you know about it, the less you like it. It's one thing to use it in a solar power station where there's nothing in there for a mile away except for the turbine. It's quite another thing for an energy storage facility to be put inside a factory where people are working. When I mentioned safety first, you don't want a system that can catch fire or spill a superheated liquid that would burn everybody or release toxic gases. I'm not aware of any molten salt projects that haven't sent at least one person to the hospital. So there's the molten salt systems.And again, they work. They're proven but they have proven challenges.David RobertsThey just require a lot of engineering to contain.John O'DonnellWell, and that's another matter that you've talked about previously, which technologies get cheap, right? Molten salt systems are a lot like they have the nuclear reactor characteristic that everyone is bespoke, those tanks at that site with that engineering and there has not been much learning capable to drive cost out. The modular approach, the factory manufactured approach, eludes that technology. Now there are a lot of people exploring how do we do modular factory manage. And one of the things that you first do if you want to store heat is, okay, what's it cheap to store heat in?As you mentioned stone, crushed rock, various kinds of rocks in a box or sand in a cylinder where you build an industrial strength hairdryer. You blow superheated air through the rock or the sand bed. And then when you want heat, you push cool air the other way through the sand or the rock bed. That works. There are people taking it to scale. It has temperature and cost challenges. What you find in every one of these cases, the rock is cheap, but the box costs a lot.David RobertsAnd the fans, I assume like the fans and that kind of engineering adds to the ...John O'DonnellThat's right. And remember now that your fan has to blow at your peak charging rate. And there's an example of a technology that leads you to it's more expensive to charge fast. But the big problem with those unstructured materials is when they heat up, they expand and you have to have a container strong enough and then when they cool, they shrink and settle and then the next day they expand again and they slowly turn into dust over at a rate. So the material looks really cheap, but the system turns out to be not so cheap.Right then you mentioned there are a lot of interesting science experiments with new materials that have never been used this way before. When we started Rondo, we did a really careful look at everything that's out there. There are people using liquid silicon. It melts at 14° Celsius stores a lot of heat. Just like ice melting in a glass absorbs a lot of heat melting and releasing silicon. Freezing silicon is a really good thing for high temperature heat. But what do you make the glass that's holding that silicon-ice? How do you keep it like there are a lot of challenges that companies have been working on for years and it's probably going to take another decade before that technology is at the point that an ordinary project finance guy will say, yes, that's as low risk as PV. I'll invest in that at the same finance rate. And that time to bank ability is one of the biggest issues. If you want a technology to go big fast, everybody's got to agree it's boring and low risk and that's a challenge with new materials. Graphite is another material that's interesting. It has higher heat capacity than rock or brick, especially when it gets hot, but it catches fire at 560°C. So you want to store energy at 1500° or 2000°.You've got to keep it in some atmosphere so that it can't catch fire for 30 years and it's conductive electrically, which could be great. But anyway, there are interesting engineering challenges and there are at least four companies working on that. One of them is also looking at using that graphite not for electricity to heat, but electricity to heat to electricity. Using PV cells to capture the light from the graphite.David RobertsIs that Indora?John O'DonnellAntora.David RobertsAntora. Yeah, I talked to them, too. And in terms of like science-fiction geeky fun, that one is just a great one. They heat the graphite up, it gets so hot that the energy comes back out as light.John O'DonnellLight.David RobertsSo they have it covered in shutters that they can open incrementally. And the light can either shine on tubes full of fluid if you want heat, or these special PV modules that they built especially for it. If you want electricity, like the whole conceptually, that's very satisfying.John O'DonnellIt's super cool. My first job was infusion power, where you have a reactor that wants 100 million degree plasma right next to a superconducting magnet that has to be five degrees. The Antora PV challenge when they solve that that technology is cool for electricity to electricity because it could turn out to be long duration, no moving parts storage. It's hard for us to see that. That's an example of we're going to do something deeply innovative. How long will it take to prove that it's bankable and what we're doing is much more boring? The back to electricity is their superpower is back to electricity.David RobertsYeah, I want to discuss that. Like the ability to go back to electricity and what, you'll come to that. We'll get to that. But you guys have settled on rather than any of these materials science fun time experiments. Bricks.John O'DonnellYeah. Okay. Somebody told me this the other day. How many gigawatts of batteries are there in the world right now, do you know?David RobertsI don't.John O'DonnellSomebody told me there are about three gigawatts of batteries in the world right now.David RobertsLithium-ion batteries, you mean?John O'DonnellYeah. So how much heat storage is running in the world right now? As we speak, there's about 30 gigawatts of heat storage running right now. In 1828 was the first patent for a thing called a cowper stove, which is a tower with a thousand tons of brick in it that has air passages that on a 1 hour cycle. The still combusting exhaust of the blast furnace is blown down through that tower and heats all the brick to about 1500°C. And then for about 20 minutes, fresh air is drawn up through the tower and it's providing the inlet air to the furnace and it's delivering 115 megawatts heat for about 20 minutes.David RobertsCrazy.John O'DonnellAnd then it's heated again. These. Things are heated and cooled 24 times a day. They last 30 years. There's a million tons of that brick in service right now at the blast furnaces around the world.David RobertsAnd these are just ordinary brick-bricks that people are familiar with. Like, what are bricks made of?John O'DonnellWhat, are they the term they use? Yeah, there are a bunch of different materials, but two of the most abundant elements in Earth's crust are silicon and aluminum. Silica, silicon dioxide, alumina, aluminum oxide are two of the most important minerals. Different bricks are made of different mixtures of silica and alumina. And there are other kinds of bricks as well that are even higher temperature, but they call it aluminosilicate brick. It's higher temperature brick than in your fireplace. Looks a lot like it. And it's what is in every if you have a ceramics kiln, that's what's in your ceramics kiln liner.It's in a cement kiln, and it's again, used in all kinds of areas. People have been making brick like this for thousands of years. Brick is made from dirt. I mean, certain kinds of dirt. You mix it up, you put a little binder, you throw it in a kiln, and you've got your brick.David RobertsSo if I'm looking inside a Rondo box, am I literally just looking at a stack of bricks?John O'DonnellPretty much. The one thing that's different ... our breakthrough. So the brick, as you know about brick, it's brittle. If you drop a brick, it'll break.David RobertsRight.John O'DonnellYou also know that brick is not a good heat conductor. That's why we make fireplaces out of it. So if we want to heat it fast, we have to heat it uniformly. If you stuck a brick and you had, like, one side in a bucket of water and the other side in a fire, the brick might fracture. But if you put the brick in the middle of the fire, it'll heat up rapidly to the temperature of the fire. It's one of those ideas that once you see it, it's obvious. But it only took 80 design revisions.If you look inside a Rondo unit, what you'll see is a brick stack that's full of these open chambers. It's a checkerboard of open boxes surrounded by brick, and brick surrounded by these open boxes. And electrical heaters are embedded directly in the stack, and they provide radiant heat within those open boxes. And because thermal radiation of every object in the universe goes as the fourth power of its temperature in degrees Kelvin, as I know you remember.David RobertsOf course.John O'DonnellThings that can see each other get to become the same temperature by exchanging heat. So the result of this was we found a way to directly, rapidly heat the brick.David RobertsAnd this is an alternative to blowing hot air over the bricks.John O'DonnellThat's right.David RobertsWhich, a. would require more engineering and more money, but b. also might not heat them uniformly, like might heat one side before the other side or something like that.John O'DonnellHot air. You can heat them uniformly, like the blast furnaces do that. But in that case, you have the same electrical heater that's in something like a hairdryer. And inside a hairdryer, the heaters are mostly radiating to the metal plates, which in turn are heating the air, which in turn would in this case, heat the brick. There'd be a couple of hundred degrees difference between the final temperature of the brick and the temperature of the wire. In our case, that's about five degrees.David RobertsSo instead of using the wire to heat the air, to heat the brick, you're just sticking the wire in the brick, and the wire is heating the brick directly.John O'DonnellThat's right. So we just last week, we announced the world's highest temperature thermal energy storage system running. That's not because we use different heating materials than others. It's because of that physics insight that led to that structure. That's right.David RobertsGot it. Okay, just quickly, what are some of the engineering challenges here? Do the bricks expand and contract when they are heated, or do they degrade over time? What sort of things are you dealing with here with bricks that you had to overcome?John O'DonnellYeah, there were lots of things because what we're talking about is kind of at some level obvious, and people have done really good work on this previously. But the challenge is you have to think about, yes, the bricks expand and contract, so build your structure. But the nice thing is they're freestanding. They don't need a container to hold them in. So if you build your structure properly, it can freely expand and contract.David RobertsSo there are like spaces between the bricks in which they can ...Where they're touching when they're hot and spaces open up when it's cold. Exactly. Other big challenges consider if you have a storage system and one area has some airflow blockage so that during discharge, it's not getting as cool as another area the next day when you put heat in, it's going to wind up hotter than another area. And the day after that, even hotter thermal runaway that would cause failure because one part was too hot. If you have that possibility, you have to run the whole thing cooler. So it turns out one of the hard problems, one of the hard engineering problems is making sure that the temperature inside the material is uniform.John O'DonnellAnd it's uniform not just when the unit is new, but when it's 30 years old.David RobertsYour promise here is that this Rondo battery has the same capacity and the same performance characteristics in 30 years that it does today. Is that the idea?John O'DonnellThat's exactly right, yeah.David RobertsAnd no other battery? There's no other battery that can say that.John O'DonnellI think that's true. But here, there's a million tons of this material running in the world, and those guys have much higher mechanical force on it. They build 30 meters tall things. We build eight meter tall things. They heat and cool it 24 times a day. We heat and cool it once a day. Lasts 30 years for them. Pretty clear it's going to last longer than that for us. Yeah.David RobertsAnd let me ask about getting the heat out to where it needs to go, because as I have been reading about, I did a thing on a company a while back that was using concentrating solar to superheat a fluid. And they could get to these levels of heat that are germane to concrete and whatever the higher end, the higher temperature applications, but only at a particular spot. Right. It's got to be right where the sun is and where everything's coming together in that one spot. And then, of course, you face the challenge of how do I get that heat to where it needs to be without losing a bunch of the heat?And this is sort of, obviously the other half of the thermal energy challenge. And there's sort of two challenges. One is making it into steam right. For all these lower temperature applications, and then, I don't know, making it into what, for the steel or the super high energy. I don't even know how you transfer that high version of heat. So what are you using on the back end?John O'DonnellYeah. So every combined cycle power station in the world has a jet engine that's generating electric power. Its exhaust is around 605 C. That exhaust is passed through a boiler, a heat recovery steam generator that drives a steam turbine that makes extra electric power. So the world knows how to build those boilers that run on about 600 C air.David RobertsGot it.John O'DonnellThe Rondo storage is much hotter temperature than that we mix down. And for the systems that are delivering steam, we work with leaders who build conventional boilers and we've engineered the heat battery to include that boiler. So the basic heat battery models are exact drop in replacements for particular models of industrial boilers. They're just about the same size. Stick us next to your existing one, hook us up to the pipe.David RobertsYou're replacing a fossil fuel run boiler with a heat battery and a boiler in the same space.John O'DonnellYeah. We think of the heat battery as from the substation to the steam flange in that case. So it is a like for like drop in replacement. The less work the customer has to do, the better off we are.David RobertsYeah, I was going to ask it. We might as well discuss this now, because this is obviously one of the this is something you run into with battery chemistries all the time. Right. Which is just like there's so much existing infrastructure that even if you have something clever and fancy and new that's super cheap, if it requires all the facilities to update themselves, you're just starting way, way behind the eight ball.John O'DonnellThat's right.David RobertsSo to what extent is the sort of Rondo heat battery plug and play like in a low temperature steam application and like a steel plant, can you wander into any of these and just switch out with no pause.John O'DonnellAll of the energy. So the top four categories in the United States, the Doe just gave a talk recently and the top four categories in descending order of industrial heat use are chemicals, food and beverage, paper products (That includes everything from toilet paper to cardboard,) then cement, and then steel. So for chemicals, about a third to 50% of all the heat is steam. For food and bev and paper products, it's all steam. And for cement and steel, none of it is steam. So we are simultaneously, we're delivering drop in boilers today and simultaneously with our investors and partners building and developing the calciners, the ethylene crackers, the kilns, to drive particular industrial processes.Because you made this point about the solar tower. Yeah, you have a spot that's 100 meters up in the air where you can have your heat. But what we want, the heat is in some process unit. And look, we have 200 years of designing industrial process units that are powered by fuel. Which of those can we retrofit? Where will we need to design new things? We were given a grant by the Danish government. We have a project underway to design and pilot a true-zero cement process, intermittent electricity to zero-emission cement. Most of the work in that project is the design of a calciner that instead of internal combustion, runs on superheated air or superheated CO2.So it doesn't all happen all at once, but it does all happen, but some of it will. The high temperature things will take more work to integrate because industrial plants today were designed with magnificent engineering and heat balance and efficiency burning fuel. And so, as it happens, everything that runs on steam, easy drop in all the high temperature processes. We have work underway now and hope to have results over the next couple of years that use the same thermal storage platform.David RobertsBut this first commercial battery that you've deployed now, which by the way was just last week, I think, what application is that or what temperature level is that?John O'DonnellYeah, that's targeting steam, steam, steam, steam and steam. The particular installation is at a fuel producer and it's at a biofuel producer. Whether you're making renewable diesel from soybeans or animal fat or ethanol from corn, about half the total carbon intensity of that fuel is fossil fuel that was burned to produce that biofuel. And we can set that to zero. So we can produce biofuels that are about half the carbon intensity of what they are today. Interesting, our customer is really a visionary that's going to zero because the other thing that's been talked about a lot with biofuels is combining carbon capture of the biogenic CO2 in those facilities.As it happens, using Rondo for the heat eliminates about half the total carbon intensity using carbon capture, eliminates about the other half and together you get about essentially a zero-CI, zero-carbon-intensity fuel. That little unit we just started up is the pilot for deployment of a series of larger ones to do exactly that, to produce zero carbon biofuel.David RobertsVery interesting. So let's pull the lens back a little bit, maybe talk about business model. Is the idea long term that if I'm say I'm a manufacturing facility and I'm making I don't know what baby food, is the idea that I buy a Rondo unit and install it in my factory? Or is the idea that Rondo comes in, sets things up and sells me heat as a service? In other words, am I buying the equipment or am I buying the heat? Or some of both.John O'DonnellYeah. Over time, there are as many answers to that question as there are to how conventional gas turbines and steam turbines are sold. Right. Sometimes people own their own cogeneration plant. Sometimes they contract with someone else to provide them electricity or heat as a service. The renewable heat as a service business will develop the same way. In the United States today, there's a huge community of developers who know how to shave a few pennies off solar and wind electrons, but have never really looked at these industrial facilities. In Europe, actually, there are already renewable developers who are out there originating renewable industrial heat projects.So, first of all, Rondo is offering, on four continents, commissioned, guaranteed installed heat batteries. That's the foundation. We are also originating and financing heat as a service, principally in North America.Interesting.Because, again, whether you make baby food, as you said, or steel, you don't drill gas wells to get the fuel to run your process. You buy energy as a service, your capital dollars, most folks want to spend it on their own processes. And this class, this thermal energy storage class, is arguably creating one of the great business opportunities of our time for the development community, because we all know wind and solar deployment is slowing down, not because of reduced demand, but because of congestion.And I think the interconnection queue time in England is now 13 years.David RobertsYes, there's like a terawatt now, I think, waiting in the queues.John O'DonnellRight. Rondo heat batteries. Our basic unit, the RHB 300, needs 70 megawatts of generation. Typical installations may have two to ten at a single site. These are utility scale energy demand and they can be built with no grid connection.David RobertsRight. So the idea is you go build a solar farm or a wind farm that is just attached to these batteries.John O'DonnellThat's right.David RobertsAnd then you're selling the heat from the batteries. So at no point do you need the electricity grid. You're not waiting for the interconnection or anything else, that these are a coupled unit. Wind and solar being so cheap, the implications are endless and often counterintuitive. Like when I hear I could either buy heat from a conventional boiler or I could buy heat from someone who had to go out and build an entire utility scale renewable energy installation and a couple of heat batteries. Intuitively, that just sounds more expensive. But are wind and solar so cheap now that that's competitive?John O'DonnellYes, absolutely. And it depends, right, because one of the things that's exactly the right matter that you just raised someone is making an investment that's going to provide 40 years of energy to your facility. They're going to sell it to you on a contract, they're going to care about your credit worthiness and your willingness to sign that contract. That's one of the things that's unique here. It's different than selling electricity to a utility. On the other hand, from your standpoint, someone is saying you can get off the fossil fuel price roller coaster. Not surprisingly, there are a lot of people in Europe who ... and we've seen that in US.Prices have been fourteen, they've been two, they're ten. And they are also in places that have carbon prices. You can have a permanent. This lack of volatility and exposure to regulatory matters also is a strategic advantage. A friend of mine said, why were all the factories in England built on the coast? Because where it was cheap to bring the coal, low cost, reliable energy supplies are the foundation for industrial investment.David RobertsSo you're free from fluctuations in fossil fuel prices and you're free from any worry about escalating carbon prices or other carbon related regulations. Basically, like two huge worries because as you say, for a lot of these facilities, the cost of energy is the bulk of the costs. And to have the bulk of your costs fluctuating 500x back and forth over the course of a couple of years is just an insane way to try to run an industrial facility.John O'DonnellThat's right. This matter of what kind of risks do we take? People say, oh, it's risky to work with this new technology, but look at the risks that we just were used to taking. And we're entering this new world where we're not talking about a green premium, we're talking about the same or lower energy cost with these reduced risks. And then, of course, depending on what the commodity is, low carbon aluminum trades at a price premium on the London Metals Exchange. Low carbon fuels trade at much higher prices in California and Germany. And for consumer facing brands, there are buyers, coops of producers who are seeking low cost effective renewable heat sources so they can offer to the market low carbon commodities.David RobertsYeah, I mean, it seems like there ought to be a bunch of market actors that are just ready to embrace this. Like, for one thing, as you say, just on a quantity basis. If you take all that energy that we're using for heat and transfer that to electricity, you need a lot of new electricity and a lot of new clean electricity. So it seems to me like renewable energy developers ought to be over the moon about this, like beating down your door. Are they lining up to be proponents for renewable heat in the industry generally or have they not caught on yet?John O'DonnellIn some places the answer is yes. As I mentioned, Europe is very aggressively moving in this direction and a number of folks over the last few years have said "this Rondo thing sounds too good to be true. Come back to me when you're operating something commercial." We're now operating something commercial. So the short answer to your question is yes, because again, these projects offer this mix of speed and certainty that we're not tied up in a grid queue. Scale, utility scale, there's a lot of commercial industrial C&I Solar, where people are building 2 MW here, 2 MW there.It takes the same amount of brain power and lawyer time to do the two megawatt project versus the 400 megawatt project that the same facility would use for heat, and returns now that we're in an era where that's the coolest thing is that the numbers work for the heat user, they work for the financier, they work for the builders of the solar fields and they work for us. And that's a new world and economic tailwinds driving it. It will keep going faster and faster. The size you mentioned, I think at the end of 2021, there was about 1000 gigawatts of wind and 1000 gigawatts of solar each in the world.The IEA did an assessment of industrial heat and their number is it's about 9000 gigawatts of new generation that's going to be required to replace the oil, coal and natural gas now being burned.David RobertsGood grief.John O'DonnellThat's worldwide, right? And so it's only, what is it, 20% of that in the US. Yeah, that's right. It's only a few thousand gigawatts in the US.David RobertsAn enormous opportunity to build more renewable energy.John O'DonnellYeah.David RobertsA similar question is, and I have always had this question about electric vehicles too, which is electric utilities are sort of notoriously stressed, worried about this death spiral, they're worried about grid defection. And you represent potentially just a wild new load, a new responsibility for them. Something that natural gas utilities were doing, were handling, is now all going to transfer and be their responsibility, which is just a way for them to grow and invest and just a wild new opportunity for them. Why aren't they at the front of the line beating down the door, trying to make this happen faster?John O'DonnellThat's a great question, and they are. One of our investors is Energy Impact Partners, whose backers are the North American electric power industry. And for sure the lowest cost way that we're going to decarbonize all of civilization is electrification. And for sure the electric industry is at the heart of that. One of the things that's really profound about what we're doing for them is that electrification, you install an electric furnace. That furnace is now running on wind power 30% of the hours of the year. And the other 70%, it's a new load on gas fired or coal fired power stations until the grid has fully decarbonized.David RobertsRight.John O'DonnellThese thermal storage systems, these things can be dispatched by the utility the same way they dispatch generation. The deal is not that I want a megawatt continuously, the deal is I want 24 megawatt hours today. You deliver them when it's convenient. These things become an asset in the electricity grid and a solution to these problems of variability and over generation and balancing.David RobertsRight. In the same way that sort of any controllable load helps grid stability. These are controllable.John O'DonnellYeah, but people talk about controllable load, demand response, for example, is a load that you expect to run all the time, but you can turn it off during emergencies. That's not this, this is something that no, no, you're going to dispatch it so that it never takes a single megawatt hour of spinning reserve or gas fired power generation. You're going to dispatch it so that it never raises the peak demand on your transmission or distribution system. You can manage it with telemetry from the grid operator. It's different than anything that's come before. It's like lithium-ion batteries in that sense, but at a tiny fraction of the cost.And we're not trying to solve from moving electric power from noon to 07:00 p.m.David RobertsRight.John O'DonnellWe are taking that electric power and replacing gas combustion principally in North America, and oil and coal combustion. We're opening an entirely new segment to renewable deployment. So, yeah, the electric utilities are getting engaged now. They face all kinds of issues with the regulatory frame that we have for electricity. Of course, they're already facing those matters as renewables deploy. And there are some new challenges, but there are people actively working that issue and we're thrilled to be working with them.David RobertsSo if I'm, I've got this manufacturing facility, I've got a big Rondo battery and I'm trying to decide between two options. One is I could build my own off-grid behind the meter generation, solar and wind. I could put my own solar and wind up, or I could just get on the grid and time my charging so that I'm chasing the clean energy on the grid so that I'm only charging when there's clean energy on the grid. Do we have any sense of which of those will be more economic or why you'd want to go one way rather than the other?I'm just wondering how many of these sort of self contained, off-grid, purpose built renewable energy installations there are going to be, it seems to me intuitively like that ought to be more expensive and what you ought to prefer is just for the grid itself to clean up so you have more, so it's easier. But what are the choices there?John O'DonnellThese questions are right at the heart of the matter. You're dead on. And I'll give you the long answer. The short answer is it depends. And it depends primarily on where you are. Pre-war economics, one project in Europe, large operation, that wanted to replace a 250 megawatt gas boiler. They could install a 250 megawatt electric boiler and eliminate their scope one. Their actual scope one, plus scope two would go up because they're in an area that's about 40% wind. And now, if 60% of the energy is coming from a coal plant, you were worse off.But from an economic standpoint, they were paying $35 a megawatt hour for gas fired heat. The electricity price annually would have been about €68 sorry. Per megawatt hour. But upon a study, given the presence of offshore wind in that area, their expected energy price on a long term buying in the cheapest 4 hours a day was under €10 a megawatt hour. So that's an example where the grid connected thing is exactly right, and it will only take four years to get the grid upgrade done, of which about three months is construction. So in a lot of places, the grid connection for grid projects is a matter.Oklahoma last year had 2000 hours of negative wholesale prices. If you put a project in Kansas or Oklahoma, you have energy prices that are slightly negative on an annual basis. If you can charge very rapidly, if you are allowed to participate in the wholesale market, there are regulatory obstacles.David RobertsBut in theory, in Oklahoma, during a time of negative wholesale prices, your facility that's running off a Rondo heat battery could be paid to charge itself.John O'DonnellThat's right.David RobertsIs that how that works? Is that what negative prices means?John O'DonnellThat's what negative prices means.David RobertsThat's so mind-blowing.John O'DonnellWell, again, and we have lots more of that coming. I know you've spoken to folks about the IRA. The production tax credit coming to solar is going to broaden the areas of the country where we see intermittent negative prices. Because, of course, if I'm getting $20 megawatt hour for tax credit, I'm perfectly happy to generate when prices are negative $19, right?David RobertsYeah. That's just crazy.John O'DonnellTechnologies like this that can absorb those periods are going to lift the price floor. They're going to benefit all the generators, especially the generators that can't turn off. And we're pretty excited. But again, it's can we connect to the grid? Can we capture those prices?David RobertsBecause if you can, there's enough heat to absorb all the curtailed power in the US, times a gazillion. Theoretically, if you could hook up all heat to electricity, you'd never curtail again, or at least not for decades. Probably.John O'DonnellOf course, subject to where is the heat-load versus where is the curtailment? Some curtailment is regional associated with total generation. You know, some of it is transmission constrained. But to a first approximation of the answer yet, that was correct, yes?David RobertsYeah, that again, seems just a crazy business opportunity for everyone involved.John O'DonnellYeah, we agree.David RobertsBut you do expect to see these off grid, custom built renewable energy installations, purely powering heat batteries in areas, say, where the grid is congested, or the grid is dirty or the interconnection queue is unusually long. You do expect to see those pop up?John O'DonnellWell, as I mentioned earlier, and just for scale, California has on the order of 20 gigawatts today. We need 100 gigawatts of new PV just to replace the BTUs of fuel now being burned for industrial heat. About 40 of those gigawatts, because of where the things are cited, could be built with no grid connection at all. And most of them will need some kind of grid connection. We see again and again that the new renewable project development model is going to be building a project that part of its electricity goes to industrial heat, into a heat battery, and part of it goes to the grid.And that, that's the sweet spot that delivers lower cost electricity to the grid. And we're absorbing what would have been curtailed power from that new purpose built thing to get all the power we need for the factory or the cement kiln or whatever.David RobertsRight. Yeah, if I'm a renewable developer and I catch wind, that there's this whole category of renewable projects that don't require this unholy paperwork nightmare that they all go through. Now again, I just can't imagine that they're not going to be stampeding in this direction. I mean, I hear them complain about this constantly.John O'DonnellWhat are the required conditions? Obviously the financial community we have to get our minds around. Okay, how are we structuring these projects where most of the energy is going to a single factory rather than to the utility? Let me think about the credit worthiness of that. And then for the moment, how long will it take to retire the Rondo technology risk? How do we backstop that? And we're busy building systems and projects that this first one of course, is the first step at commercial scale to build the track record. But again, there's a reason why we chose these century proven materials specifically, so that once you turn one of these things on and operate for six months, there's nothing left to prove.We know it works and we already know everything is durable.David RobertsThe brick heats up, the brick cools down. It's not again, it's so simple.And exact ... but that exact material, there's a million tons of doing that around the world. Doing that right now in much more severe service. But yes, it's simple. That's right.And I would imagine also that this space is going to see a lot more entrance competition. Of course, once it's kind of uncorked and it becomes clear what the opportunity is.John O'DonnellLook, trillion dollar markets don't happen without lots of people trying to enter them and nothing could be better, right? That's what we urgently need.David RobertsRight. One other question about industry, about location matters. You mentioned industry clustering along a coast where the coal is available. As more and more of our industrial activity in general and civilization gets hooked up to cheap renewable energy. Do you see something like over the course of I mean, I guess this will take years and decades, but do you imagine areas of intense renewable capacity like with lots of sun and lots of wind becoming new attractors to industry? Do you see global industry starting to migrate to renewable energy? Is it that much of a chunk of the cost of an industrial facility that it might be worth someday literally moving to it?John O'DonnellThe short answer to your question is yes. Just look at what happened with the shale gas revolution in the US. Vast investments in petrochemical and other manufacturing immediately shifted to where huge employment growth shifted to where that low cost energy was. And there's a question of how fast these transitions happen. Vasila Smill likes to talk about, "oh, it takes a really long time," but there are lots of examples where that is not true. Just, again, when the rules changed and combined cycle gas fired power generation was allowed in the US. We saw giant capital flows and giant rates of transformation.Now, that took awareness. It took enough experience that investors could say, oh yeah, I'll build that giga project because I know it's going to work. It took awareness of the kind that you are building that these opportunities exist, but the long term. Yes, absolutely. That's right.David RobertsThat'll be such an interesting geopolitical like of all the forces in the last 50 years or whatever that have moved industry around the globe, this will be just a completely new version of that. It's going to scramble all the previous alliances.John O'DonnellYeah, but there is one example that's even faster, which is not just the long term, but the right now. A couple of weeks ago, I spoke at the Munich Security Conference in a session with a number of industry CEOs and Ursula von der Leyen, the European Commission president and president. Wevine said, look, there are three wars underway. There's the ground war, there's the energy war. He thought he would bring us to our knees. And there's a clean energy war, mostly with China. And a huge challenge before us today is how do we get off gas? But we need to get off gas without deindustrializing.There have already been giant plant shutdowns and layoffs because of the unavailability of gas right now and the forecast unavailability of gas longer term. Europe's bullets in the energy war are clean electrons, domestically produced, stable, low cost sources of energy. And again, we and all the other electric thermal storage technologies because we save twice as much gas per kilowatt hour as hydrogen. We're an important part of speeding up that transition there and preserving an existing industrial base. I think the same thing is true in the US as well as carbon prices come into the world. As gas prices rise, the competitiveness of US manufacturing on the world stage is going to be affected by how fast can we make this transition to renewables.And it doesn't happen all at once. But there are beyond the climate drivers, beyond the huge business response that we've just seen in the last five years, to the climate drivers, the pledges, and not just pledges, but action that we're seeing across all kinds of industrial producers. We are really at an amazing moment. I kind of wish we had gotten started with what we're doing here at Rondo five years ago. But five years ago what we were doing was stupid, right?I mean, go back ten. What we're doing somebody could have figured out earlier.David RobertsI said it at the outset, I'll say it again, I say it over and over again. Wind and solar being as much cheaper now as they were five to ten years ago is just like it's not an incremental change, it's a phase change. It's a flip to a different system. All we're doing now is just like sort of one at a time here and there in different industries, in different places, kind of opening our eyes to like, oh, this is a completely different landscape, like completely new opportunities. It's a different world now. It's going to take a while just to absorb the implications of super cheap renewables.John O'DonnellYes. And the thing we know for sure is that every year somehow those cost reductions will continue, right? We have some short term supply chain things, but somehow, I mean, I worked in the electronics industry for decades and everybody every year said, oh, Moore's Law is over, it can't keep getting better.David RobertsThey say it every year for wind and solar too, right?John O'DonnellYeah, exactly. And you look back over every five year period, every year's forecast was wrong, it fell faster than that. It's reasonable to assume we're going to continue to be in that, so that this era that we're entering, it keeps getting better and better. Our storage technology and the other storage technologies will cost reduce as they come down. But the storage technology is only 20% of the cost of the total project. The fact that the wind and solar are coming down so steeply, this cost advantage is going to continue to open for the people who have made this transition onto renewables.David RobertsIt's really interesting watching people in industry try to sort of skate to where the puck is going to be, as they say, sort of like start off on something that might not be economic when you first start developing it, but you're going to meet that cost curve, right, in five years, and then your business model will become viable. It's a real tricky timing there. There's a lot of people trying to sort of coordinate that dance just right.John O'DonnellYes, but my point is we're already at that point where we're at break even or better, we're not waiting five years. That's one of the big difference of this class versus there are a lot of things that are just as you said, we're investing now because we're hope it's going to be cheaper in the future.David RobertsWe're already at that point, right, so a final question. I wanted to ask you a little bit more about this, but maybe we can try to do it quick, which is just you've got these things that store electricity as heat, fairly cheaply for a long time, with very low losses. The applications you're overwhelmingly focused on are industrial, because as we've discussed, industrial heat is huge, difficult to decarbonize, giant market opportunity. But I'm just wondering, it seems like there are probably other uses that we could think of for boxes of heat. Are you actively pursuing any or alternatively, like, do you see any out there over the horizon that you might get to eventually?What else could we do with heat batteries?John O'DonnellThere are two big things we've been pulled into that. If you'd asked me a couple of years ago, I would have said, oh, that's going to happen much later. One of them is industrial Cogeneration. PURPA back in the 1980s established special tariffs for Cogens because it's the most thermodynamically efficient way of delivering electric power and heat. Repowering Cogens with renewable heat makes them more efficient. A unit that delivers industrial steam and electric power is 95% efficient. It's more efficient than any lithium-ion battery, although it's only delivering about 20 or 25% of its energy as electricity, and the rest is heat.Almost every industrial Cogen, the industrial needs so much heat that that Cogen is exporting power to the grid as a side effect of delivering all that steam. So, renewable cogeneration, or they also call it combined heat and power, is an area that we see distributed generation. 20 MW here, 50 there, ten there. That is decarbonizing small industries, but providing baseload distributed high value generation to the grid.David RobertsBriefly, what does that look like, though? What is a cogen? Because cogen, just for listeners maybe, who aren't familiar, you're using a turbine to generate electricity and then you use the excess heat from the turbine ...John O'DonnellThat's right.David RobertsFor whatever you need. So what does it look like in this case?John O'DonnellYou said it exactly right. Instead of throwing the heat away into a condenser, you are using that heat as medium pressure steam, making tomato paste or paper or chemicals or any of the things. And so you have a facility that the heat battery, or today, a natural gas boiler makes high pressure steam, goes through a turbine, medium pressure steam goes to the factory and electricity comes out from the turbine. Exactly the same thing. Now you've got a heat battery making high pressure steam and driving combined heat and power. So really it's 95% efficient. Electricity in to heat and electricity out and you are exporting back to the grid.So that's one. The other has been a surprise. Again, it's something I would have said we wouldn't be engaged in. I think just today there was the announcement that the latest EPA rule is going to cause another 15 gigawatts of coal retirements. Coal-fired power stations people think of as about 40% efficient. That's about right. But that's about an 85% efficient boiler, times a 47% efficient turbine, minus the loads associated with air pollution cleanup.David RobertsRight. All the filters and whatnot.Keep the turbine, knock down the boiler, make that a giant long duration electricity storage. That's now in one of those places where there was negative prices, you have anchors for development. We have several projects where developers are looking at these conversions as enabling the construction of a huge renewables cluster, sometimes an offshore wind landing point, or onshore wind development. And right there, reusing one of those things.So this would look like, say, a bunch of offshore wind turbines generate electricity. They generate excess. The excess is stored in a heat battery, and then that heat battery is used to run an existing turbine.John O'DonnellThat's right.David RobertsLike at a coal plant to produce power. It would just be a dispatchable. It would be like a peaker plant.John O'DonnellHowever you want to use it. That's right. Whether you want to use that to take intermittent and now get to base load underneath the intermittent. But it's an electricity storage approach that reuses all the infrastructure, including the turbine. It is lower efficiency than electrochemical batteries. It's far lower cost. Those are large projects. I'd say that's the other one that's a little longer term out the cogeneration, though, the combined heat and power is more efficient than any other electricity storage technology. Right. More efficient. So I think those things will happen first, and we'll see about both of them.David RobertsIf I'm repowering a coal plant turbine, that electricity to heat to electricity conversion is lower efficiency than what I would get from electricity to lithium-ion battery to electricity.John O'DonnellThat's right. But the coal turbine provides other services, like inertia that are needed to make the grid work.David RobertsAnd it's already there.John O'DonnellIt's already there. It's already operating. There's. The first of these conversions using molten salt. That's underway right now in Chile.David RobertsInteresting.John O'DonnellAES announced a project recently that had been in development for a long time. We're very interested to see how fast that sector moves. And all of our focus is on the industrial side. But as I said, we've been pulled into some of these projects.David RobertsYeah, that's interesting. There's a lot of talk from a lot of different directions about repowering these turbines, these existing turbines that exist. I know the geothermal people are big into that idea, but it just does make intuitive sense. Like, you have all these quite sophisticated and expensive turbines built all over the place. Why not just go take out boilers and use renewable heat instead? To power them and then sort of like open your eyes, you're like, oh, we're like we're surrounded with turbines.John O'DonnellYes. But this brings us back to one of the little laws of physics about temperature. The higher the temperature of heat, the more efficiently it can be converted to electricity. Those coal plants use burning coal. Geothermal systems make heat at lower temperatures. They can't directly because we're the highest temperature storage. We're the only one today that can repower those coal plants at higher than their original efficiency.David RobertsIs that, no limit?John O'DonnellNo, it's removing the losses from the boiler and removing the losses from the station load. So basically, it's getting the net power efficiency much closer to the gross and leaving the gross unchanged.David RobertsInteresting.John O'DonnellPardon me, diving in too deep. But there's very interesting synergy with other lower temperature heat, with waste heat recapture and with geothermal heat, where some of our customers are showing us stuff, where they're combining high temperature heat from storage and recapturing some lower temperature heat. And it's going to be very interesting to see how that develops.In terms of innovation for Rondo itself. And I promise this really will be the last question. I'm just wondering, brick is simple and the whole system is simple. As we've been saying, that's part of the that's part of the delight of it. But I'm wondering, where are opportunities for big innovation? Do you have materials science? Is it within reach to heat bricks up hotter than you've got them to get up to the full, whatever 1500°C or whatever insane super hot? What's the innovation horizon for you?Well, the driver for us, first of all, is speed, speed and speed to scale.David RobertsRight?John O'DonnellWe're manufacturing in two locations now. A lot of our material science will be driven by qualifying other sources of materials. We've produced now on three continents, little pilot scale things. So one chunk of material science is about just getting this 2 million ton a year scale. The company formal goals are 1% of world CO2 in a decade and 15% in 15 years. And there are no material blockers to doing that. It's okay. Did we execute properly? Did we find the finance and developer partners? But to your point, the pieces today we're using the most expensive brick materials, the highest temperature, highest strength there will be innovations in simply reducing cost by the system is way overdesigned for reliability as we gain experience.All kinds of cost reductions come from that. But as I mentioned, we have two international cement manufacturers today as investors. We have this project with some Danish universities and a cement plant builder. We're working on high temperature applications where most of the development is the process equipment that will need the heat. And then we'll be taking this core technology and connecting it to those other things. But speed, scale, cost and then temperature and serving these other industries are the priorities.David RobertsThank you so much. For spending all this time with me. As you can tell, I find this particular area so interesting and fascinating. And it will be interesting to come back and talk again. Maybe in two or three years, who knows?John O'DonnellThank you, Dave. It's a real privilege to speak with you. I'm just delighted. Thanks so much.David RobertsThank you for listening to the Volts podcast. It is ad-free, powered entirely by listeners like you. If you value conversations like this, please consider becoming a paid Volts subscriber at volts.wtf. Yes, that's volts.wtf so that I can continue doing this work. Thank you so much. And I'll see you next time. Get full access to Volts at www.volts.wtf/subscribe

BIPOC communities are most likely to bear the effects of climate change, but BIPOC-led environmental justice groups are severely underfunded in climate philanthropy. In this episode, Abdul Dosunmu of the Climate Funders Justice Pledge talks about his group’s aim to challenge big donors to give more equitably.(PDF transcript)(Active transcript)Text transcript:David RobertsWhether it’s suffering the effects of fossil fuel pollution or fighting back against it, black, indigenous, and people of color (BIPOC) are on the front lines of climate change. Yet they are starved for resources. More than a billion dollars a year goes toward climate philanthropy, but of that amount, little more than 1 percent goes to BIPOC-led environmental justice groups.The two-year-old Climate Funders Justice Pledge, run by the Donors of Color Network, is trying to change that. It challenges big donors to a) be more transparent about where their grants are going, and b) within two years of signing the pledge, raise the amount going to BIPOC-led groups to 30 percent.The pledge, featured in a just-released report from Morgan Stanley and the Aspen Institute on how to increase the impact of climate philanthropy, has already led to more than $100 million in annual commitments to BIPOC-led groups.I talked with Abdul Dosunmu, who runs the pledge campaign, about why BIPOC leadership is important to the climate fight, how transparency changes the behavior of foundations, and how to improve the relationship between environmental justice groups and big funders.Alright. Abdul Dosunmu. Welcome to Volts. Thank you so much for coming.Abdul DosunmuThank you so much for having me.David RobertsThis is an interesting topic to me with lots of ins and outs, but let's start with just, I'd like to get a sense of what is the pool of philanthropic money available to climate and environmental organizations? And then how much of that currently is going to EJ groups?Abdul DosunmuThe Morgan Stanley-Aspen report, that we were honored to be part of, and was just released really details a stark challenge in terms of what the author of the report, Randall Kempner, says is both the quantity of climate philanthropy and the quality of climate philanthropy. So, on the quantity side, according to the report, only about 2% of all global philanthropy is focused on climate.David RobertsThat's wild to begin with, honestly.Abdul DosunmuInsanely wild. And what's interesting about that, what's hard to square about that is the fact that if you ask philanthropists how urgent the crisis is, 85% of them say it's extremely urgent. So they're talking one game but walking another game.David RobertsRight.Abdul DosunmuSo, of all global philanthropy, only about 2% is focused on climate. And then of that 2%, only about 1.3% of it is focused on BIPOC-led environmental justice organizations. So if you think about the quantity versus quality framework that Randall has, the Morgan Stanley-Aspen report is really focused on the quantity side of it. The climate funders justice pledge, which I lead, is focused on the quality side of it.David RobertsRight. We'll get to that in just one second. I got a bunch of questions about that, but I just want to in terms of quantity, do we know that 2% that goes to climate related stuff. Do we know what that number is? I don't have any sense of scale at all.David RobertsIs that a billion dollars? A few million?Abdul DosunmuSo our data, and I'm not sure Randall goes into this in the report, but our data is really focused on about 1.3 billion or so of climate funding.David RobertsGot it.Abdul DosunmuSo we're looking at single digit billions. But we also know that in recent years, frankly in recent weeks, that number is steadily escalating as new Climate Funders come onto the scene with last names like Bezos, and Powell, Jobs, and others. And so we really don't have a solid sense of what that new number is.David RobertsRight.Abdul DosunmuBut in terms of the 1.3% number that we focus on at CFJP, we're looking at about 1.34 billion of that which was awarded to National Climate Funders. And of that, only about 1.3% is going to BIPOC-led environmental groups.David RobertsSo that's less than 20 million. Say something in that neighborhood, right?Abdul DosunmuAbsolutely.David RobertsOne other distinction on this is I know that there is giving that gets categorized under EJ activities, which is separate from money actually going to EJ led groups.Abdul DosunmuThat's right. So that's a critical distinction, and you've really just jumped in on the core part of the work that I do. We believe that it's important that EJ work is funded when it is BIPOC-led just as much as it's funded when it's not. And currently what we have is a system where EJ work led by communities of color, conceptualizing communities of color is not funded at the same scale that other work might be funded. And the reality of that is that there are deep consequences because as we often say, the communities that are closest to the problem are closest to the solutions, but they're also the furthest away from the resources.David RobertsSo let's get right into that then. I guess probably a lot of listeners will take this as self-evident, but when you go to big funders, people sitting on big endowments and stuff, and you are trying to make the case that BIPOC-led groups are important to tackling climate change, what's the case? What's the evidence? What do you tell them?Abdul DosunmuWell, we start with a basic concept that says that the climate does not discriminate, people and systems do. And the reason we start there is that we really want to drive them to the data that most of your audience will probably be familiar with around the fact that most frontline communities, the communities that are hit first and worse by the effects of climate change are Black and Brown communities. Most fenceline communities are Black and Brown communities that when it comes to the ways in which this crisis is manifesting itself on the ground and in people's lives, it disproportionately impacts BIPOC communities. So we start there.That if you're actually interested in mitigating the effects of this crisis, by necessity, you would start with BIPOC communities, right? The second piece is if you're actually interested in shifting the systemic landscape that has led to this crisis, you would start with BIPOC communities. And here's what I mean by that. Power differentials in society is what has created the condition for exploitation, extraction, and pollution. It's the power differentials that have created the foundations of this crisis. It's the fact that certain communities have been politically disenfranchised and subjugated and those are also the communities that have been impacted by environmental exploitation and extraction.David RobertsYeah, I feel like this is an important point because sometimes what you hear from, I don't know that they'll say it publicly a lot anymore, but sometimes what you hear in private from climate people is climate is about emissions. And we should attack emissions, right? We should be lowering emissions. And insofar as you are being distracted by other social, like you're mixing your ice cream of peanut butter or whatever, like you're letting your social issues get involved in your emissions issues, you're just going to be less effective at reducing emissions. I think that mindset still has quite a hold on quite a few people.So this point that they're linked is important, I think.Abdul DosunmuYou said. You don't know if people will actually share it publicly. I hear it almost every day.David RobertsSo they still do say it publicly.Abdul DosunmuThey still do say it publicly.David RobertsRight, that there is a sense that you can somehow disconnect the climate crisis from the social and racial inequities that exist in our society, when in fact, the communities that have been the most exploited and the most extracted have been communities that have been denied political voice, right. And they've been BIPOC communities. I often tell the story of a neighborhood in my hometown, Dallas, Texas, called the West Dallas neighborhood. And it's largely Black and Brown, historically has been as a result of housing segregation. And this community was home for 50 years to a lead smelter plant. And this lead smelter plant obviously polluted the environment.Abdul DosunmuIt also poisoned generations of young Black and Brown kids growing up in that community. And it was the political powerlessness of that community, it was the political subjugation of that community that allowed that lead smelter plant to operate with impunity for 50 years. And this is the critical point that we make. It was the rising up of that community. It was the mobilization of that community that ultimately booted that lead smelter plant from the community. And so it's important for us to see that these things are linkedDavid RobertsJust to sort of restate, the whole problem of environmental pollution generally, including climate, is this ability to basically produce waste and impacts that you don't pay for.Abdul DosunmuThat's right.David RobertsBut you can't do that unless there's some community that's disempowered enough that it can't stop you from doing it, right? I mean, the whole setup relies on there being disempowered communities that have no choice but to accept this junk.Abdul DosunmuThat's exactly right. I have a dear friend in the movement, Felicia Davis from HBCU Green Fund, who says we don't just have a climate crisis, we have a power injustice crisis.David RobertsRight. And relatedly, I think, another old piece of conventional wisdom, though, this I think has been changing in recent years. But if you go back I've been doing this for close to 20 years now, and if you go back like 15 years, I think the sort of conventional wisdom was climate is something that educated, affluent, White people worry about because they have the luxury and time to worry about it. And BIPOC communities, vulnerable communities, EJ communities have other things to worry about that are more proximate and more difficult and they don't have time to worry about climate change.And thus those communities are not going to be a big part of a social movement for climate change. And of course, now the data shows that that's wrong, like almost inversely wrong. So what is the level of kind of knowledge and engagement among these communities on the subject of climate change?Abdul DosunmuWell, and this is a key point that I like to make. The first part of that that I would like to deconstruct is this notion that climate is separate from the other issues that impact these communities, right? That in many ways, part of the innovation and the imagination that these communities are bringing to the fight is to recognize the interconnections between climate and housing, climate and labor policy, climate and transportation, right? That they are uniquely positioned to see that climate is connected to a whole range of other systems that decide and define how we live. So that's part of the deconstruction that has to be made.David RobertsAnd you might also say that a White affluent businessman is uniquely positioned to want to not see those interconnections, right? Like there's a lot of incentive not to see them if you benefit from them, basically.Abdul DosunmuRight. There is a desire to focus the fight against the climate crisis on a little intervention here, a little technology here. And the reality is that the crisis is the result of systems that shape how we live. And in order to fight the crisis, we've got to actually change those systems, right? And communities of color are uniquely positioned to be able to understand that and to lead that fight.David RobertsAnd that shows up in the data, and surveys, and polls and stuff. Do you feel like that sentiment, that knowledge is pretty widely dispersed in those communities at this point?Abdul DosunmuOh, absolutely. I think one of the things that we do at CFJP is we actually look at and profile a lot of the movement work that is happening on the ground in communities. And so we're not just talking at a level of theory, we're talking at a level of understanding the movements that are being led by communities of color. So there is a reason that billions of tons of greenhouse gas emissions are disrupted every year by indigenous organizers. There is a reason that it was the BIPOC-led organizations that pushed President Biden on Justice40, and that conceptualized the New Jersey and California environmental justice laws that preceded Justice40.There is a reason that the Climate Justice Alliance, for instance, has had a massive impact on shifting away from extractive energy practices. And so it's important for us to see that we don't need a poll to tell us, all we need to do is look at the work and the organizing that is happening in these communities and see the ways in which it is moving the needle on this conversation.David RobertsYeah, and I'll just say, from my perch, my perspective, like, I remember when the climate bill was being put together back in 2008 and 2009, I don't know if you were unfortunate enough to be in this area when that was happening, but EJ was it wasn't absent, but it was clearly an add on, right? It was like an amendment. It was like a thing you stick on at the end as an afterthought. And it's been remarkable to me just to see, over the years, EJ just becoming much more assertive and having a much bigger place at the table.David RobertsTo the point now that the Democratic, official sort of Democratic Party climate agenda has it right there at the core, and it's included in a lot of these Inflation Reduction Act grants. So it's like night and day in terms of the engagement on both sides. To me, obviously there's a long way to go, but I've seen the change.Abdul DosunmuThat's absolutely right. And that change was led by BIPOC-led organizations. And here's why that's important, right? Obviously, you know this better than I do. We're dealing with a movement that has historically excluded and alienated the voices of People of Color. And there are organizations out there that are doing this work around diversity, equity, and inclusion in the environmental movement, right? And the data has never been good. It's always been bad. And here's the core point that we make. I draw an analogy. One of my favorite football teams, I'm a great Texan, I'm a great Dallasite.So the Dallas Cowboys, what we're doing right now in the climate movement is the equivalent of the Dallas Cowboys finally making it to the Super Bowl but fielding only about a 10th of a team on the field. That's what we're doing right now in the movement. Our best players, our most imaginative players are not on the field because we have historically excluded them.David RobertsLet's talk about that. So the Climate Funders Justice Pledge, what is it specifically? What is it asking of large philanthropies?Abdul DosunmuSo it's pretty simple, which is not to say that they always receive it as such.David RobertsNot easy. Easy and simple are different.Abdul DosunmuEasy and simple are different. But it's pretty simple. It says two things. Number one, it says commit to transparency. So we call on the nation's top climate funders, primarily institutional funders, so we're talking foundations, big foundations to commit to transparency, right? And what that means is we ask them specifically, "how much of your current climate giving is focused on BIPOC-led environmental justice organizations? Not just environmental justice organizations, but BIPOC-led EJ organizations." And we define that very concretely.We say 50% of your board has to be People of Color, 50% of your senior staff has to be People of Color, and you have to have an explicit mission of serving communities of color. So how much in dollar amounts of your current climate giving is going to BIPOC-led environmental justice organizations? That's a transparency component.David RobertsAnd that information is not available today.Abdul DosunmuIt's not easily available. And to be honest with you, most funders have not asked themselves those questions, right?So one of the things that has been a learning journey for us is actually getting feedback from funders that have taken the pledge. And what they tell us is that for them, the most transformative part of it has been the transparency component because they had never actually looked at the data.David RobertsI bet they're not finding out good things, right? They're not pleasantly surprised.Abdul DosunmuNo, they're not. In the main, they are not pleasantly surprised. I mean, the data is what it is, right, nationally. And part of what we wanted to do with this pledge is we wanted to make that data available to communities and movements so that they could actually hold these funders accountable, right? And so that the funders who are committed to environmental justice can hold themselves accountable. So it matters that a Kresge Foundation, for instance, says, "you know what, what has been most imaginative about this for us is that it has forced us to go internal and look at our data."So that matters. And we don't just ask for the data, and hoard it, or put it in a report that we release annually. We actually post that number on our website. So if you go to our website, you can find that number for each of the funders that have taken the pledge. And then we do a whole bunch of media amplification around it because we actually want communities to organize around this data.David RobertsWhat's a typical number, like Kresge or whatever, once they looked, what are they finding?Abdul DosunmuWell, Kresge is actually, they're an anchor pledger of ours, which is great. And I don't want to misquote their number. If I'm remembering correctly, they were under the 30%, probably in the 20s range. And it's important to note that, again, they have had this as a commitment for a very long time. So actually challenging them to, "okay, let's look at the data," has been super helpful for them.David RobertsInteresting. Okay, so transparency is step one.Abdul DosunmuStep one is transparency. And I actually looked at the number. They're actually at 33%. Let me give Kresge their credit, they're at 33%.David RobertsI'm going to guess that's unusually high.Abdul DosunmuThey are one of the leaders in the field, no question about it. It is very high for the pledgers that we have, and they are making continued strides. So the transparency piece is very important because it allows us to have conversations like this one. "Where is this funder? Where is that funder, and how can we hold them accountable to the commitments that many of them have?" Right? So let me just put a pin in this and say after George Floyd, we saw a number of funders make new commitments around environmental justice, around BIPOC communities. And in the couple of years since, we've seen most of those commitments fade into the background, right?And so this has become a tool that communities can use to actually hold funders accountable to what they say they're going to do.David RobertsGot it.Abdul DosunmuAnd then the second component of the pledge is the 30% requirement. So what we say is after you tell us your number, if you're not at 30% and a good number or not, we challenge you to within two years of taking the pledge to get to 30%. So scale your grant making to at least 30% going to BIPOC-led environmental justice organizations over the course of two years.David RobertsCan I ask where 30% came from? I mean, is it just sounds reasonable or is there something more to it than that?Abdul DosunmuYou know, if you look at it, BIPOC communities, about 40% of the population, what we said was 30% seems like a good floor. It is not intended to be a ceiling. And what we hope to see is that over time, that number is far exceeding 30%. But at least as a floor, 30% felt right to the networks of movement organizers and leaders that we pulled together to help develop this campaign.David RobertsAnd so this funders pledge has been going on for how long, and what's the state of play? Are foundations signing on? How much money have you shifted? How long has this been running?Abdul DosunmuSo you're talking to me pretty much on the eve of our two year anniversary. And so we've been around for a couple of years. And to date, twelve of the Top 40 climate funders have taken the pledge.David RobertsInteresting.Abdul Dosunmu32 foundations overall have committed to at least one portion of the pledge. And so some of them will say we'll do transparency, but we're not quite ready to go to 30%.David RobertsRight.Abdul DosunmuAnd we accept that because sunlight is the best disinfectant.David RobertsYeah, I think you're right that transparency is the big piece here. It's like that dream where you wake up in school, and you're naked in school or whatever, all of a sudden everybody can see ... that alone, I think is going to create a lot of push.Abdul DosunmuRight. Nobody wants to be at the bottom of the list, right. Nobody wants to be in single digits when everybody else is in double digits. And the ones who are in double digits, like Kresge, they want to do better, right? They want to get more shine. They want to tell their story, more impactfully. And so we offer the transparency piece not just as stick, but also as carrot to those who are doing well in this fight, and want to help us tell the story, and amplify the mission. And so what we have seen is that there is momentum around the pledge.And we're very proud to say that we have helped to catalyze a new baseline, funding baseline through the pledge for BIPOC-led organizations of around $100 million in the two years that we have been around. But $100 million is really just a drop in the bucket because right now we're seeing, again, as I said earlier, new funders come into the field every single day.David RobertsWell, this was my very next question, is do we have any sense of what sort of dollar figure we would be talking about if this succeeded, if all the big philanthropies signed on, and if all the big philanthropies actually did it? Do we have any idea sort of like, what the ultimate pool of money is?Abdul DosunmuSo I don't have that hard number, but I can tell you that our campaign has a goal, right? An aim of catalyzing $500 million. So if we could get to $500 million, we feel like we would be radically transforming the possibilities for BIPOC-led environmental justice organizations. But that's going to require that we make the transition, the pivot, from what I would call the legacy funders, right? So legacy funders like Pisces, and Kresge, and Schmidt, and Rockefeller Brothers and Hewlett and ... a number of the ... MacArthur, a number of the others that have Heising-Simon's Energy Foundation, Packard Foundation, a number of those that have taken the pledge.We've got to make the transition from just those to now some of these more entrepreneurial startup funders in the space, like a Bezos, like a Waverley Street, like a Sequoia.David RobertsHave you talked to any of them? I mean, I assume you're reaching out. I guess one of the questions I'm sort of curious about is, is there a big difference in culture that you found between these established groups and the new ones coming in?Abdul DosunmuThere is. We are outreaching every day to the new funders. One of the reasons I make the distinction between legacy and entrepreneurial is that when you're a legacy funder, you have deeper roots in communities because you've been funding them for a long time, or at least you've been giving lip service to funding them for a long time, right? And so you're more susceptible to their accountability, right?David RobertsRight.Abdul DosunmuYou're more accountable to them than a new funder who's coming in, who is somebody who's made a bunch of money in tech and just wants to give it away out of a good spirit and a good heart. But there isn't the same level of connectivity there to communities, and so that has been the biggest challenge. And then the other piece of this is when you're an entrepreneur and you've come in right on the heels of having made a lot of money, a lot of money in business, you tend to think you know how to do things.David RobertsWhat? Tech guys?Abdul DosunmuI know, it's a crazy thought, right?David RobertsYeah. I was going to say I don't want to cast aspersions, or use any stereotypes, but when I think about tech-bros fresh off making billions of dollars like sensitivity to racial justice is not what leaps to mind.Abdul DosunmuWell and they may have the sensitivity, some of them, but they also have the kinds of neurosis that come from having made a lot of money and been very successful, and you think you kind of know everything, right? And so oftentimes they will come into the field and say, "here is what I want to do on climate," and it has no relationship to what communities actually are doing and need to do. That's really probably the biggest culture challenge that we face is that it's both the accountability piece, and it's the part of this that understands that, ultimately, this is a learning experience both for the funder and for the broader field. This is not top down, it's bottom up, and the best solutions come from the bottom up.David RobertsAs you've talked to foundations, have you received any straight up kind of disagreement about your goals?Abdul DosunmuWell, we mostly don't get that, right. We mostly get, "well ... we're going to work on ... " That's my impersonation. "We're going to work on it, and we're going to see, and talk to us in six months and ..." that sort of thing. But every now and then you do just hear "no, we're just not going to do it."David RobertsRight.Abdul DosunmuBut generally that doesn't come from a disagreement with the goals or the objectives of the campaign because it's hard to disagree with the goals and objectives of the campaign. It generally comes from a sense of, "you know what, this is just not part of our agenda. This is not what we do, and we're not going to have anybody external to our organization directing our strategy."David RobertsYeah.Abdul DosunmuAnd so that's generally where most of the resistance comes from.David RobertsIf you imagine a huge new flood of money descending on these groups, over the course of the next two or three years, you can imagine ways that that could go poorly. That's a big disruptive thing. And one of the things I was thinking about is when you talk to these small groups, often what they'll tell you they need is just operating expenses. Like they need to be able to pay decent salaries, right? Just to begin with. Trying to run a whole movement on underpaid people is difficult, and they need sort of just like cost of living, cost of operations, operations money.Abdul DosunmuRight.David RobertsAnd what you often find, or what they tell me they run into when they talk to funders is, of course, funders are wealthy, and therefore overestimate their own cleverness, and often have their own ideas about what they want groups to do. So I worry, like, is this going to be the right kind of support? And you can certainly imagine a big new pot of money coming with a bunch of sort of big footed demands about how these groups do things, right? Like, you can imagine big funders trying to sort of dictate the strategies of these groups rather than listening and learning from them.So I don't know how you go about, I mean, I don't know exactly what I want you to say in the switch, but are we confident that this support is going to be the kind of support that these sort of small struggling groups need most?Abdul DosunmuRight. You are really touching on a critical part of this that our campaign is going to be doing more work on. It hasn't been a core part of it thus far because we really see ourselves as the accountability mechanism in the field, but we do think there's an opportunity for us to engage on these questions. So to start, what we really need is a shift in the culture of philanthropy, right? And so part of that shift is a shift in the "philanthropy knows best" mindset. And we've been talking about that. Part of that shift is a shift in the desire of philanthropy to really dictate all of the terms of engagement. And they do that primarily by focusing most of their grant making on program grants.Right.And so you might get a grant to run a specific program, but you're not going to get a grant to actually scale your organizational capacity.David RobertsRight. This is a notorious complaint from nonprofits across the board from time immemorial, right. They're like, we can get a grant to do a specific thing, but we just need, like, printer paper,Abdul DosunmuRight! "We can get a grant to do a specific thing, but we need to hire people to do the thing, and we need to be able to offer them insurance, health insurance, and we need to be able to keep the lights on in the building." And that is a part of this conversation that, again, we have not touched on, but we see there's an opportunity for us to touch on as we continue to move forward. So those are really the two of the areas where there's room for additional intervention. The other thing I'll say is this. It's a bit of a vicious cycle that these groups are in because they don't get the funding, so they can't build the capacity. And because they don't have the capacity, that lack of capacity is used as a pretext to deny them more funding, right?So it's a vicious cycle. And now we're in a moment where there's some $500 billion coming down from the federal government, on climate related resources. And a lot of that is sort of focused on, or earmarked on a climate justice lens. And we're happy about that, right? We fought for that, the movement organized for that. But the concern that we have now is that because of this disparity in funding and private philanthropy, many of the organizations that are BIPOC-led, that are going after these grants won't be able to successfully compete because they've been locked out of the private funding, right?And so a lot of work is being done on the ground, and movements, and organizations to actually try to help organizations build capacity over time to be able to compete for these new dollars that are coming down and to actually be able to fulfill the spirit of Justice40, but we need more funding to do that, and the private funding market is critical.David RobertsYeah. And another thing I've heard from these groups, these are most often pretty small under-resourced groups. And another thing I've heard is that even the process of applying ...Right ...For these things, is burdensome, and difficult, and expensive. Like, if you're a two, or three, or four person operation, it's nothing for a Kresge to sort of send someone out to hear your pitch. But for you to make the pitch is a lot of hours of labor which you can't really well afford. And I've heard from groups where they say, they'll come consult with us and ask us how to do better in their EJ funding and et cetera, et cetera, and we make these elaborate presentations and then they vanish and we never hear from them again.So I just wonder, are there broader ... you could imagine a regime where a big wealthy funder pays some small stipend to a group to offset the cost of consulting, the sort of free consulting they do, or the cost of applying for grants or something like that. And that would just be can you think of are there larger ways that we need to change the relationship between small EJ groups and big funders, beyond just the monetary beyond just giving them money, in terms of just the kind of social aspects and cultural aspects of their interaction? Are there larger reforms we need in that aspect?Abdul DosunmuHow much time do we have?David RobertsI thought you might have something to say about that.Abdul DosunmuRight. I have the privilege of wearing a bunch of hats in my work.David RobertsYeah, I meant to say, I read your LinkedIn page. I had to take a nap halfway through. You're a busy man.Abdul DosunmuI'm a busy man. I do a lot, and I sit across a lot of different buckets, right. And so on the CFJP side of things, obviously, I'm wearing a bit of a philanthropic hat. We don't necessarily consider ourselves philanthropy, but we're not movement. We're somewhere in between, right. But we definitely wear a philanthropic hat. And then in my other work, I actually lead a grassroots voting organization of Black lawyers and law students. And so on one side of my work, I am challenging funders to do more. And then on the other side of my work, I am living every day the ways in which this system is inequitable toward founders of color and leaders of color.And so I see this from both sides. Really, I think the first place to start in this conversation is with a conversation. And so typically the exchange between funder and organization is a one-way conversation, right. It's a one-way street.David RobertsYeah. Speaking of power differentials.Abdul DosunmuExactly. These broader power differentials in society are being replicated in how foundations engage with organizations. "And so you can apply for a grant if we invite you to apply, we want it in this 60-page application format."David RobertsAnd then you get the grant. And like we need a 60-page report every year.Abdul DosunmuThat's right, "we need the 60-page report every year. Oh, and by the way, you probably won't get the grant in time to actually do the work you need to do with it because we're going to take our time delivering the grant to you, and you interface with us and interact with us when we invite you to."David RobertsRight.Abdul DosunmuThat has to change. And so part of the culture change that you're talking about that so many organizations are advocating for, starts with making that one-way conversation, a two-way conversation, and actually listening to organizations on the ground and having those organizations inform your grant making practices, right?So let me go back to Kresge for a minute. One of the other things that they have said to us has been impactful for them is actually the transformation that the pledge has wrought in their grant making practices, in their day to day grant making practices, and how they engage, and how they interact with grantees.David RobertsSo that just means they've been learning by doing, they've been learning by interacting with these groups?Abdul DosunmuThat's right. That's right. Absolutely. And we've heard that from multiple funders. And so really what has to happen is that the funder has to become a learner, right. And that's what we're pushing through this pledge. We're challenging funders to become listeners and learners and actually hear from the organizations on the ground about what needs to change in their grant making practices in order to be more equitable. And a lot of them are making changes. I think that's really where this starts is the conversation, shifting it from one-way to two-way.And one of the things, by the way, that we have tried to do is that a number of these funders have said, "well, how do I actually get this data? How do I actually get the demographic data information? How do we kind of navigate that?" And what we have done is actually provide resources for them, so that when they're seeking out this data, they're not creating more layers of burden on these groups, right? So we have tried to incorporate that even into our own program.Right, so these groups don't have to sort of do another report on our demographic makeup, et cetera, et cetera. So that's a little bit more public. And it also occurs to me I mean, maybe this is even too obvious to point out, but it also occurs to me that it would be nice if these big funders going to these groups were not like 18th century British royals visiting the islands like strangers in a strange land. Like, it might be nice if they were composed if the makeup of the actual big funders changed.Well, there you go. There you go. I mean, you've made exactly one of the critical points, which is that the work that Green 2.0 and so many other organizations are doing to actually change the makeup of these funders is directly connected to our work. Because you're absolutely right. You should not be visiting these communities as though you're visiting from Mars. You should have people on staff in senior positions who are deeply rooted in these communities, that know the work that's happening, that know the challenges facing these organizations and are directly invested in this work, right? Part of what I have seen in the time that I've been doing this work is that there are so many brilliant folks across the country who are directly and deeply invested in this work, and they are the people who have been laboring in obscurity.They are the people who've been laboring without resources. And in order for this system to change, the system of philanthropy to shift, part of what we've got to do is bring those voices from the outside in and make sure that they actually have the ability to transform these funding institutions. And that last point is critical because it is not enough to have People of Color faces in high places if they do not have the ability to actually engineer change.David RobertsI used to work for a nonprofit. The first journalistic organization I worked for, Grist, was a nonprofit. And especially back when I first started, we were very small. There's like four or five of us. So I became intimately familiar with the grind of begging foundations for money. Luckily, I didn't have to do that part for long, but I saw enough of it. And one thing that just struck me immediately and overwhelmingly is that we were an organization that was specifically targeting young people. We wanted to be sort of irreverent, and funny, and just all these kind of things that appeal to young people.But the people we're talking to and begging for money are, to put it bluntly, White boomers. They're older White people who are not necessarily who you'd go to to learn about what the youth of today want out of a journalistic outlet, right? And so I wonder if you have gotten any sense that younger people in general are hipper to this issue than their elders?Abdul DosunmuIn some ways, yes, and in some ways, no, right. And so what's clear is that younger people just generally understand the climate crisis better than their elders. So we start there, right. You have less of a case to make to younger folks about the urgency of this crisis, but I think it's important for us to be clear that when it comes to age, that does not necessarily portend more enlightenment on racial justice issues.David RobertsYes.Abdul DosunmuAgain, I work in sort of the democracy space, and I think there's always this assumption that the younger the electorate gets, the more progressive it's going to get, just because younger people have grown up in more diverse environments. On some level, I think that is true, but I would not want to bet the house on that. And I think we have to continue to be more intentional about cultivating, even among younger people, an understanding of the racial justice implications of this crisis. And so, as a case in point, I was in Miami for the Aspen Climate Conference last week.David RobertsYes.Abdul DosunmuAnd I did a number of panels during the week, and most of the programming had a climate justice angle to it, right. Most of the speakers referenced it. It was rare that you would sit through an hour long panel, and it wouldn't come up.David RobertsRight.Abdul DosunmuBut I'll be honest, there were still rooms that I walked into where I was the only Black person in the room. And I don't want to put any blame on anybody. This is not me trying to do that. This is not about assigning blame. But it is about recognizing that even among the cool, hip kids who are invested in the climate movement, that investment in racial justice still needs to be intentionally and actively cultivated. And we cannot assume that it is going to happen by osmosis.David RobertsRight.Abdul DosunmuOr that it will happen just because younger people are younger people, right.David RobertsJust because the arc of history right.Abdul DosunmuThe arc of history is long, but it bends towards justice. I firmly believe that. But I also believe that we have to bend it.David RobertsYeah, there's a reason it bends towards justice, because all the people are working to bend it, right?Abdul DosunmuAll the people are working to bend it. And so I think there is more consciousness than ever about climate, and there's more consciousness than ever about racial justice, but we still have to do the work to actually translate that consciousness into action.David RobertsWell said. Well said. Thank you. Abdul Dasumo, thank you so much for coming on. This is very illuminating. I'm glad you took the time.Abdul DosunmuThank you so much for having me. Thank you for the platform. It was an honor to be with you.David RobertsThank you for listening to the Volts podcast. It is ad-free, powered entirely by listeners like you. If you value conversations like this, please consider becoming a paid Volts subscriber at volts.wtf. Yes, that's volts.wtf, so that I can continue doing this work. Thank you so much, and I'll see you next time. Get full access to Volts at www.volts.wtf/subscribe

In this episode, Erik M. Conway discusses his new book The Big Myth: How American Business Taught Us to Loathe Government and Love the Free Market, coauthored with Naomi Oreskes.(PDF transcript)(Active transcript)Text transcript:David RobertsIn 2010, historians of technology Erik M. Conway and Naomi Oreskes released Merchants of Doubt: How a Handful of Scientists Obscured the Truth on Issues from Tobacco Smoke to Global Warming, a book about weaponized misinformation that proved to be extraordinarily prescient and influential.Now Oreskes and Conway are back with a new book: The Big Myth: How American Business Taught Us to Loathe Government and Love the Free Market. It's about the laissez-faire ideology of unfettered, unrestrained markets, which was invented and sold to the American people in the 20th century through waves of well-funded propaganda campaigns. The success of that propaganda has left the US ill-equipped to address its modern challenges.On March 8, I interviewed Conway at an event for Seattle's Town Hall, where we discussed the themes of the book, the hold free-market ideology still has over us, and the prospects for new thinking. The organizers were kind enough to allow me to share the recording with you as an episode of Volts. Enjoy!Megan CastilloGood evening, everybody. My name is Megan Castillo. I'm Town Hall's program manager. On behalf of the staff here at Town Hall Seattle and our friends at Finney books, it's my pleasure to welcome you to our presentation with Eric Conway and David Roberts. Conway's new book, "The Big Myth," is the subject of tonight's talk. Please join me in welcoming Eric Conway and David Roberts.David RobertsHey, everybody. Thanks. I'm just going to jump right in. Several things I'd like to get into, but just to start, one of the things that really the book really gets across well, I thought, which I don't know that I fully appreciated, is the extent to which this idea of unfettered, unregulated free capitalism is an invention of the 20th century. It's not what capitalism ... the founders and architects of capitalism, it very much goes against their larger philosophy and their larger kind of moral sentiments. And the way it does this is by elevating property rights, basically trying to they call it the "indivisibility thesis" that property rights and political freedom are one and the same.And any limitation on property rights is de facto a limitation on political freedom. That's new, that was not original to capitalism. So maybe talk a little bit about property rights and how they sort of what the pivot these groups did with that concept in the 20th century, in the early 20th century.Erik ConwayOkay, so that's a jump forward from a book that starts with child labor laws in the 19th century. What I think you're bringing up is the tripod of freedom that the National Association of Manufacturers concocts in the late 1930s as part of their effort to undo the New Deal of the Roosevelt administration. And the idea of the tripod of freedom was, if you think about a three-legged stool there's what they would call industrial freedom or business freedom, religious freedom, and political freedom are the three legs of the stool. So if you remove industrial freedom, businesses freedom to do what they want, then the stool falls.This is a slippery slope argument that equates business freedom with the other two first amendment freedoms. That's what they spent a decade and millions of dollars, 1930s dollars, promoting through billboard campaigns and materials made for schools and movies and so forth in order to try to convince the public that that's the American way, even though it is a pure invention. In the 19th century, of course, lots of business was regulated and the corporate form itself was primarily a tool used by states. States would create a corporation to accomplish a thing like the Erie Canal Corporation to build and run that canal system for the state.And roads were done this way and so forth. And through a whole complicated process, the corporation sort of slowly gets disentangled from the state in the 19th century so that by 1935, we can imagine corporations that are no longer state functions.David RobertsYeah, one of the wild things is learning that early corporations had to go to states and say, "Can we be a corporation?" And the states would be like justify why? Like tell us why. What public good are you serving? It's just a wild inversion of things. And also another piece of this is, and maybe this doesn't come into it as much until the Austrian economists that get brought over, and I guess this would be in the 60s, kind of 50s and 60s, Hayek and the other one whose name is not coming to my mind. Yeah, but this idea that not only is business freedom core to American freedom but the role of the business person, businessman, I guess they always said back then, is explicitly not to be decent, not to be good, solely to make money.So the idea is that if you have these like purely self-interested actors, the magic of aggregating them produces social good, but the individual not only has no obligation to do public good with their business or their corporation, in a sense they're sort of like violating the spirit of capitalism if they do it. Which again is like would send Adam Smith rolling in his grave. Only if you could just say a little bit about how they conceive of the morality of the business person or the morality of business and how that changed from what Adam Smith laid out.Erik ConwaySo that invention of what we now call shareholder value we can trace really back to Chicago school economist. It's mostly popularized by Milton Friedman, though he didn't concoct the term. The idea is, in his 1962 book Capitalism and Freedom he takes a more extreme view of that than the Austrian economist did. Hayek, for example, actually thought there was grounds for workmen's rights of some kind and that there were some justifiable kinds of social mitigations of industrial freedom, as did Adam Smith. Yet Friedman's ideals are what take over in the course of the early eighties. I think it's in the 1980s that the idea really takes off around General Electric Corporation.For example, those of us of a certain age remember Neutron Jack just dismantling General Electric and removing the basic ideas that the company had served in the 30s and 40s, for example, of investing in its community in order to have healthy communities around its plants and so forth. And all that goes away in that era of the 80s. So you can see, for example, in the movie "Wall Street," if anybody remembers that from the 80s, there's a great speech about Teldar paper by Michael Douglas and how it exists only to serve its shareholders. And that's where all the profits should go, and its only social good should be ensuring the continued flow of finance to the shareholders.And all other good things are supposed to fall out of that, except what else actually fell out of that is workers livelihoods and so forth. It's a fascinating reinvention. In fact, as we begin to bring those Austrian ideas into the US in the 30s and 40s, they become simplified, and they become oversimplified as they're put through the businessmen cycle. Because the businessmen in the United States were simply unwilling to accept even the social protections that Hayek and Adam Smith and so forth had thought were necessary in that decade. And so they commissioned economists to essentially rewrite Hayek.David RobertsGlobalization goes with this too, because the more you're a multinational company, the less pretense or need you have to pretend like you need to nurture a particular community, right? If one falls apart, you just go find cheap workers somewhere else. Another thing the book really brought home that I did not fully appreciate... I mean, I guess I knew just from being a journalist that business is out there advocating for leave us alone. But I don't think I appreciated the scale and how long that's been going on. I mean, your book sort of describes waves starting in the late 19th century of government would try to do some decent thing.There'd be a huge propaganda effort against it. Finally, government would win some new protection for workers. Then business turns around, claims moral credit for the protection against workers, and argues against the new thing that's about to happen via billions of dollars of propaganda over and over. There's like three or four waves of this. So maybe just talk a little bit about how extensive this effort was. Like they're going after schools and libraries, morning cartoons. I mean, they really thought it through about how to go wide.Erik ConwayWell, so we started the book with child labor laws in the 19th century because it's the beginning of the conversion of the National Association of Manufacturers from what had originally been a very protectionist organization. They were founded not at all for free markets, they were founded to promote tariffs, the idea being that tariff walls would protect American manufacturing during the period in which the United States developed. And they begin turning against the idea of government itself around the issue of child labor and workplace safety because those things both threatened to cost the money in various ways. They used child labor in order to reduce wages, and they used well, frankly, they managed to convince the courts that workplace safety problems were actually the fault of the workers and not themselves.And so there's a long fight by reformers in the United States to both provide better workplace protections and to eliminate child labor that ultimately businesses lose and then basically change their tune and decide that, well, we supported removal of child labor all along. That's sort of the first wave of the story. And that first wave takes it set in in the 1930s and then NAM changes actually kind of fundamentally in the 30s for a very internalist sort of reasons. The National Association of Manufacturers had originally largely represented small businesses, not large. They have a leadership change in the 30s in which essentially they're taken over by large manufacturers.And then those large and much wealthier manufacturers begin to believe that it's in their interests to try to change the political tone of the United States. And World War II really helps them show how the Roosevelt administration engaged in an enormous public propaganda campaign to support the war. And our manufacturing friends learn a whole lot about how to spread messages. And we don't get into it a great deal in the book because there's so much material. But for example, I pick up with a story of a congregationalist minister in los Angeles becomes quite famous nationwide for setting up an organization known as Spiritual Mobilization.Spiritual Mobilization's idea was to try to reconvince Americans of the moral basis for free market capitalism and to spread that through the churches. He was a minister. He attracted, of course, the interest of the National Association of Manufacturers, very key to our story. And in particular, one of their leaders by the name of J. Howard Pew, who is president of Sun Oil and Pew, becomes Fifield's biggest backer for spiritual mobilization. Spiritual mobilization operates throughout World War II, actually and into the 1950s. And they tried to develop curriculum to push out into seminaries as well as putting materials out into churches and so forth for free market ideals.Now, it's important to understand that as a congregationalist, Fifield was a theological liberal and J. Howard Pew was not. He was very much a theological conservative. So he takes that idea in 1946 and he starts founding new organizations to do the same thing but into the conservative churches. And so the Christian Freedom Foundation was one of his creations. Magazine Christianity Today is one of his creations. He attracts Norman Vincent Peale from the first marble church and so on. And he becomes an enormously successful entrepreneur of the idea of shoving free market capitalist views into American religion.And that's just one thread of the propaganda story that we tell.David RobertsYeah, I was going to say it's creepy enough trying to sort of conflate free market capitalism with America, with America's founding and America's founding values, but then it gets conflated with Christianity. They get merged in a way that only has gotten creepier and creepier over time. I frequently look around today at various and sundry propaganda campaigns still ongoing and wish to myself that the institutions we have set up to seek truth and accuracy, namely academia and journalism, would be more stalwart in their resistance to propaganda campaigns. And it's tempting for people in the present day to say, oh, what's happened to the media?What happened to the old media? But you read through your book and you sort of realize, like academia and journalism were never particularly they didn't put up a very good fight, let's say, against all this stuff.Erik ConwayNo. Another of the stories we tell again about the breadth of these campaigns, it's around the National Electric Light Association, which doesn't exist anymore. It folded after its propaganda campaign was exposed. This is an organization that existed into the 1920s, like the National Association of Manufacturers. It took up the effort to prevent regulation of the electrical utility industry. And one of the ways they did it was by paying academics to author studies that they could use to prove, quote unquote, "that privately provided electrical power was cheaper and more reliable than publicly provided and produced power." Except there was lots of evidence that that wasn't true for both Europe and Canada, which not only tended to have cheaper electricity rates, but also much more widespread electrification.One of the things that we've all forgotten by now, because we were almost all, maybe all of us, were born after electrification is completed. But in the United States, electrification stalled at the city borders and it stalled at the city borders for decades because utilities figured it simply wasn't profitable for them to string lines across rural America.David RobertsEurope beat us to rural electrification. I don't think I really knew that before I read ...Erik ConwayYeah, well, most people have forgotten, but they beat us to rural electrification because they saw it, well, in a couple of different ways. One was program of improvement, but another big one was, remember, there really was a threat of the communists and socialists taking over in Europe, and that was, of course, used as a foil here in the United States, too. But what the European politicians did was they simply decided, well, we're going to take on some of the claims of the reformers and actually do them in order to forestall the revolution. Bismarck was actually pretty successful for a while, and many other of the European countries were successful at more than a little while.And we kind of tell that story, too. But to answer your question is there were paid academics then as well who were not only not attempting to get at the truth, but were fairly well, I would say that they had already been indoctrinated. They already believed that free market, if you couldn't even say such a thing existed, was the proper way. I would say the better way to say it really is private enterprise is a better way to do it. It's a better frame. One thing I haven't said yet, but I want to make sure I do, is that Naomi and I don't believe there's such a thing as a free market.Markets are constructs. They're social constructs. Birds and bees and so forth don't have them. We all regulate markets in some way, either by law or by the guys that break your knees if you don't pay up. They're all forms of market regulation, and some are preferable to others.David RobertsYeah, and they bought off so many editors and newspapers, too, in just like the chintziest ways. They just mail them a pamphlet or take them out to dinner and boom, they got great press coverage. It's very disheartening.Erik ConwayBut I would even say that they didn't have to be bought off, necessarily. Partly that's social pressure you're talking about, which we've all experienced, being invited to the right parties and so forth, and we don't really get into that because sociology is not our subject. But it's also the case that many of these editors were raised in the same propaganda, especially nowadays were raised in the same propagandaized malu that everybody else was. And it's hard to decide that all these things you've been taught for most of your life are wrong. It's very hard to decide that.I'm sure that most of what I've been taught through most of my life is sort of true, at least. But I'm not always sure, and I have to think hard about it nowadays.David RobertsOne thing that comes across also is big business has been organized and at this for a long time, well over a century now. But they weren't really successful for a while. Like, they fought and fought and fought against the New Deal. But the New Deal mostly went forward and mostly remained popular. And it's like wave after wave of propaganda until around, like, the 70s Carter era and Reagan era. So what converged there in history to allow this to break out from basically being kind of a fringe view to it's common sense now, sort of common wisdom, meddlesome bureaucrats and government inefficiency and picking winners.These are all phrases that ordinary people know now sort of sifted down into the popular consciousness now. So what was it that allowed it to finally overwhelm resistance and win?Erik ConwayWell, I think the first thing we've already said we've had this decades long propaganda campaign that helped lay the groundwork, and that's the main subject of our book. And then part two is the 70s. We have a whole series of intersecting crises in the United States. And we talk about the inflation of the 70s from the economic perspective being that big crisis. And the advantage that the free marketeers had was that they had an answer that was different than the standard answer. And Naomi and I are not the first to think about it this way. They had a different answer than the economics of the last 40 years, which had been successful, maintained a relatively growing and prosperous economy, much more prosperous for how do I want to put it more equitable prosperity than what we have now or prior to World War II, frankly.And yet that seemed to be breaking down in the so that's the way we see it. And because they had an answer and because Carter then has, of course, a great foreign policy crisis as well. And honestly, I think Jimmy Carter believed some of the free market mantra in that his administration really launches the era of deregulation, right? It's the Carter administration that undoes airline regulation and trucking regulation and begins undoing rail regulation. And there's even banking deregulation in the Carter administration. And so they begin getting rid of a lot of, in fact, the leftover artifacts of the New Deal in the Carter administration.And what Naomi and I do is we discuss that, what was done, what effects they began to have. And honestly, to some degree, we are supporters of it. Except there's one place that we think they went wrong, really, and that is they didn't apply labor protections that had existed under the New Deal laws. So trucking, for example. And that's they're kind of the poster child for deregulation because ten years after the trucking deregulation law, most of the trucking unions had collapsed. Most of the trucking businesses that had existed collapsed and they'd been reformed into new nonunion trucking organizations.Wages collapsed and so on. And so deregulation helped reduce the inflationary period. Trucking is a major expense to move stuff around, but at the same time it also crushed wages, which benefits inflation, but not the workers and so on. So that's our story of the conversion. And I'm sure you could write others because in the couple of chapters we had, we could barely scratch the surface of what it was, I think, a very complex and challenging period.David RobertsI know you're a historian, so history is your thing. But as you look around now, maybe you and Naomi have talked about this. Do you feel like the hold of kind of the free market mythology is loosening? Do you think we're heading in another direction now? What's your take on the current state of this? Because it seemed to sort of hit its peak in sort of like Bill Clinton. When you got a Democratic president saying the era of big government is over, you've sort of, like, won at that point. You've won the argument. Where do you think we are now with all this stuff?Erik ConwayBoy, I wish I knew. Being a historian, we're bad at crystal ball kinds of things. It's certainly interesting to me that the current president and his predecessor are not free marketeers, neither of them, but in quite different ways. Right. Trump is still backers of kind of Reagan style deregulation gutting environmental agencies and that sort of thing. He did those kinds of things but at the same time was almost doing the 19th century idea of tariff protectionism.David RobertsReally old school.Erik ConwayReally old school. I know some people have called it neo-feudalism, but I don't see it that way. But then again, since I'm a 20th century guy, there wasn't a lot of feudalism for me to study. So maybe I'm wrong. But I do find it intriguing that it's no longer the default position of either party, that the idea of unregulated markets are to continue to be dominant. But what comes next? I don't know. That's the challenging and terrifying part to some.David RobertsAnd neither of them seem to get much internal pushback from their own party over that.Erik ConwayNo, exactly.David RobertsThere doesn't seem to be like an organized presence for it anymore.Erik ConwayRight. And instead it's patchwork. But that's not the word I want. It's more a matter of what they perceive to be immediate self interest at the party level. And so there's lots of discussion now of big-tech regulation and to some degree I would support it depending on the details, but it's not clear to me what that would be. For example, it's an interesting political moment to live in.David RobertsAntitrust is sort of poking its head up again.Erik ConwayYeah, we might actually enforce antitrust statutes for the first time in decades, maybe.David RobertsFinal question, and this is my plaintive question I ask everyone, and especially when I spend a lot of time talking about the media environment, the sort of epistemic environment and Fox and the right wing media and all of this misinformation and stuff. But one thing I'm constantly lamenting or wondering about is why, when you look back over this 150 year period almost, and you see these repeated waves of propaganda against government, basically against government as such, not against this or that in particular, but just government is bad. Like government's inefficient and bad, wave after wave. Why do liberals or progressives or whatever you want to call them, why does the left, why do the people who believe that government can improve people's lives as it demonstrably has many times through our history?Where are their propaganda campaigns? Where is the think tank that's just devoted to arguing that government is good? I can name ten on the right that are devoted purely to the subject of how government is bad. Is there one on the left that's just government is good as opposed to this immigration group and this crime group, whatever? Why does the side of social democracy, mixed capitalism, the stuff that seems to work, why does it not have a propaganda arm or effort? Or why does it never seem to fight for itself as such? Do you have an answer to that question?Erik ConwayI don't have a good answer. The usual joke you get is that they just don't have the money. And maybe that's true, but I think there's actually a better argument in another book, and I'm really hoping the name of this author comes to me. But unfortunately, I read this. It was published after we'd finished our manuscript. But there's an argument about back in the 1970s that the Consumers Rights Movement undermined precisely that argument because the government was so complicit in allowing itself to be used by corporate lobbyists because the corporate lobbyists had been so successful in ensuring regulations were written in ways that benefited the incumbents right.The existing big three carb manufacturers and so forth. And I can remember when we were doing the book tour for what little book tour we had for Merchants of Doubt. I was up in, I think, Alberta province in Canada, and I wish I knew who this was, but I was talking to an economist over a beer who told me a great story about one of the Carter administration's economists. And the person I was talking to was saying that really, it's not that he believed in free markets, it's that he believed that corporations could rig government to do essentially whatever they want to use the government to build and sustain their own monopolies.And the only solution to this was to sweep away all the rules. The problem with that is that then you have to keep doing that, right? Because every generation of corporate titan gets the rules written again to protect itself. And I mean, that was the only fly I could see in that argument. But to go back to your question, the problem that liberal activists would have is that because a lot of people on the left, I think, actually agree with that. And I even think that there's merit to it because I've seen it so often in my own research career.Corporations do get state and federal governments to write rules that benefit them. And so that undermines the whole notion of a pro government propaganda campaign, right? Because maybe it's just that all of the leftists have very mixed feelings about it. And honestly, I think we should I don't want to say one of the things I hope you will get out of our book is that we're not saying that all corporations are bad or that the government is always good because neither of those positions are true. They're not.David RobertsOkay, well, I'd love to hear from the audience. Let me just say this is a subject about which I feel many people will be tempted to have more of a comment than a question. And I just want to get out ahead of that and say, if you have comments, save them for afterwards. You can talk to us afterwards. People came to hear Eric talk, so try to keep your questions concise. Yeah, just come on up to the podium if you have questions, or if not, I'm going to keep asking them.Audience MemberI have a process rather than content question. So I'm a retired oceanographer. I'm familiar with your co-authors work in the scientific field. So it's kind of a dual question of, you guys seem to be stepping out of your area of technical and scientific expertise into the economic world, and I'm curious about the process of how the two of you work together on this?Erik ConwayOkay, so we did the book because we wanted to follow up "Merchants of Doubt", in which, if you're not familiar, was really a history of four physicists and how they spent their retirement careers working to cast doubt about the truth of environmental problems. And what we concluded was that they were believers in market fundamentalism, the idea that only free markets could protect political freedom. In other words, basically a 1980s version of the Tripod of Freedom from 1935. And so in this book, we wanted to tell the history of market fundamentalism, so that's why we did it.Audience MemberCan you tell us who we is?Erik ConwayOh, sorry. Naomi Oreskes. She's the lead author in the book, and I'm Eric. Process, so I guess I'm the one who had spent a lot of time or a lot more time in economic history initially because I'm a historian in technology, and you really can't separate technology from business and economics to a lesser degree. So I guess to some degree, you can blame me for the initial ideas. And then once we had sort of gotten the book proposal sold, process was we separate the chapters, figure out who's doing what, whose expertise more aligned to one idea or the other.And then it's a whole lot of researching and writing and mailing chapter drafts, back and forth and so on. Kind of the early core of the book is built around material from the Hagley archives, which it's a business history library and archives on the Dupont family estate in Delaware. The Dupont family did History of the United States enormous favor, frankly, in turning over some of their original powder factory buildings to be a business history archive. And that's how I can tell you exactly what J. Howard Pew was doing and setting up these organizations, because he was proud of it.He wrote to people about it. He helped get a textbook by an economist by the name of Tarshis removed from university curriculum on grand claims to trustees and so forth, that the guy was a communist when actually he was just a Keynesian economist. And that prepared the way for Paul Samuelson's textbook to become the dominant textbook in American economic education for most of our lifetimes. But Samuelson, seeing what happened to Tarshis, revised it to make it satisfactory to the market fundamentalists who'd gone. After Tarshis and Samuelson told us that story. But we can know these things because archives exist.And sometimes even the people that we criticize are the people that made it possible for us to know that.David RobertsYeah, they don't come across in the book as any of them as particularly bashful or embarrassed about the fact that They're ...Erik ConwayThey're proud of it.David RobertsWaging massive propaganda campaigns.Erik ConwayNo, they're proud of it because they believe in what they're doing.David RobertsI have another question, which maybe is more philosophical, but this is something I've gone back and forth over the years too, which is at no point from the late 19th century forward, really, at no point ever are any of these business titans who are waging these propaganda campaigns acting consistently according to free market principles. All of them happily welcome subsidies. When subsidies are available, all of them will happily tax their competitors. None of them ever in history have turned down something that would benefit them on the basis of free market principle. So you could make the argument that what's going on here is about power.They have power and the microphones and the money. They don't even really believe the arguments. So in a sense, the only thing that can counteract that, insofar as you view it as a bad thing, is counterpower. And in a sense, arguing as though sincere ideas are in the driver's seat here is kind of like a bait and switch. I feel like they just laugh when we go off and write arguments and research things and care about facts like they're just playing us. They don't care about the facts. They're just exercising power. How central is the argument to all this?And how much of it is just a cover for corporate power that can only be sort of restrained by power?Erik ConwayWell, first off, self interest is fundamental to their depiction of free market capitalism, right? One thing they certainly internalize is that everyone acts in their own self interests, including themselves, and they happen to be in a position to use their power to maximize their self interest, even if it harms others. So you can argue that they are actually acting according to principle. It just isn't a very satisfactory answer, right?David RobertsWell, it's not a free market principle, right?Erik ConwayIt's not a free market ...David RobertsPrinciple of self interest.Erik ConwayYes, that's right. It's not really a free market principle. So you can see, for example, in the paper of J. Howard Pew, and he's writing to Rose Wilder Lane, the daughter of Laura Ingalls Wilder. He goes through some contortions at times to defend his own or what she perceives to be his own violations of principle because, whereas J. Howard Pew is willing to compromise to improve his standing, in a lot of ways, Lane wasn't, she really was an ideologue. Well, she kind of drives herself out of the movement, in a sense, because she's more extreme than they were and continue to be.So it gives you an example that there actually were people even inside, for a while, even inside this conservative movement, who were principled and would actually manage to drive themselves away because they wouldn't make those compromises. But they're not the ones that had power, or rather that retained power, as you say, because they were acting in the those that remained were acting more in the interests of power than in pursuit of the free market principles. So, again, I keep saying that there's no such thing as a free market. There's always a regulated market. And it's just how and by whom that we're talking about.David RobertsWell, to this day, I think there are like seven true libertarians somewhere in DC. Who are constantly pained by their betrayal by the Republican Party, which is coming up on 150 years now. You'd think they would see the next one coming, but still .. Hi.Audience MemberSo I'm a little bit outside of my element here because I've not read the book, but usually in a big myth, and I look forward to it that you and Naomi arrestes have written what were the little myths? What are the little myths, and can you articulate them that are backing up that big myths? I mean, we can come to our own conclusions, but can you articulate those?Erik ConwayOh, they're legion. Well, I kind of told you one. There's the Tripod of Freedom. That's a set of mythologies that the National Association of Manufacturers concoct in 1935. The idea that industrial freedom has anything to do with the Bill of Rights is laughable.It just doesn't exist there any more than the kind of maximalist interpretation of property rights. My character, Fifield, to give you another example of a myth, tries very, very hard in his campaigns to bring the clergy around to the idea that property rights are sacred, that they descend from God and not from the fifth Amendment to the Constitution, which makes them, if you ever bother to read it, modifiable by act of law, which we can't modify God by active law. So there's another myth. The individualist mythology is another one. And we don't explicitly criticize that in the book.It's already too big a book. But rugged individualism is another area of mythology that is built into this idea of the free market in the so there are a whole network of sub-myths that go into what they are. What we don't do is we don't make give you a typology, a chart of all the different sub-myths, and we just didn't think about the problem that way. We were trying to tell you partly a story and partly a well evidenced history and less rigorous philosophical analysis, I guess you can say.David RobertsYeah, well, one thing that comes across is you'd like to think there's a marketplace of ideas, speaking of myths, just a marketplace of ideas where ideas compete based on their rigor. But of course, these ideas were at every juncture, very well funded and pushed. And I always thought it's not hard to understand why rich, powerful people in society welcome a philosophy that characterizes success in a market as a matter of heroic overcoming individual effort. I mean, of course, the people who won want to believe that, right? In that sense, it's in a tradition of hundreds of years of mythologies that mainly serve to justify the place of the people in charge.Erik ConwayWell, so I guess there's two stories built into that question. In the marketplace of ideas, milton Friedman didn't rise to the top in a free market because the Chicago School of Economics program was built on the funding of a foundation, the Voelker Foundation, which was run by a gentleman, by named Harold Luhnow. And it's their money that got the Chicago School's free market program going and supported Friedrich Hayek there at the School of Social Thought ...David RobertsGot us into Readers Digest, which I thought was just excellent detail.Erik ConwayWell, yes, this is the power of money, right? Because not only could they afford to support faculty members for a decade or two to get the free market ideals built into academia, they could spread them through cartoons and so forth. Right. So none of us live in a free marketplace of ideas anyways, because money can boost the ideas that people with money want boosted. And Milton Friedman is a great example of how that came about. So marketplace of ideas? Well, it's a very rigged market, much like General Electrics, electricity markets,Much like all markets.Audience MemberYou brought up Milton Friedman. So shock therapy, right?Erik ConwayYeah.Audience MemberRight. All over the world, or especially South America. But I wanted to ask you, your historian, I mean, the more you read, you can become depressed. But one question to you about could potentially the reason why there is no thorough backlash or a fight against this propaganda is because a lot of the intellectual stuff that we learn about just they're so wrapped up in the hypocrisy of all the stuff that we've done as a society, including propaganda, capitalism, that they're just, like, useless, that they can't germinate, they can't forment this type of backlash that you're talking about.David RobertsWell, your colleague up here, what do you think about that?Erik ConwayI would say that they would have a hard time selling it here. I'll take back to the idea. Remember I told you this story briefly about Lorie Tarshis being having his textbook suppressed by a propaganda campaign and aimed at trustees of universities and so forth in the 1950s, and therefore Samuelson's textbook becoming dominant. That's an American story, and it largely didn't happen in the rest of the world. So economics programs in Europe are much more intellectually diverse than they are here because that kind of story didn't happen. Right. The rigged market here resulted in one outcome, a very similar thought throughout most of American academics, which is not really so much true in Europe.Now, the question was about the public. But ideas generally have to come from somewhere, right? And if all the economic departments in the United States basically think the same way then where do the ideas get started? In left wing think tanks. There's not very many of those, as we were discussing earlier. And they start out from a position of less credibility precisely because they're think tanks. Right. There's no independent work on that kind of going on.David RobertsNo liberal "Little House on the Prairie."Erik ConwayWell, there's not that either. So I would say to you that part of the problem is you start out with having fewer ideas that can be marketed and then you don't have the infrastructure for marketing them to get the change across that you might want. But again, that's beyond our subject. Other people have written about the think tank world than not us.Audience MemberI'm curious in your research for this book whether you came across any industries where deregulation and free market ideas actually made a more equitable or efficient outcome. You talked about how the electricity market is not a good market for free market principles but I'm curious whether you researched anything where it did improve it.Erik ConwayWell, so efficiency is a difficult term because efficiency is often well, the definition of efficiency matters, doesn't it? If you're talking about cost effectiveness, for example it's much more cost effective to buy property in poor neighborhoods or near poor neighborhoods and make them dumps. Right? So efficiency often leads to inequity. And so we don't often see efficiency and equity going hand in hand at least not in the United States. But to be honest, we weren't looking for that because our story was built around a propaganda campaign by people who weren't interested at all in equity. Not at all.In fact, they discuss and we have a little bit about this in the Christian capitalism chapter they openly discuss the idea that some people really are superior and should rise to the top and equity is simply not equity is not the American way. So following that thread we would never have found what you're asking about. So I hope it's true that at some level you can have relative efficiency and relative equity. But that's not what our actors were talking about.David RobertsYeah, they very explicitly say attempts to improve equity are ipso facto going to suppress economic growth. Like they don't they don't even allow the possibility that you can do both at once. They set them up as being diametrically opposed.Erik ConwayYeah, which I actually which I believe, anyways is a fundamental misunderstanding of Adam Smith's capitalism. His basic idea is that the circulation of capital improved everything. But what he meant, I think, was circulation top to bottom. Right. The money has to reach the people at the bottom because that's where most people are and improve their lives and that's what drives the system. If you have the concentration of wealth at the top then it becomes not only less equitable, it becomes a less efficient and less generative economy. But that's me. I think a great many economists don't think in terms of top to bottom circulation of wealth that's more circular in their minds or something, but I don't think that's what Smith meant.The concentration of wealth strikes me as being less effective long term and it's certainly less stable. I'm sure I've got more questions though.Audience MemberSo it's certainly easy to be cynical about corporations talking about ESG. But overall would you say that the increasing talk about and emphasis on ESG is a bit of a backlash to some of this capitalism and free market mythology? Or is it pure whitewashing?Erik ConwayOh, I wish I knew. But being a historian, even the present is blurry to me. It's easier to see the past in a lot of ways, but it seems to me at one level a welcome response to the shareholder value idea in which the company only has the interests of its shareholder at stake. And the EEC movement strikes me as being at least better than that, that there is some other set of interests and values at stake there. I hope it's not all whitewashing or greenwashing rather as the term goes. But like I said, I don't study the present particularly strongly.So people ask me questions like what are the best companies for environmental things? And I have no idea, none whatsoever.David RobertsIt's worth pointing out though that as we speak the usual suspects are mounting an enormous very well funded propaganda campaign against ESGs. Specifically like there's Republican states passing laws against it. So it's real enough to cause them to mobilize against, I guess so something.Audience MemberYeah. Comment question. Since 1968 I'm looking at the Gini coefficient from FRED database here. It's risen from 38.6 to 49, which is incredibly high measure of inequality. And since that time there's been six different agencies added to the federal government. And you just discussed heavily on we don't have a free market and we have a very strong governmental regulatory capture system.How do we overcome that? And probably the biggest beneficiary we see today is the world's richest man, Elon Musk. With SpaceX, with governmental money. We've got all kinds of carbon capture systems with these batteries and his new cars. All we doing, we're just handing him money. And isn't government the problem there? I mean you talk about this okay ...David RobertsI think we got it. What do you think, Eric?Erik ConwayAbsolutely. We have a less and less equitable society and we don't spend a lot of the book trying to figure out what's at fault there. Personally, I would blame capital gains tax more than just Elon Musk or the expansion of or the addition of federal agencies. Don't get me started on Musk because I have always seen him as being nothing really but a successful harvester of federal dollars and also a really good propagandist, until recently.David RobertsHe's really off his game lately.Erik ConwayYes, he used to be good at the whole fanboy thing, and maybe he still is and I'm just left the family, I don't know. But regulatory capture, real problem.David RobertsCan we throw in the Supreme Court removing all limits on campaign, on finance spending, and we throw that in there. If you don't like corporate capture, then.Erik ConwayThat's another again, we don't go there in the book. It's already too big a book. But yes, the equation of money and speech is a whole other level of corporate capture. Right. It doesn't just allow unlimited lobbying spending, but an unlimited political advertising spending. And that just reinforces the propaganda power of things. And I guess I would say back to the original question, I actually don't know how you break the cycle here. It's one of those things where historians can help you diagnose the way the world is, but not necessarily help you fix it. Because I don't know how to undo the equation of money and speech.I don't know how you build a government that can't be captured somehow.David RobertsBut I mean, there are governments out there in the world that are more competent, that are less wasteful, that are less captured, like there are better and worse administrative states. So at the very least, you can do better than we're doing.Erik ConwayYeah, that's right. And so one of the things we intended to do with the book and ultimately didn't because we decided other people were already writing about it is that the idea that there are varieties of capitalism and Europeans practice much different varieties by and large, than we do and that is wrapped up in the kinds of states they have built, right. And that just takes us back to the idea that there aren't actually any free markets. Markets are embedded in states, they're embedded in particular cultures, and those things can be changed. It's just a question of so what I posed to my audience is the question really is what kind of state versus-slash market do we want?Because we're the ones that have to choose and then have to figure out how to make the politicians do what we want. And that's a tough road to haul, particularly when we have this basic problem of the equation of money and speech and therefore the richest man in the world gets to decide who gets heard. And by unabout what.David RobertsI'll get to your question one second. But I also just wanted to throw in that some of these big states that have huge taxes and robust welfare programs actually have the freest markets, like Finland or whatever. They have fewer regulations on business. They have enormous taxes and enormous redistribution. But the business sector itself is relatively free compared to ours. So we're not even getting the free market we're promised, much less all the rest of it. Alright, final question.Audience MemberSo I'll get historical 60, 70 years back, the straw man of communism gets beaten to death for a couple of decades. And to what role did business, American big business, play in that particular bonfire? Or was there another path? Or was that whole anti-communism deal more of an invention of the wealthy?Erik ConwayWell, so the anti-communist crusade of the business community goes back well into the 19th century because they were terrified of the communist potential revolution of eliminating private business. So they were always leaders of the anti-communist charge, and they used that as a foil to oppose unionization.They would use it to oppose they did, in fact, use it to oppose child labor laws because it was taking children away from their families and making them wards of the state and so on. We tell all that story. So it's been that rhetoric, that anti-communist rhetoric has been a big business rhetoric for more than a century. They were fundamental to helping spread that set of ideas throughout the United States for longer than any of us have been around.David RobertsYeah, there's another thing I discovered through the book is how far back the knee-jerk response of socialism goes. They were using that from the jump. I didn't know how recent that was. It turns out that's been all the way through.Erik ConwayIt's been a universal curse. Now for conservatives for more than a century. It's lost, as far as I can see, any meaning or any relationship to what the socialists actually originally wanted or intended.David RobertsAlright, last question. Sneak one more.Audience MemberI mean, there's a lot of corporations that one would argue do a lot of good things. Like Boeing has been a corporation that's provided an immense amount of jobs and pensions, and it's a lot of our economy. And then you could argue that corporations just need regulation by government to be good to create wealth. But I guess my question is, as a historian, what countries in the world have done a better job than the United States on all these things we're talking about? I mean, it's good to criticize all this stuff, and it's definitely lots to criticize, but are there any countries that stand out as an example of what we should be more like?Erik ConwayWell, first I want to say again, I don't want to come across with the idea that all corporations are bad or that everything corporations do is bad because markets are tools, there are constructs, and they can be very powerful tools for positive things when they're well run. And the second thing I would say is that it's also a mistake to think that government can do everything. Boeing was run by engineers for about half a century and that Boeing did enormously positive things. By and large. I used to study aviation history, and they're still around because actually for a long time, they didn't have a lot of military contracts.They managed to survive on just commercial businesses, which almost nobody in aerospace did. And that's a positive thing. And as you were saying, help really build this city. Well, that's a whole other story. Well, Boeing bought Douglas or Douglas bought Boeing with Boeing's money or something. Yeah. Anyway, where I wanted to go with that was that I wish we could also talk about corporate culture changing because in what you see in Germany, for example, is the corporations, the corporate leaders don't fight particularly hard against their unions. They have a different, completely different, really set of social contracts there in which they still are very productive and yet they don't have the very hostile labor management relationships that we do.And that's fundamentally to me about the internal culture of corporations and also what business leaders are taught in business schools and economics departments and so forth. So again, I don't want to convince you that the government is always right or that the government is the only thing that can save us, but there are a lot of changes that that would need to be made, one of which is corporate culture. Another of course is would be a better culture of public service and in the government because a lot of the government either stopped doing its regulatory job like FERC and the California Energy Crisis in 2000, decided, well, it just wasn't going to regulate. And that's a failure of the idea of service, public service too, as well as corporate penetration of companies.David RobertsI mean that's a classic example of Enron out there propagandizing for markets and just rigging ...Erik ConwayUnregulated markets.David Roberts... up one side and down the other, like farthest thing from a free market participant you can imagine.The question was about what about employee-owned corporations.Erik ConwayWhat I'd say is a little bit of a dodge of the question because I don't know a lot about the longevity of such companies or what kinds of goods or bads that they do. But what I would say is that again, our study was really of propaganda and we have this idea of private free markets and yet we live in a very mixed economy, as you say. There are not just shareholder owned companies, there are worker owned companies, there are nonprofit companies all over the place. I actually work for one. So that's not the free market mantra we're talking about, is not the whole story of America.And sometimes we not just Naomi and I, but we all forget that there are other kinds of business and capitalism possible. And that's what I'd say, that there are other opportunities to build businesses that aren't shareholder valued returns to private shareholders.David RobertsAlright, thank you everyone. Thanks for coming. Thanks Eric for coming out. Thanks for the book.Erik ConwayThanks for coming.David RobertsThank you for listening to the Volts podcast. It is ad-free, powered entirely by listeners like you. If you value conversations like this, please consider becoming a paid Volts subscriber at volts.wtf. Yes, that's volts.wtf. So that I can continue doing this work. Thank you so much. And I'll see you next time. Get full access to Volts at www.volts.wtf/subscribe

Every year, the Business Council for Sustainable Energy partners with BloombergNEF to produce the Sustainable Energy in America Factbook, a compilation of charts, graphs, and statistics about the US clean-energy industry and where it's headed.The 2023 edition is out and it shows a record year for investment in clean energy and installations of renewables — alongside record demand for natural gas and record investment in gas infrastructure.To chat about some of the numbers, I contacted Lisa Jacobson, president of BCSE. We talked about the momentum behind clean energy, the enormous investments uncorked by the Inflation Reduction Act, the supply-chain difficulties that plagued the industry this year, the backlash to ESG investing, and the surge in energy storage. Get full access to Volts at www.volts.wtf/subscribe

Under a new partnership, Heirloom Carbon Technologies captures carbon dioxide from the air, then passes it to CarbonCure Technologies, which permanently sequesters it in concrete. In this episode, CEOs Shashank Samala of Heirloom and Robert Niven of CarbonCure give the lowdown on this pioneering carbon removal project. (PDF transcript)(Active transcript)Text transcript:David RobertsLast month saw the announcement of a pioneering project: a company called Heirloom Carbon Technologies will capture carbon dioxide from the ambient air and then hand it off to a company called CarbonCure Technologies, which will inject the CO2 into concrete made by a company called Central Concrete. It will mark the first time ever that carbon from the air is permanently sequestered in concrete.Heirloom, with runs the US’s only operating direct air capture (DAC) facility, does not use the familiar capture technique that involves giant fans. Instead, it binds carbon to exposed rock and then cooks it out using electric kilns — and then binds more carbon to the rock, in a circular process. It claims the capture is cheaper and more efficient than previous methods.CarbonCure injects the CO2 into a concrete mixer, where it mineralizes, becoming permanently captured even if the building using the concrete is demolished. In the process, it strengthens the mix, requiring less cement and cutting costs.Direct air capture (DAC) has faced a great deal of skepticism, and concrete has the reputation as one of the worst carbon offenders, so this project — one of the first that can fairly be called carbon removal — could go a long way toward convincing investors that the former can help the latter change its ways, with a technology that is, at least some day, commercializable.I talked with Heirloom CEO Shashank Samala and CarbonCure CEO Robert Niven about their respective processes, how they work together, and what the project says about the future of carbon removal.All right, Shashank Samala, CEO of Heirloom Carbon Technologies, and Robert Niven, CEO of CarbonCure. Welcome to Volts. Thank you guys for coming.Robert NivenThanks very much for having us.David RobertsThis is really a nifty project you guys are working on together. It's two separate pieces that normally I would probably do a pod on each. So we're going to have to, or at least I'm going to have to be less wordy than normal to squeeze it all in in 1 hour. I want to talk about both halves of it. So let's start with Shashank. The first half of this process is Heirloom’s process of removing carbon from the air. Can you just explain quickly how that process works, what it looks like?Shashank SamalaSure. So, Heirloom, if you're not aware of who we are, our goal is to basically remove a billion tons of CO2 from the atmosphere annually by 2035. And our whole goal is to help reverse climate change. And the way we do that is through a process called limestone looping. Essentially what that means is we use a rock that is very abundant in nature, limestone, that has a natural propensity to pull carbon from the air. What we do is we basically give superpowers to limestone to pull a lot more carbon than it otherwise would naturally.So how it works is we start with limestone, we put that into a kiln, we heat it up, and we pull out the CO2 that's already sequestered in the limestone, which makes the leftover lime highly thirsty for CO2. So we take advantage of that natural property by laying it out on trays. Think about baking trays. I lay them out on trays, and then we vertically stack those trays, very tall, and the air brings in the CO2. And the the lime sitting on the tray acts as a sponge, pulls up the CO2 molecules. From there, it becomes limestone again after it pulls it up. And we do that in about three days.Naturally, it would take many months to pull carbon from the air. We did that in three days using our well treated algorithms and technology.David RobertsSo in three days means the lime is full, absorbed as much CO2 as it can.Shashank SamalaExactly. We don't go all the way up to 100%. We go up to about 85%, which is sort of the optimal point, we realized. And then, yeah, it becomes limestone again, which is great, because that's what you started with. So we can recycle limestone by putting it back into the kiln, pull out the CO2 we captured, and then store it underground or store it into concrete, which you're doing with Carbon here.David RobertsRight. So one of the questions I had is you crush up this lime and spread it out on, well, calcium carbonate is limestone. Calcium carbonate ...The chemical formula. Exactly right, the calcium carbonate.And then after you bake it, take CO2 out. Then what is the chemical remainder?Shashank SamalaCalcium oxide.David RobertsCalcium oxide. Right. So you have calcium oxide laid out on trays, becoming calcium carbonate. Then you take the calcium carbonate, cook it, get the CO2 out of it, and then do the whole thing over again.Shashank SamalaExactly. We just keep doing that. It's a super simple chemical process to pull carbon from the air.David RobertsYou have this calcium oxide, and it's absorbing CO2 from the air. That just sounds like an ambient chemical process. How can it be accelerated? What does it even mean to accelerate that?Shashank SamalaSo, technically, calcium oxide, we hydrate it, it becomes calcium hydroxide. Basically, there's a water molecule binding onto the calcium oxide. But essentially what we realized is that there's a specific parameter space where particle size, particle size distribution, thickness of the bed, humidity, temperature, airflow, there's all these different variables that dictate how fast calcium hydroxide likes to bind on to CO2 molecules. So it just so happens that in nature, there's a specific parameter space where this happens, and in nature, it doesn't see that parameter space as often. What we do is essentially make it see that all the time.And how we specifically do that is really the IP. But we've collected millions and millions of data points over the last few years, doing lots of small experiments, adjusting thickness, adjusting particle size, surface area, all of these things. And we found that parameter space. And as the weather changes throughout the day, we have to change that parameter space. So essentially, we babysit these trays. If you look at, essentially, what this technology looks like is you have these tall stacks of trays, and in the middle, you have a little robot that goes up and down, and every few hours, it's babysitting these trays so that they can be carbonating as fast as they possibly could.David RobertsSo is this all in a big climate controlled facility of some kind? I mean, presumably, you have to control the climate because you need specific conditions.Shashank SamalaYeah. So, fortunately, we were able to not have it be fully climate controlled. So if you actually if you come to Brisbane, our headquarters, where we have this pilot facility, this is actually sitting outside in ambient conditions. Yes. So this robot is actually creating a microclimate for each tray every few hours. So because what we're trying to do is try to symbiotically work with nature to pull carbon, right. And nature gives you humidity and temperature and airflow. Right. We don't want to put forced airflow, these large fans, pushing air through. We want to leverage wind. We want to leverage humidity.And then when it doesn't get enough from nature, we complement it. We accelerate it with a few things.David RobertsAnd so when you have this calcium carbonate that's absorbed all the CO2 and you put it in the kiln, what does that kiln look like? How's it powered? And how hot does it have to get?Shashank SamalaSo the kiln is actually super simple. It's like your toaster oven. Effectively, it's electric. It can be run by renewable energy. Essentially, it's a metal tube, and you have an electric heating element, and just like your toaster oven, that sort of surrounds it. And then you have insulation ceramic that keeps the heat inside. And then that's it. You essentially send calcium carbonate through that metal tube. It stays in there for the order of minutes.David RobertsAnd how hot is the inside?Shashank SamalaIt's about 850 to 900 degrees C.David RobertsOh, wow. Really hot.Shashank SamalaIt's hot. Electric kilns can actually go way higher than that. That's one of the questions we get. It's like, oh, you're using electricity. Why are you not? You would think that you would use natural gas or some other form of combustion to get that temperature. It's like no, the electric arc furnaces for steel actually go up to, like, 14,000, 15,000 degrees C. So, yeah, we need about 850, 900 C. And then, you know, it's only there for seconds to minutes.David RobertsOh, really? So the CO2 comes out pretty easily.Shashank SamalaYeah, exactly. So there's only two things that come out. It's CO2 and calcium oxide. The CO2, it's pure. We capture that gas and compress it. And then the calcium oxide, we reuse it again.David RobertsAnd what's the sort of energy balance here? It just strikes me that it must take a lot of you're saving energy by letting natural conditions do the air circulation and humidifying and all that, but you're using a lot of energy in the kiln. I'm just sort of curious how energy intensive this is per sort of captured ton of CO2. I guess there's not a big comparison base of other carbon capture technologies to compare it against, but well, the lens.Shashank SamalaWe when we first started looking for which approach to use to pull carbon from the air, two things were important to us. One was use abundant, abundant minerals, abundant processes.David RobertsDid you start with the idea of mineralization, or did you just come to this with just a blank sheet of paper and say, what's the best way to capture carbon?Shashank SamalaSo I actually came in from the mineralization perspective. So I was looking at rocks. I was talking to lots of scientists working on using rocks to pull carbon because it's just like an abundant mineral to start. And if you want to pull gigatons of CO2. You need to have abundant minerals that are also trillions of tons of rock in the Earth's crust. And then we realized, actually, just using rocks won't get you the economics and the land. We wanted to use as little land as possible. We want to use as little water and energy as possible.So we needed to engineer it a little bit to ensure that we use as little energy as possible.David RobertsIn terms of materials, how much is lost in the full cycle of sort of you're mining the limestone to begin with, I guess, right? There are limestone mines around already. Limestones abundant. So you're mining the limestone to begin with. Once the limestone goes through, one of these whole cycles gets cooked, replaced, absorbed, absorbed again, cooked again. How much material is lost in those cycles?Shashank SamalaSo, so far we found very small material losses. Essentially, that's one of our main metrics over the last couple of years as we were scaling it up to actually putting this outside. And one of the things we get, it's like, hey, if you put these rocks out there, doesn't the wind blow everything off? Essentially what happens is when this is hydrated, it actually turns into a crust. It's like a cake. So, yeah, we've seen very small material losses, and we will continue to tweak the entire process to reduce it even further.David RobertsBut your materials are pretty cheap. They're not the big cost center.Shashank SamalaIt's not. I mean, the material itself is like less than half a percent of the entire CapEx. Limestone is, You can buy it for $20 or $30 a ton. It's the second most mine material on the planet. You have way more than you need.David RobertsOne additional question I wanted to ask about the process is you make a big deal about modularity. And this is a subject close to the heart of Volts listeners. We just did a pod a few weeks ago about sort of what kinds of technologies get on learning curves and what kinds don't and sort of what features of a technology lend it to rapid learning. And one of those features is of course modularity is it have easily reproducible bits. So just say a little bit about how you sort of had that in mind as you designed the process.Shashank SamalaIt was absolutely number one for me. I come from a manufacturing background. Before this I had an electronics manufacturing company where we basically built lots of circuit boards in a factory. One of the things that humanity really understands and knows is how to build things in mass volumes with a very steep learning curve. Right? And we saw that with solar panels, lithiumion batteries, cars. Tell the team here it's like you're trying to build cars, not airports. Right? Airports are on site custom construction and the folks who are working on one airport are not going to the next airport.The learnings don't don't translate.David RobertsWhen people think about a big direct air capture facility. I think probably what comes to mind is something like an airport, a big bespoke one time thing, but you are trying to avoid that.Shashank SamalaYeah. So there's a difference between modularity and the plants, right? So the plants themselves need to have modules that are mass produceable or built in a factory so they can just be brought to the site, bolt them to the ground, ready to go, instead of having to build up from the ground up on the site. So essentially you're trying to minimize on site construction. So there's always like solar panels, right? They need to be bolted down to the ground. There is some concrete slabs involved and wiring and plumbing, et cetera. But you want to minimize that as much as possible and that's the fundamental idea behind Heirloom.Like our tray is basically the smallest module and we make lots and lots of trays.David RobertsOne doesn't think of trays as something that have a lot of room for innovation. Is there anything special about the trays?Shashank SamalaThere's a few things that are custom and it so happens that the world, we needed such large trays that we went to the vendor that makes the largest trays in the world and they just would not make the trays that we needed. So we actually make custom trays. Yeah, they're large, so we make the world's largest trays. They use traditional manufacturing processes, extrusion, thermal, formula, et. They're not complicated and that's one of the principles behind Heirloom too. We don't want to come up with a new manufacturing process. The world has immense just lots and lots of experience building all sorts of things and we just want to leverage them and scale them to the max because that's how you get 2 billion tons of CO2 remove it as fast as possible.David RobertsSo the trays a module, the trays stack.Shashank SamalaAre also and the next level of module.David RobertsIs a module. And presumably the kilns are pretty standard issue. They don't have to be tweaked or whatever for individual.Shashank SamalaYeah, traditionally, if you go to a cement factory, kilns are actually these massive onsite built kilns. But we use an electric kiln technology that we're actually going to be releasing a few weeks here that is modular. So you essentially stack a couple of cylinders on top of each other.David RobertsOh, interesting. So you did a little design work of kilns of your own?Shashank SamalaYeah, we did some here. We were working with a technology partner to do that too.David RobertsThis whole process, presumably, if you sat down to try to figure out what's the best process for capturing air carbon, you looked at the traditional. I think when most people think of direct air capture, if they think of it at all these days, the few people who think about it at all think about the big machines out in the desert with the fans sort of pulling air over a sorbent. Is your process more efficient than that in terms of sort of energy and material input versus CO2 output?Shashank SamalaYes. At the end of the day, what we're trying to do is use abundant materials that are incredibly cheap and use as little energy. That is thermodynamically possible. Really, all of our energy is in that back end where we are regenerating the sponge, which is common across all directory capture technologies. That's sort of second law of thermodynamics. You have to put in some energy to regenerate the sorbent. And for us, we want to essentially lower that regeneration energy as much as possible and then not use energy when we can leverage nature and other things.David RobertsIt strikes me then that the cost of energy is going to be one of your big top line items. How big is the cost of energy in your overall picture?Shashank SamalaAt scale, it's more than half. And that's exactly where you want to be, right? Because laws of physics tells us that you have to put in energy to do gas separation, especially gas separation that is as hard as 400 parts per million. So if you design a system and you look at the long term economics, you want to make sure that, you know, at long term, almost all of all of that is energy, because that's something you cannot beat. Like energy creates your cost floor.David RobertsRight.Shashank SamalaIf your CapEx ends up being a much bigger proportion, well, you haven't really designed or engineered it. Well, that's what I tell the team. It's like you want your cost floor to determine by physics and not engineering. So that's why we use very simple trays. We're just putting a bunch of rocks and a bunch of trays and using a metal tube, on the other hand, and putting some insulation around it. So you want to keep that as low as possible so that your your $100 a ton. That's really our cost target. You've probably heard of the cost target.$100 per ton. That's really the cost point where it's affordable for humanity to do this at a billion ton scale and actually make a meaningful impact.David RobertsAnd of course, it's like renewable electricity is galloping down the aforementioned cost curve. So insofar as you can hit your ride to it, it's going to tear you down the cost curve too.Shashank SamalaYeah, exactly. The nice thing about renewable energy for us is you can pull carbon from the air anywhere, right? It can be in the Gulf Coast. It can be New Zealand, it can be South Africa, India, Indonesia. Wherever you go, the concentration of CO2 in the air is exactly the same. And that's what our technology works with. So we will go to places where renewable energy supply is high, but the demand is low, so we don't take away the supply that could have been used for food production or putting our buildings.David RobertsSo ideally then, these facilities would be colocated with some big renewable energy just to minimize ...Exactly.Transmission costs and all that. Two final questions. One is, you mentioned the $100 cost per ton target. Can you give us a sense of where you are on the road to that? Is there a number?Shashank SamalaYeah, so we're in the sort of high hundreds of dollars per ton right now and essentially we are at the demonstration scale, right? We are building this by hand, engineers are building them. We built a couple of Formula One cars effectively, and we need to get to a stage where we can mass produce Toyotas off of the factory line. What is Formula One cars cost these days? Like millions of dollars versus $20,000 Toyota. So at the end of the day, the material inputs are so cheap, limestone and trays and metal tubes, that at scale, we should be able to hit that cost.And for us, it's all about how do you get there as fast as possible.David RobertsYeah. And if you're chosen super cheap material and renewable energy, which is super cheap, and if those are your only two inputs, logic says you're going to get cheap eventually as you approach the cost of the materials. So the final question is this. At the end of this process, you have CO2, which you can do anything with. Are you deliberately staying out of the business of doing something with it? I mean, is the model always to just hand off the CO2 to someone else who's going to do something with it?Shashank SamalaYeah, there's a lot of things you can do with CO2, but for us, there's only two things you can do so far. One we are looking at is concrete, working with folks like CarbonCure and putting it underground. And both are permanent. And an incredibly important principle is permanence because CO2 stays in the air for 1000 years. So you don't want to pull carbon from the air only for that gas to go back in the air ten years later, 100 years later, we're just pushing the buck into the future. So for us, it's incredibly important that we permanently sequester it into something so it doesn't come back out.And the only two things we've found so far with that type of over 1000 year durability is concrete, where essentially you're binding CO2 into a rock, it mineralizes and then putting it underground. And that is something that humanity has over five decades of experience putting CO2 underground. And it's permanent and we know it's safe.David RobertsBut are you planning at all to get into the permanent storage business? Or is the idea that you produce the carbon and some other entity is running the storage facility, how does that work?Shashank SamalaSome other entity is running the storage facility. We're going to be focused on really building an incredibly efficient, cost-effective capture system. And we will work with a whole set of partners to put a billion tons of CO2 stored somewhere permanently.David RobertsI've heard you say this in other interviews, too. But just to be clear, the vast bulk of it, especially once we get scaling up towards whatever, billions and billions of tons, the vast bulk of that is going to be stored in underground caverns. The amount that can be used in a way that permanently sequesters it is a relatively small fraction of the total amount that's going to be produced.Shashank SamalaYeah, I mean, as much as possible, every ton of concrete we can put CO2 into, we will do that. That is our first priority. Right? Because essentially you're creating a stronger building material. It's a value added product and it's permanent. You're checking all the boxes and that's better than putting the waste underground. So every ton of concrete, we can do that. We will absolutely want to do that. And when we can't, we will put that underground. And most likely at a gigaton scale, most of that will likely be underground, but it's hard to predict the future, right?David RobertsRight.Rob, let's talk to you then, because here is where we get to the part of the relay race where Shashank hands you the baton, or rather hands you a bunch of tanks of CO2. So describe for us then the CarbonCure process, which starts with a source of CO2. You get the CO2 from Heirloom and then what?Robert NivenSure, I'd be happy to jump into that just to help the audience understand, is we're both carbon removal companies, but coming at it from both ends of the process.Shashank on the capture ourselves on the relay race, receiving that CO2 and doing something with it. CarbonCure has been in business for about ten years. We're a Canadian company and we have about 700 plus customers worldwide that every day are using CO2 to mineralize it in concrete. To make a better, stronger concrete that provides some cost efficiencies by cement efficiency. By making stronger concrete, you need less cement which provides that economic incentive.And low carbon concrete is in great demand in the market, not only private sector, but we're seeing a lot of policy incentives as well.David RobertsSo you're in the business, you're sequestering carbon, you're doing it today, you're getting CO2 from someone and sequestering it in concrete. Do you have any what's the current scale so we can get our heads around kind of what's involved there?Robert NivenWe have everything connected through the cloud and you can actually pull up our our home page and you can see the numbers go up every second about how many metric tons and it's just about 250,000 metric tons to date. So the key difference here is that most of our CO2 to date is received from what's called post-industrial sources. So these are our large emitters and rather than diverting those emissions into the atmosphere, they're capturing it, compressing it. And companies that are industrial gas companies are taking that CO2 and selling it to a multitude of different industries.And we're a relatively new user of that CO2.David RobertsThe big one is beverages.Robert NivenFood and beverage is a big one. Yes, food and beverage. Also some CO2 is used in things like enhanced oil recovery which some other DAC companies are pursuing. So lots of different ways that you can use CO2. But the main point is there's a large existing commodity market for CO2. The key thing here and what's really special about our work with Heirloom is that this is direct air capture source of CO2, right? And by getting CO2 from the air it allows you to actually reverse the effects of climate change and pull down the parts per million of CO2 in the air rather than limiting and reducing the rate of emissions that go into the air, so there is a distinction.David RobertsAdditionality is the term of art here. This is 100% additional CO2.Robert NivenWell, I would still say that it's also additional if you're using postindustrial CO2. The key difference here is like this actually enables you to get into removal, a pure removal kind of category.David RobertsRight.Robert NivenFor ourselves, we've always seen this as we'll develop huge and a multitude thousands of storage centers, which is also called a concrete plant to most people. We'll run ahead as fast as we can and develop all of this demand for CO2. And then as DAC gets online is that we'll have the optionality to be able to use that CO2 when it's available.David RobertsWill there be degrees of greenness of concrete depending on the source of CO2? Have you thought about that? Sort of like different levels of concrete?Robert NivenI think so. We sell carbon credits as part of our business model and we definitely hear from our credit buyers is that they're willing to pay more if it's using atmospheric sources of CO2.David RobertsInteresting.Robert NivenSuch as DAC or biogenic source or whatever it is, whatever can get CO2 out of the air. There is a demand for that. The other group that really matters are the people that purchase the concrete. So these would be architects, engineers, building owners. They're also really excited and probably not as sophisticated on the CO2 sourcing question, but I wouldn't be surprised if that starts to become higher in their consideration. The other point that was brought up by Shashak earlier was permanence. That is very, very important for everybody is we don't want to be going through all of this trouble to put away CO2 for it to just bubble out again in 30 days, like what's the point? So that's very important.David RobertsSo when you say you inject CO2 into the concrete process, spell out a little bit what that means, what that looks like for people who are not that familiar.Robert NivenMost people, if they're familiar with CarbonCure are aware of our readymix technology. But CarbonCurever the last three years has expanded by creating technologies that use CO2 in the concrete value chain in different ways. But let's start off with the ready mix technology. So whenever concrete, if anyone's visited a concrete plant, there's about 125,000 of these locations worldwide, about 7000 of them in the US. They're basically all the same. They are mixing sites that take aggregates, rocks, cement, water and a few performance enhancing chemicals to mix those all up in a huge mixer. And then they pour that into a concrete truck, which you are all aware of and seen driving around the road.And then that's delivered to the construction site so that if we go back and look at that mixer is all those ingredients are being added. And just like Shashank is like if we're really going to meet scale is we want to have a modular system that in our case retrofits these existing concrete plants very, very cheaply and very very quickly without disrupting their production. In fact, it takes us a day, we don't charge any CapEx and the system starts to use that is enabled to start using that CO2 and becomes a carbon removal factory. It starts mineralizing CO2 the next day and it has all these value added benefits without creating a price premium on the product.David RobertsOh, interesting. So this is not some bespoke process that you have to build a concrete plant around. You're literally just going to an existing concrete plant, slapping something on that takes a day to add and then from the concrete plant owner's perspective, that's it. Nothing else changes. They don't have to do anything else operationally to accommodate this at all.Robert NivenWe automate everything. That's the key. And it's the same design principles that Shashank has brought into his company. Of course, he's done it fully, separately is you want to make this as simple as possible to scale because the concrete industry just does not have the discretionary budget to start. Spending a lot of risk capital in these kinds of solutions. So we've done all that for them.David RobertsAnd they're very small C conservative too, for obvious reasons.Robert NivenPerhaps it comes in all different flavors of concrete producers, but they all want to work on this, but they have a lot of limitations. So what we've tried to do is make it as simple as possible, but also do it in a way that they receive the most rewards and that can be in the form of cost efficiencies and production, being able to tap into this rapidly growing demand in the market for low, so they can sell more. We always recommend to keep the price at parity and also participate in carbon markets. So we create the incentive structure and make it really simple to adopt and quick so that producers can start to mineralize CO2 as quick as possible.So back to your question how the process looks like is we're actually adding CO2 into the mixer and please come to our website as well. We actually have footage and video of what's happening and then we also have some animation on what's happening at the chemical level. But essentially by adding CO2, it's a very similar type of reaction and thermodynamics as Heirloom. And that that CO2 is very quick to react in seconds with the concrete and it reforms a mineral, a calcium carbonate, if we go back to that again, but in a specific size called it's a nanomaterial, which provides all these performance benefits for concrete as it develops its strength, which then leads to some commercial benefits.And then we also use CO2 to treat the main wastewater from the plant and that's called our reclaimed water technology. So it's a second way that we can mineralize a lot more CO2 on the concrete plant, but at a different site of the concrete plant where all their wastewater is being collected is we can actually treat that water to have it upcycled so it can be reused instead of version cement and water. And then finally we can make CO2 into aggregates, but all three of those can be bundled together to be able to drive down the carbon footprint of concrete.David RobertsYeah, this was my question when I was looking at your website. If I'm a concrete plant owner, can I get all of those versions? Like, can I get CO2 in my wastewater and CO2 in my mixer and CO2 in my aggregate? And are they additive? Like, will that result in three times the carbon removal?Robert NivenYeah. And that's how we're building this business, is to create multiple ways to mineralize CO2 in the concrete value chain and then surround that by doing all the enabling work. So we make it a very easy decision for concrete producers to do that. I will caveat that we don't have the aggregate technology commercialized, but the other two we do. In fact, we had the first pilot with Heirloom that was at the Central Concrete Facility, which is a division of Vulcan Materials in San Jose, California. That plant is the first in the United States to have the reclaimed water and the ready mixed technology.So they're one of now two plants in the US. That are able to provide that combo, which is really exciting,David RobertsInteresting and do the strengthening benefits you're talking about, do you get double those too? When you do both the stages of adding carbon.Robert NivenThe ready mix technology gives you that strength benefit and then on the reclaimed water, jury is still out on redefining the strength benefit. But what it definitely does is it allows you it's a substitution effect, is that you're actually able to recover the cement in that wastewater and then use that instead of virgin cement. So at the end of the day, it's the same effect using less virgin cement to make concrete.David RobertsRight.Robert NivenBut you're achieving that by mineralization. What's cool about the reclaimed water technology is we actually won the Carbon Xprize for this technology, which was defined as the world's most scalable CO2 utilization technology.David RobertsInteresting. What happens to the water today? Is it just thrown out or what happens to the reclaimed water?Robert NivenMost of it just gets thrown out today. The traditional way of doing that is it would go into large settling ponds, they would scoop out the settled material, which by the way, is valuable cement and chemistry. That producer paid a lot of money for. And there was a lot of CO2 release to make that that would often just get landfilled and then the water would get sometimes treated for PH and then discharged. So we're able to turn all that process and eliminate it by reusing it in a circular manufacturing type of design.David RobertsInteresting, a question about the strength benefits, are the strength, by which we just mean the cement is a little stronger and so you have to use a little bit less cement in the concrete. So your savings that way, are those savings in terms of strength enough to pay for the thing? Or do you have to value the sequestration on some level to make this pencil out?Robert NivenWe are able to provide the low carbon concrete to the market in combination through our carbon credit sales and through these manufacturing efficiencies of using less cement, we're able to provide that concrete at no price premium by using a blend of both contributions. And that's very important. Like a year ago, if you go onto your podcast catalog, Rebecca Dell was on the show talking about how green premium is really, really important. We need to find ways to eliminate that to unlock adoption in building materials. And green premium is really anything can inhibit mass adoption. That's what's really important is that we don't apply that green premium.So that the market whether that be the government which is the largest buyer and we're seeing a lot of buy clean type legislation or private sector which have a lot of sustainability targets from corporate actors are able then to make these kinds of procurement decisions without compromising on price and certainly not compromising on quality, and working with the same suppliers that they've worked with for years prior.David RobertsMaybe this is a naive question, but if I'm a concrete manufacturer and I can have this done and installed in a day, it's not going to affect my operations. It's going to save me a little money on reducing cement, it's going to make me a little money on selling carbon credits. And otherwise I'm selling a more or less identical product at a more or less identical price. Why wouldn't I do that? What would stop someone from doing this?Robert NivenYeah, I would say just education. But we're already, like I would say I don't know for sure, but probably the fastest growing technology in the concrete sector. Concrete sector is not known to be rapidly adopting new technologies, but I would say we are growing at a very rapid rate. And certainly there are different kinds of concrete producers which normally adopt technology faster than other types of producers profiles. And we're seeing that happen. And the rate of adoption is happening far faster when we see those market signals like the procurement policies or even requiring environmental product declarations in the procurement process.So those kinds of things really accelerate this transition to the market. There's a reason why so much innovation is happening in San Francisco in the concrete sector, is because there's a lot of companies that operate there that are really walking the talk. And the concrete industry is enabled, empowered to bring their best forward. But if concrete producers are in markets where they're never hearing someone talk about decarbonisation, yeah, they have 20 other things that, that they can prioritize, that they need to work on.David RobertsRight? So you need some valuation of the carbon benefits to kind of push this up to the priority list.Robert NivenAnd it doesn't have to be a premium, right. When you say valuation, it just needs to be identified. Like an example would be of Microsoft. When they're building, they're asking all of their suppliers to say, I want to reduce our carbon target by X. And then they go around and they say, what can you do for me? What can you do for me? What can you do for me? When the concrete producer hears that loud and clear, and they may win that bid over a competitor if they have some ideas and they can bring something to the table.David RobertsI want to get a sense of scale before we move on from the process. Sort of if I'm producing concrete and I'm using your process to inject CO2, say I do both of the available options and I get CO2 injected into my wastewater and I get CO2 injected into my mixer, is the end product of that carbon negative or how close is it to carbon negative? Give a sense of scale, like how much of the carbon in the process is being offset by this?Robert NivenYeah, it's one piece of the pie. To get to carbon negative or neutral concrete is we're going to need some substantial changes on the cement side as well. And there are some fellow companies within our investors portfolio. A great example would be like a Brimstone who are working on the cement side. We're working with whatever cement is coming down the line and we're adding if you sort of combine the reclaimed water and ready mix, you're getting another 10% to 15%. But that's 10% to 15% off of a global commodity with a huge volume and we can do it today with very little CapEx and it's permanent.So if you think about a marginal abatement cost curve, it's like this is the furthest left on that curve. This is the thing that is easy to implement at scale. It has a significant percentage reduction, but off of a huge number, the volume of concrete is enormous. There's about 40 billion tons of concrete produced or 4.2 billion tons of cement.David RobertsAnd what's the number? I think it's 8% of global emissions, something like that.Robert NivenWe use the word the number 7% and most of that's cement. And the reason it's so big is because so much concrete is being used, it's second only to drinking water in production. Yeah.David RobertsSo you can take 10% to 15% of the CO2 basically out of the final product, but more than that is going to require deeper changes in the process.Robert NivenAnd that doesn't include our aggregate technology. So that will layer in a lot more. But we need to work together all the way along the value chain. The traditional cement sector are doing things like they're using supplementary cementitious materials instead of cement and that means using things like fly ash and slag. The problem is those materials are declining in availability, they're doing things like fuel switching, so using waste materials, energy efficiency, all those traditional things should be done. But then there's also some real deep tech stuff going on right now about fundamentally changing the cement process or chemistry.But that's going to take a lot of money and we still have a lot of time ahead of us. So we need to get going today on those immediately deployable solutions.David RobertsRight, so you've got a solution here you can just slap on existing concrete, plant boom, you get your ten to 15, maybe a little bit more CO2 out.Robert NivenAnd we've shown that this is not only applicable in the United States, but we're operating in many many emerging markets and really only about 2% of cement is being produced in the US. It's the emerging markets. That's where we really impact climate.David RobertsRight. And that's where it's growing.Robert NivenThat's where people is in concrete they haven't built out. There's a lot of population growth and we're already going into those markets now because we know that it takes a bit of incubation time and in some markets we're seeing that already entering into that scaling phase.David RobertsSo you need CO2 as an input to your process. Is there any supply issue? CO2 easy to get and I'm also curious how much you pay for Heirlooms CO2 versus more traditionally acquired CO2? Is there a big price differential?Robert NivenSo the first part of your question is, is there supply chain issues? Yes. Our industry, the concrete industry has been massively impacted over the last twelve months by cost and supply of cement and in our case cost and supply of CO2. Really? Believe it or not you can't buy CO2 in certain markets.David Robertsa shortage of CO2.Robert NivenAnd the price is skyrocketing because of it.David RobertsNo kidding.Robert NivenIt's a really perverse situation. So we need a lot more air loops and we need them to get them into market faster to start to diversify the supply of CO2 because some of the traditional emitters that you would have been collecting that CO2 are now changing their process so that that CO2 isn't becoming available anymore. Ethanol is the largest supplier of CO2 in the industrial gas market in the United States. So today if the price varies so much it's largely dependent on transportation. Very commonly we're paying well over $500 a ton for CO2. We haven't gotten to that stage with Heirloom where they have the volume, the capacity to have those discussions yet but we really encourage them to move along as fast as they can to get to that billion ton target because that gives us a lot more CO2 that we can work with.So we're exploring all different options for CO2 supply because just from a supply constraint or supply chain disruptions we're very encouraged to solve for that problem now.David RobertsIt's just something that sort of kind of confuses me. And maybe you both can take a swing at this answer, but I'm seeing a process here at your demonstration plant where we're digging a limestone up, doing a bunch of stuff that strips the CO2 out of it, and then injecting the CO2 back into the concrete process, where it then becomes limestone again. Why not just dig up the limestone and put it directly in the concrete? It seems like a lot of physical processes to sort of end up where you started. Maybe just sort of help me understand that kind of how is this not kind of running in place in sort of energetic and CO2 terms?I'm sorry if that was a very vague question.Shashank SamalaWhat we are trying to do is pull CO2 that is already in the air so you need a sponge to pull up that carbon and we find that calcium oxide which is derivative of calcium carbonate is highly alkaline. It's highly thirsty for that CO2 and then that's how you create the limestone and then you're essentially looping the limestone through the cycle.David RobertsThe limestone you're finding that you're mining has already absorbed CO2, right? That's what it's been doing. It's what it's been doing. So in a sense, it's already absorbed it. Why not just put it directly into the concrete, do you know what I mean?Robert NivenYeah, maybe my perspective solves that on that bit better. The way that I think about Heirloom is if you take a sponge and you put it into your kitchen sink and then you pick up collects water and then you squeeze it out, then you put it back in and squeeze it out. So it just happens to be calcium. But for our process, there may be some listeners who are from civil engineering and understand concrete a bit deeper, and they say, well, concrete already carbonates, right? So there is a natural process that's already happening, but that's limited to the exterior skin of concrete and it's not value added, it doesn't provide those performance benefits.So some way of looking at that is like, yeah, if you left concrete exposed to the air for 1000 years, which not too many buildings are around for a thousand years, is you might get that full carbonation extent. But even if you did that, you wouldn't get all the benefits, the performance enhancing benefits that come from carbonating actively in a certain way that create this nanomaterials, which provides the cement savings. And it's also done in a very short time frame within seconds. And so that's a key difference here is the time. And the other thing is, if you let carbonation happen passively, that's called weathering carbonation is it actually has the opposite effects on performance.David RobertsOh, really?Robert NivenYeah, it'll actually cause the PH to drop and then it will make the steel corrode, which makes said structure made with that concrete to have durability issues and may fail. So engineers like myself are trained to limit carbonation because you don't want that carbonation layer to get to the steel, because then that causes that concrete to fail. So you take many, many steps to stop that from happening. The way that we're doing it is different in that we're actually deliberately carbonating to a certain extent. So you get all these performance enhancing benefits and that's a really important nuance.David RobertsOne question is this sort of demonstration project of Heirloom on the one side, CarbonCure on the other side, pulling CO2 out of the air, putting it in concrete. I obviously see the benefits in terms of like educating the public, making carbon capture and sequestration more real and tangible to people, showing investors that things are happening here, all these effects. But looking down the roadways is the sort of direct capture to concrete pipeline. Is that going to be a real business? Is that going to scale up? Or is this mostly just for demonstration purposes?Robert NivenIf they can provide CO2 for less than $500, we've already shown it scalable. Right. So for us, that's the marker. And we're more than happy to work with Shashank and Heirloom because if they can provide us cheaper CO2 on a reliable supply and the market would prefer atmospheric CO2, I'll do that all day, every day. But we're already showing today that using CO2 and concrete is immediately scalable and used in emerging markets, developed economies, what have you.Shashank SamalaYeah, the awesome thing about concrete is it's the most abundant commodity, the industrial commodity that we produce. It's like 12 billion tons of concrete that we make. So that's the awesome thing, right? That's why this demonstration, I think, is so powerful. This is not just a small test, that it is a signal for what's to come. And I tell Rob every time I see him, tell me what is the price where we can put CO2 in every ton of concrete that they're at and plants that they're not yet at? Right. To reduce that cost per ton on the concrete plant side, where it is just economical, no brainer for a concrete plan to add Heirloom CO2 into the CarbonCure process.So, yeah, that's the thing that's exciting.David RobertsHas anyone done the math on the total sequestration potential of concrete globally? I mean, do we have a sense of scale here? The limits?Robert NivenWell, the theoretical limit is half the weight of cement could be carbonated.David RobertsOh, wow.Robert NivenBut I'm not saying you want to do that. I'm saying, theoretically, that Stoichiometry says that if there's 4.2 billion tons of cement, you could conceivably mineralize 2.1 billion tons. And that doesn't include all the aggregate. So you put all the aggregate on on top of that. And aggregate is the vast majority, about 85% 90% of the of the mass of of concrete. So you could really get to certainly hundreds of millions low billion tons of CO2 mineralization in the concrete value chain through carbonating, directly through concrete, like what we're doing, or by using CO2 to make aggregates.There's a few companies that are doing that as well. So it does become sizable. But I really want to emphasize it's, the value added nature and the immediate nature of this, like the time value of carbon is important in climate change discussions.David RobertsYeah.Robert NivenA lot of solutions are targeting to come online and start scaling in 2030-something. This is happening now, right? And we need to do as much that we can, especially if there's very little CapEx requirement and no price premium.David RobertsSo I've kept you long enough, I guess I'd ask the same question to each of you to conclude it's the nature of carbon removal that it's not producing a product that is valuable enough in and of itself to pay for itself. There's going to have to be a market created for removed CO2. We're going to have to sort of generate a market around this if it's going to pay for itself. So I guess I just asked both of you, by way of concluding shashank you first, what sorts of policies can help you or would most directly help you scale up?Shashank SamalaSo two types of policies. One is a compliance market that essentially requires corporations to effectively price carbon as an externality and have a cap for carbon emitted so that carbon that is not abated or reduced needs to be offset and removed. And there's a price for that.David RobertsAnd this is something a few companies are doing kind of voluntarily, right? Like the stripe constellation of companies are basically sort of modeling what that would look like. But that's got to be made law at some point, right? You're not going to get enough voluntary companies to ...Shashank SamalaNo, according to APCC. We need to be removing five to 10 billion tons of carbon from the air by 2050. And if you want to see that type of scale, if you want to see that type of it's a trillion dollar market at $100 a ton. That's a trillion dollars of revenue every year that we need to get to. So it's amazing and we're so fortunate to work with folks like Frontier Stripe, Shopify, Microsoft, who are all early buyers of this technology, but we need thousands more and policy and compliance markets is what gets us there.The second type of policy is what 45Q is doing today. You may have heard of it. It's a tax credit. It's a direct pay for direct recapture that is stored permanently. So, you know, we're fortunate and, and, you know, really we, we appreciate everyone who, who worked on the Inflation Reduction Act, having that passed last year, that is such an important element. It's at $180 per ton subsidy. It's it's stackable on top of what customers pay us that helps us bring down the cost of, of carbon removal so it is affordable to everyone. So, you know, that is something that, you know, not just the US.But, you know, every other count ry, europe and Asia should adopt something similar. So compliance markets and subsidies like 45Q really help us come down the cost curve.David RobertsIs there a country doing more than the US for this or they are their models to look to where they're going more sort of gangbusters on on DAC?Shashank SamalaCanada is actually pretty close. I don't think they've passed this yet, but there's a pretty large CapEx, I think it's called the Production Tax Credit that might be even more compelling than 45Q depending on how that's written. So, yeah, super fortunate that US and Canada, that is the type of competitive battle we want, right? This sort of geopolitical competition to see which country can help us decarbonize the planet. And in the past it was some countries in Europe that were sort of good hearted and have these policies like the subsidy for solar in the early 2000s.But now you're seeing countries compete against each other to bring clean tech and climate tech into their country. So I think it's warring from a good hearted nature to a competition, which is exactly what the planet wants. So that's what we should all be up to, optimistic and excited about.David RobertsAnd how about you, Rob? What's your policy wish list? What's on top?Robert NivenI would echo what Shashank said, certainly. And about we need many more credit buyers of some of the same names, like the Shopifys and Stripes. That really the Microsoft's and Patches that drove the world of demand for these credits. 45Q, for sure. For us, though, the most important policy are these low carbon, concrete, or buy-clean type procurement policies.David RobertsRight.Robert NivenNew Jersey just passed landmark policy just a couple of weeks ago. It was based upon similar work done in New York and Hawaii and California. We saw a lot of it in the Federal Infrastructure Act. That's what really drives us.David RobertsAre there federal procurement buy-clean elements in the Infrastructure Act?Robert NivenYes. If I recall, it's about $4 billion in incremental spend on low carbon material purchases. That is very important for our business, and that's what will drive the storage piece within concrete especially. And then that in turn will drive the DAC side or the carbon capture side. So that was really important. And they're designed in a way that also requires a strong reporting element using LCA documents like environmental product declarations, and you need those to compare the different options in a third party verified way. So that procurement policy is very important based upon the kind of models like we're seeing in New Jersey with its LECCLA Bill.David RobertsInteresting. Well, thank you guys for coming on and walking us through. It's really interesting. I think if nothing else takes a very abstract discussion, what can often be a very abstract discussion about carbon and carbon removal and all this and just makes it very tangible. One of the things I love about this is that on both sides, this is not PhD chemistry or whatever. It's trays of rocks and squirting CO2 into a mixer. I love the there's a ruggedness, I guess, to simple processes that I really like. So it's been really fun to talk through.Robert NivenYou're welcome. Although I will say we have a lot of PhDs working on our team as well, so I don't want to diminish the great work that they're doing to make it look this simple. You need to work extra hard.Shashank SamalaYeah, exactly. There's just a lot of engineering and science that goes into making things simple and scalable. So, yeah, you have lots of PhDs and great engineers on the team.David RobertsAll right, Shashank Samala and Rob Niven, thank you so much for coming on and talking us through. This is super fascinating.Shashank SamalaThank you so much for having us.David RobertsThank you for listening to the Volts podcast. It is ad-free, powered entirely by listeners like you. If you value conversations like this, please consider becoming a paid Volts subscriber at volts.wtf. Yes, that's volts.wtf so that I can continue doing this work. Thank you so much, and I'll see you next time. Get full access to Volts at www.volts.wtf/subscribe

Even if greenhouse gas emissions halted entirely right now, we would continue to feel climate change effects for decades due to existing carbon dioxide in the atmosphere — and warming could accelerate, as we reduce the aerosol pollution that happens to be acting as a partial shield. In this episode, Kelly Wanser of nonprofit SilverLining makes the pitch for solar radiation management, the practice of adding our own shielding particles to the atmosphere to buy us some time while we step up our greenhouse gas reductions.(PDF transcript)(Active transcript)Text transcript:David RobertsOne of the more uncomfortable truths about climate change is that temperatures are going to rise for the next 30 to 40 years no matter what we do, just based on carbon dioxide already in the atmosphere and the reduction of aerosol pollutants that are now shielding us from some of the worst of it. That's going to bring about potentially devastating changes that we do not yet well understand and are not prepared for.How can that short-term risk be mitigated? One proposal is to add particles to the atmosphere that would do on purpose what our aerosol pollution has been doing by accident: shield us from some of the rising heat. No one credible who advocates for solar radiation management (SRM) believes that it is a substitute for reducing greenhouse gas emissions. Instead, it would be a way to buy a little more time to reach zero carbon.My guest today, Kelly Wanser, is the head of a non-profit organization called SilverLining that advocates for research and policy around near-term climate risks and direct climate interventions like SRM that can address them.I've long been curious about — and wary of — solar radiation management, so I was eager to talk to Wanser about the case for SRM, what we know and don't know about it, and what we need to research.Okay then. Kelly Wanser of SilverLining, welcome to Volts. Thank you so much for coming.Kelly WanserThank you very much, David. I am a fan and it's a pleasure to be here.David RobertsAwesome. Well, I have wanted to do a pod on this subject forever. I'm going to try to be focused, but I sort of have questions that are all over the place, so let's just jump right in. The way I'm approaching this is, I think, to average people off the street, and maybe I even include myself in this. The idea of reaching up into the atmosphere and fiddling with it directly, thinking that we can dial in the temperature we want, strikes me as crazy. And I think that's probably a lot of people's intuitive response. Obviously, you have thought your way past that, going so far as to found an organization designed to advocate for this stuff.So maybe just tell us a little, to begin with, your personal background and how you came to advocacy for geoengineering, which is not a super crowded field.Kelly WanserI'll say first that you're actually not in the business of advocacy for geoengineering and it will give you some context for how I came to be doing what I do.David RobertsSure.Kelly WanserReally it was about — I was working in the technology sector in an area called IT infrastructure, and that's the sort of plumbing of data in the Internet and was looking at problems like how you keep networks operating. And I started to read about climate change, and I was very curious about the symptoms that we were starting to see in the climate system and where the risk really was. And I started to get to know various senior climate scientists in the Bay Area and other places, and I asked them the question like you might ask, how would you characterize the risk of runaway climate change in our lifetime? And this is maybe twelve years ago.And they said, "Well, it's in the single digits, but not the low single digits."David RobertsNot super comforting.Kelly WanserYeah, I mean, my original degree was economics, so I thought, well, if you had those odds of winning the lottery, you'd be out buying tickets. If you had those odds of cancer, you'd be getting treatment. So that seemed like a really high risk to be exposed to. And then they told me about another feature of what was happening in that carbon dioxide stays in the atmosphere for a long time, keeping things warm. Comes out very slowly. So even if you stop emissions completely and there are other dynamics going on, the system will continue to warm for a while.And so you've got another few decades of warming. So wherever you are and whatever you see, you've got some additional warming that's going to happen, which means that whatever risk point you're at, you reach a higher risk point over that period of time. And so I became very interested in that problem, because there's a mismatch between the increased risk profile of really serious and catastrophic climate events and impacts and the kinds of responses that we had to reduce the risk. So really my organization is focused on what we call "near-term climate risk," which is the 30 to 40 year time horizon where the things we need to do to ultimately fix the problem, all the ways we reduce greenhouse gases in the system, they don't work in that time horizon to meaningfully reduce the risk.And so that's how we find ourselves here. Because getting back to your original comment, in the absence of the kind of risk situation that we're in, these ideas would be really extreme and you wouldn't consider them. So we like to use the sort of metaphor of medicine because it has many similarities to medical treatments. And medical treatments require a lot of research and they're as useful as the context of where your condition is.David RobertsRight. So maybe the way to phrase this is you looked around, you saw climate change, you saw that our ways of mitigating climate change are sort of slow, if you will, slow acting and long term, which leaves this short-term risk gap.Kelly WanserRight.David RobertsSo there's going to be warming over the next 30 to 40 years, regardless almost of what we do. And you're focused on how to mitigate those risks.Kelly WanserYeah. So related to that, and again, you can go to the United Nations Climate Reports, and you can see what they think is happening and going to happen they have these charts that show these curves. And the curves go up all the pathways, all the different scenarios for climate change going up through 2050, some of them bend back down because we've done a good job. But in their reports where they describe that they're projecting what's happening to people and different parts of the world over those 30 years. And right now they've come out and said, well, under their projections, as many as 1 billion people get displaced.And you can go to websites that have simulations of what's going on and you can see places that get overwhelmed by water, that get overwhelmed by heat. And so you've got a lot of suffering, a lot of dramatic impact that's baked in. And so what we are saying is we need to do really rapid research to find out if we can do better than that. Because in the current projections, it's bad for everyone and it's terrible for quite a few people.David RobertsYes, two things spring to mind confronted with that situation. One is a lot of people looking at that would say, "Well, we need to go gangbusters on adaptation." Let's figure out how to make that suffering less by adapting to some of it. And the other thing that jumps to mind is methane, which, as Volts listeners know, is a greenhouse gas, but acts on a much shorter time horizon than CO2. And so I think that the thought in some quarters is if you could rapidly reduce methane, you could have a much more rapid effect on the climate than in reducing CO2.Why not either of those two routes?Kelly WanserSo, also those two routes. I think one of the things that struck me about coming into the climate space was it wasn't very well-equipped to think in terms of portfolios. So if you look at the risk profile, it's sort of like we're having these debates about should it be wind and solar, or nuclear? Should it be emissions reductions or these things? But if you look at the risk and uncertainty involved, there's a lot of uncertainty involved in all the different ways of responding to climate change. And there's a huge amount of risk, potentially existential risk.And so from a portfolio perspective, methane reduction is one of my absolute favorites. And there are some great things happening in that field. Adaptation is a harder problem, and it was made harder because people didn't want it in the portfolio 20 years ago. And they didn't want people to think it was adoptable. So they didn't want people looking at it. Well, it turns out when you look at it, you find out it's not easily adoptable, really. You can see, like, look at Pakistan. These big extreme events happen. They're pretty overwhelming. And even in the US, we're arguably one of the best equipped places in the world to manage these things, and Austin, Texas, had a third of the city with no power.David RobertsYeah, we managed to bungle it regularly, even with all our money.Kelly WanserBut really what it was about is saying, okay, we should have a rich portfolio here. If you thought of this as like, shares, or you thought of this as insurance policies, we'd have a portfolio of things so that when you brought that portfolio together and those things that are different profiles and there are different levels of uncertainty, we have a lot of coverage.David RobertsRight?Kelly WanserAnd the problem is that this part of the portfolio, if you needed to arrest climate change quickly, if you really needed to get in there and say, oh, the ice sheet is about to go. The wet bulb effects in India are happening and we can't take it. And you needed something that operated in a sub-decade time horizon, then that's the key part of the portfolio that's empty. And we don't want to do those things. But from a risk management point of view, in terms of what's at stake, even evaluating whether we have them, that's something on deck that we really should be doing.David RobertsAnd one more thing about the risk question, the short-term risk question, and I feel like maybe more climate types have grown cognizant of this recently, but it's really an under-discussed aspect of all this, is the aerosol effect. So maybe just tell us what it is and why that adds to these worries about short-term risk.Kelly WanserThat is a great question, because as I was digging into this and finding out the things I'm telling you, this came up effectively. There are forces in the atmosphere that trap heat and help keep us in this sort of temperate zone that we're in. And there are forces in the atmosphere that reflect energy away. And so the particles and clouds in the atmosphere, they're reflecting sunlight away from Earth, which is part of what keeps us in this Goldilocks zone. When you look at the Earth from space and you see that shiny blue dot, that's what that is.And these particles that come into the atmosphere, they create clouds, they live in the atmosphere. They're part of that whole system, and they come from nature, but they also live in pollution. And the particulates in pollution that come from coal plants, that come from ships over the ocean, they are mixing with clouds that are living in the atmosphere in ways that make the atmosphere slightly brighter. And it's this effect that scientists have reported is cooling the planet currently by reflecting sunlight back to space. And they don't know exactly by how much, but they think it's between a half a degree Celsius and 1.1 degrees Celsius.David RobertsThat's not small.Kelly WanserNo, it's not small. It could be offsetting half the warming that the gasses would otherwise be making.David RobertsYeah. Just to sum that up. So our particulate pollution to date has had the sort of perverse effect of reflecting away a bunch of solar radiation with the consequent problem that insofar as we clean up our pollution, which we are striving to do, we are going to lose that cooling effect and maybe get another one whole degree of warming which would double...Kelly WanserThat's right.David Roberts...our warming since preindustrial times. So that's a little wild.Kelly WanserI was just going to say it's right there in the climate reports. And it's been there consistently, but not prominently noted, not highlighted in the sort of climate discussion. And so it's surfacing more now recently, that this was there. And we're getting very good at cleaning up pollution. One of the features of this problem is that in climate reports, when they show these effects, they'll have bar charts that show the different effects on the climate system. And they have these lines that show how much uncertainty there is. This is the most uncertain thing about the climate system.And that uncertainty has been unchanged for 20 years. We have not been able to improve our understanding of that. And so when we in SilverLining are talking about our advocacy, we're saying we need to improve our information base, we need to quickly improve our ability to do that problem. That problem happens to be the same or very similar to the problem of what if I want to achieve this effect actively. So we think it's kind of a no brainer for society to say we need to go after that problem really hard, like the human genome, and understand what's going to happen when we take the pollution away.And is there a cleaner, more controlled version of this that might help?David RobertsRight, yeah, I'm going to get some of those questions in a minute. So the aerosol effect is you have these particles up there now which talk about geoengineering. We've been geoengineering the climate ever since industrialization by throwing all these particles up, which are shielding us. So, in effect, as we clean up our particulate pollution, we are pushing the target for climate change farther and farther away. In other words, we're making a longer and longer runway for ourselves. So in addition to advocating for research, which we'll get to in a minute, it looks like your organization has because the term geoengineering, I think, as people think of it now, brings to mind all sorts of various and sundry schemes in the ocean and crumbling rocks and there's all these different notions.But it seems like you all have settled more or less. Your main focus is on solar radiation management, SRM, which is just replacing the particles that we're taking out of the atmosphere with new particles to continue enjoying that cooling effect. Why focus in on that one rather than the others? Is there a reason to think it is the most out of all the geoengineering schemes? Why focus on this one?Kelly WanserWell, we, we don't use the term "geoengineering." We don't use the term "scheme." But I will answer your question.David RobertsI know, I noticed that you carefully say "climate interventions" rather than "geoengineering."Kelly WanserYeah, "climate intervention" was a term the National Academy of Sciences coined in their 2015 report. And it's useful because, like you said, "geoengineering" kind of evokes the most engineering-oriented stuff, engineers in space, and there's really not a lot of engineering involved. There's a lot of science involved, and it's directed at climate. And intervention is a really good term because it's so similar characteristics to a medical type intervention. Engineering has a lot of certainty. Like, if I can do the math, I can engineer a bridge. An intervention has a lot of uncertainty and a lot of trade-offs, depending on where the patient is.So this looks a little more like that. But to your question, we are a science-based, science-driven organization, so we follow what the scientists recommend. And so we didn't arrive at this conclusion ourselves. We took what the National Academy of Sciences and the Royal Society in the United Kingdom said. They'd done a couple of assessments where they gathered scientific experts together and asked the same question and if you wanted to reduce warming in the climate system quickly, what are the best candidates for research? And so they landed on this because there's a lot of precedent for this effect in the atmosphere.So in addition to what pollution is causing, they've seen this effect when large volcanoes go off and release material into the outer layer of the atmosphere, the stratosphere. And they've seen that cool the climate system globally. So when Mount Pinatubo erupted in 1991, they observed about a half a degree Celsius of cooling for about a year and a half. So when people talk about all these things are terrible. Well, most of us who are 25 or older experienced this already when Mount Pinatubo went off and we didn't notice the sky was different. So we've actually lived it a little bit already.David RobertsIn a sense, we know it works, or at least we know the physical effect is somewhat predictable.Kelly WanserAgain, I'm going to go back to the medical analogy because it's so similar. There are differences in efficacy and side effect profiles based on what we know today. And the reason we want to do research is to understand the efficacy and side effects better.David RobertsRight.Kelly WanserAnd so in the outer layer of the atmosphere, they feel like they know a lot more about the efficacy because the stratosphere is very uniform. They've seen it with volcanoes. And so you can get a pretty good grasp, although they're finding just as early research is going on, there are pretty big differences, maybe in how you do it as to what happens. And you certainly don't want to do it like volcanoes do.David RobertsWhy not, just out of curiosity?Kelly WanserLike all at once big bursts. So it turns out that doing it from — most volcanoes are around the equatorial regions, which for some of what they're finding is like the worst place to do it and that you wouldn't do it like in one giant burst all at once. And of course, volcanoes include a lot of stuff that you wouldn't put in there that is...David RobertsRight.Kelly WanserSo what we know, or have some handle on, is that in that kind of a burst where there's material in the stratosphere for a year or two and it gradually falls out. We kind of know a bit about what the side effect profile is of that a bit. And I should say we don't know that much about the chemistry effects and the ozone layer and things like that because our measurements aren't very good. But the thing we really need to think about is, okay, if you needed to do this for a couple of decades of 20, 30, 40 years, and it's got a side effect profile in different parts of the system, maybe it's heating up the stratosphere a little bit.And that gets to a point where you have big changes in circulation or other things. That's what they don't know.David RobertsIt occurs to me that we've gotten this far in without ever actually really saying what we're talking about. So just for listeners who might be confused, the idea here is to deliberately inject a bunch of these particles, sulfur particles, into the atmosphere to basically do on purpose what our pollution is doing by accident reflect light away. And there are a couple of different versions of this, even if you just focus in on this is called solar radiation management. I don't know if that's the term you all use.Kelly WanserYup.David RobertsThere's a couple of different versions even of that. So maybe just discuss like what are we concretely talking about doing? There's different layers of the atmosphere, there's different methods of throwing things up, maybe give us a sense of what it looks like in practice.Kelly WanserSo there's the idea that would sort of be lifting off from what they've seen with volcanoes, which is dispersing particles into the upper atmosphere, this stratosphere probably via aircraft and possibly with selected places that they're releasing the material based on what they're learning and models about what produces the best efficacy with the least side effects. And that this would probably happen in a continuous way with planes flying continuously, releasing stuff. And the net effect that they're trying to produce is about a 1% increase in the amount of sunlight the stratosphere reflects. So it's not something that you see from the ground.It's not something that would be noticeable except for maybe certain changes in light to certain types of plants, things like that. And that would be the idea.David RobertsOne question about that, the stratosphere you said is pretty uniform. Would interventions on that level have a uniform effect around the world or would they be localized?Kelly WanserIt's far more uniform. The particles get entrained in really high winds up there and disperse globally. And so you get a global effect. You might have some differentiation in how that plays out down below in weather patterns and things. And that's what people want to study. And because it's not simple, it's a really complicated system. And one of the concerns scientists have is that like reflecting sunlight up there, you're slightly heating the stratosphere and that can affect its interactions with the atmosphere below it. It can affect the way chemicals play out in the stratosphere in a way that affects the ozone layer.And so all of those things, again, if you're really good to think about medicine, it's like oh, how does it interact with that part of the body? There are medications. So there it's really about trying to project forward, trying to figure out what is the optimized way to do this, where you get the highest efficacy and the best safety.David RobertsAnd isn't there also a whole other genre of this that has to do with clouds putting the particles in lower clouds?Kelly WanserGreat question. Yes, there is. And the particles that they're talking about putting in the clouds are different, too.David RobertsDifferent than the stratospheric particles.Kelly WanserThat's right. So in the stratosphere, their starting point is sulfur dioxide, which is like worse than pollution. And they know the most about that because it's what volcanoes put up there. Aircraft pollution is starting to waft up there too. But they're also looking at other things in the stratosphere, like calcium carbonate, which is chalk, like chalk dust.David RobertsInteresting.Kelly WanserAnd even diamond dust. So those are the kind of the two other methods.David RobertsAnd the idea here is trying to maximize reflectivity while minimizing, presumably other...Kelly WanserThat's right.David RobertsEverything else.Kelly WanserAnd in this case, especially thinking about the ozone layer. And that's important, obviously. And in fact, in the international arena, in the UN, where they've done probably the most scientific evaluation of these things to date is in the part of the UN that looks after the ozone layer, the Montreal Protocol. So they're thinking forward about that. And that's the issues in the upper atmosphere, in the low cloud layer. So we have lots of particles going up into clouds all the time, especially over land. The less polluted clouds are over the ocean, although you can see and if anyone listening to the podcast, if you Google Ship track it'll pull up pictures of cloud decks over the ocean and you can see these streaks and the clouds that are made by the emissions of ships.And so that's like the ship particulates from the ship pollution brightening the clouds and you can see it visibly where it's really concentrated, but it's also spreading in ways that you don't see visually. So the idea here is, well, could we use a cleaner material and really optimize the effect? And it turns out one of the very best materials for doing this with is one of the materials that's part of making clouds over the ocean, which is sea salt. Sea salt spray from ocean water. And so what scientists proposed two British scientists back in the 90s was, well, maybe you could make a really optimized mist from sea spray spray it from ships in a continuous way and brighten the kinds of clouds that are really susceptible to this, and do it in more localized areas where you get a big bang for the buck.And so you still offset a couple of degrees of warming, but you're only dispersing over like something equivalent to three to 4% of the ocean surface.David RobertsInteresting. And this would also have a uniform global effect because it seems much tighter area, lower clouds. It just seems intuitively, like that ought to be more of a local effect. Does that also end up spreading?Kelly WanserYour intuition is correct. It is localized. And the side effects that you're most interested in is what does that do? Because you are creating concentrated areas of cooling in the system and these are all the mechanisms by which weather and atmosphere move around. So it's almost certainly likely to affect weather flows and patterns. And the thing you would be trying to learn then is are there ways for that to work in your favor and are there ways for that to be really bad? And so I'll give you two examples. And one of the reasons we're such strong advocates for research is because these kinds of questions really shine a light on where our climate models and our climate observations are weak.So to answer these questions, you've got to really improve doing that uncertainty problem and also getting better at weather circulation. But in the very early models which we helped fund to try to represent these things, one of the possibilities that arose is that when they simulate brightening clouds over the Southern Ocean, which is one of the places that you might do it. You get these cooling currents because it cools the water below in the air in the low layer that flow onto Antarctica. And so you got this improvement in kind of an outsized cooling of Antarctica, which is a useful thing potentially.But on the reverse side, in another targeted area of clouds, when they cooled that region, they affected weather patterns such that you got dryness in the Amazon forest region, which is a very bad thing to have.David RobertsYeah.Kelly WanserSo in the moral to this story is that these are just very early bottle based simulations that tell you you have these kinds of questions and that it's probably given the state of the risk that we have, and given that it's one of the top two candidates, and given that studying it will help us understand what the pollution problem is going to do. Really important to study, but really hard to say for sure whether or how you should use it.David RobertsSo these two versions of SRM, solar radiation management, the injecting particles in the stratosphere and then the cloud brightening, are those the sort of two main, most viable sort of targets for research. Like when people think about SRM, are those the kind of the two things that should come to mind?Kelly WanserThey are from scientific assessments and from senior scientists. There's a third one that's sort of like a tier below because it's even more uncertain than the low cloud brightening, but it is something that is already occurring. And this is in the high cloud layer. So between the stratosphere and the lower atmosphere. So the upper troposphere where you get to when you're cruising altitude on a long flight, 30,000 feet, depending on the circumstances, when you put pollution particles or similar into these high clouds, you can have the effect of either thickening them or thinning them, depending on the conditions.And those clouds are insulating clouds, so they keep heat trapped in. Infrared radiation trapped in. So if you put particles in them in the right circumstances, you could thin them.David RobertsLet more heat out.Kelly WanserLet more heat out. And this phenomenon is happening from air traffic, from airplanes, and we don't know enough about it.David RobertsWell, I have a bunch of questions about governance and moral hazard and all this, but first let's just briefly touch on the main subject of your latest report, which is just research, advocating for research. I come into this sort of like leery about doing things like this that we know so little about. But when I got into sort of reading about the kind of research we need, what's sort of remarkable is probably like two thirds of the research you're advocating is not even directly on doing these things. It's just understanding what's in the atmosphere right now, like what are the risks of short term rapid changes now?Just very basic climate science stuff that you would think we would already be researching. I think even sort of the most committed opponent of these schemes would agree that it's crazy how little we know about this whole area of study. So maybe just like talk about what when you advocate for research, just talk about sort of the basics of what you're advocating for here. I mean, I think people will be a little bit shocked that some of this stuff doesn't already exist.Kelly WanserWell, thank you for that. You're exactly right because I think we were shocked not coming from this field and just kind of looking at it as an information problem. And the problem you want to do is you want to be able to project and evaluate the risk of what the climate system is going to do. So I'd really like to know, be able to project with some confidence how the Earth system is going to respond to this warming over the next 30 years and then what it would look like if you change the things that are influencing it, either in the warming direction, the greenhouse gases, or in the cooling direction, what scientists call aerosols.These particles. So we're coming at it saying, "Okay, we just want to help set us up to do that problem and evaluate what it looks like if you are introducing aerosols in different ways and how does that improve or not, like the risk profile of what's happening." And so then we bump into these gaps and what the problems that we can't do in the models and a lot of them center right in the atmosphere, that the models don't represent all the phenomenon that are happening in the atmosphere very well and that we don't have the observations that we need to improve them.David RobertsIt's like insane. It's like five, six decades now. Of talk about climate change and talk about all this, but we still on some very basic levels are just not watching what's happening in the atmosphere.Kelly WanserI think people assume that it's like, hey, we've got this, right? And you hear there are these satellites and you hear the scientific studies coming out that are projecting what climate is going to do. We have satellites looking at everything. And then you sort of dig under the hood and that's where solar radiation management just has an analysis problem. Because what some of the scientists in our circles have said is people want a higher standard of evidence for this. So they're saying, well, you need to be able to tell us what will happen and what the impacts will be.And we shouldn't be having that standard of evidence for what greenhouse gas is doing and what these other aerosols are doing, but we haven't. And so we get in there and say, okay, if you really want to do this problem, here's what you need. So to give you example for the very top candidate for this is putting particles in the stratosphere. And so if you want to project what will happen, you first need a baseline of what's in the stratosphere. And it turns out we don't have that. We can't characterize what's in the stratosphere currently. So then it's very hard to do that problem.And so the first thing that we did when we started talking to members of congress and working with NOAA is just to say we have this problem of having a baseline of what's there, which is a really important problem to solve. If you want to know if somebody else is adding material to the stratosphere, if you want to know what it will do, and so that was our starting point. And it's similar kinds of things now, where even in the low cogler, we're working on a program to put instruments on ships like the current ships that travel, that would just be taking atmospheric readings of that low atmosphere so that you would have a baseline and you'd be able to help the models and even the satellites interpret what's going on.David RobertsRight. So just gathering more data about what's actually in the atmosphere. So we have a baseline, because one thing the report emphasizes over and over again is that it doesn't really make sense to talk about the risk of doing these things in isolation. It's always, what is the risk of this intervention versus the risk of not doing this intervention? What are the risks we're facing as a baseline against which we are measuring the risks of this intervention? And we just don't know. That's what's wild to me. We just don't know what the current risks are. So there's no way to make an informed risk judgment because you don't know the differential.Kelly WanserThat's right. And we haven't really invested in it, which is another quite eye-popping reality.David RobertsIt's wild.Kelly WanserLike, globally and in the United States, climate research investments have been relatively flat for decades.David RobertsThat is wild to me. I know. Every time I read that, I read that statistic periodically, and every time I run across it, I'm shocked all over again. Like, all this talk, all this international action, all this agita and angst, and we're not spending any more on climate research than we were two decades ago.Kelly WanserThis really baffled me. Coming into this, I didn't understand it, and I sort of learned there was quite a long period of time where there was an orientation that I'm kind of sympathetic to, which was, we know what we need to know. We need to reduce emissions. And so if you think about it as like two sides of an equation, and you look at the reduced emissions side of that equation, and you just focus everything on that, and you say, don't spend your energy on figuring out what's going to happen if it gets warmer, because we're not going to let it get warmer.And really, that combined with a lot of other pressures on climate science, climate science has been in lockdown mode. I can still remember, like ten or twelve years ago. It's brutal.David RobertsUnder siege, yes.Kelly WanserTerrifying. But now we're seeing these extremes, and we've had a flat level of investment. And inside that flat level of investment in climate research, in the part that looks directly at the atmospheric observation of atmospheric basic science has actually declined in real terms.David RobertsOh, my God, that is mind-boggling.Kelly WanserIt's heartbreaking. And that's the fulcrum for everything we need to know about what's happening and how we evaluate what we're going to do. So the good thing is it represents an opportunity if we can improve it. And I'll just finish by saying climate research investments in the United States are about three and a half billion a year, and that's everything on that side of the equation. And if you compare that to the 55 billion we spent on the three most recent storms.David RobertsYes.Kelly WanserAnd even the big money that's gone into these other programs, what we're saying is, hey, to invest an additional 60 or 70% in that bring it up to 5 and a half, 6 billion a year, that seems reasonable.David RobertsI really encourage listeners to go look at the report because the details of what kinds of research are needed are, like, I keep saying, sort of eye-popping because over and over again you're going to read something and be like, wait, we're not doing that already. We're not looking at that already. We're not measuring that already. That's not included in the models already. A lot of the research recommendations are just like stuff we should obviously be doing. Regardless of what you think about these direct interventions, only when we have a better understanding of these short-term climate effects can we even coherently compare what would happen if we did these interventions right.We have a baseline against which to compare, and the details of some of that research are really interesting. But just sort of to wrap up the research part, let's just talk about that price tag so we can get a sense of the of the scale. You want to double from 3.3 billion to 6.3 or something like that, but just, you know, like I hate to be a cliche, but like, compare this to how much we spend on defense research or like pharmaceutical research or like dog food research. It's it's, you know, concretely, what price tag are you asking for?And sort of like, where basically would that money go?Kelly WanserWell, so concretely, we're asking for an additional 2.6 billion a year on top of approximately 3.5 billion. So it's less than double. And it spread across kind of the modeling and analysis of scientific workforce side of it, across observational platforms, which are the most expensive piece. So you need the airplanes that fly through the atmosphere to take readings. You need stuff on the ocean at the surface. And shockingly, the satellites that actually can look at aerosol particles in the atmosphere. They're aging out and there are no plans to replace them. Yeah.David RobertsSo we're going to know less about aerosols.Kelly WanserWe're going to know less soon.David RobertsThat seems like the wrong direction,Kelly WanserSo the investment in those platforms. And here's the other hold your gut thing. The US supplies most of the world's data. So if we don't do it in the US, we can't count on it coming in. There are some European programs, but the US is the biggest provider of this information.David RobertsYikes. It just seems like how is it in the UN, all this sort of like, poorer and more vulnerable countries organize and they want money in the Green Fund and all this. How is it like they are the ones who are most directly at risk in this 30 to 40 year time horizon in some very direct and scary ways. Why aren't they advocating for research? Like, what's going on?Kelly WanserWell, they have a lot of fish to fry, huge amount of sympathy because they're getting pummeled by the impacts and they're not getting the money they were promised to deal with the impacts or the transition. And what's striking is many of them are still ahead of the developed countries in transitioning away from fossil fuels. You take a country like Honduras, they're over accomplishing against their commitment and they're like the second or third most impacted country by climate change. Like half the country is going to disappear in the period I'm talking about. And so a lot of these countries are really impressive in how they're trying to deal with this, but they don't have good visibility of these research problems because they don't have the assets to do this problem at all.David RobertsRight,Kelly WanserAnd so that gets into where you talk about the climate system is so big and so complicated that you need very high tech resources like massive supercomputers satellites, stratospheric capable aircraft that only a handful of countries actually have.David RobertsYeah, I guess one additional note about the research to emphasize is just and you have a whole piece about this in the report. It's just the people from these vulnerable countries who are now more or less locked out of this research by the high sort of capital costs of it need to be brought in, right. This cannot be another sort of white dudes around a conference table undertaking. Their interests are most directly involved and they need to be involved in the research. That's just to put a pin in that.Kelly WanserI'll say one more thing, and I'll give a plug to our partner at Amazon, because we care about that problem a lot and there are ways that technology can help. And so with regard to giving access quickly, getting the climate models and data sets onto the cloud, out of these big supercomputing, one off facilities and onto the cloud where people in different parts of the world can access them, has a huge potential to benefit. Takes a bit of technical work, it takes some money. But then they have supercomputing too. They have climate models, they have the data sets too.And so we're working on this very actively right now. It's like Netflix. It's like how do we bring it to the world? And if you want those people to be able to do these problems of what is climate change going to do in my part of the world? And then what would these interventions do? You need things like that and you need them pretty fast.David RobertsRight. Most research, yeah, you notice of the little there has been, has been focused mostly on developed countries because that's just where the researchers tend to be.Kelly WanserThat's right.David RobertsThere are huge justice implications to both these interventions. And just to emphasize again, to not doing these interventions, to not doing anything, both those have enormous justice implications which need to be centered. So yeah, if I could just sort of summarize the research bit. The part that struck me is just how much of this research seems like it ought to be happening anyway. It is uncontroversial. It's crazy that we're not doing it regardless of whether we decide or want to intervene directly or not. Understanding the short-term dynamics of the climate and the risk of tipping points and the dynamics of aerosols and all these things, we're just woefully underfunded and need more funding. That seems uncontroversial.So I want to get to the problems that everybody when I ask about this online, everybody sort of comes up with the same question, which is just this sort of nest of moral hazard problems. And so just for listeners who aren't familiar with the term, the idea of moral hazard is the worry here. One of the worries here is if this becomes a real possibility, it will serve as an excuse to do less mitigation basically to reduce emissions less. The idea is here we have an escape hatch. Like, I had a guest on talking about modeling a few weeks ago and she was sort of talking about how in climate models we just have CCS plugged in as kind of a carbon capture and Sequestration plugged in as kind of a gap filler because we don't know what else to fill that gap with.But it gives us sort of this false sense of security. Like, oh, we can get to the targets. Even though if you look at the models like, oh, here's a kajillion tons of a technology that does not really exist yet on any commercial scale. So it's giving us a false sense of security. And her worry is that solar radiation management is going to serve a similar role. ie. Kind of an escape hatch that you can just plug into models when you want to get the right output. That's one of the remoral hazard arguments is it'll lull us into a false sense of security and will reduce the urgency of mitigation.I'm sure you've discussed that issue a kajillion times. What's your kind of take on it?Kelly WanserYeah, we might need a whole 'nother podcast, but...David RobertsI know I wish we had more time for this.Kelly WanserI share the worry that it gets plugged in in a similar kind of way. I might differ in what I think that means about research because I've had this moral hazard issue come into our world in saying it's a reason not to do research, because the research itself creates this impression that you're going down this path and it opens up this option and digging into this coming from outside and looking starting to learn from people the history. Because these same arguments were made about adaptation research, and they were made about carbon dioxide removal research, and they were even made about research into reducing methane that it would distract from looking at CO2. And what kind of happens is they say, well, the research creates a moral hazard, so they sort of suppresses research.Adaptation research is a really good example because then you didn't have it. Well, the research might have given you a lot of really interesting information that compelled thinking about emissions reduction because of the kind of adaptation shit show that...David RobertsI know, the more you know about adaptation, the more — it's not like you're going to be like, "Oh that's easy, that's easy."Kelly WanserLet's just do that on planet Earth would have been to have just tons of adaptation research. That really blew my mind, actually. And so when I think, I guess, or our premise is that information actually helps. And when you dig into these climate interventions, they're not magic. And I sat with conservatives and Republicans in Congress and said to them, look, what the science tells you is the least amount of additional things you put in the atmosphere, the safer it is.David RobertsYeah, which is just completely ...Kelly WanserIt's showing you where the thresholds are, and I can have that conversation. And so we say there's at least we need to look at the evidence that when we start to dig into this, there's also evidence could be highly motivating of pushing on emissions reductions and pushing on the things we can do, that's in addition to all ... the fact that we want to fill gaps and information that will help all these other parts of the climate problem, we're saying that we think society actually with more information, can do a better job and that information itself isn't bad.David RobertsWell, most people would agree with that up to a certain extent, I think, but then gathering information is one thing, but how do you at a certain point when you're talking about doing these things it's so complex, there's no way to predict or model completely in advance what's going to happen. So ultimately you have to do some of this stuff to find out what's going to happen. And I guess a lot of people just wonder sort of like how do you half do this? What does an experiment along these lines even look like? And ultimately, like how much can you learn without doing it on a big broad scale?And then once you've done it on a big broad scale it's sort of like the Pandora's box is open. It's one thing to understand the climate better, but how do you understand doing these things without doing them?Kelly WanserI think if you think about the steps of what you can learn, in what ways. So the thing that scientists are proposing doing are releases of plumes, like small batches of plumes, like the equivalent of what comes out of the smoke stack of a ship or of an aircraft. And that gives you a lot more information than you have now about how the particles behave when they hit the atmosphere and how they disperse. And that is information that right now, if you want to model this stuff, you're just taking a wild flaming guess, and then everything downstream of that is based on your wild flaming guess.And so if I want to know like what are the exactly right size of particles and those really teeny in earth terms experiments give you that first order information that you can plug into models and then your models of what happens at a bigger scale are a lot smarter. And so that level, like I think scientists have said they've recommended it already in scientific assessments, but people are confused because it's sort of conflated with, "Oh, previous folks in the space have said this is cheap and easy to do and we got a guy out there saying you can throw up balloons." It's like I've dug a tiny hole, but I'm building a skyscraper. What you would need to engineer the climate system is tens of billions of dollars of investment in something that would be able to influence the planet at a really big scale.And so you have this inflection point where there's a bunch of science you need to do to even advise countries or the world as to what would make sense as far as regards investment like that, if anything. So no one is going to be off doing this at the kind of scale that would really have a major impact without a really big investment.David RobertsWell, let's talk about this then, because it is sort of...Kelly WanserI let myself in for that one, didn't I?David RobertsThis kind of conventional wisdom, or at least often repeated in this space, that sulfur particles and squirting them up into the atmosphere is relatively cheap compared to other things such that like a single interested country or even a single interested billionaire could do a big chunk of it themselves. So before we discuss the kind of security and governance implications of that, just is that true?Kelly WanserWell, I think what's happened, as some research has started to happen there's the things that sort of physicists and modelers do with the information that they have and the numbers that they have and aren't taking into account a lot of the complexity, a lot of the uncertainty, or even a lot of the way the world really works. And so then you dig in and you say, oh, no, what it looks like is you need platforms capable of reaching the stratosphere if you're going to work up there. There's only a handful of countries that have that one species programs, and you would need to scale up very substantially, like any sort of capacity for that, which is not within the means of more than a handful of countries and really not in the means of any individual billionaire either. And also, by the way, none of them are stepping in to spend their whole net worth this way either.So I think that was kind of when you do it in the back of the envelope and you know very little, you can sort of be optimistic about that. But when you dig in, the reality is it's probably a subset of the world's developed countries or countries with a lot of assets who would be players in that. Now, in the low cloud layer, it's a little bit different because you've got these cloud seeding efforts that are coming up and springing up to try to address local impacts and there are ways that cloud brightening could be used that people are starting to look at. And so you could get regional things that could affect other people and things like that that are more widely available or potentially used.So these are questions that need to be thought about. And again, science and observation really helps you and it's not a good space to be flying blind in.David RobertsRight.Well, the broader question of governance, I guess, is one thing that really just vexes people about. This vexes me about it, too, which is just like whenever I read or listen to someone like you talk about it, I'm like just like cool heads.Reasonable people taking all the right precautions, building institutional capacity such that scientists are in the driver's seat of this thing and policymakers only doing what scientists sort of advise them. And there's international cooperation and there's knowledge sharing, et cetera, et cetera. It sounds delightful when sensible people discuss it as though sensible people will be in charge of it. But of course, a glance at recent world history reveals that quite frequently sensible people are not in charge. You said that the bar for getting seriously involved in this is higher than maybe people think. But it certainly seems like this is something that people could be doing sort of half ass experiments with in various ways.How do you I guess just what's your confidence that a sensible international knowledge transparent knowledge sharing system is going to be in place to manage doing this research and taking these experiments and trying this versus scientists losing control over it and insane capitalists or rogue nations or whatever taking it and running with it? Is there an answer to that question like what's the best we can do to try to keep this under the control of sensible people?Kelly WanserWell, that's a good question. And I think one of the reasons that SilverLining exists is really that question, which is if you think about the climate conditions getting potentially worse and worse and people being more inclined to take kind of radical actions how do you put yourself in a position to be smart, to be equitable, and to be as safe as you can in that context? So it definitely appears that when you have a sharing of information and you have cooperation around science and information, it calms everybody down. And there's a lot of when we have conversations with policymakers, whether it's in Congress or the UN.And we say, yeah, you know, we're here to talk about science anyd how we step forward on scientific work and cooperation and feel like, great, because we can do that as as policymakers and we can work across the aisle. We can work with people we don't agree with on other things. If we're in the science lane and that's been true in our experience in the US where we've worked across the aisle in Congress and we've gotten Republicans to increase basic climate, basic science budgets in a Republican Congress.David RobertsWell, that's something.Kelly WanserYeah. And so when you're talking about science and you're talking about ways of the technology can improve science and sharing information, same at the UN level. And then as we started to dig into how do different things work in the UN and where do they work well and where don't they work well and why? And we worked with a couple of experts, Dan Bodanski, who wrote the book on international climate law, and Sue Biniaz, who is the current Deputy Climate Advisor for the US to look at that question in the context of this subject and what emerged is like what we are interested in, SilverLining is what is most effective in terms of outcomes?What produces the best outcome in the environment, what produces the best outcome in safety for people? And the absolute best case of that is the Montreal Protocol for the Protection of the Ozone layer. And so we really have gone up close and personal to figure out why does that work? And yeah, people say, "Well, it's a narrow problem, but actually it's quite similar to this one. You've got a smaller number of actors, you've got a sort of focus thing they're emitting. You've got all the countries of the world not only agreeing to that, but they've agreed that changes in it, expansions of it, everybody makes their commitments."It's really interesting. And they have this feature that's different from the other UN fora the scientific and technical assessment panels that make the evaluation of what's going on and what needs to be done are fully independent of the nation states. Their reports are written completely independently. And if you look at the IPCC, where the UN does their climate work, they negotiate kind of the top line summary of what those reports say...David RobertsYeah.Kelly Wanser...with the countries. And so, again, we could do a whole podcast on this. But I would say that really looking at the Montreal Protocol, a. because it does apply to this particular thing as it would operate the stratosphere and b. because understanding how that works is really important because all the countries of the world are continuously meeting every year and we went to their meeting.It's calm, people are calm. It's incredible. So figuring that out and how we can translate that onto other things, I think it's a really good idea.David RobertsYeah. If only all international cooperation and agreements could be as calm and sensible as Montreal.Kelly WanserRight.David RobertsThis does seem like an area where really going overboard to keep the science independent seems super important because this is just this whole thicket of issues here is going to implicate countries in a lot of like sort of our interests versus global interests. There's going to be a lot of ulterior motives, I think involved. Everybody's going to be sort of thinking, on the one hand, how can we improve the world and the state of science? On the other hand is like, how can we make out best in a world where people are messing with solar radiation?So it does seem like independent science is more important even than normal.Kelly WanserAnd it's really important to your point from before, that other countries, especially the most impacted to developing countries, have the same level of access to information and can evaluate it for themselves.David RobertsIs there kind of a short-term goal of yours? Like, is there a particular development or institution you'd like to see funded or just like a first step, is there something kind of tangible people can look forward to and advocate for if they want to see more progress on this?Kelly WanserWell, certainly they can support SilverLining. We're like a medical foundation, so we fund research directly so that we can help advance some of the initial critical research, like getting the climate model supporting some of these problems, some of the lab work and things like that. And that feeds into our broader advocacy, which is trying to get the US government to invest in research aggressively. And like you said, some of these assets that we need to understand the atmosphere and climate system for people who are in a position to help influence attention on the fact that we have gaps in our understanding of what influences on the atmosphere due to the climate.And that's not acceptable. And we need to improve on that really fast.David RobertsRight. It's a little wild that we just spent we just passed a bill spending hundreds of billions of dollars on manufacturing and stuff, and literally like a rounding error on any of those sums would have been enough to double our research budget. It's a little wild.Kelly WanserYeah. So anything people can do to kind of be in there for the atmosphere. We're alone on the Hill right now lobbying for increases in budgets for atmospheric observations and research.David RobertsI guess I don't understand. Why are scientists themselves not more self interestedly, advocating for this? Like, why don't you have allies?Kelly WanserVery interesting. I talked to them about because, like, the astrophysics community, the telescope people, man, they get those big telescopes. They're really good at it. But part of it is that climate research is classified and has emerged as a basic science. It's very academic, and it hasn't involved big applied efforts. And technologies have come in relatively recently, so they've been pretty good at getting, like, super computing attached to national labs. But in general, it's very academic. There's been a lot of downward pressure on climate scientists in terms of sticking their necks up. And so it just hasn't had those same drivers, and it doesn't have a commercial community like bioscience or space.There's no money in it for anybody.David RobertsYou got to wonder once we understand these things a lot better and get a lot better at it if there might emerge commercial applications. Can you imagine that?Kelly WanserIt's changing quickly because there are obviously economic interest in being able to make better predictions. And as the climate system gets more volatile and there are more risks, that information becomes more valuable. So the landscape is changing, but that upstream part, which is, do we know what's specifically in the atmosphere? And can we model that from its tiny components down to what it's doing to the climate system? That piece is so basic and so general to everyone that nobody's there.David RobertsInteresting. Well, thank you for coming on and clarifying this. I feel like this is a subject where there's just lots of weird mythologies and hang ups and access to grind floating around and not a lot of sort of basic knowledge of what's actually happening and what needs to happen, so I appreciate your work on this. And thanks for coming on and sharing with us.Kelly WanserWell, I really appreciate your questions and the opportunity to talk about it. Love your show. Thanks for having me.David RobertsThank you for listening to the Volts podcast. It is ad-free, powered entirely by listeners like you. If you value conversations like this, please consider becoming a paid volts subscriber at volts.wtf. Yes, that's volts.wtf, so that I can continue doing this work. Thank you so much. And I'll see you next time. Get full access to Volts at www.volts.wtf/subscribe

In this episode, Brian Deese, outgoing director of the National Economic Council and an influential advisor to President Biden, discusses the opportunities and challenges in Democrats’ new focus on industrial policy.(PDF transcript)(Active transcript)Text transcript:David RobertsBrian Deese has had a remarkable two years. As President Joe Biden’s top economic advisor and director the National Economic Council, he has played a key role in defining and implementing Biden's policy approach. In April of last year, he delivered some “remarks on a modern American industrial strategy” that laid out a vigorous approach to investing in economic sectors deemed important to national and economic security. And by all accounts Deese played a pivotal role in seeing the strategy into law, through the Infrastructure Investment and Jobs Act (IIJA), the CHIPS and Science Act, and the Inflation Reduction Act, which together amount to the greatest reinvestment in US infrastructure and manufacturing — and, specifically, clean energy industries — in generations. The pivot to unapologetic industrial policy is a big change for Democrats. Deese has moved in those circles for a long time — ten years ago he was a young wunderkind advisor to Obama, making The New Republic’s list of “Washington's most powerful, least famous people” — so as he prepares to depart the administration, I was eager to talk with him about what the shift to industrial policy means, why the US needs to onshore key supply chains, and the work ahead for Democrats in implementing their new laws.All right, then. Brian Deese, welcome to Volts. Thank you so much for coming.Brian DeeseOh, I'm really happy to be here.David RobertsI had, I'll say, a little banter, maybe a couple of jokes scheduled here for the front end of the pod. But then I looked at my list of questions for you, and we don't have time for any jokes, Brian. We don't have time for any banter.Brian DeeseVery serious, very quick.David RobertsWe got to get deadly serious right off the bat here. So let's start here in 2012. Ten years ago, you were the deputy director of the NEC under Obama. And in 2022, ten years later, you were the director of the NEC under Biden. And I'm just curious how things have changed, how America's sort of strategic economic outlook has changed in that ten years. And specifically, I'm curious whether the sort of vigorous investment in industrial policy that we're going to talk about here in a little bit, the kind of stuff that has been going on under Biden, whether you were recommending that to Obama at the time, or whether there's something importantly unique about this present moment.Brian DeeseWell, look, I think a lot of the world has changed since that period, both in policy and economic terms. If you think back to 2012, we were both right on the back end of a historic and transformational policy accomplishment in the enactment of the Affordable Care Acts, which changed the fabric of our economic and social safety net in important ways right on the front end of that implementation. And at the same time, in a period of very challenging and slow recovery from the Great Recession that was made worse by a failure of policy, a failure of the ability for Congress to overcome Republican opposition at the time, to invest more, to try to help to drive a stronger recovery. You look over those ten years, we live through a period that a number of people have characterized as secular stagnation where our output was constrained and that had a lot of impacts on quality, on labor markets.And then of course, we lived through this once in a century event of the global pandemic and in many ways historically unprecedented in modern human history. And I think that that helped to bring to the forefront a set of economic challenges that had persisted over that decade and much longer. But we're now really to the floor, particularly the vulnerability of supply chains and the weaknesses in our industrial capacity as a country. And so those things together helped to crystallize the economic strategy that Biden as a candidate put out in 2020 and really have been pursuing, that in some important ways have similarities to things we were promoting at the time.Significant investment in physical infrastructure is something that has been clearly necessary for a long time, but in some ways have important differences. I think we've got a different approach to clean energy and clean energy deployment at scale, which I'm sure we'll get into here, but also the prioritization of key geostrategic priorities like rebuilding semiconductor capacity here in the United States. So I think the landscape looks very different now economically both because of some of these significant economic changes but also policy changes as well.David RobertsWhat you're talking about and sort of what's come to the fore over the last ten years policy wise goes under the umbrella term of industrial policy. There's been a lot of kind of hype and talk lately about kind of the return of industrial policy. But I'm not totally sure that average listeners really have a sense of what that means. So maybe just let's just start by saying what do we mean by having versus not having an industrial policy? And where has industrial policy been for the last like two or three decades versus the last two or three years which has seen a really vertiginous sort of pivot around this subject.So maybe let's just start by defining what we're talking about.Brian DeeseYeah, sure. And look, I use the term industrial strategy, which is obviously very similar to industrial policy, but a bit broader in ways that I'll explain. And I think at its core, the idea behind an industrial strategy is that the private market on its own, private actors operating to maximize their own utility, will end up under investing in areas of the economy that have strategic and economic significance and that by using targeted public investment you can unlock greater economic opportunity and crowd in greater private investment in those areas. And so an example of this is in physical infrastructure that allows you to unlock productive capacity of the economy.And we have a great history of this in the United States, from the interstate highway system to the intercontinental railroad, where public investments in laying the foundation for private capital helped unlock greater productivity, greater innovation across the United States. I think what happened is that in the late 1970s, early 80s, there was a broader philosophical push around what now people talk about as trickle down economics that basically at its core had the view that any government or intervention was by definition going to pervert markets and crowd out private capital. And so the dominant paradigm became one of tax cuts, often skewed toward the highest income folks. Thus, the trickle down but also deregulation getting the government out of the way in all cases. And I think that that philosophy helped to feed a sense that if you were doing industrial policy, it was in fact a dirty word. You were, by definition, perverting a private market or picking winners, the government picking winners versus picking losers. And as a result, a lot of the policy conversations steered away from even mentioning the word. And so I think that obviously that has changed. And it's changed. Things have changed certainly earlier than the last couple of years. But I think in the last couple of years, particularly in the wake of the pandemic, there's been more of a recognition that some of these basic ideas of having active and energetic government investment to help crowd in and build more capacity in strategically important areas is not only not a dirty word, it's absolutely necessary to address the economic and national security priorities we face.David RobertsAnd I think one could fairly argue that there's no such thing as a giant industrialized wealthy democracy that does not have some sort of industrial strategy. It's just whether you're upfront and honest about it right. Or whether it's sort of buried in the tax code and you're sort of quasi-ashamed about it, but you can't, practically speaking, literally just let the market do whatever. It's not practical industrial strategy has always been there.Brian DeeseWell, that's right. And I would say that one of the interesting things about, I think, the evolution and the reinvigoration of this conversation, this public conversation, is that one of the hallmarks of effective industrial strategy is transparency.David RobertsExactly.Brian DeeseAnd so we back our way into potentially really self-defeating the industrial strategy approaches when we, as you say, we end up there. We don't admit it or we don't acknowledge or we don't actually identify what are our policy goals. Transparency is a key element of, I think, doing industrial strategy effectively, both for economic reasons and for political economy as well, so that people can understand why you're doing what you're doing and then can hold you accountable to whether the thing you were trying to get done actually happens.David RobertsRight. And this notion of picking winners, I guess I'm curious sort of how the US. learned to stop worrying and love picking winners. All the traditional sort of objections to this, government doesn't know what's going to be next, government makes bad bets, government distorts things. What do you make of those worries? I mean, are you worried about making some bad bets or getting some things wrong? How do you think about the dangers of picking winners, which are real dangers?Brian DeeseYeah, like any critique, there's a kernel of something really important in that catchphrase of the government shouldn't pick winners and losers. And I think that the caution, the important caution is the closer that the government gets to actually directly picking individual companies or individual counterparties in a way where there is a sort of a high stakes economic interest there. You do need to worry about waste, you need to worry about corruption. And we know that in different countries and different parts of our history, those things certainly are worthy of being paranoid about. But I think the core mistake that people extended from that critique for too long was to say that that was a concern that meant that you shouldn't engage in the enterprise altogether.And one of the things that I believe and I think that we have tried to build into our policy approach is wherever possible, the best way, I believe, to try to drive industrial strategy outcomes is to provide long term and technology neutral incentives to encourage investment where the government is not actually going in and identifying and picking a particular winner. Now, there are some cases where that is necessary. And we could talk about the semiconductor program that we're putting in place where because our capacity has eroded as a country and because of the scale necessary to build semiconductor fabrication capabilities, there are only a small handful of companies around the world who even have that capability. And so in that case, we needed to design a policy that was going to provide grants directly to companies on a competitive basis.But precisely because of that, we are putting an extraordinary amount of thought into the way to run that competitive process in a way that guards against some of the downside risk and captures some of the upside opportunities, but wherever possible. And a lot of what is in the Inflation Reduction Act around clean energy is actually trying to lay that foundation of signaling to private companies and the private market that there will be long term predictable incentives in place. But then not having the government say, we think that this particular technological application is going to be more successful than this.David RobertsRight. More like picking winning areas of investment than picking winning companies, right?Brian DeeseYeah. The way I like to think about this is look, if you want to know our American industrial strategy in a nutshell right now, we have identified three broad areas that we believe will have big returns in terms of productive capacity and our economic and national security. And those are infrastructure innovation with semiconductors at the center of it and clean energy. And so we are picking those. We're picking broadly that those are areas that for geostrategic reasons and for economic reasons and for what we know about, where you can get productivity enhancements in our economy. But then wherever possible within those, we're not trying to say the government is best positioned to figure out whether this particular technology for generating clean hydrogen in this particular application is going to be more effective than this other one.We're trying to say we need more clean energy capacity. Clean energy supply. We need it faster and cheaper than we have gotten it to date. That's an existential project. And if we do it in the United States, we'll build manufacturing industrial capacity here, we'll be able to capture greater export share of a very fast growing global market. And for all those reasons, that's the industrial strategy part of this.David RobertsThat segues nicely to my next question, which is that a big part of the thrust of the big three bills that were passed — the Infrastructure Act, CHIPS, and the Inflation Reduction Act — is onshoring, basically bringing more of the supply chain into the US. So let's just talk about that a little bit. The case for onshoring, if I put my sort of conventional economist hat on, it doesn't fit very well, it's too tight, it constrains blood flow in my brain.Brian DeeseBut I wish we were on video so I could see that hat.David RobertsYeah, you can imagine me grimacing while I'm wearing it. But the traditional economist take is why not just buy whether it's semiconductors or lithium-ion batteries or the materials for lithium ion batteries, why not just buy them wherever in the world they could be made for cheapest? Would it not benefit all global consumers if whoever can make those for the cheapest makes them and sells them to everybody else? This is sort of the basic Econ 101 justification for trade, right? For international trade is specialization. Some people can do things cheaper than others. Why do we need to make these things domestically?What is the threat exactly of international supply chains which are, it should be pointed out, ubiquitous. Like most of the stuff we get and use in the US. We don't make here. We don't dominate the supply chain. So why in these particular areas do we need to bring mining and processing and manufacturing the whole supply chain into the US.Brian DeeseSo I think there's two broad answers to that question. The first is the rise of China in the global economic system. And the second is the embedded risk that we have now seen made explicit around brittle and just in time supply chains. So let me take the two in order. The first is that that kind of stylized. Let's just try to find the lowest cost producer. Again, there is a lot that we shouldn't look through and we should harvest in that basic intuition. But one of the things that it misses is that over the course of the last 20 years, China's rise in the global economy has been achieved through non market economic means in many instances.And so the Chinese economic model, where you either steal or expropriate technology, use significant non-market subsidies and other tools to build capacity to then dominate particular industries, is a constructive challenge to that basic model. And there are some clear national security implications where there are technologies that we believe, for national security reasons, we need to deny in certain instances.David RobertsCan I press on that just a little bit? Because this is I find that a lot of people refer to the danger of China dominating, say, the lithium-ion battery supply chain in those terms, sort of vaguely like it's national security. It's a threat. And I find it all a little hand-wavy. So I just like to hear what concretely do we think China would or could do? Like, China selling us a bunch of stuff? That's a two way relationship. It hurts them also if they cut us off from buying the stuff they're making so tangibly, what do we worry China might do?Brian DeeseRight? So, look, and I think you're right that it's important that we be specific in these contexts and in our policy to avoid broad-brush characterizations. First, there are certain direct military applications for cutting edge technology that we have to be particularly aware of. And without going into the kind of detail that I shouldn't. If you look at, for example, the export control regime that we have put in place for leading-edge semiconductor technology, we are trying to be quite intentional about being specific and tailored and targeted in those purposes, but in controlling some leading-edge, the most sort of advanced chip technology because of its direct use application, in particular military applications.Okay, so that's one category. There's a second category about the fact that if part of the Chinese model is to employ slave labor or to violate basic rights and norms, that you don't want to be reliant on a dominant supplier where the basic technological capacity to produce key inputs is subject to those outcomes. And so the upstream solar supply chain is a good example of this. Right. Where over the course of the last decade plus, because of a variety of different means and tools, China dominates those markets and does so in ways that we can't rely.It creates instability because we can't rely on a producer, where if the production is only done as a function of unacceptable basic human behavior, then the technology and the capacity doesn't exist elsewhere to pivot. And you've created an acute supply chain vulnerability.David RobertsYeah, I guess another way of putting that is if there's only one producer, none of the buyers have any leverage over the producer, basically.Brian DeeseThat's right. And that's why I think that the second piece of where I think conceptually why we should care is this notion of supply chain resilience. And one of the things that we did when we first came into office, the first month it was February of 2021 was the president issues an executive order to identify the key supply chains and do a full forensic analysis of where the vulnerabilities and the chokes points were, where you had the dynamic you just described of one dominant technological owner or one dominant supplier, where you might create those types of vulnerabilities.Right? And the answer to those questions is not and should not always be that you just need to bring every one of those supply chains to the United States and have the production happening here.David RobertsI assuming you even could do that.Brian DeeseBecause it's neither feasible nor advisable to try to have all of it in the United States. But at the same time, there's clear lessons and clear outcomes where having homegrown industrial capacity and the technological and the innovation benefits that come from that is an absolute necessity. So there are areas like leading-edge semiconductor production where we in the United States do need to have that homegrown capacity to produce and the technological spillovers that come from that. That does not mean that the goal is that the United States is going to produce all or even most of the leading-edge semiconductors that are produced in the United States.But once you have that capacity and you have more diversification of players who are capable of doing it, you're reducing your vulnerability. And that's true of the upstream battery supply chain, of the solar supply chain as well.David RobertsSo it's mainly about resilience and national security.Brian DeeseYeah. And I think you are right, and it is right to push policymakers to be specific rather than vague about the applications in those contexts because there is a risk, as you say, of just sort of justifying any particular market intervention on those terms. But I think that because of the work in the analysis that we've done, at least in the areas where we have taken seriously and put into place industrial strategy policies, I think that we can demonstrate what does resilience mean? Right? What does it mean? What is the goal in terms of trying to get leading-edge semiconductor production here into the United States?And certainly as we go and we implement and execute, we should be held to account, to actually identifying those goals and then seeing if we are meeting them.David RobertsWhat about those cases? And it does seem like there could be cases where industrial strategy is in some tension with climate strategy. And so, as an example, let's take these EV credits in the IRA. They are the new version. The new generation of EV credits are tied to some pretty strict domestic content requirements and domestic manufacturing requirements, arguably so strict that no one meets them yet. So it seems like, intuitively, I can see how that's good for industrial strategy, maybe even good for the US economy and good for resilience to manufacture and do more of that stuff onshore.But it also seems like, intuitively, that's going to slow down the spread of EVs in the US. If we are putting a speed bump, basically between us and us adoption of EVs from a climate perspective, you just want to lower emissions as fast as possible, as much as possible, the cheapest, fastest way you can. And this is not the cheapest, fastest way. Right? Deliberately it's not. It's got an eye to resilience and redundancy. So how do you think through that tension?Brian DeeseI actually think that to have a durable, effective climate strategy that also operates with the urgency that the issue deserves, you have to factor in this concept of resilience or you're not going to succeed across longer periods of time. And I think the upstream solar supply chain example that we were just discussing illustrates that. If the idea into the current global market with the reality of how China and other actors operate, is that a narrow, fastest, cheapest without any factoring in anything else mentality results in China dominating key input components. To the degree that there is no other producer, then it's not a durable strategy to reduce emissions over the time period that we need to do this.Because even as we act with urgency, this is a project that is going to operate across the next two decades and longer. And so I think that you need to have strategies that are focused on driving down those costs as quickly as feasible, but factoring in that cost reductions into brittle and unreliable supply chains are not actually going to deliver those cost reductions in a reliable way over longer time frames. So the electric vehicle credit example that you raised, again, the legislative process is imperfect, and there's lots of ways in which the bills are imperfect.David RobertsThat's the kindest way I've ever heard it described.Brian DeeseWell, I had a but there, which is the status quo prior to the enactment of this law, was that the credits had a very different structure whereby many of the leading electric vehicle producers had grown themselves out of getting any credit.David RobertsYeah.Brian DeeseAnd so the status quo ante was not unmitigated credits everywhere. This approach sets a different bar. Not once you sell 200,000 vehicles, you no longer get a credit. And instead it sets the bar of saying, can you move more quickly to try to get to more resilient supply chains? And while I recognize that that does have some of the impacts that you're describing, I will also say, having talked to a number of the companies that operate in this space, a number have said to me, look, I'll be honest. When this bill was in its final drafting stages, we were incredibly concerned about all of this.And in the weeks and months afterward, it has totally changed our behavior. We are reorienting. We are investing in particular ways. Interesting things that we thought were hard or impossible may still be hard, but we're now making them possible. And so, look, we'll have to see. And as I said, I wouldn't claim that we've got that element or some other elements perfect, but it's a high bar to drive toward a different goal.David RobertsLooking back on this in ten years, say, do you think our move to onshore some of the supply chain will look faster and easier than we anticipated in advance?Brian DeeseLook, I think any strategy to address the climate crisis today needs to do at least two things. One, is have a credible way to massively drive down the cost curves of deployable technologies to decarbonize the power sector, the transportation sector, the built environment, et cetera. And two, to do so in a way that creates resilient supply chains for the input components for all of that building that we're going to need. And that the strategy that will succeed in really driving the mission direction we need. We'll have to have both of those components. And so I am hopeful that because of the action that we have taken over the last two years, we've given the United States now a historic set of tools to achieve both of those outcomes and to achieve both those outcomes at a scale and a speed that many would have thought was not possible even a couple of years ago.That doesn't guarantee success in the outcome, but it certainly puts us in a very different position than we were a couple of years ago.David RobertsLet's turn a bit and talk about one of our favorite subjects here on Volts, namely administrative capacity. I would say that serious industrial strategy needs administrative capacity, right? It's almost axiomatic. And so Rob Meyer had a piece in the New York Times recently, sort of making the case that the recent US ambitions, as expressed by these three bills, especially IRA, are somewhat exceeding our administrative capacity. In Germany, for instance, you have government departments that work very closely with certain industrial sectors, sort of hand in glove to do some planning and to adapt along the way to see what those sectors need.We don't really have that. And tax credits are kind of a blunt instrument, a blunt force tool, I guess. We have the Loan Programs Office in DOE, which is doing amazing things under Jigar. But our administrative capacity in the federal government in the US seems to have withered a little bit over the last several decades of this kind of neoliberal period we've been going through. Do you think we have the administrative capacity necessary to do something of this scale and speed?Brian DeeseWell, look, I appreciate the challenge, and Rob and I went back and forth on, I think what his thoughtful New York Times speaks to this effect. I think the answer is that we need to build that administrative capacity. But the one thing that we can't do is we can't wait for the chicken to produce the egg at the stylized utopia where the United States builds all the administrative capacity necessary for this kind of big national project and then and only then gets to passing the legislation is not only not how our political system works, but the intensity of the need for speed on clean energy and climate change doesn't really give us the luxury of doing that. But I would say do we need to build more administrative capacity across the board?Yes. Are we making big strides and innovating in new ways? Yes. You mentioned LPO and the work that Secretary Granholm and Jigar are doing. There are other great examples of that. We've stood up a joint program office between the Department of Transportation and the Department of Energy to do electric vehicle charging implementation across the country and showing how do you actually build the administrative capacity to get two different agencies to work together with 50 states to coordinate to actually do that. So yes, we are building that car while we charge it or whatever the right analogy is.But we're showing good results. A lot of people said you're never going to get all 50 states to even apply for this because some don't even have the capacity to do so. But through an iterative process of building capacity at the federal level, building capacity at the state level, we just yesterday, we're recording this on the 16th, yesterday released the Electric Vehicle guidance for how we're going to get interoperability standards. We worked with key companies, including Tesla around them, announcing for the first time to open up parts of their network. These things need to work together.But I think the right answer to that constructive challenge is how do we build this at the same speed and urgency that we need to address the issue. Last point, I'll say you made the point about tax credits. Tax credits are blunt, but they can be enormously effective in the American system. Right. We're going to do this in the American system in a way that is different than some of the European models and otherwise. And having long term technology neutral tax incentives is among the most powerful and efficient ways to give private capital providers the incentive to pull forward investment.And we know that that investment is among the most powerful ways to drive cost curves down and it also requires less administrative capacity to your point. So, I wouldn't discount that, even as I agree that there are a number of places where we need to build up that capability and we need to do it quickly.David RobertsYeah, but by no means do I want to bad mouth tax credits — they made the point many times. They are the quiet workhorses of the progress made thus far. They don't get as much attention and argument and sort of team sports as you get around other policies, but they've been in the background for decades now, just chugging away with demonstrable results. So, administrative capacity is one aspect of implementation, but implementation of course, is a broader subject, a big thorny subject. There's a common critique of sort of people on the left that they fight and fight and get a bill passed and then they go home and watch Netflix.And of course with something big like this, three big bills like this, all the devil is in the details in the implementation. So I'm sort of curious how you think about trying to avoid what Leah Stokes calls in her great book "The Fog of Implementation". Sort of just curious what are your worries implementation-wise? What are you worried could go wrong and how are you thinking about just following up and making sure this is done well?Brian DeeseYeah, well, I think one of the key elements is to maintain consistent leadership and urgency from the president, from the White House, from the key leaders across federal agencies, and to make sure that there is a consistent effort to try to connect the technical and the programmatic implementation with concrete outcomes that people can see in their lives and in their communities.And obviously that's important from a political perspective, but I actually think it's quite important in maintaining the kind of culture and dynamic to avoid that fog of implementation that there needs to be a kind of urgency to being able to say if we are undertaking a national project to eliminate lead pipes in 10 million homes and 400,000 schools, that everyone involved in that process, from the EPA administrator down to the regional EPA offices down to the state grantees and onward understand that there are targets and metrics and milestones and you want to go into communities and you want to be able to show and demonstrate when that is happening because that's going to keep people forward, leaning forward rather than leaning back. Other big things that will keep me up at night issues is we do need to reform and change the way that we do permitting.That's not just an issue of federal permitting, it's state and local. And the other thing is, I do think that there's a need to, at the grassroots and the community level, help connect and unlock the enthusiasm and the openness to recognize that a particular investment, again, be it in a wind farm or a small scale nuclear facility or in a rail corridor, is actually connected to this larger project. And there's not only an openness and acceptance, but an enthusiasm around trying to move more quickly rather than putting up roadblocks.David RobertsWhat about workforce? I hear from all over these days like, we don't have enough electricians, we don't have enough plumbers, we don't have enough sort of trade. We're moving into this period where there's going to be a frenzy of building and construction work and just the need for trade labor and we seem short on it. How much do you worry about that and what sort of things are the Feds doing to kind of help with that?Brian DeeseIt's an enormous priority. And for this year 2023 and next year 2024, connecting more people with these new job and career opportunities has got to be a top priority of implementation, I would say. While I recognize and I hear often the concern, I also think a lot of people are missing how much opportunity there is there because for the first time, and this is to go back to our very early conversation about sort of secular stagnation dynamics of having output below potential, we have a dynamic now where incentives are really aligned. Private companies are prepared to invest in job training and invest in paying workers and showing them that there are career paths and opportunities.And so a lot of the opportunity is making sure that we are connecting those employers with the training providers that we know work effectively and efficiently, community colleges, union registered apprenticeship programs, et cetera, and then going and being proactive about reaching out to workers and communities that may have been overlooked. Right. So we are looking to try to get a million more women working in the trades and in construction than we've had in this country. And there's extraordinary job opportunities, extraordinary career opportunities. And I think one of the reasons why you see such a gender split is that employers and trainers in that space have either explicitly or implicitly built these things in ways that they haven't reached out to those communities.And so we're going to have to be creative about doing things like that. But I think this also creates a lot of opportunity to bring more people into these trades and to do so in a way where you're giving them more upward mobility as well.David RobertsAnother big subject that I know you probably had to address a bunch, but I would like to just grapple with a little bit are the sort of foreign policy / trade implications of all this. It looks to me like these three bills represent a pretty explicit pivot away from the sort of free trade consensus that has reigned in US politics in both parties really for decades now. And you see sort of trade partners in South Korea and Europe kind of freaking out about this a little bit. They're calling the stuff in the IRA "protectionism". They're sort of threatening protectionist policies of their own.Are you worried that this sort of dramatic disruption of the free trade status quo is going to run afoul of some longtime trade relationships? Do you worry about this sort of global trade regime holding together amidst this?Brian DeeseI don't. And here's why: The first is that the Inflation Reduction Act itself is going to be enormously beneficial to our trading partners and allies. And I think that we are making real progress with our European partners and others in helping them see and understand that that's the case. And that's because at core, the Inflation Reduction Act reflects two things. One, the United States meeting and stepping up to its obligation to actually meet its clean energy and climate commitments in a credible way, which is a priority that many of our allies, including our European partners but also others, have been urging the United States to do for years.And also a commitment to use US taxpayer dollars to dramatically accelerate cost reductions in key next generation clean energy technologies that the world needs in these countries need as well. Now, we also all share the need to have more secure and resilient supply chains to the conversation we're having earlier. And the other, I think key and important part is that we are operating into a sector, we're talking about clean energy in this context where the world is way short supply. So we need dramatically more deployed clean energy technologies and capabilities in the United States. We need that in Europe, we need that in Canada, we need that in Australia, we need that across Asia, we need that everywhere.So the United States stepping up and showing a viable scalable model to do so, in a way that will help drive down global costs, and in a way that puts the United States in a credible position to meet our commitments actually creates much more opportunity than constraint. And what it requires is harmonization and effective economic diplomacy and making sure that there is transparency and making sure that we are not doing things that would create unproductive or inefficient subsidy races. But at the core, the United States stepping up and investing in our own industrial capacity in these spaces is first and foremost the right thing to do for our country, the right thing to do for our workers and communities. But it also will have these global benefits as well. And I think that we will, over the course of this year, have a lot of opportunity to actually build partnerships against this.David RobertsSo you're not worried about sort of like if we put domestic requirements and we put, say, a border adjustment or something like that, and then another nation will do it, and then we'll ramp ours up and they'll ramp theirs up and you will end up in trade wars. That will slow the sort of act as a slowing force on the spread of these technologies. You just don't think that's going to manifest?Brian DeeseLook, I think you're identifying a risk. But I would say from where I sit, both on the substance and the economic diplomacy of this, there is more opportunity than risk in that area. So it's always a risk. It's always a risk that you should take seriously. But if we were having this conversation several years ago, the dominant conversation would be whether, how and in what context could you ever envision building a durable political coalition in the United States to pass any meaningful legislation that would increase clean energy and energy security and do so in a way that would put the United States in a position where it could actually sit at a table with the Europeans and talk credibly about them how to increase global ambition. And that would be the conversation, right? We are in a different conversation that certainly it has risks, but it's a higher class conversation if the goal is how to deploy clean energy globally at scale.David RobertsGood problems to have. Another sort of aspect of that similar family of worries is that if the US follows China's lead and starts sort of lavishly subsidizing its own industry and the EU follows, the US. Starts lavishly subsidizing its own industries, these developed nations sort of look inward. There's a worry sort of floating around that developing nations will end up sort of getting screwed, not getting the investment they need. So how do you sort of balance the need, which you've laid out here, for the US. To invest in itself, for a bunch of reasons, with the parallel need for developed nations to invest in helping developing nations build capacity themselves and lower their own emissions?Do you think those are in tension at all?Brian DeeseI don't think they need to be, and in fact, I think that they can operate together. But you're right to absolutely raise the issue. Look, I think it is incredibly important for the credibility of global climate progress for the United States to be able to credibly meet its own commitments. And that's important for developing as well as developed countries, number one. Number two, the United States being a place where we are investing taxpayer money to drive down technologies that will be particularly important in deployed applications in developing economies means that developing economies can also benefit from driving down those cost curves as well.But I think it also goes to the need for the United States and other countries together to continue to increase our game in building partnerships with key developing countries to demonstrate that we can together bring climate finance at very significant scale into their economies to help drive this transition.David RobertsBecause that has not been happening, right?Brian DeeseWell, look, I would say there is a model that we need to build on the JETP initiative that we have launched, which stands for Just Energy Transition Partnership with South Africa and Indonesia, the partnership we launched with Egypt at the COP this year. These are models to demonstrate the potential of US investment, lower cost clean energy technologies, policy reforms to create more stable investment environments in these countries, and then the ability to actually bring private capital at scale into big, important projects. That's what it's going to take, but we're going to have to do that at a scale that we have not done yet. But I think the action that we're taking in the United States creates significantly more opportunity for that than constraint.Again, it's sort of a similar, I guess I would say a similar story. Much work yet to be done, but we're definitely better positioned having taken the action that we have in the United States than if we hadn't.David RobertsRight. Let's talk then about the US being slow. This has been an increasing subject of conversation in liberal circles recently. I'm sure you've heard and seen this idea that US is entering this period where we badly need to rebuild ourselves, our industries, our infrastructure, not just because of climate, just because a lot of it is falling apart. We just have been under investing for a long time. But when we do invest, it's very slow and this manifests in a bunch of different areas. But I'm just curious how you untangle all those factors that are going into making the US building in the US slow and expensive.How do you increase the pace without running roughshod over vulnerable communities? The fight over permitting reform did not auger well for this debate. It did not seem to suggest that it was going to be easy to resolve this debate. So just on the big picture level, how do you think about the US. Being slow and expensive and what can the federal level, what can you do to shake that loose?Brian DeeseYeah, I think it may be the biggest and most significant challenge that we face. And to go to your question about what we at the federal level we can do, we can commit to and then execute on doing business differently. Right. So we need to have the kind of accountability and transparency around project timelines that we have not always had in the past. We need to deploy efficiencies and creativity and innovation that we know is out there, but deploy it at a much broader scale. Some things that sound very simple, like we have a program called Dig Once, right, where we are coordinating between road projects and broadband projects and transmission projects.So that if we're going to have a right of way, we should be trying to operate all of the digging projects that we're going to do as much as we possibly can in the same right of way at the same time. Now that sounds simple, but actually it's an innovation that if deployed, can have a geometric impact on speed. But then there's also more sophisticated design, technological approaches that we can use and we can borrow from other countries and we can do things like you had mentioned, labor. One of the things on these big complicated projects that project sponsors are finding is having a project labor agreement working up front to actually demonstrate how you're going to make sure that you've got the right people on the right time to do the work that is needed in a quality way.Helps to reduce bottlenecks, helps to reduce cost overruns and time overruns. And so those are all things that we at the federal government can do, we've got to do in a more systematic way and at scale. Having legislation that would give some key reforms to the permitting process would help on that score. But there is also a lot that we can keep doing and working. And you made a really important point. We have to demonstrate that we can do all of this in a way that also builds more fairly than we have in the past. And so there's nothing simple about that project.But we do have I often hear these conversations about permitting that move immediately to a certain sense of defeatism. Well, the United States just moves slowly and things cost a lot and therefore this is all going to go sideways. And I think we can point to practical examples of success and then we need to build on those.David RobertsOne of the big bottlenecks in terms of building, in terms of things going slowly is transmission and energy, long distance transmission famously holding back the rest of the clean energy economy and it's just very difficult to build. There's landowner NIMBYs, there's state NIMBYs county NIMBYs, there's baroque bureaucracy on and on. There was some stuff in the Infrastructure Act, I believe, that did some good on transmission, a little bit in IRA. The permitting reform didn't end up going through. So that was the biggest thing. So I'm curious now that sort of the period of legislating is probably over what tools are left in the Biden administration's toolbox that can shake loose transmission and get that moving.Do you guys have ideas on that score?Brian DeeseWe do. It's a great question. It's a super important policy. We've been working hard at this. I don't want to get too far ahead of where we will be,and our agencies will be shortly. But I think I could say that I think you'll see from us shortly that there are tools within our existing authority, under existing statutes that will allow us to very significantly prioritize and streamline the process at the federal level in terms of agency approvals and also use our federal authorities in ways that create stronger and more significant incentives for not only project sponsors, but also states and localities, municipalities to operate in line as well.And one of the things that to go back to the culture point that I was making earlier, one of the things that we have now, ever since the infrastructure bill passed, is Secretary Granholm. She's got it, she's trying to make it famous, this map where she's got the transmission lines that need to get built right and they need to get built and they need to get built at scale. And to the point about success, we can already identify that there are a handful on that map that have moved from yellow to green and are moving forward in a way that was not true a year ago or even six months ago. But these additional authorities, I think you'll see us moving out on in the course of the next couple of months will give us more to work with and I think make 2023 a year where we can really accelerate on that front.David RobertsSweet. One other follow up on the slowness question another big area of congestion is housing. This is also a hot topic lately. I think it feels like it's become more and more clear to more and more people that constraints on housing in high economic opportunity areas is not just a local issue. It is in the aggregate having serious macroeconomic effects on the US. It is a serious in other words, it is a serious nationwide problem, not just sort of quirk of coastal states. What, if anything, can the feds do? Because so much of that is local or state.Are there levers available at the federal level that can shake that mess loose a little bit?Brian DeeseI'm so glad you raised this question. It's a hugely important issue and we have a housing supply crisis in the United States, which is a crisis that has developed over the course of years, basically going back to the Great Financial Crisis. And if we don't build more supply of affordable and dense housing, then we get exactly the dynamics that you just described and it's harder for people to move to opportunity and find affordable places to live.We have been dogged on this issue and there's a couple of things that we can do. The first is that we can build into some of our existing federal grant programs and new federal grant programs in the investments in infrastructure and otherwise incentives that says that if localities actually have more coherent land use and zoning policies that encourage this type of building, then that's going to be a plus up for them in receiving federal grants for something like, for example, public transportation, which makes a lot of sense if you think about it, which is we shouldn't be spending federal dollars on public transportation into an environment where they're not going to build coherent housing.Secretary Buttigieg has done this in a couple of ways, but we've never done before and we're now franchising that to other grant programs. The second is we could pass legislation. The Low Income Housing Tax Credit and something called the Neighborhood Homes Tax Credit. Bipartisan support for these pieces of legislation that provide incentives for people to build dense rental, multifamily and single family housing, again in areas where they have local land use policies that encourage this type of building. And there's bipartisan support for that type of legislation. I know that there have been conversations across time of trying to advance this.Both of those steps are things that we could do. You are right that the decisions operate in many cases at the state or the local level, but we can provide a powerful incentive to encourage and invest in those communities that are doing the right thing.David RobertsCould have done a whole pod on politics but I mostly left that out. But I'm just curious. Looking back now, it seems striking that Democrats went into this latest session heads full of extremely ambitious dreams. The original Build Back Better Bill was robust. Let's say it had a little bit of everything in it over time. We just saw that get stripped down and stripped down and stripped down but somehow the climate piece, the clean energy piece, survived more or less intact through that entire sausage making process. What are we to make of that? Does it all just come down to sort of like whether Joe Manchin woke up on the right side of the bed or are there larger political lessons to be learned from the sort of resilience of this one piece of the Democratic agenda?Brian DeeseOne of the takeaways that I have is that it has been important for us to change the policy and the political approaches to trying to radically and dramatically build clean energy capacity in the United States. And that one of the important parts of how President Biden has approached this. And frankly, Democrats in Congress — and a lot of Republicans too — is to focus on this as about building our capacity, our manufacturing capacity and our energy security by dint of having more homegrown, affordable, reliable energy and to do that and to build a strategy that can achieve very significant climate ambition. But it is based fundamentally on that investment opportunity.And that has, I hope and expect, will be an important takeaway over the last couple of years is that even as this process has been challenging and winding across time, if you look across the infrastructure bill as well as the CHIPS bill, but also, obviously, the Inflation Reduction Act. What you see is that these types of investment approaches have a lot of salience. And they have a lot of salience because they're focused on places and people and giving people economic opportunity and helping to drive significant emissions reductions across the country. But based on that core opportunity, I think that is very different from the political conversation that we had in 2009 and 2010 on this issue.It's different than the conversations we've even had over the course of the decade since and I'm hopeful that it will lead to a more durable political environment for us to drive forward these policy pieces that are going to be hugely important for our economy and our country and our planet in the future.David RobertsYou are credited alongside Chuck Schumer with bringing Manchin around. I don't suppose you want to give us any secret insight on what was the magic key, the magic phrase, what sort of sorcery achieved that?Brian DeeseNo. Look, Joe Manchin is an independent thinker, independent minded guy. And he has spent an enormous amount of time thinking about these issues. And he has always, throughout this process, prioritized the importance of energy security and moving on the climate goals and the climate priorities that we needed to move with a focus on American capacity and energy security. And I think that he always brought a ton of insight into what was necessary. And a lot of this was about listening and understanding and understanding places where we had principal disagreements, but at the end of the day, trying to get at those core issues where the policies themselves were less at odds.And so Senator Manchin always has and always will operate independently based on his own principles. But I was fortunate enough to be part of this process, part of a team to ultimately get us to the finish line. It was a long process, that's for sure, but better for the country that we're on the other side of it.David RobertsJust in terms of being placed kind of at the center of history and seeing things unfold. It's been quite a two years you've lived through there at the center of everything, so I hope you're able to catch up on some sleep.Brian DeeseWell, thank you for that. And I hope that we can continue to have these conversations about what I think are a set of incredibly important climate and clean energy challenges, but also a really high class set of challenges compared to where we were a couple of years ago. And so that's what leaves me pretty fundamentally optimistic about all this.David RobertsThank you for listening to the Volts podcast. It is ad-free, powered entirely by listeners like you. If you value conversations like this, please. Consider becoming a paid Volts subscriber at volts.wtf. Yes, that's volts.wtf, so that I can continue doing this work. Thank you so much, and I'll see you next time. Get full access to Volts at www.volts.wtf/subscribe

The lowly circuit breaker was first patented by Thomas Edison and hasn’t been updated much since — until Atom Power CEO Ryan Kennedy came along and made a digital version. In this episode, he describes the basics of the digital circuit breaker, the ways it’s making a difference in the EV charging market, and its gamechanging potential. (PDF transcript)(Active transcript)Text transcript:David RobertsThere is perhaps no building block of the electricity grid more fundamental, ubiquitous, and overlooked than the humble circuit breaker. Every electronic device that is attached to the grid runs through a circuit breaker, a device that automatically shuts off current in the case of a fault or surge.Currently, though they have become extremely reliable, circuit breakers still rely on technology that was patented by Thomas Edison. They operate purely through electromechanical forces, with no digital control.My guest today, Ryan Kennedy, is the first person to develop, patent, pass UL testing with, and commercialize a digital circuit breaker. It is solid state — that is, it has no moving parts — and current is controlled entirely through semiconductors.In addition to being faster and safer than electromechanical equivalents, each digital circuit breaker contains within it its own firmware and software, which can be programmed to emulate, and thereby replace, any number of other software-driven devices like demand management systems, load controllers, meters, and surge protectors.Kennedy's company, Atom Power, is currently focused on the electric-vehicle charging market, offering smart load balancing and management from a centralized circuit board, replacing the need for complicated hardware and software in the EV chargers themselves.But the ultimate applications for a digital circuit breaker are endless. Everywhere they are attached, a grid becomes a smart grid and appliances become smart appliances. If even a substantial fraction of today's circuit breakers could be replaced with digital equivalents, it would bring unprecedented visibility and control to millions of distributed energy devices, enabling all sorts of sophisticated demand management.I was extremely geeked to talk to Kennedy about the basics of circuit breakers, their application to EV charging, and the many possibilities that lie beyond.Alright, then. Ryan Kennedy, welcome to Volts. Thank you so much for coming.Ryan KennedyDavid, thank you for having me.David RobertsThis is awesome. I'm so interested in this widget and its possibilities, but I think to help people get their heads around it. Before we get too deep into anything, let's just start at the most basic level. For those of us who were humanities majors and never took any electrical engineering or anything, let's just talk about what is a circuit breaker. I know people are very vaguely aware of circuit breakers. They are in a circuit box in your garage. Occasionally, your power goes out, and you wander out to your garage and flip switches around and try to see what works.But, I think that's probably the extent of most people's knowledge. So let's just start there.Ryan KennedyCircuit breakers, electrically speaking, are one of the oldest products on the market. They first were invented, at least patented by Thomas Edison to show you how far back they go. But, they're effectively a method of interrupting the flow of electricity when things go wrong. Too much current, short circuits, things like that. The purpose of the circuit breaker is to simply open the circuit when those things happen and protect from fire, primarily.David RobertsAnd, presumably, protecting the appliances and the things on the other end of the wire, too right.Ryan KennedyGenerally, that's the assumption, though I don't know that it's necessarily the explicit purpose. I think the more explicit purpose is to prevent fire. That could mean your equipment may go bad, in the process, but generally speaking, to prevent fire and hazardous conditions from electricity.David RobertsAnd so, every appliance, or device, or anything that uses electricity from the grid is connected to the grid through a circuit breaker. Is that true? Is that a universal rule?Ryan KennedyThat's right. Actually, the easiest way to visualize that is to think about the home or apartment, where you have a panel with breakers in it that typically open the front door and you can see breakers in there, and you flip switches and things go wrong. So basically, you have a big power feed from the utility that comes into that home to that panel, and then out of that panel, power gets distributed through each one of those little circuit breakers out to individual loads in your home, such as hot water, HVAC, lights, receptacles. That scales out. Commercial buildings and industrial buildings and data centers are the exact same thing.I mean, there's more breakers, and they often get bigger, but it's the exact same architecture across the entire planet. Or the circuit breaker always is the thing that sits in front of the thing that consumes energy.David RobertsRight. And so, the purpose of these things is to basically shut off current if something goes wrong. How do they do that currently?Ryan KennedyThere's a couple of different ways, but the most predominant way is it gets into a little bit of engineering speak. So I'll try not to dive too deep, but basically, it's through thermals and magnetics. So, there's kind of two situations you would have. Let's just pick on the home a little bit because the same problems scale upward to commercial, industrial buildings. When you say, plug in way too many things into the outlet, the breaker will trip. And that's tripped through thermals, means that too much current is flowing, things get hot, and some expansion happens inside of the circuit breaker. And, mechanically speaking, it flips a spring, and causes the breaker to open.David RobertsSo it's not a heat sensor. It's literally the heat expands something physical, and the physical change trips something.Ryan KennedyIt literally expands the metal inside of the breaker to open it up. That's what happens. The second, there's two methods—that was thermal—the second is called magnetic. That mechanism, it operates physically the same way. The actual springs and levers inside of the breaker open up the same way. But what causes it is different. So, magnetic happens when you have, say, a short circuit. Don't do this at home, but if you took one of your wires from your home and just put it into a pool. Lots of current flow all of a sudden, really really fast. That's called a short circuit.And you don't want to wait for things to heat up because that's when really bad things happen. So what happens is an enormous amount of current starts flowing through that circuit breaker, creates a pretty quick magnetic field that basically pushes the metals apart inside of the breaker to open it up, as well. So it's very much a passive device in the sense that there's nothing in them that say, oh, that's that, or this is that, so, therefore, I need to do this. It's a reaction of the metals inside of the product itself. It's quite an old technology, actually.If you open up the circuit breaker, it looks like a mousetrap condensed.David RobertsYeah, tiny little mousetrap that's basically set off by heat or a magnetic field. You think about electricity these days. You think about all our sort of digital devices and digital controls. And it's a little bit wild that on every single line going to every single device, there's this mousetrap, just so old fashioned. That always struck me. It's so weirdly old fashioned. A little piece of metal with, like, springs on it that springs shut to cut off your electricity. So it's very mechanical. Let's say electromechanical, as you say.Ryan KennedyYes, very established technology that is, in today's world, relatively ancient from a technological standpoint. But, to achieve those basic results of circuit protection, they work. The basic results of circuit protection.David RobertsRight. And it's passive, as we say, just responds to perturbations, and, I guess you would say, dumb, in that, it doesn't know there's no awareness of what's happening or why it's happening. It's just metal expands, it flips, it cuts off.Ryan KennedyThat's correct.David RobertsSo there must be millions and millions and millions of these things. I mean, if there's one of these things between every electrical load and the grid, there must be billions out there in the world.Ryan KennedyLikely, yes. I think your first number was correct. Millions and millions and millions.David RobertsSo what you've done is make a digital circuit breaker, which works differently than the electromechanical. So why don't we just start with if it's not a physical reaction, if it's not a physical thing happening inside this digital circuit breaker, what is happening? How does it work?Ryan KennedyWe can dive into the technical and how it works, and then it'd be good to talk about kind of why we're doing that. So first, the technical. And the reason I say that is because, well, breakers work. Why do anything to them? Right? But technically speaking, what we've done is we've created a digital circuit breaker. More specifically, we call that a solid state circuit breaker. What that is is saying, hey, instead of using mechanics or mechanical devices, meaning like metal on metal, the things we just talked about to conduct electricity through a breaker, let us use semiconductors instead.So semiconductors are a broad ranging topic, but basically means that you can control current with a small digital input much like you can on your phone or computer, et cetera. But scale that up to power and say well, let's make a circuit breaker with semiconductors so that you can now interrupt, in the case of protection, the circuits when bad things happen with semiconductors instead of mechanics. With that, we overlay. So, what happens when you go to a semiconductor approach? It is very much an analog, as if you said what's the difference in a rotary phone versus a smartphone?It's making that leap all at once. Because now with digital control being semiconductor control at the breaker, it means that you can now put smart things inside of the breaker and make it do things and add value that it typically didn't have. That's what we're doing.David RobertsI just want to stress on the core function of shutting off current in danger. Even on that core function, it's faster. It's better and faster than a mechanical device. Is that right?Ryan KennedyThat's correct. By multiple orders of magnitude. So to give you an idea, we are, roughly speaking, about 3,000 times faster than most mechanical breakers in the market. That equates to two things. One is safety. There's some old footage of us, that we don't do so much anymore, of slapping hot wires together to kind of show that safety function. Don't try that at home either. So that's one thing which is actually quite important when you scale into larger buildings because there's more energy and more utility and short circuits can be explosive events. So it definitely helps in that regard.David RobertsAnd you say conventional circuit breakers work, but we should note that there are faults, there are fires, there are arc—what do they call them? Arc.Ryan KennedyArc flash.David RobertsWhatever—yeah. They're not 100%.Ryan KennedyThat's right. What's interesting about—not so much in residential although this can't happen in residential—but when you scale up to, like, the larger buildings, commercially in the industrial space and especially in data centers where the utility services are very large, you can have catastrophic events from short circuits that are balls of fire. Now, the breakers will open, but that doesn't mean a ball of fire didn't happen in the process. Right. So that does happen. I mean, in the worst case in my in my past life, I used to design buildings and also worked for, you know, a contracting firm.So I've seen, particularly in one instance in a high rise building where there was a short circuit in the electrical room on, like, the 19th or 20th floor, and it blew the doors off of the electrical room. And these are like commercial grade steel doors that got blown off the electrical room. So it's an amazing force that can be had when you get into the bigger buildings. But, I digress a little bit. It certainly eliminates that problem. Let's put it that way. Go into a semiconductor just purely based on speed.David RobertsAnd that's just because a digital signal travels at the speed of light. Right. And it's just faster than any mechanical reaction.Ryan KennedyYeah, inherently a semiconductor is going to be, like I said, including propagation delays and things like that within the compute and sensing, we're around 3000 times. And to give you an idea, that's in the microsecond range as opposed to millisecond range or millisecond spurl in the case of mechanical circuit breakers. Now, okay, micro milli. But electricity does move virtually at the speed of light. So arc flash propagates not quite that quick but pretty quick. Whereas that time really really matters. So yeah, the impact to the safety is effectively arc flash just doesn't happen on the output of our product, even in the largest utility services.David RobertsSo you get the basic function of the circuit breaker is faster and better. But then, as you say, you have this device that has semiconductors in it and you can put other stuff in there too. So maybe just describe like, I know what a circuit breaker looks like. It sort of fits in the slot in my circuit box, so I have the vague idea kind of what it looks like. What does your thing look like? Is it the same size? Does it, what is it composed of? What does it look like?Ryan KennedyToday, what we have on the market doesn't look so much like what you would see in your home. It looks more the size of a commercial grade circuit breaker. So can't fit in the residential panel yet, with a strong emphasis on yet, but we do have a similar form factor of commercial grade circuit breakers.David RobertsAnd is that just the difficulty of shrinking down little computers and stuff? I mean, is it that simple?Ryan KennedyNot quite the compute, it's more the power semiconductors that actually do the switching. So we're on this incredible curve that probably could take up a large portion of this conversation but also simplify it to basically mean that the world of power semiconductors is advancing quite under the hood actually of everything else that's happening. Power semiconductors are what enable electric vehicles to be as efficient and as effective as they are. Power conversion and solar—UPS has lots of things power conversion related. They are advancing at a pretty rapid rate from a power density standpoint. Power density meaning like how much power you can actually pack into that power semiconductor.So power density is going up, size is getting smaller. That plays into our own internal strategy as a company to optimize the form factor in the coming couple of years to where it becomes much more of a universal product that can fit into existing panel boards. But today, we have—it looks like a small box that fits into our—we manufacture panel boards as well, so you don't have to figure that out, but we figured all that out for you. Make panel boards, circuit breakers, everything as a whole system.I always say that there's two major components to a solid state breaker. There's a brain and a heart. The brain is the control system, the stuff that software defined, that makes the thing work, provides cybersecurity, things like this. And then there's the heart, which is the power semiconductor that the control system attaches to. Yeah, very much like a phone, in a way, in the sense you have a brain, you have a heart and a phone as well. And that combination creates a pretty powerful component. And electrically speaking, that's what we're doing in this space is really enabling far more than we used to.David RobertsRight. So maybe one way to think about it is that electromechanical, old school circuit breakers, only had hearts. And now you've added a brain to the equation.Ryan KennedyYou could see it that way. Yeah, absolutely.David RobertsAnd so if all these things are digital and if everyone has a little computer in it, basically, if we could think of these as tiny, tiny, tiny little smartphones, I know one thing that comes to people's mind whenever I discuss digitizing anything is security, cybersecurity. So if your power in your home or your commercial building or whatever, if every bit of it is running through a tiny little computer, people, I think, naturally wonder, like, what happens if they get hacked or someone takes over, can control the power flow through my entire building, et cetera, et cetera. So how do you deal with security?Ryan KennedyUltimately, circuit breakers are life safety devices. That's the core function. That's the phone call and the phone right? It has to make the phone call.David RobertsRight.Ryan KennedySo we're life safety devices. So when you shift from purely hardware to software defined hardware, in any industry, the right approach is that cybersecurity is the number one priority in software. That's been our approach the whole time. Now, there's a couple of ways to dice that. One is to say, the way we describe it is, there's Stuxnet and then there's hackers. And so we want to guard against both, and we call it Stuxnet as in, if you know what that is, that was the uranium enrichment thing that read all about that some other time. But the point is, in that case, the biggest threat is to make a critical device be something that it's not supposed to be or do something that it's not supposed to do.So that is priority one to say, okay, above all things, the breaker can't be made to be something that is fundamentally not and create an unsafe condition. So how we're attacking that is really good. I'll just tell you that, There's some secret sauce there that effectively amount to there's built in safeties that are still digital, but you basically can't get into under any circumstance. So that's priority one. And then the next priority says, okay, well, if we solve that, which we have, then the next one is to say, well, how do we keep folks from coming in and just say, shutting power off or doing funny things.Shutting power off is probably the number one funny thing there. But how do we prevent that? So, I'd like to say that in the world of software, there's this standard out there, and you follow that standard and you're good. That is not the case with cybersecurity for anybody. It's always evolving, and you're always trying to tackle it and address issues as we go along. But the core things that we do is end encryption on both software and hardware, which means that we have encryption elements physically on the breaker, encryption elements physically on our onsite management tools and cloud software.So that's actually quite critical, is to have the physical encryption as well as the software based encryption. There's many ways you could go about cybersecurity in the sense of many different entities have cybersecurity standards, but the one that we're headed towards now is called FedRAMP. That's really the direction we're headed from a standard standpoint. That's to do work for the federal government. Things like this, you have to be FedRAMP compliant or certified. So that's the direction we're headed. We're not certified, yet. We anticipate later this year we will be. But nonetheless, that's kind of how we've addressed it. That is one of those areas that I wish there were this, like, gold star. You got that. So everyone's good.David RobertsRight. Because there is a gold star in the circuit breaker safety. The heart part, the UL standard is pretty well...Ryan KennedyYeah, UL is kind of our FDA equivalent in the world of circuit breakers. Yes.David RobertsRight. And you guys have passed those tests?Ryan KennedyWe have. We're the first and only company in the world who have ever done that, for a solid state digital circuit breaker.David RobertsYeah. And one thing, I don't know if we mentioned this, but this made an impression on me when I first learned about it, so I just want to throw it out there. I think when people think of networked devices, they think it won't work without the network. So it's just worth sort of emphasizing, here, that every one of these circuit breakers has the firmware and the software and the operating system inside it. So it is, in some sense, a self contained little machine like, it does its thing, even absent networking.Ryan KennedyYes. We just call that fully autonomous. So, yes, they're fully autonomous devices.David RobertsRight. And one more thing I wanted to mention about the move from conventional to digital and circuit breakers is that this eliminates a lot of equipment that traditionally goes around circuit breakers in sort of commercial and high value areas. Sort of safety equipment that kind of gets larded around circuit breakers. So maybe just talk a little bit about that, sort of like the kinds of things that you've consolidated into one device here.Ryan KennedyYeah, absolutely. So it's worth stating that the easy part of the power distribution world or electricity is that, as we said, there's a circuit breaker that sits ahead of everything that consumes energy. The hard part comes in where if you look at, well, what do we actually do with electricity? All electrical things require really three things. So any application of electricity requires protection, visibility, and control. This is related to HVAC, certainly related to EV charging. In the case of HVAC, you have protection in the sense of a circuit breaker that feeds the HVAC system. Inside the HVAC system, you have a control mechanism that actually controls the flow of energy in its own little way. And then you have visibility either through software or through the thermostat. You could say the same thing for basically everything, electrically speaking. EV chargers, certainly same thing. Every EV charger that's been built out there, with the exception of Atom Power, is fed from a breaker, always, inside the EV charger, whether it's a pedestal or wallbox, there's visibility and control. And you could say the same about elevators and many, many other things that we use electricity for.So basically the way we look at it is what do we do with electricity? Well, we want to protect it, but we also want visibility and control. So what we've done is basically to say, okay, well, let's offer superior circuit protection, but let's also have the ability to have visibility and control because, well, that's what we do with electricity. All within the circuit breaker. And so I think you asked a sort of broader question like what are we doing that's kind of adding some of those things in. Inherently being a semiconductor device, it's easy to control the flow of energy. As simple as that sounds, that's monumental because it is extraordinarily difficult to make a circuit breaker that can universally control energy. Meaning, universally, as in the home or in the data center, or in a commercial building or industrial building with the same device.David RobertsYeah, we should pause here, just to add, because I don't know that we ever actually mentioned it, but physical circuit breakers, old school circuit breakers are also designed for a specific voltage, right? They're sort of locked into a specific voltage. Whereas if you're doing it with computing power, you can adjust to different voltages with the same circuit breaker. Is that right?Ryan KennedySo, think of it more as different amperages.David RobertsAmperages. Sorry, I get those confused.Yeah, it's okay. So if you go to, name your hardware store. If you go there and you go say, "I want to buy breaker." The questions are going—your menu, I should say, is going to be, well, do you want a 15 amp, a 20 amp, a 25, a 30, a 40, 50, 60, etc. And then, you know, you, you buy that product for what it is, say, call it a 30 amp breaker to feed my, I don't know, hot water heater. That's going to be fairly typical. It's always going to be a 30 amp breaker forever and ever and ever. Which means from a UL standpoint and a safety standpoint, you can only put that on 30 amp circuits.Right?Ryan KennedyI will say, yeah, that is an interesting benefit that I think evolved along Atom Power's way, which says, well, now that you become a digital circuit breaker, you can effectively be a lot of circuit breakers in one, which is what we do. And you can program our circuit breakers from 15 amp all the way up to 100 amp. And it's you all listed for each increment in between. So that's pretty powerful when you consider, roughly speaking, it depends on your metric. About 90% of the breakers on the planet are 100 amp and less. So we're hitting a huge market with one single product.David RobertsRight.Ryan KennedySo that's certainly one thing from a protection standpoint, and thank you for reminding me, on that. That is a feature I often gloss ever, and it is unique for what we're doing. But the visibility, obviously, through the software we have and the ability to see the breaker and control the breaker is the other thing. And to be able to tell the breaker what it is. And I think that's the key thesis within Atom Power, which is to say, well, let's not just create a digital breaker, but let's create it in a way to where you can tell the breaker what it is instead of buying a breaker.Well, because you have to for protection and then having to buy a specific built appliance for the application that you need to perform, like EV chargers are a strong symptom of that.David RobertsThis is a perfect segue here because the first time we talked years ago, I think you were sort of messing around with big commercial facilities and industrial buildings and kind of a little bit all over the place, but you just got $100 million investment to do, specifically EV charging applications. So tell us why all these things we're hearing about digital circuit breakers, why they're specifically well suited to EV charging.Ryan KennedySo you're right about the earlier engagements we had, with great customers, were in the industrial space, primarily. Certainly prior to the investment, we saw a need, a major pain point, when it came to electric vehicle charging at scale. So charging vehicles has been around quite some time. For the longest time, it's been relegated to if it's outside of the home, to be candid, often optics put a couple here, a couple there just to have them. Right. But as we've progressed, particularly in the 2020s, here we are seeing, and we saw this is why we're in this space is we saw this, that there were some major, major problems with charging at scale.Meaning like, instead of a few chargers put in hundreds into a single facility or complex, heck, even tens, but certainly in the hundreds, things become really problematic really fast.David RobertsAnd that's fleets. We're talking about basically fleets.Ryan KennedyFleet, multifamily, and hospitality.David RobertsRight.Ryan KennedyYeah, anywhere where you're going to have lots of chargers. But yeah, particularly fleets, always need lots of chargers. Multifamily, as well. So the problems start becoming quite extreme in those cases. To give you an example of what I mean by this, we, we have a project up in Queens that is roughly now it's, you know, close to 700 charging stations that's going into generally the same location that is on the same, you know, substation grid, network, etc. If you do the math on that, you're basically connecting up to between six and 7 megawatts of potential load onto that grid, just in that.So appliances don't solve that very well, which is more or less what level two chargers are today. There are appliances that sit in front of the car and you plug it in. When you start talking about that scale, it's really critical that your infrastructure is the smart thing that can actually solve pain points such as, hey, how do we not do that?David RobertsHow do we not have a bunch of cars charging at once and overload basically the substation, because you could fry a substation if everybody like if you had 700 chargers going all at once.Ryan KennedyAbsolutely. Things like that. Things like me as a customer, how do I not spend the amount of money that you would otherwise spend on the infrastructure alone to make that happen? Meaning transformers, wires, switch gear, things like that. And then, with that much energy, how do you not just say, don't overload the grid, but how do you actually, effectively, energy, manage in real time against things like peak loads, or peak demand, or time of use and keep energy cost as low as you can and charge during the right times of the day and when there's a grid event and things like this.All that requires real time infrastructure intelligence.David RobertsRight. So the EV charge has to be networked with one another. They have to be communicating with one another, basically. Is that not something they can do now? If I'm looking at a fleet with a bunch of chargers today, are the EV chargers just freestanding, isolated, or did they talk to one another now in other ways?Ryan KennedyYeah, oftentimes they are. But there's where the problems really started was in the fleet, because that started becoming apparent, right, the more that they were putting in. To answer your question, can EV chargers today, outside of Atom Power, talk to one another and do some level of energy management? The answer is certainly, yes. That's the start of the conversation though, the devil in the detail says, okay, put that in and make it code compliant with our national electrical code and get the inspector to sign off on it and guarantee the billing owner that that's going to operate always, no matter what, safely. There's where things get problematic.So, if you are the life safety device and you're already connected and you got to buy a breaker anyway, for each EV charger, things become so easy to do. Now it's built into our panels breakers. It means the National Electrical Code to the t. Inspectors have no problem with it. And there's a lot of things that become super easy all of a sudden. So without going into a ton of complexity, being the infrastructure, being the breaker, being the panel board where the breakers sit, makes it super easy to solve those major pain points with very little effort from the customers' standpoint.David RobertsRight. And I think the way to think about this, and kind of what turned the light bulb on for me, is if your intelligence, your software, your coordination, et cetera, is in the circuit breakers that are in the circuit board, that means the EV chargers themselves can be dumb. So that like the things that are out there in the parking lot can just be dumb conduits. Right. Because the control is elsewhere. And this is something that's always struck me about the EV charging space. It's just like you have these, today, you have these like really incredibly complex high power computers sitting out in parking lots. Which always kind of struck me as a little bit insane, that normal customers are interacting so directly with something so expensive and kind of complicated.Ryan KennedyWell, you're hitting on the next pain point, which is, again, at scale that becomes very problematic that your most expensive asset in that ecosystem now sits in front of the vehicle, typically outside.David RobertsRight.Ryan KennedySo the second question outside of the infrastructure cost is how do we not do that? Can the pedestal or wall box be—wallbox not the brand, but box...electrical—can that thing be very low cost, low maintenance, zero maintenance, preferably? Whereas if it did get damaged, really nothing happens, other than I can easily replace it. And the answer is yes, because... Yeah, you're right. And once you become intelligent infrastructure and you sit safely back in the electrical room, the pedestals that have the cord sets on them become very dumb in air quotes. But the system is really smart.David RobertsRight. I'm curious what sorts of things having this kind of central intelligence, controlling multiple EV chargers can do. We mentioned it's going to prevent, whatever, 700 cars from charging at once. That's the kind of baseline it's going to prevent so much power from running through the system that it fries the grid it's on. But what else can you do with that sort of central computer control?Ryan KennedyYeah, so I would say there's a ton, but the highest value ones are going to be certainly in energy management that we've been talking about here that relates more to than just to saying, hey, prevent 700 cars from charging at the same time. It says, hey, you know what, let 700 cars actually charge at the same time, but let's intelligently distribute so that they can all get a charge and not cause major problems and major electrical bills. So that's one, I mean, I would say the other one is it is extremely easy to create a campus environment as well with the system. It kind of relates to what we spoke of earlier. Like the network connectivity is completely different from any other system, as in like it's really easy to do. So it's very easy from a campus wide perspective to say, hey, how do I connect this campus of chargers to a single system, single pane of glass that also does energy management, that also saves on electric bills, things like that. So things become very easy through that network piece.There is another element to it that says, well, kind of goes off. The programmable breaker to some degree is when you buy an EV charger today. This is another pain point. Again, at scale, it can sometimes also be a pain point, not at scale, but when you buy one today, it's fixed. In other words, level two charging, which is most of the charging, goes all the way up to 80 amps. All right, so just take that as a number. Well, if you buy a charger, it's going to come in several different flavors. You can get a 24 amp charger, you can get a 32 amp charger, a 40 amp, a 48 amp, and then on rare occasion an 80 amp because 80 amps kind of hard to do for various reasons. There's just less of those.But nonetheless, what you buy is what you buy and you're stuck with that. So if you buy a 32 amp charger, which is most of them on the market, that's it. You're not going to get 48 amp, you know, that a Tesla needs. You're not going to get 80 amp. That a Ford f 150 needs. You got 32. So you're probably picking up this a little bit, that with a programmable breaker now, on the other hand, what I can do is we can just simply go the full range of charging through the same product.David RobertsRight.Ryan KennedyYou're buying a full level two now, regardless. You just tell it what it, again, tell it what it is. And that can happen real time. You know, I could start off as 48 amp charger and then move up to an 80 amp charger, you know, a couple of years from now as more demand picks up for adm charging with the same infrastructure with no stranded assets. And that's absolutely critical. So let's say that's another one.David RobertsSo I got the intelligence is in the circuit board and they've got these sort of dumb chargers out in the parking lot. So like a bolt could pull up and charge at that charger and the circuit board knows the right amperage level. And then an F-150 could pull up to the same charger and get more charge because the circuit breaker knows.Ryan KennedyCorrect. But it's not enough to say, because you were mentioning network a minute ago. It's not enough to say, well, a programmable breaker alone solves that. It solves a major chunk of it, which says, well, I can now program my system to be 80 amp, not 48, yes. But there's another element to it which says, well, to do that, then again, think of that example of 700 chargers. Now, if I, if I boost, say, these chargers over here to 80 amp, say, call it 50 of them, right?David RobertsRight.Ryan KennedyNow, the entire system has to communicate amongst itself because, well, they sit on the same utility to say, well, oh, those have 80 amp now. So we need to see how we can spread the rest of them intelligently, so these other folks get a charge while these get an 80 amp charge. So it's still a system level network event. Right. And we make that easy and out of the box effectively. Whereas it becomes extraordinarily difficult, if not impossible, the way things have been done today.David RobertsRight. Because I guess if you're buying multiple ones today, you're just sort of bricolaging them together piece by piece.Ryan KennedyCorrect.David RobertsSeems a lot more like people are being asked to kind of wing it a little bit. And as I'm sure you know, as having interacted with customers, if I'm just like an owner of a hotel or whatever, I don't want to know, you know what I mean? I don't want to have to think about this much. I just want to plug something in and have it work. There's not going to be a lot of electrical systems management from these customers.Ryan KennedyYou are absolutely right. And that brings us to probably, I would say, the core of how we're personally selling, but also what we're seeing the market in this space look for, which is EV charging is one of those unique animals you mentioned, hospitality, where it's unique in the sense that if you offer it and it doesn't work, the perception of your facility becomes different.David RobertsRight.Ryan KennedyIf the lights out or the TV doesn't work in the hotel room or something, it causes nowhere near the impact that your EV charger not working does. There's various reasons we think that is. But anyway, so what's happening is and you're right, those hotels, especially hotels, don't want to think about this stuff. So being able to package it up in a way that is highly effective out of the box and by the way, extraordinarily reliable. Because we're a breaker now, we're falling to a completely different standard. That becomes absolutely critical that you have a super reliable, super easy...I don't have to think about energy. I don't have to think about demand. I don't have to think about this stuff, from a hospitality, or multifamily, or fleet perspective...that becomes a very powerful thing. But it's a culmination of kind of all the is stacked on top of one another. Smart breaker panel connected, dumb pedestal system level approach.David RobertsRight. And this is like if I'm the hotel owner, do I just plug and play and this thing runs itself forever...or is Atom involved, somehow, in monitoring and running? Are you involved in operations at all? Once you install these things, who takes over operations?Ryan KennedyI'd like to say we have a singular way of selling, but it's such an early market still that we don't. We sell all the way down to just hardware. All the way up to full managed services. So we have a 24/7 network operation center within our facility that we monitor key customer assets that we have service agreements with, particularly in hotels. That's one of those sectors that ask for that frequently because the hotels don't...they want to equate EV charging rightfully so to WiFi. You don't think about the router. Yyou don't think about gigabit or whatever that is. It needs to just work. I can connect to it, and it works. That's it. That's all I care about, rightfully so.David RobertsAnd one other question about these EV control systems. Obviously, the first thing on everybody's mind is the sort of EV facing part of it, managing which vehicles are charging and how much at what time. But of course, if you have this intelligence and software you also could think about communicating with the grid. And so, I wonder how much, because once you are getting up to 700 whatever. I don't know why we picked that number out. 700?Ryan KennedyIt's actually a project we have up in New York.David RobertsOh yeah. Well, you've got 700 vehicle charging stations and 700 vehicles charging, potentially. You've also got a fairly large dispatchable, at least somewhat controllable load, which seems to me could be quite helpful on some congested grids. So how big of a piece is the grid facing intelligence in these things? And I guess some of that depends on utilities and whether they're ready to do this kind of thing but I just wonder are you sniffing around in that space?Ryan KennedyI would say the way we're approaching it is, to answer your question, your hunch is dead on. That is a major utility concern at scale is to be able to have some level of at least visibility if not some level of demand responsibility in those events. We're not starting there, really. We're starting to satisfy what customers need right now, like, what are the most important things for them in the sectors we're in. So we see that as an evolution and it is happening. We are engaged in multiple utilities, just to put that out there. But today it's not so easy to say okay, well let's control that.What first needs to happen is customers need to start utilizing. The utilization picks up, that utilization picks up more. Then those discussions, the real, like, "what do we do about it" discussions will start happening with utilities we predict.David RobertsIt's going to force the question. If you've got 700 vehicle loads coming on and off your grid I mean, you kind of really can't just ignore that.Ryan KennedyThat's true. But with the evolution of electric vehicles and the adoption rate, all 700 aren't going to be on today. I think that's the point is, like, as more and more vehicles come onto that system—in relatively short order the next couple of years—then things become more apparent. Right. Then things become more potentially problematic for the utility. And we do expect that there's an engagement with the utilities, at various levels, for some sort of a demand response tie in. We certainly see that, but we're not day one pitching that as part of—the product is capable, absolutely capable—it's just the connection rate from the vehicles to the chargers has to pick up more and more and more and then eventually that will begin discussions once it becomes problematic for the utility, but not before it becomes problematic, typically.David RobertsYes, that sounds right. So you're out there now selling these systems, these EV charging systems to fleets and campuses. I'm sort of curious, who are the customers so far? What sectors were most eager for something like this to exist?Ryan KennedyWell, they initially fleet, so think parcel pickup delivery fleet. That's where we kind of started off our sales, was there. Multifamily is a close second at this point because they have the same pain points. They both need to have lots of chargers and they both have pain points associated with, well, effectively becoming a gas station. Trying to minimize costs associated with that.David RobertsRight. Yeah. There's one other thing I forgot to mention when we were talking about this earlier, that since you mentioned multifamily, I'll just throw it in here. Another sort of interesting application of this is if you own condos or apartment buildings or something, you might want to have certain chargers dedicated to certain people. Or you might want to have certain chargers that are available only in certain times of day. Or you might want to have one charger that's shared between two people who live in your apartment building. And all of that is of course, you can do, if you have this central control system, you can do a lot of micro fiddling with the individual spaces.Ryan KennedyYes, already built in, super easy to do.David RobertsAnd so the EV charging space is a very obvious application of this. A place where some central control of multiple devices is most obviously needed, and the demand is rising very quickly and that whole industry or set of industries is in really kind of like it's a crazy time of ferment in and around that stuff... But as we emphasized early on, as I emphasized when I wrote about this back in 2019, really there's no end to the possibilities here because the way I think about it is every single device on the grid is connected through a circuit breaker. And so if circuit breakers can become smart computing devices, then basically every device connected to the grid becomes smart or at least somewhat smart, without having to put all that programming and smarts and computing power into the appliance itself. You're putting the intelligence in the connection to the grid. I don't know, the more I think about this, the more it kind of blows my mind. That what you could do, eventually, if some substantial portion of the millions and millions and millions of circuit breakers in the country become smart. I don't know, it just seems to open up like the sky is the limit kind of thing. So I'm just curious, like, you're moving into the EV space for obvious reasons. It's hopping. There's a serious demand for precisely this sort of thing. But do you have plans?Like what's next after that? Because I could just think of a million different...Ryan KennedyWe do, as I think, hopefully, the listeners have picked up and I think through our conversation here, it's probably become apparent that EV charging for us is viewed as an application of the breaker, but not as the thing.David RobertsRight.Ryan KennedyMuch like many other things are. That will be scaling in the near future, in a way that is unique, in a way that is very easy and primarily of which becomes truly universal. So we are, you know, evolving product into a form factor that, you know, like we're universal today from a product standpoint. In other words, you can put us in any building, anywhere, it doesn't matter, same product, and we're capturing 90% of the breaker market doing that. But we're in our own panel. As we evolve, that will shift into a form factor that fits into most panels, at least in the US. And can be adapted for the European markets and add further ability into the product to effectively be able to tell it what it is.So we see a future. That the breaker that you have to buy anyway, instead of going and buying a meter or a control device or EV charger or industrial control, whatever it is, you just tell the breaker you're that thing, and it does it. That's the world we see. Now at scale, at extreme scale, I always like to think in kind of polar extremes, extreme scale of that, because consumption defines the grid, not the other way around, is you effectively could have control of the entire grid.David RobertsYes.Ryan KennedyAlso obsolete about 80% of the electrical products on the market at extreme scale.David RobertsThat's the other thing I was thinking about is like all those things you're talking about building into the circuit breaker. Those are entire freestanding industries, like long standing industries. This is a huge amount of stuff, consolidation here, if nothing else.Ryan KennedyCorrect. I think what we're trying to do is—I hate to use the phone analogy, but it's very similar, but in a little different way—is that we are looking to electrically speaking, unify the applications and unify the customers into one platform. I mean, many other industries have done that most visibly, the phone. The applications and the phones get used by everyone. And we want the same to happen in the electrical space. That there's this massive gap...that there are more electrical products on the market than probably any other industry because just over time, as the industry has evolved, we've just made specific things for specific applications for specific customers.David RobertsRight.Ryan KennedyThat's what EV chargers are. They don't have to be that way, right? The breakers have always been there, but it's not thought about much. So let's make that thing that actually does it since, well, it's part of the electrical system, right? You have to buy it anyway. It needs to be there. So let's make that the universal thing. And I think that's where you mentioned the investment. I think that's probably where Atom Power differentiated. Because if you were going to go make that kind of investment, the 100 million into, say, an EV charging company, the problem is it may not be a problem, but I mean, the way we look at it is, well, that's all that they do.The product charges a car, you can't use it for this, you can't use it for that. That is it. That is what it's going to do. Whereas Atom Power, it's like it being an application of a universal device, means that, well, as we see this market over here take off, we apply to that market and we see this market over here, but we apply to that market. Why? Because all of them require breakers.David RobertsRight? So, like a facility with a central circuit board controlling multiple EV chargers, there's no reason that it couldn't plug other types of ICEs into that same circuit board, and it could coordinate all of them alongside the EV chargers, with the EV Chargers. There's nothing EV specific about it.Ryan KennedyExactly.David RobertsI'm thinking about scale here. One of the things I think people are starting to become familiar with are sort of smart panels at home...like this company, SPAN, has the smart panel...which is sort of doing in the home what you're talking about doing with EV chargers at big facilities, which is just controlling loads and balancing loads and timing things and all this kind of thing. So in a sense, a smart panel like this, in the home, would kind of make the home into its own little micro grid, right? This own little independently managed micro grid.And I'm curious about scale. What does it look like as you scale bigger and bigger? Is it just stacking these little circuit breakers on top of one another to eternity?Ryan KennedyThat's actually a really good fundamental question, is that breakers cover a large swath of land when it comes to electrical space, right? They go all the way from, you know, technically ten amps in the US. All the way up to 5,000 amps.David RobertsWhat does a 5,000 amp circuit breaker look like? Is it..Ryan KennedyA refrigerator, basically.David RobertsRight.Ryan KennedyBut, but the point is, is like, you know, when you get into big distribution systems, you start off with a goliath utility and you finally work your way down to the small, what's called Brandt circuit breaker. That basically means last breaker in the system. That's where we play, is in that Brandt circuit breaker, meaning the last breaker in the system. And like I said, 90% of those are 100 amp and less. And so you capture that market, you effectively capture most of the grid, you know, at scale. So in other words, it's like saying 100 amp and less, 90% of your loads are on that, you know, and that's what we focus.David RobertsI mean, if you let your mind drift in sort of futuristic utopian direction because I think about this stuff a lot. It's like what sorts of things do you think could be unlocked? What sorts of things do you think could become possible? When it's not just, you have this occasional smart load here and smart load there, but suddenly the bulk, the majority of the loads on a grid are smart controllable. I'm just curious what you think sort of like the emergent big picture effects of that will be like what will intelligence do for the grid on kind of the macro scale?Ryan KennedyI think as you scale out, especially at the extreme end, you can do some pretty granular things, like, neighborhoods, electrically, are talking to one another, and that becomes apparent where you can shed load without interrupting someone's life and save a substation or save another generator from having to come online. It kind of speaks to demand response, but in a different way that says it's not brute force, shut things off. Instead, let's all talk to one another and know that, hey, the conditions look like this. This home is unoccupied, likely because the electricity consumption is so low.The imagination, there's no limit. This is the thing, again, because the consumption of electricity is what defines everything else...is once that becomes a unified platform and understandable ecosystem made of billions of devices, that becomes very powerful in ways that I don't think we've even thought about yet. But at a high level it means that now, electrically, you can speak to one another, and it's not like by home. It's not like my home is pulling 20 kilowatts, your home is pulling 15. That doesn't tell you anything. What does tell you things is the patterns of usage, of EV charging, of HVAC, of hot water, of lights.There's a lot there that, at scale, gives you a ton of intelligence that you can do a ton of things with, that I think the sky is the limit.David RobertsYeah. At the base level, you are ensuring that every bit of electricity that's generated is used efficiently.Ryan KennedyCorrect.David RobertsAnd that alone is going to just take a huge whack off. I feel like the demand for new power plants and new capacity, you're going to be able to avoid a ton of new generators and new, maybe even new high voltage lines just by using the electricity you've got.Ryan KennedyYeah. You just hit the core of the company, our company's thesis. This is actually what we were founded on...which was in the future, and we started in 2014, there was going to be this probably once-in-a-century event of transferring a lot of energy—think of that, not electrically, just pure energy onto the grid.David RobertsYeah.Ryan KennedySo that's happened. It's certainly happening now. I think we call that the energy transition now...But we had this thesis in 2014 where we said, well, you basically have like three options there, because the grid can't sustain that level of what we were predicting what's going to be transferred on the grid, primarily by vehicles. You have kind of three options. You either create more generation, somehow, even though we're reducing generation through baseload like coal and natural gas, rightfully so. You either do that, which is going to be really hard to do, or you have large scale energy storage combined with solar, which we have one of those, not both, solar, not so much energy storage, or you have large scale demand response. But the way to do that is through a universal method, not, not a disaggregated, like, you know, thermostat adjustment or smart EV charger here, but not there thing. It has to happen at a macro level scale, at the infrastructure level. So this is fundamentally why we actually started down this path, is sort of seeing that need in the market in the future. And this was 2014.David RobertsThis comes up over and over again. You talk about transferring the heating load in the frigid Northeastern part of the country to electricity. That's A) a huge load, and B) the timing of that load is very different than the timing of the load it's adding onto. And that's just, you either meet that with brute force by building a shitload of new generators and power lines and everything else, or you just got to get much much much smarter about how you use the power you've got.Ryan KennedyYeah. And the low hanging fruit, at least conceptually, is that you can be a lot smarter. But it's hard to actually execute on that without a universal platform that fits all industries—which at the end of the day, because again, everything's fed from a circuit breaker—that needs to be the thing that is innovated on, not a new appliance. But it's really hard to do that, super hard to do. I could go into why breakers are hard to actually innovate on, but nonetheless, it is the hardest path to pick.David RobertsBut you're there for a big chunk of applications and can see, at least in the future, a form factor small enough to go into residential boxes. Right.Ryan KennedyYes.David RobertsAnd once it's in the box, it's programmable, which means it's not the same thing. It can be, like you keep saying, it can be a bunch of different—once it's in the box—it could be whatever we need it to be as needs evolve. This makes such sense to me. Like I remember when I first encountered it back in 2019, I was like, yeah. If you have one kind of device that is required for every single electric load, then why not make that the device that's smart, instead of creating new smart devices for every different kind of load. Why not just make the one lego building block, that's the whole grid, make that smart and then you've got all your smart devices in one? Seemed sort of like a smack your head obvious kind of thing to me. So why are you still the only one with a certified digital circuit breaker? Like I would think other people would be moving in this direction sooner or later.Ryan KennedyYou know what's interesting is that, I will tell you this, we were not the first ones to come up with the idea of a salt tape breaker. The idea of that actually is quite old. Traced this back to the mid-80s, of a semiconductor based circuit breaker by some large companies. So two things. One, is, I think, the natural question after that would be well, like okay, well, "why didn't anybody do it?" So, I think, there was probably—let's start there. There's probably a couple of things. One, is that the circuit breaker space is an interesting one. It really is. And the reason is because it is a super old industry. That's basically dominated by four companies, across most of the planet, who have all been building breakers for over a century each. That's just kind of the nature of this industry. So by the way, worst pitch ever. Hey, we're going to build a new breaker, where four companies dominate the planet, and it's all hardware and life safety, side note. But anyway, the point is it's a unique industry in that sense. So I think probably there were some "The Innovator's Dilemma" there a little bit because once you establish a means and methods and that's how things are done, it's really hard as a large company to move away from that and disrupt your own business.David RobertsYeah. And it seems like building tiny computers is very different than building tiny electromechanical devices.Ryan KennedyYeah.David RobertsI don't really know very well, but it doesn't seem like a lot of transferable knowledge.Ryan KennedyIt's definitely a different field. Right? I mean, once you say hey, let's build a solid state breaker, you now get into the realm of power semiconductors and physics that don't haven't historically applied in traditional circuit breakers. So, there's a few things. I think one is there were some enabling technologies that evolved since the 80s like computing, especially, in sensing and speed and power semiconductors, certainly. But I think the other piece of that is a bit of "The Innovator's Dilemma" that says, well, if I'm a company who's making breakers, but I'm also a company who's making industrial controls, and I'm also a company who's now making EV chargers.David RobertsRight.Ryan KennedyIt's so difficult, so difficult to say, well, why don't we just make that one device.David RobertsAnd cannibalize all our other product lines.Ryan KennedyYeah, look, rightfully so it's difficult. Because if you've been set up that way and your company evolved that way, I mean, they're full of smart people... It's a structural challenge, right, to go do that. So I think Atom Power came out would work in a way, and that we're all from the industry. Me, specifically, I was an electrician, so I kind of used to design buildings. So I would like to say I think Atom Power had a view of the world that was much more simple and holistic, that says, well, "why should products be defined by the application? Why can't the product define the application?" Which seemed just a natural question. But then we started from there. I think that there are since Atom Power, there are emerging, I would say, technologies within established companies, as well as some startups who are trying to do effectively what we're doing. My view on this, is we welcome it because, coming from the industry, we believe what we're doing is the right thing to do. We also know we can't service every single customer base on the planet.David RobertsIt's millions and millions, as previously discussed. Well, I'm curious, if somebody, if another company makes a digital circuit breaker, do we know already that it will communicate with yours? Or does that remain to be hashed out? Like, is there a standards are there standards issues here?Ryan KennedyWell, it depends what you mean. I mean, there's a UL standard now that basically Atom Power defined the path for and establish with UL.David RobertsBut I meant more of the software kind of intercompatibility. I don't know anything about software, so I don't even know what the question is. But insofar as this is meant to be a universal system, is it going to all be operating on the same sort of software protocols?Ryan KennedyYeah. Yes and no. So we do see a world where from an application standpoint, in other words, if you're say a facility manager and you have one pane of glass you're looking at for software, interoperability between devices is going to be necessary.David RobertsRight.Ryan KennedySo the way we structured our product is that the sort of core firmware and stuff is proprietary because, well, it's hard to open source that, because it's life safety, it's UL. It's like there's a lot of whizbang stuff that happens in the breaker to make it do what it does, but then the layer on top of that which says, well, okay, well, let's set this up as an EV charger, that layer of software, we're open protocol and API based, as well. So you could tie even today, you can tie an existing building management system into our software, for example, the way it should be for other manufacturers if they come to the market. We haven't seen you actually come to the market, yet, because, like I said, it's super hard to do this, and I think it takes so much time and energy. Atom Power is dedicated years to this, at this point. It's a hard thing to do.David RobertsWas there any sort of public policy assistance or is this all private investment, and are you making money now? I'm curious because a lot of industries, when you're going up against a super giant incumbent industry, you need help to cross those first few humps. Has this all been private money so far?Ryan KennedyIt has, yes.David RobertsAnd you're out selling things for profit now. You don't feel like you need any help.Ryan KennedyWell, I mean.David RobertsNot like you're going to turn down help if...Ryan KennedyWe always welcome help, but in the form of investment, we're capitalized for quite some time at this point, and our goal is to not ever need to raise funds again. That's kind of... So we need to be... We are post revenue, not pre-revenue, but as a company, we have to get to a sustainable level of profitability, right? Because from an investor, in a markets perspective, the markets are very harsh right now on companies in the new energy space. There's many publicly traded companies, especially the ones that went this backroute, you can see this on right now, which is kind of a Goldilocks scenario because it's a high growth market, yet if you're not profitable, investors are punishing you on valuation, specifically. So we need to become a very profitable company in this space, but to sustain ourselves and to continue to grow products, organically, right, and not continue to raise money. That's what we're headed towards.So my point is, it's really hard to make money in the energy space, as the markets have shown. So the best companies are going to be the ones who have a sustainable technology, but also a sustainable business model to where they can take the profits and continue innovating, to further advance and create solutions to the major pain points that are out there. I mean, this is our thesis. Like, we have to become a profitable company.David RobertsThis is really fascinating to think about the sort of these lego blocks that are really kind of composing the entire grid—thinking about all of them getting smart is really just, for a sort of grid geek—really lets your mind spin off and all sorts of interesting directions. So, thanks, for taking the time and explaining this all to us, and good luck in your next steps.Ryan KennedyDavid, thank you. I really appreciate the conversation today.David RobertsThank you for listening to the Volts podcast. It is ad-free, powered entirely by listeners like you. If you value conversation like this, please consider becoming a paid Volts subscriber at Volts.wtf. Yes, that's Volts.wtf, so that I can continue doing this work. Thank you so much. And I'll see you next time. Get full access to Volts at www.volts.wtf/subscribe

A newly signed state law sets Minnesota on course to use 100 percent carbon-free electricity by 2040. In this episode, Minnesota House Majority Leader Jamie Long describes the decisive legislating that took an ambitious climate bill from introduction to the governor’s desk in the space of one month. (PDF transcript)(Active transcript)Text transcript:David RobertsBack in 2019, I wrote for Vox that there is one weird trick states can use to ensure good climate and energy policy. That trick is: giving Democrats full control of the government. It has worked in California, Washington, Oregon, Colorado, Illinois, New Mexico, Massachusetts, New York, Hawaii — the list goes on.As I covered in a pod a few months ago, the 2022 midterm elections brought Democrats full control — with trifectas of both houses of the legislature and the governor's office — in four new M states: Maryland, Massachusetts, Michigan, and Minnesota.Does the one weird trick still work? Well, you’ll never guess what happened in Minnesota last week. Gov. Tim Walz signed into law a historic piece of legislation that would set the state on a course to carbon-free electricity: 80 percent by 2030, 90 percent by 2035, and 100 percent by 2040.My guest today is the bill’s primary author and sponsor, Minnesota House Majority Leader Jamie Long. Long, formerly legislative director for then–U.S. Rep. Keith Ellison (D-Minn.), was elected to the Minnesota legislature in 2018 and became majority leader this year. He worked closely with Senate sponsor Nick Frentz to shepherd the bill quickly through the legislature, with no extended conference committee. It was an adept and decisive bit of legislating — not necessarily the norm for Democrats. I was excited to talk to Long about some of the ins and outs of the bill, the forces that supported and opposed it, and what's next for Minnesota energy policy. All right, then. Representative Jamie Long of Minnesota, welcome to Volts. Thanks so much for coming. And I guess the first thing I should say is congratulations.Jamie LongThank you. It's a big month out here in Minnesota.David RobertsYeah, big news. I want to get into the actual bill and the actual targets and everything, but just let's do a brief bit of history to start with. You arrived in the Minnesota legislature in 2018. I'm curious when this bill was born, basically, how long has this been cooking?Jamie LongSure. Well, this was my top-priority bill from my very first day I ran for office wanting to work on climate change and clean energy, and knew that 100% clean energy was the big bill that I wanted to focus my efforts on. So, we introduced this pretty early in my very first year in office. So actually, when we had the bill signing, I was looking back, and it was about four years to the week from when we had a bill signing that I'd introduced it. So, that was the first time we'd had 100% clean energy proposal in Minnesota, but we certainly had a lot of other renewable energy standards that had been tried and had failed over the years. The last time we'd updated our renewable energy standard was 2007 in the state.David Roberts2007. And that was, I'm guessing, the last time you had Democratic control over both Houses?Jamie LongNo, in fact, it was broadly bipartisan. It was signed by Governor Tim Pawlenty, Republican governor, who later it became a political issue when he ran for President because the Republican primary voters were not that happy that he was a clean energy leader who took climate change seriously. But it got such broad bipartisan support, it was almost unanimous in the House and Senate at the time.David RobertsWild.Jamie LongAnd that was 25% renewable energy standard by 2025 was what was passed at that time. That seemed really ambitious, but we actually met that in 2017, so we met it eight years early.So, at the time it seemed like it was going to be a big deal.David RobertsIf only we would ever learn from experience.Jamie LongI know, right?David RobertsThat's the same story with every single one of these that's ever passed anywhere.Jamie LongThat's right. But we do have only the second trifecta in the last 30 years in the state. We did have one in 2013, 2014. We didn't update the renewable energy standard then, but we did do some other good climate policy. But yes, unfortunately, since 2007, climate and clean energy has taken a turn for partisanship in the state. And so it has taken until we got this trifecta, and we have it barely in the Senate. This will sound familiar to the congressional story, but we have a one vote margin in the Senate, and we have a two vote margin in the House.David RobertsCrazy. And this was pretty rapid and decisive. Like, you guys have not been in office for that for that long.Jamie LongYou got it. Signed within a month.David RobertsThat's unusual to see the Democratic Party acting with such alacrity and clarity of purpose. I don't know what's going on here.Jamie LongWell, we felt like we heard loud and clear from Minnesota voters that this is what they wanted. There was a poll in our local paper right before the election asking voters what were their top issues for deciding on the candidates that they wanted to support. And climate was a top five issue.David RobertsNo kidding.Jamie LongOur governor, Tim Walz, has been a strong supporter of 100% clean energy since day one. He was at our very first press conference with us four years ago, and he ran on this this past election cycle for his re-election, it was in his first ad. He was one of those Democrats back in the Waxman-Markey days who voted for Waxman-Markey and thought it might have cost him his seat, and it didn't. But he's always been very proud of his climate leadership and has been a really strong leader in our state.David RobertsSo, I want to talk about some of the issues of contention, let's say in a minute, but let's just start by talking about what's in the bill. So, there's two targets for the state utilities. There's a renewable energy target and then there's a zero carbon target. So, tell us just briefly, like why are there two and what are they?Jamie LongWell, we wanted to have a renewable energy baseline. That was important for a lot of our partners and constituency groups that we were working with. We do have nuclear energy in the state, there are three nuclear plants, all owned by Xcel Energy. So, this wasn't really relevant for most utilities, but we wanted to have a baseline for renewable energy. So, there's a 55% renewable energy standard by 2035. But the big numbers are the clean energy standards or carbon-free energy standards and those are 80% by 2030, 90% by 2035 and 100% by 2040.David RobertsGot it. So, the renewable energy target is just an extension of the previous law? Yes, it's just sort of an updating of the previous renewable energy law or does it change anything substantially from that law?Jamie LongWell, it updates the previous law. So as I'd mentioned, our current law has 25% by 2025 and everybody's gotten there, so there's no real story there. So we have 55% now by 2035. We did update it some. The renewable energy definition at that time had a couple of things that we tweaked. One was that it constrained hydro to only small hydro. And the thought had been at that time that there was some concern that if we did large hydro we would basically push out all of the wind and solar. We would just go towards large hydro or we have access to Manitoba Hydro here and some other large hydro projects.And so the concern was that you wouldn't get the solar and wind development that we would want. That's less of a concern now. We aren't seeing a lot more large hydro projects being built. And particularly on the timeline that we're talking about, between now and 2035, you're not really going to get a new large dam sided and constructed. So, the question was just really, were we going to let that count for utilities that are already purchasing large hydro? And we thought that would be fair. And then the other discussion was around waste energy. And so we have a facility in my city of Minneapolis that is located next to the neighborhood that has the highest black population in the city, and also happens to have the highest asthma rates in the state, there's a lot of cumulative impacts with different industrial uses in that particular neighborhood. And so we excluded that particular facility from the definition of renewable energy.David RobertsThat's Hennepin?Jamie LongYeah, the Hennepin Energy Recovery Center is what it's known as. So we excluded that as a gesture to the community and to the county that we understand this is a facility that we don't want to see be the long term solution to our waste problems in that particular location.David RobertsI'd like to pick up both of those a little bit. On the hydro, my understanding is that this was a subject of some contention, I mean, one is what if we just get more hydro and don't do any wind or solar, as you say, that's probably not as much of a concern. Now, although, I'm curious, you're accessing this Manitoba Hydro, could you theoretically just buy more of existing Manitoba Hydro? I'm curious, have you topped out how much you can get from there?Jamie LongYeah, it's pretty well topped out. It's all spoken for between Manitoba and Minnesota. So last year there were lower water levels in Manitoba and they wound up being able to ship a little less power to Minnesota because they had to use it all from Manitoba. So both with the existing transmission and the existing need, there's no real extra capacity.David RobertsBringing on any substantial new big hydro from Minnesota would mean building new dams.Jamie LongYeah, and it would take longer than the time allotted.David RobertsI know there are sort of concerns about the pipeline from those Manitoba, the electricity lines from those Manitoba dams down to Minnesota. How did that play out? Because my understanding is that environmental groups, the reason they didn't want big hydro counted is partially because they don't want more of that. How did that sort of controversy play out?Jamie LongYeah, there were some concerns from some indigenous environmental groups around large hydro. And so that was one of the reasons why we made clear it was only existing hydro. So we didn't allow for new hydro to count towards that renewable energy standard, so that we would foreclose the possibility that new construction would be eligible. So in the law, it says only as of the effective date of the act, those facilities would count.David RobertsI see. So even if they did build new dams.Jamie LongIt doesn't count towards renewable energy standard. It would count towards carbon-free because we don't have technology limitations there. It's anything that's carbon-free. But for the renewable energy standard, it wouldn't count.David RobertsGive us a sense of where non hydro renewable energy is in Minnesota. Are the big Minnesota utilities in shouting distance of that 55% target?Jamie LongThey are. So last year in Minnesota, we were at 52% carbon-free for the entirety of Minnesota's power generation. Now 24% of that was nuclear. So about a quarter of our power in the state's nuclear, but 28% was renewable energy. So that's pretty good. And then if you look at it based on, by utility, there is a bit of a differentiation. Minnesota Power, for example, which is the utility that services the northern part of the state, they're pretty unique because they serve some really large customers. Mines, timber. They were at 90% or so coal in the 1990s, and then as of even 2015, we're at about 75% coal. And now they're over 50% renewable.David RobertsOh, wow. So they've been moving pretty quick already.Jamie LongThey've been moving very quick already. And so we've had some good leadership from utilities in the state. Xcel Energy, our largest utility, was the first in the nation to say that they wanted to move towards 100% carbon-free electricity. And then both Minnesota Power and Great River Energy, which is our generation and transmission cooperative for most of our rural electric co-ops in the state, have also committed to carbon-free. Now, all three of those had 2050 as their target dates, so we're pushing them considerably faster than they had wanted to go, but they had set the direction that they were going to move towards carbon-free electricity, and all three of them, in the end, were supportive or neutral on the final bill. So I do give them credit for setting a direction and being willing to come along even as they were being pushed.David RobertsJust to clarify sort of the goals that they had set for themselves, that was all internally driven, that wasn't in response to any sort of mandates or government product.Jamie LongThose were public announcements. And so even before the law had passed, something like 80% of Minnesota customers were already being served by a utility that had themselves, on their own, committed to decarbonizing their electric service.David RobertsSo this is mostly accelerating what your big state utilities are in the midst of doing already.Jamie LongAccelerating and mandating, which is an important distinction. But they had made these targets on their own and they weren't binding. You know, Xcel Energy at different points in time had described it as an ambition or a goal or, you know, there was a lot of flexibility in terms of how they described it and now there is not.David RobertsNow there's locked in. Let's talk a little bit about garbage incineration because this sort of like only comes up in some states and not in others, and I've had questions about it over the years and I've never really bothered to poke around and learn a lot about it. But my understanding is two things: one is that the main reason municipalities are doing this is not for energy. It's that they don't know what else to do with their trash. They don't have anything else to do with their trash. And my understanding is that environmental groups are largely opposed to it and would have preferred to exclude it from the zero carbon energy standard entirely.So tell us a little bit about, just sort of like, what are the dynamics or how did that play out?Jamie LongSo it's this interesting interplay between waste policy and energy policy, right?David RobertsRight.Jamie LongSo I think most folks agree that landfilling isn't a good outcome for our waste management system. And there's disagreement though, on how much we can do in recycling and composting, and other forms of waste diversion. Environmentalists like me tend to think that we can do a lot more than we're doing. Pushing hard at the state level to do more in the recycling and organics management side. But a lot of counties in our state have moved forward with waste burning as what they view as better than landfilling. So not the outcome that they want, but better than landfilling.You still do have to landfill though. You're landfilling all the ash that's coming out, and the ash is toxic, and you're producing localized air pollution when you're burning it. So it's certainly not an environmentally friendly solution, but nor are landfills. And so there aren't easy choices here. But when it comes to the energy space, when we're thinking about moving towards a decarbonized electric sector, when you're burning trash, it produces carbon. So right now the waste energy, at least for our 100% target, doesn't count as a fully decarbonized source. We have a few pathways that counties could pursue which I can get into if you're interested in terms of how they could continue to operate.But they are, under our bill, either going to have to change or pay a little bit more money in a renewable energy credit to be able to continue to operate. And so it will make waste to energy harder, as a long term solution.David RobertsI don't want to get too deep into incineration here, but when you say improvements that they could make, does that mean there are safer and better ways to incinerate trash, or do you mean alternatives?Jamie LongWell, so under the bill, if you are not at 100% carbon-free electricity, one option you have is to purchase renewable energy credits.David RobertsRight.Jamie LongAnd this is a pretty common way to account for that sort of last couple of percent in different standards, and it was also in our previous renewable energy standards that we've had.David RobertsYeah, I want to get into that later.Jamie LongYeah, so that would be one option that they could pursue. They could shut down the facilities, they could not sell the power to a utility. Because we're regulating the sales to utility customers in the bill. So there are a few options, but I do hope that this will prompt some conversation in our counties about how they want to manage waste 16 years from now. I feel like there's a lot of time to figure out better alternatives than burning.David RobertsIt's not super clear to me what the ideal state of the art is here. But yeah, like you say, there's time to figure that out. What about within the bill? Is there anything specifically for distributed solar or distributed energy? That's one of the things I heard back from some sort of state advocates is that the big utilities are fine going renewable, but they're more resistant to losing control over assets and having customer owned assets. So I wonder, is there anything, is that mentioned in the bill at all?Jamie LongNo, we don't have a specific carve out for distributed energy. We wanted to keep our technology neutral approach intact. As you might imagine, there were lots of different requests for specific technologies.David RobertsInteresting.Jamie LongMost of those didn't go in the direction that I would call climate friendly. So we tried to keep the overall integrity of allowing for utilities to have some flexibility in how they are getting to 100% carbon-free in the bill. Now, that said, I do believe that there's going to be an awful lot more distributed energy built because of this bill. The utilities are going to need to find as much solar and wind as they can, and it's not all going to be able to be utility scale.So I think a lot of it will be distribution grid, interconnected. But I think that a lot of that conversation is probably going to take place in other contexts later this session. So we are one month in to our legislative session, and we've been talking for a long time about our community solar program. We have the largest, I guess now second largest New York just passed us, but for a long time we have the largest community solar program in the nation. There's a lot of conversation on what to do in the distributed energy space with interconnection. I think that's going to be a hot topic in session and there's going to be a lot of interest on policy fixes in that space.But for the purposes of the 100% clean energy bill, we felt it was important to keep flexibility for utilities and how to meet their targets.David RobertsInteresting. One other question about sources. I know anytime I mention energy policy on the internet, which is frequently, I get the question, well, what about nuclear? Is it nuclear just better? Why don't we just do nuclear, blah, blah, blah. You knew this was coming. So in Minnesota, you've got three nuclear plants, yes? Who are providing 25% of your power and a good chunk of existing low or no carbon, carbon-free energy. And that counts toward the standard, that energy counts toward the, the carbon-free standard for 2040. But there is also alongside that, a prohibition on new nuclear in Minnesota.And I know there was some argument on some quarters that the prohibition should be lifted, that small modular nukes should be allowed under this technology neutral standard. The bill didn't get into that. What's the status there?Jamie LongYeah, so nuclear politics is obviously complicated, not just in Minnesota. But you're right, we have three nuclear plants in the state and we have a moratorium on new nuclear plant construction.David RobertsAnd that was a bill that was legislative from previous.Jamie LongThe 90s. It dates way back. It's not a recent choice. And the reason is that we have the closest community living near a nuclear plant anywhere in the United States, and that's the Prairie Island Indian Community, which lives like a stone throw from the Prairie Island Nuclear Plant. And so it's in their backyard, right behind their houses. And so the Prairie Indian Community has had long standing concerns about the onsite nuclear waste storage, because we don't have any long term storage solution yet for nuclear waste. And so that waste happens to be stored right on site at the Prairie Island Nuclear Plant.And so when they were seeking permitting to store that waste on site, the compromise that was passed included a moratorium on new nuclear construction. So that's the history. The tribe remains concerned to this day about living that close to a nuclear energy plant in their community. So removing the nuclear moratorium is fraught. And there's also, I didn't have a single large utility come to me and say, "Hey, I'm ready to build a small nuclear modular reactor and I want this repealed so I can get this going".David RobertsYes, this discussion is extremely theoretical at all levels.Jamie LongYeah, exactly. That may be a topic of conversation that comes to the state in the future, but it didn't need to be solved in this bill because there is no real live proposal before us. All three of the nuclear reactors in the state are going through relicensing applications with the NRC. They're all at the end of their licenses or nearing them. And so that's the kind of active conversation.David RobertsYeah, are you talking about several states have taken action recently to extend the life of existing nuclear plants, is that on the table or in the discussion somewhere?Jamie LongNo, we don't really need to subsidize our nuclear plants in the state. They've been operating within competitive rates and we're regulated state, we're not deregulated. I think some of the states that have had to support their nuclear plants because they're deregulated.David RobertsRight.Jamie LongBut I think there is broad support for relicensing for those three facilities. The tribe that I mentioned is in active negotiations with the utility about waste storage next to them in a relicensing application. So there may be discussions there, but I think that there is general support for extending the life of those three plants and nothing more. We really need to do with the legislature on that. But in terms of new small modular nuclear reactors, there's no real active proposals or need to solve those problems this month.David RobertsLet's talk a little bit about utilities and their sort of disposition towards all this. Let's start a little bit, I think with munis and co-ops, municipal and cooperative utilities. I think, probably, most folks listeners live in cities and are served by big utilities and so might not be familiar with what these things are and why they tend to be resistant to the net zero push. This is not just in your state but in many states. So maybe you could just explain sort of like, what are these little utilities and why across the country do they tend to be centers of resistance to the push to clean power?Jamie LongGreat question. So municipal utilities are pretty straightforward. It's a utility that's run by municipality or at the municipal level to supply power. And they tend to be more of a distribution utility. They're often purchasing their power from somebody else.David RobertsThey're just not big enough to own assets on their own.Jamie LongMost of them don't. Yeah, there are a couple of municipal utilities in the state that do own some of their own generation, but most of the time they're purchasing the power that they sell. And then cooperative utilities are managed by local boards that are elected and they tend to be in rural communities. That's the history. It was part of the ability to get electrification to rural America, right? And the big utilities serve the cities and there needed to be a model that helped serve rural communities and so cooperatives was a model that took off. But in Minnesota it's 40% of customers or cooperative utilities or municipal utilities.So it's a big chunk. And if we're only focusing on our three investor owned utilities in the state, we're leaving out a lot of folks who have power delivery. So the cooperative utilities are very diverse in terms of their customer size, their location in the state. So we have some that now, once were rural, but now serve kind of a suburban membership, and then we have some that serve very small rural memberships. A lot of them tend to purchase power from these generation and transmission cooperatives. And so there's a handful of those that make the bulk of the decisions that then trickle down to the co-op.So I mentioned Great River Energy, in our state is the largest, and so it's complex. And in terms of why they resist, well, there's a couple of reasons. One is that they have tended to not have necessarily the same pressures to move as quickly as some of the investor owned, I think Xcel Energy, Minnesota Power, those are publicly traded companies. They've got a lot of folks who are looking at their future and what might be their risks. And for Xcel, I think part of the reason they went first on saying they wanted to be the first utility to get to 100% was to get noticed, right, to make a mark on the national stage that they were a leading utility.The boards of a lot of these local co-ops don't tend to be electricity experts. They're community members, right? They're folks who live in their communities and care about.David RobertsAnd we should say, I'll say it if you won't, rural and therefore likely quite conservative.Jamie LongYes, that's right. And so their understanding of the most up to date energy policy is sometimes a little dated. So I've met often with rural cooperative boards in our state and I even have brought graphs of the cost of solar and wind over time and showed them,"Look, it's cheaper! It's cheaper". And the feedback I'll sometimes get is, "Well, it's not reliable", right? There's always kind of something else. So there has been traditionally a lot of resistance at that level. But I'll give credit to some of the large G&Ts that work with the co-ops. They've understood that moving towards renewable energy is going to save their members money.So Great River Energy had a very large coal plant that it sold, that wasn't located in North Dakota, and it lost $170 million at that coal plant in 2019. They tried to sell that coal plant for a dollar and couldn't find anybody who would take it. So they wound up having to sell it with a very valuable high voltage transmission line, which probably down the road is going to carry mostly wind power from North Dakota to Minnesota. And by selling it, they projected that they would cut rates for their member co-ops by over 10%.David RobertsWow.Jamie LongSo, the economics are really driving a lot of the transition now for some of these rural co-ops, too. But they tend to be resistant to mandates and requirements.David RobertsSo, I was going to ask how you brought them around, but it occurs to me that maybe you just didn't and didn't have to. Did they come around?Jamie LongSo, the municipal utilities did not. They were the last holdouts. Every other utility association or utility in the state wound up being neutral or supportive. But the municipal utilities.Interesting.Were not, and in part they have local politicians who are involved in those discussions, and those tend to be from rural communities, and so you can connect the dots. For the rural cooperatives, to their credit, they came to the table. They have a very diverse membership, as I said, and there were a lot of pressure on that group. But they had one reasonable ask, which was, a lot of our co-ops are starting behind where these large utilities are. They don't have nuclear power, they don't have access necessarily to the same level of hydro as say, Minnesota Power in the north. So, they're behind. And so they asked for a longer on ramp to get to the same place. And so that seemed reasonable to me. So, we have the same standard for them in 2035 and 2040. They've got to get to 90% 2035 and 100% 2040. But for 2030, which, you know, in utility terms is very fast for planning purposes, we said, "Okay, we're going to give you 60% target for cooperative and municipal utilities in 2030". So that they had a little bit more lead time to do planning and to get on board.And that got them to neutral. So that was a big deal that they were willing to make that agreement.David RobertsA couple of other, you know, sort of what are being framed as concessions to utilities because, you know, utilities, of course, if you mandate something, they immediately come back and say, well, you know, they spin this scenario where 2040 is looming, and we don't have enough, and we're spending kajillions of dollars, and we're having blackouts.Jamie LongRight.David RobertsSo you have to formalize some sort of, well, you have in the bill an "off-ramp", quote unquote "off-ramp", which just amounts to, as I understand it, if the dates are approaching and the utility doesn't think they can meet the target without compromising reliability, it can go to the PUC and say, "Hey, we can't do this without compromising reliability". And the PUC will say, "Okay, here's a little extra time". Is that the long and short of it?Jamie LongPretty much, so a little more to it. But this has been in our renewable energy standard laws since the beginning, because there was always sort of a concern that when you got close you might not be able to get to meet it, and then you don't want the lights to go off. Right, is the argument.David RobertsI always just think it's funny, like find me a state, find me a PUC in the country that's going to be like.Jamie LongExactly.David RobertsYou can't meet the target without compromising utility reliability. Sorry, we're locked in by the law, we're all just going to have to have blackouts.Jamie LongYeah, too bad. the Republicans in the legislature called this the "Blackout Bill". And my last name is Long, so they called it the "Long Blackout Bill", which I thought was good. It was like maybe if my last name had been Short, then it wouldn't have been as scary. We can deal with a "Short Blackout", but that was "Long Blackout". So the 2007 standard, 25% by 2025, no one ever used the "off-ramp", right? No one needed to. They met at eight years.David RobertsI don't know of a utility in a state, anywhere in the country that has had to use one of these "off-ramps". Like they always meet the targets. It's always easier than they think. It's like can we learn from but.Jamie LongI think it is important to have this in the bill because I don't want to assume that we're going to come back and change this bill a bunch of times between now and 2040. If passed us any lesson, we haven't done this since 2007, it might be another 20 years until we get back to this. Who knows? And so right now I'm pretty confident that we can get to 100% clean energy by 2040. But maybe I'm wrong. Maybe we can only get to 98% and then do we really want to force that last 2%? So it does feel like it is worth having that mechanism in here.But what we did do is we made sure that there were real factors that the Public Utilities Commission would have to weigh. So yes, they have to relay weigh reliability and affordability, but they also have to weigh impact on environmental justice communities. They also have to weigh the social cost of carbon. And so what is this going to mean for the overall impact on our society? So you're right. At the end of the day, if it's going to affect reliability, and importantly now the utilities will have to establish that on the record in a public hearing through the Public Utilities Commission.So it's not just the utilities saying, "Hey, sorry, I know I'd said 100% by 2050, but Tesla couldn't do it". No, now they will have to actually put together a record and demonstrate to the Public Utilities Commission, "Hey, here is why I can't do this thing".David RobertsWe tried.Jamie LongYeah, exactly.David RobertsSo it's not an easy thing. It's not something they could just screw around for 20 years and then invoke this.Jamie LongNo, and they have to do it before the public. So does the utility want to go and say, "Hey, I'm going to have to be burning more dirty energy"? I mean, they're not going to want to do that unless they feel like they really have to. So I do think it's important to have that tool in there but, I would not be surprised if it's used very infrequently, if ever.David RobertsYeah. So the "off-ramp" did not bug me at all, but something else that's in there has kind of bugged me, and I read a bunch of articles about this and I just didn't see anybody else pick it out or examine it at all. But it also, in the bill says that utilities can buy RECs for compliance, renewable energy certificates, which basically just means someone else somewhere else generated more renewable energy than they need for their compliance and they're selling the leftovers, and you can buy the leftovers counted towards your total for compliance. To me, that's more of a red flag than the "off-ramp" thing because, as anyone who's been listening to Volts for a long time knows, these RECs are fairly cheap.Like if you just want to buy bulk solar and wind, like wind power from the Midwest RECs, they're pretty cheap. And in many, many cases they're going to be cheaper than actually reforming your own operations or acquiring new assets of your own. So why shouldn't I be worrying about that more? It seems like if there's something I'm going to worry about utilities doing, it's not just putting things off, it's just buying a bunch of cheap RECs to cover their obligations. So how do you think about that?Jamie LongYeah, well so this has been the framework that we've had in state law since the beginning of our renewable energy standard. So it's a tool that's been around and widely accepted. The renewable energy credits vary in cost and it's, you know, hard to know exactly what a 2039 renewable energy credit will cost. But they are real. So, you know, there's sometimes there is a concern around offsets in general, and I think a lot of that is valid, but renewable energy credits are a wind or solar or other renewable energy system where there's retiring their credit for a specific use.So it is additional renewable capacity that is being built on the grid and, at least for Minnesota, for the RECs that have been used to meet some of the earlier renewable energy standards, 60% of those are in Minnesota, and all of them are in the Midwest.David RobertsIs that by requirement or is that.Jamie LongNo, that's not by requirement but that's been the way, the way it's happened and I think the Public Utilities Commission has worked with trying to make the RECs as local as possible. So they so far have been all in the Midwest, and 60% have been in Minnesota. So that is additional renewable energy that's getting built in the state, and those credits can't be retired for anybody else. So if the utilities building their own renewable energy they're going to retire the RECs for themselves. So it is real. In some ways it acts as a carbon tax on the margins.When you're getting towards that last little bit of power that you need to meet your targets, then you're going to have to pay a fee. But we know that renewable energy is cheaper right now than fossil fuels and this is only going to put even more of a finger on the scale towards renewable energy. And if you're an investor owned utility you're going to have to go in front of the Public Utilities Commission and demonstrate why it is cheaper for your ratepayers to have a fossil fuel plant where you're paying RECs on it than wind and solar. And I just don't think that is likely to happen.David RobertsSo you are not worried about RECs forming any substantial chunk of compliance?Jamie LongNo, I'm not. I think that the most likely use for that will be when you have a last one or 2% and you have some sort of, I don't know, hydrogen peaker that uses some hydrogen that made from fossil fuels or something like that, that it'll take over that last couple of percent. Or something like waste energy, that I was describing before, where there's some other public policy good that you're dealing with. We have a big emerald ash borer problem in the state right now, and are cutting down a bunch of our ash trees, and we have a couple of facilities that are burning that and making energy out of it so. That produces carbon and there might be a need to have a REC for something like that.David RobertsAnd I also just sort of idly wonder when we're getting up to 2030, 2035 if compliance won't be, if more and more utilities are under compliance standards whether there are still going to be so many.Jamie LongWell that's right.David RobertsExcess RECs to sell, right? I wonder if that market is going to tighten up.Jamie LongMarket is going to tighten up. I mean these are going to be needed for a lot of different reasons. Corporate purchasers want RECs, utilities want RECs. We're seeing these standards become more common. So, I don't know that we can count on cheap RECs forever. And there does need to be I think some mechanism to account for these hard to deal with marginal sources. And we could say that you can't burn trash and you can't burn wood, but I probably couldn't have passed that bill.David RobertsRight. A couple of things about the bill itself. I'm sure you're aware one of the bigs from ongoing conversations in the clean energy world these days is about permitting and sighting and the difficulty thereof, that being kind of a bottleneck. Sort of like, even if you have willing capital and willing utilities and willing everything else, you have this process of permitting and sighting that is sclerotic and slowing things down. Did you take that on at all in the bill?Jamie LongWe did, yeah. We know that transmission is going to be a big challenge. It's a big challenge right now. We have a very constrained grid in Minnesota and a lot of renewable energy projects aren't getting built that otherwise could because the transmission costs are too high. And our regional ISO, the Midcontinent ISO in Minnesota, has announced recently a $10 billion new transmission investment in Minnesota and the region, that's the largest in US History.David RobertsOh yes, we did a pod on that last year.Jamie LongYeah, I listened to it. It was great. So frankly, myself and the former Republican Energy Committee chair and the Senate pushed really hard on MISO to move as quickly as they could on this because there were so many constraints. So we've been working at that level, but we also are trying to help at the state level. And we have several provisions in the bill that are designed to help with siting. One would remove a specific certificate that independent power purchasers are currently required to do, that was designed for utilities with ratepayer customers, and so it wasn't really the right fit.Another would, for very short tie lines for solar projects, that right now have to get county approval, would move that to the Public Utilities Commission. A lot of the counties don't want to deal with that anyway. So we were trying to do some of these easy streamlining things and they all wound up being really non controversial. But to help just make it a little easier to get some of this renewable energy deployed.David RobertsAnd do you feel like there's more to do there? Like, is that something that's going to come up again in the legislative session, do you think?Jamie LongWell, there may be. We had four specific fixes in the bill, and these had been around for a few years, we've been working on them for a while. There may be other changes that are needed to help out. The big thing we need to do is just figure out how we can get some of these projects built in our state that MISO has approved and we need to keep those on track. Minnesota Power has proposed a really innovative transmission line in northern Minnesota that's going to connect to some new wind power in North Dakota. And so that will be an important project too.I think they're getting some federal support for that transmission line, it was recently announced. So we have to build some of these projects out and I think there's going to be some state support to do that. For example, we're going to try to pass a pretty hefty package of state matching dollars to help out with the Federal Inflation Reduction Act, available money for transmission, and we're hoping that that will help deploy some of these projects.David RobertsI'm curious both about the prevailing wage provisions, and sort of beyond that, the general disposition of labor toward all this, like the role they played in all this.Jamie LongI think that was one of the best parts of the coalition work we did was having the broad support of our building trades and labor partners. It's not always been an easy conversation with building trades and clean energy transition, but I think seeing where the economics have pushed some of the coal plants in our state, and also recognizing that we have really good opportunities to build clean energy. A lot of the building trades in Minnesota have been really good partners in trying to help make sure that we are moving towards clean energy and that we are doing so with good union jobs. So because Minnesota was kind of an early mover in clean energy, even though we haven't been that active in recent years, we did get an early mover advantage in our, kind of the 90s into the 2000's, and we have two of the largest wind and solar installers in the country, based in Minnesota. And combined, they tell me that they've installed over 50% of all wind turbines in the US In the last decade. So we have a lot of opportunity that Minnesota workers have seen over the years to build renewable energy projects.David RobertsAnd an existing workforce that's presumably helping you, lobbying with you for all this.Jamie LongThat's right, that knows that these are good jobs. So we put a prevailing wage requirement for all new large energy projects in the bill, which is a big deal. And then we also included local worker considerations for the Public Utilities Commission, so that they could weigh when they were approving projects if they were in fact helping employ local workers. We also put in there preference for projects that are going to be in energy transition communities where coal plants, for example, will be retiring. So that we're trying to help backfill some of the tax base in those particular communities.So we worked hard with our labor partners and I don't know if there have been other states where the entire building trades, the statewide coalition supported 100% clean energy standard, but in Minnesota they did. And we had the bill signing at the Labor Center in St. Paul to mark what a strong partnership this was.David RobertsWell, it seems to me like nothing but a good thing that this element of the legislation, the sort of prevailing wages, local workers, all this kind of stuff seems to be a standard part of these state bills now. Washington, my home state of Washington, did some great stuff on this, but it seems like now it's just sort of like a standard piece of the puzzle, which strikes me as all to the good.Jamie LongI think that's right. And I think President Biden deserves a lot of credit on that too, to having made this labor climate partnership a real cornerstone of his clean energy agenda.David RobertsSo, before we wrap up with just a couple of political questions. You've said a couple of times that Minnesota is the purplest, let's say, state to pass one of these things.Jamie LongYes.David RobertsWhich is true, but, you squint close up, and it's party line vote in both chambers. So, I mean, this almost feels silly to ask, but was there anything helpful or supportive from anyone on the Republican side throughout this process or did you just come into this thinking, "We're Democrats, we got to figure it out among ourselves, there's no hope"? Was that as predictable as I would have expected?Jamie LongWell, unfortunately it was. It was fully party line in both the House and Senate. We have had some bipartisan clean energy wins in recent years. We were one of the only split legislators in the country in the last four years, and when I chaired the Energy Committee, we had some good wins on energy efficiency and solar deployment. But for the big changes that we really need, we really weren't able to find the partnership that we wanted across the aisle. I don't think that that's true with Minnesota public, though. When you look at the public polling, and we have some public polling on our bill, it's broadly supported by the Minnesota public.There are partisan differences, though, even in the polling. So it does show that unfortunately, we are at a place where climate clean energy policy is more polarized than I think is healthy. But I think that the good news is, we have broad buy-in now from our utilities, from our labor partners. And I think if we look back on this in ten years, you'll find that the public is going to be very supportive and the politics on this will change. I think that when the public sees the benefits that this will have for job creation, for overall cost of utility bills, and of course, for climate public health, I think that support will grow.But I don't want to undersell what we accomplished either, which is that with a one vote margin in the Senate.David RobertsYeah, I mean, let me just ask about that directly, because the Inflation Reduction Act was a friggin miracle.Jamie LongRight.David RobertsBecause it all came down to the whims of one vain, relatively illinformed person and just sort of woke up on the right side of the bed. We sort of touched on some of the elements of this story, like, you brought the utilities around, at least to be neutral, not against it. Labor was for it. I mean, there weren't a lot of big organized commercial interests, seems like, against it. It's just Republicans against it. So how did you manage to keep every single senator on line?Is there some magic dust?Jamie LongSo Senator Frentz, who was a lead author in the Senate, and I worked really closely together throughout the entire process. And he's a rural moderate Democrat, I'm an urban progressive Democrat. So we were a good partnership. But when the Senate flipped to Democratic control, I was taking a look at some of the new members and hoping that we would be able to pass a bill as strong as the one we passed. And there was a member who won, who was the majority maker, who won in the Trump district, bright red district in the far northwest part of the state, around Morehead.And then I started reading up on his background and turns out he's a meteorologist who has been talking about climate change on the air for 20 years in his community, and the impact that this has on agriculture. He spoke on the floor on the Senate talking about how if we don't act now, the agricultural impact in our state is going to be enormous.David RobertsIt's kind of a lucky stroke.Jamie LongThat was a pretty good draw. We had a member who was in a challenging part of the state in the Iron Range, as we call it, in northeastern Minnesota, but we had all of his utilities that were neutral or supportive and we had the strong support of labor. And so for him, I think it was a vote that he could take and take with confidence. So, you know, the coalition that we built really helped. But we, we didn't we didn't take this to conference committee. We, Senator Frentz and I negotiated together and got to a place where we had a bill that could pass and get the support of folks in Trump districts in greater Minnesota and Minneapolis, districts in the Metro, with one bill with no amendments through the House and Senate into the governor's desk.So that took some work, but I'm really proud that we were able to get it done.David RobertsThe ability to hash this out such that it didn't need to go through a long dragged out conference committee process is really a notable level of party discipline and purpose, which we don't always associate with the Democratic Party. So it's really great to see when it comes up, like, you guys did not faff about you just went straight at this thing and passed it.Jamie LongThat's right. We knew what we wanted to do and, yeah, we got it done in a month. So it was an intense month, but I think we knew our purpose and we were aligned in our goals. And I wasn't two months ago sure that we would be able to get a bill as strong as the one we got through done. But I think Senator Frentz deserves a lot of credit for the work he did with the senators. And frankly, our partners, the utilities, deserve credit for being willing to come along, right? They understood that this is the direction we're headed.They knew this bill was going to pass. And so the asks that they made were pretty reasonable on the scale of things. And now I think we have one of the five strongest clean energy standards in the country.David RobertsTwo very brief questions to wrap up. One is North Dakota says they're going to sue Minnesota over the idea being that, you not buying their dirty power is a matter of interstate commerce. And thus your bill, something, something, dormant commerce clause. The illegal analysis I've read indicates that this suit has no merit. There was a suit back in 2007 that the Republicans won, but apparently it was on different grounds, the law was very different, it's a whole different thing now. I don't know if there's anything to say about this other than, it's likely to fail, but do you have any additional thoughts on it?Jamie LongWell, it says a lot about energy politics in the state of North Dakota. I think it says more about that than our legal chances. But we're North Dakota's biggest customer for their biggest industry. So energy is a lot of what North Dakota does and, to date, they have tended to focus on fossil fuels. Now they are moving, there is a lot of wind energy development happening in the state and to Governor Burgum's credit, he has said that he wants to move to a carbon neutral economy by 2030, or carbon neutral energy system.David RobertsYeah, they got a bunch of CCS and hydrogen fantasies to work out.Jamie LongThat's right. Yeah. So that's where most of his hopes are pinned on. But in terms of the legal challenge, no, there's nothing really there. I mean, the overall framework which is that we are regulating what Minnesota utilities sell to Minnesota customers, has been in law for all of our renewable energy standards since the inception, and North Dakota has never challenged those. So they did win a lawsuit against us after the 2007 energy bill and that was around a restriction that we had on imports of out of state coal. So that is a harder one to hold up in court and it was struck down.But in terms of this particular provision, it's not the same. And, as I mentioned, it was in law then and they didn't sue it against it because they knew that they weren't going to be able to win. So it is unfortunate. We'll probably have to go to court with our neighbors, and that's not never fun, but we're going to win this one and the law will go into effect, and hopefully North Dakota can sell us a lot of wind power.David RobertsI really wonder what North Dakota thinks it is communicating to the rest of the nation with this behavior. Like, how do they think this looks? I know they're all conservative and so they're all in the bubble, they're all watching Fox, so maybe they don't know how this looks to the rest of the country, but like good grief, suing to stop the future. Anyway, so final question this is electricity. Done and done. Check, check. What about transportation? And what about heat? What about natural gas heat? Those are the two big prizes after electricity. Are you cooking up plans to go after one or both of those?Jamie LongYes, we are. So on transportation, Governor Walz has been a real leader on vehicle electrification. He was the first state in the Midwest to sign on to the clean car standards out of California that are permitted for other states to sign on under The Clean Air Act and took a lot of flak for that, but stood up to the naysayers. And that's been a good commitment from him. But now we have the opportunity to do good work at the legislature, too, on electric vehicles. So I suspect there's going to be a really big package there and a very big package on transit, which I know has been something that we have wanted to fund at a substantial level for many years and haven't had the political support to do that.David RobertsYeah, you have some really, sort of, in those terms, kind of progressive cities in Minnesota that could use some help, I think, becoming more walkable and transit oriented.Jamie LongWe sure do. And they very much want it, and haven't had the support to get there. So we got another light rail line we're building out right now, we want to build a fourth. We have a lot of bus rapid transit that's being built in the region that we want to help support, as well as new bike-ped infrastructure. My city of Minneapolis tends to rank in the top five cities in the country for bike infrastructure, but that doesn't come for free, and they want more. So we need more. So that's going to be a big area.And then in terms of buildings, absolutely. The governor has a proposal to move our new commercial construction to net zero by 2036, for our codes, which I think would be exciting. And so that would be updating our codes every three years to get to that point. So I'm hoping that we can pass that this year. And certainly that's just the first step, we do need to make sure we're looking at existing buildings, I had a building benchmark bill last year that we are hoping can move this year, too. So there's more to be done. And luckily we have a lot of session left since we were able to get this done in month one.David RobertsRight. How novel, just to get something done quickly, and then I imagine even elements of the public who are against it, just like, everyone prefers for this just to be done, right? Nobody enjoys these full year long dragged out, miserable. No one wants that again.Jamie LongNo, yeah, we avoided the Manchin "Will he? Won't he?" for a year.David RobertsOh, thank God.Jamie LongAnd just got her done, so that was, I think, exciting.David RobertsAwesome. Well, congratulations again.Jamie LongThank you.David RobertsRepresentative Jamie Long. Thank you so much for coming, and thanks for all your great work in Minnesota.Jamie LongThanks, David. Appreciate It.David RobertsThank you for listening to the Volts podcast. It is ad free powered entirely by listeners like you. If you value conversations like this, please consider becoming a paid volts subscriber at volts.wtf. Yes, that's volts.wtf, so that I can continue doing this work. Thank you so much. And I'll see you next time. 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In this episode, utility watchdog David Pomerantz discusses all the ways that utilities use ratepayer money to lobby against the clean-energy transition — and what regulators and policy makers can do to stop it.(PDF transcript)(Active transcript)Text transcript:David RobertsThere are many features of US public life that I believe, perhaps naively, would be the subject of a great deal more anger were they better understood. One of those is the role utilities play in climate policy.A rapid transition to a low-carbon energy system is necessary to avoid the worst of climate change. Happily, that transition is going to be an enormous net benefit to US public health and the US economy. It's good for quality of life, economic growth, international competitiveness, national security, and the long-term inhabitability of the planet.But it’s not necessarily good for the companies that actually sell energy to customers — power and gas utilities. In fact, utilities are using every tool at their disposal to slow the energy transition, from lobbying to PR campaigns to donations to, as the last few years have demonstrated, outright bribery.And here's the even more galling bit: they are fighting against the clean-energy transition using your money. They use ratepayer money — from captive customers over whom they are granted a monopoly — to fund their lobbying. They have effectively conscripted their customers, who have no choice where to get their power and gas, into an involuntary small-donor army working against the public interest.It’s outrageous. In a new report called “Getting Politics Out of Utility Bills,” the Energy and Policy Institute — one of the best utility watchdogs out there — details some of this utility corruption and offers recommendations for how to prevent it. These are not futile recommendations to Congress, but actions that fall within the current powers of state regulators and the Federal Energy Regulatory Commission.I have been ranting about utilities for years, and one of my most reliable sources on the subject has always been the report’s author, Energy and Policy Institute Executive Director David Pomerantz, so I was eager to talk to him to air some shared grievances, hear some enraging tales of utility shenanigans, and discuss what can be done to rein them in. All righty, then. David Pomeranz. Welcome to Volts. Thank you so much for coming.David PomeranzThank you so much for having me.David RobertsI was thinking of you just earlier today as I saw a new story in the Washington Post about how the gas industry is under fire and it is now hiring Democratic politicians to shill for it. And I thought: "Golly, isn't that thematically on point?". So it seems like a perfect time to be covering this report. Before we get into specifics of who's done what and how to stop them from doing it, let's just start with power utilities are out there getting involved in politics. And let's just sort of discuss what is their net effect on politics. Like, what are they pushing for and against out there in the states and at the federal level?David PomeranzThat is a great question, and I think it will be important in context for your listeners who I am count myself as a loyal one, and I know many are thinking about climate change, and energy policy, and decarbonization, and the energy transition. And if they are concerned about those things then they should be concerned about utilities, political power and their political machines. So let's talk about what their political agenda is. And we're talking about both electric and gas utilities. Oftentimes the same companies, but sometimes, you know, there are utilities that sell gas only and electricity only. And they're all relevant to this conversation.So, since you mentioned, gas utilities pushing back against building electrification, and that has certainly been in the news quite a lot this month, so we can start there, because that's really simple. The gas utilities sector is, with almost no exceptions, united in its aggressive political effort to stave off building electrification. They basically see that as an existential threat to their existence. They have for some time.David RobertsAnd it is.David PomeranzYeah, we can be honest about that, I think.David RobertsYeah.David PomeranzWe'll talk about electric utilities, of course. You know, electric utilities have not only a role to play in decarbonized world and a transition from fossil fuels, but really like the very central role to play in it. And I wish they would, more of them would get religion on that. But gas utilities don't really. Their role is, they make money from putting methane gas in pipes and sending it to buildings and factories.David RobertsThese companies that are both, you can sort of see a root out of this for them. But an exclusively gas utility really is, you know, destined for the trash bin of history, and knows it and is fighting it tooth and nail. But some of the stuff electric utilities are fighting, I don't think is as straightforward or obvious. Why they seem hostile to both distributed renewables, sort of consumer side stuff, and hostile to interregional transmission of the big power. So they seem hostile on sort of both ends of that. Why are they out doing that and how significant is their opposition to this stuff in the grand scheme of things?David PomeranzYeah, it's significant. It depends a bit on the issue. So maybe let's start on one end of the spectrum, with the things that they are most opposed to with the lease nuance.David RobertsRight.David PomeranzAnd I would say that that is distributed resources, customer owned resources, like rooftop solar, and energy efficiency, which we maybe don't talk about as much as we should. But, for decades now, electric utilities have opposed those because it presents a threat to their business model, right? As you have kind of, like, in the high priest of helping people to understand this, electric utilities in our current model make money when they build stuff. If people are putting solar panels on their roof, or adopting technologies to use less electricity, either one of those kind of has the same effect on the electric utility. It means they don't have to build as much stuff. And so they make less money.David RobertsYes, you're using less utility power.David PomeranzRight. So they are opposed to that. And we'll talk about some of the most scandalous things that utilities, electric utilities, have used their political machines to do in the last few years, but a lot of it roots from this almost paranoid obsession with stopping the growth of rooftop solar in some places. So that's that. On the other end of the system in terms of, like, the bulk power system, it's a little bit less monolithic and a little bit more of a spectrum within the industry. So there are absolutely electric utilities who have figured out that they can make money by retiring coal plants and gas plants, and instead building wind farms and utility scale solar farms. So Xcel Energy kind of coined the term "steel for fuel" to represent that change. And it makes sense. Now, they're all kind of in a different place on that. Some have really embraced that transition. Some of the dinosaurs in the industry, like Southern Company, or Duke Energy, or Entergy, they're not there yet for a bunch of reasons that I think are largely cultural, frankly. They just have a lot of groupthink in their leadership and their C-suites, and they haven't figured out yet that that solution sort of helps their profits and also helps customers. It's really good for everyone. And so on that, there's some heterogeneity in the whole sector.But there are companies who, utility companies, who absolutely, in the very recent past, have used their political power to slow down that transition too. So probably the canon example of that, and I think we should talk more about this because it's really such an important case study, is FirstEnergy in Ohio.David RobertsYeah, we'll definitely get into that.David PomeranzSure.David RobertsAnd the transmission thing too. I think is maybe not intuitive for people just to understand that sort of, if your power generation and transmission is confined to your utility area, you're sort of stuck with the resources you have within that area. And insofar as you connect to other areas, and potentially get cheaper power, right? You lower the price of power generally. And utilities, especially the owners of those plants that are getting those sky high prices, don't want that either.David PomeranzYeah, this is really counterintuitive for people. And I think, unfortunately, this narrative has kind of taken over that the main obstacle to building the high voltage regional transmission lines that we desperately need to transition from fossil fuels to renewables, is like some farmers and ranchers and NIMBY, "not in my backyard" protesters.David RobertsYes. Or environmentalists wielding environmental review, et cetera, and protecting salamanders.David PomeranzRight. And I'm not dismissing those things as real. There are people, you know, there is a history of landowners not wanting transmission lines going on or near their property. But in my opinion, far less of a barrier and gets much more attention than it should compared to this really big structural barrier, which is these multibillion dollar companies that don't want to see transmission built, regional transmission. And that regional part is kind of the key when it comes to utilities. So, utilities are very happy to build local transmission. In fact, they're probably gold plating their local transmission assets because they can get it approved very quickly.David RobertsYeah, super easy to get it greenlit.David PomeranzSuper easy. And it's a money making machine for them. The regional transmission assets, first of all, as with anything, they'll fight the opportunity for anybody to own those assets but them. So they will fight against any kind of merchant development of transmission, which takes a big piece of the market out that could make things cheaper for everybody. And, yeah, they'll fight against transmission lines that weaken their assets. So a good example of how this stuff all interacts is, there was a proposed transmission line to bring clean hydropower from Quebec into New England, and it was fought by local activists.But also NextEra Energy paid $20 million to bankroll, very quietly, some of those protests, and to campaign against the transmission line because they own gas plants and a nuclear plant in the region, and so that imported hydro would have undercut the profitability of those assets. There's another case, that we documented on our website, about how Entergy, utility company that operates in Louisiana and in the south, they actually hired sort of an undercover operative, like a consultant that didn't disclose they were working for Entergy, to go to some of the meetings of MISO, the Mid Continent Independent System Operator, and basically kind of try to gunk up the works, and slow down development of transmission lines that would bring lower cost wind energy into Entergy's service territory. So they fight that too. They fight distributed resources, they fight competitive regional transmission.David RobertsAnd they fight the creation of new competitive electricity markets too.David PomeranzYes, for sure. So, we have competitive wholesale electricity markets in many parts of the country. The ones we have could use some reforms to make them work better for customers. Utilities certainly will fight those. But there are also places where we don't have any, and the biggest one is the southeast. And the utilities there, companies like Duke Energy, Dominion Energy, Southern Company, they are very aggressively using their political power, including paying groups with names like Power for Tomorrow, that pay former regulators to do some of this stuff, to argue against bringing an RTO to the southeast, which many legislators in some of those states have expressed an interest in, for both parties because they want to see cheaper electricity.Large customers want to see it, because many of them want to have better access to clean energy, and a regional transmission operator would help with that. And the utilities are fighting that too. So it's really kind of up and down the system. A lot of solutions to decarbonization. Building electrification when it comes to gas utilities, certainly rooftop solar and energy efficiency, and in some cases shuttering fossil fuel assets, regional transmission... All of those are things we need, and all of those are things that in various parts of the country, one of the biggest reasons we're not getting those things fast enough, is because utilities are blocking them.David RobertsThis is one of this genre of podcast I think of as the "you should be madder pod", and people really should be madder about this. So it's kind of wild. So, anything that sort of like, brings cheaper power, and decarbonization, and customer empowerment, like all these things that are good socially, and environmentally, and economically, and politically, name it. Everybody wants all these things, except for the companies that control electricity which are out fighting them, which is just really wild. You know, like any widget maker is gonna go politically lobby against a ban on widgets, you know what I mean?Companies have, in our collective wisdom, we have decided that corporations are people, and have the right of free speech, and have the right to defend their interests, and whatever the propriety of that, it's a real thing. But, cannot make the point enough that utilities are not just another company, they're not just another private enterprise. So, give us that context too as well. Why? It's like, it's bad enough that the companies that control electricity are out comprehensively opposing better, cleaner, cheaper electricity. But these are not just normal companies, like, these are monopolies.David PomeranzYeah, they're basically state granted monopolies and that is a really important distinction. That's kind of everything. So, if you don't like the political position of some company that you buy some consumer product from, if you don't like the political position of a fast food company, you can buy your hamburgers from some other fast food company.David RobertsSo you don't like the behavior of a certain Tesla executive.David PomeranzPrecisely. You can buy an EV from some other car company. It's getting easier than ever. But if you don't like the political positions of your utility, first of all, you have no recourse. You have to buy electricity. In some cases you have to buy gas, for the time being at least. First of all, it's interesting you mentioned how in our collective wisdom, or at least the collective wisdom of the Supreme Court, we've basically created kind of, like, an anything goes campaign finance environment. And that's meant to, if you believe it, if you give credence to the logic behind those court decisions, like Citizens United, it's meant to protect the free speech rights of corporations. I disagree entirely with the construct, but that's the construct.What about the free speech rights of utility customers? Right? Like, if my utility is taking my money and spending it to sue the EPA, so that they can poison my air and water with impunity, that's political speech, you know? And I'm basically being conscripted unwillingly into an army of small dollar donors by my utility to fund that political speech. So there's case law about this. I'm not an attorney, but my First Amendment rights are being violated basically by compelling my speech. So that's one whole set of problems.David RobertsLet's just emphasize this real quick, because I don't know that we ever stated it clearly. But it is important for people to know that it'snnot just that your utility is out lobbying against your interests. And it's not just that you are a captive customer of that company and cannot get away from it, even if you disagree with its positions. It is also the case that the money you are being forced to give the company is being used for that lobbying. So you're not just an irritated bystander, you're literally paying for the companies to do this through bills that you have no choice but to pay. Which just seems like as straightforwardly.I mean, it's a little wild to me that there hasn't been lawsuits about this. It's a little crazy that we allow utilities to do this in the first place. I don't know what the positive argument is for allowing utilities to conscript their customers into being dirty energy lobbyists. Are there not lawsuits?David PomeranzThere have been some challenges and we're starting to see more of them. I think, like a lot of issues, this one kind of only rears its head and becomes salient when a lot of people start to talk about it. Utility political influence and regulatory capture kind of thrives in the shadows, and that's sort of the default resting state almost, like, if people don't talk about it, it just kind of grows and grows like fungus in the dark.David RobertsWell, it's kind of true of electricity generally, it's true of your utilities generally. You don't have to pay attention to that stuff.David PomeranzInterestingly, and this is a parallel to something you just talked about with Sage Welch on your show about gas stoves, there was more attention to some of these issues, like in the early 80s when there was a lot of skepticism and sort of public outrage about utilities for a lot of reasons. Electricity was expensive, it's coming off the back of Three Mile Island, and for a brief period, electric utilities were sort of treated more skeptically in terms of their political operations. And so, that's happened at other times in our history too, actually right after the stock market crash and the great depression in the late 1920s and early 1930s, which utilities had a big role in.There, at that time, was a massive degree of concern about the political power of investor owned utilities. A lot of that manifested at the time in this very big struggle between a much larger question of how we would serve electricity in the country, would it be investor owned utilities or public power, which you had FDR sort of pushing for public power, so they're... Detour. But a long way of saying, there have been periods in our history where people do pay attention to utilities political power, and there is a lot of outrage over it, and there tends to be legal action and legislation proposed and sometimes passed and regulation. But outside of those moments, it all kind of thrives in a lack of attention.My hope is that we are entering one of those cycles now, for a bunch of reasons.David RobertsYou would think, right? Because decarbon it is, like, existential threat, blah, blah, blah. Decarbon by 2050, blah, blah, blah. Like, this is here now. And imperative.David PomeranzYeah, now is the time for it. And one other thing I would just say quickly about that is, even if your utility is doing some good things, even if your electric utility has gotten the memo that it needs to decarbonize, maybe it's still fighting rooftop solar on the side, but at least it's switching from, you know, it's retiring its coal plants rapidly and switching to renewables, which some are. This corruption and political spending that they do, particularly what they're doing with ratepayer money, and what they're doing, that often breaks the law, that's really bad when it happens by the sort of, quote unquote, "better utilities" also, right? Because you have a bunch of opponents that clean energy transition, like fossil fuel companies and hardcore conservatives, who don't believe in climate change, et cetera, say they don't, they are all looking for a reason, in very bad faith, to criticize the whole thing. So if you have a utility who is investing in a lot of wind, but they're doing it via political corruption, that also presents a huge backlash risk. So it's kind of bad in all its forms and, as you said, the worst part is that we're being made to fund it.David RobertsYeah, I know. I think you could just say, and I think maybe you'd probably agree with this, it's just, it's ludicrous on its face, that publicly granted monopolies, who are providing an essential service that people cannot go without, are allowed to politically lobby at all. It's so familiar. I think we don't think about it, but it's just ludicrous that it's allowed at all. It ought to just be unthinkable. These should be technocratic nerds who follow instructions.David PomeranzJust as one small example of this, to put a fine point on it, you have all these, like, sports stadiums and concert venues around the country that are named like FirstEnergy Stadium or the Dominion Performing Arts Center. And once you see this stuff, I mean, once you sort of see the elements of the utilities political machine, once you know to look for it, you see it everywhere. It's like they're sponsoring every nonprofit, they're naming every venue after themselves. And part of what I think is so funny about that is like, why does a monopoly actually need to advertise?David RobertsExactly.David PomeranzThey're not competing for sales.David RobertsExactly. They are not going to lose costumers, by definition.David PomeranzRight. What does name recognition do for them? You can't leave them.David RobertsExactly. Why do they need to have PR departments at all? Customer service departments, yes. PR? Why, it is crazy.David PomeranzIt absolutely is. And that's a great juxtaposition because most of them have pretty poor customer service and massive PR departments. And that's where it can be hard to quantify and measure the full breadth of their political machine, but that is something we try to do at the Energy and Policy Institute. And when you look at it, they are among the biggest spenders in their states on everything, right? They're always among the top campaign contributors. They're among the top lobbying spenders. Their trade associations are among the best funded and wealthiest in Washington, DC where they do all their lobbying.And it comes back to that ratepayer question, right? In a perfect world, I think everyone would agree intuitively with what you just said, David. Like, why should they be allowed to practice almost any kind of politics at all, right? They're given this incredible privilege of getting a guaranteed profit margin and a monopoly. They should be essentially beholden to the will of our democratically elected officials. Not trying to shape it. But at a minimum, at a bare minimum, what we should do is make sure we get into some controls, to make sure that they're not allowed to supercharge and turbocharge that political machine using their customers money, right?That they're not allowed to hack off a few dollars out of your monthly bill every month and use it to pay for their public relations consultants, et cetera. And that is a relatively simple problem to solve with reforms. So that's what we're trying to lay out, how that can be done, in this new report that we wrote.David RobertsBefore we get to those specific reforms, and kind of the specific channels of utility influence, and how they might or might not be blocked with reforms, let's just take a brief detour for some storytelling. Because I think when people hear the lobbying is technically legal, as absurd as it is for it to be legal, but people should not take from that the impression that utilities are lobbying within legal bounds here. The fact that they are allowed to do this, allowed to use customer money to do it, is practically an open invitation to corruption and how they have answered the invitation.So let's talk about a few of the kind of higher profile examples that have come up in recent years. Because I think people, again, unless you really hear it put out plainly, it really boggles the mind, it beggars the imagination. Like, what they're doing is worse than anyone thinks. So, let's start with Ohio. I wrote a whole long thing about this and it was, what a rabbit hole! Like, every twist and turn you go, it's just nastier and nastier. But tell us what went down in Ohio.David PomeranzFor sure. This is a great time to talk about it. So, last week a criminal trial started for the former speaker of the House of Ohio, guy named Larry Householder. He is being charged with accepting bribes and being part of a racketeering scheme. Here's what happened. So, there's a large electric utility company based in Ohio called FirstEnergy. FirstEnergy for years had been trying to collect bailouts for some nuclear plants, and also for some of its coal plants that were struggling to make any money. They had tried with the Trump administration, they had tried with previous Ohio state governments, but they kept coming up empty and they found their guy in Larry Householder.So, what Larry Householder is accused of, and what I should note, this is very important since they're technically allegations for Householder until he's proven guilty, if he is. But for FirstEnergy, that's not the case. They admitted to everything I'm about to say in what's called a deferred prosecution agreement with the federal government, to avoid going on trial. So they paid $230 million and admitted guilt to all the following. They routed $60 million through different dark money organizations. So technically, these are 501c4 nonprofit groups, that do not have to disclose their donors, and FirstEnergy did not have to disclose giving them money.So it's kind of untraceable money that was then passed to Larry Householder. He used some of that just for his own personal use, which is what is at the center of some of the bribery charges. So, he like, used it to pay down a home of his, and he used it to pay for his defense in a lawsuit. But most of the money went to his political machine. So in 2018, most of that money went to elect a slate of republicans in Republican primaries that year in Ohio, that had sort of pledged their loyalty to Householder. They were actually in all these text messages that have come out through the legal process.They're referred to as the "team Householder" candidates. And through the political power that Householder gained through the election of a lot of those folks, he was able to win kind of an internal Republican struggle to become the speaker of the House. And in exchange, his payback to FirstEnergy was to pass a law called House Bill 6, which passed, it was signed by Ohio governor Mike DeWine. It offered over a billion dollars in subsidies to FirstEnergy's coal plants and nuclear plants. Did some other things that don't get as much attention, but are pretty important. Kind of did this fake decoupling scheme where, some of your listeners probably know, but decoupling is a policy where if a utility adopts energy efficiency measures, so its customers use electricity, they can be made whole from that. This was like one reporter in Ohio, Kathiann Kowalski, described it as a spoonful of sugar without the medicine. So basically it was like, if Ohioans use electricity, absent the energy efficiency investments, FirstEnergy would still get all that money back. And that's ended up being what happened through the COVID pandemic.So it was billions of dollars in handouts and bailouts to FirstEnergy. That's not even all of it. They also have, and FirstEnergy has admitted to this, they also paid over the last ten years, over $20 million to a guy named Sam Randazzo. $4 million of that came a couple of years ago, just before he was appointed as FirstEnergy's top regulator on the Ohio, the Public Utilities Commission of Ohio. And they have basically conceded, FirstEnergy has conceded that that last $4 million payment at least, was to influence his behavior as their regulator. And he was a big driving force behind passing HB 6.David RobertsThat's not a small amount of money for a dude, for an individual dude. These are not small bribes.David PomeranzNo, they're lots of money. And in this case, we don't always know, as this money sort of works its way through the utility accounting machine, like, where it originally came from. In this case, we know, thanks to some audits and some good investigative reporting by folks in various states and some people on my team, that this was ratepayer money, at least some of it was, went into this bribery scheme. And amazingly, not even just from Ohio ratepayers. So, at this point, it seems certain that FirstEnergy also took money from ratepayers of its subsidiaries in Pennsylvania, and New Jersey, and West Virginia, and Maryland. And all of that money kind of got hoovered into this machine and ultimately came out the other side, went to these politicians in exchange for these laws.David RobertsAmazing. If there's one thing that could be more irritating than your ratepayer money being forced to lobby your state politicians, its having your ratepayer money be used..David PomeranzSome other state politician.David RobertsFor corruption in some other state. You don't even get the benefits of the corruption. I think a lot of listeners probably were aware of this, or followed this, or read my piece about it a few years ago, or a million other pieces. It was really just to sort of put a pin in it. This is not one of these things where lines were pushed or like, it's impropriety. This is very straightforward bribery and corruption. It's almost like charmingly old school in a way like this. Like, checks being handed over.David PomeranzSometimes there are gray areas and blurry lines, but not on this one. And another day that, David Anderson is one of my colleagues who's kind of led our investigative work on FirstEnergy. He said something the other day that it's wrong for utilities to spend their ratepayer money on lobbying and politics. They're not supposed to do that. They're supposed to spend shareholder money on that, which we can talk more about, but they're not supposed to spend anyone's money on bribes. Like, that's just straight up illegal. And that's what happened with FirstEnergy in Ohio.David RobertsYeah, there are a bunch of examples in your report, and we could go through this all day, but I don't want to waste too much time. But just one other one, which I thought was also telling, is in Florida, which also involved a lot of very sort of straightforward interventions in the political system to get friendly Republicans elected.David PomeranzSo in Florida case, we're talking about a utility called Florida Power and Light. Also in the news lately because their CEO is a guy named Eric Silagy, who just unexpectedly announced his early retirement.David RobertsIt's probably fine. Probably nothing going on there.David PomeranzYeah, nothing to do with anything I'm about to say. So, unlike FirstEnergy, Florida Power & Light disputes a lot of this. But it's been reported out, and it's pretty airtight, and they've kind of been dishonest throughout the process, so I take pretty much anything they say with it the biggest grain of salt you can find. What FPL is accused of having done is, they were paying some, again, their political consultants, and these consultants then routed money. Again, you see a common theme here to these dark money 501c4 groups that they basically created for these purposes.And then, what those groups did was bankroll unaffiliated independent candidates for state legislative elections, who were designed to siphon votes away from candidates disfavored by the utility. In every case happen to be Democrats, not surprisingly.David RobertsSpoiler candidates.David PomeranzSpoiler candidates. And in Florida, this has been referred to as the "ghost candidate" scandal because these people, it's not like, oh, we're going to fund a green party candidate because we think that'll take votes away from a Democrat. But it's like, a real person who really wants to hold the office and for better or worse, is running. These are people who didn't do any kind of campaigning.They were candidates only on paper. In at least one case, the main attribute of the candidate was that they had the same last name as the democrat, which is useful if you're trying to knife and go to them. And it's pretty clear why they were doing this. That CEO who's resigning that I just mentioned, Eric Silagi, he said in an email to two other FPL executives, writing about one of the targets of this "ghost candidate scandal", a guy named Jose Javier Rodriguez, a democratic senator in Florida. He said, "I want you to make his life a living hell" to two other FPL executives. And it worked. That senator went on to lose reelection by 34 votes. So, in these state races that can have really close margins, this utility money has an effect, and that's just kind of the tip of the iceberg. FPL also, the same network of consultants and dark money groups and shady characters, they paid to have private investigators follow a newspaper columnist that had been critical of the utility. They paid for a network of these kind of fake news sites designed to spread utility propaganda.David RobertsMy goodness.David PomeranzThey were trying to buy out a municipal utility in Jacksonville. And allegedly, these consultants paid by FBL created a nonprofit to advocate for marijuana legalization, and then offered one of the city councilors who was most opposed to this FPL buyout, they offered him, like, a very high paid job with the fake nonprofit they just created. So it's really like a whole massive political machine.David RobertsPretty fucking devious though.David PomeranzIt's diabolical, man.David RobertsI guess if you're just getting millions of dollars to sit around in a room and think of fuckery.David PomeranzAnd that's literally what they do. I mean, in that sense, like other companies, this gets back to the monopoly business model issue. Like, other companies, their incentives as a business are to like, keep costs low, make better stuff, keep customers happy, grow revenues, whatever. All of the utilities profit is determined by the regulatory system, like by their public utility commissions, or appointed by governors and nominated by legislators, et cetera. So, their biggest incentive is to game all that. So that becomes the focus of the company. I mean, anything they can do. And, I think some leaders of some of these companies have maybe better ethical systems than others.But the incentive structure is for them to do anything possible, short of getting caught by law enforcement officials, to game the system in their favor. And so, we don't need to go through all the examples, it could be hours. But it's not just red states. It's not just Florida and Ohio. ComEd in Illinois, they got busted by the department of justice and paid a 200 million dollar fine for a patronage scheme with the speaker of that House. This has happened really all over the country, and I think people hear the first energy story in Ohio and think, "oh my God. Well that's got to be the bad apple". And I'm not sure that's true. I think they're the ones who were the most egregious and got caught the worst, but if it's a difference, it's maybe a difference of degree, but not of type. Most utilities are engaged in some version of this behavior.David RobertsJust to reiterate again, this behavior is not just lobbying. There's weird trade groups, there's dark money groups, there's weird public relations campaigns that are not traceable back to the utilities, there's advertising. It's really a full spectrum of fuckery going on. All of which seem sort of inevitable, based on the structural incentives. I'm sure these are a lot of scummy people involved, but if you set things up this way and make it legal for them to do this, of course they're going to do this. So one other question before we get to solutions is just insofar as these things get caught, are the punishments or the threat of punishment enough to deter future examples of this?Does anyone get strung up as an example or how far behind are lawmakers on this?David PomeranzVery far behind. Unfortunately. This is actually one of the main solution sets, is around deterrence and enforcement. But that's really a missing piece of the puzzle. And I'll give you an example of how broken this is in Ohio. Let's look at what's happened to FirstEnergy. Now, the biggest penalty they've probably actually had to pay is with investor sentiment, right? Like shareholders in the company are a little bit skittish and certainly their stock dropped after the scandal, after this CEO of Florida Power and Light just announced his unexpected retirement. Next area of the parent company, their stock dropped by about 8% that day.They may recover some of that or all of it, but they do have some price to pay on Wall Street because investors I think the sort of unspoken secret among utility investors is they see regulatory capture and utility political power as a good thing right up until the point they get caught. For them, it's like, yeah, of course we want you to control the political environment. We want you to have the Euphemism is like, good relationships with your regulators. But they don't I think they kind of are happy to hear encino evil in terms of how that happens, but they certainly don't like when it leads to, like, FBI raids and Department of justice investigations.So there is a price they have to pay there, but the bigger price ought to come from the political system, and that has not happened. So just taking a look at FirstEnergy a rational response to what they did in Ohio, which was essentially a full scale takeover, a full scale purchase, essentially, of the legislature that's supposed to be democratically elected. I think a rational proportional response to that would have been at least exploring the idea that First Energy should should lose its charter to operate, like should lose its monopoly, find another utility that can provide those services to Ohioans. Because I would argue First Energy has lost the right to be considered for that.That would, to me be a rational response.David RobertsIt's hard to think of what would justify that if not this.David PomeranzI agree.David RobertsWhat would be worse? I mean, totally.David PomeranzAnd no one with power has proposed that. I mean, people like me talk about it all the time, but no one in power to do it in Ohio has proposed that. Instead, what we've seen is really a complete abdication. First of all, they haven't even fully addressed the law that was passed via these corrupt means. So the nuclear subsidies were rolled back from HP 6, but not the coal subsidies. Those are still rolling. That law I didn't even mention it before, but that law also stripped the very meager sort of renewable incentives or renewable performance standards in Ohio.David RobertsI remember.That hasn't been returned. So they didn't even address kind of the law that was bought with it. But in terms of consequences, there's been almost nothing. The Public Utility Commission of Ohio, they say that they have some ongoing audits and investigations of FirstEnergy, those are on hold until the criminal investigations are over. We'll see what comes of that, if anything. Interestingly, they did have to pay this $230 million payment to the Department of Justice to avoid prosecution. But we should just put that in perspective. The company made $11 billion in revenue in 2021. $230 million is significant, but it's less than the ill gotten gains they got from HP 6. I mean, that was billions in subsidies.Way less.David PomeranzJust as one indicator of how broken our enforcement machine is on this stuff. Interestingly, before the HP 6 news exploded, like, before there were indictments and criminal charges, FERC, Federal Energy Regulatory Commission, they had just started an audit of FirstEnergy's Accounting practices. And not surprisingly, in that audit, FirstEnergy did not disclose to FERC the portions of the Excel spreadsheet that showed the bribe payments. They sort of left that out. So just a few weeks ago, actually, FERC announced that it was finding FirstEnergy for violating its duty of candor obligation with the commission, because when you're audited, you're supposed to provide all those documents.They didn't tell auditors about $90 million in lobbying expenses, 70 million of which were dark money payments involved in that bribery scheme. For that violation, they fined FirstEnergy $3.9 million.David RobertsOh my God.David PomeranzAnd they said, well, this is kind of a fair and equitable fine based on our practices, but that's $4 million.David RobertsHouseholder got more than that. Personally, bribes, never mind the rest of it.David PomeranzIt's a $4 million penalty for lying, about $90 million, much of it spent on a corruption scheme that netted billions for the company. So to call it a slap on the wrist is kind of an insult to slap on the wrist. And the way regulators treat this right now, it's interesting. Public Utility Commissions and FERC actually have a lot of statutory power to fine utilities. That is like a key component of what it means to be a utility regulator is that, if you want to, you can penalize them. FERC has authority to find violations that utilities commit in its jurisdiction up to a million dollars a day for every day that they're in violation.But they almost never use this authority. I mean, occasionally FERC will use it in cases of really, really egregious market manipulation. But on this stuff, I'm like lying or sort of quote unquote, "mistakenly charging customers for political expenses", that's almost never fined very, very rare cases, and the fines are very small. And when they do catch it, what they say is like, okay, well, you got to refund the money to Raypayers. But that's sort of like telling somebody who robbed a bank if a cop caught a bank robber mid act and said, "Oh, you know what? Just put the money back in the vault and we'll call it a day". That's basically the way regulators treat this kind of misbehavior. So there's almost no deterrent.David RobertsWhich is to say, even from the perspective of today, what FirstEnergy did was perfectly rational and business positive. And if I were a FirstEnergy investor, I'd be like, "Nice work, do it again". There's no reason not to do it again. They get so much more out of this than anyone penalizes them for, even if they are caught. So in terms of maximizing shareholder returns, it just seems like perfectly rational behavior on their part.David PomeranzAnd they're the ones who got caught, which is the minority, I think. Obviously, we don't know what we don't know.David RobertsRight.David PomeranzBut FirstEnergy, at least had to suffer some consequences. Like they've gone through two CEO, they fired the CEO who was responsible for much of this, and the next CEO didn't hold his job terribly long, they've had some board turnover.David RobertsI'm sure those guys are suffering, David. I'm sure they're on the soup line now, regretting their choices.David PomeranzThat's a great point. But to the extent they've had any consequences at all, it's only because they got caught and other utilities are not, or they're caught doing things that are deemed to be just on the right side of legal. So, as an example, Michigan Utilities, not caught in as much attention because there haven't been criminal charges, but they've spent tens of millions of dollars on dark money operations to control the political environment in their state and even in others. I mean, DTE Energy is a Detroit based energy company. They own some biomass plants in California as part of their unregulated part of their company.And they routed money through a dark money group, which ultimately ended at a national laboratory, which put out a report talking about how those biomass plants would be great candidates for carbon capture and sequestration, which is what DTE is trying to do. So none of that has been prosecuted. None of it's been caught. We've tried to expose some of it. Sammy Roth at the L.A. times wrote a great story about that scheme. And and I should say, by the way, just quickly, as an aside, there are reporters around the country who are working tirelessly to expose this kind of corruption.Too many for me to name individually, but they're really doing an incredible service to not just energy customers, but to democratic institutions that these utilities are undermining. But your central premise is, right, just a newspaper article or two. And even when there have been criminal prosecutions, the consequences are too low to deter utilities from doing this. And part of the reason we know that's true is because they keep doing it.David RobertsYeah, proofs in the pudding. So with our time remaining, then having griped about this, which is deeply gratifying to me, as you know, griping about this for many years now, let's talk about what can be done. Obviously, in a sane world, in a country with an operational federal apparatus, which you'd like to see is Congress to act, right? I mean, Congress could just write a law saying utilities can't do this anymore, period, full stop. And that would be nice. As we know, Congress doesn't work, et cetera, et cetera. Half of them are bought by utilities filibuster, on and on, usual.So we're left basically looking to either federal agencies, that Biden can control, or state governments. So what can those entities do that would have some actual bite and then some effect?David PomeranzYeah. A lot, thankfully. So that's what our new report is about. And usually the stuff that we do at EPI is just kind of like, try to expose and document all these problems. But we've been spending so long doing that, and it does seem like people care that we wanted to at least take a stab at saying, here's what we can do about it. And there's basically three things. One is having utility regulators. So this is mostly Public Utility Commissions simply pass rules and clarify the existing rules to close all these loopholes and just make clear that utilities cannot spend their ratepayer money on any kind of political influence activity and then define that activity really clearly.By the way, if you ask utilities right now, they would say, "Well, we don't spend any ratepayer money on politics. We certainly don't spend any ratepayer money on lobbying." But that's just sort of fun with words, like, the way they define lobbying as the narrowest possible definition. And even then they're not actually following those rules, which we can get to how you prevent that problem. But the first thing is to make those rules airtight. So define, Public Utility Commissions can define all of these different kinds of politics lobbying, PR machines, advertising, political advertising, regulatory lobbying, where you're going to regulators and asking for stuff, all of it, and say you cannot use customer money for that.If you want to do it, you can do it out of your own profits.David RobertsTwo things. One is, so any PUC can just do this now. PUC has the regulatory authority to just do this. Now, my only question is how easy is it to distinguish utility ratepayer funds from utility, I don't know, like investor...David PomeranzProfits? Yeah.David RobertsProfits. I'm sure there are all sorts of ways of muddling those.David PomeranzThere are. And that's what happened in the FirstEnergy case. I won't bore you all with it. But the answer, is it's hard to distinguish. And so that's what gets into the second leg of this tool.David RobertsI mean, why not just say don't do it at all with anybody's money?David PomeranzThat would be the perfect world. So that is something that a public utility commission couldn't do by itself, but a state legislature could. And we've seen some efforts at this. I think it's politically a bigger lift, but that doesn't mean it's not possible. There's nothing stopping a state legislature from trying to say "Utilities are different from other kinds of companies, and we think they shouldn't spend any money on politics". And clearly define what that means. Usually in the wake of big scandals, there have been some legislators, state legislators, who have proposed bills like that, like after utilities in South Carolina tried to spend billions of dollars on a nuclear plant and just built the world's most expensive piece of pipe art.There were some legislators who proposed bills like that. I would love to see more of it. I think those kinds of bills will run into challenges in the courts, given our current campaign finance rules, but they're worth trying. And I'm not a constitutional law scholar by any means but there is reason to believe that, I think there is legal justification to treat utilities different than other companies when it comes to campaign finance.David RobertsI mean it's an interesting legal question because utilities sit in this really weird ontological space like they're companies. They're kind of private companies, kind of not, kind of public, kind of not. Has it been hashed through the courts whether they have all the same rights of expression as truly private companies?David PomeranzI don't think it has. I'm going to get out over my skis pretty quickly talking about legal stuff. But one thing I will say, interestingly, just as a note, that maybe will pique folks interests, in the Citizens United case, the liberal justices in their minority opinion argued that the framers did not think corporations should have kind of unfettered speech, and they're different from human beings free speech rights. And of all people, Justice Scalia's rebuttal to that. He actually said well when the framers said that kind of stuff they were talking about state chartered monopoly corporations and that might be true for them, because, at the time, we had, that was common then, corporate structures were very different 300 years ago.So comments like that do sort of open the door of this tantalizing question like, should there be legal efforts to try to treat monopoly utilities as fundamentally different? Like you said they operate in this different space., they're not like other private free market companies. Should they be treated differently from a campaign finance perspective? And I think if there are constitutional lawyers who are listening to Volts I hope they will explore that question because it's ripe for that.David RobertsBut don't you just think like whatever the legal merits, our Supreme Court will end up getting it and doing whatever is corporate friendliest regardless of the legal merits? I mean, law feels so futile these days.David PomeranzYeah, well I'm certainly not optimistic.David RobertsBut PUCs are squarely within their rights to say "Don't use ratepayer money".David PomeranzYes, absolutely. So that's sort of why we start there, it's just because it requires no systemic changes, no constitutional challenges, it's really simple for PUCs to say "No ratepayer money on politics".David RobertsAnd that is because, by law, utilities are supposed to spend money in whatever the most just and reasonable.David PomeranzReasonable. Exactly.David RobertsAnd so this would be under that provision basically saying it is not fair and reasonable to spend money this way.David PomeranzThat's exactly right. And then the challenge becomes, as you said, okay well, we can say that but how can we tell which money is very fungible? How can we tell which pot of money this political activity is being funded by? And so that requires basic transparency and disclosure reforms. So, right now, if you want to know whether a utility spend ratepayer or shareholder money on a given activity, the process basically is to wait for the utility to go in for a rate increase, and then there's a sort of quasi judicial rate case. And if you have money and can hire a lawyer, you can intervene and get status to be an intervener in that rate case, and then you can ask discovery questions with the utility and try to find out how that activity was funded. Now, to be clear, like groups do this. Earthjustice, they do an incredible job of that around the country. Sierra Club does that. Consumer advocates in every state try to do that. They're trying to protect consumers from that, but they're totally outgunned. And some utility companies don't have rate cases for five years or longer. Alabama Power in Alabama, they haven't had a legally contested sort of open rate case with public intervention since 1982. So who knows what they're spending money on.So what we need is basically, the solution to this is having annual line item granular disclosures that utilities are made to file with the PUC in all of these areas. So anything that is vaguely political, or even adjacent to political, PUCs should be requiring them to basically submit a spreadsheet every year that says what they spent, where the money came from. And then you can kind of check. So that the first step is to make sure the rules are strong. The second step is to have these disclosures, so that you can verify that companies are following the rules.And the third step is enforcement. So this is what we talked about before, so I won't dwell on it. But if you make the rules strong, so the utilities know them and they can't say that they screwed up by accident, and then you have the disclosures, so that members of the public or regulators can catch if they screwed up, and they did screw up, or they did break the law and they charged ratepayers for some political activity, then there have to be consequences. Otherwise there's no deterrent. And those consequences should be severe. So we're arguing, like, if a utility takes a million dollars of ratepayer money and spends it on, you know, what political trade association or some kind of politics that they're not supposed to, they should have to return that money, and then be fined, like, at least that million dollars and probably a lot more to make the deterrent adequate. So those are kind of the three steps. We've got better rules, better disclosure, better enforcement.David RobertsRight? And is enforcement, at least what's available today that we know works, is that mostly just financial? Is that mostly just fines? Are there other potential consequences? Because for a company like FirstEnergy that's doing billions of dollars of business and lobbying on behalf of billion dollar nuclear plants, there's just unfathomably large amounts of money being deployed here. And I'm just trying to imagine the size of fine that would compete with those amounts of money for their interest in there. You know what I mean? Can fines even get big enough?David PomeranzIt's a really good point. Well, I think one answer is let's try some really big fines and see how they work.David RobertsLet's give it a world.David PomeranzLet's give it a college try. But I do agree with your premise there that some corruption, some kinds of behavior, are so bad enough that it is hard to imagine a dollar figure that could adequately deter, especially when they're all counting on not getting caught. And so, in that case, I do think this probably would be something that a legislature would need to do and would be difficult for a PUC to do unilaterally. But I do think in cases like FirstEnergy, public officials in Ohio ought to consider whether the company should be allowed to continue to operate in its current form there. So that can all be part of enforcement as well.David RobertsWhat about a legislature saying "This balance of public and private that we tried in investor owned utilities clearly isn't working, so we're just going to make you public, make you into a public utility". Has anyone tossed that out there? Is that even on the table?David PomeranzI think so. People are talking about that. I mean, there are movements of people where I live, for instance, in California, who's basically suggested it's a little bit different than these political issues, but they've basically said that PG&E's criminality with regard to starting these devastating fires has been so bad that the only solution really is to have them be converted into a public power entity. There have been similar efforts like that in different pockets of the country. There's one ongoing right now in Maine, and a lot of that I think is inspired by this problem. If you talk to advocates of public power, they will say that we just can't trust these investor owned utilities to not run these political machines that threaten the integrity of our state government. And I'm very sympathetic to those views. I'm not sure if that solution will work at scale everywhere. And it's also worth noting, like public power entities aren't perfect, they also require good governance and good accountability. All you have to do is look at TVA.David RobertsI was going to say, and they don't necessarily perform better. I always sort of caution people about that. Like, the issues that dictate good or bad performance don't necessarily line up with public and private. But it does seem like, at the very least, if it was a public utility, it would have less structural incentive to cheat and lie. Do you know what I mean?David PomeranzI think that's true. I agree with that. And so I think that option should be on the table in places where that makes sense. I'm all for people pushing for it. It's a much bigger lift, obviously.David RobertsYes, all of this is pretty tough.David PomeranzIt is. Although, just to back up to some of these changes that would be easier for a single public utility commission to do, or a single state legislature. The kind of stuff that we're outlining in this report, I don't think it would solve every single problem when it comes to utility political machines. But something is better than nothing. The status quo is pretty bad. So let's start trying things. And these are all doable within the current system. Some of them are being explored now. So just as some bright spots, some examples. The New York state legislature recently passed a law that banned utilities from charging ratepayers for any trade associations that lobby.I think that's progress. FERC has an open proceeding. So, inspired by a great legal challenge from the Center for Biological Diversity. So yes, who's doing lawsuits? Who's doing legal challenges on this stuff? Center for Biological Diversity has an energy justice program with great lawyers that are doing some of this. So they petitioned FERC to take a look at some of this, and FERC opened an inquiry, they got lots of comments. Everybody other than the utility said, "Yeah, we need some accounting changes and some new rules and some better transparency to prevent utilities from charging customers for trade associations, for politics, for their politically motivated charitable giving, for all that stuff".Interestingly, even people who I don't agree with about anything agree on this. Like oil companies actually as electricity customers, weighed into the FERC docket and said, we would prefer not to pay for their lobbying. Also that happened, and FERC can act at any time. So you mentioned through federal agencies, FERC is meant to be independent, for commissioners are appointed by the President, but they don't act in his direction. But FERC can do this anytime they want. They've had this notice of inquiry proceeding. It's been responded to by all parties. They could draft a rulemaking that makes it harder for utilities to supercharge your political machine on rates.And there are some individual public utility commissions who have disallowed some things, who have done some aggressive disclosures. So we point out those examples in the report. People should check them out just to show like this is possible. And our hope is that more PUCs and legislators start proposing these things and we'll see what comes of it.David RobertsIf you're just a listener out there and you didn't realize how bad this is and are now mad per the you should be mad or about this episode, they just listen to what can people do? Is there a particular organization that's working on this? Or is it just a matter of contacting your own state's PUC or writing your legislature? Is there a place to sort of centralize this work that people can go just support?David PomeranzGood question. Well, they can learn more about it at our website. So that's energyandpolicy.org. We focus pretty heavily on this stuff. In terms of groups that are taking action, I'd recommend a couple Center for Biological Diversity, as I mentioned, they are doing some great legal work on this. There's a group called Solar United Neighbors who works with rooftop solar advocates and customers, but they have operations in a lot of different states, and they have a national advocacy program, and they are invested in creating some of these kinds of changes. And then if you're not sure, like, those groups have ways in for you where you live.The Sierra Club is involved in Public Utility Commission proceedings in most states, and they're very much invested in attacking utility political power. So that's another organization that folks can check out.David RobertsYeah. And worth saying again, as I've said so many times over the years, PUC meetings are pretty sleepy. You're not going to be standing in a long line to get in one of those. So a little bit of noise goes a long way. Especially relative to a lot of other places you could make noise, like, they don't get a lot of noise there, so they care.David PomeranzI couldn't agree more. These parts of state government that are responsible for regulating utilities, they're not very well known. And for people who want to become active, they can do a lot as a single person. I'll give a shout out to one activist in Arizona, a woman named Stacey Champion, who pretty much working independently, she's a very skilled person, but she didn't have lots of backers or anything really helped to bring Arizona Public Service, a utility that was behaving very badly in that state, to heal over the last years just by getting lots and lots of attention and doing great organizing work and campaigning.So it is a place where people can make a difference and everything's harder alone. So they just kind of need to find some people who are willing to work with them on it.David RobertsAwesome. Okay, well, thank you so much for coming on and walking through this. It's like with so many things like you, listeners, probably vaguely know that it's bad, but it's way worse than they thought. So, David Pomeranz, thank you for coming and sharing this with us.David PomeranzThank you so much for having me.David RobertsThank you for listening to the Volts podcast. It is ad free, powered entirely by listeners like you. If you value conversations like this, please consider becoming a paid Volts subscriber at volts.wtf. Yes, that's volts.wtf so that I can continue doing this work. Thank you so much, and I'll see you next time. Get full access to Volts at www.volts.wtf/subscribe

Will widespread electrification of the US personal-vehicle sector inevitably be accompanied by a huge rise in environmentally destructive lithium mining? Not necessarily, says a new report. In this episode, lead author Thea Riofrancos discusses options for reducing future lithium demand through density, infrastructure, and smart transportation choices.(PDF transcript)(Active transcript)Text transcript:David RobertsThe transportation sector is the leading carbon emitter in the US economy, and unlike some other sources, it is on the rise. Decarbonizing it is inevitably going to involve wholesale electrification of personal vehicles. We're going to need lots and lots of EVs. That’s going to mean more demand for minerals like lithium, which is mined in environmentally destructive ways and almost everywhere opposed by local and indigenous groups. But lithium can be mined in more or less harmful ways, depending on where and how it’s done and how well it’s governed. And the number of EVs needed in the future — and the consequent demand for lithium — is not fixed. The US transportation sector could decarbonize in more or less car-intensive ways. If US cities densified and built better public transportation and more walking and cycling infrastructure, fewer people would need cars and the cars could get by with smaller batteries. That would mean less demand for lithium, less mining, and less destruction.But how much less? That brings us to a new report: “Achieving Zero Emissions with More Mobility and Less Mining,” from the Climate and Community Project and UC Davis. It models the lithium intensity of several different pathways to decarbonization for the US personal-vehicle market to determine how much lithium demand could be reduced in different zero-carbon scenarios.It’s a novel line of research (hopefully a sign of more to come) and an important step toward deepening and complicating the discussion of US transportation decarbonization. I was thrilled to talk to its lead author, Thea Riofrancos, an Andrew Carnegie Fellow and associate professor of political science at Providence College, about the reality of lithium mining, the coming demand for more lithium, and the ways that demand can be reduced through smart transportation choices.Alright. Thea Riofrancos, welcome to Volts. Thank you so much for coming.Thea RiofrancosThanks for inviting me.David RobertsI've been meeting to get you on forever and waiting for the right occasion, and this is just a humdinger of an occasion here, this report. It's right at the nexus of, like, a lot of things I cover a lot, and a lot of things I feel like I should cover more, bringing them together. So before we jump into the details, I just want to take a step back and summarize the report, the framing of the report as I see it, because I've seen and heard some media coverage of the report, and I'm always just a little frustrated by how other journalists cover things.Thea RiofrancosUnderstandably.David RobertsIt's just this weird oblique... they don't take the time to sort of say, "what is the main thing?" Before getting on into weird little side questions. So I'll just say, as I understand it, the premise of the report here is we need to decarbonize transportation, yes. And electrifying vehicles is a huge and unavoidable part of that and extracting a lot of lithium is an unavoidable part of that. However, and here I will quote the report, "The volume of extraction is not a given. Neither is it a given where that extraction takes place, under what circumstances, the degree of the environmental and social impacts, or how mining is governed."So the idea here is: yes, we have to decarbonize, we have to electrify, we have to electrify transportation. We need electric vehicles, but there are better and worse ways of doing that, more and less just ways of doing that, more and less lithium-intensive ways of doing that, and we should do it the best way we can. Is that fair?Thea RiofrancosThat is fair. And you've also quoted one of actually my personal favorite lines of the report, because I agree with you that it really gets at the heart of what our goals are, the kind of questions that we're asking, and also this desire to align goals that might seem in tension with one another, right? Which is rapid decarbonization on the one hand, and on the other hand, protecting biodiversity, Indigenous' rights, respecting other land uses, and those can feel—and to an extent, materially are—in tension with one another in specific instances. But our goal was to say, "Is there a way to have it all from a climate justice perspective?"What's the win win? Or what's the way to get away from at least a sort of zero-sum framing?David RobertsRight. Or just a north star, a way to look, a goal to pursue rather than just sort of this binary notion of we're going to electrify transportation or not. There's just a ton of room within that to do it in different ways. So that's the main thing here. We're thinking about how to decarbonize transportation in the best possible way, where it's both rapid decarbonization and as just as possible and as light on the Earth as possible. So within that, you sort of take as your primary metric: lithium. You compare scenarios based on their lithium intensity. So maybe let's just start there and you can just explain to listeners why choose lithium as your sort of central metric?Thea RiofrancosGreat question. Because one could imagine this report being replicated across a whole host of transition minerals, and I actually hope that it is, right? I do see this as a kind of opening to a research agenda that we hope is malleable in other sectors as well. Why lithium? Maybe let's zoom out a little bit and just say how urgent it is to decarbonize the US Transportation sector, right? And so that's why transportation which we can talk about more later, of course.David RobertsYeah, I think in the latter half we're going to get into transportation and US Transportation all the stuff.Thea RiofrancosIt helps us sort of understand why the battery and the battery helps us understand why lithium. So I'll just treat it in that order briefly, which is transportation sector number one, and main steel sort of rising emissions sector in the US, right. In order to decarbonize that sector, there's lots of forms of transportation. We're focusing on ground transportation here. And the prevailing technology for decarbonizing ground transportation is the lithium ion battery. That may change in the future, and I'm happy to sort of entertain that. We can talk about it if we want. But right now, in terms of commercial viability, scale, and just the actual material production that's going on in the world, it's the lithium ion battery.When we sort of dig into those batteries, and I know you've covered batteries on prior shows, there's a whole set of different minerals and metals used in the cathodes, the anodes, the separators, et cetera. Lithium is central, though. Lithium is the kind of non-substitutable element in that recipe. You can go to different cathode chemistries that do or don't use nickel, that do or don't use cobalt, et cetera, right. The iron phosphate versus the NMC. And those have different benefits or drawbacks in terms of energy density, power density, et cetera. But lithium is in all of them right now.And so lithium felt like a good first cut, a good sort of catch-all. I'll also say that we expect that if we overall focus on reducing the raw material needs of the energy transition, those benefits carry on beyond lithium, right? A lot of our suggestions would also reduce mining of other materials, including those outside of the battery, right. Like copper, if we look at the broader car. So we chose lithium for those reasons. One other thing to sort of note is that lithium has also been a particular target of a range of public policy and corporate strategies over the past couple of years, right.I hate to kind of use imperialist language, but I'll just use it because it's how the media frames it. Right, there's like a scramble for lithium, a rush for lithium, a lithium boom. It's considered essential and strategic by public and private sectors in ways that are also making it sort of a laboratory of new corporate and public policies. And so that's another reason to focus on lithium.David RobertsYeah. Kind of an early indicator of how these institutions will approach decarbonization more broadly or materials more broadly.Thea RiofrancosAbsolutely. And playing into that and also kind of a result of that at the same time is like the crazy price volatility with lithium over the past few years. And maybe volatility is not the best way to put it, because it's been just consistently rising. Over the past decade it's been super volatile, big crashes, big booms, and busts. But in the past few years, we've just seen steady increases, getting to the point of historic highs last year. So lithium is now a huge factor in the price and affordability of batteries, which are in turn, the main and most expensive component of an EV. So from a totally different angle, we care about how much are batteries an EV is going to cost, and why? What is their cost structure? Lithium is like a good place to look as well.David RobertsLet's talk about lithium, then. Let's just start with... because it's funny, prior to EVs, the lithium market was looking from the perspective of what it's going to be in a fully electrified world, pretty sleepy, kind of backwater market. And it's one of many things in the energy transition world that is sort of quite suddenly being expected to 10x itself. So let's just start with the lithium market as it exists now. Where does it come from? You say there are four main countries where lithium is mined. We should say—most listeners probably get this—but we should just say lithium, the raw material is spread pretty evenly all over the world, but it's mined in very specific places.So talk about where those are.Thea RiofrancosYeah, with a lot of extractive industries, but really very much so with lithium, the map of deposits or of underlying existing lithium in the Earth's crusts or oceans is totally distinct from the map of production, right. The map of production is a really small subset, so that's important to keep in mind. But where it's currently mined is Australia, Chile, China and Argentina. Those are the top four. Those have been the top four. They've actually jockeyed and sort of changed positions at different moments over the past few years. But those have been the top four. They are the top four, and they will sort of be the top four for at least the next few years, right. Mines take a long time to build, which we can talk about if we want, so that's not going to instantly change. But I foresee that in the next decade thereabouts, we're going to have some different players on that top, and it'll be more like a top ten list rather than a top four list, right. But that's where it's mined now.And one other interesting thing about lithium—we don't have to get too nerdy about lithium per se—but it's a weird element because it's a very reactive metal. So you don't find it as a metal in nature. You find it in all these heterogenous compounds, right. So there's lithium-bearing clays, there's lithium in geothermal brines, there's lithium and non-geothermal brines, there's lithium in the spagamine, there's lithium and other types of hardrock deposits that haven't actually been mined so much yet, but will be on the horizon. There's really low concentrations of lithium in the ocean. I don't see that as per se the next frontier, but it's there. So there's lithium comes in all forms, really, and each of those has, like, different extractive techniques, different environmental impacts, x, y and z, but it's really variable.David RobertsOne of the things that follows from that, from it being reactive and thus not found in pure form, is that whatever it is you're digging or hauling up, you then have to do a lot of processing to it to get the lithium out, which is tends to be the gross part. So let's get nerdy a little bit. There are two main mining techniques you talk about in the report, hardrock and brine. Let's just briefly go through those. So, like, hardrock is in, as I understand it, Australia. Tell us what hardrock lithium mining looks like. Just like, what's the process?Thea RiofrancosThe nice thing about this form of mining from a listener's perspective is it's much more like every other form of mining that we're familiar with, right? So we're removing large quantities of hard rock. This is in Western Australia. That's where the lithium assets are there. And then there's a basic level of processing that happens in Australia which separates out what is considered waste rock, right, from where the lithium is in higher concentration. And then pretty immediately, the vast majority, like 95% of still relatively unprocessed lithium is then sent over to China for further processing and refining. And then that enters rather directly into, of course, their battery production.David RobertsAnd then there's the brine technique, which is grosser, I think, fair to say. Maybe just briefly describe what it means to have lithium and brine and what it involves getting it out.Thea RiofrancosI had the opportunity to see some of the brine operations in Nevada. I got a very cool mountain view of them when I was actually looking at the Rylight Ridge Project. And that... if you sort of hike around a bit, you can look at the Silver Peak brine production in Nevada, which is the one lithium mine in the US now in production. So we have brine in the US We also have Brine in Chile and Argentina and elsewhere in the world. So, Chile is a place that I've done a lot of research, but the processes are quite similar in Chile and Argentina, and actually also in Nevada.In fact, the way that brine is removed and evaporated—which I'll get into in a moment—in Chile, was first developed in Nevada and kind of exported to Chile. So there's kind of an interesting whole story of, like, US Chile mining relations in both lithium and copper, where there's been a lot of back and forth knowledge and technical expertise and that sort of thing. So, anyway, in Chile, you have the oldest and driest desert on Earth, in a way that driest place on Earth, except for some subregions of Antarctica. So it's extremely dry. But the oldness is important because there's a huge amount of scientific value in the kind of evolutionary processes and the origins of this desert that are worth thinking about while all this mining is happening and sort of destroying some of those landscapes.So, right now, mining for lithium happens in the Atacama Salt Flat, which is in the Atacama Desert. That really old, dry desert I just mentioned. And the salt flat is enormous. I live in Rhode Island, the state of Rhode Island, which is a very small state, but the Atacama Desert is like two-thirds the size of the state of Rhode Island, right? It's very big, and it is like just breathtakingly beautiful and strange and with a very rich, both natural and indigenous history. And so when you're standing on it, you are in this very unusual landscape that's gray and white and those kinds of shades ringed with these towering Andean mountains.So I don't know if you've been had the privilege of going to the Andes, but these huge...very tall mountains, right, very dramatic, some of them are volcanic, right? So that's the kind of landscape the surface is a very crusty kind of surface, but it's not barren. So when you're walking around, especially in, like, ecological preserves and places where there's been good conservation, there are these surface lagoons and there are beautiful flamingo species that are endemic to the region that are just chilling out in the lagoons because they, with their filtered gills, kind of just suck up little species that live in the salty hunter water there. And that's how they survive.And so there's a whole ecosystem that relates to the salt flat, and there's a lot of migratory birds, as well as other animals. Underneath the salt flat at various depths, right, there is subsurface brine deposits. So these are deposits of extremely salty water—much saltier than the oceans—that within them have various kind of valuable minerals suspended. And one of those is lithium. And so the basics of the way this works is that the subsurface brine is pumped to the surface. You can think of like a giant straw or whatever, just kind of any well-pumping system pumped to the surface and then it is arrayed in these enormous evaporation ponds. And it is moved from pond to pond with different chemicals being added, removed such that to reach maximum lithium concentration. But what's most important is actually the work of just solar radiation, because in addition to being the oldest and driest desert on Earth, in general, this desert is considered like a poly-extreme environment. That means it's super dry, but it's also super sunny, and it's super windy, right? It's just like the super high altitude. It's everything. And all of those conditions are very auspicious for the evaporation of brine, right. If you're going to put water out in a desert like that, it's going to be thrown up into the air very quickly.David RobertsIt's funny, I was reading about this and I got to the part where, you know, I knew that the brine was down there with these elements in it, and I was thinking like, "Well, how do they, you know, reduce it down to the elements?" And it's like they throw it in a big pool and let it sit there for a while and come back to it. It's weirdly...low tech, but also weirdly like space inefficient just like big, sprawling, all that fluid sitting out in the sun. You just need giant swaths of land for this.Thea RiofrancosAbsolutely. You need a lot of land. And then there's a question of, well, we're throwing water into the air in one of the driest desert or in the driest desert on Earth. What is the implication of that? Of course, what mining companies will say is, "It's brine, not water." But what scientists that I've spoken to and read have will say is, "Well, the water and the brine are actually connected in ways that we don't even fully understand because there hasn't been quite enough research on it." But the subsurface water system, they are porous boundaries. How porous they are is a subject of scientific debate between underground freshwater, which is absolutely essential to human life, to animal life, to other industries, right. Porous interfaces between that and then the subsurface brine.And so the question is—and this is the real point of scientific debate—is whether pulling out that brine is actually pulling down the freshwater through the forces of gravity and nature of pores, a vacuum and the whole thing. But also because the downward pressure in the nucleus of the salt flat creates a depression, which further pushes down the brine and also potentially further pulls down the water at the edge, the freshwater. So there's a whole complex kind of desert hydrology.David RobertsAnd in terms of environmental impacts, let's just talk about what's nasty about it. I mean, I think people can get sort of a picture when you're digging up big pieces of land, you're using lots of land for these evaporation pools. Presumably, when the water evaporates, it's not just lithium left behind, right? There's all sorts of other stuff. What happens to all that other stuff? What is the sort of environmental risk here?Thea RiofrancosRight, so there is like, piled up waste salts that are left behind. The companies will say those aren't toxic, but physical waste being removed from underground and piled around in a place that nature did not intend it. I think the most important thing, though, is what I was just talking about, which is the watershed, because this watershed is already exhausted. And that's a technical definition, not just me being an environmentalist. Like it's called exhausted by the Chilean water agency. And there are multiple reasons for that. There are multiple compounding factors. I will definitely call out the copper industry as being the worst.The copper industry uses so much fresh water that they've had to switch to desalination plants because there's not enough fresh water. And they have built the largest desalination plant in the world, I'm pretty sure, to serve one enormous copper mine in Chile.David RobertsWild.Thea RiofrancosAnd that desalination plant is on the coast, obviously, the water is desalinated there from the seawater, then—where very energy intensive process—polluting. And then that water is shipped to the highlands where the copper mines are. So that's the number one impact on freshwater is how it's been exhausted, a lot of it because of the copper industry, which is in the same location.David RobertsAnd copper, we should also maybe just say, as a side note, also expected to rise considerably...Thea RiofrancosDramatically.David Roberts...under clean energy.Thea RiofrancosRight. Because of the copper wiring in the cars, the copper wiring and the transmission lines, the charging stations, our whole, "electrify everything" is very copper-dependent under current technologies. So there's that. There's climate change, which is further desert-ifying—I don't even know how to pronounce that—the desert, right? Like it's making it drier. So there's that issue, and then there's agriculture, there's human consumption, and there's lithium, right? So there's a variety of stressors on the same water system, and as a result, it's been called exhausted. And they say that they're not going to give out more freshwater permits x, y, and z, right?So that's just like the context that it's in. And where the debate is with lithium is how much removing vast quantities of brine—we're talking about like thousands of liters a second, I believe, if I don't have that wrong—vast quantities of brine by these two major mining companies, SQM and Albemarle, is further playing into this watershed exhaustion. Another thing that's interesting to note, to go to sort of a totally different type of environmental impact that we humans may not think about very much, which is microorganisms.So what's fascinating about the brine is that it's actually an ecosystem. It's not just dead salt water, whatever that would mean, right? Microorganisms live in the brine, both in the surface salty lagoons, but also in the subsurface brine deposits. There are microorganisms, and those are important for a variety of reasons, but including they hold clues to evolution and the origins of life on Earth because of how old this desert is and also how poly-extreme the environment is, replicates earlier Earth conditions, but also like Mars conditions. So if we want to understand, could there be life on other planets, scientists say we need to understand how these microorganisms can survive.And not only this super extreme in all the ways I listed, but also, like, some of the saltiest environments. And saline is really hard on organisms, right? And so it's amazing that they can survive in this hypersaline context. But we're basically just sucking them out. We're killing...they're not going to survive the process of lithium extraction. And that, again, may not depends on the listener, how much that matters, but there's a lot of science that says these microorganisms are important for a variety of reasons and we should think about conserving them.David RobertsThere's a lot more detail in the report, but let's just consider it settled. Lithium...lithium mining, everywhere that it exists is pretty environmentally nasty. And another thing you point out in your report is that almost everywhere it exists, there is opposition to it, local opposition to it. Indigenous and other groups organizing to protect landscapes, organizing to protest the fact that they're not consulted, they're informed consent was not gained. Sort of all the capitalist evils that spring to mind when people think about mining are on the loose in lithium mining, and it's opposed almost everywhere it is happening.And that is kind of just the important background here for everybody who's thinking about decarbonisation in this way, which is that, like we said, yes, it's going to be better to do this than to continue pulling gazillions of tons of fossil fuels out of the Earth every second of every day. It's going to be better. But every step you take towards more lithium, there are tangible harms being done to vulnerable people. That's something we can't ever forget as we're tossing these things around.Right now, it's relatively small. There's four countries involved. There's a lot of talk about vast expansions coming. There's a supposed supply crunch over the next five to ten years as, like, demand is rising much faster than supply. But there are also, as the report points out, these huge discrepancies in projections, depending on who you believe, how much lithium is going to be needed. So just give a sense, like, how fast and big the lithium mining sector is going to expand. How big is the pressure to expand here? And what do we mean? Are we talking about twice the size, ten times the size?Thea RiofrancosIt depends who you ask, as you already noted, right. And everyone agrees: big increase. But beyond that general consensus, there are differences. And I know you recently had a conversation about modeling, right? And like how much goes into modeling. And I have never been more convinced of this than I am now, both in diving into the existing models and what their assumptions are, but also in seeing some of the contrast with our report, which we'll get into later, and how different the findings can be if you change some of those assumptions or play around with them in some way, right.Models are not, like, written in stone or laws of nature. There are a lot of human decisions made sometimes with political and economic interests at play, right? So everyone agrees big increase, right. As you noted earlier, like, lithium was, and actually could still be considered a rather small market. For a long time, it's mainly been about personal electronics, but also it's used in some construction glass materials as a coolant. It's used in lithium as a psychiatric medication. But it's really like the EV market that has been a game changer, right? And what's been the case for the past couple of years, and will be the case even more so going forward, is that batteries for passenger EVs, specifically, are the number one driver of demand for new lithium, right? So that's also important to sort of keep in mind. They vastly outweigh any other end use in terms of why there's so much talk about lithium demand.So, a couple of ways to cut the cake. And I'm drawing on a mix of our report and other existing forecasters out there. One way to think about it, and this comes from our report, is that if we just look at today's demand for EVs and then project outward to the future, taking into account growth, et cetera, to 2050, the US market alone would need triple the amount of current global production.That's one way, because it's hard to wrap our heads. I mean, there's many ways to say the same thing, right? That's one way to say it, right? The US in 2050 would need three times what the whole world needs now.David RobertsYes.Thea RiofrancosAnd that's, again, not thinking about all the other countries that have their needs, right. So that's one way to think about it. Another that I can find a little more concrete because it talks about individual mines, and here we're drawing on Benchmark—they're a big forecaster, which people have opinions about, right, so I'm not waiting into that. But they are a big forecaster and they influence government a lot, particularly. So Benchmark mineral forecasting says we'd need a 200% increase in the number of lithium mines, the just number of discrete mines by 2035. So a closer time frame to meet expected demand for EVs. That's globally, not US-specific. So we need a lot more lithium mines as discrete entities.David RobertsBut this is what breaks my brain about all this. You say it can take up to 16 years to get a mine going. These are not pop up operations. So 200% more mines in the next twelve years just...Thea RiofrancosIt seems hard to meet that. Now, what will happen, and this we could talk about the implications of this, and there's a lot of debate in the climate, environmental, et cetera, community, but some of those time frames might get shortened because there's a huge pressure in the US, in Europe, and in some other jurisdictions, to fast track mines. Like right now, yes, it takes a decade...We say 16.5 years. It could be shorter, can be a decade in some cases. But we're talking about at least a decade, right, to develop a mine, to go through financing, getting your financial back errors, the permits to get the quote unquote "social license," which is like an industry term for communities, like, giving you bare minimum sort of agreement or something.David RobertsThe thought of all that happening lots, lots faster does not calm my heart.Thea RiofrancosMe neither. And I think there's a whole separate conversation. I know you've dealt with this in other writing and on the show, but like this permitting conversation, I think speed gets equated with outcomes in a wrong way. I mean, saying we're going to do everything faster doesn't actually always make it faster, because what that means is there's various corners being cut, which just turns into lawsuits. So actually making the timeline for NEPA faster in the US case does not actually per se mean we're going to get the lithium faster. So that's a separate conversation, but I just want to throw that in there.Okay, so a lot more lithium. I'll throw out one other statistic because it's the one that alarms me the most when I try to grapple with it. It's the international energy agencies from 2020 or 2021, from a report a couple of years ago where they said compared to a 2020 baseline, we need 42 times as much lithium in 2040. That's like an enormous increase. I think that means 4200%, if I understand math. I don't know. Or 4300 percent. Whatever it is, it's really big. It's a large increase, right. It was larger than any other mineral they tracked.David RobertsYeah. And this is wild. I don't even know that we have to spell it out, but just like, let listeners just imagine what is a global rapid herding toward more mining? How is that going to play out? The idea that it's going to be done more sensitively or with more consultation with indigenous groups, et cetera, et cetera, when everyone is basically panicking and trying to do it as fast as possible, it's just not a great recipe.Thea RiofrancosRight.David RobertsAs the last comment on lithium, let's talk a little bit about the coming supply crunch and where... one of the big things the report talks about is these four countries are the main lithium mining countries now. But obviously with this sort of global stampede on, there's going to be a lot more mines in other countries. So where can we expect mining to branch out? And what is the timeline of that versus the timeline of this crunch?Thea RiofrancosOne thing to note at the top is that there already is a lithium supply crunch, right. We're already in that domain, so to speak. And the way that we know that is that the prices for lithium have been historically high, right? Because supply, demand, price, et cetera, right. Supply is not keeping up with demand. And that is important to our renewable energy kind of wonk and industry folks on the show that are listening to the show, because that, is in turn, changing something about battery pricing for decades and for sure since 2010, which is when Bloomberg started tracking this, but you can go back to earlier data from other sources.For decades, lithium ion batteries have been decreasing in price in a sort of secular trend based on R&D, economies of scale, innovation, manufacturing efficiencies, all the things that make things cheaper under capitalism when that occurs, and that is priced in kilowatt hour. And this sort of, like, the idea was we're going to one day get to $100 per kilowatt hour, and that will get us to price parity without taking into account subsidies with ICE vehicles, right? So that was the sort of golden target. In 2021, they plateaued, they stopped that decrease, and we didn't know what was going to happen in 2022, but now we do.So in 2022, they rose for the first time, and we went from like 130-something, 135, I think, to like 151 per kilowatt hour. I'm not trying to be like a doomsday or I'm not saying they'll increase now from here on out. I don't actually think that. But I do think it's important because the reason battery prices, for the first time since Bloomberg started tracking this, have increased in price is because of raw materials. So, in an interesting way, because we've done all this manufacturing efficiency in R&D, and we really cut costs on all other parts of the process, the raw material components are logically a larger component of the cost structure.At the same time, coincidentally, those raw materials have increased in price in their cost, right. So that is why batteries are now more expensive. I'm sure things will settle in whatever way, especially as we build up a lot more battery-manufacturing capacity around the world, which will depress prices. But it is true that this is starting to call into question, further question the affordability of EVs, because these are the main and most expensive component of an EV.David RobertsRight, which in turn sort of complicates these long term projections of EVs, which in turn complicates the long-term projections of lithium demand. Like the whole...Thea RiofrancosIt's all circularly interrelated. But we can definitely say that there's been a huge rush to mine lithium in the US Which is just another reason for people in the US to think about this. It's not just about stuff that happens far away. This is happening here. We have 50-odd projects with some level of financial backing or permitting in Nevada alone in one state.David RobertsWow.Thea RiofrancosThat's tracked by the Center for Biological Diversity by Patrick Donnelly. Shout out to him because he's been tracking that. It's really hard to compile those statistics. And the US government is throwing money, $700 million at Ioneers mine in Rayte Ridge. That's the Department of Energy just gave them a huge loan.The auto industry is throwing money. GM just gave $650 million in equity stakes to Lithium Americas for their Thacker Pass mine—which is, by the way, in federal court right now, over fast tracking concerns raised by environmentalists, so, the whole thing.David RobertsAll of these are facing opposition. Like, almost everywhere a lithium mine exists, it seems like there's some opposition. It's funny that's one of the things I've been sort of joked about with the Inflation Reduction Act is everyone loves the idea of onshoring the whole supply chain as a slogan. Everybody's super into that. But there are lots of links in the supply chain that are pretty nasty. I'm curious what their political valence will be once people get a little closer look at, like, what mining and processing of lithium really looks like, whether they'll be so excited about onshoring it.In the report mentions in the brine area, there are new techniques of mining lithium from brine that are less impactful than the traditional sort of, "leave it out in an open pit while the sun bakes it" technique. So it's not that lithium mining is a fixed quantity of environmental destruction. There are better and worse ways to do it, could be better or worse, governed, regulated, all these kind of things. But we got to move on to the second half of your report. So the report focuses on, it says, "Okay, we need to electrify, but we'd like to do it in the least lithium-intensive way possible."And so you focus on the US Transportation sector because, as you note, that's a huge, huge driver of lithium demand, and you focus on personal vehicles, which are the bulk of US transportation emissions, and therefore they're going to be the bulk of lithium demand in the future. And so the whole question here is: how could we decarbonize the US personal vehicle sector in the least lithium intensive way, otherwise known as increasing lithium efficiency, "Getting more mobility," I think this is the title of the report. "More mobility out of less lithium" is the idea here.This is, I think, a great part of the report because in some sense, once you see it on paper, it seems obvious, like, yeah, if lithium is bad, we should think about how to use less of it. It just seems sort of obvious, but it is wild how much total auto domination in the US is just taken for granted and invisible in most projections of car demand and for lithium demand, it's just an unspoken assumption that the current pattern of auto insanity in the US is going to continue. So in a sense, it's, I think, a great advance in the state of things just to say, "Maybe we could do it differently." There's other ways, other ways to do it. Yeah, it's not, as you say in that first quote, "It's not a fixed thing."We have choices here. There are different ways things could go. So you lay out four scenarios. The first scenario is just: assume electrification of the existing number of cars on the US and otherwise everything stays the same. The car, the auto intensity, the land use, the amount of car use stays the same, and we just try to electrify all the vehicles. In a sense, I think it's tempting to sort of take that as the default scenario, but one of the points you make in the report, which I think is important, is it's not obvious that that's the easiest way to go.It's not even obvious that that's possible. So let's first just talk about that, because it seems like kind of what we're stumbling toward, which is just take the cars for granted and try to electrify as many of them as possible. So just tell us maybe what's wrong with that, the sort of status quo we're stumbling toward.Thea RiofrancosRight. Well, first of all, it assumes an enormous quantity of EVs are going to be bought by people, which is, in a way, an assumption of all of our scenarios to be fair. All of them involve what we could call the mass deployment of electric vehicles. None of them eliminate electric vehicles entirely. They just change their relative predominance within the transportation mix in various ways, right? But in scenario one, the most need to be purchased, right? And so first and foremost, it's a question of millions of individual consumer decisions going as planned.And it's a question of how much our policy environment and especially financial incentives will need to change pretty rapidly in order to make that a reality. Because I don't know that IRA is going to cut it. Putting aside all the debates over the specific mechanisms IRA uses, it gives rebates, you know, at a below a certain income threshold that can get up to, I think, $7,500, you know, not nothing. And so that's the approach in the IRA, but I already noted and we've talked about how these vehicles might be getting more costly over time. I mean, there's different trends at the same time, on the one hand, the batteries are getting more expensive, which will make the cars more expensive. On the other hand, now, all the car companies are saying we're going to out compete one another on price and we're willing to forsake a little bit of profit. These are uncertainties. I don't know which will, on the balance, which will be the prevailing trend.David RobertsWell, also in the key dynamic you point out in the report, which is if lithium demand is as high as it would be—looking at the US car fleet—that exacerbates the crunch, exacerbates the high price.Thea RiofrancosYes, right.David RobertsSo in a sense, trying to sell more is almost self-limiting.Thea RiofrancosYes, that's an excellent point. And so that is one problem with scenario one. Like will we have to increase subsidy? I'm not anti-subsidy. I'm not like anti-government spending. I'm, like, in favor of government spending. So it's not like I'm trying to do some taxpayer-efficiency thing or like star of the beast thing. It's not about that I mind spending public money. It's like on what, right, because all of this involves public money. Whether it's EV subsidies, whether it's those might be more invisible forms of public spending, but the more visible forms are the transportation authorities and then of course, highways.So all this involves public money, but this one involves trying to use public money to shape individual consumption decisions and that's not the most efficient way, right. And it would be more efficient and we'll go through this with scenarios two, three and four to actually use that to beef up mass transit. So that's one issue with scenario one, or a couple, I guess. Another, though, relies on peer research, not our own research, but other folks that we cite which say that we will get to zero emissions faster if we get people out of cars. And so we don't directly test that because all we're looking at are 2050 scenarios. So we're assuming zero emissions in 2050. And what we're playing with is like, how we're going to get there.But other people that test: will we get to zero emissions? or how fast will we, show...and this stands to reason, right, like the fewer vehicles on the road, the more people are sharing the same vehicles, the easier it is to electrify more quickly, because if you electrify a bus, you deal with many people's transit at once. And also even before you electrify the bus, that's still like a net positive if you're getting people out of an ICE car into a bus, like you've dealt with some carbon emissions before you even make it an e-bus, right? And so there's a lot of...this is what I like to say to the carbon hawks among us, right? To people that really unilaterally focus on...which I, in some ways, count myself among, but I'm less unilateral, like, I'm also thinking about biodiversity and all these other issues, but for people that are like, "All I care about is the emissions trajectory." We will lower emissions faster if we don't do the super car-dependent one-to-one EV to ICE swap, right, or ICE to EV, excuse me.And it's not even one-to-one. It's more we have to produce more EVs over time as the population grows.David RobertsDemand is rising. Yeah. Population is rising. Yeah. I mean, you point out that there's some doubt in a lot of scenarios and modeling whether we can even hit the 1.5, whether we can get on a 1.5 consonant scenario or even a two degrees consonant scenario with this sheer volume of cars that we have to electrify, right? It's an enormous amount and it's rising all the time. So lowering the amount of cars is lowering the target to more achievable levels. So that's important. So I just want to get I think people maybe think that this is kind of the default thing we're heading toward, which is just samesies with all the cars except they're electric now.Whether or not you think that's the best way to go, there's real reason to doubt whether it's possible to do that. Certainly on the time frame we're talking about.Especially as the cars get bigger, right? There's that other research that's not ours. We do a lot on battery size, so we'll talk about that. But there's a separate research academic article that just came out a few months ago showing that the e-Hummer, like when we get really large, like really gargantuan batteries, cancel out their climate benefits, meaning that the carbon-intensity of that supply chain to produce that vehicle adds to emissions rather than decreasing them, right? And so that's when we get at the real extremes of car size. I'm not saying every EV is an e-Hummer. It's just not right.But unfortunately, our trend is trending upward in size. And so we also, back to our earlier analysis of supply chains, have to think about emissions across the supply chain. Right. And when we produce enormous vehicles that then are shipped on container ships like these just enormous production networks. And if those are not fully decarbonized as production networks, then we have to factor that in.Yeah, embedded embodied emissions are huge here. So, you have four scenarios. The first one is just everything stays the same except it becomes electric. And then scenarios two, three, and four are, sort of, I guess, escalating versions of europeanizing American cities. I'll just say upfront, you summarize towards the end here relative to scenario one. With scenario two, you get an 18% reduction in lithium demand. Scenario three, it's 41%. And scenario four is 66% reduction in lithium demand, which is... that's not marginal, right? So these alternate scenarios you're talking about are real substantial reductions in lithium demand.Thea RiofrancosMore than I expected. Like, honestly, as someone who's looked at this for a while but never read a study like this because...not existed. But my assumption was it was going to be a little lower, though still important, still significant, but it was higher. And it gets even higher over time. Like if we go all the way to 2050, we can get a bigger spread, partly because by that point we have more recycling feedstock to work with and other changes that are more cumulative, take place. And so, it gets really dramatic when we look at best and worst case in like the year 2050, for example.David RobertsBut...and this is maybe an area where I need you in specific because I know you always have good things to say about thoughts like the ones I'm having, which are I'm looking at these scenarios. Just scenario two, the first level above one, it says, and I quote, "Levels of car dependence in US cities and suburbs are reduced to the equivalent of comparable EU cities." And to me, just that just getting US cities and suburbs on par with comparable EU cities is alone just mind-boggling in its scope and its political difficulty. And I just look at that and I feel daunted.And I know you're always going on about we need to expand our imaginations, we need to push the window open, and we need to think more about what's possible and not feel locked in. But, in scenario three goes...Thea RiofrancosMuch more ambitious.David Roberts...farther than that. And then scenario four is basically like: every US city becomes Vienna. Every US city becomes not just average EU city, but state of the art, progressive, cutting edge. And I just have a lot of trouble seeing that happening. So how do you think about or do you bother to think about...Thea RiofrancosNo, I do.David Roberts...the political realism of what are very, very substantial reforms in US land use and habits and public spending and on and on.Thea RiofrancosYes. So there's a lot to dig into there because I absolutely do think about it. And I'm a political scientist, for whatever that's worth, and also someone who's done a lot of political organizing, legislative advocacy, et cetera. So as utopian as I can sometimes perhaps sound or feel or whatever, I mean, I have ambitious ideas. I'm a big proponent of the Green New Deal, et cetera. I do think about the brass tacks of moving people on issues and of what regulations or what legislation will be necessary and what's possible at the state or local versus federal level.And I want to talk about all those things. I want to say something first, though, is just like a set piece, which is we've been treating these as like four big different pathways, right? Which they are. But what's important to note is that there are subpathways and subpathways meaning there's actually like dozens of scenarios that we test because there's a lot of on-off switches that can apply to each of these. And one key one is battery size. So let's go back to that scenario one that we've been talking about, which is the status quo but electric, or the status quo plus population and consumption growth, but everything EV, and it turns out it makes an enormous difference if we can just get back to where we were a few years ago with average battery size in the US, or where our peer nations are, or peer affluent nations like in East Asia and Western Europe are with battery size. We're now like double the size of a decade ago. We're double the size of the global average. And what's concerning is that...David RobertsGod, that's so dumb.Thea RiofrancosIt's so dumb. Because there's so many reasons it's dumb. Those cars are unaffordable to most Americans. The larger the battery, the more expensive the car. But it's also just being sold in a sort of luxury framework, right, of these fancy pickup trucks and fancy SUVs that contractors aren't using. I mean, it's just like affluent suburbanites for the most part, and they're using them to go to the grocery store, not to go hiking or to, like, haul stuff.David RobertsI know. And I get that every new consumer product you start on the luxury end, you make it an object of desire, and then you and then you move down. But like, we're like ten years into this shit, and...Thea RiofrancosIt's getting worse! It's moving into opposite direction.David RobertsI know. They're getting bigger and bigger...Thea RiofrancosLike, now it's like everything is the Ford e-Lightning or whatever.David RobertsI know. Okay, let's get like some freaking hatchbacks now. Like we did it.Thea RiofrancosIs what most working and middle class Americans can afford and drop. And so we're getting really crazy with the average battery sizes double, as I said, the global average double where we were a decade ago. And it's concerning because it's a trajectory. So are we going to be triple that in a few years? Like, where is this ending? But, the good news is, that we can be as car dependent...we can change like, nothing about the political, social, cultural infrastructural status quo. Like, we could stay with our car dependency in all the ways that that's locked in.And we could get really significant decreases in lithium volume, especially as we get closer to the end of our...we get to 2050. So in 2050, just snapshot year, because that's our final year that we model. We could have 42% less lithium in scenario one, the car-dependent scenario, if we have more normative—I don't want to say smaller because it's misrepresents it. It's like more normative sizes.David RobertsNormal-er.Thea RiofrancosNormal-er.David RobertsNormal-er batteries.Thea RiofrancosWhere we were recently, and where most of the world is now.David RobertsLike, when I first read through, I thought that the reduced battery size demand in your scenarios was a causal result of land use changes and walkability....Thea RiofrancosNo, it's a separate parameter.David RobertsSo you're just turning that knob...Thea RiofrancosFor each scenario.David RobertsIndependently.Thea RiofrancosExactly. Which is why—and I'll just say it here because it's my favorite of our findings, because it's the most dramatic—that if we compare scenario one like the car-dependent scenario and with large batteries, ones that are currently larger than average, but is, like the direction we're going. We compare that to scenario four with small batteries, with perfect recycling, with everything, like ideal utopian Vienna, whatever. In 2050, 92% different in lithium volumes, right? So there are radically different futures ahead of us. And it's helpful to look at the extremes, even if our worst case is, like, unlikely on the negative end and our best case is unlikely on the positive end.Let's look at the total spread, because that's the spectrum we're working with. And that's where we can use policy, behavioral change, cultural norms, whatever is available to us as tools to shift people towards the best case scenario.David RobertsYou highlight three specific changes that are the most efficacious kind of levers to pull to reduce lithium demand. There's reducing demand for vehicles overall, densifying urban centers, and then reducing battery size. I get reducing demand for passenger vehicles. You do that with better public transit, better land use. You do that in part through densifying urban centers, increase walking and stuff like that. But it's notable that battery recycling, which people are quite bullish about, doesn't really make much of a dent for quite a few years. So maybe just tell us a little bit about what is the state of recycling, what you expect from it?Thea RiofrancosYeah. So what's interesting about recycling is that you need to have enough feedstock available. Meaning, like, if you're going to use recycled, recovered materials to manufacture batteries instead of new mining, which is the goal, we want to use circular economy kind of approaches so that the end of life batteries and also the manufacturing waste, all the things that are spit out by our system, like reenter the loop. And we close the loop. And so instead of new mining, we're sort of like we're mining batteries, right? Instead of mining the Atacama Desert.David RobertsRight.Thea RiofrancosSo that's great. We're super proponents of it, and there's very optimistic results shown in terms of how we can get close to 100% material recovery. The technology is there. That's what I want to start with.David RobertsMaybe it's too obvious for you to even say, but I'll just put it out there. Signpost is just even best case, recovering 100% of materials. You still have to get enough materials in the loop in the first place.Thea RiofrancosThat's where I'm going. We're several years out from that being significant because we don't have the level of EV penetration yet. And then forget about just the current level of EV penetration. How long do people own their cars? Hopefully, these cars last a minute, right? Like they're durable goods, right? So, yeah, it might be ten years, you know, whatever it is, right. Until we're actually end of life with those batteries. And then it's interesting. I'll just throw this out there because I think it's it's kind of interesting and it helps people understand how materials cycle through systems.So when we get to the end of life of a battery in a car, it no longer gives the power and energy density that a car requires to move quickly and for distance. At that point there are a number of other applications we could use the battery for, and we often go to the grid as the first thing, and that's great. Backup storage or primary storage, even on an energy grid because of variable solar, wind, et cetera. So we can store energy, but also we can even use it for less intense mobility applications, right? So, like, a city bus does not move as quickly, it also gets much more frequent overnight charge. There's a variety of ways in which buses strain their batteries less and can work with a second-life battery. So there's lots of interesting applications. But there's a critical choice there, like, do we put the battery in a second-life application or do we strip it of its materials and use those materials to become feedstock for new...and I'm not trying to make it, like, a zero-sum thing, though I guess at the literal cell level, it is, right, like one or the other is happening.David RobertsDon't you want to do both? I mean, can't you completely exhaust the battery and then get them...Thea RiofrancosIt puts the horizon back, defers the horizon because if we're reusing then and... reduce reuse, recycle, that old environmental thing is actually useful to remember. So we're talking about reducing lithium demand in this report. We're also talking about reusing and recycling at the sort of end of life. Right, but you first reuse, then you recycle, but it just pushes out the time frame for when we'd have enough recycling feedstock to really be replacing significant amounts of new mining.David RobertsRight.Thea RiofrancosAnd one other way I like to, just as a metaphor, think about it is: over the pandemic, we've had lots of debates on different public health tools and one thing that public health experts said about the vaccine is that if we don't reduce the spread in other ways we're asking the vaccine to do too much work.David RobertsRight.Thea RiofrancosIt's not a perfect analogy, but I think that way about recycling. And I think people gravitate to recycling because nothing else has to change and also because it's itself a business opportunity, right? There's a lot of new investment in recycling facilities. So it's sort of like, "Oh, that's the silver bullet. We're going to get recycling to sort of totally replace new mining." Well, maybe in 2050 or 2070 or something that could start to be possible, but not in the near term. And so we need to do other things so that we're not expecting recycling to be the number one demand reducing tool.David RobertsRight, so you're reducing demand for lithium in the first place helps...Thea RiofrancosRecycling play a bigger role.David RobertsRecycling, it helps decarbonization, in addition to helping reduce the need for mining and injustice and all that other stuff, it just makes...the lever you can pull that makes almost everything we want easier to do. So you have these scenarios that basically involve—and this is stuff I know Volts audience knows very well—just your basic densification, helping walkability, bike paths, all that kind of stuff. So, let's just say a bit, because I don't want this to get lost. In addition to all the benefits of reducing lithium demand in terms of our ability to decarbonize on schedule and are just having enough and getting recycling going better, it's also worth noting that all these changes being discussed in the transportation sector have numerous co-benefits and, specifically, are extremely beneficial to the poorest and most vulnerable.This is all completely extrinsic to the greenhouse gas discussion. Just these changes you're talking about making in transportation are good for a bunch of other reasons and so I think...probably we mostly get that. But let's just say a brief word about how transportation in the US is specifically a kind of source of injustice and how these reforms would serve justice.Thea RiofrancosThere's so many things to talk about here that we won't get to them all, because it's such a sort of nexus of where so many injustices inequalities and also inefficient uses of resources kind of intersect. One thing to remember is just how financially burdensome car ownership is for low-income and working class and even middle class people. Buying the car or leasing the car, the auto insurance, the maintenance of the car, and the gasoline—until we electrify, right. Caveat there on gasoline point—but are all very expensive, and they're more expensive the lower income you are, they're like a bigger portion of your overall income, right?And they're also more expensive if you're lower income because you're more likely to have an older car, which requires both more maintenance and more gas per mile. And so we think about car use as a form of freedom in the US. And there's tons of scholarly books written on this and just a million pop culture examples and just the advertising of the auto industry itself. It's thought that carnership is like a key to freedom understood as this sort of spatial mobility. Like, you go wherever you want, right?David RobertsSuper generational, though. Super generational thing. A real generational divide, I feel like.Thea RiofrancosYes, I agree, and I'm hopeful about that. And we should come back to that point because we still haven't really discussed the policy tools and the politics of this in the contemporary moment. But I think of it almost the opposite way, which is, like, total choicelessness, which is unfreedom to me.David RobertsA single choice. I mean, literally the only way to do something.Thea RiofrancosAnd I know that very firsthand, not to make it too personal, but for many years of my adult life and childhood and everything, I didn't use cars very much. I grew up in New York City, right? So I'm weird in US context. So I grew up in New York City. I use public transit. We just use a car if maybe we're going upstate to the Catskills. But, basically, I'm going in public transit, and I'm walking. Then I become 18, moved to other places. I moved to Portland, Oregon. I then live in Philadelphia. I live in some Latin American cities, et cetera.In all of these places, I used a bike. I used mass transit, or I walked. And I did not actually get a driver's license until I moved to Providence, where I currently live. And after the first three months of biking to work, which was really not a great situation, there were no bike paths, like, it was extremely stressful and dangerous. But I did it because I like bike riding. And it was only 20 minutes. It wasn't a big deal. It was just a stressful 20 minutes. Once November came, New England, right? So it got cold. It's like, "Oh, I guess I have to do something else to get to work."I looked into the bus situation. Impossible. Like, an hour bus first is, like 20-minute...because I had to go downtown first, go to the main hub. I mean, the bus is for stigmatized poor people in Rhode Island, basically. I mean, that's how our bus system works. It doesn't have commuting in mind. It doesn't have other types of users in mind, and it's just underfunded and a whole crisis.David RobertsA very familiar story, all Americans, I think, will have some familiarity with.Thea RiofrancosAnd so I got a license. Like, I was forced to get a license, and I started using my partner's car, which I had never driven before, to get to work. And I experienced that as a constraint, like, I have one option.David RobertsAnd more stress, I mean, this science on this is very well-settled. Like, you probably were taking years off your life by switching to a car just from the noise stress.Thea RiofrancosExactly. But so there's lots of benefits of moving us into these other scenarios.David RobertsLet's talk about the policy levers that you're talking about. A lot of these I think, will be familiar to my audience here, just sort of urbanism stuff. But did you have particular...because I know one of the things the report says is that transportation decarbonization policy, insofar as it's popped up in the US, especially at the federal level, is very car-centric. Talk a little bit about better policies.Thea RiofrancosYeah, so I want to circle back to something you said earlier that's on this point about can we imagine the US being like a European city, or not the US, but US. Cities. That seems utopian, as you said. And I understand that. But I want to also just note that things have changed a lot in European cities, recently.David RobertsYeah.Thea RiofrancosAnd you reported on this in Barcelona and maybe elsewhere, right. And so we could go to Barcelona, we could go to Amsterdam, Paris, London. Our global cities in Europe, like the cities that have a lot of stature, those were actually more car heavy a decade ago.Two decades ago. They used policies ranging from the design of streets, right, the super blocks in Barcelona that you discussed to like congestion pricing to increasing mass transit options, to designs, making mass transit free or lower cost, a whole battery of kind of policy tools. And significant, like in Paris, they decrease car use by 30% over 15 years.David RobertsWild, what they're doing so fast.Thea RiofrancosIn London by 40% over the same time period. In Amsterdam—and we think of Amsterdam as like the cycling haven—but that's increased over time. Like they have actually used policies to make it more friendly to cycling. These things that we think of as so, like exotic, like, are actually the outcomes of intentional policy decisions that took those cities off of a track, getting more similar to the US to a track of where they are now. So it's important to not like naturalize, exoticize, essentialize, whatever it is, like, because we could do these things too. And in fact, in cities, you know, cities and other localities and even at the state level, we have a lot more options than at the federal level, so we should look at those urban experiments very closely.You know, it's duh. The GOP controls Congress. Like, I am aware, I read the news, right. So I'm not super enthusiastic or waiting on the edge of my seat for some massive infusion to public transit authorities coming from the federal level. I don't think that's about to happen. Thankfully, we got a little in the bipartisan infrastructure, otherwise things would be even more dire. We didn't get anything in IRA. We didn't even get e-bikes in IRA. I mean, it's nutty, like how car-centric that bill was.David RobertsI don't know if this was inevitable and unavoidable, but it is unfortunate, though, that the whole reactionary, backlash, conservative movement as it exists is now more or less organizing around defending sprawl. I don't know if that was just going to happen at some point regardless, but it's just not good that one of two major parties is foursquare against all the reforms you're talking about.Thea RiofrancosExactly. This has become a culture war point. But those culture wars are a little bit less intense at the state and local level, though unfortunately, they're there too. I'm not, again, Pollyannish, but let me throw out a couple of things. So what I think would be really cool—which we couldn't directly model because of data limitations, but we do discuss—is e-bikes. So we can't yet break down, like what proportion of cyclists are on e-bikes and how much lithium is in the e-bikes, because again, the data constraints. But we know that e-bikes use so much less lithium just on the battery level and the per rider level when we compare it to any of the other e-transportation options, right. They're better than buses, even, in terms of the lithium use per person.And so we have had some cool stuff. So Denver, Colorado did a major ebike subsidy experiment, and it worked. It not just worked in its popularity, but it got people out of cars, specifically. They showed that now in research on the experiment. Hawai'i, I don't know where exactly it is in the legislature, but it's moving along. I think it's been introduced for a state-level big e-bike subsidy program. And there's a bunch of other cities, if we look them up, cities and even states that are looking into subsidizing e-bikes, both for the climate reasons, the affordability reasons, but also specifically to reduce car use. That's like their goal. So they're designed with that goal in mind and they're making sure, like, we're subsidizing e-bikes that could replace cars for grocery store trips or commuting.David RobertsAnd of course, the more of your citizens are on bikes, the more political power.Thea RiofrancosYeah, you build a constituency which you have in places with a lot of cycling, like Portland. Like literally, there's like a bike lobby. I mean that in a positive sense, right? There are people advocating and watching policies. There's a couple of other things that are interesting. I'm going to do one more on e-bikes because this was surprising to me. I just learned it. In 2021, Americans bought nearly twice as many e-bikes as ecars. There was a huge amount of e-bikes being bought, and I think there's like a variety of reasons for that. Some of it was like pandemic people doing this outdoorsy stuff and the e-bikes were coming on market at this.So I think there are some just like circumstantial factors there. But it's interesting. Americans like e-bikes, so we should think about that and think about that as like a climate policy more among climate progressives. Think about how to expand that. There's a few other things. One is bad, but I want to talk about it, which is the so called death spiral for mass transit. So there's been this ongoing thing, but it got much worse during the pandemic where lower ridership, which really dipped, of course, when there were much more limited movement due to COVID concerns. So people stopped taking transit as much, worrying that they'd get COVID if they took transit or they just weren't commuting in the first place.And then that undercut a major source of funding for transit agencies, which is the fare. And so you had this death spiral which then they would do fewer buses or fewer trains or subway cars and then that would further depress ridership because it was less reliable or less frequent. And that's the death spiral. So we're at kind of a critical juncture for transit in this country, and we need to sort of decide, like, especially among climate folks who are at least people thinking about this, do we want to actually include refunding? And actually more secure and sustainable funding models that don't just rely on the fare as much or these like emergency federal or state funding, but just have more secure funding over time, more durable.David RobertsWell, I mean, the juncture we're at is like, are we going to let our lame minimum that we have die completely or are we going to maintain our lame minimum? Effectively, outside of New York City, we don't really have, like, a full-fledged worthy of Europe in hardly any city, much less, like, all these mid-sized cities.Thea RiofrancosAnd they've gotten worse. I mean, some of them used to have better transportation in the past. I mean these streetcars, all this thing was destroyed, partly by auto industry lobbying. This history is very sordid.David RobertsIt would have to be a real huge culture turn.Thea RiofrancosYes, but I want to say it's important to remember that the first culture turn was a big one. Like getting these cities off of what they previously did, which was walking and streetcars and commuter rails and that kind of thing, into the current car dependency. That happened not in our generation but in one more back. So this stuff has not been since like the literal founding of America or whatever that...you know what I mean? Like these are all things that happened over the 20th century and dramatically.And so we have the climate crisis to deal with. We also have a variety of economic crises where we want to think about redeveloping and making cities more flourish. We have a lot of things happening at once and it's one of those other critical moments of: are we going to just let transit die or are we going to embrace it? At the very least, I would love to see progressives that are climate advocates like, fully embrace transit, e-bikes, all of these solutions that are good for a host of reasons that we've discussed and center that.David RobertsOne of the things that sort of raise an eyebrow about this is that the modeling more or less assumes that lithium is going to remain dominant for the foreseeable period of the study. Battery chemistry has lurched around a bit over the last few years, and trends in battery chemistry can change pretty quickly. Like, LFP was dead for a while, and then all of a sudden it's roaring back. I guess I just wonder if you're worried you might be underestimating the possibility of technological improvements. Because I know a. people have their eye on lithium as a bad thing because of the mining and all the rest of it, b. they have their eye on it because the prices are rising and it's threatening the entire edifice of transportation electrification. So I know there's work going on trying to reduce lithium, trying to make batteries without lithium. How confident are you that at least for the next 20 years, lithium is going to stay on top? Did you give a lot of thought to that?Thea RiofrancosI have, partly because anytime I tweet about my research on lithium, someone says to me, "Lithium will be dead tomorrow. Don't. Why are you spending so much time on this?"David RobertsI don't know if I go quite that far.Thea RiofrancosNo. But there's a lot of reply guys on this point, on Twitter especially, which has fortunately helped me, like, has had the positive impact of me thinking about this question more. So I in some ways appreciate the reply guys.David RobertsThank you, reply guys.Thea RiofrancosYeah. So, the 20-year question is an interesting one because that does feel harder for me to answer. I feel pretty confident, a decade out, that lithium ion batteries will be the prevailing technology. That doesn't mean the only one, but that changes will be at the margins and that they will still dominate when we get out to 15-20 years, I still feel like due to some costs, due to the prior investments, due to the fact that there is just like an energy density advantage with lithium over anything else, those are still all true, and those, I think, will still make it the sort of majority technology.But after we get to 15-20 years and beyond that, I think that there could be substitutes. But let me say a couple of things. So people got very excited about the CATL, the major Chinese battery manufacturer, announcing that it was going to really commercialize and at scale, the sodium battery. That announcement was made, I think, a month ago or something like that. When you dig into the details there, they cannot make a whole battery pack for a car with sodium cells. There are still many lithium ion cells, right? Because remember, a pack, the modules, the packs, we get, like, many cells pressed together, so we can't get the energy density a car requires with just sodium cells. We can swap in some of the lithium cells for sodium and maintain decent energy density.So that just goes to show two things at once. One is that substitution is possible. But two is that we're not at a point where we have full substitution and we just get rid of the lithium altogether. So that's one thing to keep in mind. I think there's a bigger—I don't want to say philosophical, it's probably not the right word—but just like a deeper question here, which is I've used the word silver bullet already. I think that regardless of what the raw materials are and their specific impacts, and it might be true that sodium has less impact on lithium, and I'm absolutely willing to agree that there would be a set of materials that, for some reasons, involve less environmental impact when they're mined or they're more efficiently used or something other, right.I'm also a big believer in making the batteries more efficient with the raw materials that they use, right? Getting more out of less, right. So I'm a believer in all of those things. But what I'm not a believer in is this idea that we can just escape the dilemma of resource extraction just by technological innovation. Right, this kind of sci-fi idea...I like the sci-fi that's more realistic, where extraction is there. Like, if we look at "The Expanse," these kinds of shows that show these problems with extraction still exist in the future or in other landscapes, right?I don't like the sci-fi idea that we just escape our earthly impact and presence.David RobertsWell, you build a blue light arc reactor, and it just hums and pumps out energy. Right?Thea RiofrancosAnd, yes, maybe certain things we can be totally synthetic, or we just...I don't know. But even with, like, hydrogen, you just had your newsletter about that. In the way that we are producing all of these climate technologies, there are going to be earthly impacts, there are going to be extractive requirements, and our goal is always to be more resource efficient, regardless of what the substrate of resources is.David RobertsRight. And this is kind of the main point I want to make about this whole report and this whole sort of subject matter, which is: it's not like we should improve material efficiency because it'll reduce our mining impact on the environment, but there are countervailing considerations. There really aren't any countering considerations.Thea RiofrancosIt's all good to do that.David RobertsIt's better for people. It's better for decarbonization, it's better for our physical and mental health. It's better for, literally the financial health of cities. Like you just go down the list. One of the things I think is most exciting about this report is it is an explicit attempt to get climate advocates, global justice advocates, and urbanist, city advocates on the same damn page, pulling in the same direction, working with one another toward the common vision. And I've just thought that that is like, sort of implicit, but it's like, you don't see it translating into efficacious organizing.Like, you don't see those groups really working together as much as you want. So how much of this report was just had that in mind? And is that too utopian? Do you think that's a doable thing to get these interests on each other's team?Thea RiofrancosThere are two motivations of this report in terms of its origin, like, why we decided to do it. One is, back when I was first in Chile researching lithium in early 2019, I learned about the impacts, I learned about the protests, the concerns, et cetera. And I started to think, like, is there a way maybe not to eliminate lithium, but at least to reduce the stress on landscapes and to reduce the volume required? And I was reading these alarming forecasts at that point, and I thought, "Oh, there must be a study that shows that there are more and less lithium intensive ways to decarbonize transportation."Like, I booked that up on Google Scholar and I tried like, 30 different keywords, and there was no such study. And then I asked every expert that I interviewed who was expert on transportation, battery tech, whatever this question, and they said, "Oh, that study doesn't exist. It would be useful, though, just to know."David RobertsIt's kind of telling how utterly hegemonic the kind of car centric view is. It doesn't even occur to people.Thea RiofrancosIt's not an askable question.David RobertsYeah, people don't even ask the question.Thea RiofrancosSo that was one origin point to this. I just wanted this data so that when I presented my work on lithium and the political economy of it, the contention when people ask me, like, is there another way I could say something other than, "well, logically, if we had more mass transit, we'd need less" just if-so facto or whatever. So I could just say something with data. So that's one origin point. But there's another origin point that's equally important, which is I participate as a researcher, as an advocate, as a think tank person, and wearing different hats, like, in a variety of coalitional spaces with some of the people you just mentioned, but not with all of them at once often.So that's important, right? I think that that full spread has not quite happened yet in terms of building coalitions and constituencies that are speaking to one another. But there is some of each in a variety of political spaces. And I find that there are tension points and...this not a novel observation at all, actually. Much ink has been spilled on this. Like, is it totally impossible to decarbonize without harming indigenous rights? These stories have been written. These analyses and thought pieces have been written, but they're not just like, takes. They're also like, real people trying to work through real problems and not always having the data or policy tools that would kind of show a different way forward. And so aligning those, not perfectly, because I do think there's different ideologies, there's different personalities, like, you can't make everyone agree perfectly...but at least showing that these are not as fundamentally at odds as they seem. If we envision a little bit more broadly and creatively like what the energy transition might look like.David RobertsYes, and just do the sort of grown-up thing of explicitly acknowledging that we have multiple goals, some of which are in some tension of each other, and the best we can do is to balance them as best we can and try to pull in a direction that serves all of them at least somewhat, right? Like an adult way of making decisions not characteristic of our society necessarily. Thank you for coming on and talking through this. I mean, there's so much in this report. I feel like any chunk of this report, we could do a whole pot on it. A whole thing on lithium, a whole thing on transportation, a whole thing on justice, and everything else, but I do think it's for just those reasons you said there in your last answer, like, this is much needed and much overdue. So thanks for doing it and thanks for coming on.Thea RiofrancosThanks so much. This was a great conversation.David RobertsThank you for listening to the Volts podcast. It is ad-free, powered entirely by listeners like you. If you value conversations like this, please consider becoming a paid Volts subscriber at volts.wtf. Yes, that's volts.wtf, so that I can continue doing this work. Thank you so much and I'll see you next time. Get full access to Volts at www.volts.wtf/subscribe

How can electric school buses be made accessible and cost-effective? In this episode, Highland Electric Fleets CEO Duncan McIntyre makes the case for why school districts should overcome the challenges to bus electrification, and the ways his company’s subscription model helps them do so.(PDF transcript)(Active transcript)Text transcript:David RobertsOne of my very favorite things in the world to talk about — second perhaps only to electric postal vehicles — is electric school buses. It's difficult to think of a more righteous cause than reducing air and noise pollution in direct proximity to the country's most sensitive lungs and ears.Currently, however, electric school buses still cost two to three times what their diesel competitors cost, which can be daunting for school districts with tight budgets. Electric buses pay themselves off over time through dramatically lower fuel and maintenance costs, but the upfront costs of the transition are steep enough to scare away many administrators.My guest today runs a company called Highland Electric Fleets that is attempting to overcome that challenge by offering a new business model. Rather than purchase and maintain the buses themselves, school districts pay Highland a subscription fee, locked in for a 15-year contract, which covers the buses, a depot, charging infrastructure, scheduling, training, and ongoing maintenance and replacement of buses when required.In addition to a saving most school districts money immediately, the subscription contract derisks the transition to electric buses. That is about the best thing I can think of that someone could be doing these days, so I was eager to talk to Highland CEO Duncan McIntyre about the advantages of electric buses, the challenges school districts face, and the problems solved by the subscription model.Alright, with no further ado, Duncan McIntyre, welcome to Volts. Thank you for coming.Duncan McIntyreDavid, thanks for having me.David RobertsThis is awesome. Volts listeners are so interested in electric school buses, so I just have a gazillion questions, so let's jump right into it. Tell us, what are the advantages or benefits of an electric school bus over the current line of school buses, which as I understand it, are mostly diesel?Duncan McIntyreThat's right, they're mostly diesel. A little over 80% today. But your question is about the advantages of electric. I think the list is long, but I would highlight a few of the big ones. There's a clear benefit in emissions profile just in the health of everyone who's operating or riding a bus. There's no tailpipe at all, and as a result, they're very clean. Another big advantage is they just operate much cheaper. The fuel is a lot less expensive, there are very few moving parts compared to a diesel bus, and as a result, there's no oil changes, there's no exhaust filters. There's lots of things that just aren't on electric buses, and so operating is much less expensive.David RobertsAnd I don't want to get caught up in the whole thing too early, but I'm trying to sort of conceive of the sort of magnitude of the pollution reductions here. Like, have there been measurements or studies about the difference when an electric school bus replaces a diesel bus? Or are we too early to know for sure about that kind of stuff?Duncan McIntyreI think there have been plenty of studies about the health impacts of a diesel bus. And the comparison is simply the health impacts of not having a diesel bus since the electric format has literally no tailpipe and no emissions profile at all. But the health studies have been done by groups like American Lung Association, groups like that, and there's quite a few data points that look at reduction in NOx and particulate matter, specifically on things like pediatric asthma. I would say that's one of the main studies that has taken place, but also tying the emissions associated with the diesel tailpipe to just other general health key indicators.David RobertsYeah, one thing I would toss out too, because people always forget about this, but is noise pollution, which is the research on noise pollution is wild. I don't think people appreciate the effect that has. And all these kids are effectively sitting right next to a jet engine, more or less. It's extremely loud. But the first question that comes up for everybody is they cost more. So what is the current cost differential between an electric school bus and a diesel school bus?Duncan McIntyreThe electric school bus ranges from $275,000 to $375,000, really, depending on the state you're in. And your question is about the differential. It's about $200,000 of differential on average. So it's a $200,000 premium to buy an electric.David RobertsThat's not small. That's two or three x the cost.Duncan McIntyreThat's exactly right. It's not small.David RobertsLet's also talk about some of the other barriers other than cost for a school district looking... if I'm in a school district, I have this wild idea I want to replace all our diesel buses with electric buses. The cost of the buses themselves is not the only barrier or challenge I face. What are the other extra challenges that have to be overcome?Duncan McIntyreThere's a few other buckets. One would be charging infrastructure. You need to establish your depot wherever you operate your buses today as an electrified depot. And that involves installing a whole bunch of new equipment, running an interconnection to bring new power, new electrical service into that depot. I'd say that's one big bucket of sort of a project that's required to get up and running. There's another piece that's all about training. Your workforce needs to be trained. Mechanics need to figure out how to work on these vehicles. Your drivers need to know how to operate them and how to not just operate them, but how to be really comfortable with running them.And then there's an operating cadence of charging them. The fueling activity is a little bit different. And unlike diesel fuel, with electricity, you really want to pick and choose when you charge and how quickly you charge, as it can result in lower or higher costs and more reliability if done right.David RobertsAnd so that'll get into logistics, right? Like routes and the timing of routes and these kind of things?Duncan McIntyreAbsolutely, that's right.David RobertsAnd so these are all fairly substantial challenges. So what is the current market penetration here? What is the base we're starting from? Are electric school buses anywhere, or is it still an extremely marginal sort of market?Duncan McIntyreWe're at an inflection point right now, David. If you'd asked me the question a year ago, I might have said electric buses made up 2% of the new school buses purchased in 2022. But in 2023, our perspective is it'll be closer to 10% of the new school buses purchased, and in 2024 will be 20% to 40% of the new school buses purchased. So it's changing very quickly right now.David RobertsYou think we're on the upswing of that s-curve in adoption?Duncan McIntyreWe are. There's lots of reasons behind that. The federal government, as well as many states have launched programs that are putting a lot of fresh grant capital as well as tax credits.David RobertsIf I'm a school district now, what is the total kind of pool of assistance available to me? I think there's some stuff in IRA. I think there was some stuff in the infrastructure bill. I know there's state stuff. What is the sort of menu of assistance I can find?Duncan McIntyreYeah, it's a tidal wave of assistance, David. It takes a full-time person just to navigate it all. But I would put it into a handful of big categories. One is the Clean School Bus Act, which is part of the infrastructure bill, and that's $5 billion that will roll out over five years.David RobertsAnd are those just grants to buy school buses?Duncan McIntyreEssentially just grants to assist in buying electric school buses. I think the second big category is tax credits in the IRA. And the tax credit is not as big on an individual vehicle basis, but importantly, it can be bundled with other grants and so it provides support. And then many states have their own programs. California has had a program for years that's robust, really a grant program. Colorado has a new grant program. There are funding mechanisms everywhere from New York to Maryland to Virginia. And in many states, the totality of bundling a state program with a federal grant program and a tax credit actually make an electric school bus much less expensive than buying a new diesel, so there's a real cost advantage in some parts of the US today.David RobertsGot it. So we're not just talking assistance. We're talking sufficient assistance at this point.Duncan McIntyreMore than sufficient assistance, we would argue.David RobertsRight. Okay, so we've got a school district that has a dream of switching out fleets, but it is daunted by the individual cost differential of the buses. It is daunted by this notion of infrastructure and how to build it and where to build it and how to run it. It's daunted by, basically, being busy and not knowing... not having time to study how to switch sort of the logistics of the fleet and the dispatching everything. So into this environment comes Highland. What is your business model? How are you trying to address those barriers?Duncan McIntyreYou've laid out the barriers quite well. The Highland business model is the finance engine behind driving the electric school bus movement. What we found is that while capital, upfront capital is a huge barrier, accessing the grants can help bridge that gap. But it's complex. And on top of that, if you've got the grant money, it's still very difficult to figure out how to design the equipment, build it on time, build it reliably, and then ensure that you can operate, reliably and within your budget. And so, our business model is truly the finance engine. We pay for everything that's not grant-funded from vehicles to equipment, and then we commit to operate that equipment and really support our customers—support the schools—by promising their fleet of electric buses will be fully fueled every morning for 15 years.David Roberts15 years. So just to make sure I have this right, the school district pays basically a subscription fee to you, to Highland, and Highland buys the buses, builds the chargers, builds the depot and trains staff, and then maintains, but does everything else, maintains the vehicles, repairs the vehicles if they needed or replaces them. Everything else, Highland does. So the only thing that the school district is on the hook for is a subscription fee, is that right?Duncan McIntyreFrom a financial standpoint, that is exactly right. And from a practical standpoint, you're spot on. The only nuance would be vehicles are often maintained by the district's mechanics. So we will train them and then we will pay for the maintenance. So the staff that's on the ground today is typically very well-suited to actually do the repair work, and they're eager to get the training and be part of this new industry.David RobertsSo financially, the school district can be confident that the subscription payment is the totality. There's not other things that they haven't thought of. They're going to come and post costs on them.Duncan McIntyreThat's exactly right, yeah. The school district knows it's predictable and reliable that our subscription fee is on par or less than what they spend to put a diesel fleet on the road.David RobertsI'd like to get into a little bit of detail about that. So it seems like just financially, just comparing the cost is complicated. So I assume you've done this math and you've worked through this with some school districts. So what is the kind of cost of a subscription? And how does that compare to... if I'm a school district with a fleet of diesel school buses, the cost of switching the buses, building the infrastructure, training, maintenance, et cetera, et cetera, how does the total cost shake out?Duncan McIntyreYeah, that really is one of the key drivers behind this industry.David RobertsI'm sure it's everyone's first question when you approach them.Duncan McIntyreTotally. And in terms of your listeners, David, I would imagine solar is a good analogy. The reasons why companies like Sunrun have done so well is because the average homeowner doesn't necessarily know that if they spend $25,000 on solar equipment, they don't know what they're going to get in return. And so a developer can take on the risks, place the capital, build the equipment and promise that the equipment will work. And the result is the homeowner pays ten cents a kilowatt hour and they know that's cheaper than the utility. We sort of do the same thing. We know what the capital costs are going to stack up to be on any given project. And they differ depending on the state that we're in. Illinois is different from Maryland.David RobertsWell, size of the school district, too. I mean, presumably these bus fleets range quite widely in size and scope, like geographical scope.Duncan McIntyreAbsolutely, that's right. But we know what the cost is to build and then we have our own perspective on what the ongoing operating costs will be. Electricity to fill the buses every night, the software we need to run it, all the costs. And then the third big piece is we know what the grants look like and we need to organize our deployments so that upfront costs and downstream costs match up and that can result in a very affordable rate that the school district can pay us under our subscription. But embedded in that is the risk that the equipment will perform and the risk of commodity prices.David RobertsRight.Duncan McIntyreAnd the risk of keeping the fleet maintained and running. And so it lends itself very well to a business like Highland where we have the scale to bring specialized teams to do all those things really well and deliver it as a bundle.David RobertsRight. So presumably the total cost of owning and maintaining the fleet for you is going to be somewhat lower than it would be for the school district just because you have the procedures and the staff and the expertise and the relationships with vendors, et cetera, et cetera.Duncan McIntyreThat's exactly right. There's economies of scale around every corner, and we're the largest buyer of electric school buses in the country today. We've got more of them on the road than anyone else. And as a result, we have scale in our operations that others don't have.David RobertsAnd so this subscription fee is locked in place for 15 years?Duncan McIntyreThat's correct.David RobertsThat's part of the guarantee. Like, you will pay X amount each year for 15 years no matter what happens to the cost of electricity or more supply chain problems or whatever else.Duncan McIntyreThat's exactly right. And it's more like per mile, $2.50 a mile might be a contract we would sign, and we know they're going to be driving that bus about 10,000 miles a year, but it could be a little more. It could be a little less.David RobertsRight. So a lot of risk you're taking on a lot of risk cost. So can you guarantee—I'm sure you don't want to guarantee because there are lots of different kinds of fleets and a lot of different kinds of places. But, can you come close to guaranteeing a given school district that the subscription fee they would pay you is lower total cost than going electric on their own? Is that something you can sort of set in stone?Duncan McIntyreWell, the school would have to go through the details and come to the conclusion on their own. But in almost every case, we found that we are cheaper than them doing this on their own. And I would highlight a couple of reasons why. One is simply we're a larger buyer than they are individually and that gives us access to better pricing from all the equipment providers. A second reason is we have invested in all of the technology needed. That creates interoperability between the charging stations, the vehicles, the utility, and the software management tools. And so we can roll that out very inexpensively at scale.And a third reason is there's a tax credit out there that has a lot more value in it for a private tax-paying entity that's structured in a way to monetize it. It's the same reason why most solar is privately owned as opposed to publicly owned. It's because there's tax credits that are tricky to monetize otherwise. And so there's a chunk of cash that we take off the top just for the tax credits that schools aren't aren't able to sort out very easily.David RobertsSo that's one financial question: is it cheaper than doing this ourselves? But maybe the more difficult financial question is: could you go to a school district and say over the course of the 15 years of the contract, this will be cheaper than continuing to maintain your existing diesel fleet? Can you promise that?Duncan McIntyreI can't promise that because we don't know what diesel fuel prices will be two years from now. But we can make a very strong case that we will indeed be cheaper by quite a bit. It requires everyone to agree on some assumptions around diesel fuel pricing. But we have one other benefit, which is: not only are we typically cheaper when you model it out, but we have no fluctuating costs to the school.David RobertsYes.Duncan McIntyreAnd so that's a benefit. It's a big benefit.David RobertsYeah, this is such a big benefit of renewable energy that I feel like manifests in a lot of different areas that gets overlooked a lot of the time. Just risk of commodity price fluctuations is such a huge factor in these financial transactions, such a huge factor in national inflation risk. It's like a huge factor in everything.Duncan McIntyreI totally agree. And the reality, David, is we can lock in electricity prices for many years into the future by going into the competitive electricity markets. And that's a lot more difficult to do with diesel fuel, unless you want to pay a big risk premium. And so not only is are the kilowatt hours much cheaper, which just makes the totality of fueling costs lower, but electricity has more management tools for companies like ours to go into the markets and really lock in those prices. So we aren't taking twelve years of completely naked risk either. We're just bringing a set of strategies to bear to offer that to our customers.David RobertsSo you can make a strong case that it will be cheaper over the 15 years. What about though, like, next year? If I'm a school district and I have sort of a set school bus budget, can I save money on the first year? Because it's always these upfront—as I'm sure you will know, it's always these upfront costs that are daunting to people and keep people away from these things—is there immediate savings or is it comparable immediately?Duncan McIntyreYeah, there's immediate savings, especially in the environment we live in today, where there are some grants available to support project costs. And so year one, year two, year three, there's immediate savings and there's also just a huge savings in the first year because you avoid buying a new diesel bus. So you might avoid spending $140,000 for a capital purchase. And you've gone to a world where Highland gets paid $30,000 a year, which includes a vehicle, it includes all the fuel, it includes repair costs, it includes software and training. So there's cost savings day one and there's a very strong case that there will always be cost savings.David RobertsSo this is a naive question, but you're coming to school districts and saying, "Hey, a. you're going to save money on day one, b. you're going to improve the health of your kids and your drivers, c. you're going to improve general sort of satisfaction and performance." Who says no to this? And why? Does anyone say no to this?Duncan McIntyreI ask myself the same question occasionally. It's almost too good to be true. We're at a moment in time where the technology is ready for the task and there's a combination of available services and capital and those are coming together in a really nice way. But what we're doing, David, is still asking municipalities to buy transportation in a different way. They're accustomed to a capital budget to buy vehicles and an operating budget to run them, and we're asking them to blend them into a subscription. So there is a little bit of a new dynamic, a new purchasing dynamic, and then I would say there's always concern about new technology and we're still in the early innings of the electric school bus movement.And so there's, I think, a healthy element of skepticism around, "Will they be reliable?" And so, those are some of the obstacles that we run into. But I would say we very rarely get a flat out no. It's more... we just get folks who need to come up to speed. They're on their own educational journey and they need to kick the tires. And so we host a school district almost daily at one of our sites, whether it's Maryland or Colorado or Massachusetts, we're hosting a lot of visitors expressing interest, and they're in various places on their buying journey.David RobertsWhat about, god forbid, the risk that Highland goes out of business at some point in the next 15 years? What happens then to these contracts?Duncan McIntyreIt's a good question. The vehicles are still there and the vehicles will still be operated and the contracts stand independently. We set every contract up in its own entity and we fund each individual entity in a way that's appropriate to capitalize the project. If you think about a project, the risk that we go under is really only for the couple of months at the very beginning when we're building and delivering. Once we've installed all of our equipment at a customer site and we've delivered all the vehicles, the project entity that we own, but the project entity that serves the customer, is simply basically producing profit that goes to pay back the investment. But if Highland were to go under, that project entity will still stand and serve the contract until the end of the contract.David RobertsGot it. So the the maintenance and operations side of things is locked in for the 15-year contract, regardless of Highland's fate.Duncan McIntyreThat's a good way to think about it. That's exactly right. And so there's a lot of details behind how that works, but every one of our customers asks the same question you ask, and they get very comfortable because of that dynamic.David RobertsRight. So as I'm envisioning the country's school districts, the first thing that comes to mind is just wild variety of size, of financial wherewithal, the number of buses, the geographical scope of the buses, the weather conditions in which buses operate. So how standardized can you get this? It seems like there's this element that's bespoke to every school district that's sort of unavoidable. How similar is what you do from district to district and how much is it kind of customized?Duncan McIntyreThere's a few things to unpack there. There's a component around the environment that the project is asked to operate in. So whether it be the average temperature by week per year, the topography, are they going up steep hills and down, or is it flat? How many stops? All that stuff gets, gets boiled down to the sort of the operating plans and we build our charging infrastructure and size the batteries. And every aspect of a project design depends on those key assumptions. But we have done this everywhere from scrubbing data from a project in Tok, Alaska, which is arguably the coldest electric school bus in operation.David RobertsYeah, I was going to ask, I mean, everybody, as you can imagine, everybody on Twitter everywhere else, one of their first questions is, "What about cold weather? What about when it's freezing? Blah, blah, blah. What about... don't EVs lose range? How do you keep the buses heated when you pick up your first kid?" All these questions about cold weather. So you've dealt with those.Duncan McIntyreYeah, the answer is, it's actually not that complicated. It's just about planning. I'm sitting here in Beverly, Massachusetts, at our headquarters. I'm looking out the window, and we're getting dumped on by snow right now, and the buses are out picking kids up. And it's fine. You do lose a little range. It's better to precondition the batteries and the cabins of the vehicles with some heat before you unplug them. So the vehicles go out pre-warmed with a full tank of gas, so to speak. But that's sort of a segment of your question.The broader question is, can you standardize a product offering here? And the answer is, absolutely. That's what we've been working on for the better part of five years. Every project has expertise needed in designing and building a depot. And so you've got parameters that you need to solve for that include topography, temperature, range. You've got people who need to be trained. You have investments that need to be made, and you have a utility that you have to interact with, and you have to put all those things through a standardized process so that you deliver reliable, affordable transportation at the end of the day.David RobertsYou've not run across a school bus route that is too long or too far to do with electric like...?Duncan McIntyreWe have. We've run into a few, but they're very rare. We serve both very rural and very urban customers. In Illinois, we have a contract that's in a very rural part of the state, and the routes are over 100 miles. That's entirely doable, as long as you plan your charging equipment appropriately. But occasionally we see 150, 160, 170-mile day, and the driver doesn't have the time to circle back. And so those are some of the routes that are less appropriate for electric today, but it's less than 5% of the routes.David RobertsWhat is the range of an electric school bus?Duncan McIntyreWith the products that are available today, between 100 and 160 miles. Most of the buses we have on the road today have 140 miles of range.David RobertsAnd should we assume that that's being steadily improved like everything else? I was going to ask about this later, but let's get into it now. Just about the sort of manufacturing of the buses themselves. I'm presuming that among all the many other things you're doing, you're not manufacturing school buses. Where are you getting them and are you ordering? I mean, is there like a standard offering that you're just buying in bulk from some manufacturer, or is it possible to customize them? And if so, how much? Like, in terms of the physical buses and how you procure them, how does that work?Duncan McIntyreWe do not manufacture buses. You are correct. We buy them from the top tier manufacturers that have electric products available. Thomas Built Buses. We buy from Bluebird, we buy from IC, all of the major US-domestic manufacturers that have electric product available. We essentially buy one of two or three formats. There's a type C, there's a type D, which is a little bigger but a shorter wheelbase, and a type A, which is a smaller bus. And while there's lots of bells and whistles, you can add safety features, those can all be specced by each individual school.It is fundamentally the same foundational vehicle, just with more cameras or seatbelts or whatever someone might add on. So we do buy, in bulk, for a couple of those categories as part of our procurement strategy. And so we end up working really closely with the manufacturers, not only in terms of the features we need to operate the vehicles efficiently, but also the feedback loop. What are the things we found that are tricky for drivers? Little quirks?David RobertsYeah, I'm very curious about those people who have road tested these things now and there's... driving school bus routes every single day is a real stress test.Duncan McIntyreIt really is.David RobertsWhat do they find in terms not just of like, drivetrain or whatever, but sort of those bells and whistles? What do they and do they not want in those terms?Duncan McIntyreWell, first, I would say the drivers, almost universally, absolutely love them.David RobertsThis is for the same reason that everyone loves it when they switch to an EV, presumably?Duncan McIntyreIt's a lot of the same reasons, right? The vehicles have better torque. They're completely silent. The braking is a real pleasure. You really just take your foot off the accelerator and a regenerative braking system slows the vehicle down at an even pace. It's a very calming experience, and it puts more power back in the batteries while it does that. And so it takes a little bit of training and a little bit of practice to get the hang of it. But the drivers love it and it eliminates the wear and tear on the brakes. But I would say, David, the biggest highlight I would throw out there is because the vehicle is so quiet, no engine rumbling, the kids in the back don't have to yell over the engine rumbling to talk to each other, and so it's just a quieter drive to school, the whole experience.David RobertsYes. My memories of school buses in my youth definitely involve a lot of noise, a lot of screaming.Duncan McIntyreAbsolutely. And I would throw out one other just anecdote, which is while the drivers absolutely love the vehicles, there's lots of little quirks that we found, especially in the first couple of years of operating— fewer and fewer today—but little software quirks where if your bus is Idling for more than a minute, it will shut off in the early iterations. So you have to flip the switch and turn it back on. And since there's no engine rumbling, you don't know that it's shut off. And so that was a little inconvenience that had to be sorted out with the manufacturers. But little things like that are pieces of feedback that were, I would say, weekly, monthly for the first year and a half, and now it's more like quarterly.David RobertsAlso in terms of the physical buses... in the EV space, there's this sort of division between sort of legacy manufacturers that are trying to move to EVs. And the thought is among, some people I think probably fewer people these days than before, but the thought is among some people that a company like Tesla, which is just starting on EVs from the beginning and designing an EV from the ground up rather than trying to sort of adapt old existing chassis and things like that, is going to produce, ultimately a better vehicle that in the long term will be cheaper. Is there a Tesla of school buses or of buses generally, or are these all legacy manufacturers?Duncan McIntyreLion Electric is a Canadian company that's the closest to what you described in this sector, and they were the first manufacturer to put an electric school bus on the road a number of years ago. They've had a lot of success in California, and they've got the lion's share of the market in Canada. And they're focused on other areas too, other categories of medium and heavy duty, municipal and other transportation, trucking and busing. And they are very... Lion is a very formidable competitor for the incumbent OEMs. I think one of the areas that is really unique to school busing is there's a very tight relationships with the regional dealers, not only on buying the vehicles, but just the ongoing support that's needed to keep them on the road. And, I think it's an area that is harder to break through that network without your own. Whereas Tesla had the benefit of consumers not having quite as tight of a relationship with their dealers.David RobertsEven loathing their dealers.Duncan McIntyreYeah, that's right. In many cases, I think that's right.David RobertsFinal hardware question: what kind of batteries do these buses use? Are they all using LFP batteries?Duncan McIntyreThere's a few technologies, but they're for the most part lithium-ion batteries.David RobertsAnd this is not like do you not get parents or school administrators worrying about battery fires? I mean, I know they're rare, but obviously—in this setting—you wouldn't want to take any chances.Duncan McIntyreI agree. That has not been a key area of concern for parents or school administrators. We do get the question occasionally, but it hasn't been a key area of concern. We own a lot of Thomas Joulies, which is the Thomas-built electric school bus, and they are powered by a powertrain built by Proterra. Proterra is a domestic manufacturer. They make batteries specifically engineered for the medium- and heavy-duty transportation sector. And the safety requirements and standards in that category of vehicle are such that Proterra had to do a tremendous amount of safety work. And they are one provider. Cummins has a platform as well.There are others, but our opinion is the industry has done a pretty good job of designing, you know, the right safety precautions and designing their equipment in the right way just to make them really safe.David RobertsYeah. Okay, there's a whole set of questions I want to ask about utilities and your interaction with them.Duncan McIntyreSure.David RobertsPutting aside for now, fancy talking to the grid and all this kind of stuff just in terms of going into a utility area and installing what amounts to really substantial new load and not only substantial new load, but load that when it's running full out, is a really high level of power involved. I just am assuming that you have to tell utilities, ask utilities, interact with utilities in some way just if you're going to show up and do this. Is that accurate?Duncan McIntyreYes, that's accurate. David, I would say it's somewhere in between ask and tell because the reality is the utilities, distribution utilities have a mission which is to serve the public with electrical service wherever needed. You don't build a new hospital and the utility doesn't say, "Sorry, you can't do it", right? It just comes down to timeline and cost. And so, we do need a ton of power. We have five sites right around Washington DC and Maryland. And each site has a five megawatt interconnection foot charge, electric school buses, so do 25 megawatts in a very small geographic footprint.David RobertsI mean, so that that's like grids are going to have to plan around that. I'm like, I'm curious if you've ever gone to an area where the utility says, like, "We would love to help you with this, but right now we just don't have the infrastructure, we don't have the lines, we don't have the ability to accommodate this much new power." Have you ever run into that?Duncan McIntyreWe have. And a couple of quick thoughts. The first is: it's always possible it just comes down to timeline and cost. And so it's an exercise in doing our homework, right? So we do all the work. I would advise anyone before you talk to your utility, you do your homework. What does the distribution feeder have available on it? Like what's the amount of power you can draw today? This is available information that can be looked up. Then it's about figuring out how difficult it would be to upgrade the service if it truly needed to be upgraded, how many miles of three phase have to be run from the nearest point of connection.And then, it's looking at the landscape, and that is everything from the existing rate tariffs to the Public Utility Commission to the politicians. And there's more and more support in more places for electrifying fleets, electrifying everything from passenger cars to garbage trucks, right? And so the political will is there to support investment, rate-baseable investment, in EV infrastructure. And it's about threading the needle between all those dynamics and coming up with a plan. There are places where we want three megawatts of power, but we'll settle for 1.5, because we can get 1.5 in a year, and we can work on the next 1.5 over the next four years, and plug the gap with some stationary storage or some other form of a charging strategy.And so, I would argue it's really about interacting with the right people at the utility to come up with a plan that leverages the utility's assets and capabilities with the needs of the fleet, and it gets married up by the equipment that's available to sit in the middle.David RobertsYeah. Have you run into a situation yet where you had to wait? Where you had like, people ready to sign contracts, but you had to wait for years, two years, three years, four years, whatever, to let the utility prepare?Duncan McIntyreWe signed our contract with Montgomery County Public Schools in February of 2021, and we promised to have the first depot up and running in August that summer, which is lightning fast, but we promised to have three more depots up and running 18 months later because we knew they were going to be slower. And then we didn't promise to have the fifth depot up and running until the summer of 2024. So we knew that one would take three years and it will take us three years. We're in the middle of it now. And that was exactly a function of those local dynamics, how to get the power, how to get it efficiently, how to get it affordably, and how to work with the utility to do that.David RobertsYeah, I don't know that I would want to be in a business where I'm waiting on utilities to do anything as a general matter.Duncan McIntyreIt's an inevitability here. But once you're up and running... first of all, for the most part, utilities have been pretty darn good partners. Everyone has this in their roadmap, and so more often than not, they're kind of excited when someone comes and says, "Hey, we've got a real project, let's work on it together."David RobertsBeyond just the basics. Once you have a fleet of electric school buses, you have a distributed set of very large batteries which are sitting unused most hours of the day. So I guess two questions. One is about grid to vehicle communication, i.e. do you time the charging of these vehicles in coordination with the utility in some way?Duncan McIntyreSo I heard two things there.David RobertsWell, the first is time-to-charging, which I think of as sort of grid communicating with vehicles. And then the second is vehicle-to-grid, which is vehicles occasionally discharging electricity into the grid when the grid needs it. My sense from talking to people in this space is that just timing you're charging is relatively easy. First step in that vehicle to grid communication is a little bit more complicated and is not all utilities are ready for it but just sort of tell me like to what extent are you getting into grid services?Duncan McIntyreWe are absolutely doing both and you're correct that simply timing your charging we view as table stakes. You sort of need to be doing that to run an efficient operation. I would say that we coordinate that with the utilities a little bit. But the utilities don't get deeply involved in interacting with customers on topics like that today. What they do is they push out programs. They say, "We have a time-use rate tariff." You, customer, choose if you want to change your charging schedule based on the rate tariff and so we are doing that very actively.The equipment that's available today it doesn't come fully ready to allow customer choice around charging times. You really have to do it in more of a manual way. We've had to build a software stack with all these controls to do it in a reliable format but I do think that's an area where the tech is getting better and better and if you do it right you will save 75% on your power costs.David RobertsNo joke. That's a lot.Duncan McIntyreIf you look in places like San Diego, if you charge at the wrong times, you'll trip demand charges. And without getting into all the details, your bill can skyrocket. And so charging is really important to get right because it just comes down to dollars and cents.David RobertsAnd so at this point, you have got software integrated into the buses such that the driver can just plug in whenever without worrying about it and the software does the timing?Duncan McIntyreThat's exactly right. The software allows us to control our charging times and our charging rates from our remote operating center. And the software creates that connective tissue between us and our equipment in the field and helps us to scale and helps us to assess fault codes earlier vehicle health, look at trends, collect data, but ultimately control charging in a very dynamic way.David RobertsAnd you feel like that's... you've got that relatively down?Duncan McIntyreWe've got that fully down. We do have a partner, it's a company called Synop, software company, and we've done a deeply integrated commercial partnership with them that's many, many, many years long and then on top of them we have our own systems and processes that effectively ensure that all the hardware speaks and allows the software to do its job. So it's a full tech stack of software and hardware and it's all got to be stitched together in the right ways to work smoothly.David RobertsInteresting. And so what about then vehicle-to-grid? I am assuming that that's rarer that there are only some utilities that can accommodate that. Are there any yet? Is that a real thing yet or is that still like a gleam in people's eye?Duncan McIntyreIt's a real thing but today it is binary in that either the utility has something you can do or it doesn't. And we have vehicle-to-grid up and running on about a third of our projects today. And in most of those cases, the vehicle-to-grid activity is in its simplest form, we're charging the buses full during the overnight hours in the summer, July and August, and we charge overnight because there's lots of power available. It's very inexpensive, and the grid has it available. And then late in the afternoons, the next day, from 3:00 to 6:00, 4:00 to 7:00, we will actually export all the power in the batteries from the buses back to the grid. And it's because the grid needs the power and they're willing to pay for it. And it's very lucrative and so helps drive down our cost to serve school districts.David RobertsYeah, when you say lucrative, I mean, compared to saving 75% on your charging costs, is it that lucrative? Like, where is it relative to just sort of timed-charging? Are you, are you making comparable money offering these grid services?Duncan McIntyreIt's more lucrative than simply saving. Just to put, you know, some round numbers around it, if you charge at the wrong time in San Diego, you could get a $5,000 utility bill for the month for one bus. If you charge in a smart way, that might be $1,000, right? A lot less expensive. Our vehicle-to-grid income on a per bus basis in parts of New England is $12,000 a year.David RobertsNo shit.Duncan McIntyreYes.David RobertsThat's a lot!Duncan McIntyreNow, you have some equipment that you have to invest in to do it. So it's not all profit, but what it does is we pass dollar for dollar, we pass that money on to the school district, we underwrite to it as we invest in equipment to serve them, and then we operate the vehicle-to-grid program so that we can make it more affordable for schools. And I'm convinced that we're in the very early days, but in five years this will be happening in more places than it's not and will be a meaningful contributor to eating away at that $200,000 vehicle premium I described in your opening questions.David RobertsWell, also presumably, do you use that to lower I mean, is your subscription fee standard everywhere, or is it lower in some places than others based on grid circumstances?Duncan McIntyreYeah, our subscription fee is different for every opportunity. Each customer account might have different costs and different expenses, but we use that income to lower the subscription fee to the customer. And there are cases where the customer is saving 20-25% compared to their diesel fleet operation and the vehicle-to-grid is that extra savings.David RobertsInteresting. Vehicles-to-grid is one thing. There's also, of course, if you have this huge set of batteries, what about using them during blackouts for backup power for schools or community centers or things like that? Is that on your radar?Duncan McIntyreAbsolutely. As more and more electric school buses come online, they are increasingly becoming a source of resiliency for local communities. We call this vehicle-to-community. Very much describes the activity taking place. The buses have very energy-dense batteries, and they happen to be energy-dense batteries sitting on wheels. If you've got a community that has lost power, you may need to keep cold storage going at a local high school. You may need to give people the ability to charge cell phones. You may need to set up air conditioners...David RobertsHospitalsDuncan McIntyreAbsolutely. Hospitals. Absolutely. These vehicles can be anywhere in a community in a short amount of time, and they can deliver power into buildings if they've been set up with the right equipment.We're building out these capabilities for a number of our customers, and I actually think it's maybe one of the most exciting, most promising dynamics that is very much an untold story to date, but it's just really exciting to make an electrified fleet that much more of an asset to its community.David RobertsYeah, huge resiliency advantage there. Because people say that the new Ford F-150. People will tell you that can power a medium-sized suburban house fully for like three days on that battery. I don't think people appreciate how big these batteries are. And that's just one truck. I assume the battery on a bus is much bigger. So, this is not a small amount of dispatchable power you've got in your hands in the case of a blackout.Duncan McIntyreThat's exactly right. Our electrified site in Bethesda, Maryland, when it's fully operational, which is a couple more years, there'll be more vehicles arriving. But that site will be able to deliver five megawatts of power in a resiliency format for a period of a little more than 3 hours, or it can deliver half a megawatt for many, many days. That's a large hospital right there.David RobertsYeah. Wild. One other thing about utilities, before I forget, I was reading there was a battle in Virginia, I think, recently. I think it was Dominion. The utility wanted to get into owning electric school buses. Owning and operating. I think maybe more or less along the lines of what you guys are trying to do. Does that make any sense to you?Duncan McIntyreIt does. That's well-described and it's pretty accurate. Dominion launched a program a couple of years ago where they proposed owning electric school buses and the charging equipment and basically providing them to schools, public schools in Virginia. And they proposed rate-basing all of those investments so paid for on your electricity bill if you're a resident in the state of Virginia. And the case they made was that this is part of the electricity ecosystem, and with the batteries and the buses, we can deliver reliability services. There are varying formats of that being proposed at utilities all across the country.David RobertsInteresting.Duncan McIntyreBut in very, very few cases does the utility propose to actually rate base the bus. And so Dominion was challenged by policymakers in Virginia, and the policymakers ended up saying, "You cannot do this in any sort of longer term programmatic format." It may be that they're going to try again.David RobertsWas it just sort of like generalized hostility towards utilities? Or was there some specific reason why they thought it couldn't work?Duncan McIntyreI don't think so. I think the case was made that the vehicle itself is not something that the average electricity purchaser, the average homeowner should be paying for. That's not a fair expense to pass on to the ratepayer. It's something that should be passed on to the schools. Now, if the batteries have value and you can isolate the value to help balancing the system, then maybe that's an acceptable investment. But, I think Dominion was early on in this movement and I would expect comeback with a modified version of their plan that probably has a higher likelihood of success.David RobertsAnd that would be competition to you, would it not? Some of the same services?Duncan McIntyreIt is and it isn't. They would be providing equipment and agreeing to pay for some of that equipment, but that's not much different than a grant which just pays for some of the equipment. Dominion does not come with a suite of services to basically ensure the fleet gets built on time and operates reliably.David RobertsRight. They're not going to build a depot or repair school buses.Duncan McIntyreThat's right. And if your charging station doesn't work, are you going to call Dominion? You're not going to call Dominion. So I think businesses like ours have a natural ability to partner with utilities in any format that the utility shows up in. We can plug the gap with additional capital and with services that ultimately benefit reliability and cost certainty to schools.David RobertsOkay, so then let's wrap up maybe with a final kind of question or set of questions. So we've got the business model here available. It's advantageous for most school districts just on a pure cost basis, to say nothing of not pumping diesel fumes directly into kids lungs and deafening them with jet engines as they get to and from school. And I'm a parent in a school district and I am taken by this and want to advocate for it. Where do I go? To whom do I direct my strongly-worded email? What's the best way for people to try to organize and advocate for those?Duncan McIntyreI would send your email to three recipients and put them all on the same email. The first recipient is a board member, a member of the school board who is an advocate for this type of activity. The second individual would be a Chief Business Officer or an Assistant Superintendent, someone who's typically tasked with the operating side of the house and ultimately responsible for finance and contracts. And then the third would be the Transportation Director, whoever's running the current fleet. And what you do there is you get everyone on the same page. They all hear your message. A board member can be an advocate and push that message down, which often creates more willingness to take a deeper look faster. A business officer can get comfortable with the risk and the cost, and a transportation director can ground it all in the reality of: Will this work to pick kids up and drop them off back at home? And so that would be my advice, David.David RobertsThis seems like a great and very obvious step for school districts to take. Like, everybody, we needed to decarbonize, regardless. Kids' health is particularly important. This model overcomes the upfront cost barrier. But what if you receive pushback along the lines of the following: we're still early days in both electric school buses and in models like this, business models like this. And it's very likely that a few years of experience are going to scale a lot of things up, bring a lot of costs down, and that the subscription fee will likely be lower in three to five years than it is today. Why shouldn't we just wait until the market is more fully-baked?Duncan McIntyreThere's a decision that has to happen every single year to buy vehicles, to replace the oldest vehicles that effectively need to go to the scrapyard. If a school district has to buy ten new vehicles, they have an inflection point that is immediate.David RobertsRight.Duncan McIntyreThey can buy diesels or they can go electric, either on their own or with a model like Highland's model. And so it's less about "will the cost come down." Sure, the cost might come down for the ten we need to buy next year and the ten we need to buy the year after that and the year after that. But that doesn't change the fact that we have to buy ten vehicles right now.David RobertsRight.Duncan McIntyreAnd if it's cheaper, arguably cheaper, with a very, very strong argument to be made that it will always be cheaper, and it's definitively cheaper for the next five to seven years, then that tends to win the day with a business officer. And you really just have to get comfortable that the technology is ready to meet the routes and the reliability standards of your district. And there's enough projects out there at scale that we think prove that in a very strong way. But the last thing I would say is that's why Highland exists, because you don't own the vehicles. You, as the school district, are in a performance-based contract. And so Highland only gets paid if the vehicle operates by the mile. If the vehicle stops operating, there's an inconvenience, but the school is not out any capital or any additional money. And so we are truly incentivized as their partner to keep the fleet operating smoothly, fully fueled every day for a pretty long time.David RobertsRight. And it's in your financial interest to maximize performance with the lowest possible budget.Duncan McIntyreThat's right.David RobertsAll that sort of constant effort of looking for economies and looking for improvements and everything else, that's such a mental time load that is being offloaded.Duncan McIntyreWe agree. And David, it's not that the model is new to schools. It's new for school buses. But, schools have been buying energy efficiency equipment under energy savings contracts for decades. They're very accustomed to that business model within the operations of their plant, their facilities, and this is no different.David RobertsOne thing I always say about this model of subscription, rather than buying, and this is true across product categories is if you're just subscribing to your equipment. If a new, cooler, better school bus comes into the world, it's to Highland's advantage to buy it and switch it out. Unlike if you buy a diesel bus, you're just sort of stuck with the diesel bus for whatever it is, 10, 20, 30 years. You can see continuous improvements when you're on a subscription model. You don't have to buy every new model of bus. Someone else is going to do that for you. So you will likely see improvements in hardware and service over the course of the subscription.Duncan McIntyreThat's exactly right. And I would also say that our customers, if you speak with any of our customers, they would say that this whole experience is an upgrade. We give them better insights into their fleet. We provide a technology platform that is state-of-the-art and robust. They have better information than they've ever had on where the buses are located, state of charge, the health of the vehicle, lots of analytics and other tools. And when something goes wrong, we have people there and we're on the phone, and we're opening up power cabinets and solving problems very quickly. And the whole experience is, as you described, an upgrade.David RobertsWell, this is awesome. Volts listeners know that I have enormous enthusiasm for electrified postal vehicles and electrified school buses. Those are my two favorite things in the entire world to talk about. So I'm so thrilled, a. that you're out there doing what you're doing, and b. that you came on and took all this time with us. So thanks very much.Duncan McIntyreYeah, David, I love your podcast. I love what you're doing, and I was very glad that you're interested in hearing more from Highland about our experiences and what we're seeing in the market. So really appreciate you having us on and look forward to hearing it live. Thanks.David RobertsThank you for listening to the Volts podcast. It is ad-free, powered entirely by listeners like you. If you value conversations like this, please consider becoming a paid Volts subscriber at volts.wtf. Yes, that's volts.wtf, so that I can continue doing this work. Thank you so much, and I'll see you next time. Get full access to Volts at www.volts.wtf/subscribe

In this episode, Raffi Garabedian, CEO of startup Electric Hydrogen, discusses all things electrolyzer, the current hydrogen market, and the future risks and opportunities for green hydrogen. (PDF transcript)(Active transcript)Text transcript:David RobertsVolts subscribers are likely well aware of the fact that a fully decarbonized energy system is going to require an enormous amount of hydrogen to fill in the gaps left by wind and solar. What's more, they are probably aware that hydrogen comes in a dazzling variety of colors, from blue to gray to brown, depending on the carbon intensity of the production.In the end, though, only one such color matters: green. That is to say, a fully decarbonized energy system is going to require lots and lots of hydrogen made with renewable energy, with no carbon emissions. The way to do that is to run water and electrical current through an electrolyzer, which splits the hydrogen off from the oxygen.Currently, about 95 percent of the world's hydrogen is made using fossil fuels. Green hydrogen — hydrogen made with renewable energy and electrolyzers — comprises only a sliver of the remaining 5 percent. Yet it’s going to have to scale up to 100 percent in the next several decades, even as demand for hydrogen rises.This is all a familiar story, at least to energy nerds. But if you're anything like me, the more you think about it, the more you realize that, despite the key role they play in that story, you don't actually know very much about electrolyzers themselves. What are they, exactly? What do they look like? How can they be improved? What policy is supporting them?To talk through these questions, I contacted Raffi Garabedian, the CEO of Electric Hydrogen, a startup that has set out to rapidly drive down the cost of green hydrogen. Garabedian, who was previously chief technology officer at First Solar, believes that the market for green hydrogen today is roughly where the solar market was in 2008, with all the attendant risks and opportunities.Garabedian (quite patiently) walked me through the basics of electrolyzers, the current state of the market and the technology, the kind of cost improvements he believes are possible within the next five years, the increasingly supportive policy environment, and the future of green hydrogen.With no further ado, Raffi Garabedian, welcome to Volts. Thank you so much for coming.Raffi GarabedianIt's great to be here, David.David RobertsI'm excited to talk today about electrolyzers because I think I am, and I think probably most of my listeners are already convinced that hydrogen is going to play an important role in a decarbonized electricity system. I think we can just assume that. And I already think, and I think my listeners probably already know this too, that in a true decarbonized system, it's going to have to be so called "green hydrogen," hydrogen made without greenhouse gases. I know there are 50 other colors made from different other things with varying levels of greenhouse gas production. But, I think—and obviously you think, since you've predicated your business on it—that we got to make green hydrogen work.And green hydrogen is hydrogen made with renewable electricity and electrolyzers. So, we know all that. But I find that when I think about the technologies involved, I have a pretty good understanding of all the pieces of that puzzle, except for electrolyzers. They're just kind of this thing that plugs into a certain spot in the diagram. But I find that when I actually focus in on it and think about it, I turn out to know very little about electrolyzers. So I'm very excited to have you on the pod today because I suspect I'm not the only one who has that sort of gap in my knowledge. So maybe we can just start with: what is an electrolyzer?Raffi GarabedianYeah, let's start there. Let's first start by just exploring and defining the problem that we're trying to solve, right? So we're trying to make hydrogen, which is both a feedstock and a fuel, and we're trying to make it using renewable energy. So how does that work? Well, it all starts with the water molecule. So everybody knows water is... what's the chemical formula for water? It's H2O. So think of that as oxidized hydrogen. Hydrogen, the word, actually is derived from hydro: water, gen: produces. So when you burn hydrogen yeah, interesting, right? When you burn hydrogen, you get water as a result.So burning is oxidation. So what an electrolyzer does is the opposite of that. It's the reverse of oxidation, which is called reduction. But it does so electrochemically. Now, what does that mean? Electrochemistry is a whole field of science and technology that involves the interaction between chemical reactions and electricity. And generally the kinds of electrochemical systems that are used in industry involve things like membranes and electrodes. But the function of these devices is to drive some sort of a chemical reaction that requires energy towards a desired end state. Now, in this case, what we're trying to do is drive water, which is burned hydrogen, oxidized hydrogen, back to its original state, right back to hydrogen's original state, which is H2, which is just the diatom of the element hydrogen.David RobertsYou're unoxidizing it.Raffi GarabedianYeah, you're unoxidizing it and and to do—you're unburning it. And to do so requires a tremendous amount of energy. That's because the reaction of hydrogen plus oxygen equals water, releases a lot of energy in the first place. It's, as they say, energetically downhill. So to go the other direction, we have to pump a lot of energy into it. Now, that's the good news. It's not bad news in this case. The good news is: we are able to store a lot of electrical energy as chemical potential energy in the form of hydrogen. And then we're able to extract that either as heat by literally burning it like you would any other fuel or through other mechanisms. For example, you can run hydrogen through a fuel cell and you can get electricity back out again round trip, just like a battery.David RobertsSo all that energy you're using to break up the water is effectively stored in the hydrogen, and you're getting all that energy back out when you...Raffi GarabedianYou got it. I've heard people say, "Oh, well, electrolysis is bad because it's so energy hungry." Well, that's exactly the point. It's energy hungry because you're trying to convert, transform that electrical energy from electrical potential into chemical potential, right? That's what an electrolyzer does. So an electrolyzer is the machine that does that, and it's generally got a bunch of parts to it. The heart of the machine is this thing called an electrochemical stack, typically. And that's a bunch of plates, layers of plates, and they're literally stacked on top of each other, which is why we use that term in the art.But you flow water through this thing, you pass electricity through it, and what comes out is oxygen on one side in one pipe and hydrogen on the other side in another pipe. It's got an anode and a cathode. And that's where you get the two gases are produced on either side of that cell. Now there's a bunch more to it. There's a power converter that delivers the electric power to the device and controls it. And then there's a bunch of piping, plumbing, valves, control systems, gas, water, separators, whole bunch of things wrapped around it, which we usually call like the balance of plant. Electrolyzers, historically... they've been around for a long time.David RobertsThe metal that the plates are made of is something reactive, right? Such that when you introduce electrical current to it and water to it, it causes the chemical reaction in question, like what do we have other than water and electricity?Raffi GarabedianRight. There are different technologies for electrolysis, but they all involve a thing called a catalystDavid RobertsRight.Raffi GarabedianAnd a catalyst is typically, in these cases, metals or metal oxides, which, well, like the word implies, catalyze the reaction. So they sit there, they don't get consumed, but they play a critical role in facilitating the reaction to occur. You can make water break into hydrogen and oxygen without a catalyst. Some of your listeners might remember high school chemistry class, right? You have like a little beaker of water. You put some stuff in the water to make it conduct electricity. You put two wires in it, connect it to a battery, and you see bubbles. Well, bubbles on one wire, oxygen. The other wire is hydrogen. And you can collect those gases. But that's a very inefficient way to electrolyze water. To electrolyze water efficiently, you need a very special kind of a catalyst. So those are the metals you're referring to. So they sit there, they're part of the construction of the device. They don't get consumed in the process, but they play a critical role in the process.David RobertsRight, so the catalyst is the same, whatever, after a year of production as it was at the beginning. This is not something that is breaking apart in any way or declining in any way.Raffi GarabedianWell, ideally, that's the case. Now, with any practical device, there are breakdown mechanisms, degradations, all sorts of practical things we technologists and scientists think about. And nothing works forever. Everything in the world breaks down. But, yeah, the first order, what you said is generally true. They're participants in the reaction, but they're not consumed in the process.David RobertsOkay, so you got these basic parts. What is the scale of this thing? Like, what is the smallest electrolyzer you could build? Or the biggest one? Or what is the typical one look like? Is it bigger than a breadbox? Like, what am I looking at if I'm looking at an electrolyzer?Raffi GarabedianYeah, let's go back in history a little bit, okay? So I think... forgive me, my dates are probably off a little bit, but I think the first electrolyzers were built in Norway, I believe. And they were built to utilize hydroelectricity to make hydrogen. And those were built using a technology called alkaline electrolysis, where caustic soda, or lye, is used as the working fluid, which is water-based. It's an aqueous solution. And those units are extremely physically large. Think of an object the size of a school bus, and they operate at pretty low power levels for their physical size.Think about something on the order of hundreds of kilowatts to a megawatt kind of scale for an object the size of a school bus. On the other extreme is this more advanced, I would say, technology called proton exchange membrane electrolysis. And that was invented... gee, I don't know the exact inventor, but I think it might have been Westinghouse back in the... fifties? And it was invented to make oxygen, interestingly, for submarines, for nuclear power subs. So these were relatively small devices operating in the kilowatts to 100 kilowatt regime, literally platinum- and gold-plated, super expensive things. They made it from submarines to the International Space Station to spaceflight again for oxygen.David RobertsAnd this is more like breadbox size.Raffi GarabedianYeah, that's right. But they've been adapted and have been scaled up over the years for the production of hydrogen. They typically go from, again, from that small scale breadbox scale to objects the size of a small refrigerator, shall we say, that could be as big as a megawatt in power capacity. So electrolyzers these days, the largest electrochemical stacks you can get are on that order, about a megawatt. They're physically very different in size depending on the technology.David RobertsSo it's not crazy to think that electrolyzers could be used in places where they need to sort of tuck into a relatively small space. Like, they vary widely in size. They could be made custom-sized for custom tasks.Raffi GarabedianYeah, they've been used industrially for years. They've been used in laboratory settings for years and years. They've been used for on-site production of extremely high purity hydrogen for things like semiconductor applications, for metal processing applications, whatnot. There's kind of a history of using these devices, but generally at relatively small scales. Now, when we think about the energy transition, which is the topic of your podcast and certainly my topic of interest, we are starting to now speak about a much, much different regime of scale.David RobertsRight. So this leads to my next question, which is: currently, I think it's 5%, something like that, of the world's hydrogen is made with electrolyzers. 95% still comes basically from fossil fuels. So those of us who are interested in decarbonization are expecting or asking this technology to scale up super big, super rapidly, relatively speaking, like this is like we're knocking on the door like, "Hey, can you like 2000 x in the next decade or whatever." So my question is just about... is the technology itself ready to scale up that big? Is it mature in the sense that efficiencies have been wrung out? Like we have it down as well as we can? Or do you feel like there's basic tech work to be done before we're prepared for that sort of explosion?Raffi GarabedianThat is a great question and a great framing of it. There's all sorts of really interesting technology in the laboratory today that promises to ultimately allow electrolysis to expand up in scale and down in cost. But, our problem is clear and present and urgent and so waiting for technology to emerge from the lab, which can take a decade or more because most of these devices are...first of all, electric chemistry is notoriously difficult to transition from the laboratory to reality.David RobertsWhen you say in lab, do you mean something fundamentally than what you described to me, the proton exchange membrane? You mean like fundamentally different kinds of electronics?Raffi GarabedianThat's right. There are different chemical cycles that people are experimenting with, different membranes, new catalysts, all sorts of really great science.David RobertsThere was something biological...capillary?Raffi GarabedianAll sorts of stuff.David RobertsWe can table that. Maybe we could mention that later.Raffi GarabedianYeah, all sorts of stuff that's out there. Electric Hydrogen, my company, we of course are aware of all of these kind of more advanced scientific developments. We've chosen a very different path because of the time horizon of the industry. So we are clearly focused on largescale decarbonization and both the market fundamentals, the secular trends and the policy frameworks are now in place to facilitate this industry to expand and become meaningful in the next five years. And that time horizon doesn't really support basic new technology development. And so we have opted to take a very well-developed mature technology, proton exchange membrane electrolysis, and adapted to our new needs.Now, that is done through some very core technical innovations. But the fundamental outcome of those innovations is to dramatically increase the productivity of that physical object. So that refrigerator-sized electrochemical stack we're talking about? Think about a five times increase in both the amount of power that we can run through it and the amount of hydrogen we can get out of it. The same physical-sized object. Now we can talk a little bit about how that's done. I'll be cagey about how we do it.David RobertsYes, this is exactly my set of questions right here. I figured you would be a little bit cagey about it, but maybe you can tell us some general things because we're talking about both kind of the electrolyzer itself, the core, the electrodes, the membrane. And then, as you said, there's all this "balance of plant" stuff. It's a big complex process which suggests that there are lots of places within that process to tweak things and tighten things up and make things more efficient, et cetera, et cetera.Can you tell us a little bit about in that whole big messy process where you are going in and tightening the screws and finding these efficiencies?Raffi GarabedianThe pat answer to your question is "everywhere," but let's peel that onion apart a little bit and explore it. So, let's start with the product we're building. The biggest electrolyzer that one can buy today is roughly, I think, a 20-megawatt plant.David RobertsWhat does that look like? What does a 20-megawatt electrolyzer plant look like? Is that a factory?Raffi GarabedianIt's a huge building that looks like a small chemical plant. And it has, you know, maybe 15 or 20 electrochemical stacks in it...David RobertsGot it.Raffi Garabedian...with a lot of plumbing and pipes and pumps and all sorts of things. And it's extremely expensive. That's the key, right? The key isn't actually how big it is. The key is the cost. Now, those things are related because the cost of plumbing, piping, valves, pumps, all of those things scales kind of with size. So to make it smaller is a good thing for cost, but also to keep it large in terms of its production capacity is extremely important.Let's talk about the application for a second before we go into the guts of the plant, because I think it's useful to have a frame of reference for scale. So you mentioned the current use cases for hydrogen, of which 95% is supplied using steam methane, reformation of natural gas. So those use cases are roughly 50-50 split between refineries. So hydrogen is a chemical input to the petrochemical refining process. And the other half goes to the production of ammonia, which is fertilizer.David RobertsThat's the current hydrogen market?Raffi GarabedianThat's the current hydrogen market, yeah. Now let's just talk for a second about an ammonia plant. There are dozens and dozens of these around the world. A typical ammonia plant, if you wanted to run it off of renewable green electrolyzed hydrogen would require rough numbers on the order of a gigawatt of renewable capacity and electrolysis. So that's a big number. And remember, we're talking about these electrochemical units which are at their fundamental building block level. They're one megawatt in scale. So it would be a thousand of these things. That's a problem.David RobertsA thousand of these stacks?Raffi GarabedianYeah, that's right.David RobertsPer ammonia plant?Raffi GarabedianPer single ammonia plant. World scale ammonia plant. Of which there are many, many. And that's just scratching the surface of what we want to do with hydrogen. Because, look, cleaning up ammonia production for fertilizer. That's great. That's some single digit percentage of global CO2 emissions right there. But the world is not interested in green hydrogen just for that reason. The world is interested in green hydrogen as an energy vector for moving energy from where renewables are abundant to where people are abundant and need the energy, for example, right? But also as an input to numerous industrial processes which cannot be electrified directly with renewables.For example, the DRI primary steel production process, which converts iron ore to metallic iron.David RobertsRight. Industrial fuel, airplane fuel...Raffi GarabedianShip fuel. So synthetic fuels is generally a broad category of applications so.David RobertsSeasonal energy storage is another...Raffi GarabedianYou got it.David Roberts...big one. Really, hydrogen can do literally anything. So you could go down the list.Raffi GarabedianYeah. And when you add up all those things that are very hard to decarbonize directly, you end up with about 50% of global emissions. I think the IEA's official number is something like 30%. But that skips over a very important factor you mentioned, which is the long duration storage of energy for the electric system. And when you add that back in, you get to about 50% of global emissions. So it's a massive, massive problem, requiring ultimately terawatts of capacity to be built and installed.David RobertsBecause I know some people have lots of weird hangups about hydrogen. I know there are some people out there who are skeptical about some of these larger uses of hydrogen. But I think it's worth saying that even if that estimate is off by several percent in either side, it's still many, many, many, many, many times the current production. Like, at a certain point, it hardly matters. The target is so far distant.Raffi GarabedianThat's right. You could be ten times over ambitious about what hydrogen could do for the world and still have an immense scaling opportunity and challenge ahead of you. Because again, we're talking about terawatts of ultimate available or necessary capacity to decarbonize all of these sectors. A tenth of that is 100 gigawatts. So big numbers here that we're talking about. So how do we address the scale of the opportunities and the scale of the plants that have to be built with technology that's at a fundamentally different scale today?David RobertsRight. We cannot meet that scale we need with current technology.Raffi GarabedianExactly. So we can just try to make more of them. But the issue with that is that they're too expensive when they're that small. So the other thing we can try to do is make them more productive. And the word I use is: "higher throughput." So again, take those same physical-sized objects and get a lot more value out of them. The name of the game in all of this is to make green hydrogen cheap. Let's not lose sight of that. Some of the applications you mentioned for example, shipping fuel. The economic parity point for shipping fuel is almost impossible to reach with anything other than what's currently being burned, which is bunker fuel.It's the sludge that comes out of the bottom of a distillation column and a petrol... super gross. Bunker fuel, because it's so gross, is super cheap. Now we know we can't compete economically against bunker fuel. Nothing can. However, the alternative of continuing to burn bunker fuel is less and less tractable. And so, both by legal restriction and through other economic means, the cost of the conventional approach, the bunker fuel approach, is gradually rising and we see it rising at an accelerated pace as time goes forward. So what we have to do if we want to change that industry, just as an example, right? We have to drive down the cost of green hydrogen-derived fuels very rapidly to intersect as soon as possible with the rising cost of burning bunker in ships.David RobertsAnd we're all presuming and we'll maybe discuss this in a little bit more detail in a minute. But the assumption behind all this is that policy is going to help do this. Like policy is going to be pushing up the price of fossil fuels—one hopes—even as technology and scale are pushing down the cost of hydrogen.Raffi GarabedianIt's happening as we speak. Okay, let's go back to the machine. So the machine has got to be big.David RobertsYes.Raffi GarabedianAnd let me just say the product that we are building at Electric Hydrogen, it's about an acre in size. It's funny to think of that as a product, but that's our product.David RobertsAnd that's multiple... stacks within that?Raffi GarabedianIt's multiple stacks, but not nearly as many as you might think. And it's comprised of modular process units. So think about kind of tractor trailer-sized frames like you might see in an oil field or a gas field. These are fluid processing units, heat exchangers, tanks, pumping skids, water treatment units and power conversion equipment, right? So we modularize all this equipment so that it can be easily put in place at a project site interconnected to produce a large-scale hydrogen plant. When I say large-scale, our product, that one acre size thing, that is 100 megawatt plant.David RobertsWhat is 100 megawatt referring to? 100 megawatts worth of hydrogen coming out or energy going in?Raffi GarabedianThat's the energy going in to the electrolyzer. And if you want to get geeky, that's about 50 tons per day of hydrogen output at full nameplate capacity. Now, a green hydrogen electrolyzer should almost never run at full capacity all day long.David RobertsOh, really?Raffi GarabedianThe only scenario in which you should be able to do that is if you're connected to a hydroelectric power plant.David RobertsAre you talking about because of renewables coming and going?Raffi GarabedianExactly.David RobertsBeing variable.Raffi GarabedianWhich is kind of the point of the architecture of our product as well. Is to be able to follow and track those renewables without firming the energy. And it has significant bearing on the choice of technology and the design of both the electrolyzer itself and also the whole plant that's put around it.David RobertsAnd to what extent are you improving the electrolyzer itself? From what I understand, the electrodes are made from fairly specialized metals? Like, are you looking for cheaper electrodes? Are you trying to improve the actual physical electrolyzing process itself?Raffi GarabedianThe latter. So there are really two approaches to making electrolysis more cost effective to making the equipment cheaper, which goes directly to making the gas cheaper. The two approaches, broadly speaking are: make the existing hardware for less money, find cheaper materials to make it out of, reduce the labor content of the manufacturing, et cetera, et cetera. The other approach is: get more out of the same hardware, the same kind of hardware. Now, when we analyzed these two approaches when we were starting the company, we kind of looked at the scenarios and what we thought could be done.What's the entitlement for the two approaches? Our conclusion was there might be 30-40% cost to find in the existing technologies if one can thrift the materials, find cheaper materials, lower labor, all that, right? And frankly, we're not all that good at that. I mean, we're good at it, but it's not our forte. What we're actually really good at is driving a technology roadmap around performance. And when we thought that through and really analyzed the entitlement, we found numerous opportunities to get multiples higher performance out of what is essentially existing technology, materials and components that are well developed.David RobertsAnd this is the balance of plant stuff you're talking about, like, stuff outside the elec...?Raffi GarabedianNo, this is in the very, very guts of the electrolyzer cell itself. So, we take a device physics approach to the problem. For those of your listeners who don't know my background, I was Chief Technology Officer at First Solar for many years. My co-founder at Electric Hydrogen was also Chief Technology Officer at First Solar. Before that, he was with Bell Labs running their device physics department. Long career in electrical and electrochemical devices.David RobertsYeah, I guess I'm a little baffled how you get more out of the same materials, so please.Raffi GarabedianYeah. And the way you do it is by understanding the physics of the device, deconvolving the various contributors to both performance losses and efficiency losses, and designing solutions to those material science and interfacial and transport problems. So it's all around interfaces, material choices, and the physics of how the device operates. And so with that kind of device physics approach, we've been able to quintuple essentially, like, dramatically improve the performance of the electrolyzer cell itself. Now, that gives us the ability to, without changing the size or materially changing the cost of that refrigerator thing, it allows us to get a lot more power into it and a lot more hydrogen out of it, and that's the secret trick. Right, so our hydrogen production is extremely physically dense.Now, when you sell an electrolyzer, what does the customer care about? The customer is typically a project developer or industrial owner. They care about the hydrogen production cost. Ideally, about half of that cost is the cost of capital that's involved with the purchase of the plant.David RobertsRight.Raffi GarabedianSo when you buy a plant like this, you price it in terms of dollars per watt or dollars per ton of hydrogen per day produced. So the more you can get into and out of that thing, the lower its price proportionately on a dollar per watt basis. So if I make that refrigerator size box and I can get a megawatt out of it, its price is a dollar, right? If it costs a million dollars to make or to sell, it's a dollar. If I can get just make up a number 10 megawatts out of it, wow. That same thing costs ten cents a watt.David RobertsSo those are your biggest gains you're making. Or is it in the electrolyzer?Raffi GarabedianAbsolutely. And the electrolyzer then has knock on effects and ramifications for the rest of the balance of the plant that's around it. If you look at our plant architecture, at first flush, it looks like others. But on more detailed inspection, one finds a lot of very critical differences. Some of them actually add cost to the plant relative to a conventional approach in order to support this really fancy, super high energy electrolyzer stack. But on average, in some total, the cost is greatly reduced even at the plant scale.David RobertsOh, that's... sort of counter my intuitions. I sort of figured that with nobody having really tried to scale these things up to the point you're scaling up, I would think that all the stuff outside the electrolyzer all that plumbing and structure of the plan itself and.... I figured there's lots of efficiencies in that stuff that just nobody's thought to look at yet or squeeze out of yet.Raffi GarabedianYeah, I think that's also true. Maybe there's about 500 megawatts of electrolysis installed in the world today. I think the vast majority of those plants are custom engineered and designed and built—stick built by EPCs—for a site, right. So there's not a whole lot of economy of scale or learning yet in this industry.David RobertsAnd your acre-size plant is a set thing. It's the same every time you build it?Raffi GarabedianYeah, that's why I call it a product. It's not a project, it's not engineered for a site. You can buy any size and shape electrolyzer you want from us as long as it's this one. It's like the old black Model T.David RobertsWell, theoretically you could build two if you had two acres. Right?Raffi GarabedianYeah.David RobertsModular in that sense.Raffi GarabedianThat's right. And that modular approach is actually really interesting in the market as well because we're at the early stages of this industry's growth and so project finance is a major constraint. Of course, people who are building a gigawatt-scale plant. They don't want to take the risk on building that whole gigawatt all at once.David RobertsRight.Raffi GarabedianThey want to build it in small modules. So it does also serve a market need in that regard.David RobertsA couple of other questions about cost. How big a factor is the cost of the energy you're buying, the cost of the renewable energy. Like, if renewable energy continues to get cheaper or for whatever reason, you're able to just find cheaper energy, does that make a major difference or is that marginal?Raffi GarabedianYeah, it's a huge difference. So let's talk about some numbers here, okay? So hydrogen produced from steam methane reforming of natural gas in Texas and Louisiana today, which is kind of the lowest cost region of production in the world, save maybe a few places in the Middle East—which are comparable. That hydrogen costs about a $1.50 to $2 a kilogram to produce and buy. And it's directly proportional almost to the price of natural gas. Okay, so that's the bogey. If you can beat a $1.50 a kilo or lower, the world is your oyster because you're at so called fossil parity hydrogen.David RobertsRight.Raffi GarabedianThat's—and by the way, that's the dirtiest hydrogen. That...well, not quite. Hydrogen from coal is dirtier, but that's dirty hydrogen, that's so called gray hydrogen, right. Where the CO2 is emitted. If you try to capture the CO2, that price only goes up. Now, when you talk about electrolysis, the energy input to the production of hydrogen for most electrolyzers equates to about, well, every $10 a megawatt hour of electricity price contributes about $0.60 roughly per kilogram of hydrogen production cost.David RobertsSo really makes the difference whether you're competing with that cheap stuff or not.Raffi GarabedianThat's right. So the best in class solar energy power purchase agreement that I've seen is just under $10 a megawatt hour in the Middle East. We also see in the US, new build wind in the wind belt that's on that order, below $10 a megawatt hour, is possible. But if your energy is $30 a megawatt hour, you're already going to be north of a $1.50 a kilogram hydrogen production cost just with the energy input, not even counting the cost of capital to build the electrolyzer plant.David RobertsRight. And you have limited control over that. I mean, in some sense, you're subject to what energy is available.Raffi GarabedianYes and no. So here's what we know. We know that renewable power all around the world where the resource is rich is extremely inexpensive as long as you don't try to firm it, as long as you can take it when it's produced. Anything you do to try to firm that power adds substantial cost, right? Because batteries are expensive.David RobertsYes.Raffi GarabedianSo the key for making low cost hydrogen is to take the renewable energy intermittently is to take it when the wind's blowing, when the sun's shining.David RobertsI mean, I'm sure you get this question all the time. One of the, you know, I sort of threw this out on Twitter, and I got many versions of this question, which is: how is it economic to run a hydrogen-making plant where the capacity factor is, whatever, 40% or 50% or lower? How do you pencil out the economics when your energy supply is variable?Raffi GarabedianWell, your Twitter followers are brilliant.David RobertsI could not agree more.Raffi GarabedianThat is exactly why we have been working so hard towards this singular goal of making a large-scale electrolyzer plant that's really cheap. Not cheap on a dollars per unit basis, but cheap on a dollars per watt or dollars per ton of hydrogen produced per day basis, right? That's the key. If your capital plant, your electrolyzer, is too expensive, you can't afford to run it at a low capacity factor.David RobertsRight.Raffi GarabedianIf it's cheap enough, now you can afford to use really cheap energy and run your electrolyzer intermittently. That is the secret. That is the way you get to low cost hydrogen production. That's also completely green hydrogen production. The other thing we should note here is that if you try to firm the energy input to an electrolyzer using the grid, what you're literally doing is in the hours when the wind isn't blowing or the sun isn't shining, you are ramping up a fossil generator somewhere to power that electrolyzer. And that is a terrible outcome!David RobertsAnd you no longer have green hydrogen!Raffi GarabedianYou have the worst possible thing. You're burning a fossil fuel, which you could have converted directly into hydrogen to make electricity and then convert back into hydrogen right through an electrolyzer. That's a terrible thing to do. By the way, there's a policy...I don't know, maybe I'll call it a food fight going on in the US right now around the rulemaking that results from the IRA. I go back to policy.David RobertsWe'll get there. So accommodating intermittent energy input is not so much a specific technological thing as just a price thing. If you can get your plant cheap enough, then you can make it work with intermittent energy.Raffi GarabedianYeah, it's a bunch of things. We have to make the plant cheap enough so that it can work with intermittent energy. That's the only scalable kind of clean energy in the first place. There's a lot of hydro in the world, but not enough to solve a terawatt-scale problem.David RobertsRight. Well, people talk about building nuclear energy plants specifically to make hydrogen. People talk about using offshore wind energy specifically to make hydrogen, that way you wouldn't have to string a power wire out to the offshore wind. Is any of that stuff on your radar or you think that's mostly distraction?Raffi GarabedianWell, the energy problem is extremely localized. It's regional. So if you're in a place where natural gas is super expensive and in short supply for geopolitical reasons, whatever, your fossil parity price for hydrogen might be a lot higher than the numbers I threw out, right? So if you're in Northern Europe and you're concerned about Russian gas supply, you might be willing to spend a lot more for your hydrogen production. And in those scenarios, things like offshore wind could make a lot of sense.Nuclear is a tough one for me to understand, quite frankly, because, look, I mean, the best use of a flexible nuclear plant, I think, is to continue to clean up the electric system first and foremost. So if we're able to figure out how to build and scale more nuclear, wow, let's go do that. I'm not sure making hydrogen out of it is the right answer. Also, the price of that power is quite high.David RobertsYes. I can just tell you, Raffi, out there in the world, out there on Twitter world, people really just want nuclear. They want it to be useful for something, and so they propose it for everything. So one more question about the physical thing here, which is: where are these things currently manufactured? Because one of the big arguments going on around all the rest of clean energy is who's making it and who should make it, and is it worth trying to onshore manufacturing? Who makes electrolyzers today?Raffi GarabedianToday... I mentioned I spent over a decade in the solar industry. When I started in 2008, the solar industry felt a lot like the electrolyzer industry is today. So we had really strong industrials in the electrolyzers today, just like in solar back then. We had really strong industrial players in the US and Europe, who kind of had the core technology and sold the bulk of the equipment. But we're seeing China emerging. They're doubling down on electrolysis, and they're coming up in capacity. I think there's probably more electrolyzer manufacturing capacity in China today than anywhere else in the world. Though, it's a different kind of business than solar. And I think exporting these very, very large units from China to the rest of the world is going to be a different kind of challenge. I'm not sure it rolls the same way.David RobertsRight, so the plants you're building in the US are manufactured in the US? All your parts and pieces?Raffi GarabedianYeah, we'll be manufacturing in the USDavid RobertsOne of the things we've been talking a lot about on the pod recently are learning curves and what kinds of technologies do and don't get on learning curves. And this work out of Oxford last year made such a big splash—claimed that electrolyzers are on a learning curve. So what's your take on that? Is there an answer about the percentage that the cost falls per doubling of deployment? Or is it still, do you feel, like, too nascent to have an answer to that question?Raffi GarabedianYes, I think we are too nascent. Look, I mean, learning curves are an analysts' way of explaining the trajectory of a whole industry's work in an area. The goal of any given company, technology company, is to be a nonlinear force in going down that curve. Right, so, I don't want to be on a learning curve at Electric Hydrogen. I want to disrupt that learning curve and put it in a new direction. And, you know, the analyst learning curve is simply the aggregate, the average, of a whole bunch of companies trying to do the same thing, which has come out on top with the best solution to the problem. So I don't put a lot of stock in learning curves. I understand why they exist. They're useful, particularly on the buy side, to kind of try to understand and predict the future.David RobertsWell, they're good descriptive. The question is whether they're predictive at all, right?Raffi GarabedianYeah. And predicting the future is notoriously difficult, right, so.David RobertsBut do you think, based on your experience, that costs are headed down? You're confident that costs are headed toward that target they need to hit, and that target is reachable?Raffi GarabedianI am. And our explicit goal at our company, at Electric Hydrogen, is to accelerate that cost down curve. So it's not that electrolysis isn't going to be scaled without us. It's not that it's not going to get to the price point it needs to without us. We think our role in this industry, at least with the role we're going to try to play, is to be an accelerant, a catalyst.David RobertsPardon the pun. But it's odd, given what a central role electrolyzers play in this sort of vision of a decarbonized future. I find it odd, I guess, that I just haven't heard of more people doing what you're doing, trying to squeeze costs out of this juncture of the whole system. Do you have a lot of competitors? Do people coming to this...like who's solar? You could name five zillion companies, five zillion research labs. Is there comparable brain power going toward this right now?Raffi GarabedianThere's a lot of research. So if you look at companies involved in electrolysis, it's kind of bimodal. On the one extreme, you have a group, a mode of companies who are large established players. I'm talking about thyssenkrupp, Siemens, Cummins, folks like that, right? And then on the other extreme, you have a large number of very small companies who are at that low technology readiness level stage. So kind of in the lab playing with new membrane materials or new catalyst chemistries or whatnot. Now, the large industrial players, they tend to be very conservative and slow moving in their technology, road mapping. They tend to be risk averse because they have massive businesses and their reputation is contingent on every piece of that business performing as advertised. So they don't like to take risks. And then on the other hand, you've got the small companies, the material science-y companies, who might be a decade from the market. There are relatively few companies, you could name a small handful today in kind of the middle ground, which is where we are.David RobertsRight, right.Raffi GarabedianWhere we're rapidly developing and commercializing technology that has relatively low risk profile.David RobertsRight. And part of what you could do if you succeed, and tell me if I'm wrong about this, is de-risk this a little bit and lure some of those bigger players into devoting more resources to this.Raffi GarabedianAbsolutely. Now, I don't know, history is sometimes a good teacher. And again, if we go back to solar, the big industrials all got out.David RobertsYeah, I remember BP bailing.Raffi GarabedianOh, yeah, everybody bailed. And whether... you could list the litany of names who no longer exist in the solar industry, who really wilted under very, very rapid technology innovation cycles.David RobertsYeah.Raffi GarabedianAnd resulting steep cost reduction curves. So the learning curve in solar was just brutal and fast and hard. And if you weren't willing to run with it, you weren't going to survive in it. Electrolyzers very well could go that way. They also could go the way of wind, right? So wind power has really been a game that's been dominated by large industrials because wind has scaled the other direction. It hasn't scaled in the volume axis, it's scaled on the size axis. So frankly, the physical size of those units makes them very hard to innovate rapidly.David RobertsRight. Fairly curious where EVs fall and that sort of... maybe it's too early to tell.Raffi GarabedianI think it might be.David RobertsWhether the big players will be able to pivot fast enough.Raffi GarabedianYeah, I'll hold my opinions on that.David RobertsAlright, so at long last, let's talk about policy. Because one of the questions I got about this, which I think is a very good question, is the danger, it seems to me, of being in the green hydrogen business is that the danger is getting out ahead of policy such that you start producing on a greater scale than there is demand. Generally, the market will opt for the cheapest hydrogen until forced not to by some sort of policy. So is there enough policy support for green hydrogen now that you're confident demand will exist for whatever amount you can produce?Raffi GarabedianYeah, I think in the long term, absolutely. Yes both...David RobertsLong term is, we're all dead in the long term, or whatever the phrase is.Raffi GarabedianYeah. Well, let's frame it more carefully. So five plus years out.David RobertsRight.Raffi GarabedianI think the answer is yes. There is still a big question mark around the two to five year time frame. There are gigawatts and gigawatts of announcements globally of companies who are building—air quotes building—fossil-free hydrogen production plants for industrial uses, for energy uses, for grid firm, all sorts of applications that we've talked about and mentioned. But what does it take for those to get to a financial investment decision and for ground to be broken and for electrolyzers to be installed? That's the question, right.And I think there is a lot of risk in that. It comes down to understanding, from our point of view as a company in the business of making and selling electrolyzers, we do as much diligence on our customers as they do on us. So our customers are worried about our technology. "It's a new technology. We haven't seen it before, and you guys haven't really built one before. How do we know it's going to work? Okay, great." That's our customers diligence on us. The other side of that coin is, "Hey, we want to understand... who's your offtaker for hydrogen? Why do they want the gas?"David RobertsAlright.Raffi Garabedian"Why is it economical today? What policies are supporting it? What's the end use segment and application? And how does all that work? Why does your project actually make sense?" Because if we believe it actually makes sense, then we can have much, much higher confidence that it will go through, that it will get built.David RobertsA little wariness on both sides then, at this point, like the supply side and the demand side.Raffi GarabedianAbsolutely. I would say the reality-to-hype ratio is about one to ten right now.David RobertsYes, it is right there in that cycle. But, presumably your business thesis, the way you're raising money, is by saying demand is on the rise.Raffi GarabedianDemand is on the horizon. And we look really carefully and thoughtfully, at least we try to, at the leading indicators that predict demand. Because, look, I mean, this is an industry that essentially doesn't exist and has never existed before, so we can't use past performance to predict the future, right? So we've got to look at leading indicators. We've got to look a layer or two underneath what's being built today to understand what's driving that behavior. And we think the fundamentals are there. So a number of things come together. Certainly the European policy framework has firmed up, continues to firm up, and is driving bona fide, like, verifiable activity on the European subcontinent.David RobertsIs that just the cap and trade? Is that just the general squeezing of carbon? Or there's the hydrogen-specific stuff you're talking about.Raffi GarabedianThere's hydrogen-specific stuff in Europe as well, but there's also a lot of secondary, "Hey, it can only be solved. We can only meet these requirements with hydrogen we don't know how else to do it" kind of things. And then when we look at the US, again the IRA, which I mentioned, that makes fossil-free hydrogen an economic viability, like with the snap of a finger.David RobertsAnd that's just a big tax credit. That's like a per production tax credit. What exactly is the structure of the...?Raffi GarabedianThat's right, it's framed as a production tax credit. So for each kilogram of hydrogen you produce, you get a certain number of dollars in tax credit back, which goes to the bottom line of a project.David RobertsAnd does it have any stuff about the other colors of hydrogen, or is this a black and white, sort of like, "We'll give you money if you do green."?Raffi GarabedianWell, it's thoughtfully framed, actually, in terms of the greenhouse gas intensity of the hydrogen that's produced. It's technology agnostic, it's greenhouse gas indexed, so you can get anywhere from $0 to $3 a kilogram tax credit, depending on your carbon intensity. I mentioned a little while ago there's a bit of a food fight going on around the rules for that because the quality of the electricity going into an electrolyzer is what's being fought over.David RobertsOh, interesting.Raffi GarabedianYeah. Some of us in the industry kind of want to take a long view, and the long view says, "Gee, that electricity really needs to be directly fed from a renewal plant." Not on one wire, but at least time-synchronized and locationally matched.David RobertsAs opposed to just sort of using grid electricity and then buying wrecks or whatever.Raffi GarabedianYou got it. That's exactly the fight that's going on.David RobertsThis is, again, Volts listeners will find this whole discussion familiar from the distinction between going 100% renewable and going 24/7 renewable, matching on an hour-to-hour level.Raffi GarabedianIt is the same exact thing being fought out right now against this $3 potential tax credit.David RobertsSo you're advocating for, "we need to be doing this hour-by-hour so we know...not just that we're offsetting, but that we're using clean energy."Raffi GarabedianI will unabashedly say we're advocating to do it right, for God's sake.David RobertsAnd this is ambiguous in the language of the law. So this will be...who's making this decision in the end?Raffi GarabedianYeah, like any law, right. There's a of lot rules associated with it. So yeah, the decision is being effectively litigated at this point.David RobertsAnd does the IRA tax credit sort of add a stroke, make your current product viable? Is it enough in and of itself?Raffi GarabedianYeah, frankly it does. But I will also tell you that, again, based on experience in solar and the resulting scar tissue, I'm extremely wary of subsidies. I value them highly. They're necessary to get a nascent industry like this off the ground in the face of a much cheaper but dirty alternative, which is fossil fuels.David RobertsIt's the iconic case for subsidies.Raffi GarabedianAbsolutely. But having said all that, our goal as a business is to enable subsidy-free fossil parity hydrogen production as soon as possible because the subsidies are always at risk. They're expensive, right.David RobertsBut the ones in IRA are not capped or time as an expiration date or?Raffi GarabedianI believe it's a ten-year.David RobertsSo that's a pretty good runway. It's a great runway assuming it stays in place, right.Raffi GarabedianAssuming it stays in place. And of course, these things are political at the end of the day.David RobertsYeah.Raffi GarabedianSo for a lot of reasons, both fundamental reasons and also political reasons, our goal is to be subsidy-free to enable subsidy-free fossil parity pricing as soon as possible. And we think we can do that in under five years.David RobertsReally? That's pretty tight. Like, have you built a plant yet? Where where are you at in deployment? Have you got a demonstration plant? Where...what's going on?Raffi GarabedianWe have a small scale prototype here in California. We'll be building a pilot towards the end of this year. So the answer to your question is no.David RobertsThe pilot is the full-acre plant?Raffi GarabedianIt's the indivisible unit of that full-acre thing. It's not the full-acre thing, but that'll be coming in 2024.David RobertsAnd background policy. I know that the IRA is a big, huge deal. I know there are supports in Europe. What about procurement rules? I think, like, the federal government now has some sort of like, rules about the cleanliness of the hydrogen can buy, or big institutions basically saying, "We'll be a market for this, we'll be guaranteed offtakers." Is there much of that, or is it mostly the IRA you're banking on?Raffi GarabedianWell, right now in the US, it's mostly the IRA that's driving adoption. Well, it's the IRA coupled to corporate procurement and decarbonisation strategies. And just like you see in the world of renewable energy procurement, the same is going on now in renewable fuels, clean fuels, and hydrogen writ large as an element of various industries.David RobertsRight, well, like steel and stuff like that, too. If you want green steel, you're basically saying you want hydrogen. Green hydrogen.Raffi GarabedianThat's right. And if you survey the steel industry, you'll find a spectrum of opinions from company to company as to how seriously these producers are approaching decarbonization. Some are extremely committed to decarbonizing rapidly, and others, I guess I would say, are making moderate moves, grudgingly in that direction. So you see that in every sector that we work in. You see it in ammonia production, you see it in fuels, you see it in steel. There's a spectrum of opinions.David RobertsWell, as you said, specifically in the hydrogen market, there's this sort of like, "You go first. No, you go first." between the buyers and the sellers. It's a very specific moment in the market.Raffi GarabedianIt is. You could say it's a high risk moment. It is. It's also a high opportunity moment.David RobertsExactly.Raffi GarabedianOne of the things about this industry that I think will track in a similar direction as both wind and solar did, there's going to be a large wave of adoption. And if you're not a participant in that first wave of adoption as a technology provider, I think it could become very, very difficult to get down the learning curve and to scale at a future date.David RobertsSo you think early movers have a big advantage here?Raffi GarabedianI do think so. I do think so.David RobertsBut it's worth saying, you seem confident that these efficiencies exist, that the technological possibility exists. So even if, God forbid, your company doesn't make it, you think this is going to happen, these electrolyzers are going to get cheaper and cheaper until green hydrogen is cost competitive? You think that's more or less inevitable?Raffi GarabedianI do. I think that's inevitable. I also think the continued reduction in renewable power costs is inevitable. Despite there are short-term disruptions in that market kind of supply, demand, balance thing. But in the longer term, again, it only gets cheaper. It doesn't get more expensive.David RobertsAwesome. I've kept you a long time, but I guess just by way of a final question, is you're, as you say, specifically not messing with the stuff on the lab right now. You are trying to economize and bring down the cost of existing technology. Is your sort of like business plan open to the idea that if one of these capillary things come along or one of these sort of fundamentally new...because this is a question about storage...that I often ask people in the storage industry. Like, lithium ion is so established and so far ahead that if you want to compete with lithium ion, at the very least, you need to be able to slip stream in to basically the same manufacturing process because otherwise you're just starting from nothing and you'll never catch up.Is this the sort of thing where if a fundamentally new kind of electrolyzer comes along that you could just slot it in? Or just how modular is this and how open is your business plan to sort of big advances in the technology like that?Raffi GarabedianOh, we're not only open to it, we're eager for it. And we expend some of our R&D effort on just those kinds of directions as well as talking to other companies who are more in the lab than we are. So, yeah, we're absolutely open to it. It's early days in this industry and there are very few examples in the world of technology where the solution today is the solution 20 years from now, right? So this is a long game. We're going to be doing this for a while, and the technology will shift and will adapt with it, but not at the expense of losing focus. Again, I think we have an opportunity that's three to five years in front of us to scale this industry from a glimmer in our eyes to something that actually matters at the scale of the global energy system. That's what we're laser focused on.David RobertsWell, thank you so much for coming. This is hugely clarifying for me now. I feel like I have a little bit something in that electrolyzer bucket in my head now, and I know our listeners will appreciate that too. Thanks so much for coming on.Raffi GarabedianThis has been a great conversation. Thanks for all the awesome questions and thanks for having me on the show.David RobertsThank you for listening to the Volts podcast. It is ad-free, powered entirely by listeners like you. If you value conversations like this, please consider becoming a paid Volts subscriber at volts.wtf. Yes, that's volts.wtf, so that I can continue doing this work. Thank you so much and I'll see you next time. Get full access to Volts at www.volts.wtf/subscribe

British researcher Erica Thompson’s recently published book is a thorough critique of the world of mathematical modeling. In this episode, she discusses the limitations of models, the role of human judgment, and how climate modeling could be improved.(PDF transcript)(Active transcript)Text transcript:David RobertsEveryone who's followed climate change for any length of time is familiar with the central role that complex mathematical models play in climate science and politics. Models give us predictions about how much the Earth's atmosphere will warm and how much it will cost to prevent or adapt to that warming.British researcher Erica Thompson has been thinking about the uses and misuse of mathematical modeling for years, and she has just come out with an absorbing and thought-provoking new book on the subject called Escape from Model Land: How Mathematical Models Can Lead Us Astray and What We Can Do About It.More than anything, it is an extended plea for epistemological humility — a proper appreciation of the intrinsic limitations of modeling, the deep uncertainties that can never be eliminated, and the ineradicable role of human judgment in interpreting model results and applying them to the real world.As Volts listeners know, my favorite kind of book takes a set of my vague intuitions and theories and lays them out in a cogent, well-researched argument. One does love having one's priors confirmed! I wrote critiques of climate modeling at Vox and even way back at Grist — it's been a persistent interest of mine — but Thompson's book lays out a full, rich account of what models can and can't help us do, and how we can put them to better use.I was thrilled to talk with her about some of her critiques of models and how they apply to climate modeling, among many other things. This is a long one! But a good one, I think. Settle in.Alright, then, with no further ado, Erica Thompson, welcome to Volts. Thank you so much for coming.Erica ThompsonHi. Great to be here.David RobertsI loved your book, and I'm so glad you wrote it. I just want to start there.Erica ThompsonThat's great. Thank you. Good to hear.David RobertsWay, way back in the Mesozoic era, when I was a young writer at a tiny little publication called Grist—this would have been like 2005, I think—one of the first things I wrote that really kind of blew up and became popular was, bizarrely, a long piece about discount rates and their role in climate models. And the whole point of that post was, this is clearly a dispute over values. This is an ethical dispute that is happening under cover of science. And if we're going to have these ethical judgments so influential in our world, we should drag them out into the light and have those disputes in public with some democratic input.And for whatever reason, people love that post. I still hear about that post to this day. So, all of which is just to say, I have a long-standing interest in this and models and how we use them, and I think there's more public interest in this than you might think. So, that's all preface. I'm not here to do a soliloquy about how much I loved your book. Let's start with just briefly about your background. Were you in another field and kept running across models and then started thinking about how they work? Or were you always intending to study models directly? How did you end up here?Erica ThompsonYeah, okay. So, I mean, my background is maths and physics. And after studying that at university, I went to do a PhD, and that was in climate change physics. So climate science about North Atlantic storms. And the first thing I did—as you do—was a literature review about what would happen to North Atlantic storms given climate change, more CO2 in the atmosphere. And so you look at models for that. And so, I started looking at the models, and I looked at them, and this was sort of 10-15 years ago now—and certainly there's more consensus now—but at that time, it was really the case that you could find models doing almost anything with North American storms.You could find one saying... the storm tracks would move north, they'd move south, they'd get stronger, they'd get weaker, they'd be more intense storms, less intense storms. And they didn't even agree within their own aerobars. And that was what really stuck out to me, was that, actually, because these distributions weren't even overlapping, it wasn't telling me very much at all about North Atlantic storms, but it was telling me a great deal about models and the way that we use models. And so I got really interested in how we make inferences from models. How do we construct ranges and uncertainty ranges from model output? What should we do with it? What does it even mean? And then I've kind of gone from there into looking at models in a series of other contexts. And the book sort of brings together those thoughts into what I hope is a more cohesive argument about the use of models.David RobertsYeah, it's a real rabbit hole. It goes deep. The book is focusing specifically on mathematical models, these sort of complex models that you see today in the financial system and the climate system. But the term "model" itself, let's just start with that because I'm not sure everybody's clear on just what that means. And you have a very sort of capacious definition.Erica ThompsonI do, yeah.David Roberts...of what a model is. So just maybe let's start there.Erica ThompsonYeah. So, I mean, I suppose the models that I'm talking about mostly, when I'm talking in the book, is about complex models where we're trying to predict something that's going to happen in the future. So whether that's climate models, weather models—the weather forecast is a good example—economic forecasts, business forecasting, pandemic and public health forecasting are ones that we've all been gruesomely familiar with over the last few years. So those are kind of the one end of a spectrum of models, and they are the sort of big, complex, beast-end of the spectrum. But I also include, in my idea of models, I would include much simpler ones, kind of an Excel spreadsheet or even just a few equations written down on a piece of paper where you say, "I'm trying to sort of describe the universe in some way by making this model and writing this down."But also I would go further than that, and I would say that any representation is a model insofar as it goes. And so that could include a map or a photograph or a piece of fiction—even if we go a bit more speculative—fiction or descriptions. These are models as metaphors. We're making a metaphor in order to understand a situation. And so while the sort of mathematical end of my argument is directed more at the big, complex models, the conceptual side of the argument, I think, applies all the way along.David RobertsRight, and you could say—in regard to mathematical models—some of the points you make are you can't gather all the data. You have to make decisions about which data are important, which to prioritize. So the model is necessarily a simplified form of reality. I mean, you could say the same thing about sort of the human senses and human cognitive machinery, right? Like, we're surrounded by data. We're constantly filtering and doing that based on models. So you really could say it's models all the way down.Erica ThompsonYes.David RobertsWhich I'm going to return to later. But I just wanted to lay that foundation.So in terms of these big mathematical models, I think one good distinction to start with—because you come back to it over and over throughout the book—is this distinction between uncertainty within the model. So a model says this outcome is 60% likely, right? So there's like a certain degree of uncertainty about the claims in the model itself. And then there's uncertainty, sort of extrinsic to the model, about the model itself, whether the model itself is structured so as to do what you want it to do, right? Whether the model is getting at what you want to get at.And those two kinds of uncertainty map somehow onto the terms "risk" and "uncertainty."Erica ThompsonSomehow, yes.David RobertsI'm not totally sure I followed that. So maybe just talk about those two different kinds of risks and how they get talked about.Erica ThompsonSo I could start with "risk" and "uncertainty" because the easiest way to sort of dispatch that one is to say that people use these terms completely inconsistently. And you can find in economics and physics, "risk" and "uncertainty" are used effectively in completely the opposite meaning.David RobertsOh, great.Erica ThompsonBut generally one meaning of these two terms is to talk about "uncertainty," which is, in principle, quantifiable, and the other one is "uncertainty," which perhaps isn't quantifiable. And so in my terms, in terms of the book, so I sort of conceptualize this idea of "model land" as being where we are when we are sort of inside the model, when all of the assumptions work, everything is kind of neat and tidy.You've made your assumptions and that's where you are. And you just run your model and you get an answer. And so within "model land," there are some kind of uncertainties that we can quantify. We can take different initial conditions and we can run them, or we can sort of squash the model in different directions and run it multiple times and get different answers and different ranges and maybe draw probability distributions.But actually, nobody makes a model for the sake of understanding "model land." What we want to do is to inform decision making in the real world. And so, what I'm really interested in is how you take your information from a model and use it to make a statement about the real world. And that turns out to be incredibly difficult and actually much more conceptually difficult than maybe you might first assume. So you could start with data and you could say, "Well, if I have lots of previous data, then I can build up a statistical picture of how good this model is," whether it's going to be any good.And so you might think of the models and the equations that sent astronauts to the moon and back. Those were incredibly good and incredibly successful. And many models are incredibly successful. They underpin the modern world. But these are essentially what I call "interpolatory models." They're basically...they're trying to do something where we have got lots of data and we expect that the data that we have are directly relevant for understanding whether the predictions in the future are going to be any good.David RobertsRight.Erica ThompsonWhereas when you come to something like climate change, for example, or you come to any kind of forecasting of a social system, you know that the underlying conditions are changing, the people are changing, the politics are changing, even with the physics of the climate, the underlying physical laws, we hope, are staying the same. But the relationships that existed and that were calibrated when the Arctic was full of sea ice, for example, what do we have to go on to decide that they're going to be relevant when the Arctic is not full of sea ice anymore? And so we rely much more on expert judgment. And at that point, then you get into a whole rabbit hole of, well, what do we mean by expert judgment?And maybe we'll come on to some of these themes later in the discussion, but these ideas of trust. So how are we going to assess that uncertainty and make that leap from model land back into the real world? It becomes really interesting and really difficult and also really socially, sort of, dependent on the modeler and the society that the model is in.David RobertsRight, it's fraught at every level. And one of the things that I really got from your book is that it's really, really far from straightforward to judge a model's quality. Like, you talk about... what is the term, a horse model? Based on the guy who used to make hand gestures at the horse, and the horse looked like it was doing addition, looks like it was doing math, but it turns out the horse was doing something else entirely. And so it only worked in that particular situation. If you took the horse out of that situation, it would no longer be doing math.Erica ThompsonAnd I think what's interesting is that the handler wouldn't even have realized that. That it wasn't a deliberate attempt to deceive, it was the horse sort of picking up subconsciously or subliminally on the movement and the body language of the handler to get the right answer.David RobertsRight. Well, this is for listeners, this is kind of a show that this guy used to do. He would give his horse arithmetic problems and the horse would tap its foot and get the arithmetic right and everybody was amazed. And so your point is just you can have a model that looks like it's doing what you want it to do, looks like it's predictive, in the face of a particular data set, but you don't know a priori whether it will perform equally well if you bring in other data sets or emphasize other data sets or find new data. So even past performance is not any kind of guarantee, right?Erica ThompsonYeah. And so it's this idea of whether we're getting the right answer for the right reasons or the right answer for the wrong reasons. And then that intersects with all sorts of debates in AI and machine learning about explainability and whether we need to know what it's doing in order to be sure that it's getting the right answer for the right reasons or whether it doesn't actually matter. And performance is the only thing that matters.David RobertsSo let's talk then about judging what's a good and bad model, because another good point you make, or I think you borrow, is that the only way to judge a model, basically, is relative to a purpose. Whether it is adequate to the purpose we're putting it to, there's no amount of sort of cleanliness of data or like cleverness of rules. Like nothing in the model itself is going to tell you whether the model is good. It's only judging a model relative to what you want to do with it. So say a little bit about the notion of adequacy to purpose.Erica ThompsonYeah. So this idea of adequacy for purpose is one that's really stressed by a philosopher called Wendy Parker, who's been working a great deal with climate models. And so, I guess, the thing is that what metric are you going to use to decide whether your model is any good? There is no one metric that will tell you whether this is a good model or a bad model. Because as soon as you introduce a metric, you're saying what it has to be good at.I can take a photograph of somebody. Is it a good model of them? Well, it's great if you want to know what they look like, but it's not very good if you want to know what their political opinions are or what they had for dinner. And other models in exactly the same way. They are designed to do certain things. And they will represent some elements of a system or a situation well, and they might represent other elements of that situation badly or not at all. And not at all doesn't really matter because it's something that you can't sort of imagine it in. But if it represents it badly, then it may just be that it's been calibrated to do something else. So the purpose matters.And when you have a gigantic model, which might be put to all manner of different purposes. So a climate model, for example, could be used by any number of different kinds of decision makers. So the question, "Is it a good model?" Well, it depends whether you are an international negotiator deciding what carbon emissions should be or whether you're a subsistence farmer in Sub-Saharan Africa or whether you're a city mayor who wants to decide whether to invest in a certain sort of infrastructure development or something or whether you're a multinational insurance company with a portfolio of risks. You will use it in completely different ways.And the question of whether it is any good doesn't really make sense. The question is whether it is adequate for these different purposes of informing completely different kinds of decisions.David RobertsRight, or even if you're just thinking about mitigation versus adaptation, it occurs to me, different models might work better for those things. I guess the naive thing to think is, if you find one that's working well for your purpose that means it is more closely corresponding to reality than another model that doesn't work as well for your purpose. But, really, we don't know that. There's just no way to step outside and get a view of it relative to reality and ever really know that.Erica ThompsonYeah and reality kind of has infinitely many dimensions so it doesn't really make sense to say that it's closer. I mean, it can absolutely be closer on the dimensions that you decide and you specify. But to say that it is absolutely closer, I think, doesn't actually make sense.David RobertsRight, yeah. The theme that's running through the book over and over again is real epistemic humility.Erica ThompsonYes, very much so.David RobertsWhich I think...you could even say it's epistemically humbling the book. That's sort of the way I felt about it.Erica ThompsonGreat. That's really nice. I'm glad to hear that.David RobertsYeah, at the end, I was like "I thought I didn't know much and now I'm quite certain I know nothing at all."Erica ThompsonBut not nothing at all. I mean, hopefully, the way it ends is to say that we don't know nothing at all, we shouldn't be throwing away the models. They do contain useful information. We've just got to be really, really careful about how we use it.David RobertsYes, there's a real great quote, actually, that I almost memorize is, "We know nothing for certain, but we don't know nothing," I think is the way you put in the book, which I really like. We're going to get back to that at the end, too. So another sort of fascinating case study that you mentioned, sort of anecdote that you mentioned that I thought was really, really revealing about sort of the necessity of human expert judgment in getting from the model to the real world is this story about the Challenger shuttle and the O-rings. The shuttle had flown test flights, several test flights beforehand using the same O-rings.Erica ThompsonYes.David Roberts...and had done fine. So there's sort of two ways you can look at that situation. What one group argued was: "A shuttle with these kind of O-rings will typically fail. And these successful flights we've had are basically just luck." Like, we've had several flights cluster on one side of the distribution, on the tail of the distribution and we can't rely on that luck to continue. And the other side said, "No, the fact that we've run all these successful flights with these O-rings is evidence that the structural integrity is resilient to these failed O-rings to the sort of flaws in the O-rings."And the point of the story was: both those judgments are using the exact same data and the exact same models. And both judgments are consonant with all the data and all the models. So, the point being, no matter how much data you have—and even if people are looking at the same data and looking at the same models—in the end, there's that step of judgment at the end. What does it mean and how does it translate to the real world that you just can't eliminate, you need, in the end, good judgment.Erica ThompsonYeah, exactly. You can always interpret data in different ways depending on how you feel about the model. And so another example I give that is along very similar lines is thinking, sort of, if you were an insurance broker and you'd had somebody come along and sell you a model about flood insurance or about the likelihood of flooding. And they said a particular event would be pretty unlikely. And you use that and you write insurance. And then the following year, some catastrophic event happens and you get wiped out. What do you do next? Do you say, "Oh dear. It was a one-in-a-thousand-year event, what a shame. I'll go straight back into the same business because now the one-in-a-thousand-year event has happened."David RobertsRight. It's perfectly commensurate with the model.Erica ThompsonIt's perfectly commensurate with the model, exactly. So do I believe the model and do I continue to act as if the model was correct or do I take this as evidence that the model was not correct and throw it out and not go back to their provider and maybe not write flood insurance anymore?David RobertsRight.Erica ThompsonAnd those are perfectly...either of those would be reasonable. If you have a strong confidence in the model, then you would take option A and if you have low confidence in the model, you take option B. But those are judgments which are outside of "model land."David RobertsRight, right. Judgments about the model itself. And it just may be worth adding that, there is no quantity of data or like detail in a model rules that can ever eliminate that judgment at the end of the line, basically.Erica ThompsonYeah, because you have to get out of "model land." I mean, now some parts of "model land" are closer to reality than others. So if we have a model of rolling a dice, right, you expect that to give you a reliable answer, quantitative. If you have a model of ballistic motion or they're taking astronauts to the moon and back, you expect that to be pretty good because you know that it's good because it's been good in the past. And there is an element of expert judgment because you're saying that my expert judgment is that the past performance is a good warrant of future success here. But that's a relatively small one and one that people would generally agree on. And then when you go to these more complex models and you're looking out into extrapolatory situations, predicting the future and predicting things where the underlying conditions are changing, then the expert judgment becomes a much bigger and bigger and bigger part of that.David RobertsYes. And that gets into the distinction between sort of modelers and experts, which I want to talk about a little bit later, too. But one more sort of basic concept I wanted to get at is this notion of performativity, which is to say that models are not just representing things, they're doing things and they're affecting how we do things and they're not just sort of giving us information there, they're giving us what you call a "conviction narrative." So maybe just talk about performativity and what that means.Erica ThompsonYeah, so the idea of performativity is about the way that the models are part of the system themselves. So if you think about a central bank, if they were to create a model which made a forecast of a deep recession, it would probably immediately happen because it would destroy the market confidence. So that's a very strong form of performativity. Thinking about climate models, of course, we make climate models in order to influence and to inform climate policy. And climate policy changes the pathway of future emissions and changes the outcomes that we are going to get. So, again, the climate model is feeding back on the climate itself.And the same, of course, with pandemic models which were widely criticized for offering worst-case scenarios. But obviously the whole point of predicting a worst-case scenario isn't to just sit around twiddling your thumbs and wait for it to come true, but to do something about it so that it doesn't happen. I suppose, technically, that would be called "counterperformativity" in the sense that you're making the prediction, and by making the prediction, you stop it from coming true.David RobertsExactly. We get back, again, to, like, models can't really model themselves. It's trying to look at the back of your head in a mirror, ultimately there's an incompleteness to it. But I found this notion of a conviction narrative. I found the point really interesting that in some sense, in a lot of cases, it's probably better to have a model than to not have one, even if your model turns out to be incorrect. Talk about that a little bit. Just the way of the uses of models outside of sort of their strictly kind of representational informational.Erica ThompsonYeah, okay. So I guess thinking about this kind of performativity, and maybe counterperformativity, of models helps us to see that they are not just prediction engines. We are not just modeling for the sake of getting an answer and getting the right answer. We are doing something, which is much more social and it's much more to do with understanding and communication and generating possibilities and understanding scenarios and talking to other people about them and creating a story around it. And so that's this idea of a conviction narrative.And what I've sort of developed in the book is the idea that the model is helping us to flesh out that conviction narrative. So, "conviction" because it helps us to gain confidence in a course of action, a decision in the real world, not in "model land." It helps us to...and then "narrative" because it helps us to tell a story. So we're, sort of, telling a story about a decision and a situation and a set of consequences that flow from that. And in the process of telling that story and thinking about all the different things, whatever you happen to have put into your model, and you're able to represent and you're able to consider within that, developing that story of what it looks like and developing a conviction that some particular course of action is the right one to do, or that you'll be able to live with it, or that it is something that you can communicate politically and generate a consensus about.David RobertsRight. And very frequently those things are good in and of themselves, even if they're inaccurate. You talk about some business research, which found that sort of like businesses with a plan do better than businesses without a plan. Even sometimes that the plan, it's not a particularly good plan, just because having a plan gives you that...just kind of a structured way of approaching and thinking about something.Erica ThompsonYeah. And so maybe this is one of the more controversial bits of the book, but I talk about, for example, astrology and systems where if you're a scientist like me, you will say, "Probably there is no predictive power at all in an astrological forecast of the future." Okay. Opinions may differ. I personally think that, essentially, they are random.David RobertsI think you're on safe ground here.Erica ThompsonI think so. Probably with your audience, I am. But the point is that doesn't make them totally useless. So they can have genuinely zero value as prediction engines, but still be useful in terms of helping people to think systematically about possible outcomes, think about different kinds of futures, think about negative possibilities as well as positive ones, and put all that together just into a more systematic framework for considering options and coming to a course of action.David RobertsRight, or think about themselves.And think about themselves and their own weaknesses and vulnerabilities as well as strengths. Yeah, absolutely. It gives you a structure to do that. And I think that is absolutely not to be underestimated. Because there's sort of those two axes. There's the utility of prediction, the accuracy of prediction: "How good is this model as a predictor of the future?" And then, completely orthogonally to that, there is: "How good is this model, in terms of the way that it is able to integrate with decision making procedures? Does it actually help to support good decision making?" And you can imagine all four quadrants of that.Erica ThompsonObviously, we sort of hope that models that are really good at predicting the future will be really good at helping to support decision-making. But, ultimately, if it could perfectly predict the future and it was completely deterministic and it just told you what was going to happen, that wouldn't be much use either. You're back into sort of Greek myths and Greek tragedies, actually being told your future is not that useful. You need to have some degree of uncertainty in order to be able to have agency and take action and have the motivation to do anything at all.David RobertsYeah, so I guess I would say that astrological, astrology wouldn't have hung around for centuries, despite having zero predictive power.Erica ThompsonIf somebody didn't find it useful.David RobertsRight, if it did not have these other uses. I just thought that was a little bit sort of tacking the other way from a lot of the points, a lot of the points you're making in the book about the sort of weaknesses or limitations of models, et cetera, et cetera. But this was a point, I thought, where you sort of make the counterpoint that, it's almost always better to have a model than no model, it's better to have some...Erica ThompsonWell, maybe. It depends what it is and it depends whose model it is and it depends what the agenda is of the person who's providing the model. And you can maybe take sort of both lessons from the astrology example because I think you can find good examples in the past of sort of vexatious astrologers or astrologers with their own hidden agendas. Giving advice, which was not at all useful or which was useful to themselves, but not to the person who commissioned the forecast.David RobertsYes. Or like the king deciding whether to invade a neighboring country or something.Erica ThompsonRight, yeah.David RobertsNot great for that. So given all these—and we've just really skated over them, there's a lot more to all these—but given these sort of limitations of mathematical models, this sort of inevitable uncertainty about whether you're including the right kinds of information, whether you're waiting different kinds of information well, whether past performance is an indicator of future performance, all these sort of limitations and the need for expert judgment all, to my mind, leads to what I think is one of your key points and one of the most important takeaways, which is the need for diversity. Diversity, I think, these days has kind of...the word conjures is sort of representational feel-good thing.We need to have a lot of different kind of people in the room so we can feel good about ourselves and everybody can see themselves on the TV or whatever. But you're making a much more...very practical, epistemic point about the need for diversity of both models and modelers. So start with models. What would it mean to...like if I'm trying to forecast the future of the severe climate events, I think the naive, a naive sort of Western way of thinking about this would be: you need to converge on the right model, the one that is correct, right. The one that represents reality. And your point is: you never reach that. And so in lieu of being able to reach that, what works better is diversity. So say a little bit about that.Erica ThompsonYeah, that's exactly it. So, I suppose the paradigm for model development is that you expect to converge on the right answer, exactly. But I suppose what I'm saying is that because there can't—for various mathematical reasons—be a systematic way of converging on the right answer, because essentially because model space has infinitely many dimensions—go into that in a bit more detail for the more mathematically inclined—but because we don't have a systematic way of doing that, the statistics don't really work. So if you have a set of models, you can't just assume that they are independent and identically distributed, sort of throws at a dartboard and we can't just average them to get a better answer.So the idea of making more models and trying to sort of wait for them to converge on this correct answer just doesn't actually make much sense. We don't want to know that by making more similar models, we will get the same answer and the same answer again and the same answer again. Actually, what we want to know is that no plausible model could give a different answer. So you're reframing the same question in the opposite direction. What would it mean to convince ourselves that no plausible model could give a different answer to that question. Well, instead of trying to push everything together into the center and, by the way, that's what the models that are submitted to the IPCC report, for example, do. They tend to cluster and to try to find consensus and to push themselves sort of towards each other. I'm saying we need to be pushing them away.David RobertsYou talk about this drive for an Uber model, the, whatever the CERN of climate models, this push among a lot of climate models to find the sort of ER model, the ultimate model, and you are pushing very much in the other direction.Erica ThompsonYeah, I mean, that has a lot to commend it as a way to sort of systematize the differences between models rather than the ad hoc situation that we have at the moment. So I don't completely disagree with Tim Palmer and his friends who say that sort of thing. It's not a silly idea, it's a good idea, but I think it doesn't go far enough because it would help us to quantify the uncertainty within "model land," but it doesn't help us to get a handle on the uncertainty outside "model land," the gap between the models and the real world. And so what I'm saying is that if we want to convince ourselves that no other plausible model could give a different answer, then we need to be investigating other plausible models.Now the word "plausible" is doing a huge amount of work there and actually then that is the crux of it is saying, well, how can we, as a community, define what we mean by a plausible model? Do we just define it sort of historically by...stick with climate for a minute. We've started with these models of atmospheric fluid dynamics and then we've included the ocean and then maybe we've included a carbon cycle and some vegetation and improved the resolution and all that sort of thing. But couldn't we imagine models which start in completely different places that model the same sorts of things?And if you had got a more diverse set of models that you considered to be plausible and you found that they all said the same thing, then that would be really, very informative. And if you had a set of plausible models and they all said different things, then that would show you perhaps that the models that you had, in some sense, had a bit of groupthink going on, that they were too conservative and they were too clustered. And I do have a feeling that that is what we would find if we genuinely tried to push the bounds of the plausible model structures.Now, actually, then you run into the question of plausible, and that's a difficult one, because now we're into sort of scientific expertise. Who is qualified to make a model? What do we mean by "plausible"? Which aspects are we prioritizing? And then we introduce value judgments. We say you have to be trained in physics or you have to have gone to an elite institution, you have to have x many years of experience in running climate models. You have to have a supercomputer. And all of these are, sort of, barriers to entry to have a model which can then be considered within the same framework as everybody else's. So this is another...then the social questions about diversity start coming up, but I start with the maths and I work towards the social questions. I think that we can motivate the social concerns about diversity directly in the mathematics.David RobertsRight, so you want a range of plausible models that's giving you...so you can get a better sense of the full range of plausible outcomes. But then you get into plausibility, you get into all kinds of judgments and then you're back to the modelers.Erica ThompsonExactly.David RobertsAnd you make the point repeatedly that the vast bulk of models used in these situations, in climate and finance, et cetera, are made by WEIRD people. I'm trying to think of the Western... you tell me.Erica ThompsonYeah, never quite sure exactly what it stands for. I think it's Western, Educated, Industrialized, Rich, and Developed, something like that. I suppose it's used to refer to the nation rather than the individual person. But it's the same idea.David RobertsRight. The modelers historically have been drawn from a relatively small...Erica ThompsonFrom a very small demographic of elite people. Yeah, exactly.David RobertsAnd I feel like if there's anything we've learned in the past few years, it's that it is 100% possible for a large group of people drawn from the same demographic to have all the same blind spots and to have all the same biases and to miss all the same things. So, tell us a little bit about the social piece, then, because it's not like the notion that you should have a degree or some experience with mathematical models to make one and weigh in on them. It's not...Erica ThompsonIt's not unreasonable.David RobertsCrazy, right. How would we diversify the pool of modelers?Erica ThompsonSo that's what I mean, it's a really difficult question because it's what statisticians would call a "biospherians trade-off." You want people with a lot of expertise, relevant expertise, but you don't want to end up with only one person or one group of people being given all of the decision-making power. So how far, sort of, away from what you consider to be perfect expertise do you go? And I suppose there may be the first port of call is to say, well, what are the relevant dimensions of expertise? And you can start with perhaps formal education in whatever the relevant domain is, whether it's public health or whether it's climate science.But I think, then, you have to include other forms of lived experience, you know, and I don't know what the answer looks like. You know, I say in the book as well, what would it look like if we were to get some completely different group of people to make a climate model or to make a pandemic model or whatever. It would look completely different. Maybe it wouldn't even be particularly mathematical or maybe it would be, but it would use some completely different kind of maths. Maybe it would be, you know, I just don't know because actually I'm one of these WEIRD, in inverted commas, people, myself. I happen to be female, but in pretty much every other respect, I'm as sort of standard modeler-type as it comes. So I just don't know what it would look like. But I think we ought to be exploring it.David RobertsAs I think through the sort of practicalities of trying to do that, I don't know, I guess I'm a little skeptical since it seems to me that a lot of what decision makers want, particularly in politics, is that sense of certainty. And I'm not sure they care that much if it's faux certainty or false certainty or unjustifiable certainty. It is the sort of optics and image of certainty that they're after. So if you took that out of modeling, if the modelers themselves said, "Here's a suite of possible outcomes, how you interpret this is going to depend on your values and what you care about," that would be, I feel like, sort of, epistemologically more honest, but I'm not sure anyone would want that. The consumers of models, I'm not sure they would really want that.Erica ThompsonBut it's interesting. You say that that's a reason not to do it, I mean, surely that's a reason to do it. If the decision makers are, sort of, somewhat dishonestly saying, "Well actually I just want a number so that I can cover my back and make a decision and not have to be accountable to anyone else. I'm just going to say, 'Oh, I was following the science of course.'"David RobertsRight.Erica ThompsonWell, that sounds like a bad thing. That sounds like a good reason to be diversifying, and that sounds like a good reason not to just give these decision-makers what they say they want.There are maybe better arguments against it in terms of...is it even possible to integrate that kind of range of possible outputs into a decision making process? Like would we be completely paralyzed by indecision if we had all of these different forms of information coming at us? But I don't think that, in principle, it's impossible. For example, I would say that near-future climate fiction is just as good a model of the future as the climate models and integrated assessment models that we have. I would put it, kind of, not quite on the same level, but pretty close.David RobertsHave you read "The Deluge" or have you heard of "the Deluge"?Erica ThompsonI've not read that one, no. I was thinking of maybe Kim Stanley Robinson's "Ministry for the Future." But other explorations of the near-future are available.David RobertsRight. I've read both. I just really have to recommend "The Deluge" to you. I just did a podcast with the author last week and it's a really detailed 2020 to 2040 walking through year-by-year. And, obviously, fiction is specific, right? So there's specific predictions, which are scientifically, sort of, you'd never let a scientist do that.Erica ThompsonBut you can explore the social consequences and you can think about what it means and how it actually works, how it plays out in a way that you can't in a sort of relatively low-dimensional climate model. You can draw the pictures, you can draw the sort of red and blue diagrams of where is going to be hot and where is going to be a bit cooler. But actually thinking about what that would look like and what the social consequences would be and what the political consequences would be and how it would feel to be a part of that future. That's something that models, the mathematical kind of models can't do at all. That's one of their...that's one of the axes of uncertainty that they just can't represent at all. But climate fiction can do extremely well.David RobertsYeah, I was going to say that book got me thinking about these things in new ways, in a way that no white paper or new model or new IPCC ever has.Erica ThompsonExactly. But if you're thinking of the models as being, sort of, helping to form conviction narratives and they are sort of ways of thinking about the future and ways of thinking collectively about the future as well, as well as kind of exploring logical consequences, then in that paradigm, the climate fiction is really, genuinely, just as useful as the mathematical model.David RobertsWell, we've been talking about models in general and they're sort of limitations. So let's talk about climate specifically, because it sort of occurred to me, maybe this isn't entirely true, but like the epidemiological thing and the finance thing, both, in a sense, models play a big role in there, but there's also a lot of direct experiential stuff going on. But it's sort of like climate has come to us, the thinking public, almost entirely on the back of models, right? I mean, that's almost what it is. You know what I mean? Like you can see a severe weather event, but you don't know that doesn't say climate to you unless you already have the model of climate in your head.So it's the most sort of thoroughly modelized field of sort of a human concern that there is. And so all the kind of dysfunctions that you talk about are very much on display in the climate world. Let's just start by pointing out, as you do, the sort of famous models that have been used to represent climate. DICE; William Nordhaus's DICE model is famous. One of the earliest and famous. One of the things it's famous for is him concluding that four degrees—right there is the perfect balance of mitigation costs and climate costs. That's the economic sweet spot.And of course, like any physical scientist involved in climate who hears that, who's just going to fall out of their chair. Kevin Anderson, who you cite in your book, I remember almost word for word this quote of his in a paper where he basically says, "Four degrees is incommensurate with organized human civilization." Like, flat out. So that delta. tell us how that happened and what we should learn from that about what's happening in those DICE-style models.Erica ThompsonWell, I think we should learn not to trust economists with Nobel Prizes. That's one starting point.David RobertsI'm cheering.Erica ThompsonGood.David RobertsI'm over here cheering.Erica ThompsonSo, yeah, what can we learn from that? I mean, I think we can learn, maybe, for a starting point, the idea of an optimal outcome is an interesting one. Who says that there is an optimal? How can we even conceptualize trading off a whole load of one set of bad things that might happen with another set of bad things that might happen?David RobertsImagine all the value judgments involved in that!Erica ThompsonExactly, exactly, exactly. You're turning everything into a scalar and then optimizing it. I mean, isn't...that weird, if anything?David RobertsYes. And you would think, like, how should we figure out how we value all the things in our world? Well, let's let William Nordhaus do it.Erica ThompsonYes.David RobertsIt's very odd when you think about it.Erica ThompsonYou can read many other, even better critiques of Nordhaus's work and, sort of, thinking about these different aspects of how the values of outcomes are determined and how things are costed, and of course, as he's an economist, everything is in dollars, so it's the sort of least-cost pathway is the optimal one. So it may indeed be that the lowest financial cost to global society is to end up at four degrees, but that will end up with something that looks very strange. Maybe there will be a lot more zeros in bank accounts. Great, fine. But is that really what we care about?David RobertsRight. How many zeros compensate for the loss of New Orleans or whatever?Erica ThompsonExactly. The loss of species across the planet and coral reefs and all the rest of it? I think even the concept that you can put these things on a linear scale and subtract one from the other just doesn't make sense.David RobertsAnd also, one of the amusing features of these models that you point out—which I have obsessed over for years—is, they sort of assume, as a model input, that the global economy is going to grow merrily along at 3% a year forever. And then and then, you know, I have arguments with people about the effects of climate change and they say, "Well, you know, it's not going to be that big a deal. The economy is going to keep growing." And I'm like, well, "How do you know that?" And they're like, "Well, that's what the model says." And I'm like, "Well, yeah, that's because you put it in the model!" Like, you can't put it in there and then go later, go find it there and say, "Oh, look what we found, economic growth." And they sort of they hold that 2% growth steady and then just subtract from that, whatever climate does. And the whole notion that...Erica ThompsonI mean, the notion, I think everything is predicated on marginal outcomes, that, as you say, everything will just continue as it is, and climate change is only an incremental additional subtraction on top of that. I think for anyone who has really thought through—and perhaps we need to be sending these economists some more climate fiction so that they can start thinking through what the systemic impacts are of climate change.Because yes, I can sort of see that if you thought climate change was only going to be about the weather changing slightly in all the different places, that you would say, "Well, what's the big deal? The weather will change a bit and it'll be maybe a bit hotter there and a bit wetter there and a bit drier there, and we'll just adapt to it. You just move the people, and you change your agricultural systems and grow different crops and raise the flood barriers a bit." And all of those have a cost, and you just add up the cost and you say, "Well, actually, we'll be able to afford it. It'll be fine." So I can sort of understand how they ended up with that view. And yet, as soon as you start thinking about any of the social and political and systemic impacts of anything more than very trivial perturbations to the climate, it just becomes impossible to imagine that any kind of incremental model like that makes any sense at all.And yet this is sort of state-of-the-art in economics, which is really disappointing, actually. It would be really nice to see more.David RobertsYou don't even need to send them climate fiction. As you say in that chapter, even if they just went and talked to physical scientists, if you just ask physical scientists or sociologists or people from outside kind of the economic modeling world, "What's your expert sense of what's going to happen?" None of them say, "Steady economic growth as far as the eye can see, with the occasional hiccup."Erica ThompsonYeah. So I think economics has become sort of wildly detached from physical reality somehow, and I'm not quite sure how it happened. And, you know, there are good people within the economics profession fighting against that tide, but it seems very hard to counter it. Nordhaus was getting his Nobel Prize in 2018, which is only five years ago.David RobertsYes. Another quote that grabbed me is, in the sense of, we don't know how to assign probability to some of these, sort of, big kind of phase shift things that might happen, tipping points or whatever you call them, or social tipping points. We don't know how to assign probabilities to these things and so we don't put them in the model. And so then the model tells us, "Don't worry, these things aren't going to happen." But as you say, "Absence of confidence is not confidence of absence."Erica ThompsonExactly.David RobertsAnd one point you make, your general point about climate models is that they sort of represent a failure or several failures of imagination. But as you say, making the models this way so they only show marginal changes, so they basically show the status quo out to the indefinite future with just 1% or 2% of GDP growth shaved off. It's not benign to do the model that way because in the model feeds back and affects how we think about the future. The failure of imagination going into the model then comes back out of the model and creates a failure of imagination.This gets back to the sort of models not just being predictive engines, but being narratives, stories, ways of thinking.Erica ThompsonYeah, these models change how we make climate policy. They change how we think about the future. They change the decisions that we make. They frame the way that we think about it. And so, I think when we have economic models that say, "Four degrees is optimal." or when we have climate models that sort of, I think, are not to the same extent, but somewhat guilty of doing the same thing, of projecting a future which looks much like the past, but with marginal changes.I think maybe modelers, physical modelers are becoming more confident about the possibility of more radical change in the physical system as well. It was interesting to see the change in language around the Atlantic meridian overturning circulation, for example, the Gulf Stream, which is such a big influence on the climate of Northern Europe. And of course, it's also because it transfers heat from the Southern Hemisphere to the Northern Hemisphere. If that were to change, it would be a huge change to the climate of the Southern Hemisphere as well. So it's not solely a European concern.But I think models over the past sort of 20-30 years have been...again, it's sort of this trying to find consensus and trying to look like the other models. And I wouldn't say it's necessarily deliberate. It's just sort of you run a model and you find that it does something a bit weird. So you go back and you tweak it, and you do something a bit different, and you try and get it to look more like the other models. Because you think that if all the other models say something, then that must be sort of what we're expecting. And we don't want to look too far out, otherwise, maybe we won't get included in the next IPCC report.David RobertsRight. And if you're averaging out, it's the discontinuities and the sudden breaks that kind of get thrown overboard if you're trying to...Erica ThompsonExactly. And you start saying, "Well, this one's an outlier, so maybe we won't include it in the statistics. Or this one, it just doesn't look physically plausible." And of course, anything, as soon as you start looking into the details, you're going to be able to say it's wrong or you're going to find a bug or something because it's wrong everywhere, because all models are wrong. But that shouldn't be a problem because we make models, knowing that we are making a simplification.But if we investigate the ones that are more far out, with more zeal to look for these errors and problems, we will find a reason to discount them. So that is statistically worrying, because we should have to sort of preregister our model runs and say, "Actually, I'm going to run this set of model runs with these sets of parameters, and it doesn't matter what the output looks like. I'm going to consider those all to be equally likely." Because if you start going back and pruning them, with respect to your expert judgment about what it ought to look like, then you'll end up with a distribution that looked like what your preconception was, not like what the model was telling you.David RobertsYeah, it's one thing to say any given sort of discontinuity or outlier might be statistically unlikely, but to me nothing's more statistically unlikely than 80 years of human history with no discontinuities and no sharp breaks and no wiggles in the lines of smooth curves. And another way, this way of modeling sort of turns around and affects us is, as you say, as we are forming policy. And, I guess I had had this in my head, but I thought you crystallize it quite well, which is that if you look at these models, these climate economic models...if you look at the ones where climate change gets solved—right, it's just sort of the steadily increasing curve of solar and the steadily increasing curve of wind and everything sort of just like marginally inches up to where it needs to be—when you think about it, that representation excludes radical solutions. It excludes everything, really, but price tweaks.Erica ThompsonYes, because that's the way these models are made. They are cost-optimizing models, which are entirely determined by the price that you happen to set. And so the integrated assessment models that we're talking about, they include costs on different energy system technologies. So a cost for nuclear and a cost for renewables and a cost for anything else you want to put in. And depending on what it costs, it will rely more or less on that particular technology. But of course, behavior change could just as well be put in.How much would it cost in dollars per ton of carbon avoided to change people's behavior so that you use less electricity, for example? Maybe we're starting to see that with all the stuff about, you know, conserving energy in light of the Ukrainian crisis, but how much would that cost? And it would be completely arbitrary to say how much it would cost, because it's so dependent on social and political whims and the winds of change and the trends in society. It doesn't really make sense to try and put a price on it because it would depend on how it's framed and who's doing it and all of that.David RobertsRight. Or like, what is the dollar value of a social uprising that results in social democracy like that? How do you price that?Erica ThompsonAnd also on the technologies. I mean, I'm sure you've discussed this before on your podcast, but the cost of carbon capture and storage, how much is that going to influence the pathways that we have? And you see the pathways more and more are dependent on a lot of carbon capture at the end of the century in order to make everything balance out. If you put it in with a high cost, then you won't use it. If you put in with a low cost, you'll use loads of it.And then is that performative or is it counterperformative? Is it the case that the policymakers look at it and say, "We're going to need loads of this interesting technology and we don't have it yet, I'd better put loads of money into investing and developing it." Or do they look at it and say, "Oh, this means that the economic forces that are acting in the climate domain mean that it will be highly economic to do air capture at the end of the century and therefore governments don't need to do anything and we'll just wait and it will happen because it's determined by the market." Which way are they thinking? I have no idea.David RobertsRight.Erica ThompsonBut those are really different, and they result in really different futures. They don't result in the future that was predicted.David RobertsRight. This gets to moral hazards and model hazards, which I hope you can segue into here because I found that those two concepts also quite helpful.Erica ThompsonSo the next one I think that is going to end up in these models is geoengineering, for example. And so you could equally well put into the same model with the same framework. It would be then in terms of sort of either dollars per ton of carbon equivalent in the atmosphere, but negative for the amount of shading that you could get for a certain amount of stratospheric aerosol injection or whatever your favorite technology is, but you could, in principle, stick that in.And what is the price that you're going to put on it? If you put it in at $2,000 per ton of CO2, it's not going to happen. If you put it in at $2 per ton of CO2, it's going to be totally relied on and it will be the linchpin of all successful trajectories that meet the Paris targets by 2100. And if you put it in somewhere in between, you'll get more or less of it, depending on that price point. So who decides what price point it's going to go in at?David RobertsYes, and you really capture the sort of oroboros nature of this. So we add up all the technologies we have, there's a hole left, we say we're going to carbon capture that hole. That's how we're going to fill that hole in our mitigation. And then we turn around and look at the model where we stuck this arbitrary amount of carbon capture in and turn around and say, "Oh, well, we have to do carbon capture because that's what the model said is needed." And again, it's like, wait a minute, you went and put that label on the hole in the model?"Erica ThompsonYes.David RobertsAnd then you went in and found it in the model and are now claiming that the model is telling you you have to do this, but it just says you have to do this because you're hearing an echo of your own decisions.Erica ThompsonExactly. But I think, more generally, that's what these models are doing for us. They encapsulate a set of expert judgments and opinions and they put them into a mathematical language. But that doesn't make them any more objective. It perhaps makes them slightly more logically self-consistent with the different numbers that have got to chime with each other, but it doesn't actually make them any more authoritative and objective than if they were just written down or spoken.David RobertsWell, it insulates them.Erica ThompsonIt insulates them from criticism.David RobertsPublic scrutiny.Erica ThompsonYes, absolutely.David RobertsIt gives them the vibes of expertise that daunts people and keeps people away.Erica ThompsonYes.David RobertsAnd so carbon capture right now is playing that role. We just sort of decided arbitrarily we need x amount of carbon capture because that's how much mitigation we have left to do that we don't know how to do with other sources. And we're arbitrarily deciding on the price of carbon capture because we don't know what that price is because it doesn't really exist at scale yet. So we're making these arbitrary decisions.Erica ThompsonExactly. It was going to be renewables and renewables weren't fast enough, so then it had to be something else. And then it was going to be carbon capture and storage and that wasn't quite enough. So now it's direct air capture and next it's going to be geoengineering. I mean, I can't see another way around that. That is the trajectory that these models are taking. And once the geoengineering is in the models, then it will become a credible policy option, an alternative. So we need to be ready for that.David RobertsWell, this point you're making so disturbed me that I wrote the whole quote down from the book. You say, "If the target of climate policy remains couched in the terms of global average temperature, then stratospheric aerosol geoengineering seems to be now to be an almost unavoidable consequence in its inclusion and integrated assessment models will happen in parallel with the political shift to acceptability." That's just super disturbing. So we're just sort of assuming a can opener to fill these holes in our models and then we're finding a can opener in our model, and we're like, "oh my god, we got to go build."Erica ThompsonYes. And so this is why I think it's so important that we move the discussion from technology and away to values. I think that stratospheric aerosol injection could be a perfectly legitimate and reasonable solution, but it must be one that we've talked about, and it must be one that we understand what value judgments are being made. What trade offs are being made? What kind of solutions are being ignored in favor of doing this technological thing? What kind of other options are favored by different people and different kinds of people?Because geoengineering, the sort of big, sexy technological project, is a very tech bro solution. It's a very top-down, mathematical elitist, predict, and optimize...it's in the same vein as all of these economic things. It's about optimization and calculation.David RobertsI always think about the guy who wanted to blow up a nuclear bomb on some Alaska coast to make a better harbor.Erica ThompsonYeah, right. So it's about one-dimensional outcomes. If you say, "All we want is a harbor." Okay, go ahead and do the nuclear bomb, because it will achieve your objective. And if literally the only objective of climate policy is to keep global average temperature below two degrees, then geoengineering will probably be the most cost effective and easy way to do that. But, it is not the only thing that matters. The future of global democracy, the values of different citizens. What kind of future are we trying to get to? So I think this is another problem of the way that we typically model, is that it starts with an initial condition of where we are now, and then everything spreads out and everything becomes more uncertain as you look forward in time.And that kind of leaves people twisting in the wind, wondering, well, what is this future going to look like? We just don't know. It's really uncertain. It's really scary. It could be this, it could be that. It could be catastrophe. And actually, I think politically and in terms of thinking maybe more in conviction narratives, what we need to be doing is coming up with a vision for 2100, articulating a vision for what the future would look like if we had solved the problem that we have.And it's not just climate change. It's resource scarcity, and it's sociopolitical questions. And ultimately, it's a much bigger, kind of almost theological question about how humanity relates to the planet that we happen to find ourselves on. You know, these are big, big questions, and they're not technical questions. They're social and political and spiritual questions about what we're doing here and what we want society to look like. And so, if you if you had a vision of the future, of what you want 2100 to look like and how people should be living with each other and how, politically, we should be thinking about our problems then you say—and then you use your model in a different mode—you say, "If we're aiming for that kind of future, what do we have to do one year from now, five years from now, ten years from now, thirty years from now, in order to stay on track for that future that we want?"Rather than just saying, "We are starting here from this initial condition, and we have all these possible outcomes, possible trajectories kind of diverging forward from us." That's a really...much harder sell and it's harder to communicate. And I think it lends itself towards this one-dimensional thinking of saying, "We have global mean temperature is the problem." Well, global mean temperature is not really the problem. Geopolitics is the problem.David RobertsNobody lives in mean temperature.Erica ThompsonNobody was ever killed by global mean temperature. People are killed by things that happen locally.David RobertsAnd if you're envisioning the 2100 you want, nobody's envisioning a global mean temperature.Erica ThompsonBut people may be envisioning very different things. And then I think it is interesting to listen to some of the people who might call themselves climate skeptics. What is it that they're afraid of? It's sort of authoritarian global government and all that sort of thing. And is that, in fact, what climate models and the larger scale modeling community are kind of being shepherded into propping up? I mean, what is it, politically, that is convenient about this kind of model as opposed to another kind of model or another kind of way of thinking about the future and orienting ourselves towards the future?David RobertsThis is, I think, something the book conveys really well is that if you think about adequacy to purpose and you think about, "Well, what is the purpose?" And the purpose of achieving a desired sociopolitical outcome in 2100 is very different than the goal of achieving average mean temperature. But just because you're targeting average mean temperature doesn't mean you you're not making a political statement. The political statement you're making is: "We want to preserve the status quo." Right? We want everything to stay the way it is with a few tweaked parameters. I'm sure the modelers probably wouldn't sort of explicitly say that.Erica ThompsonNo, and I think it's harder to make that argument for climate models than for economic models. You know, the physics of climate is somewhat different from the economics of climate.David RobertsWell, the climate economic models, I mean.Erica ThompsonYeah, the economic models. No, absolutely. And it's all in there in that one-dimensional reduction of everything to costs. If we reduce everything to costs and we say, then actually the amount that African GDP will change by if African GDP decreases by 80% versus American GDP increasing by 20%, maybe that's an adequate trade off. You turn it into something...again, this just doesn't make sense. Like we have to be thinking about the moral and ethical content of these statements.When you say "A dollar is a dollar is a dollar," then actually if you say that and you are happy to trade off 80% of GDP in Sub-Saharan Africa against 20% increase in GDP in Northern Europe or the US, which is what some of these economic models end up effectively doing, that's an enormous ethical judgment and one that I think, if it were made clearer, people simply wouldn't agree with.David RobertsThat's a more elegant way of putting the point that I frequently put bluntly to modelers about this, which is: you could wipe out, I mean, never mind 80% of the GDP, you could just wipe out the entire continent of Africa, and it wouldn't have a very big effect on the course of global GDP. So is that okay? Are we optimized still if we've lost all of Africa?Erica ThompsonThis is one of the successors to Nordhaus. There are other papers in climate economics which take a more, you know, a slightly more realistic view. And so, I was asked for a comment on a paper about, effectively the same thing, the sort of average temperature and the optimal pathways. And so they look and find that an increase of a few degrees would reduce the GDP of Africa by something like 80%. You know, very dramatic. And and you say, "Is this is it remotely credible to think that one could have absolute economic crisis in some of the largest nations on Earth without that having any feedback effect on the rest of the planet?"David RobertsAnd they just meekly accept it. They're like, "Whoa, dang it. Dang it."Erica ThompsonRegardless of whether you consider it ethically acceptable, do you really think that it can happen without any geopolitical implications? Is the billionaire sitting there in the bunker in New Zealand going to be happy with a few extra zeros on the end of their bank account as the world collapses around them? I mean, are they really? I really am interested to know what the kind of thought process is there. Like, I don't quite understand how you come to what seems to be the conclusion that you should be hoarding the resources and then holding up in a bunker in New Zealand.David RobertsOh, my goodness. I don't know if you saw recently the article by David Rothkopf where he was summoned basically to a panel of millionaires.Erica ThompsonOh, yes, I did see that oneDavid RobertsAnd they were asking him questions about their bunkers. And whatever low opinion you might have had of them. It's not low enough. The questions about their bunkers are so naive.Erica ThompsonYeah, it's depressing.David RobertsSo in "model land," in some sense, it's absolutely wild.Erica ThompsonBut this is the economic mentality of saying that "The zeros on the bank account are all that matters and that I am an individual and I am not part of a society and I can thrive regardless of what the rest of the planet looks like." It's that sort of divorce from reality that, somehow, somehow, some group of people—and perhaps it's an extreme version of the mentality of the economists and the economic models that are making these kind of projections and saying that this kind of thing can happen.David RobertsSo, taking your recommendations, I mean, you have at the end of the book, five recommendations for better modeling, and I think people can probably extrapolate some of them from what we've said so far. You bring in more kinds of perspectives. You bring in more different kinds of models, you take outliers more seriously, things like that. But if you did all those things, what you would be doing is stripping away a lot of the kind of faux objectivity that we have now and exposing the fact that there's a hole that can only be filled by expert judgment or by judgment, really, by human judgment.And that is terrifying, I think, to people, particularly people making big decisions that involve lots of people. They're desperate for some sense of something solid to put their back against, right, something that they can reference if they're questioned later about why they made the discussion. So I wonder if in a sense, this is not problems that are arising out of just sort of bad modeling, but in some sense these problems are downstream from a very basic, sociocognitive need for certainty and fear of, sort of, openly exercising judgment and openly defending ethical positions. Do you know what I mean? In some sense, that fear is what produced this situation rather than vice versa.Erica ThompsonYeah, I don't disagree. I think they kind of have gone together and as the models and the idea that the science can give us an answer—and the promise of the scientists that science will be able to give us an answer—as the scientists have kind of gone, "Oh, hey, we could do that. And we could do this. And we could do the other thing as well. And we can give you an answer and just give us a few more million pounds and a better computer and we'll give you more answers and better answers, and then we'll start applying some AI as well, and we'll automate it all." And eventually, you won't even need to think about it. You can just follow the science.David RobertsFollow the science.Erica ThompsonFollow the science. I really don't like, "Follow the science."David RobertsI hate that term so much, I was literally cheering in my bed reading this part. But you say, what to me always seems so obvious, and yet when I try to talk about this on Twitter or in public, I just get the weirdest backlash. But I just want to tell people in the climate world, like, science does not tell you what to do. Quit claiming that we have to do X, Y, and Z because science says so. That's just not the kind of thing that science does!Erica ThompsonScience hopes to be able to tell you, like, in the best case scenario, science can tell you if you do A, this will happen, and if you do B, that will happen. And if you do C, that will happen, but it doesn't have an opinion, in theory, on which of those is the best outcome. Now, in practice, the kind of science that we do and the way that I've sort of described that values and judgments do enter into the modeling process, actually, we do to some extent have an entry of those value judgments into even that beginning section. If A, then what? And if B, then what? And if C, then what?But, you can't get from an "is" to an "ought," you have to introduce value judgments. You have to say, "I prefer this outcome." And ideally, if you're making decisions on behalf of a large group of people, that has to be in some way representative, or at least you have to communicate, "I want this outcome for the following reasons." And so, I would really like to see an IPCC working group for, which is about ethics and value judgment and the politics of climate change, and says, "Well, why is it that people disagree?"Because I think if you go to climate skeptic—again sort of in inverted commas—conferences, or if you talk to them, they are not idiots and they are not uncaring. They tend to be people who genuinely care about the future and about their children's prospects and all the rest of it. And okay, many people find them very annoying, but the point is that their underlying motivation is actually very similar to most other people, and they just have quite different assumptions about either what the future will look like, perhaps misconceptions about the facts as well, in some cases. But a lot of that is motivated by a worry about the political outcomes of what people saying, "follow the science" are telling you to do.David RobertsRight, exactly. And I think they sense, in some ways, almost more than sort of your average kind of lefty climate science believer does, that there are value judgments being smuggled past them undercover of science.Erica ThompsonI mean, it's easier to spot value judgments when they are not your own value judgments, because if they are your own value judgments, then you don't really notice them, you just think it's natural. And so this is another good argument for diversity in modeling, because in order to be able to see these value judgments, they are much more easily uncovered by somebody who doesn't share them.David RobertsEven just to say, "Humanity is worth preserving, we should preserve the human species." That, in itself, is a value judgment.Erica ThompsonYes, a value judgment. Absolutely.David RobertsScience is not telling you you need to or have to do that. I sort of wonder and this is talk about unknowables, but if the IPC did that and really did systematic work bringing all these value judgments, sort of dragging them out of their scientific garb and exposing them to the light and reviewing how different people feel about them, do you feel like that would? Because, I know your average weird science-model bro. His fear about that is, well, if you do that, then everybody will just think they're relative and they can choose whatever they want and, you know, it'll be chaos. But do you think that's true or do you think it would help?Erica ThompsonI don't know whether it would help. I mean, I think I think that it would help to separate the facts and the values because I think people who disagree on the values are because there is no conversation about the values. They are left with the only thing that they can get their hands on is the model and, effectively, the facts, the science. And so they start doing...making sometimes, what are quite reasonable, questions about statistics of model interpretation and, sometimes unreasonable, criticisms about, say, the greenhouse effect.Now, if we could separate that out and say, actually, we agree that the greenhouse effect is a real thing because this is basic physics and actually criticizing that doesn't make any sense. But we will entertain your difference of value judgments about the relative importance of individual liberties and economic growth versus the value of other species or of human equality or whatever, all of these other things. You can stick it all in there and say we allow you to have a different opinion and then maybe we can agree to agree on the facts. So I think it probably wouldn't work, because things are probably too far gone for that to actually result in any form of consensus.But I think if we could sort of bottom that out and say "What is it that you're most scared of?" to everybody. "What is it that you're most scared of losing here?" I think that would be a really revealing question, and I think that would that would also help to incorporate different communities and more diverse communities into the climate conversation because I think then you're into questions about, well, really, what is it that you care about? What are you scared? What future are you most scared of? Are you most scared of a future where society breaks down, in inverted commas? But is it because you're scared of other people? Or is it because you are worried about not having the economic wealth that you currently enjoy?Or is it because you are scared of losing the biodiversity of the planet? Or...there are so many things that people could kind of put in that box.David RobertsOr are you most scared of losing your gas stove?Erica ThompsonYes, that's an interesting one, isn't it? So why has that become such a big thing?David RobertsReally is, right? There's layers to it.Erica ThompsonThere's layers, but there's layers on both sides. I mean, there's the kind of the instinctive, "Don't tell me what to do," but there's also, "Well, why are you telling people what to do? What is the information not sufficient?"David RobertsRight?Erica ThompsonWhat is the kind of knee jerk requirement to regulate versus the knee jerk response against regulation? They're both kind of instinctive political stances.David RobertsYes, and a lot of values...Erica ThompsonWith a whole load of other things tangled up in them. Which, I'm not an American, so I hesitate to go any further than that.David RobertsYes, well, there are layers upon layers that you can even imagine. They're like local political layers. It goes on and on. I'm doing a whole podcast on it and I'm worried how to fit it all into 1 hour. It's just on gas stoves. And I also think...to follow up on the previous point you're making, the model centric-ness of our current climate dialogue and climate policy dialogue, I think just ends up excluding a lot of groups, who have things to say and values. And, you know, the sort of cliche here is the sort of Indigenous groups, you know, they have relationships with the land that are extremely meaningful and involve particular patterns, and those things are of great value. But if they're told at the door quantify this or...Erica ThompsonQuantify this or it doesn't count, yeah.David Roberts...stay out, then they're just going to stay out. So...Erica ThompsonYeah.David Roberts...at the very least it would be a more interesting dialogue if we heard from more voices.Erica ThompsonYeah, but I mean, I think we have to sort of internalize and accept the idea that people with less education, you know, formal education in the sense that sort of we consider there to be a hierarchy of people with more letters after their name are more qualified, and therefore more qualified to inform climate policy and more qualified to have a view on what they think the future should be like. I realize it's a somewhat radical position, but I think that everybody has a valid opinion and a right to an opinion about what they want the future to look like.David RobertsYes, we're just back to...it's funny we're talking about it in the realm of climate but as you say in the book, there's just a million realms of sort of human endeavor, especially collective human endeavor. We're running into these same kind of things. We don't really seem to know how to have honest, transparent arguments about values anymore.Erica ThompsonAnd we find it really hard to talk about values at all. It's really hard, even like if a scientist stands up and says that they love and care about something, that's kind of a weird thing to do. Why would you do that? We're all a bit uncomfortable. You're biased. Exactly.David RobertsBiased in favor of life.Erica ThompsonWhen you start saying that sort of thing, maybe your science is corrupted by it. We can't have that.David RobertsYes, I know. And just like convincing another thing I get yelled at about online just trying to convince people that you are an embedded creature. You have a background, you are socialized to think and feel particular ways, like, you are coming from a place and it's worth being aware of what that place is and aware of how it might be influencing your thinking and aware of other ways...blind spots. and just like people give very...Erica ThompsonAnd aware that some peoples, places, and situations are noticed more than others. If you are a, sort of, white male, well-educated tech bro, then your personal background and situation is not scrutinized the way it is if you are someone "different," in inverted commas, in whatever way that might be.David RobertsAnd the more privilege you have, the more incentive you have to think that your opinions are springing from the operation of pure reason.Erica ThompsonAre "objective" and "neutral."David RobertsWhen your value judgments are "hegemonic," let's say...Erica ThompsonExactly.David RobertsIt's all to your benefit to keep them hidden, right? You don't want them dragged out into the light. Anyway, okay, I've kept you for way longer than I thought I would. As I said, I love this book. There's one more thing I wanted to touch on just briefly, and this is a bit of a personal goof, but I in another lifetime, many, many moons ago, studied philosophy in school. And you slip a line in here early, early in the book when you're talking about what models are and just sort of what you mean by model, and you talk about how they're just ways of structuring experience so that we can make sense of it and predict it.And when you think about it that way, as we said earlier in the conversation, pretty much everything is a model. Like, we're not processing raw data, right? We're filtering from the very beginning through our, sort of, models. And you slip in this line where you say, in this sense, real laws, like, say, speed of light or gravity or whatever are only model laws themselves, which is to say, all our knowledge, even the knowledge we think of as most objective and sort of straightforward and unmediated is in a model. And therefore all the things you say about our relationships with our models and how to do better modeling, it seems to me, all that applies to all human knowledge, right?Erica ThompsonYes. I mean, you're really in the rabbit hole now, but yes. What is it that convinces you that the speed of light is the same today as it will be tomorrow?David RobertsExactly.Erica ThompsonI mean, how do you know? How do you know? What is it that gives you that confidence? I mean, I think you can reasonably have confidence in many of these things. And of course, the mathematics is, as somebody else said, unreasonably effective in the natural sciences. There is no a priori reason to think that it ought to be, so don't worry too much about it. I think that we can make an empirical observation that the laws of physics do work really well for us and that models are and can be incredibly successful in predicting a whole load of physical phenomena and can be genuinely useful and can be calibrated. And we can have good and warranted reliance on those models to make decisions in the real world. So, yes, you're right that, technically, I think there is a problem all the way down, but we do have more confidence in some areas than others.David RobertsWell, this course you're charting between, on the one hand, sort of naive logical positivism, right. That we're just sort of seeing reality, and on the other hand...Erica ThompsonNaive skepticism that says we just can't do it.David RobertsHopeless relativism.Erica ThompsonYes, exactly.David RobertsWe have this middle course, which I associate very strongly with the American pragmatists, James Dewey, and then on and on later into Rorty. I don't know if you ever got into that or studied that, but this sort of practical idea that we know nothing for certain, but we do know things. And to say that we only believe a model because it's worked in the past—and we don't have any sort of absolute metaphysical certainty that it maps on to reality will work again—is not disqualifying like that's just the nature of this is just the nature of human knowledge.Erica ThompsonIt's as good as we can get. You just can't have full certainty.David RobertsBut it works.Erica ThompsonIt works. It's good.David RobertsLike some things work. And something, to me, this is pragmatist epistemology all over again. So I don't know if anybody's ever brought up that parallel with you.Erica ThompsonYeah, I'm not a philosopher, and I'm kind of only tangentially involved with philosophy of science, and there are many different streams of thought within that, but, yes, it sounds very much like that.David RobertsWell, those were all my beloved...that's what I studied back when I studied philosophy, and so a lot of this stuff that you're saying throughout, I was like, "this is not just about mathematical models, this is just about how to be a good, epistemic citizen." Right? How to think well.Erica ThompsonWell, that would make a good subtitle.David RobertsYeah. I thought you might want to rein in a little short of...Erica ThompsonMaybe the next book.David Roberts...of those kind of grand claims. But I really do think that, even people who aren't interested in mathematical modeling as such, can learn from this just about how to have, what's it called, "negative capacity." Just, sort of, a bit of distance from your own models, a little sense that you're not bound up in your own models, the sense that models are always, in some sense, qualified and up for debate and change. I just think it's a good way to go through the world.Erica ThompsonAnd just how to think responsibly about models in society, think critically and think carefully about what it implies to use these models and to have them as important parts of our decision-making procedures. Because they are, and they're going to stay that way, so we need to get used to it, and we need to understand how to use them wisely.David RobertsRight. "Good tools, poor masters," as they say about so many things. Yes, and this is what you kept referencing expert judgment. But I kept coming back again and again throughout the book to the term, "wisdom," which is a little bit fuzzy, but that's exactly what you're talking about. It's just...Erica ThompsonYes, yes it is.David Roberts...accumulated good judgment. That's what wisdom is.Erica ThompsonWisdom and values and understanding, having leaders, I think, who can embody our values and show wisdom in acting in accordance with those values. I think that's something that has kind of gone out of fashion, and I would really like it to see it come back.David RobertsTrue, true. Well, thank you so much. Thanks for coming on and taking all this time. I really, as I say, enjoyed the book, and people are always asking me to read climate change books, and, you know, like, 90% of them are like, "I know all this. Like, you're just telling me things. I know." But I would I would say if I was going to recommend a climate book to people who already know about climate and they're familiar with the science, I would recommend this book because it's, just, how to think about climate change, is one of the most important still, I think one of the most live and important discussions around climate change is just, how do we cognize this? Like, how do we act in the face of this? How do we think about how to act in the face of this? And I think your book is a great guide for that. So, thank you.Erica ThompsonFantastic. Well, thank you so much for having me. It's been fun.David RobertsThank you for listening to the Volts podcast. It is ad-free, powered entirely by listeners like you. If you value conversations like this, please consider becoming a paid Volts subscriber at volts.wtf. Yes, that's volts.wtf, so that I can continue doing this work. Thank you so much and I'll see you next time. Get full access to Volts at www.volts.wtf/subscribe

In this episode, climate communications expert Sage Welch gives scientific and social context to the politicized brouhaha around gas stoves.(PDF transcript)(Active transcript)Text transcript:David RobertsEarlier this month, gas stoves exploded into the news. Overnight, everyone had an opinion and Republican Congresspeople were threatening violence if jackbooted government thugs arrived to confiscate their stoves.A great deal of this gas stove discourse has been lamentably stupid, and some of it has been educational, but on all sides, there's just been a lot of it, so I thought it was worth doing a podcast trying to tease out the facts.To help with that I contacted the Sage Welch of Sunstone Strategies, a climate communications firm that's been supporting electrification policies since 2018. Welch has spent years tracking the science (which has been accumulating for decades), public opinion, and regulatory action on gas stoves. Together, we dig into how this controversy arose, the science informing it, how the politics are shaping up, and what it portends for the future of decarbonization.Alright, here we go. Without any further ado, Sage Welch, welcome to Volts. Thank you so much for coming.Sage WelchThank you for having me.David RobertsSo we're going to do this, we're going to get into stoves. Those of us who have been following decarbonisation and electrification have known about this for a while and probably have been cooking with induction for a while, but Lordy, did it bust into the popular consciousness in the past week or two and just cause a frenzy of nonsense. So, we're going to try to walk through the whole thing here, the background, the science, what's ahead. We're going to try to get it all, God help us. Alright, so, Sage, first of all, why now? What happened? Why is everybody talking about gas stoves now?Sage WelchYeah. So the roots of the past couple weeks debate is the result of three different things that happened in December. So, in December, the Public Interest Research Group held a webinar. The webinar was to launch a report that they had done with the Sierra Club based on a ten state survey of what information, if any, gas stove shoppers were receiving at point of sale from the nation's three largest retailers of stoves about the health risks and how folks can protect themselves, et cetera. And the answer to that was like, not very much information at all.David RobertsYeah, I'm guessing none is approximately none.Sage WelchNone and a lot of disinformation. Don't worry about ventilation. And many folks just hadn't heard of it. And to be fair, the retailers haven't been able to train their sales associates and staff. This just hasn't been on the radar. But they thought it was important to take a look and just see does anyone even get any inkling of this information when they're shopping? And so Richard Trumka, Jr., who is a consumer product safety commissioner, joined that webinar and he used that time to announce that the CPSC would be opening an RFI, a request for information on gas stove pollution in 2023.And he used pretty strong language. He said we need to be talking about regulating gas stoves, whether that's drastically improving emissions or banning gas stoves entirely. And this is pretty surprising, even to health and consumer advocates who've been urging CPSC to investigate this in recent years, but also going back 40 years.David RobertsSounds like it was pretty surprising to his own agency and to his bosses. Sounds like it was pretty surprising to everyone.Sage WelchThe world was not ready for Trumka Jr. to make this statement.David RobertsDo you know why? I mean, is he just the kind of guy who gets excited and gets out over his skis? Do you hear any hint of deliberate twelve-dimensional chess here? Or is this just Trumka getting too excited?Sage WelchI mean, it was a PERG webinar, so I'm not sure that, like, there was a lot of chess playing going on.David RobertsThat's a lot of dimensions of chess if you're starting there.Sage WelchThe sense I get about his position on this, and again at the CPSC level and we'll get to this, this issue is like, not new. But the sense I get is that he just takes his role and the role of the commission quite seriously as far as duty to protect consumers. And this question about whether gas stoves are safe or can be made safe has been hanging around for a while. But when he says banning gas stoves, I think maybe what he is getting at is like, he made these follow up remarks to Bloomberg a month later on products that can't be made safe can be banned. And I think, again, what he's getting at is just like, there is a duty at the commission to ensure safety of products. And as we'll jump into, there is what EPA and many others deem a safe level of NO2 pollution. And jury's still out on whether gas stoves are safe in that regard.David RobertsOr can be made safe in that regard.Sage WelchAnd can be made safe, exactly.David RobertsOkay, so Trumka says this on the webinar and then it didn't blow up immediately, right?Sage WelchIt didn't. Some folks actually did cover this. So the Hill Chicago Tribune actually kind of technically broke this story, but it doesn't blow up immediately. And then the following week, I think just somewhat coincidentally, Senator Cory Booker's office released a letter from 18 members of Congress calling on the CPSC to investigate gas stoves, calling out the health harms. And again, not the first time that a congressional body or a subcommittee has made this recommendation. And actually the Senate committee escapes me, but the head of a Senate committee also made this recommendation last August as well. So this is something that's been brewing in Congress in recent months and years. And then that happens and there's a little bit of coverage.But then in late December, a new study was published in a prominent medical journal from researchers at RMI Albert Einstein College of Medicine and the University of Sydney. And this study found that 12.7% of childhood asthma cases in the US are attributable to gas stove use. And that in some states, like Illinois, New York, California, where there's really high rates of gas cooking, that number is actually much higher. In Illinois and California, it's over 20%. So that study was fairly shocking, although it's based on statistics that have been around for quite a while that find that kids living in homes with gas stoves have a pretty substantial increased risk of developing asthma symptoms.David RobertsRight. Maybe we can touch on this again later, but just to be clear, this new asthma study was not a direct...it's just sort of a regression run on existing data from this 2014 study.Sage WelchYeah, this 2013 meta analysis. And actually, they only focused in this study on risk factors that had been established through North American peer-reviewed published data. But it is basically like a math problem. We know that this percentage that living with a gas stove can increase risk of developing asthma symptoms. And, therefore, when we look at the number of kids with asthma living in homes with gas stoves, it's called like a population attributable factor.David RobertsYeah. Right. The point being, it's not new. It's just that information was sitting there in that meta analysis basically has...Sage WelchExactly. It just helped them put a fine point on the number of cases that could be linked.David RobertsAnd so those three happened, and then the Bloomberg story followed up on that.Sage WelchYeah. So Bloomberg reporter Ari Natter was covering that report and then also thought to go ahead and do an interview with Trumka just based on those statements made in the webinar earlier. And so Trumka, in that interview, now utters what I feel like is just kind of this infamous statement that "Gas stoves are a hidden hazard. Any option is on the table, and products that can't be made safe can be banned," which is true. And so the Bloomberg piece publishes on Monday morning, and it just goes viral. Like, within 12 hours, everyone starts covering this potential ban. I think the language of the headline made it feel like this was far more imminent.David RobertsYes, I think he knew what he was doing here. So, just to be clear about what Trumka is talking about—not that the truth of what Trumka was talking about matters at all in this hysteria—but at best, he's talking about launching a process that will investigate things, that will go through rounds of whatever, that may someday result in gas stoves being banned from new construction. That is the worst possible—I mean, if you're scared of this—that's the worst possible outcome here. No one at any point was talking about going into existing homes and ripping out people's stoves. Let's just get that out there.Sage WelchNo, but the imagery is compelling.David RobertsThe jackboots.Sage WelchYeah. So for whatever reason, and obviously they'll find anything they can I think, but the right-wing echo chamber just goes, like, totally ballistic trying to paint this picture of a full-blown midnight raids of, like, dark Brandon invading with a crowbar, just like, pipes and all that...David RobertsWell, there's no mystery why they do that. They did the same thing with beef around Green New Deal or whatever. They know that this triggers all the right kind of resentment.Sage WelchYes.David RobertsOkay, so these three things happen and then Trumka follows up these three things with the big old bandword and then this all explodes. Suddenly everyone's talking about it. This is one of these funny experiences that people have in our world where we've been talking about this forever. It's just fascinating, sociologically fascinating to watch the vast bulk of people who just have never thought about this at all, right. This is the first they're hearing of anything about it at all. So it's interesting to watch people sort of like untutored, spontaneous reactions to this.Sage WelchTotally. I mean, this is, I just think, the best thing ever. I'm loving every second of it. A, because we've been working to create awareness about the health harms of gas stoves for a long time. But also, and we can get into this, I think Republicans think they've touched on this major kitchen table issue. But I think this is a really shining and striking moment for the climate movement and becoming relevant is not a bad thing.David RobertsYes, we'll discuss the politics later. I think they're less straightforward than people think. And I think you're right. But first, so this is why it's on everybody's mind now, insofar as we can do so in a reasonable amount of time. Let's talk about the science. Everybody's arguing about the science now. What do we know and how long have we known it? Give us sort of like a capsule history of the science.Sage WelchSo when you cook with methane gas, you're combusting a fossil fuel, much like you do in your car, but you're doing it in your home, and the pollution that's created goes directly into your kitchen and kind of just like, straight into your face. And ventilation can help disperse some of those pollutants. Ventilation is super important, especially if that ventilation is going outside. Unfortunately, a lot of ventilation circulates straight back to you and/or no one uses it, and/or you may not have a range hood, but we've actually seen ventilation not be super effective at dispersing nitrogen dioxide pollution. And that's the pollutant that we're really concerned about when it comes to the health impacts of cooking and of combusting the gas.David RobertsWell—what about I'm going to jump in with naive questions here.Sage WelchSure.David RobertsOne thing I hear a lot is that one class of pollutants produced by cooking is just from cooking the food, charring the food itself, which is going to be produced by any cooking.Sage WelchTotally.David RobertsAny type of cooking. So what are the percentages here? If I'm worried about those pollutants? Are those the main ones or is NO2 the main one? Where do they all kind of fall out?Sage WelchOkay, so when you cook, that process itself does produce particulate matter like PM2.5, right. There is research that shows that gas cooking produces like 50% more PM2.5. Or homes that are cooking with gas does produce a bit more of that particulate matter. And again, we'll talk more about this, but the gas industry is really seized on this idea that all cooking creates pollution. And it's absolutely true. Even electric stoves. It's a good idea to try and fan some of this particulate matter away from you and out the window.David RobertsYes, ventilation is important in all cooking. Let's just put a stake in that.Sage WelchBut then the conversation that we're having in regards to asthma and lung irritants, specifically, we really do need to zero in on nitrogen dioxide and NO2, because NO2 exposure is just really bad. This leads to aggravated respiratory symptoms, higher susceptibility lung infections like COVID, increased risk of asthma, as well as, like, IQ and learning deficits, increased risk of cardiovascular effects. I don't think there's anyone that's going to argue that NO2 pollution is not bad. We've regulated NO2 levels outdoors for a very long time. And I actually think that there's steady new research coming out that NO2 is even worse outdoors than we ever thought.But there's this funky little thing where no one actually gets to regulate indoor air concentrations. But what we know about cooking with gas is that in the time it takes to, like, bake a pie, about an hour, 90% of all homes, specifically when you're cooking with gas, will have an unhealthy level of NO2 pollution, a level that EPA says is not acceptable in outdoor air. And EPA research shows that homes with gas stoves can have up to 400% higher NO2 concentrations than homes with electric stoves.Because with an electric stove, you're not combusting a fossil fuel. This pollution is very specific to that fossil fuel combustion. And that, when it comes to NO2, kids are just really at risk. And so are seniors, and so are pregnant people. There's a lot of populations who, for whom, NO2 produces very bad outcomes. So there's about 57, just by my team's count, peer reviewed studies that have come out since 1976 that find links between gas cookings and various health harms. And these are all, again, peer reviewed journal published studies. And as we mentioned, that latest asthma study is based on some really important work that came out in 2013, which is a meta analysis. It's like a literature review of more than 40 different research papers looking at the effects of NO2 from gas cooking, and it's linked to asthma.David RobertsA lot of what I'm seeing about the science goes back to this 2013-2014 meta analysis and some back even to, like, a study in 1991, I think. I guess my naive question is: why isn't there more recent—especially given the rising sort of profile of this whole issue—why is there not more recent empirical, direct empirical research about this?Sage WelchI don't know exactly, but I'm not sure that my answer is I think it's just firmly established. I mean, I think the purpose of that meta analysis was to say the science on this is relatively well-established as far as the gas cooking creates NO2, NO2 creates health hazards. And we'll talk about this, but there was a flurry of research on this in the 70's and 80's by the gas industry, but also by the National Academy of Sciences. There was a 1981 symposium on indoor air pollution in Massachusetts and there was no less than 15 papers introduced at that symposium on pollution from fuel-fired appliances. We actually had this very robust conversation about this in the 70's and 80's, and it just kind of died down.David RobertsA couple of other naive questions. One is, like, my gas furnace also has a pilot light, right? Is also combusting a fossil fuel, in some cases people's water heater or whatever. Are all indoor gas appliances producing NO2 or do other appliances handle it better in some way?Sage WelchSo those other appliances are also producing NO2 and a wide range of pollutants. But the difference is they're vented outdoors naturally. The stove is the only one that's not directly vented outdoors. And I think it's important to bring this up, though, because I don't think it's been underappreciated the role that gas appliances play in smog formation. In California, where I'm based, there's air quality management districts and also the California Air Resources Board. These folks are required to meet federal air quality standards. And what I see them focusing on right now because actually there's some movement on this, we can't actually meet these standards unless we do something at the moment about these vented appliances.David RobertsSo gas appliances in homes and buildings are a notable contributor to outdoor pollution.Sage WelchThe gas appliances in the Bay Area contribute more like more NOx, which creates smog, than all of the passenger vehicles in the Bay Area.David RobertsNo shit.Sage WelchIn California, in total, these appliances are responsible for more than four times the NOx pollution than our power plants.David RobertsThat is wild.Sage WelchIt's striking! Which, also helps put the stove in perspective because you're just like, yeah, you're burning a fuel that produces pollutants. There's not really any way around it. And that's one of the reasons why the California Air Resources Board, as a part of the state implementation plan, which is their plan for how they're going to continuously meet these federally mandated air quality standards, committed to basically a zero greenhouse gas emissions standard for heaters and hot water heaters by 2030, which effectively is going to end the sale of those products here in California simply because they are key contributors. And the Bay Area is also working on a rule on this, a NOx rule essentially. But fortunately we have technologies like heat pumps and others that don't produce any pollution. But yes, really underappreciated contributors to smog.David RobertsInteresting. And second naive question: a lot of the criticisms of the science you're seeing online are saying things like these studies sort of like seal a room in plastic and then run the stove and then of course you find nitrous oxides. But if you ventilate properly, you're fine. Can you get to a safe indoor air level if you are using proper ventilation? What's the story there?Sage WelchWell, I think that's the question that CPSC is setting out exactly to determine what is a safe level of NO2 and how can we ensure that cooking products are meeting it or fossil fuel appliances are meeting it. I think ventilation can help and it is, again, it's super important, especially as we're having this conversation. Let's talk about mitigating risk factors while also talking about long-term policy solutions. And I'll probably speak rather imprecisely and we can let people attack us on Twitter for that. But my understanding is that ventilation is not entirely or...I would guess I would use the word like "adequately effective" against specifically that NO2.My kind of silly understanding of it is that NO2 is like a heavier pollutant and it's harder to disperse. There was a study about whole home ventilation, which is kind of different than super high-powered range hoods, but it's actually kind of considered the gold standard in ventilation as we're learning more about how to produce the healthiest indoor air possible. And that found that that specific method is not effective against NO2. And to be clear as well, you're going to have levels of NO2 in your home because that is the key pollutant that comes from fossil fuel combustion.So if you're living by a road, which we probably all are, you're going to have some trace and ambient amounts of NO2. But you're not going to have...I mean, the gas stove is a little mini fossil fuel power plant. It is burning it right in your face. So it just changes that concentration dramatically.David RobertsAnd also it's worth pointing out here that what studies we have show that something it's like 20% of people, 30% of people report actually using their hoods, using their ventilation at all, much less on...And one of the reasons they cite they don't want to do it, is it's too loud. And of course, it only works the way it's supposed to work if you crank it up to the right level, right, based on your cooking. So you need it to be kind of loud and kind of running all the time if you want to even approach these sort of top levels of safety.Sage WelchYeah, if we ended this conversation with just ventilation, we'd be doing ourselves like a pretty wild disservice. And yeah, not only do folks not really use it and there are questions about how effective it really is. It's also...my last apartment, we had a gas stove with no range hood whatsoever. I can't even actually remember living in a place, which maybe speaks to Bay Area housing, but that has had ventilation paired with a gas stove. And as a tenant, you're very stuck there.David RobertsWe discovered when we remodeled our kitchen that our vent, which we never used because it was loud and rattling, just vented up into the attic. Like it didn't go outside at all. So it was just recirculating. And I forget the exact figures on that, too, but something like half of ventilation fans do that. They just recirculate air in the home, which, of course, is doing next to nothing for you. This is sort of my sign post around ventilation. Like, if you approach it scientifically and set it all up exactly right, you might be approaching safe levels of indoor air, but that is just the wild exception.And as you say, I want to return to this later, but we'll just sort of put a pin in it here. Renters and low-income people are the ones most likely to live in shitty setups with bad stoves and bad ventilation.Sage WelchAnd smaller. And this is the other thing that really matters here, is like the room size matters, the airflow matters. And yes, it's the smaller households where this is just really highly concerning. And it's also...I don't know, these could well be folks who are living in areas that are already really overburdened with pollution at the outdoor level. So the fact that you can't find access to clean air, I mean, I'm a parent. It just breaks my heart. It's not...yeah, it's terrible.David RobertsOkay, so this is the science. Is there more to say about there's lots of studies about NOx. Virtually impossible to get a safe level of NOx in your house if you're running a gas stove.That's well established. And then there's this other—honestly, really creepy—body of evidence that is coming out about what is in the gas that's in our home and when and how we're being exposed to that through leakage. So there's been a series of three studies in the past year. The first one came from Stanford. It came out in January of 2022. And that found that gas stoves are leaking methane. I mean, unsurprisingly, because gas is almost entirely methane around the clock while they are off.This is the pilot light or just something else?Sage WelchNo, this is like leakage from the fittings, from the stove itself. I think there's just...like this is a gas that wants to leak and it's going to find a way.David RobertsThis is an echo of all the recent research about methane pipelines, too, right. The whole methane infrastructure is leaking all over the place.Sage WelchAnd for this reason, and you folks have been making this point, like, gas stoves are a relatively small emissions impact, but they're actually a much more potent climate hazard than we thought. And that's what that research shows us. So that body of research shows that not only are gas stoves leaking a bunch of stuff well off, the methane side of that leakage is contributing to the...it's like the emissions equivalent of 500,000 cars being driven each year, totally separate from the combustion of the fuel. But just that sheer methane leakage is pretty big climate issue. And so that kind of established this point that these are leaking.And then researchers from Harvard and PSC Healthy Energy started a project measuring and looking at what was in the unburnt gas that was leaking from gas stoves. And they've done this in two places so far. The first study was in Boston, and they found nearly 300 chemical compounds, including 21 pollutants, that are known to be toxic to humans, including benzene to the known carcinogen linked to blood disorders and leukemia. And the Boston study didn't measure concentrations, but just the presence. We're like, "Okay, stoves are leaking, and they're leaking some really harmful stuff." And I just think at the core of this, it's just deeply fascinating that we don't know—and kind of have never really known—all the different components that are in gas.David RobertsIt's a little wild, right?Sage WelchIt's totally crazy! It's coming into our homes. And this PSE study that I'm about to mention, the title of the study is, "Home is Where the Pipeline Ends," because it literally is. From sourcing to transportation to distribution lines to your house, gas is picking up all kinds of stuff, and we don't ever really determine what is in that and how it could affect you. So this PSE study did the same thing as the Boston study. They measured what was in the gas that was leaking from kitchens in California, but this time they measured the concentrations and they found that in California, the benzene levels that were leaking were just off the charts, up to seven times California's recommended exposure limit.But those exposure limits are saying...those exist because the state kind of has to say something. But the World Health Organization, any health authority, is going to tell you there is no safe level of benzene exposure to the toxin that accumulates in your body over time, and it gives you cancer in the long term. So they compared this at the concentration level. The leakage in homes in California was about the same level of the benzene concentration that you'd see if you lived with an indoor smoker. And that's kind of interesting because the most recent RMI asthma study also found that that 12% childhood asthma link level is about the same as secondhand smoke.David RobertsInteresting.Sage WelchSo we have two different places where we're learning that the health impacts are just quite strikingly similar to what it would be if you were living with a smoker indoors.David RobertsAlthough I am extremely old, I did not actually live through the arguments, or at least was not paying attention to the arguments about indoor smoking. But from what I've read about them, they took an oddly similar shape to all these arguments we're having now. This is something I say about air pollution all the time, my Volts listeners are probably sick of hearing it, but just, it's been decades now that more or less every time scientists return to the subject of air pollution and they discover the same thing: "it's worse than we thought, it's worse than we thought, it's worse than we thought."That's consistent across decades, now, across pollutants. Particulates are this way, NOx, et cetera. So you don't want to sort of say, "Here's what we know today, and this is probably final." It's just, like, intuitively things are probably going to keep going in the direction they've been going. We're probably going to keep finding out they're worse than we thought and worse than we thought.Sage WelchTotally.David RobertsOkay, so NOx is super bad. The chemicals in gas are super bad. Both are being leaked into the home. We've known about NOx for a long time. We're learning about benzene and these new chemicals more recently. So let's pivot from the science then to the politics of this. So you say we've known these issues about indoor air quality related to stoves have been around for a while. Give us just a little bit of the history. Like when did this first start coming into the sort of consciousness of regulators and how has the gas industry responded over the years?Sage WelchYeah, so this is super fascinating and I think has kind of been missing from the discourse this week. So I'm really excited that we get to talk about it. But the best snapshot I've seen of this historical debate comes from a paper we found. The paper is called the "Impact of Indoor Air Quality on the Gas Industry." It was published in 1984. And let's just take a moment. Not the impact of the gas industry or gas on indoor air quality.David RobertsRight!Sage WelchYeah, this paper was commissioned by the gas industry. The purpose was to provide an overview of the indoor air quality issue to gas utility legal representatives.And they say over and over, the reason that they are commissioning this report and looking at this is due in large part to the fact that the Consumer Product Safety Commission was, at that time, undertaking a rather robust investigation into fuel-fired appliances. And so scientists, federal authorities, and the gas industry were all engaged in a very robust conversation about this. The American Gas Association actually set up something called the Gas Research Institute in 1976. Fun fact: costs that were eventually passed on to ratepayers to establish that institute through some fees that they were paying for pipeline transportation.And in 2000, that merged with the Institute of Gas Tech, or GTI, and they're still producing research for AGA. AGA and the gas industry kind of set up their own research. But what this paper shows us that in 1974, the science of the health harms was not only well-established, but there was like a lot of discussion about this in media. The gas industry in the paper says the gas industry has been researching this since the 70s due to Congress and public concerns. And as I mentioned there was that 1981 symposium they mentioned this in the paper where there's just like an explosion of papers and scientists really interested.And this is also around the time where we were really focused on energy conservation, so we were tightening up building envelopes. And I think that's part of the reason why there was also an expressed interest in what might be floating around inside because we were steadily locking people into those pollutants.David RobertsYes, the building ceiling I think you could probably view as like the tail-end of the kind of oil crisis, Jimmy Carter, "Let's preserve oil, let's do energy efficiency," tail-end of the 70's, that movement, which then ran into the 80's and Reagan, which I think our story does as well.Sage WelchYes. And so yeah, in this paper they give you this really fascinating snapshot, particularly of the media interest. So they're noting that there's a lot of articles running in the Wall Street Journal and Reader's Digest and Consumer Reports. They have some quotes from Consumer Reports. I'll read this one from 1982: "Children from gas stove homes have a greater incidence of respiratory illness and impaired lung function than those from homes with electric stoves." And then in 1984 there's this excerpt from a Consumer Reports article that says "The evidence so far suggests that emissions from a gas range do pose a risk. And if you're buying a new range and you can choose between electric and gas, you might want to choose an electric one."And that is just like verbatim what everything has said this week and some new reporting that we're seeing from Consumer Reports. So it's so interesting to me that we were having this conversation and we just kind of developed collective amnesia. I mean I think that's due in large part, and I'm sure we'll chat about this, to marketing of gas stoves, but for everyone being like this is coming out of the blue, it's being manufactured...like no!David RobertsIt's only about climate change.Sage WelchRight? Yeah, exactly. This is because we have this hidden agenda? I guess, maybe it's a hidden agenda to keep people safe. But no, we have long been...David RobertsSo what happened in the 80's? All these questions pop up in the early 80's. I remember other things about the politics of the early 80's. Think about all the many things that we started in the 70's that we just kept doing them, we so much better off today. Yes, and it all came to a screeching halt in the 80's.So during the 1980's, you have both EPA and the CPSC kind of working on this. Congress created this interagency research group on indoor air quality to coordinate research in 1979. And so that included various EPA investigations, and then, as we said, the CPSC was undertaking these investigations and offering reports about fuel-fired appliances. In the spring of 1986, EPA instructed CPSC, they're kind of exchanging dialogue about the fact that they kind of think there's a problem here. So EPA tells CPSC to identify the level of NO2 in homes that is coming from appliances.Sage WelchSo they're like, "Alright, this is your sort of wheelhouse," which I think this could also well be EPA's wheelhouse, but they say, "You need to now go out and find out what level of NO2 is coming from appliances and whether or not that's safe." And the fact is that that just never happened. And that's exactly what the RFI that Trumka's is referring to is going to do. So again, this isn't some new thing. It's actually just fulfilling this 40-year-old request from EPA. And I should add that this doesn't seem that uncommon on the consumer-product side.Like, I'm pretty sure asbestos and baby powder and lead paint. There was really well-established science for 50, 60, 70 years before...David RobertsLeaded gas, too! 50 years we knew about leaded gas. It's wild to look back now in retrospective how long all these things took.Sage WelchYeah. And honestly, thanks to industry and the fact that no one is really often is working on behalf of the American people, but a lot of people work on behalf of industry.David RobertsWell, let's segue then into one of the explanations. This concern was big in the late 70's and early 80's. It was moving forward and then got sort of shut down at the consumer agency, probably because they were not, the administration, was not big fans of regulation at the time, and was big fans of fossil fuels at the time. So one of the reasons that this got put on the backburner, pardon the pun, and stayed there for decades, is that the gas industry worked very hard to keep it on the backburner. So let's talk about that then a little bit.I think people are...there's a lot of information flying around these days about the gas industry's current sort of propaganda efforts, all its Instagram influencers and whatnot, but they've been at it for a while, so let's talk a little bit about that history.Sage WelchYeah. So even while, you know, the gas industry is doing a lot of research and kind of trying to work with regulators to control the narrative on the pollutants, they're also undertaking really aggressive marketing of gas stoves. But actually this goes back much further. So like nearly 100 years. This has been coming up a lot on the internet, and I'm so happy it's coming out, because I think it's one of those things that illustrates just how conditioned we've been. But this phrase, "cooking with gas," that was a phrase that was developed by an executive from the American Gas Association in the 1930's, and he happened to know some writers for Bob Hope and some other radio show hosts.And it starts to appear in these scripts and then just gets picked up by other places and really becomes, like, ubiquitous, this phrase and culture by the 1940's. Emily Atkins, in her heated newsletter last week dug up an old AGA newsletter where they're, like, reflecting on this, but pretending that they didn't actually plant it, and it's just a super funny...I thought that was hilarious. The newsletter is like, "Gasmen began to listen as they had never listened before, not knowing whether to be glad, mad, dazed, or dazzled by such widespread free publicity." It's like, they know full well...David RobertsHow did it happen? What's going on here?Sage WelchTotally.David RobertsOne of the obvious sort of first questions to ask is, you know, people who are familiar with the subject now know that gas stoves represent a relatively small percentage of gas demand, right. It's not a big piece of the gas industry puzzle. So what explains their sort of obsessive focus on it for so long?Sage WelchYeah. So, I mean, I think they recognized really early on that this was the way that they were going to ingratiate themselves to consumers and this was their way to get in the house and stay in the house. This was the only possible appliance that one could have an attachment to, right? It's the only one that's visible. It's the only one that you kind of actively use.David RobertsRight. And it's cooking, it's family, it's caring for your family. It's got all that whole web of associations.Sage WelchYeah. And they begin to market it as a status symbol. There's tons of marketing by the 50's and the 60's. It's how you're able to cook better. It's how you make food that tastes better. And they're really just, like, selling at the time to basically women. Like, this is how you be a good wife and a good mother, and this is how you feed your family. And they're especially speaking to kind of like, major coastal urban areas just because that's where gas demand was sort of emerging and that's where they had the funds, essentially to put in the infrastructure. So, as you referenced, gas residential use just really skyrockets, very particularly in major coastal urban areas, so, New York and California. And that's still today where we have the highest rates of gas cooking and gas consumption.David RobertsRight. Well, let's just make a note of this because everybody loves to laugh about this on the Internet. Gas stove use is much higher in blue states than in red states. This sort of an inversion of the culture war that we're having. Actual distribution of gas use is almost opposite of that.Sage WelchTotally. And so to see, like, the right-wingers pick this up as like this kind of populist kind of issue when it's actually been like, you are much more likely to cook with gas if you are a higher-income person, especially if you're in the Southeast, because you paid a lot to get yourself gas service there. And so there's a huge amount of consumer marketing through these decades. But then there's other ways that utilities specifically and when we talk about the gas industry, there's a web here, but often we're talking about the gas utilities who sell the gas to consumers.David RobertsYeah, and let me just say by way of background, I mean, maybe this is probably obvious to you, but to make sure it's clear to everyone, an electric utility is involved in giving you electricity. It is, at least in theory, neutral toward how to generate that electricity, right. It can accommodate different ways of creating that electricity. A gas utility is very different. It's about the one fuel. And if we use less of the fuel, then the utility shrinks and disappears. Gas is existential for gas utilities in a way that none of these arguments are for electric utilities.Sage WelchTotally. And so you see, gas utilities do this kind of interesting thing where they set up, like, culinary centers and test kitchens and they develop relationships with restaurant associations, they sponsor scholarships, and they make gas, this core curricula of culinary schools, which is obviously another very clever way that you are embedding yourself in that culture specifically for chefs and for folks who do cooking as a profession.David RobertsRight.Sage WelchAnd as we now know, they begin to really lean into this relationship and rely on that relationship with chefs and restaurant associations to fight electrification. We're seeing this across the board in states where we have policies moving, but yeah, they've really relied on gas to be this wedge between them and their kind of competitor, electricity. And then they started to really double down on this in the past five years or so when they perceived that electrification is going to be a problem. We actually have some emails that came out through discovery between the American Public Gas Association and SoCalGas, and I find this particularly egregious because APGA represents municipal utilities.So these are like publicly-owned utilities. These are like even more than investor-owned utilities who in my opinion, also should be working for us because they're supposedly providing a public good. But like, APGA and SoCalGas are trading emails about this energy-efficiency proceeding in California and they're like, "Oh, it's coming. Broad scale electrification is on the horizon and it's a huge threat." And APGA actually launched the very first...a lot of folks have been talking about these influencer campaigns. APGA and AGA both had them. But APGA went first with this gas-genius campaign that's like very targeted marketing at Gen X, really trying to sell themselves to a particular generation there.And then AGA did the same with this "Cooking With Gas" campaign where they're basically paying influencers on Instagram to gush about their gas cooking. And as much as that got called out and has been this kind of just public source of mockery. We're still seeing them do this. Like, Southwest Gas did this just last year with some really honestly hilarious videos of some folks in Las Vegas, like, burning eggs and talking about how "you can only burn eggs effectively with gas."David RobertsIt's so cringy to us. This is one of those things where, like, how do normal people process these things? I have no idea. It's been so long since I've been a normal person on this subject. It's very cringy to us. Do we know whether it works? Like, do we know, if you're just an average Instagram schmo and you run across one of these things, whether they're effective?Sage WelchWell, the one reason I would say that it probably is effective is because it's a message that's echoed not just from an Instagram influencer, but at this point, this has been incredibly successful to manufacture a consumer preference for gas and to truly believe that you can only cook better and that food tastes better. And it's like, I can't not picture those chemicals now when I see the blue flames. So this idea of, like...my partner is like his method for cooking tortillas is like, he chars it directly over the frame. But I'm just like, that is not seems super safe or great right now.David RobertsEggs are better with benzene.Sage WelchThat is wild.David RobertsAnd we should also just note, as you noted before, but I want to just put an exclamation point on it again. Very frequently gas utilities are using ratepayer funds to do this propaganda! So it's gas customers that are often paying for the sort of lobbying and propaganda that we're seeing.Sage WelchYeah, we unfortunately have to pay our gas company to prevent us from accessing better options and prevent us from having a good faith conversation about this. And this is what makes me actually, like, very angry is, even this week, everyone acts because this is the frame they set like a zero-sum game. We don't get to have an honest, straightforward conversation about the safety of what's in our home, how we can protect ourselves, and just the benefits of doing so. And, yeah, it's frustrating.David RobertsWell, I mean, as you say, this is precisely the reason they honed in on stoves so long ago, is, number one, stoves are very emotional to people, very connected to a lot of emotion. And number two, if you're trying to electrify and get rid of gas, most people, I think, don't have a super strong preference about their water heater or their furnace or whatever. So if you can switch those out for electric, but you can't cut off the gas line to the house as long as there's a gas stove, right? So as long as there's that gas stove, there you are preserving the gas hookup in the gas infrastructure. That's what this is about. That's why they're focusing on stoves, even though stoves aren't that big a consumer.Sage WelchTotally. They know full well that this conversation really is about that infrastructure, but so long as we can keep people sold on this idea and...one thing I think is a little bit wild, a lot of folks feel strongly about their gas stove. It's becoming a Republican thing, which I totally love. And we can talk about how this is like pushing a target audience away from gas cooking, but when people say, like, "We can't switch or gas is just better," like, a. that's been manufactured. But we also haven't been cooking with gas for all that long.Like, this is the 50's, 60's, and 70's, we transitioned from like, coal stoves before. There's a chef that we work with, Chris Galarza, and he just makes the point that we can still have culture and tradition. It's not the fuel source. Cooking will remain a wonderful way to unify families. We can learn, we can change. We change to gas.David RobertsFood still heats...Sage WelchRight!David Roberts...and eats! And this is also—I don't know if it's the right time to say this—but for some reason I see these people on Twitter saying confidently, like, "I've used both and gas is so much better." The way that makes me feel is always similar to how I used to feel about the debate about marijuana legalization. Like, you can go out in public and confidently say that "if you smoke pot, you're going to be deranged and wreck your car," or whatever, but I've smoked pot. Like a bunch of people have smoked pot.You could fool us about things we don't have direct experience with, but...Sage WelchTotally.David RobertsWe've experienced this and we know that's bullshit! I've cooked with both gas and induction and the idea that just your average run-of-the mill Joe or Jane in their kitchen is so expert that these fine distinctions of like, "Oh, I've got to get exactly the right char." I'm so sure. Like, I'm so sure you're getting the exact right char.Sage WelchYou get takeout!David RobertsYeah.Sage WelchYou're eating 50% of your meals from the burrito shop. As am I! It's fine! We could admit this, but it definitely became the "smartest person in the room" response to the debate. But what I don't like about that or what I would hope folks would understand is, like, you're...I mean, it's just like with cars and massive cars, you've been taught to believe that. That has been manufactured. All consumer preferences.David RobertsPeople really do not like to hear that their own consumer preferences have been shaped by socialization and by nefarious forces. They really, really don't like to hear that. But it's just true. All of us were born into this. We're shaped, we're socialized, we're given messages, and then we grow up and suddenly we have this passionate idea that gas stoves are better. I just wish people would just take a step back and think a little bit, like, really? Did you was that purely through your experience of cooking on gas that you came to this weirdly, passionate feeling about an appliance. Just consider.What I, again love, about this week is you have these right-wing representation—walking representations—of toxic masculinity now, being like, this appliance is the thing that they care so much about, right? I mean, yeah, God, guns, gas stove, but keep it up. They should continue on this.Let's talk about this. Let's talk about this. So we've got these health concerns that go way, way back and are fairly well established. We've got this long history of the gas industry propagandizing around gas stoves, making these relationships with chefs and culinary centers really working the idea that high-end, your sort of more sophisticated consumer, of course, will only cook with gas. And so you get this sort of high-end sheen. Your thesis, I mean, I think a lot of people looking at this sort of intuitively would think, "Oh, no, this is another culture war. It's another backlash. This is another environmentalists are shooting themselves in the foot by going after things people love and they're only harming their own long-term goals." And all the usual lecturing of the left is in full flower out there on Twitter. But your thesis is that the political valence of this, the political consequences of this, are going to redound in favor of environmentalists. So tell us why.Sage WelchYeah, so there's a couple of key reasons. One is just simply like awareness raising. There has literally been close to 10,000 media stories in the past two weeks about gas flows and asthma. Like, bring it on, keep it up. This has been a phenomenal moment for induction cooking, which the issue with induction in the US, not in Europe or other markets, has just been sheer awareness. It's like 3%, I think, of the market. And unfortunately, to date, manufacturers haven't really pushed this technology super hard. And so there hasn't been a lot of advertising of it.David RobertsYeah, let's just say because this has been also coming out in findings recently, too, and this was in the New York Times story they did. The problem here is not passionate defenders versus passionate haters of stoves. The vast, vast, vast majority of Americans specifically don't know what any of this is about and might not even be aware that induction is a thing that exists.Sage WelchTotally. So, yes, when everyone is worried about this, and rightfully, we all understand, they're talking about those old school coil-heated stoves that really take a long time to heat up, and they weren't super powerful and do suck. I think new electric models are kind of fine, but induction is not fine. It's totally awesome.David RobertsIt rules.Sage WelchIt really is. But just quickly, on that kind of awareness raising, I think it may not even seem like it today or in two weeks, but my personal experience on this issue and again, I'm a renter and have pretty much all our places have had gas stoves, is that I learned about this about five years ago. I was like, wow, that's interesting, but I'm obviously in no position to change my stove. And then every time I clicked on the pilot light and I saw the flame, I just started to get a little bit worried. And then I started to realize that my five year old is fully eye level with that or like, the baby is crawling towards the stove and it's like alarm bells started to be raised and it's just that sheer little bit of doubt that finally I was like, well, "I'm tired of being stressed about this." So we just bought a Duxtop single burner cooktop, and we cook all of our food for a family of four on a little induction cooktop. And that's the other thing that I think has been missing, in there's been incredible coverage of induction. It's finally kind of coming into the public consciousness, and folks are noting it can be a little bit pricier, and I think there's a lot of cost competitive ranges. But it is true if you're getting like a full blown oven, but you don't need to do that. You can spend under $100 and you can use that and your toaster oven and your instapot and your air fryer.I think if you look around your kitchen, you'll probably find you have a lot of electric appliances that can cover all of your kitchen needs. And yeah, maybe this isn't the absolute five-alarm fire from a health perspective, it's certainly worth a look, but there's really easy solutions where we just don't even have to think about whether or not we're getting exposed to NO2.David RobertsYes, this is something I have kind of wanted to say about the whole debate. I might as well say it here, but it's like, if there were super, super compelling reasons to keep gas in your home, then maybe they would offset these health concerns. Because, like you say, there are other bigger health risks out there in America for people to worry about. This is sort of like an exacerbating factor on the edge, but there just aren't. If there's any concern at all, induction is just better, so why not do it? The idea that there are countervailing considerations here is just kind of silly to me. Like, we're talking about a product where literally a better, cleaner, more convenient product is available.Sage WelchTotally.David RobertsSo, it's like you don't need that much evidence to prefer the latter.Sage WelchYeah, top to bottom. And this isn't just true on the cooking side. This is true for heating. Heat pumps are just a better technology. You're going to get cooling access that you didn't have before. You're getting rid of super inefficient electric-resistance heating and inefficient cooling. And we're going to help solve a lot of our grid demand issues every single—and this is one reason I've been a little frustrated—because I think the climate movement in general, we get super scared when a fight happens. We're like, "Oh, my god, I'm on the spot." But this is the most incredible opening we've ever had. We have no reason to be ashamed of pushing electric technologies because they are literally better at every single level. And it's okay to fight for people's health. It's okay to fight for things that are good.David RobertsYes. And I particularly love the like, "Oh, you only care about this because of climate change. I'm like, well, even if that were true, it's kind of a big deal." It's true. I am concerned about it. You got me.Sage WelchTotally. Don't let them push you into this idea that the hot seat is a bad place to be.David RobertsRight.Sage WelchUse it. This is awesome.David RobertsAnd it seems to be shifting. So let's get back to politics a little bit. You think by the sort of MAGA crowd claiming this as a cultural symbol alongside their guns and their rolling coal and whatever else...burgers? Or whatever else they've picked as sort of their cultural touchstones, you think that's good for the politics?Sage WelchI think this is near-fatal for gas utilities, this discussion. So I think that this becoming a culture war, and again, I think gas cooking being identified as a right-wing virtue pushes a really important group of people to no longer or to think twice about identifying with gas cooking as a key part of their identity.David RobertsYes. Which, as we've noted, is mostly like most of the gas stoves are in blue states.Sage WelchExactly. Yeah. New York, California, Illinois, these states make up 25% of gas demand in the US, and they have the highest rates of gas cooking. Nine of the eleven highest gas consumption states are either blue or purple. And electrification is happening in blue states. So, as a lot of folks maybe know, about 20 states pretty much across the Southeast are preempted. So Republicans have run bill with support from their allies in the American Gas Association and otherwise to prevent them from doing any kind of a broad scale, like, local level electrification ordinance. But in blue states where we need support for this, people are now being told that cooking with gas, which has always been the biggest hang up, right? This previous attachment to gas cooking, even for climate-leaning folks, has been this lingering reason to not support electrification or to feel a little worried about it.David RobertsBecause it still has that sheen of like, sophistication and high end.Sage WelchTotally.David RobertsSo now we have MAGA people telling them... nope!Sage WelchYeah, I personally don't want to be identified with those folks. And I think a lot of the left-leaning folks don't. And these are the exact folks that we actually needed. And honestly, in my view, this is a total act of goddess. We never, ever could have unwinded that 100 years of marketing to position it like this if this week hadn't happened. This is incredible. There's a Yale study where they asked folks what words come to mind in association with natural gas. They use the word "natural." And the words that came up for folks was "energy, clean, fuel and cooking."And after this week I think it's going to be like: "asthma, harmful, health...David RobertsMAGA.Sage Welch...Republican," right? And also I just think the frenzy on it makes that identification feel a little ridiculous and that the folks who really are going to identify this are folks that unfortunately—I care deeply about them. I wish they could also have access to a pollution-free home—but that's a population we were never ever going to reach on this issue. So there's broad swaths of the people in this country that I think are normal and seeing these other folks taping themselves to gas stoves and making protection of a kitchen appliance the biggest thing in their world, that's objectively funny and it's silly and honestly, ultimately it's weak.And it's showing us that a deep identification with just one cooking technology is a little bit silly, especially if you're going to ignore a huge body of science that says that cooking technology could well be hurting your health.David RobertsIt's funny, just that angle sort of hadn't occurred to me that it's specifically now MAGA people telling the blue owners of most of the stoves that ownership of those stoves is now a MAGA right-wing thing. It is, exquisitely, sort of a counter to their own interests. Kind of beautiful that way.Sage WelchWorst possible messengers. God, I would love to see group chats on this from some other sides because I wonder...because how this went down to Bloomberg started covering it, couple of the right-wingers came out, and then it was like the next day you have Joe Manchin and it really blew up. And part of me wonders if the sending out of the talking points to get the right-wing machine in gear was coming from the more established like Koch brothers things. But I just wonder...and maybe the American Gas Association and others threw up a call for help, but I think probably pretty quickly realized that this was not going to turn out well, again, in the electrification states where the gas utilities are almost entirely dependent on selling their gas.And it might be a while before we see how this all plays out, but I just firmly believe that, again, this has been one of the most incredible turning points that we could ever have even dreamed up, or manifested, to help educate folks about the health harms of gas cooking, but also to undo this conditioning, which has barely been a barrier for us.David RobertsYes, it's beautiful. So the politics seems like the most predictable political effect of this is going to be in blue states where gas bands are being discussed are on the table now, or are a possibility. This is now going to sort of reframe those gas bands as a way to stick your thumb in the eye of the MAGA movement which is absolutely the best way you could sell those in those states.Sage WelchYeah. And also a way to protect your family and get access to funding and everything else that we need to get access to folks. I mean, I think one of the things that also could be going on and folks just get...I think climate folks in general get afraid to be vocal, but I think that this is just a really important time to again bring up that this is like not a zero-sum game, that the electrification movement gas bans or gas ordinances or all the work that we're doing to try and bring folks into healthier, better housing. That doesn't just have the super straightforward winners or losers.And I think one of the reasons why we're afraid of harnessing this narrative is like, we're very conscious of organized labor membership or people who don't have the means to electrify. But I think this is just exactly that opportunity to get out there right now and fight for those who have gas in their homes to get that out, get them access to induction cooktops, let's expand IRA funding. Let's use state budget to help supplement the cost here. And I think workers who really do care about climate change, this is our chance to tell folks that this is electrification is huge for skilled labor. There are so many opportunities.David RobertsI keep reading and hearing stories about how we're short on those workers, those basic trade workers, specifically electricians, which we're going to need a bazillion of in coming years.Sage WelchYes, this is a chance to revitalize vocational education in this country and beef up unions. Like we need electricians across the board. Also for the plumbers and the pipefitters. And this is what bothers me is that the tops, the leadership and the utilities, are going around telling everyone that, "Yeah, this means your job, your job is over, you're done if we pursue these electrification measures." When, really, we have thermal energy networks coming up as a solution in states across the country, plumbers and pipefitters are going to continue to work on pipes. We're just going to pipe, like, clean energy and use heat pumps.David RobertsHot water!Sage WelchYeah, it's electrification. It's labor-lead electrification. And even for the gas linemen and folks, who I would say probably know better than anyone exactly how dangerous gas is, and we didn't even touch on the fact that when you electrify, you're getting rid of explosions and so much beyond just the health. But these workers, if we all agreed tomorrow that we're going to retire the gas system and move to 100% electrification for homes, that's 20 to 30 years of work in which that expertise...David RobertsI know!Sage Welch...is so central!David RobertsOf all things that would do, threatening jobs is just absolutely on the bottom of the list. If there's one thing we know about what that would take, it's a lot of work.Sage WelchSo much work and an opportunity for solid family-sustaining, long-term work, and the education pipelines. There's a really innovative approach that's being proposed in New York right now to very specifically go to communities where there hasn't been traditionally opportunities and where it's overburdened—y'know there's pollution burdens—and get folks into those pipelines right now. And we can have this like an honest, real conversation about electrification is really important. I think this is an opportunity to have it, so long as we can push the fossil fuel folks out of the way who are preventing us from speaking about what's really at stake here, but also the sheer amount of opportunity that we're presented with.David RobertsRight. And I think this gets at the politics too. The gas industry would love for this entire discussion to be focused on one asthma study. So the discussion is not just about the one study. It's not just about the history of studies. It's not just about the other risk. It's about all the risks of gas infrastructure. And it's about the way that gas stoves are the sort of cork in the bottle, you know what I mean? Like, once you get them out of the way, the rest of electrification becomes easier. Even though they themselves are a relatively small part of demand for gas, they're a very big symbolic and sort of political flag in the ground for the gas industry.So they matter, broadly, for labor, for politics, for health, and for decarbonization. Even though they are a small source of greenhouse gases in and of themselves, they are part of the larger picture of decarbonization. So, I just think we need to keep pulling the lens back.Sage WelchAbsolutely. And honestly, they've been accusing us of banning gas stoves for four years, so we don't really have that much to lose in this moment. Also, this was never: a. no one's banning gas stoves, but this came from a regulator. This didn't come from climate folks. So it's a super fascinating moment. But, yes, let's harness this. There's like, so much education that can be happening, and it's okay to fight for what's right, even if it's uncomfortable. We still lack, like, climate pundits who can get into the country.David RobertsI know! Well, it's all these sort of establishment, like the disease of the left or the Democratic Party in the United States is this posture of cringing presurrender and terror. This whole idea that the power and the momentum is on the side of reactionary forces, and I just don't think that's true. And just confidence, right? Just confidence is what the whole friggin' left, the whole Democratic Party and the whole climate movement needs more of, like, "Yes, you caught us. We're trying to make things safer and stop climate change. Busted."Two more quick aspects of this before I let you go that I want to get into. One is just the environmental justice angle, sort of like one thing that reactionaries will say, "This is going to hurt poor people worse because they can't afford these fancy, expensive induction stoves, and so they're going to be hurt worse by this." But another way to look at it is by locking in gas stoves, we focus all our attention on sort of this upscale suburban woman consumer but it's going to be poor people who can't get away from gas stoves, right? I mean that's how it always ends up. The poor people who work at the restaurants, the poor people who are renting...insofar as we let guests hang around, it's not suburban mom who's going to be the modal consumer, it's going to be people who can't get away from it. So how do you think about the justice, environmental justice and sort of economic justice aspects of all this?Sage WelchYeah, we are about to see in the next month or two this wave of gas heating bills hit folks across the country. Like the price of methane gas has been up every year. It's like doubling. But this winter has been crazy for this. And I think it's like not fully understood that you have this spot price of gas, methane gas that is passed on by utilities who pushed for pipeline replacements and all this other infrastructure that is also added to your bill, but then claims no responsibility when that price goes through the roof and you're hit with hundreds and hundreds of dollars.And a lot of the moratoriums that we had on utility bills shut off have expired and I think we're about to see a really horrible crisis. So when folks say that gas is the cheaper option, well, right now it absolutely is not, and it's certainly not when you look at the concept of as you're speaking to stranded assets. The fact that a lot of folks are going to be left on a gas system that steadily needs a huge amount of investment only just to keep it safe, supposedly, let alone when utilities get their way and pilot all these ludicrous like hydrogen for heating projects and make us pay for renewable natural gas and stuff. So we have a total crisis on our hands on energy affordability across the board, but that's being driven—on both sides—from the fact that we're exporting all of our natural gas and that prices are going through the roof and that's driving up both the price of electricity and the price of gas-heating bills.And this is one area where there's folks who are really doing interesting, like push the envelope, work on energy-burden stuff. But we absolutely need to be more vocal and also just like near-term focus on these bills and making sure that power does not get shut off. But yes, beyond that, I think we're starting to see this. So California had, we had close to a billion and it got cut back a little bit and extended over years. So Governor Newsom really would like to see our funding reinstated, but close to a billion in california from last year's state budget to do low-income whole home retrofits.So this is, go to homes, get them heat pumps. And super important point here on heat pump efficiency is that in most places that's going to produce great kind of energy savings while offering access to cooling. All across the I-5 corridor, Portland, Oregon can hit 116 degrees for five days at a time. We need cooling yesterday. And actually in Portland, there's another really innovative program, this Portland Clean Energy Fund, that's distributing 15,000 heat pumps to homes in need. I saw some super sick legislation get introduced in DC to do these kind of low-income retrofits. But right now, I think if we could just all focus—and this is the goal, the kind of government funded and incentivized electrification needs to be laser-focused on helping lower-income folks. And folks without the means to electrify do that.That's a policy problem with a policy solution. There's a lot of money changing hands floating around in the world and we can absolutely make this happen. And in the process of doing so, we're going to lock in better affordability, but we're also going to clean up the air, get access to cooling, and solve a lot of major kind of urgent crises that are coming with extreme heat. And then we also need to have a discussion on the infrastructure side. Like climate change is posing a very serious problem to all of our energy systems.And right now we pay for and we maintain two really complicated energy systems, gas and electricity. We don't have a choice to live without electricity, like that's not happening. So we need to take all of our time and energy and shore up and safeguard transmission, build more transmission, build more renewables. And there's an economies of scale here. We need to focus on systematic, organized, neighborhood-level retirement of the gas system, work with those communities to electrify. And bit by bit we have this really promising future of retiring that gas system and just focusing on what we need to create community resilience, which is like distributed clean energy neighborhood resource centers where, you know you can go for air conditioning or anything else.And there's so many solutions. Again, which if we could just focus our attention there and we weren't fighting on so many fronts, we would be much better off.David RobertsSage, you're singing my song here. You're singing the Volts. This is like the Volts theme song you're singing. And this is what I would say to people, too. The arguments about this tend to be so narrow, like the cost of this stove versus that stove in January 2023, you know what I mean? Or like the number of electrical brownouts and blackouts versus gas outages and all these sort of narrow comparisons. But I just wish people would like step back long-term on some timescale and on some geographical scale. We have to electrify completely. We have to more or less get rid of as much gas as we can get rid of.And that's going to be, ultimately, safer for people, better for their health, more reliable and cheaper in the long-term. So it's not a matter of whether to do this stuff. It's just a matter of planning how to do it right. And as you say, if we didn't have to maintain two concurrent infrastructures, we could make the one that we need and love and need long term a lot better and safer and more reliable.Sage WelchTotally.David RobertsI just repeated everything you said, but that's my theme song, so I got to sing it.Sage WelchIt's an exciting proposition and I'm not sure that the kind of end goal of electrification was ever really made clear. But there's just so much about it that's going to be so helpful. I mean, we're going to have extremely responsive energy demand between vehicle-to-grid integration. They're building heat pumps with batteries in them. There's so much innovative technology and what folks are worried about is their own personal resilience. And we can invest in that. There's a lot of solutions. But yes, if we could just shove aside everyone who's trying to force us into that zero-sum game thinking and these really bad faith conversations, then I think that...if we can kind of speak to what we are giving people, which is a shit ton when it comes to electric technologies, they're going to be on our side.David RobertsWell, this is my final question. The last thing I want to ask you about: the environmental movement is often accused of only being against things and constantly saying, "no, no, no" and constantly wanting to take things away from you. And that is very much how the people currently yelling at environmentalists are trying to frame this whole thing. So I know that the anti-gas sort of movement, the science organization, it's all underway and that's great. But what about the pro-induction? Like, what about the selling of the alternative? I wish that it seems to me that that's a big missing piece of what's happening right now.It'd be a lot easier to have these discussions if average American consumers understood better, that what they're being encouraged to get is better. It's just better. So when I hear about giant propaganda campaigns to preserve fossil fuels or—I talked to Michael Thomas on the pod a few weeks ago about the sort of right-wing funding that's going into all these anti-renewable energy groups and these NIMBY groups—I always come back to the same question, which is, there are millions, billions of dollars sloshing around on the left, sloshing around the big "green groups." Where is the pro-electric appliances, generally, but just pro-induction stove propaganda campaign? Who on our side is funding...? All you need to do is you don't even need to lie to anyone. Just tell them...Sage WelchJust show that.David Roberts....the truth about induction stoves. Is anyone doing that?Sage WelchYeah, I think folks are doing this. So there's two tracks here. One is that I think we did just open this incredible door for the actual manufacturer. So if you are a stove manufacturer this week and you make both gas and electric models but the New York Times just called your product a kitchen pariah and The Atlantic said it was doomed and House Beautiful said the era of gas stoves is over.David RobertsAnd let's mention this too, Wirecutter the Geek, which all geeks worship, has revised and now no longer says that it makes sense to hold on to your gas stove if you have one. They've revised and are basically saying replace this as soon as you can.Sage WelchAs soon as you feel like it's feasible. That's huge, right? This trusted consumer resource. If I was on these advertising teams, I would very quickly be reapportioning my budgets to the potential growth industry. I think your question is really interesting. I think that the job of the climate movement on this very specific topic is to sort of push the policy that shows the market exactly where the growth industry is. And I think we're starting to do that, so heat pump sales are through the roof, and, my hope, is that this week will lead to induction.David RobertsI wonder.Sage WelchWe just showed them this is how you market it. It's clean air, it's pollution-free, it's worry-free technology for your kitchen. And we have local news folks, actually. I saw two clips that I just thought were adorable of going around to appliance showrooms this week being like, "Are you getting a lot of questions about gas stoves?" And all the appliance people are like, "Yeah, and we're super psyched because we've been sitting on these induction stoves that we're finally getting to tell people about." But my hope is that we're going to see a huge influx in advertising dollars just because also, right now, close to a quarter of the population in this country is living somewhere where an electrification policy is moving.And if you make these technologies and a lot of the OEMs make both, you should really start to invest in the product that has a future, rather than the product that simply doesn't. I think it's a little awkward to have climate folks necessarily selling technology because I actually worry that would turn folks off. What I want to see is the cool, sleek folks who know how to advertise stuff to put money into this so that we can show them. And I think the role of climate people honestly should be continuing to push the policies that are going to push the market.And I think the OEMs are starting to come around on this. And I also think the technology is improving so dramatically that I guess my hope is that we're about to see a massive influx. But speaking to your other question, or part of your question about why, which I've heard you bring up before, like, why does the climate movement or the folks who hold the big money, which tends to be the big greens and or the funders, not put more money into paid advertising? I think part of it has to do with a metrics issue and part of it just has to do with being wholeheartedly focused on our narrow view of hitting policymakers and that policy line.And I do see some general advertising TV spots starting to push back and I think that we should actually be far more aggressive in going after our enemies with those advertising dollars in general. One thing that worries me is like popular opinion or public opinion, like on climate change, for example, doesn't necessarily translate to policy action. So I think funding for paid-on really targeted kind of state-level advertising is a really good idea basically, for lack of a better word, to take down opponents and make very clear who is standing in the way of what I think most people want. I don't think our goal is to shift public opinion on climate so much anymore, is show exactly who is standing in the way of that and overcome that barrier. Because unfortunately just the politics of our country mean that even if something is wildly popular with folks, it doesn't translate into them getting access to that through policy.David RobertsRight. Yeah, I get all that. My instinct is that it just wouldn't take that much money. It wouldn't take that much money to do what I want is, sure the stove industry is going to advertise their stoves and the car industry is going to advertise their EVs, but I always think about this commercial for the Nissan Leaf. I don't know if I'm the only person who remembers this commercial. It's one of my favorite commercial in the friggin' world. But it shows these people waking up in the morning and they go crank up like a fossil fuel powered coffee maker, which starts sort of spewing smoke in their home and then they go crank up their microwave.The point being like, "Wouldn't it be ridiculous if your home appliances were powered by fossil fuels and were spewing pollution into your home? Wouldn't that be crazy? You wouldn't want that. Why wouldn't you want electric and clean?" And this to me is sort of like it's the gestalt of electrification that no commercial entity is going to advertise that, but somebody needs to be talking about how look, you got an induction stove with a battery in it. You got your car with a battery in it, you got your whole-home sort of software that's coordinating these things so you can make it through a blackout and so there's no emissions.Just to sort of like a better world as possible kind of gestalt. I just feel like that is something we know about. You and I and people like us can envision. But that vision I think, is very not well-known. Products are unsafe. It's a very familiar story to American people, but this sort of, like, this electric utopia that lies ahead of us in coming decades, I don't think any of them know about that.Sage WelchAbsolutely. And yeah, maybe only because I just don't necessarily want to see the in-house comms teams at the big greens produce those advertisements.David RobertsJust give money to someone who knows how to do it.Sage WelchExactly. Let's bring in...and there's efforts underway. There's the Clean Creative Projects that are working to get PR agencies more engaged with climate and saying no to fossil fuel projects and things like that. But, I totally agree. That kind of combo. I would like to see our points and their messaging and advertising expertise and also in part their advertising dollars. Because even if we peeled off money from...I agree there's billions floating around here, but I think it's usually a drop in the bucket compared to what major companies put into their sort of core advertising push to sell products.But if we can create that alignment and, again, I think the policy is showing them that at least if you want to salvage it. And just what I would like to make clear is, just don't spend your time trying to salvage the bad stuff. But yes, let's show everyone how amazing the good stuff is going to be.David RobertsYes, a lot fewer people will want to fight these rearguard battles if they can see a positive vision ahead, not only for the world, but for their stove company or whatever.Sage WelchAbsolutely. And so all those big OEMs and others with major...that pay a lot of lip service to climate, like, yeah, maybe it's time to start embedding that in the advertising and in the messaging that's going out from your companies.David RobertsWell, Sage, I really cannot thank you enough. The stove thing is sudden and sprawling, is both sudden and sprawling. So it was very helpful to walk through it like this and maybe we can do it again in a year and see how induction stove sales are going. I mean, this is such a fast-moving...and as you say, a huge, huge opportunity for the good guys here, the people trying to solve climate change, the people trying to improve public health, the people working for environmental justice. A huge opportunity. So thanks for emphasizing that, too. Thank you for all your time.Sage WelchOh, thank you, yeah. Best week ever. Happy to do it.David RobertsAwesome. Alright, thanks. Bye.Thank you for listening to the Volts podcast. It is ad-free, powered entirely by listeners like you. If you value conversations like this, please consider becoming a paid Volts subscriber at volts.wtf. Yes, that's volts.wtf, so that I can continue doing this work. Thank you so much and I'll see you next time. Get full access to Volts at www.volts.wtf/subscribe

In this episode, as a guest on Canadian daily news podcast The Big Story, I discuss a momentous fusion breakthrough, just how close we actually are to a future of unlimited clean energy (hint: not very), and where we should be focusing instead.(PDF transcript)(Active transcript)Text transcript:David RobertsA few weeks ago, I was a guest on the Canadian daily news podcast The Big Story, chatting with host Jordan Heath-Rawlings about the big fusion news from December, the public’s hunger for energy breakthroughs, and the energy revolution that’s going on before our very eyes while we get lost in sci-fi fantasies. It was fun! The team was kind enough to allow me to share it as an episode of Volts, so please enjoy, and go ahead and subscribe to The Big Story wherever you get your podcasts.Frequency Podcast NetworkYou're listening to a Frequency podcast network production in association with City News.Jordan Heath-RawlingsIf you've listened to this show for any length of time, you will know that we think scientific breakthroughs are cool, especially when they show us a path to a theoretically unlimited source of clean energy. When you look at the trouble we're in, it's easy to understand why anyone could get caught up in that height.Media soundbiteThe power that powers the sun, an abundant source of clean energy to help the planet kick its carbon addiction.This is one of the most impressive scientific feats of the 21st century.It's a star in a box. Putting it in a box on Earth and tapping that energy that goes forever. It's what Iron Man has in his chest.Jordan Heath-RawlingsNow, here is where I get to be a buzzkill. When a scientific breakthrough hits the mainstream media, it's important to look immediately to the people who have covered the sector before that breakthrough. They are the ones who can separate hype from hope. And while, as I said, the fusion breakthrough in December was legitimately cool, ask some of the people who have been covering clean energy and the climate crisis and they'll tell you a story of other technologies.The ones that we have right now, the ones that actually are changing the game we are currently playing and those people wonder why can't we focus on these things right now instead of waiting for a miracle? I'm Jordan Heath-Rawlings. This is "The Big Story". David Roberts runs a newsletter and a podcast called Volts, which discusses clean energy and politics. You can find it at volts.wtf. That is an interesting suffix for your website.David RobertsYes. I didn't even know it existed until I was trying to register a domain, and then I made a rather impulsive purchase.Jordan Heath-RawlingsWell, at least it's memorable. Now, before we get into what's going to happen in clean energy this year, which I'm really intrigued by, can you maybe quickly take us back to December? And I'm sure many people listening will remember a big headline and discussion about fusion. What was that news?David RobertsSure. The National Ignition Facility at the Lawrence Livermore National Laboratory has been experimenting with fusion for years and years now, and they just achieved a goal that they have been pursuing for a long time, which is they got more energy out of a fusion reaction than was put into it. And this is a big milestone in fusion research.Jordan Heath-RawlingsWhy is that milestone, theoretically at least, so important?David RobertsWell, you have to untangle a few things. In the big picture, the hope is that eventually you can master fusion to the point that it can create clean energy because the fuels required to run fusion are cheap and abundant, it's carbon free. Theoretically, fusion power plants would have a very small footprint. So, from the energy perspective it's sort of this tantalizing utopian energy source. In the actual fusion world, the Lawrence Livermore Lab is not even in the business of researching fusion for energy production. They're actually more geared toward weapons research. There are other fusion companies pursuing energy production, but they use actually a fundamentally different technology, a fundamentally different form of fusion which has not reached this threshold, this breakthrough.But there's lots of companies pursuing fusion and depending on how seriously you take their hype, maybe they'll be producing actual power plants that produce actual energy in a decade. Some of them are saying earlier than that, but they're also trying to raise money so one doesn't know how seriously to take them. But one thing to keep in mind is the Lawrence Livermore Facility costs about a billion dollars to create this small amount of energy it created. And the alternative forms of fusion claim that they will be able to create power plants for merely hundreds of millions of dollars. So, all of this is speculative and distant, let's say.Jordan Heath-RawlingsWell yeah, I mean we used theoretically a lot there, there's a lot of caveats I noticed that you kind of threw into your description of what could happen. But nevertheless, we begin the conversation here because I want you to tell me just a bit about how this went over in the mainstream news cycle because as I mentioned, this was a big deal in early December, right?David RobertsWell, there's a vision that has a hold of people's imagination of abundant clean energy produced in small power plants. And if you have sort of...Jordan Heath-RawlingsLike Sim CityDavid RobertsLike Sim City. And if you have limitless energy with barely any fuel and no waste, there's all sorts of things you can think of you could do with limitless energy. You could for instance, desalinate water at scale with something which costs a lot of money and energy now. You could grow endless food. There's all kinds of stuff you can do if you have surplus abundant energy which fills people's heads with these sort of utopian futuristic visions.And that vision I think, ends up causing people to sort of clutch to any announcement like this and say oh it's it's closer, it's going to happen, you know. But like fusion, fusion research has been sort of going through Hype cycles ever since 1950, mainly because of this Sci-Fi vision in people's heads. But you know, it just needs to be said over and over again. We are still very very far from that utopian vision of energy production. And, I would just like to remind everyone that we're in a climate crisis and we do not have decades to wait on an abundant source of clean energy.So, even if the most sort of aggressive forecast, even if everything went very well, this is going to start generating energy well after the point that we need to have largely decarbonized already. So, there's sort of two categories people can think about. There's the near term decarbonization imperative and this is not particularly relevant to that. And then there's like the long term, post 2100 futuristic, "mankind expands to fill the solar system", all this kind of whatever your Sci-Fi stuff. And this is relevant to that, but we need to keep those two separate.Jordan Heath-RawlingsSo that's why I came to you, because you've been writing about clean energy and politics for years now, as you've said, more than a decade, and you wrote a Twitter thread about this discovery that kind of opened my eyes a bit. So I'm just going to read out the first tweet to you and get you to explain your thinking to our audience. "It drives me crazy that people are still pining away for some magic blue light arc reactor Sci-Fi energy source to save us when solar and wind are out there doing it as we speak". What are you getting at?David RobertsYeah, you know there's a lot here, but where I'd start is we have wind and solar right now. We have renewable energy. And when I say renewable energy, I mean wind and solar and all the sort of attendant technologies that enable them making huge progress right now. But it's difficult progress and it's a big political fight. You're fighting at the national level, you're fighting at the community level. There's a lot of community resistance to renewable energy now. So it's just a struggle and a slog to transform the energy system around renewable energy. And I think a lot of people imagine, or maybe wish that if you had this Sci-Fi energy that could produce all the energy you want with hardly any input and no problems, you could in effect skip the politics of transforming the energy system.You could do it without politics. I think there's a real, especially among sort of, let's say tech nerds, and I say that with love. I love tech nerds. I think there's a real sort of anti politics at work here. This idea that the sort of grubby work of negotiation and compromise and half steps forward, it's all very frustrating, it's very ambiguous. I think they just are naturally sort of repelled by it and they sort of imagine ways around it, imagine ways you could improve humanities a lot without politics. And this sort of tendency comes up over and over again in a lot of different areas. It expresses itself in a lot of different ways.But I think this is a classic case, this idea that fusion could, in a sense, short circuit all these politics or skip all these politics and just sort of transform everything without anybody being upset, without anybody fighting about it. And that's just, I just push back against that again and again wherever I see it. Even if we created this magic energy source, even if fusion somehow miraculously developed enough to not just create a positive amount of energy, but to create a lot positive amount of energy at a cost that's even remotely competitive, with current energy sources. To take that and transform the world energy system with it would still require a lot of fighting and a lot of politics and a lot of slog.There is no way around politics. You've got to go through it. And that's why I think, despite the sort of spectacular success of wind and solar in the past decade, people still sort of resist it and want to poopoo it because it's just hard. It's just hard. And it feels like it's going to require too much work. You have to transform too many things. You have to transform the grid. You have to develop all these storage technologies to complement it. It requires a sort of wholesale rethinking of the energy grid. And that's just going to disturb a lot of incumbents.It's going to be a lot of change. And people just have a very, very instinctive, brainstem level aversion to change, basically, or to transformation. And that's what I think is expressing itself here.Jordan Heath-RawlingsWind and solar have seen tremendous success over the past decade. How has our reliance on wind and solar been growing? What does that tremendous success look like? Like, just in general, you know, how far have we come with these since, I don't know, 2010?David RobertsSure, there's a lot of different ways to look at it. If you're just looking at the technologies themselves, they have plunged in cost. If you look at these graphs of the cost of wind and onshore solar, that's just a steep downhill for decades now. And now we are at the point that wind and solar are creating are the cheapest forms of electricity. The electricity they generate is the cheapest electricity in the world. And that's with or without subsidies. I don't think this has fully sunk into people's heads yet. It is the cheapest way to produce energy.They're still early in their deployment and spread. So it's only like, I think solar is like 2% of US energy. It's more elsewhere. I think if you live in Denmark, I think they're getting close to 50 plus percent wind and solar there in that country. So they still early in their march to take over the electricity system. But in terms of cost, they're just dirt cheap now. So that's why, you know people wonder, why do you want to transform the energy system around sources that come and go with the weather, right? The idea is they're not reliable, you can't turn them on and off at will, they come and go with the weather.Why would you want to use that? The reason you would want to use that is because it's dirt cheap. So even with all the sort of balancing technologies you need, and even with all the changes you need in the grid to accommodate that variability, it's still way cheaper than the alternative. So we now have, and this is totally different than 2010 when we used to discuss decarbonisation in 2010, as I was, it was all Sci-Fi, I mean it was all speculative. Wind and solar were ridiculously expensive, and the technologies that would enable the grid to accommodate more wind and solar were nascent.And so, the whole thing was sort of batting back and forth speculative possibilities. But now, we have a clear trajectory toward decarbonizing grids. We know how to do it now, and we have the technology that is cheap enough to do it now. People say, well, you can't get to 100% clean energy just using renewables. And that's true. To get from say, 85, 90 percent to a 100 percent is tricky from our current perspective. We don't know quite yet how we're going to do that, but as I constantly tell people, we're not even close to 85 or 90 percent yet, so we've got a lot of runway , and we know how to get to that level.And by the time we get to 85, 90 percent, tech development will have been preceding a pace , and we'll probably have a much better idea by then how to get to 100. So, there's been this revolution in clean energy that's been happening right in front of our eyes. And it's always strange to me that people want to have this weird urge to resist it or to poo poo it or to find flaws in it, you know what I mean?Jordan Heath-RawlingsBecause it's not magic.David RobertsI guess that's it. And I think also it comes back to the politics. Today's grid is built for big centralized, dispatchable energy sources, because that's mainly what we had for most of the history of electricity. So, the grid today is still, and not only the grid physically is built for that, our rules and our regulations and our laws and our practices and utility practices and all this stuff have that hangover, are still built around sort of hub and spoke big power plants sending power out to sort of dumb consumers. To change that system, you have to make the grid much more sophisticated.You have to accommodate the fact that end users are now creating, generating energy on their own. They can generate energy on their own, they can store energy on their own, they can trade it with one another without ever dealing with that central source. We just need a much smarter grid. You need much more grid, right? Because if you're reliant on the weather and sun. You have to build the power plants where the sun and wind are, which are not necessarily where people are. So, you got to build a lot more long-distance transmission. You need a lot of transformative.You need to transform the grid along with spreading wind and solar. And that is hard, and it's a fight, and it's kind of a drag. Like anything in politics, it's a slog. And I think that's one reason people sort of resist the good news that's happening, unfolding all around us.Jordan Heath-RawlingsHas the politics been getting easier though? You just kind of walked us through this massive amount of progress. I would hope at least that as the price plummets and as it continues to be more reliable again, I'm not expecting the magic solution, I'm not expecting the politics to go away. But theoretically this transition gets easier as momentum builds, right?David RobertsWell, in some ways yes and in some ways no. Wind and solar are on what are called learning curves, which means every time you double the amount deployed, costs fall by a very predictable percentage. And that sort of ratio has held steady for decades now. So, it's pretty reliable and predictable. Which means if we continue doubling deployment to the point we need to completely decarbonize grids, it's going to get super cheap. Not only cheap like it is today, but like super dirt cheap, trivially cheap. So, there might be magic, right? There might be some magic on the horizon.People have been underestimating the fall in costs of renewable energy at every stage for decades now. If you look at the sort of official forecasts from the International Energy Agency or the US EIA, all these modeling bodies, they keep predicting over and over again that the costs are going to level out, plateau, right? They're going to stop falling, and they just don't stop falling. They just haven't stopped falling.Are they like the people that kept predicting there would be a limit to what we could put on a computer chip and that laptops would never get... Like all this stuff. This is the same science, right?Yes, exactly. Very confidently predicting that we couldn't do those things, right? I mean, it was not that long ago that people were very confidently saying a grid cannot accommodate more than three or four or 5% variable renewables before it starts falling apart and becoming unreliable. And we just shot right past that, right? Every supposed limit of renewable energy that people have been confidently pontificating about for the last two decades, we've shot right past those. It's defied all those. So, that's going to continue. And as it gets cheaper and cheaper, it gets easier and easier in some ways just because people like cheap business, people like cheap, like investors are going to go invest in the cheap thing, whatever the sort of team sports people have around different energy sources are irrelevant to big money.Big money just goes where the cheap stuff is, right? And it's going to follow renewable energy. That's true. But on the other hand, once we start building these out in real bulk, once we start getting from like 5% to 50%, you're going to need a lot of wind and solar build out and that happens on land and people live on land. And so, these fights about building stuff, and the US sort of famously has difficulty building big stuff these days because we have this thicket of rules. We have this sort of absurd degree of community. Communities are just able to stop things in their tracks, use laws that were originally designed for environmental protection to slow things down. It's really getting even more into the sort of yard by yard fight of politics.You have to overcome community resistance to get to the really high numbers. So in a sense, that politics is only starting. It's only going to get harder and harder. So, how those two things interact is anybody's guess. But I will say that the momentum of renewable energy and its attendant sort of balancing technologies, the storage, throw in some geothermal, whatever, throw in some thermal storage and the technologies that make it work have developed a momentum at this point that is effectively unstoppable. Like we are going to transform the grid around renewable energy on some time horizon.It's just as always climate change looms in the background, and we just do not have time to mess about. And this is another thing that drives me crazy about fusion. They're like, "oh, in a couple of decades we'll have limitless energy". I was like, we just don't have time. We do not have time to wait a couple of decades. In a couple of decades we're going to be living... In a couple of decades, we're going to be suffering under climate change in a much more visceral way than we are today. Climate change is going to be to the point that its tipping points are going to be looming closer and closer.We just don't have time to waste. We have to start, we need to decarbonize the US grid by 2030. That's the sort of target we've laid out in Paris. And if you ask me, I mean, I'll bet any amount of money, there is not going to be a commercially viable fusion reactor generating electricity by 2030. I will bet anybody any amount of money about that.Jordan Heath-RawlingsSo last question then. What is the next big breakthrough? And, I don't necessarily mean like magic bullet like, oh, we did this fusion reaction, but where's the next big milestone, or where's the next big thing that you're looking for that will kind of tell you something is shifted?David RobertsWell, unfortunately for those of us in media, the real development of the energy system is almost always incremental, right? That's how it's always been. It's probably how it's always going to be. There are very few legitimate, sort of like, turning points or markers that you can celebrate. So, wind and solar is just going to continue getting cheaper and cheaper. What I think where we need to look for exciting tech developments are in these balancing technologies, right? If the core, if the bulk of your energy is wind and solar, they are variable, they come and go with the weather, so you need balancing technologies.So, that's storage. I think there's a ton of work going on in storage right now. I expect some big things out of the storage community soon. And another place to look, I think, for possible breakthrough is geothermal technology. So, right now there's such a thing as geothermal electricity where you just sort of find places where there's volcanic activity underground and you stick a tube down there and get hot steam out. But, currently under development are all sorts of ways where you can dig down and kind of fracture the rock and in a sense create your own source of heat down there, which you could do anywhere, right?You can only find volcanic activity in some places, but if you can dig deep enough you can find heat anywhere. And there's a lot of work underway about deep geothermal. I mean, people are down there drilling now with lasers and sound waves and there's all sorts of crazy Sci-Fi stuff going on in geothermal right now, and I would expect some big announcements out of that. And geothermal is a) renewable and b) always on, right? It's not variable, it doesn't come and go with the weather. So, it's a great complement to renewables in a sense. It is the same complement to renewables that is currently the role that is currently being played by natural gas, right?We got to get rid of the natural gas. We got to replace that with something. And geothermal, I think, is kind of a dark horse candidate for big breakthroughs. That will be awesome, and then I think there will be amazing breakthroughs on the demand side. People constantly overlook the demand side. When you think about how to balance out renewable energy technologies, people are always looking at different energy sources. But there are tons of ways to be more sophisticated about when and where we consume energy. So, we can shift demand to times when there is more renewable energy on the grid - by storing it, by sharing it, by moving it around.Just think about your humble sort of home water heater, right? You don't care when the water is heated as long as it's hot when you need it, right? So, you can shift the time you heat the water and the water heater to match times of abundant renewable energy. And you can do the same with every appliance with EVs, this sort of using electric vehicles as a kind of distributed storage technology that helps the grid, that's just nascent right now. That's just in its early stages. So, you're going to see a ton of interesting developments in sort of digitized smart demand management.And all these things are going to be incremental. They're all going to come together in unpredictable ways. But I would just say, people are saying fusion is like exciting science in a way that renewable energy isn't, and I just don't get that. Right now, there are thousands and thousands and thousands of people out there in labs doing demonstration projects, working on various problems around renewable energy, and it's just never been a more interesting time to follow technology. I just have faith that, like, there are more people than ever working on this stuff. And the more brain power we throw at it, the faster developments are going to be.So, it's just going to be an absolutely fascinating decade to live through in the energy world, fusion entirely aside. Just pay attention to sort of like thermal storage, it's super interesting. That's nascent. Demand management is nascent in a sense. All storage technology is just at the start. Geothermal is nascent. There are going to be amazing developments in all these areas and they're going to interact in sort of ways and have emergent effects that are unpredictable now. It's just fascinating. If you're fascinated by science and technology development, you don't need fusion Sci-Fi stuff. There's stuff going on all around you right now, just like tune in.Jordan Heath-RawlingsDavid, thank you so much for this. It's fascinating.David RobertsThank you, Jordan.Jordan Heath-RawlingsDavid Roberts is the author and host of Volts, which you can find at volts.wtf. That was "The Big Story". For more you can head to thebigstorypodcast.ca. I know, I usually talk about the podcast in this space, but since they will never ever let me do an episode about this, I just have to say: Don't sleep on the Detroit Lions. That's all. You can talk to us if you want to, especially about the lions, by finding us on Twitter @thebigstoryfpn, by emailing us [email protected], and of course, by calling us. Leave us a voicemail: 416-935-5935. It's old-fashioned, but it's nice to hear from you.The Big Story is available in every podcast player, as you know by now. You can hear us ad-free in Apple if you want to subscribe to "The Big Story Plus". And you can get us for free five days a week on your smart speaker by asking it to play "The Big Story" podcast. Thanks for listening. I'm Jordan Heath-Rawlings. We'll talk tomorrow. Get full access to Volts at www.volts.wtf/subscribe

In this episode, author Stephen Markley discusses his new novel, The Deluge, which describes a future affected by climate change that hits uncomfortably close to home.(PDF transcript)(Active transcript)Text transcript:David RobertsIn 2018, author Stephen Markley won near-universal critical praise with his debut novel Ohio, a tight set piece that takes place over the course of a single night, as four high school classmates reunite at a diner in their northeastern Ohio hometown. “Four characters, one night” is pretty much the opposite of Markley’s sprawling new novel The Deluge, which tracks dozens of characters over the course of decades, from the 2010s out past 2040, everyone from climate activists to scientists to political operatives, as they suffer the effects of climate change (there are some quasi-biblical disasters) and struggle to marshal the political will to address it.The novel crucially involves climate policy, reactionary backlashes, and direct activism, among other topics of great interest to the Volts audience. On Thursday January 12th at Seattle’s Third Place Books, I was lucky enough to talk to Markley about the genesis of the novel, some of its major themes, and the difficulties he faced in writing it.The crew at Third Place was kind enough to record the event (thanks Spencer!), so I'm happy to bring it to you as an episode of Volts. Please enjoy, and while you're at it, do the smart thing and buy copies of The Deluge for all the readers in your life.Third Place Books StaffPlease join me in welcoming Stephen Markley and David Roberts to Third Place Books. David RobertsWhere to begin? I'm just going to jump right in asking Stephen questions because I have nothing interesting to say. So, I've been writing nonfiction my whole life and have thought periodically about writing fiction—like every nonfiction author does—and even took a while one summer or one time when I had some time off to sort of sit and stare at the screen for a while and think about doing it. I had kind of a plot for a near future quasi-scifi thing, and there are tons and tons of reasons why I very quickly concluded that I was not suited to writing fiction.But one of them was the one I still think about, which is just: "What does the near future look like?" And the more I thought about that, the more I thought, "Boy, I have no idea at all what the near future looks like." I mean, I guess you could say that at any time in history, but it seems like particularly now, there's just so much crazy shit going on. It's really like, how is it all going to interact and play out? And I found myself completely daunted and shut down by that problem.So here you are. You have decided to start a novel basically two years in the past, and then literally just detail what happens—not in some fictional world or some far off world—what happens in this world among these people in this country over the next two, four, six, ten years in detail. And that just strikes me as just, like, fictionally speaking, the highest conceivable level of difficulty that you could set yourself. Why do that? In the book that we talked a little bit beforehand, you were thinking about even before Ohio, it just seems like the hardest thing you could do. Why not write a couple of easy books to start with?Stephen MarkleyYeah, it all breezed by. It all went super easy and nothing surprised me. Yeah, it just came pouring out with no...nothing got in the way, historically or politically, that made... Yeah, no, it was an incredibly high degree of difficulty for the reasons you said. And all the problems of writing a 1,000-page novel, combined with the problems of it has to feel absolutely realistic at the moment of its publication. It has to feel as if it's our world sliding into this next world, right. At dinner, we were talking, I started the book in 2010, at roughly the same time as "Ohio," had to set it aside when "Ohio" was published, and then came back to it in 2017. So in that time, I don't know if you guys heard, a game show host actually got elected president. And so, the terrifying presidential character I was returning to was suddenly really unrealistic in his bombasticness. Because, like the real thing was much...David RobertsThere's a relatively muted fascist president in your book, looking at it from our present vantage point.Stephen MarkleyI mean, look, it was a mind-blowing project for me because I had to keep paying attention to every little detail of what was happening in climate, technology, politics, our society. And unfortunately, I had found the right veins, clearly, just in terms of how our politics were developing. And that just felt like it accelerated so quickly. And then with climate policy, I think that was another, sort of, murky issue. You've talked about on your podcast before, where there was this dead period after Waxman-Markey failed in the Obama administration, where it felt like everybody was throwing up their hands. And I think that was a tough place to be to...like thinking about the future of where policy would head or how it might develop.David RobertsYeah. And speaking of difficulty, sort of as you're writing and finishing, finally, Democrats are back in control and coming back to climate policy and debating the Build Back Better bill and then, specifically, the climate bill and, specifically, during that exact time period you were finishing, Joe Manchin was noodling around...Stephen MarkleyPrevaricating, let's say.David Roberts...prevaricating and noodling around and making everybody wait and wonder. And it was just wildly uncertain right up until the day he woke up on the right side of the yacht, I guess, or whatever happened. But right up until that day, it was just wildly unclear what was going to happen. It was a very big, sort of, historical pivot that was on the line. And it literally...that historical pivot took place during the years covered by your book. So, did this keep you awake at night, the course of actual events?Stephen MarkleyYeah, and I mean, in a way, when it passed, I was like both sobbing with relief and pissed at the Democrats. Like, "You should have let this fail so my novel would make more sense." Actually, what happened was I had fourth pass, like the last pass in my hands at the moment Joe Manchin was like, "I'm out on this bill. It's not happening." Right. So I send the book off to the publisher. I'm listening to people, like, cry on podcasts about our dark future, and then the bill passes. So what is going to be the case in the next edition?There are some key sentences that will be changed to reflect the reality of the Inflation Reduction Act passing. So this is just a way of me selling more books. You got to get the first edition and then come back to the next edition and buy that one too.David RobertsYeah, that's wild, it just goes to the difficulty, like I said, you're writing about things that are literally happening as you're writing them.Stephen MarkleyBut just to add to that, there was this sense, though, that people were paying attention, understood the Democrats would pass a mostly carrots package if they could get the chance. There wasn't going to be a price on carbon, there wasn't going to be any standards. It was going to be something where we're just going to toss as much money as possible at decarbonization. And so I think having that in mind, I could at least sort of point the direction of what would happen in the Biden administration. Although I do think the language in the book is currently unfair to the enormity of that policy that got passed.David RobertsI actually had that thought and then I remembered, like, "This is a novel." So, the other thing that you have to worry about in the real world is, of course, science and climate science. And this is something else that breaks my brain when I think about trying to do what you did, which is fictionalize it. Because if you are of an analytic mind, you follow climate science. Climate scientists, like all scientists, will say, "Here's the range of things that could happen," right? "Here are a set of error bars, a set of probabilities." And if you go to a scientist and say, "Well, here's what's going to happen. There's going to be a storm X big in 2029 in August." They'll just be like, "You're insane" if you try to...from a scientific point of view, it's crazy to try to say, "This particular thing will happen instead of that particular thing." So how much did you let kind of a worry about scientific plausibility...because the weather plays a huge role in the book. It's a big character throughout the book. There very key weather events.And how much did you let it worry you whether those particular events happening on that particular schedule were plausible to scientists? Like did you do a lot of going back and forth with science?Stephen MarkleyYeah, I did. And I think what I landed on is: I'm going to take the edge events as far as realism...to the end of the line, particularly with some stuff happening in Los Angeles and a storm that comes towards the end of the book. I think for me, it was like, "could this happen?" Not, "Is this probably going to happen." At the same time, you guys live in the Pacific Northwest, there was a heat event here a few years ago, and there was a quote by this guy's studied at Lawrence Livermore, I think, which was, "This event was impossible without climate change. It also was impossible with climate change." Like, it broke the model, the heat storm in the Pacific Northwest in '21. And so I think—and correct me if I'm wrong—we're continuously seeing is events outpacing the models that I find that particularly frightening.David RobertsYeah, and that gets to the difficulty of trying to pick a particular course of events, because even now we're being surprised and we're still in early, early stages of all this. The other big thing that gripped me throughout the novel, and it comes back and forth and up and down through the whole novel, the sort of the novel, insofar as it has a main character, is centered on an activist who gets into first, activism. There's a lot of activism working with politicians and trying to craft bills and create coalitions. And then there's a whole, sort of, other splinter of activism in the book, which goes very direct action...Stephen MarkleyAndre's mom-type.David RobertsYes. Which goes way down that road of direct action and bombing bulldozers and things like that. And it was interesting. This is probably not how you should read a novel, but I'm trying to squint and sort of figure out, like, "How does Steven really feel about activism and the role of activism?" I think you did a great job of certainly not coming down with any sort of pat-like pro or con, but, sort of, like there are key junctures in the book where activism screws everything up, like legitimately screws up and forestalls the possibility of good things happening.And then there are other, sort of, the larger sweep of the book. If you look at the whole thing, like, activism clearly played a big role. So what are your thoughts on the mom...Andre's Mom question, the sort of direct action? At what point is violence against property justified? And then another question that comes up later, which is: at what point is violence against people justified? It gets bad enough that that question is thrust on the activists. So I don't know if you have...where you come down on that.Stephen MarkleyWell, I think it's important to know...the job of the fiction writer. It's, like, none of these characters can share my point of view, right? Like that is that's the path to hell. That's the path to creating a character that's just your mouthpiece, right? So every character, you have to be, like, deeply in their perspective and see the world through them. So I feel like the way the book should work is if—Shane is the character you're referring to—when you're in Shane's sections, her point of view makes sense. These mealy-mouthed activists that...they're not getting anything done.We have to go after pipelines, right? Then you switch over to this other set of people and they're thinking, "These people are fucking it up for us. They are creating a situation in which, basically we're going to get a Patriot Act for environmental activists and so forth. So I think just also, all of those sections are about unintended consequences. And I think that's something incredibly important to pay attention to in terms of how the structure of the plot works. Whereas just because you want to do something doesn't mean the thing you're doing is going to pan out the way you think it will.David RobertsYeah, I mean, even at the end of the book, looking back on it, there's still not a clear story to tell about activism was the good guy or the bad guy in the story. In a sense, everybody is kind of fucking up all the time. Your activists, your scientists, your politicians.Stephen MarkleyI write realism.David RobertsNone of them really know what they're doing. Nothing works out the way any of them intend. I thought you captured that effect well, like, there's no masterminds.Stephen MarkleyYeah, but I do think that there is, at least my sense of the question is that we are all trying to point ourselves in the direction of, like, "How do we change this? How do we fucking turn the ship? At least a fifth of the degree here, fifth a degree there." And so, in the end, I think all of these characters are pointing to the way in which the ship was turned by those incremental degrees. And even if many things backfired and many things didn't work, and the consequences were sometimes very scary or horrific, it's like trying to look at the aggregate of what has happened and how to change the situation.David RobertsYeah. It's like the aggregate that comes across. And even with the sort of benefit of hindsight, have finished the book, I'm still not sure I could go back and say to any one of the characters, "This is definitely something you should have done, or this is something you shouldn't have done." It's not even clear, even in the context of the novel, what ends up actually causing things to happen. It's just sort of like, things grind on around, which I thought is a very realistic...as someone who's seen people cast themselves on the shore of these efforts over and over again and nothing work out and lose hope. In a sense, it's hopeful. In a sense, it sort of gets at what's so frustrating about all of it, right?Stephen MarkleyFrustrating being...David RobertsThere's no A to B causation.Stephen MarkleyYeah, no, absolutely.David RobertsSo, the third sort of theme of the book that felt like it was written just for me, stuff I think about constantly is the role played by sort of far-right reactionary backlash. And I was so glad to find that in the book. There's a lot I can't predict, but the one thing I feel pretty sure about is that insofar as efforts to deal with climate change get some muscle or some seriousness, there's going to be equal and opposite reaction worse than what we're already seeing. Speaking of things being ahead of our schedule. So how do you think about it? Do you think that's inevitable?Stephen Markley100%. Yeah, I think death taxes and reactionary backlash are the only things we can be certain of. One of the things that has bothered me sometimes about, anything you watch on TV with politics, anything you read, any fictional setting, is the de-politicized nature of it. That's incredibly irritating because we live in an incredibly politicized environment. So, my only goal with the book was to, sort of, not to write it from the guy who voted for Bernie Sanders and Joe Biden's perspective. This is not, again, my mouthpiece. It's like, how can politics develop, surprise us? How can they swing around in ways that we don't see coming now, but might happen in the future?And so there's a character, a Republican president who wants to do something about climate change. There's a Democrat who behaves like a monster. There's all that stuff, sort of, in the way our politics now continues to shock us, like making sure to keep the reader off balance, right?David RobertsYeah. I got to say, that Republican president doing something good on climate change.Stephen MarkleyI knew you would hate that. Even as I was writing it in 2015, reading David on Vox, I was like, "I know he's not going to like this. When he finally interviews me in Seattle."David RobertsThat was the one time where my eyebrow went up. I was yeah, and then, of course, everything falls apart on her. I was like, "Yeah, that makes a lot more sense."Stephen MarkleyYou see what I was doing.David RobertsEverything falls apart after all. Another big question—I'm hitting you with all the big themes here—is, again, maybe you try to keep your point of view out of it and just put a lot of things in people's mouths. But the net effect of the book is a critique of capitalism, basically. This idea that climate is not isolated, unique, technical problem. It is an outgrowth of the basic way our socio and economic system works.Is that you? How much of that is you and how much of that is activists?Stephen MarkleyI think if I had to distill my critique of the world into a few sentences, yeah, that would be somewhat difficult, but I think what climate represents is it's not just a crisis of, "oh, we're doing this or doing that wrong." It's like there's a lot wrong with our system that we do recognize, right? And so, as you often say, the point of solving the climate crisis is not just so we can fly around on private jets and keep the world as this inequitable and this miserable. The solutions to the climate crisis point the way forward into actually changing the world for the better in many, many ways.And what I think your podcast does so well is explicate that. I'm going to use this little moment to talk about this guy just because...no, you have to suffer through it, you just have to.David RobertsTurn off his mic.Stephen MarkleyNo, because I started reading David before I even started the book, when he was at Grist and he was one of the first climate writers I encountered who had such a clear-eyed view of the issue and, sort of, left the moralizing elements of it to the side. And since then, basically a David Roberts' completist. Like, I've been reading him the entire time, even when he went to Vox for the down years.David RobertsThis is very embarrassing.Stephen MarkleyNo. But anyway, you should check out Volts if you haven't. It's an incredible podcast. When he brings on people who talk about how we solve this. It's like one of the few moments in my day when I'm like, "Okay, there are a lot of smart, passionate and incredibly just intelligent people working on every element of this problem." And I think that's something to keep in mind when we talk about this really scary thing.David RobertsYeah, it's actually...one of the things you didn't get into that I wondered about was the role...like, one story people tell now about how this is all going to play out is that clean energy is getting cheaperly fast and the markets, people are going to start opting for these things for market reasons and basically, like, the cleverness of innovators and entrepreneurs are going to turn markets for us and save us from ourselves. There was very little of that in the book, I take it you just don't credit that.Stephen MarkleyNo, that's not quite the case. I think the whole experience of writing it, that was not happening yet, or it was happening, but it was like slower. It's really turned up in the last few years and so for me, it was just like, no introducing geothermal energy that suddenly solves all our problems. I couldn't slip that in and pretend like this is going to be the solution, even though, who the fuck knows, maybe it will.David RobertsWho knows?Stephen MarkleyRight. So, I just think that was an element of the book that, sort of, I was not eager to shove into it. At the same time, I have become more excited about the possibility that stupid capitalism is actually on our side, suddenly.Aand at the same time, I do feel like these incumbent industries, fossil fuels, are going to put up a way more voracious fight than a lot of people are thinking about right now.David RobertsYeah, one of the striking things about your book is they don't quit. The Eastern seaboard basically gets flooded and they still don't quit.Stephen MarkleyI mean, look, they're going around I would listen to that podcast with what the gentleman who was talking about...they're going around to a bunch of communities trying to gin up resistance to clean energy that will benefit those communities. And they're just really good at it.David RobertsYeah, they are good at it. So, I want to get to audience questions before too awful long, but speaking of—this kind of gets back to the capitalism thing—sort of at the end—if we can do this without spoilers—you could have, very easily, I think, and very plausibly, ended this with sort of everything falling apart and everyone dying. Just, sort of, like dissolution on the horizon as far as you look, and that would have been 100% defensible. So how much did you...this is like the most cliché question in the world.Stephen MarkleyI can't wait.David RobertsHow much did you worry about, "Do I want people to throw themselves out of a window after I read this book? Or to what extent do I need a happy ending?" Insofar as you can call a story where hundreds of thousands of people are dying and getting driven out of their homes and migrating and whatever else, happy.Stephen MarkleyRight, but we're in this very bizarre situation now where we're talking about stopping the heating of the planet at two degrees is the happy ending, which seems insane. And so I guess the book, without spoiling anything, the book lands on a knife's edge, right. It's pretty much exactly what we're looking at right now, which is: we have every tool we need to rapidly decarbonize the global economy. We could be growing much faster. Some of the terrifying results are already baked in because we waited too long and it's going to be, you know, the fight of several generations to turn this thing around.And I just think, like, the book ends as really that effort has gotten underway at the scale that it actually needs to affect the correct change, though.David RobertsYeah, it takes quite a few body blows before that comes around. Another thing, I really appreciate it in the book, I felt this about, "Don't Look Up 2" the movie. Anytime you tell me a work of fiction is about climate change, I go in pre-grimacing and do it completely tensed up.Stephen MarkleyMe too.David RobertsCompletely tensed up stuff, watching for...it's, like a doctor watching ER or whatever. You catch all the little things. But one thing I was glad you didn't do is this notion that once a disaster is big enough, right. Once there's a spectacular headlining, grabbing enough disaster, it's like a shock. And then everybody is like, "Oh, you're right, we do need to do something about this." And everybody swings around and gets supportive. And as you show in the book—show rather than tell, which I appreciated—it causes some people to do that, but it causes just as many other people react to trauma with fear and nativism and nationalism and anger.Stephen MarkleyI think the most important thread in the book is, there's one of the sections is called "Feedbacks." And feedbacks, we all know what climate feedbacks are, but the most important feedback is us as humans is what are we going to do? And unfortunately, one of those feedbacks is the worse things get, the more of that starts to come out. And it's just even more reason to arrest this as quickly as possible because those effects will accrue that kind of resentment, nativism, hostility. It's so inevitable. And so I think making sure that was ever present in the book was, sort of, a key thematic aim.David RobertsYeah, there's a president who runs on...this is something I've had in my head for a long time. A president who runs on like, "We need to put up big walls to keep all these migrants out, and we need to hoard our fossil fuels and dig up all our fossil fuels."Stephen MarkleyCarbon maximalism is the name of the...David RobertsWe have an island here, a walled island, and we're protected from the rest of the world going to hell. And of course, it doesn't and can't work, but 100% plausible that someone...Stephen Markley2024 will probably bring about that candidate.David RobertsYeah, you got to wonder.Stephen MarkleyYou're shaking your head, but, y'know.David RobertsOkay, well, I want to hear from y'all, so if anyone has questions, please. The question was, "How far out into the future does the novel go?"Stephen MarkleyIt ends in the 2040s, so it starts in our recent recognizable past, 2013. So we get like, a taste of where we've all been and then ends in the 2040s.David RobertsYeah, it really is like present day, you're familiar with, marching right forward to your tomorrow and the day after tomorrow. It's very disturbing in that way...how smoothly it goes from a very familiar situation to things going fucked up in sideways in all kinds of ways.So the question is about this perpetual argument in the climate space over individual action and individual responsibility versus structural infrastructural political changes. And as a god-like narrator, you get to choose which of those works more in the end. Did you have that in your head as you were writing?Stephen MarkleyYeah. There's no point in the book when flight-shaming solves anything that's actually...David RobertsPlastic recycling, though.Stephen MarkleyYeah, right. I'm sure we share this sense, which is very quickly into my very basic intellectual encounter with the climate crisis, even back in when I was in college, was like, "Oh, all this stuff is like, mostly virtue signaling garbage." And that's not to say, like, people should live their lives as ethically as they can and they want to like I don't want to like, denigrate anybody who does that stuff. It's just that, like, chirping about it doesn't help anything. We really, really need to accrue political power and change things at system levels, as David often says. It's the most vital thing.David RobertsBut what about just a slight twist on the question, which is rather than personal action in the, "Buy a hemp tote bag, drive a Prius, to..."Stephen MarkleyHow to green your Netflix binge.David RobertsThat type of thing. What about personal responsibility for activism and political engagement?Stephen MarkleyI love that and I wish that was...what do they have memes now? I wish that was a meme somewhere on the Tiktok.David RobertsI think they're called memes. Anyone in the audience?Stephen MarkleyBecause it is. And just, you know, I was reading Hal Harvey's book, "The Big Fix," which I very much recommend, which is about this topic. And there's a story in Montgomery County, Maryland where a bunch of high school students were agitating about their disgusting diesel-fueled buses and it led to the county electrifying the bus fleet. And that seems like a small thing, but if you start multiplying that across school districts around the country, it's not a small thing. And it dovetails with the strategy that has emerged, which is electrify everything and crush demand for fossil fuels. So I think those are the sort of actions we have to look towards.And particularly cities like Seattle and LA and all these other sort of liberals, like bastions, can go a long way in implementing policy and nobody pays attention to any of this. So a little bit of action goes such a long way. Him back there?David RobertsThe question was, "If you, in a dark alley sometime, come face to face with a climate denier, is there anything in particular, any strategy or fact or emotional valence that you have found useful in moving such?"Stephen MarkleyYeah, so what I like to do is get super upset and really dive into all my facts and just present them in a logical way and get angrier and angrier as the conversation progresses.David RobertsDon't forget footnotes.Stephen MarkleyYeah. I pull up on my phone, articles from the New York Times and I'm like, "Wait, look, Paul Krugman says this," and that works every time and it's all fine. I think like I, you know, you don't have to say it's, like, look at the Exxon documents from the 1970s. Like they knew. tTheir scientists were out studying this. They said the world was going to go to hell if they kept doing what they were doing. So you don't have to take my opinion for it. You can go look at what Chevron had to say.But no, to seriously, answer your question, though, I do think the tech has suddenly become this very interesting tool, which is like, anybody who has an electric heat pump—my dad won't shut the fuck up about his electric heat pump. Not that he's a climate denier. But it's like they should put warnings on that, on electric heat pumps that say, "Your dad might talk about this for a year."David RobertsI know. Warning to your neighbors: Do not engage on the heat pump.Stephen MarkleyExactly. There are these ways of just saying, "you should at least try this thing out," that I think once people start experiencing this very better way of producing heat and energy, it will not move the needle on denialism, but it will at least maybe a little crack or a fisher here or fisher there.David RobertsYeah. If I could just add, like, I've been at this since early 2000s or whatever, and in the early 2000s, there weren't a lot of people who cared one way or the other. So it was mostly, like, a tiny handful of us who cared and a tiny handful of jackass deniers who were paid to disagree. And I spent several years going back and forth with them and quickly realized a couple of things. One is: if you find people who are invested in denying, they're usually that way ideologically, and you will not change their mind. And the right strategy is to turn around and walk in the other direction as fast as possible.The vastly larger problem is: poorly informed and mildly disengaged. Like, the vast bulk of people just don't know that much and don't care that much. And how to get them involved is a much, much bigger and more important question than how to turn around some jerk off.So the question was: what was most helpful to you in your research about how to address the problem? And I guess that can...because there is just for you have not read it. To my great delight, there are some pretty weeds-y discussions of policy. There are rooms full of people discussing policy in some detail, which is just totally my thing. Again, not allowed to mention me. What sources did you find helpful?Stephen MarkleyI just mentioned "The Big Fix," which was written by this guy, Hal Harvey. He's been on...I discovered him through David's writing, but he works at Energy Innovation, which is a think tank. They were advising Congress on the IRA. And I was so grateful a person who works there read the book for me and sort of advised me on everything. And I'm just so relieved that there are people who are like, "Alright, what is step A? Let's do step A, and then we'll move to step B, and then we'll go to C."And it's just that sort of level of thinking of, like, what are the things in society driving this crisis? How do we change them, right? I would be remiss also if I didn't recommend a book by my good friend Lisa Wells, who is here called "Believers." It is a terrific nonfiction book. I read it in the midst of writing "The Deluge" and it's like one of those books that sort of, like, made me feel what I'm supposed to feel right now in the midst of this. And I think that's, as we were saying, like, if that's a difficult thing to do, like all of this just sort of exists in this haze. And every once in a while there's in a weather event that freaks us out. But then we all go back to normal. And even those of us who care about it have a hard time sort of holding on to it. So I very much appreciated those books that I read that was like, no, no, this is keep your eye trained on this.David RobertsAnd of course, to add fiction is one of the things that can do that in a way that no nonfiction can. And sort of like reading about this scientist who's been discussing these very sort of cold, wonky things, the whole book careening through a burning Los Angeles to try to save his daughter from her apartment. It really makes things visceral for you.So the question is about why there was so little climate fiction or art for so long, and now it seems like it's kind of bubbling up now. There's a couple of big things popping out, really big ambitious works, and whether you have any thoughts on why that's happening. And I'll say, whenever I say on Twitter or whatever, "Oh, there's not enough climate art," people start throwing obscure climate art at me and obscure climate novels. But in terms of big, popular culture stuff, really, this book is the first because you'll get lots of books that are, like, dystopic and you're like, "Oh, it's like an analogy to climate change hovers in the background or whatever." This is about climate change more squarely than any work of art I've ever met. So what do you make of that?Stephen MarkleyI think it's bizarre as well. And it's sort of in the course of writing this book, I was somewhat terrified that someone would come along and preempt me with the same thing, basically. And it never really happened. And I don't know, I might get in trouble for this, but I'll just take you through this story. I work in Hollywood now, I don't know if you saw my picture with Tom Hanks. It's up on Instagram. Okay. But we went out with "The Deluge" early to see if we could gin up interest in an option.And I just got the same question in every meeting, right, which was basically to the effect of, like, "Well, what about the people who don't believe in climate? Like, I believe in climate change, but what about the people who don't? What's in this for them?" And I always found that, like, the most bizarre, mind-blowing thing, because when you're in it, you're like, this is the most important fucking thing to ever happen to humans. Like, let alone...David RobertsYeah, like somebody proposing a pandemic movie. Like, we don't believe in pandemics.Stephen MarkleyRight? So to me, there is this weird still, and this is a testament to the power of the propaganda laid out by the fossil fuel industry. There is still, in the US especially, this sort of idea that it is this highly-politicized issue, which it is, but in a way that you can't even make art about it because it will prickle people. At least that's my Hollywood opinion. As for fiction, I think there are quite a few climate novels, but I think they do exactly what you're talking about a lot of the time, which is they're not addressing the issue, they're coming at it from allegory or whatever else it might be. And the project of "The Deluge" was like, okay, straight to the fucking eye, let's do this. Let's get every issue in this complex subject on the table.David RobertsYeah, if you want an explanation for why there hasn't been, I just think because it's super fucking hard. Like, climate is everything. It is literally everything. It's every fiscal system, every political system. It's like social system, it's emotional, it's allegorical, it's everything. So, it's one thing to understand that intellectually, but fiction is all about specificity. That's what I was trying to get out of my first question. Taking all that and deciding this specific thing, that's just mind blowing to me, and I understand entirely why people haven't done it. It sounds really hard. I'm still waiting for the first good climate movie. I don't know, "Don't Look Up" did this, sort of, like, analogy thing.Stephen MarkleyYeah, I mean, I listened to the podcast with...what's his face? Adam McKay, sorry.David RobertsMcKay, yes.Stephen MarkleyI hope he's listening to that right now.David RobertsFamed Academy Award winning director, Adam McKay. I expect in coming years there will be more attempts at this. I sort of hope that, you did the sort of needful, which is like directly grappling with the horns. But there's ways to get at this through genre. You could do a horror, you could do a heist movie. You can think of lots of different ways you could weave climate change in. That's what I'd like to see is not necessarily just a ton of stuff directly about climate change, but just more ambient climate change in culture. Just sort of more of an acknowledgement that it's whatever story you're telling and whatever you're doing, it's there. It's around you.Stephen MarkleySo, David, you're telling me you have not watched the film "Hurricane Heist"? Because that...David RobertsI have, actually!Stephen MarkleyYeah, see! What are you talking about? It's a classic, yeah.David RobertsI thought that movie was so terrible that literally no one else in the world would watch it. I'm glad you have the same appetite for terrible movies.Anybody else?Audience MemberBut did you sell the options?Stephen MarkleyNo, it's still available, Adam McKay.David RobertsDear Academy Award winning director Adam McKay...Stephen MarkleyYeah, back there.David RobertsSo the question is: was it cathartic to write this for a decade or did you find it innervating to wallow and apocalypse?Stephen MarkleyYeah, I definitely thought it was emotionally exhausting, and especially about at the 60% mark or maybe the 70% mark, when I had sort of set in motion the wheels of all these multi-faceted crises happening at once. And I just, like, it felt too real to myself. For me, really, like, the point when I had to shift my own thinking on it was when I started to explore, like, okay, who are the people out there actually trying to do something about this? Not setting their hair on fire, not bemoaning humans as a virus on the planet, but just like, what systems do we have to change in order to do this?That's when I started to orient myself a little bit more productively towards the task at hand. Then it was being edited in the middle of 2020 during the pandemic, during the riot of the Capitol, like, all that shit that just seemed like, "okay, my book, it's, like, not scary enough," you know?David RobertsSo, yeah, what about the riot? What about January 6? That happens during the time period of the book, right?Stephen MarkleyEither way, without any spoilers, the way I found out about January 6 was my friend, an early reader texted me and said, "How does it feel to be clairvoyant?" And I did not enjoy turning on the television to find out what he meant.David RobertsWe'll leave it at that. You have to read the book. When will there be an audiobook and are you going to be involved in it?Stephen MarkleyIt is available right now, and I am not reading any of it. So, you can listen to better people than me.David RobertsAnybody else? Yeah, go ahead. Do you get into the role of animal agriculture in climate change in the book?Stephen MarkleyA bit through one of the most vociferous characters, who's a vegan and sort of forces her partner to become one, as most vegans do.David RobertsHello. There they are.Stephen MarkleyOh, wow. It's like that spot-on or something. But also there's this moment at the end when basically a character is laying out, okay, like, what do we do? And agricultural policy, of course, plays a role in that, yeah.David RobertsAm I dreaming? But people aren't eating beef by the end of the book for some reason? Am I making that up? It wasn't like a policy or anything. Just like, all the cows died, or I may be making stuff up at this point.Stephen MarkleyYeah, it's basically like the US government goes around buying up livestock and then basically shutters the industry, I think, is what you're...David RobertsYes, that happens. In that sense, something quite dramatic on that.Stephen MarkleyBut then you need to precipitate a crisis like in the book, and I think we need to avoid that. Yeah.David RobertsSo this is a question about writing process, and it is a big, sprawling book. It's got lots of characters in it, and the question is, sort of, how many is enough? How many is too many? How do you know when you're representing everything you want to represent. What's the thinking there?Stephen MarkleyHave you read "Ohio"? Okay, yeah. So with "Ohio," it's like I had the four characters the whole time and knew exactly who everybody was. With this, I probably started off with ten or eleven point of view characters. And as the book progressed, it became clear, like, you're biting off way more than you can chew. And so, they began to drop away. And I think in the last edit, basically, between me and my editor, I cut one more. It was hard because when...David RobertsDo you know how many you ended up with?It's seven, basically. But when you have to cut out a whole character, it hurts. It's like chopping off your arm, right? And so I think, like, that last hurdle of getting rid of...but the book had to move. It had to be, and I think it is, like, very readable, very page turnery. And I think that was something my editor and I discussed that was vital, that a book this size with this much policy and science and so many ideas packed into it, it really had to be aggressively interesting. And so a few of the characters who I thought were vital, it turns out they kind of weren't.Stephen MarkleyAnd once you've cut it, once it's gone, you don't miss your arm anymore.David RobertsNo phantom pains.Stephen MarkleyNo phantom pains.David RobertsYeah. I just want to say for those of you who have read Kim Stanley Robinson, "Ministry for the Future", I always want to say "Swiss Family Robinson." I don't know, once I say...Stephen MarkleyThat's a different type almost!David Roberts...like that's not It! "Ministry for the Future." "Ministry for the Future" is a very, like, it says fiction on the cover but it's, like, a little bit of fiction with a lot of, like, white papers sprinkled throughout, which is, like, great if you just want to learn. You'll learn a lot by reading it. But just to be clear, this is not that. This is an actual novel. An actual page-turner of a novel, and not just a bunch of learning, a bunch of briefs.Stephen MarkleyDavid Roberts. Fuck learning.David RobertsYeah, enough with this learning. Thank you, everyone.Stephen MarkleyThank you so much for coming out. I really appreciate it. Thank you, David.David RobertsThank you for listening to the Volts podcast. It is ad-free, powered entirely by listeners like you. If you value conversations like this, please consider becoming a paid volts subscriber at volts.wtf. Yes, that's volts.wtf, so that I can continue doing this work. Thank you so much. And I'll see you next time. Get full access to Volts at www.volts.wtf/subscribe

In December 2021, Peninsula Clean Energy (PCE), a Bay Area community choice aggregator (CCA), issued a white paper on the need for 24/7 clean energy, its rationale for pursuing 24/7 by 2025, and the steps it intended to take to get there. Earlier this month, it issued a follow-up white paper reporting on the tool it built to map out 24/7 and the lessons learned.I am fascinated by the practical challenges of getting to 24/7, so I’m excited to talk to Jan Pepper, CEO of Peninsula and lead author on the latest white paper, about why PCE is setting out to achieve 24/7, the main barriers, and the ways it may get easier in the future. Get full access to Volts at www.volts.wtf/subscribe

In 2021, a group of Scholars at Oxford University published a paper that made big waves in the energy world. It argued that key clean energy technologies — wind, solar, batteries, and electrolyzers — are on learning curves which guarantee that, if they are deployed at the scale required to reach zero carbon, they will get extremely cheap.This is, as they say, big if true. In September, I had one of the lead authors, Doyne Farmer, on Volts to discuss the paper in-depth. He made a convincing case for the paper’s thesis, but when I asked him why these technologies were on learning curves and others weren't, he could only speculate.That's the question that's been on my mind ever since. Why are some clean-energy technologies getting rapidly cheaper while others aren't? What is it about particular technologies that make them amenable to learning curves?I cast that question to the academic gods, and lo, they returned with a paper, and that paper is what we’re here to discuss today. It’s called “Accelerating Low-Carbon Innovation,” by Abhishek Malhotra of the School of Public Policy at the Indian Institute of Technology in New Delhi, India, and Tobias Schmidt of the Swiss Federal Institute of Technology in Zurich, Switzerland.It sets out to chart technologies against two basic axes: design complexity and need for customization. That creates a schema that can help illuminate why some technologies developed quicker than others.I don't want to say much more than that, since I have my Malhotra and Schmidt here with me to help explain. Get full access to Volts at www.volts.wtf/subscribe

Volts was born on December 7, 2020. It recently turned two years old and I forgot to wish it a happy birthday. I also forgot to send out my once-a-year fundraising note.However! Better late than never.If you have learned from or been entertained by my podcasts over the last year, if they have helped you become more useful, and if you are in a financial position to do so, I hope you will consider signing up as a paid Volts subscriber. It is a relatively modest sum — you pay less for a year than you'd pay for a nice pair of pants — but it means the difference between me continuing this work and me getting a real job. Get full access to Volts at www.volts.wtf/subscribe

In this episode, Florida Rep. Kathy Castor, chair of the House Select Committee on the Climate Crisis, describes the committee’s ambitious goals and notable achievements over the past three years.(PDF transcript)(Active transcript)Text transcript:David RobertsIn 2019, in the wake of Democrats’ congressional victories, House Speaker Nancy Pelosi announced that she would be re-forming the Select Committee on the Climate Crisis, which had been disbanded by Republicans in the previous session. She appointed Florida Representative Kathy Castor as chair.At the time, the decision caused considerable controversy in the climate community. Climate activists were pushing for a more ambitious committee, with the power to write a full Green New Deal legislative package. Instead, the committee was to be an advisory body only, meant to do research and develop policy suggestions.History is littered with congressional committees that busily produce reports and whitepapers that no one reads. But the climate committee proved much more potent than that. Castor set about gathering testimony from hundreds of witnesses — scientists, policy wonks, and average citizens alike — and putting her expert staff to work translating their testimony into policy recommendations. But the recommendations did not simply decorate reports. The Democrats on the committee, and the Democrats educated by the committee's work, took those recommendations back to their own committees, where they found their way into a wide variety of bills. The bipartisan infrastructure bill, the CHIPS Act, and the Inflation Reduction Act contained numerous policies that originated in the climate committee.Altogether, hundreds of the recommendations made by the committee found their way into law — a crazy-high success rate for a committee with no real power. As the committee prepares to sunset — of course Republicans are disbanding it again — it has put out a final report, summarizing all its achievements and pointing to the work that remains to be done.I called Rep. Castor to get her thoughts on the committee's work, the achievements she is most proud of, and what progress she thinks can be made in the next two years.Alright, then. With no further ado, Representative Kathy Castor. Welcome to Volts. Thank you so much for coming.Rep. Kathy CastorOh, I'm delighted to be here, David. Thank you.David RobertsSo just to start off, I'm assuming that the coming Republican majority is going to shut down the committee. Has this been explicitly stated yet, or is this just ... are we all assuming? Is that a valid assumption?Rep. Kathy CastorYeah, the ranking member, Garret Graves of Louisiana, did kind of spill the beans. The problem is, on the Republican side, the Speaker-to-be, Kevin McCarthy, does not quite have the votes yet. So that leaves everything in limbo getting organized for the new year. But, they've made it plain that the climate crisis is not a priority for them, and therefore the Select Committee on the Climate Crisis will not exist in the next Congress.David RobertsSo then it's been wrapped up. It's been a whirlwind three years, I guess, since you were placed in charge of this committee. Have you had a chance to kind of pause and step back and think about it all, or are you still kind of in a sprint til' the end of the term?Rep. Kathy CastorIt has been a sprint right til' the end, especially since the large appropriations package and the defense bill were not completed due to really foot-dragging of the US Senate. We have so much more left to do. I mean, we are thrilled that this was the most important Congress when it comes to clean energy and climate action and building more resilient, safer communities across the country. I mean, this was the Congress, the one that people inside and outside have been pressing for decades, frankly. But there's still so much more left to do. We're living in a climate emergency, and the world's top scientists tell us it is just urgent that we reduce climate pollution across the board. And now we have the tool. We passed a number of the tools, but implementation will be key, and that's what we're looking ahead towards.David RobertsI wanted to ask you, looking back on it, if you can cast your mind back to 2019, when you became chair and you had a majority in the House, but very narrow-split Senate, looking back, were you surprised by the productivity of this Congress? How did it perform, relative to your expectations from back in 2019?Rep. Kathy CastorGosh, it was yes, I think the the fact that we were able to accomplish so much when the United States Senate was divided 50-50 truly exceeded our expectations, but we really didn't have a choice. Policy could not wait any longer, while so many private actors, private sector, clean energy entrepreneurs, some utilities, some states and local communities are going gangbusters. The federal government and the Congress had not responded. So the stars finally aligned when we kind of knitted together pieces of the climate movement across the country, across the economy, and had the plan ready when President Biden was elected. But a 50-50 Senate, that was a roadblock. But looking back now, it's pretty impressive. The bipartisan bills that we were able to pass into law.David RobertsYeah, my expectations are so low, naturally, that I was quite pleasantly surprised. So let's talk about a little bit about what I think is one of the most striking features of this last few years, which has been a crazy time. But I wrote a piece back in, I think it was 2019 or 2020, about the climate movement kind of splintered apart after Waxman-Markey back in 2008, 2009, and was kind of just fractured and drifting up through, I would say probably like 2018. And then, of course, I've been writing about these processes, whereby groups are talking to one another, and there's been just this intensive policy discussion and activity.And the left seem to sort of pull together around a policy vision, which I sort of characterized as standards, investments, and justice: SIJ. I tried to get SIJ to catch on, but it never quite did. But then your committee comes along, you consult with hundreds of people. You get testimony from hundreds of people. And that's kind of that shared vision is more or less what you came around to. And for all the chaos of the ensuing years and all the sort of ups and downs and roller coaster of it, there was remarkably little, I thought, conflict within the Democratic Party or within the left about policy specifics.There seemed to be a weird sort of policy consensus that kind of held firm. Did that strike you too, especially relative to like, 2008, 2009, when, you know, whether you supported cap and trade or not was this, you know, this absolute marker of your purity or your intentions and all this, you know, all the very vicious policy fights back then? I thought there was a strange amount of consensus around policy this time around. Did you find that as well?Rep. Kathy CastorI'm glad that we made it look easy, because it wasn't. And it really started with Speaker Pelosi's vision coming back in tackling the climate crisis, there's nothing like having a professional committee, staff of experts. Some of the other committee chairs in the Congress, they protect their turf, their jurisdiction, but she understood that solutions to the climate crisis cut across all jurisdictions and they needed to be knitted together. So having Ana Unruh Collin serve as our staff director, a brilliant, knowledgeable scientist, but policy guru. And then Alison Cassady is our deputy, who had served under Chairman Waxman, went through EPA after a report and now is helping Codesta in the White House get all of these clean energy and resiliency policies done. Fatima Maud, great on transmission in the power sector. Samantha Medlock, who understood that the climate we have to prepare and adapt, so another professional. So there's nothing like having a team that is in place, ready to listen.David RobertsMost of them, veterans of the Waxman-Markey fight. So, had seen how things could go, I think, and went in, determined to make them go differently this time.Rep. Kathy CastorYou're absolutely right. And what I learned watching Speaker Pelosi and just kind of growing up as a policy nerd myself, is that from the very get-go, you have to listen. You have to listen and learn. And that's what we set out to do right off the bat; listen to farmers who were hungry for climate solutions because their crops and livestock being impacted, scientists, folks in the clean tech sector, the innovators. We needed to understand what the modern solutions were. The environmental justice community, who had felt so left out of discussions on solutions, on clean energy and technology for many years, and we set out to do that, held a number of those listening sessions, but put out a request for information asking for the climate solutions across the country.And at that time, we also Hal Harvey and the folks at Energy Innovation gave us a kind of set-the-table tutorial to really point us in the direction of what gets the biggest bang for the buck when we're talking about reducing climate pollution and clean energy. And then, before COVID came down, trying to go out across the country to listen, one of the first trips was to coastal South Carolina to look at the impacts of climate on ... and coming from the state of Florida, I understand very well the impacts of climate on a tourism economy and your economic wellbeing. But then out to Colorado, to the National Renewable Energy Lab, where we really tried to bring our Republican colleagues along with us, because durable policy oftentimes has to be bipartisan. And I think looking back on the Bipartisan Infrastructure Law, the CHIPS Act, everything we've done in the defense bills through the appropriations, they were bipartisan, and they will be more durable. The Inflation Reduction Act, not as bipartisan, but, boy, to have ten years of continuity of clean energy tax credits and energy efficiency across the economy will provide that certainty that our innovators need.David RobertsSo you put out this report in 2020, or not 2020. When did the big report come out? Was that earlier this year?Rep. Kathy CastorIt was 2020, David.David RobertsIt's all a blur.Rep. Kathy CastorI know. It does get blurred. And in fact, we were set to release it in March of 2020, and I remember very well talking to Speaker Pelosi and Leader Hoyer on the floor, and we said, okay, well, we won't be announcing it next week because of the COVID, but we'll be back in a month to do this. And it took a little longer, but it gave us time because the country was grappling with the murder of George Floyd. And we knew that, unlike Waxman-Markey, kind of technical solution to the climate crisis, that people across America were hungry for solutions that are much more cross-cutting and focused on equity and addressing the communities that have disproportionately carried the burden of pollution.So, that gave us time to kind of build up our environmental justice pieces of it. And the other thing that gave us momentum was the youth climate movement at that time. And thank goodness we have environmental advocates across America who know how to organize. And they organized, and we heard them. Our very first hearing was with youth climate leaders, so that they understood that we were truly listening to their pleas for action. And it's important to have those protests they were protesting in the Congress, and they need to continue to press policymakers. But we listened and really turned their passion into policy.David RobertsSo this report comes out in 2020 magisterial report, I would say extremely I wrote it up when it came out. I just thought it's extremely fleshed out in the report. There were 715 policy recommendations, and your recent sort of wrap-up report that just came out says, "Out of those, 436 passed to the House, and then 314 of them were signed into law." So I did the math: that's a 44% hit rate. You got to be feeling pretty good about that. I don't know what typical expert committees in Congress produce, but that seems like a remarkably high success rate for getting recommendations into policy.Were you surprised how much from that initial report, sort of, survived the sausage-making process and sort of came out the other end more or less unmolested?Rep. Kathy CastorYeah. We looked for every opportunity in every bill moving through the Congress to build in some of those policy recommendations into law. And for folks that want to look at that groundbreaking report at climatecrisis.house.gov, you'll see we had legislation in certain areas already drafted that was ready to go, and then we made other recommendations for the need for legislation and to their credit, members across the Congress took us up on our offer. We work very closely with each congressional committee. Almost, just about every committee had a piece of this.David RobertsYeah, I wanted to ask about the ... because the committee didn't have the power to write legislation. It's just an advisory committee, which I think makes it kind of even more remarkable how much of its recommendations became a law. But tell me a little bit about the process, whereby this sort of recommendations that began in an advisory committee made their way to lawmaking committees. What was the sort of process, whereby you kind of diffused your recommendations and tried to get them into things? It seemed to work remarkably well behind the scenes. I didn't read a lot of stories about sort of infighting or backbiting so it seemed like a weirdly rational policy-making process. Tell us a little bit about how these things made their way into policy.Rep. Kathy CastorWell, Speaker Pelosi was very wise to appoint to the Climate Crisis Committee a number of members who are steeped in climate policy and politics. For example, Jared Huffman from California who was an environmental lawyer. He also sits on the Transportation Committee and has kept a very keen eye on those policies. Plus, Sean Casten, a clean energy tech guy from the midwest who understands power markets very well. Suzanne Bonamici of Oregon who is a leader in oceans policy, Ocean Solicitors. Donald McEachin, who recently passed away, was kind of our moral conscience, and had crafted an Environmental Justice For All Act that we recommended, and a lot of the policies in equity sprung from that.So, for example, as Chairman Peter DeFazio and the Congress was crafting the Infrastructure Investment and Jobs Act that we also called the Bipartisan Infrastructure Law. We had made recommendations for electrifying the transportation sector and doing it in a way that also built the bridge to workers and labor. And though it looked pretty easy looking back, I'll even say great. But these were very difficult discussions with auto makers, with auto workers, with members of Congress like a Debbie Dingell. But you had a Chairman DeFazio focused on this very important infrastructure law, something that President Biden ran on. So in the end, all of those taking, listening, and hammering out the compromises and policies in advance, we end up with an infrastructure law that includes $62 billion for the Department of Energy over five years to support clean energy transition and infrastructure upgrades, including the $7.5 billion to build the very first nationwide EV charging network.So, that had already been built into the Biden administration's goal of 500,000 public EV chargers, and a future where all Americans can have easy access to EV charging. But it also has those important — none of this happens unless we can build the batteries. So $3 billion for battery manufacturing, recycling grants, another $3 billion for battery materials processing.David RobertsThat was in the Infrastructure Act, right? I mean, this is one of the interesting things, is that you sort of seeded your recommendations in the Infrastructure Law and in CHIPS and in the Inflation Reduction Act. And so, we didn't end up in that kind of situation where there was just one big bill with everything this time. You guys were working on everything that had a chance of passing. It seems like.Rep. Kathy CastorThat's correct. And with a patriotic flare. Buy American, build American. I know right now it's causing some consternation for a lot of our allies that also make cars and trucks, but that domestic content and the requirements for manufacturing in the United States, we viewed as vitally important to building bipartisan support for decades to come. And already you've seen the announcements of where these battery plants, where the EV plants are going to be built, largely in the midwest, largely in red states, in Republican areas.And I think over time, the GOP is so wedded to oil and gas, but over time, as these workers and these communities have a piece of the clean energy future, it will be changing. It will build on itself, and it will help us address this climate emergency.David RobertsYeah, I want to come back to that, too. So I don't want to ask you to choose a favorite child, but out of all these, out of this report, full, just chock full of recommendations, are there any recommendations or set of recommendations that became law that you are particularly proud of, that you think are particularly sort of central to what we're doing? If you had to choose kind of your favorite thing that you did that ended up actually passing the finish line, what would you point to?Rep. Kathy CastorThe electric grid across America. And it's not all the way done, because there are some very significant policy changes that must happen. But what folks like Hal Harvey and Energy Innovators told us right away is the most important way to tackle the climate crisis and to reduce greenhouse gases is in the power sector, getting the lower cost solar, wind, energy-efficiency resources out ASAP, and then especially following on with the transportation sector. So, here I sit in the state of Florida, the so-called Sunshine State, but they've kept us addicted to gas. They've put all the eggs pretty much in the gas basket. And that has really cost my neighbors a lot of money.When we have price spikes, especially after Putin's unprovoked attack on Ukraine, we can do so much better. We can lower cost, we can clean the air. We can build more resilient communities. You probably saw that after Hurricane Ian, the one community that didn't lose power and really didn't suffer as much damage was a solar-powered community, Babcock Ranch in southwest Florida. And, I want that for the entire country. And we're on the cusp of getting there, but that's why we have more work to do when it comes to getting the renewables out. But David, there's nothing like having those tax credits now for ten years.David RobertsYeah. Hearing you put the grid at the center, of course, warms my heart. Of the stuff that didn't make it, were there pieces that you were more disappointed didn't make it? This is sort of the flip side of the other question. Is there stuff that you were hoping was going to make it that didn't, that you look back on with regret?Rep. Kathy CastorI wish we could get a national renewable portfolio standard. Again, using my experience here in the so-called Sunshine State, boy, we're a laggard. And again, we could bring that lower cost, clean energy to more of my neighbors here. And it's just so disjointed. You have states that have truly committed, local communities, truly committed. They're going to reap the benefits, and really, the benefits should be available to everyone. So, we recommended a clean energy standard, energy-efficiency standard. You need those goals to press ahead, even as you have the standards investments in justice. I think the goals are very helpful to set the bar.David RobertsWell, that's the standards piece, which is hard to get through a reconciliation bill, right? That's the nature of the beast.Rep. Kathy CastorAnd remember, it morphed into making large incentive payments to utilities to get there. But that didn't quite go. And at that time, it looked like the climate policy was teetering. And thank goodness we had a president who never gave up. And Senator Manchin came around to his credit, and a lot of outside groups kept pushing. I don't think that's very evident when you watch what's happening in Washington DC. You think it's so insular, but I think everyone can be grateful for the wide variety of interests, from the environmental justice groups to the innovators, to the scientists who just kept at it, kept pressing.David RobertsThis is probably an unanswerable question, and I don't want to get into trying to get you to psychologize Joe Manchin. Thank god that those days are past us for now. But do you think that pressure from outside groups reached him? It's very hard to tell from the outside. He looks, from the outside, like he just doesn't care about most of those outside groups. Do you think that pressure had some role in bringing him around?Rep. Kathy CastorYes, I do. And I think he has children and grandchildren. I don't think he wanted to get up and look in the mirror and be responsible for a planet that is not as livable for our kids and future generations.David RobertsLet's talk about a little bit of the Manchin changes. So he stripped out the renewable portfolio standard or the, I can't remember, the name of what it had become, but the sort of reconciliation equivalent of the renewable portfolio standard.Rep. Kathy CastorYeah, Clean Energy Payment Program or Performance.David RobertsRIP.David RobertsSo that would have been nice. But, the other main thing, as far as I can tell that he changed, was some changes to the EV tax credit. And I'm just curious what you make of the changes to that credit. Were you sort of supportive of those? Do you think they went too far? Because I've heard some concern that the requirements now for domestic content are kind of so tight that no one's going to be able to meet them for a couple of years. So curious if you have any thoughts on that.Rep. Kathy CastorIt is going to be difficult. And when I say that we had a patriotic plan of action that was because we really do want to win the future. We want the United States of America to be building those electric vehicles and have the leading technology. But the minerals and the batteries are going — the domestic content requirements are going to be difficult — and I think everyone is pressing ahead. They're good tax credits and significant dollars to build up those domestic manufacturing, the plants, the workforce. So everyone is kind of pressing along in that direction, now.It's only been a few months but yes, we're hearing from our allies. I know when President Macron was here recently that he was bending the President's ear. And there may be some ways for the administration as they go through implementation to listen and do some and things on timing. But I think, mostly, Americans are committed to wanting these to be a pathway to good paying jobs for our people. The industrial base in America, we've got to invest through CHIPS, through everything we've done with EVs, and I think we still have more room on workforce to do, but okay, so difficult, but we've got to try. It's important for competitiveness.David RobertsSo Manchin stripped out the Clean Payment Program. He tweaked the EV tax credits a little bit, sort of tightening their domestic requirements. But it was striking that, for all the sort of suspense around Build Back Better, is it going to happen, is it going to not? Manchin stripped out the care provisions and a lot of the healthcare stuff. All this drama, through all that, the basic clean energy and climate portion of that bill was mostly left alone. What ended up passing in the Inflation Reduction Act is pretty close to what your expert committee members wrote down on paper. Did you expect Manchin to do more?Because, you know, for all that, he's objecting and objecting and saying no. And I just thought, "Well, surely he's going to strip this down. Like he stripped everything else down." But he ended up sort of not doing all that much to it. What do you make of that?Rep. Kathy CastorI make of it that it really was an effort that knitted-together interest and collaboration across the economy that was bigger than the Congress. People knew if we didn't act now, we were condemning our kids to a bleaker future and that now was the time to lay the foundation to slash pollution across the board. It ended up through tax credits. Tax credits will drive investment in affordable clean energy, the electric vehicles, cost-saving energy efficiency technologies, but also through making environmental justice a cornerstone of climate action, a stronger enforcement of environmental laws. Monies will flow into that, increasing the investments to communities on the front lines. Rural communities, tribal communities, energy.A lot of the communities that grew up through coal mining and frack gas, they're going to need to see themselves in the clean energy future as well. Bonuses for those High Road Labor standards, domestic manufacturing. Also the cross-cutting approach to reducing methane pollution. I think there was broad bipartisan realization that control of methane is vitally important ASAP to give us a fighting chance to meet our climate goals.David RobertsSo do you think he left it alone because it was good policy? I guess, I love that story, and I hope it's true. So you say several times in this recent report there's a lot left to do. 44% of your recommendations pass, which is remarkable, but that leaves a bunch more that didn't pass. Do you have any hope at all of decent energy legislation passing through this coming Congress with Republicans in control of the House? Or is it more or less up to Biden over the next two years to act via executive action?Rep. Kathy CastorDemocrats are going to be quite focused on finding bipartisan solutions moving forward, even with the chaotic Congress, the House of Representatives, that is sure to come, because there are some folks on that side that just are ... they live to shut down the government for some reason, I don't know. They're just not constructive. But, hopefully, they don't cause complete chaos. So most of the action, yes, will be in implementation. We have got to get money back into people's pockets through the more energy-efficient appliances and through weatherizing their homes and building the solar plants. My local mayor here in Tampa looked at the tax credits that they will receive and said, "Well, I'm going to put solar panels on top of this brand new big community center, and that's going to save us a million dollars."Multiply that all across the country. But it's going to be important to get those monies out into people's pockets. And thankfully, we've got allies that are going to be working with us on that.David RobertsI'm just curious if there are particular things that you would like to see Biden do via executive action over the next two years? Any sort of top priorities left over from the report that you would like him to sort of prioritize?Rep. Kathy CastorThe Department of Energy now has more resources at its disposal than ever before. That Green Climate Bank, I think is going to be fascinating to see the innovations that come from across the country. It's kind of like community development block grants that go to local communities where they have the most flexibility to determine what meets their own community needs. And I see that Green Climate Bank as a way to speed up some of these climate solutions.But back to where there could be bipartisan work that I would hope everyone again can continue pressing policymakers to move on. We'll have a farm bill up, and ranchers, producers, farmers, they are hungry for climate-smart ag policy.David RobertsIs that true? Because now, traditionally there's been some hostility from the agricultural sector toward climate stuff. This has not been traditionally, historically allies. Do you really think opinion within that community has swung around to the necessity of this stuff or is it still kind of a trench warfare over there in that sector?Rep. Kathy CastorWe have work to do. But I'll tell you, I met with a very conservative group here in Florida. The citrus growers, the dairy farmers, all of our nurseries, the specialty crops and they are ready to be part of the solution. There is so much that they learn through our ag extension offices and we have now made these climate-smart ag hubs, where farmers now can do more for soil health, for conservation. They should get some compensation if they are going to be part of the solution and sequester carbon and be smarter and more efficient. The whole entire food system, I would highlight, is an area where we can do so much better as well.Then the defense bills now, the past two defense bills have been the most climate forward. For example, we're going to pass this omnibus appropriations bill and well over half of the trillion dollars, I think upwards of 900 billion goes to the Department of Defense. So they can be an important customer, a research instigator, deployment across their military bases, but developing those clean technologies in everything that they do. So that will have to continue. And that's why I'm so happy that the smart people at the Biden administration are there for two years so that we can implement and get these technologies and policies on track.David RobertsWell, if we're talking about executive branch action, you kind of got to think about the Supreme Court. I wonder how worried you are about the Supreme Court. How much of this do you think they could screw up? How safe do you think this entire effort is from the Supreme Court? What's kind of your level of worry there?Rep. Kathy CastorWell, the good news was the last term they didn't completely got EPA's authority to regulate climate pollution. So that was an important takeaway. And EPA needs to continue on in all of their important enforcement activities and ways to cut climate pollution from the regulatory side. You may remember, since you've read our 2020 Climate Crisis Action Plan all the way to the end, that we highlighted other policies that are important to tackling the climate crisis involving strengthening democracy. The January 6 Committee, now, has issued their final report. We have got to strengthen the laws relating to big money in elections transparency. There have been scandals across America in various states where electric utilities now are playing in elections. There's no reason that any ratepayer money, or some fungible money, should be going into blocking the deployment of lower cost clean energy. So strengthening our democratic institutions we highlighted as important climate solutions as well and they remain so.David RobertsIt does not seem like the Supreme Court is on your side on that particular issue. This is a little bit of a depressing question, but it's all about implementation these next two years and the nature of the House seems pretty binary whether you have the majority or not. Is there anything you can do from the minority in the House to really make sure this is implemented well? What can you do from the minority in the House? Or is this just a time to retrench and dry your powder for the next fight? or what can you do from the minority?Rep. Kathy CastorYeah, David, the policies, the grants, and the opportunities that flow out of the bipartisan infrastructure law and the Inflation Reduction Act, CHIPS, and everything else are so vast that an average member of Congress could spend every waking minute on making sure that your local community understands and is maximizing what will flow out of that law. So before I went to Congress, I served as a county commissioner and I'm busy already talking to my local partners and nonprofits, my environmental justice folks, but just plain city county governments and others to make sure that they understand what is available. At the same time, we've got to keep an eye on the entrepreneurs and the scientific discoveries. And again, I'll highlight the vast new resources at the Department of Energy.In Congress, on the Energy and Commerce Committee, we know that the Republican majority is going to shine a spotlight on the Department of Energy. I anticipate Secretary Granholm will be a frequent visitor for our committee, and there's nothing wrong with oversight. But if you're going to throw a wrench into lower cost clean energy solutions, simply to benefit the legacy oil, gas, fossil fuel industry, that's just plain politics. And we need to stay focused on the people, and people over politics, and there will be plenty to do.David RobertsSo big picture-wise, if you step back and you look at, say, the coming ten years, what do you see as kind of the biggest — between us and decarbonization, most of which is supposed to happen in the next ten years — what do you sort of lose sleep over? What do you see as the biggest challenge? Is it education? Is it transmission? Is it going to be politics? What are the sort of big, looming challenges you see that you worry most about as we try to pull off something, which is huge and has never been pulled off before?Rep. Kathy CastorYeah. Again, I come to you with a Sunshine State perspective where we should be a leader in clean energy and where we lag behind. So I see enormous opportunities to lower electric bills and we're suffering through a property insurance crisis and flood insurance is not widely people just don't take it. Maybe they will now a little more these more intense hurricanes. But I see a political system that is not responding as it should for the people to have a plan to expedite the clean energy technologies, the plain weatherization, to use every tool at our disposal to help move to the clean energy economy through good paying jobs with an element of justice.Fortunately, we now have a plan like that on the national level. But I worry it will be too disjointed and politics will come into play and the people who need it most will be denied the opportunity to have the lower cost clean energy, or the appliances, or the readily available EVs over ... in ten years that they should have.David RobertsSpeaking of red state politics, I'm curious, looking back, how much help would you say you got in all of this from the minority members of the committee? How on board were they versus trying to throw wrenches in the works? What's your sort of take on where the Republicans on your committee are on all this stuff, especially after three years of work?Rep. Kathy CastorWell, they don't outright deny climate change any longer, so they bring arguments on cost that some things are unworkable. So I guess one thing it does is it has us sharpen our pencils and make sure that what we are proposing is workable. There are some bipartisan solutions out there on natural solutions and resiliency and adaptation. We've had good discussions on that and crafted some legislation on that, but still on the clean energy side, they're not totally there. But again, I am hopeful because now businesses, small and large, innovators, universities, red states and blue states, rural areas and not, will, over time, understand and have access to the jobs, the careers, the opportunities that I think will push them. The problem is we're running out of time.David RobertsYeah, I was going to ask about that. So, one aspect of all the legislation they passed this last term, which I feel like doesn't really get enough press, I'm not sure if the public at large understands it very well. It's not just focused on reducing emissions and climate stuff, it is a big, industrial policy package. There's a ton of money to bring manufacturing and factories and mines and processing facilities and battery manufacturing and battery recycling, tons and tons of money to onshore those industries.And I swear since the Inflation Reduction Act passed, I've probably seen like a half dozen, at least announcements of new plans for big manufacturing facilities. I just saw one plan for West Virginia yesterday, I forget what it is, if it's maybe battery manufacturing or recycling, one of those. So, one of the things that's going to happen — it's happening already — but it's going to continue happening in the next few years is a flood of jobs to red states. And I just wonder, is that going to change their position on this? Is that going to change their orientation on this stuff just at a grassroots level? Is incoming jobs going to shake people out of the partisanship on this and if so, when?I realize there's no way to answer that question, but it seems like this ought to be sort of like an acid eating away at that opposition, right? The more jobs you have, the less opposition. Do you see that dynamic taking root yet or how long do you think that would take for that to sort of put down roots?Rep. Kathy CastorYeah, there is nothing like your home grown, hometown industry and workers, your neighbors tell you these are good paying jobs. We see a future for our children to stay in this community, live here. There's nothing like that in moving a policymaker. And that's why we understood it was important to focus on energy communities. A rural, electric co-op here in Florida, they highlighted to me how important that was going to be to change over from old coal and gas into solar and other clean technologies. Oftentimes, those plants are the largest property taxpayer in those communities.They are the largest employers. So, yes, over time that has to happen. But as I stated, we're running out of time, and so we're all in this together. But community engagement, that's why we thought it was also important to focus on building capacity among those energy intensive communities and the communities that have a lot of the polluting plants. And you'll see as the Biden administration rolls out grants and initiatives, they're going to stay true. I trust to that push for environmental justice, and I know a lot of people poopoo the term, but it simply is based on fairness. And we've got to follow through with our promise to make sure we're lifting up everyone, that everyone benefits from this transition to clean energy. Otherwise it will take longer and it will be harder.David RobertsWell, I've kept you a while, but to wrap up, I thought it was quite notable that in the 2022 midterms, as contentious as they were, you did not see Republicans organizing around opposition to — I was going to say the Inflation Reduction Act, but really the Infrastructure Act, CHIPS — all these sorts of big, marquee legislative achievements, many of which crucially involved climate stuff. And the Inflation Reduction Act basically was a giant climate bill. They didn't run against those, which is a striking contrast, again, to back in 2010, when opposition to the Waxman-Markey bill, the quote unquote "carbon tax," was a headline feature of almost every Republican campaign.They didn't campaign against this climate bill. So what do we make of that? Why did that happen? What what is what can we learn from them?Rep. Kathy CastorYou're right. They didn't shoot the Inflation Reduction Act with a shotgun.David RobertsYes, exactly. No one shot it.Rep. Kathy CastorNo, because climate impacts are all too real. All across the country, no one's immune. Whether you're suffering major water shortages in the west, Colorado River drying up, or huge wildfires, extreme heat, hurricanes that intensify faster, everyone ... there's been an awakening to the impacts of climate. And they cost so much. The folks aligned with fossil fuels, they've gotten away for years with saying, "Oh, we can't do clean energy because it's so expensive." Well, for one, clean energy is cheaper energy. But the cost of climate, the years of inaction or smaller steps were really costing us.And I think people understand there are solutions out there. We just have to unleash the scientific know-how that we have here and convert a lot of those good ideas into actual solutions. We've got a lot of smart people — and a lot of dedicated people — who are ready to do this. And we're on the cusp of making it happen. I think having these huge gas price spikes, and people watch their neighbor with an EV doesn't even have to stop at the gas station and drives right by it. It kind of made people think twice. I know that F-150 electric truck as it rolls off, that's the number-one selling vehicle in America.And they to think that you'll be able to come from the Florida perspective again. We have a hurricane, and they knock out your electricity and you can plug in your air conditioner, your home into that truck and power it for a while. So people now, they're waking up to ... okay, climate is ... if we don't address it now, we're condemning our kids to a bleaker future. And right now, it's costing us a lot, and we've got to get a hold of our wallets, too.David RobertsSo you really think that climate denialism and the sort of anti-clean energy has lost its political potency on the right? Are you willing to lay down that marker?Rep. Kathy CastorI wouldn't say entirely, no. There are still members of Congress. They don't lead with it anymore.David RobertsRight.Rep. Kathy CastorThey don't lead with it, but it's there, unfortunately. But, I think we're poised to deliver again. But that's what it depends on, this implementation. And it's up to everyone. I hope everyone who listens to your podcast understands they also have a responsibility, and I trust they take that seriously, to be guided by the science and rooted injustice and powered by American workers to provide those solutions to our neighbors.David RobertsWell, I do think, facts on the ground, as they say, generally do more to change people's minds than arguments and reports and white papers and IPCC meetings. So we'll get to see that tested in these next few years.Thank you so much for coming on. I encourage everybody to read this report you guys put out. It's a really interesting sort of summary of what made it from your report into law and what remains to be done for Congress. Again, it's always policy nerds. Policy nerds will love this. It's very in-depth of what has and hasn't been done. And just thank you, again, for your work over these past three years.I feel like it's not often, especially in the current American system of government, that you really get a chance to be at the center of something and help change things in a concrete way. And I feel like your committee has done that in a way that a lot of expert committees and meetings don't. So, congratulations on that and thanks for all your work.Rep. Kathy CastorWell, thank you, David. And again, we had a fantastic team, some committed members. We had the most effective Speaker of the House in the history of America, and Nancy Pelosi. And the Climate Committee was her vision, and she's always focused on making sure we're keeping an eye on our kids and future generations. But thanks to everyone. I bet a lot of your listeners weighed in with the Climate Committee along the way and helped us craft these solutions. And thanks to you for your attention to our work.David RobertsThank you for listening to the Volts podcast. It is ad-free, powered entirely by listeners like you. If you value conversations like this, please consider becoming a paid Volts subscriber at volts.wtf. Yes, that's volts.wtf, so that I can continue doing this work. Thank you so much, and I'll see you next time. Get full access to Volts at www.volts.wtf/subscribe

Independent journalist Michael Thomas did a deep dive into the methods and misinformation used by right-wing groups to rally community opposition to renewable energy projects. In this episode, he discusses what he found and how climate advocates can fight back.(PDF transcript)(Active transcript)Text transcript:David RobertsIt's easy to find stories in the media these days about communities blocking solar, wind, and other clean energy projects. This has prompted an enormous amount of discourse about NIMBYs and the challenges of permitting projects. What's often left out of the discourse — and almost always left out of those stories — is how such community groups receive organizational help and money from billionaire-funded right-wingers. Across the country and the internet, there are hundreds of conservative think tanks, groups, and individuals working to stir up community opposition to renewable energy with misinformation and lies. With virtually no public scrutiny, they have secured state-level policies restricting renewable energy siting in dozens of states.Independent journalist Michael Thomas set about to learn more about these right-wing groups. He joined anti-renewable-energy Facebook groups, combed through the tax filings of various right-wing think tanks, and tried to trace funding sources. He published the results in his own newsletter, Distilled. I'm excited to talk to him about what he found: the groups involved, the tactics they use, the policies they've helped pass, and the best way to fight back.All right then, with no further ado, Michael Thomas. Welcome to Volts. Thank you so much for coming.Michael ThomasThanks for having me. I've been a longtime reader and I'm a fan of the Volts podcast. So really happy to be here.David RobertsSo for some reason you decided to jump in and immerse yourself in the world of anti-renewable-energy people and organizations and communications online. Before we jump into the specifics, what led you to this? Did you get sort of pulled in bit by bit or did you decide to do a project on this at some point?Michael ThomasYeah, it was honestly not that intentional. I was reading a lot of stories over the summer about NIMBY opposition to local solar and wind projects and was following a lot of the discourse and debate over the permitting reform bill. And one story caught my attention that was about a group of residents on the east coast that were trying to block an offshore wind farm and a substation that was going to be put on land to bring the power to land. And it appeared to be just a normal resident group, kind of the classic NIMBY arguments that they were worried about property values or didn't like the site of the wind farm.And then I read this subtle, just one line mention of a think tank that I had heard of, the Caesar Rodney Institute, and this is a part of a much larger group of think tanks that have been funded for years by fossil fuel companies and far-right billionaires. So I started looking into it and discovered that they were very involved in the effort and giving some of these resident groups money to fund lawsuits and support. And so I started to report on that story, and it kind of got me deep into the world of climate misinformation and clean energy misinformation, and I just really became curious about what was going on and if there was a bigger story here, and ended up working on a series of stories over the last month and a half. And I learned a lot in the process.David RobertsYeah, this is a theme I'll return to later, but it really in some sense should not come as a surprise to anyone that this network of anti-renewable energy, "citizen groups" across the country is being funded and coordinated by right-wing operators. Like, of course it is — you know, the Tea Party was — like, we've just learned that over and over again. But it just seems like the pro-renewable energy forces, the pro-climate forces, just kind of sleep on that and just kind of don't pay attention to it, just kind of let it run in the background.So it's a little insane that it's not a bigger point of discussion among green types. So I'm glad you did this and I'm glad we're talking about it. So one of the things you did, God bless you, is wade into Facebook and join a bunch of anti-wind and solar groups — Good Lord — so tell us what messages about renewable energy are they emphasizing in these groups? Like, what are the consistent themes?Michael ThomasYeah, so I clearly know how to have a good time by joining all of these groups and sifting through the posts. So as context, I was doing this reporting on local opposition and learning about some of these think tanks. And I learned in that research that a lot of these resident groups are organizing on Facebook groups and pages. And that makes sense if you look at the demographics of these groups, they tend to be a lot of boomers and a lot of people who are very active on Facebook. And so I joined a few of them at first.And then in the groups there are often reshares of posts and other groups. And so by joining three or four, I quickly started to see that there were way more of these groups than I had initially expected. And in total I ended up finding about 40 groups. I joined all of them and just started scrolling through and looking at the posts and taking screenshots and taking notes and trying to understand how do the people that are in these groups communicate about clean energy? What are the common narratives? Because there are usually between 500 and 2,000 people in these groups, so we're talking about tens of thousands of people in very small communities that are receiving this messaging.So it's I think, really important...David RobertsAnd of course, you know, just to point out the obvious, these are probably the hard core and they take those messages and spread them word of mouth to many, many thousands more, right?Michael ThomasTotally.David RobertsIt's a much larger audience than just the members.Michael ThomasYeah, it's also — I think — really important to note that these tend to be the most civically engaged people. So on TikTok, a video might go viral about how great solar panels are, but if the people watching that video don't show up to the county commission meeting, then it doesn't really matter necessarily. Or it does matter, but it's not as effective. So these are a lot of people who are retired or who are very engaged in their communities. And so what starts on Facebook quickly bleeds into town halls and county commission meetings. And often the discourse is really intense and really emotionally charged.But to answer your question of what sort of themes and messages I saw, there was a range of posts. Some of them were misleading claims about clean energy. Like, an example that I saw a lot of was that solar panels and wind turbines are made using rare earth materials and they're made in China, and China uses a lot of coal. And so the implication is that clean energy is not actually that clean and it's not good for the environment, which, of course, the status quo energy system we have today that relies on fossil fuels, is terrible for the environment, kills millions of people a year, and is wreaking havoc on our environment.And these are solutions that are orders of magnitude better, but certainly not perfect. So they're sort of driving a wedge in some of that. And another similar one is that wind turbines kill birds. Of course, famous argument against wind. So you'll see memes like if this was a bird that had been killed by oil spill, this image would be all over the front page news. And that one spread like wildfire. Like that thing had tens of thousands of shares.David RobertsOh, yes, you get the hypocrisy of the mainstream media in there too. You you're hitting all the buttons.Michael ThomasExactly. And then another that starts to get us into the — from misleading to just lies — is that the wind turbines or solar panels are going to destroy property values. So we're talking about 25%, 50% declines in your property value. And this is, of course, famously shared by Donald Trump in a, I think, RNC meeting a couple of years ago where he says wind turbines cause cancer and if you live near them — BANG — 50% drop in your property values. So...David RobertsLet's just pause to note that Donald Trump is just perfectly squarely in the demographic to be receiving these messages.Michael ThomasTotally. And interestingly, he's been against wind energy for years. I mean, his goes back to like, 2012.David RobertsIt's a golf course, right?Michael ThomasI think in Scotland there was a golf course that they were going to set up wind turbines near, and so he's been spreading this misinformation longer than most people. So that was a really common one — the property value argument. Of course, again, numerous studies have shown that there's either minimal or no impact on property values when clean energy projects go into a community. But there is one London School of Economics study, which is a big name, very reputable source, that found that it dropped by I think it's something like 8% or 10% that gets shared a lot in these communities and by some of these influential anti-clean-energy thought leaders.And important to look at that study and the actual details of it, because if you do, it found that there were only three homes that they looked at. So we're talking about a sample size of three. And again, if you look at much larger sample sizes, there is no evidence that it really hurts property values. And then the last two that I'll share, kind of archetypes of posts I saw, one was the "wind turbine on fire" post.David RobertsYes, I love... They love those "wind turbine on fire" pictures. I see those all the time, even on Twitter.Michael ThomasYeah, and I was really surprised to see these at first. I actually hadn't ever seen an image of a wind turbine on fire or a video. But when I'm scrolling through these groups, they're like every ten posts or something. And I started to think like, oh my God, this stuff is dangerous. Like, if a wind turbine caught fire and it falls down, you can see where it would scare you. So I looked into the data to see how common this was, and of course, I found that the Department of Energy has done a study on this.They found that I think in 2017, there were something like 50,000 wind turbines in the country, and only 40 of them had a safety incident like this. So it's an incredibly rare event that is made to seem very common and therefore really scary to imagine a project like that going up in your community. And then the last one that I'll share, this is kind of a famous anti-wind piece of misinformation, was posts about wind turbine syndrome. This is something that I had never heard of before, and I'm clearly in different communities. And so this is based on a 2006 study that found that there were a number of people living near wind farms that would develop headaches and nausea.And this study spread like crazy. And there have been something like 20 or 25 peer-reviewed studies on this since then, and none of them have been able to replicate the same findings. None of them have found any association between wind turbines and negative health effects.David RobertsI feel like I remember one out of England where they had like, wind turbine syndrome, and then they did like, a community comparison in another community. They went in early and paid residents, they basically paid residents, like, a small percentage of the profits of the wind farm, you know, to buy them in. And there was no wind turbine syndrome at all in the second community.Michael ThomasInteresting.David RobertsWeirdly. A little money can ward off of that particular syndrome, it seems.Michael ThomasSo one interesting thing that I found in some of this research on wind turbine syndrome is that there's one exception that I found where people do start to develop negative health effects, and that's if they've already read information about wind turbine syndrome or about the negative health effects. And so it's actually really sad because a lot of people are posting this stuff and they're reaching a lot of communities that may or may not end up with wind turbines. And there's a great story in BuzzFeed a year or two back that was written by Joseph Bernstein, and he interviewed a lot of people. And in the end, he kind of concludes the story, saying that as he started to talk to more people and he was sleeping in his hotel near the wind farm, he suddenly started to hear it, and he suddenly started to be driven crazy.It's unfortunate because I think a lot of people will probably have that placebo or start to be affected by those — in their community.David RobertsThat is so darkly hilarious. So let's talk a little bit about how these groups organize. I mean, it's not like these random groups of misinformed and irritable boomers know instinctively how to organize, how to communicate, how to get results, how to block things at the state level. So how's — Let's talk a little bit about the people who are helping them. And you did a piece specifically about this guy named John Droz Jr. Tell us a little bit about him. He's helping these groups organize. What is he kind of telling them? What sort of advice is he giving to these groups?Like, presumably he's on the lookout for these groups and in communication with all these groups. What's his message to them?Michael ThomasYeah, so John Droz is certainly one of the most interesting people I've ever reported on. I learned about him as I was wading into the misinformation in some of these communities. I started to see a lot of posts to this guy's website, and I went and looked at the site, and it just has tons of resources on how to block a wind project or a solar project in your community. And they're incredibly effective tools. All, of course, styled in bright red fonts and, like, Comic Sans font and PDFs, but just like, packed with dense, probably really great information if you're trying to kill a project.But stylistically, certainly interesting. So some backstory on John Droz. In 2011, he was a retired real estate investor, spent most of his career buying and flipping real estate in North Carolina. And that year, he learned about this bill that was going through the state legislature, debating what to do about sea level rise that was coming and how to adapt to that as a state. So Droz, who has no background in climate science or climate adaptation or anything related, creates 125 slide PowerPoint titled "Our Sea Level Policy: From Science or Lobbyists?". And he goes through and basically debunks NOAA.And all of these US agencies, science and all these peer-reviewed studies saying none of this is true and the sea level here isn't going to rise and climate change isn't happening and kind of puts in all of the classic climate denial in this thing. And he was incredibly effective at getting the ear of the Republican legislators. So he met with tons of them, gave this presentation to them and was even quoted in the Washington Post in an article. Somehow the Washington Post fact checking team didn't catch this. But there was a story that ran where he cited as a local physicist and as an opponent to this bill.David RobertsKind of what you call a lay physicist maybe.Michael ThomasExactly. So North Carolina eventually decides to vote against this bill. They don't take those climate adaptation measures. And this gets the attention of American Tradition Institute — ATI, which is a climate-denial think tank that became well known when they attacked some climate scientists like Michael Mann and spread a bunch of lies about him. And so ATI brings John Droz on as a senior fellow. And in 2012 they organized this now infamous anti-wind-energy meeting in DC with really a Who's Who of climate deniers and and a group of local residents around the country who are trying to block projects.And there was a leaked memo from this meeting that I think is worth quoting from. Do you mind if I share a few minutes from this to give you a sense of what it has? So it leads: "The minimum national campaign goal is to constructively influence national and state wind-energy policies." Then they go on: "The goal is to cause subversion in the message of industry so that it effectively becomes so bad no one wants to admit in public that they are for it." — and they're talking about wind energy — "much like wind has done to coal by turning green to black and clean to dirty." Ultimate goal: Change policy direction based on the message.David RobertsHow many dozens of sort of vaguely progressive campaigns have you seen that are out there just raising awareness, you know, with — the left loves to raise awareness — and this guy on the right is like screw awareness. We want to change policy! We are after policy changes!Michael ThomasTotally, and they were incredibly effective at this. So this is back in 2012 and Droz understood long before terms like Fake News or Alternative Facts became really popular. He knew that if you provided people with an alternative story or an alternative set of facts, some small percentage of the population is going to believe it. So rather than debate the little policy details and kind of get lost in the weeds and maybe make a large number of people mildly opposed to clean energy, they spread this misinformation that gets a very small number of people incredibly passionate and incredibly emotionally charged and believing lies about clean energy.Things like: Wind energy is bad for the environment. That's an example of "turning clean to dirty", which is what he wanted to do.David RobertsFamously, Karl Rove's strategy, right? He's like, you find your opponent's virtues, what they're selling as their virtues, and go straight at them, right?Michael ThomasTotally.David RobertsYou go straight at the merits and so you go after sustainability and you go after, you know, good for the economy and good for the environment.Michael ThomasAbsolutely. So he ended up teaching all of these activists that were at the meeting and then in the ten years since then, he's taught thousands of people some of these tactics. And as I was going through all of his materials on his site and looking through old documents, I kind of started to write down John Droz's Rules for anti-wind opposition. And one of them that really stood out to me was this belief of his that in order to win, you have to have aggressive demands and stick to them. So it's all about holding your line and saying, we don't want a single wind turbine in our community. It's not about taking concessions like...David RobertsWait, not preemptively conceding things, not going in saying: We're reasonable, we want to find a reasonable middle. Wow, interesting, interesting, interesting...Michael ThomasSo they basically just say, we don't want a single project or a single turbine to go up. And this is part of what creates such a toxic discourse in local communities because there's no attempt at compromise, which is, I think, a really important thing for local communities when they're debating these things. And instead they aim for either outright bans of wind energy through these local ordinances or setback requirements that require a wind turbine to be cited something like 2000ft from a home or like 2000ft away from one another. And when you play this out, wind companies just can't create a project in a community like that. So it's an effective ban — but different language.David RobertsI was aware of this happening, but it's kind of amazing. So the Biden administration has these huge goals for offshore wind and has made a bunch of big announcements and started various processes. And since they have made announcements, they have been sued in every state on the coast. So just so listeners are aware of the scope of this thing, like, there are these anti-wind groups seated in every state where there's wind. So one of the things you wrote about in that story is none of the local media stories about these groups — you know, so like, they propose an offshore wind farm and some sort of like "earnest residence for good things" group starts.And the local media inevitably treats these as spontaneous democratic uprisings of citizens. And it's not that hard — you don't have to dig that hard — to find out that they're all getting funding from the same sort of network. So, A: Do you have any diagnosis of what the hell is wrong with local media? Why won't they tell the story and then B: Tell us a little bit about the State Policy Network, the SPN, on the right and it's sort of network of funding.Michael ThomasSure. So the State Policy Network and the group of think tanks that are members of this are really the core of the fossil fuel funded opposition and a lot of the things that we talked about earlier. So there's a group of, I think it's something like 50 think tanks. They're all set up as 501c3 nonprofits and they're in states across the country. And if anyone's read Jane Mayer's amazing book on this topic — Dark Money — about the Koch brothers efforts to try to prevent climate policy from passing in the country, you'll know that a lot of fossil fuel billionaires were involved in setting up these nonprofits.So a lot of the think tanks in the State Policy Network were either co-founded with the Koch brothers or given initial seed funding by the Koch brothers, who run — I'm sure all of your listeners know — Koch Industries, one of the biggest fossil fuel companies in the country. And since then, the Koch brothers continue to fund a lot of these nonprofits. But so do dozens or hundreds of billionaires that are in other extractive and dirty industries around the country and don't want to see climate policy pass. So the State Policy Network is the organizer of all of this so that they can take learnings from one state and pass those through to the rest of the states.So most recently, a group of bills that I saw that passed through the State Policy Network was some of the preemption bans on local governments that wanted to ban natural gas in buildings. So it's no coincidence that all of those preemption bans had similar, or in some cases the exact same language. It's a combination of the State Policy Network and then ALEC, the American Legislative... — I'm going to butcher the acronym — but there's basically the State Policy Network doing the 501c3 kind of research and then ALEC writes the policy and gives it to legislators to pass. So that's some background on state policy.David RobertsThat's worth just emphasizing briefly. It's not just that these groups get sort of standardized scripts and directions for how to oppose things. There's a whole network of right wing groups that has these sort of model bills, model legislation, model for every level of government, so that these groups don't have to investigate policy or write their own policy, right? They just take the template and change a few keywords. So it makes things very easy. It's very easy for these groups. Every step is worked out for them. PS.: It's the American Legislative Exchange Council that is incredibly difficult to remember.Michael ThomasYes, thank you.David RobertsProbably on purpose, right? I mean, it's meant to be bland and forgettable.Michael ThomasYeah. Jane Mayer read this article where she did some reporting on the State Policy Network. And there was an internal meeting between these think tanks where the head of State Policy Network described their strategy and their model, like "The Ikea of Conservative Policy" where you just, like, grab all your parts and pieces and assemble them...David RobertsExactly!Michael Thomas...yourself and then pass the bill.David RobertsAll you need is the Allen wrench and everything else is there for you.Michael ThomasShe's also described that kind of ecosystem as — like an assembly line where groups fund colleges first and universities that do research on something like climate policy or climate science. So the Koch brothers are giving millions and millions of dollars to universities and then the think tanks take the ideas from those universities and they turn them into policy ideas. And then ALEC and legislators that have been given money by these billionaires, they craft the actual policy and the legal language and then they fund the politicians who end up voting for those and it becomes an assembly line of conservative and anti-climate policy.David RobertsIt's like a vertically integrated Ikea that owned its own supply chain and like its own customers, you know what I mean? It's like a full ecosystem. And so this seems notable, right? So why doesn't the media note it? I mean, it's a little insane. It seems like the first thing you'd do if you ran across one of these citizen groups, is be like, I wonder where this came from. Who's funding these people? But they don't even seem to ask.Michael ThomasYeah, and it's important because the State Policy Network think tanks are setting up campaigns and are giving legal support to these groups. So they're very much intertwined and it's very much an effort by the fossil fuel industry through these nonprofits to block this policy. Just to give an example, one of the groups I'm currently writing a story on, Caesar Rodney Institute, they sent out 35,000 mailers in 2018 to residents all along the coast that were going to see one of these wind projects. And they sent them all of the misinformation that I mentioned earlier that I saw in these Facebook groups and then also a call for financial support.And they ended up raising $50,000 from these residents. They got 700 residents to join the group that they set up that had a very local grassroot name to it. It's like, Save Our Coast. And so now this group can in some ways legitimately say that we have 700 residents from the community who don't want this project to exist when they've really manufactured that opposition using money from fossil fuel companies to do it. So, of course, Caesar Rodney Institute got an award from the State Policy Network for this. It was one of the best communications campaigns of 2020.David RobertsAnd it is too. I hate it. You hate to say anything positive about this, but this is all brilliant. I mean, it's all so well done. Well done evil.Michael ThomasIt's incredibly effective. And so to your question of why the local media in these communities aren't covering this, I think this is a part of the larger story of the collapse of local news in America. So there's a part of this that is the story of these hedge funds, or what are known as Vulture Funds, who go and buy up local papers and gut them, fire all the journalists. And suddenly a newsroom that used to have 20 people has two people, and they just graduated from college. So that's not going to produce the best reporting. And then you also have a media environment that is encouraging really quick stories, getting stuff out every single day and not doing deep reporting.So it's just hard to catch this when you get a press release. You turn that press release into an article and hit publish two hours later and that's the environment we're in.David RobertsWell, it seems like a concerted — I mean, I'll return to this later. I don't want to get into it now. — But it seems like a concerted effort to push this information so that local journalists had access to it could be done, say, by a clever billionaire on the left. But before we get to that, one of the twists of messaging lately is something you call Woke Washing. Let's just touch on that briefly. This is from something that the Texas Public Policy Foundation, which is one of these right wing think tanks in the State Policy Network. Another incredibly forgettable name, but it's one of the campaigns they're running. Tell us a little bit about what Woke Washing means.Michael ThomasYes. So Emily Atkin — Heated, another Substack publication — and I ran a story recently about the Texas Public Policy Foundation, or TPPF, and one of the things that we looked at was how they're using environmental laws to block offshore wind projects. And a couple of the laws they're using are NEPA and the Endangered Species Act. And it's worth noting that TPPF in the Trump years was basically attacking these same laws, saying that they're preventing the country from building the energy that it needs and they're destroying the economy.David RobertsThe right has been attacking those laws since the sixties and seventies when they were passed, right?Michael ThomasYeah. So TPPF took a pretty dramatic turn when Biden got in office and has suddenly become one of the biggest advocates for the Endangered Species Act and NEPA. And most recently, they funded a group of local fishermen on the East Coast who wanted to sue the Biden administration over their offshore wind leases. And in the lawsuit, they didn't make a lot of commercial claims. It wasn't necessarily about the fishing. It was really all about how these wind farms were going to further endanger the North Atlantic right whale, which is an endangered whale — of course an endangered species and needs to be protected.But there's a whole process that a lot of environmental groups like NRDC and Conservation Law Foundation have signed off on and signed an agreement with the developers of these projects. And there are a lot of measures taken to make sure that the construction of these projects don't further endanger those whales, but TPPF is suing the Biden administration using these laws and really just trying to slow these projects down. So the term Woke Washing came up when we interviewed a disinformation expert, and she used this term to describe when far right groups use the language of justice to basically fight for injustice and against environmental law.So you're using the language of the environmental movement to prevent its goals.David RobertsGod, it's effective too, because some of these concerns are not baseless. Like you say, if you're going to protect the right whale, you do need to take measures. So if any of these groups cared about constructively engaging — The concerns are plausible enough that I can see how they work quite well.Michael ThomasYeah.David RobertsIt's very devious.Michael ThomasIt's also another example of where these groups are pushing for the far extreme solution and not compromise. So in these lawsuits, the end of them says that the plaintiff's request or the plaintiff's claim is that they want all projects that are associated with this new streamlined offshore lease program that was started in the Obama years. They want all of those projects to be stopped entirely. So that's every single offshore wind project in America, and we're talking about tens of gigawatts of power. And so they're not asking for what the environmental groups asked for when they were trying to protect the right whale, which is just some mitigation efforts and some changes to how they were going to construct the farm. They're trying to kill every single project in America.David RobertsOrganizing these groups — these citizen groups on Facebook — is of course not the only way of reaching people on Facebook. There's also just Facebook ads. So in that respect, let's talk about PragerU, Prager University — it makes me laugh to say the word university associated with this, but nonetheless that's what it's called. Tell us about Prager and PragerU and the sort of revelation that one of their co-founders have and how they sort of implemented that in practice.Michael ThomasSo PragerU is a nonprofit media company that was started by Dennis Prager, who was a conservative radio host, still is, but has been doing this for about 30 years. And when I was in these local opposition groups on Facebook, I noticed a lot of their videos popping up and so I wanted to dig in and learn more about PragerU. I watched a lot of YouTube and have for many years, and so I was already a little bit aware of the channel because...David RobertsThey're everywhere.Michael ThomasYeah.David RobertsIt's everywhere.Michael ThomasAnyone who spends time on YouTube will say that.David RobertsThey come up on my feed. My son sees them fly by all the time. They're ubiquitous.Michael ThomasYeah, they target eleven and twelve year old. You see these stories, parents around of like, what is this group doing sending my son these ads of PragerU? So I looked at their YouTube channel and tried to find all the videos that were related to climate and energy, ended up finding about 20 of them. And the titles of these videos kind of give away the message like, it's so simple. One of them is: "Fossil fuels: Greener than you think". The whole message of this video, which is delivered by Alex Epstein, who wrote a book called The Moral Case for Fossil Fuels, is that fossil fuels are clean, they're good for the environment, and that everything you've heard from environmentalists is wrong.And other videos include claims that clean energy is really bad for the environment. These are delivered by people like Michael Shellenberger and Bjørn Lomborg, and they're again making misleading claims based on real problems like wind turbines kill endangered birds, or clean energy projects are built using materials that create environmental harm.David RobertsOne of the interesting things you mentioned in the story is that they were sort of big into the straight up climate-denial business, but then Facebook and Google passed policies saying you can't do the straight up climate-denial anymore. And that sort of created a pivot. Talk about that a little bit.Michael ThomasYeah, so after many years of creating videos with claims like, there's no evidence that CO2 causes climate change, which is of course not true, Facebook and Google changed their policies not to limit their videos. So their videos are still on these platforms, but they limited the ability for them to use ads to promote them. So I looked at Facebook's ad transparency tool and I looked through PragerU Form 990 IRS documents, and I found that they were spending tens of millions of dollars per year promoting videos on Facebook and Google.David RobertsWild.Michael ThomasThat's in part how they were able to reach 100 million people with these videos about climate change, fossil fuels being good, clean energy being bad. And I also looked into where they got the money because PragerU is a nonprofit and trying to figure out, like, is there any connection here between fossil fuel companies? And sure enough, what I found was that in 2013, PragerU received a $6.25 million grant commitment from the Wilks brothers in Texas who started FracTech, a fracking company, and they gave them a huge amount of funding to make their videos. It's worth, just for reference, pointing out that PragerU at the time was bringing in about $400,000 a year.So this is a huge amount of money for them at the time. And as a part of this, two members of the Wilks family joined the board. And then shortly afterwards, they started making these videos about climate change and clean energy and fossil fuels. And the members of the family were still on the board while they were making them.David RobertsYeah, but then to get back to the policy, the anti-denialism policy, they sort of have pivoted. And this seems like — it's hard not to see the whole right as a school of fish sometimes — but it seems like they've all kind of pivoted away from the hard denialism toward the kind of Shellenberger-style, Lomborg-style "green energy isn't green" message.Michael ThomasYeah. And PragerU has definitely started to do this and they are basically able to get around the new policies by Google and Facebook that have limited their ability to spread those pure climate denial videos and are now promoting the videos that say that clean energy isn't good for the environment, which, of course, is going to be almost impossible for these tech companies to regulate. Because what's the difference between a legitimate NPR story about a problem that we really need to figure out and need to solve around the environmental impact of some of this mining for rare-earth materials and the impact it's having on local communities? What's the difference between that and PragerU's video pointing it out but turning a little bit of spin and maybe putting some misleading claims in it?David RobertsYeah, it's one thing to police outright falsehoods, but you really cannot police good faith, right? There is no algorithm for separating good faith from bad faith claims in these videos. So there's no real way to systematically — it seems to me, I mean, maybe you've thought of something else — but it seems to me like there's just no systematic way to stop this stuff or block it or even flag it. There's no real mechanism to do anything about it directly. Am I wrong about that?Michael ThomasNo, I think this is just a really hard problem to solve. I think that there's definitely ways to prevent some of it or there's better solutions out there between some of these tech companies. Like the last couple of weeks has shown us with Twitter that there's a lot of different approaches that tech companies can take before being legally required to do something. Facebook and Google have said that they're going to flag climate misinformation. They aren't doing a great job — have a lot of room for improvement. They've said that they won't let people spend to promote climate denial in their videos.But then now you have Twitter and Elon Musk just unleashing a free-for-all of what he says is free speech but in a lot of cases is hateful rhetoric and in the case of climate change, just misinformation and lies and unsurprisingly, people like Jordan Peterson have come back and are posting a lot of stuff about climate change with claims like CO2 is good for the environment and climate change isn't happening. And so I think there's definitely a lot that these tech companies can do and Twitter is evidence that what they do has a real impact and can limit some of the spread of these ideas. But another thing that I ran across in some of my research — that some tech companies have started to experiment with — is this idea of pre-bunking where you basically expose people to facts about climate change before they click a link that has known misinformation on it.David RobertsYeah.Michael ThomasAnd this comes out of some research out of Yale, I believe, and the impact of that in some studies seems to be good, but definitely not perfect and doesn't change people's opinions in a big way. So it's definitely not a panacea.David RobertsWe here on the left come to this dilemma again and again, which is you don't just want to be thinking about how to suppress other people's speech. That's an uncomfortable kind of place for us to be. That's not you know, you're constantly sort of dancing up against ethical quandaries and people who make those videos, what are you going to argue with them about whether it's good faith or bad faith. They can say it's good faith and — you know what I mean — so there's no — it seems like the root of trying to suppress their speech is fraught.I mean, A: ethically fraught, and B: on a practical level just doesn't seem to be very possible. But then, of course, you read all these studies about misinformation which tell you that once this kind of information is in someone's head, it is almost impossible to root it out. No matter how many good facts you throw in the wake of bad facts, it's almost impossible to change people's minds. And you read all these studies that, say, being exposed to these talking points again and again, even in the context of seeing them debunked, lodges them in your freaking head.So you end up — even if you see a thing debunked again and again — the talking point sticks in your head and you end up sort of like believing it. So it's this horns of a dilemma that the left is on again and again, which is misinformation seems to work, but there doesn't seem to be any reliable way to stop or suppress it.Michael ThomasYeah, there's a famous study on this that I'm sure you're referring to, which is around some ads that Listerine ran in the 70s where they internally knew that Listerine wouldn't do this, but they ran these ads that said that by using Listerine mouthwash, you could prevent the common cold. Or if you got a cold, it was a really good remedy. And they sold tons of listerine this way. They ran all these TV ads with moms telling their kids, come on over, need your listerine. So the FTC caught them and sued them and ended up making them, as a part of the lawsuit, run ads that basically said, sorry, we were wrong and correct the claim. This is definitely a different time of...David RobertsImagine!Michael Thomas...communications and regulation, but even after running this multimillion dollar campaign to sort of correct the record, people, when they were surveyed, still believed that Listerine would prevent or was a good remedy for the common cold. And it was something like 80% of people still believed that Listerine had these effects. So this is a famous study in misinformation science and it just speaks to how difficult it is to change people's minds once that information has hit them.David RobertsYeah, so I guess here's where I kind of come around on this. If we think that trying to get tech platforms to uniformly impose standards of accuracy on all the trillions of bytes of information that pass through them seems kind of impossible, and changing people's minds after they've already seen this stuff is very difficult. It just kind of seems like the only solution you're left with is do the opposite, right? Get good information into people's hands. So here's my question to you, and there's no good answer to this question, so I don't expect you to have one.But on the right, okay, you've got these billionaires. They funnel tons and tons of money and establish this broad network of think tanks, which then go on to share lessons about how to oppose these things they don't like, which they funnel down to local groups, which are more or less kind of disguised as spontaneous citizen groups. And you got other people on the right, got Prager alone spending like $20 million in the last four or five years on Facebook ads so that they become — they get their message out ubiquitously on Facebook. So, as we've discussed, there's this entire coherent ecosystem of right wing — and this is of course — all of this is just clean energy entering this ecosystem.But this ecosystem goes way back. They've been building this forever. They've been using it against all the things they don't like. This is just sort of like clean energy getting absorbed into that Borg. So my question is, what is the analog on the left among people who support renewable energy? Is anybody — are there any billionaires? Where are the billionaires? Is there a network of think tanks that I'm not aware of? Are there astroturf groups, pro renewable energy astroturf groups? Is there someone spending $20 million on pro-renewable energy Facebook ads? Is any of this mirrored on the left?Michael ThomasSo I think one of the good things that the climate movement has going for it is that the facts are on the movement side and the science.David RobertsIt's such a tiny weapon, Michael. That's the least effective weapon in the whole war.Michael ThomasI mentioned it, though, because I think that there's a lot of free media, if you will, that comes by reporters and documentaries and all this stuff that has really brought climate change into the public's awareness in the last ten years. I think that is largely a result of media going back, of course, to The Inconvenient Truth and some of the advocacy of Al Gore. But now Netflix has all of these documentaries. Whenever I talk to my friends who are not in this world, they'll tell me that they learned about clean energy and climate change from a Netflix documentary.But to me — to more directly answer your question, like more overt attempts to change minds or to influence advocacy. There's a YouTube channel that I've been watching for the last year that's become pretty popular called Climate Town and it's a John Oliver, Steven Colbert style of humor all focused on climate change and clean energy and the fossil fuel industry's attempts to block clean energy. Rollie Williams started this channel and had a career in stand up comedy and decided to use his skills to fight the good fight. And his videos have hundreds of thousands, sometimes millions of views spreading messages like my first time when he made a video about the negative health impacts of gas stoves and talking about alternatives like induction cooktops.So that's one channel. He's recently partnered with nonprofit Climate Changemakers that does climate advocacy and trains people on how to be effective advocates in their local community and also in federal politics.David RobertsI was going to say like the missing piece — what would happen on the right is, if a promising YouTuber emerged and got hundreds of thousands of clicks for spreading their message, they would be descended on by a swarm of people, giving them money and setting them up so that they could do it on a bigger level forever and never have to worry about money again. They would be immediately absorbed into the right wing money train.Michael ThomasRight? Yeah.David RobertsWhere's the analog for that? That's what's missing. It's not, you don't have tons of creative, interesting young people out doing cool things. Where is the infrastructure of money and organization that finds them, elevates them, supports them, connects them with one another?Michael ThomasYeah.David RobertsWhere is that, Michael? I don't know why I'm demanding this with you.Michael ThomasWell, I will also just make a shameless plug and say that I am launching a YouTube channel in the coming weeks and am planning to produce Vox style explainers to kind of speak to your alma mater. I think their YouTube channel is amazing and reaches millions of people.David RobertsIt's fantastic.Michael ThomasAnd what I'm planning to do is turn some of these investigations that I've done on PragerU for example — is going to be the first video — and try to get them in front of large audiences and put in a lot of production value to it. So I'm hoping to be able to sort of counter some of those messages.David RobertsWell, let's talk in a year and see if any left wing billionaires have gotten in touch with you. After you do that for a while, I'd be very curious.Michael ThomasYeah, another effort that I think is really valuable and again to talk about your alma mater Vox. I was recently reading some stories in their column Future Perfect about the future of plant-based diets and really talking about the environmental and other ethical harms that are caused by the meat and dairy industry. And I noticed as I was reading that that project has been supported by donors and so I know that Vox doesn't take any money and then let those donors...David RobertsIncluding some uncomfortable donors...Michael ThomasOh, interesting.David RobertsFuture Perfect got a lot of money from Sam Bankman-Fried. That's a whole different subject.Michael ThomasOh no, really?David RobertsJust goes to make my point, like even when we try to do the "left wing billionaire funds — good messages things", it somehow still turns into a dumpster fire. We need better billionaires, I think.Michael ThomasYeah, or no billionaires might be the best solution.David RobertsBillionaires working toward a world where there are no billionaires.Michael ThomasYeah, but yeah, I think — to just get to your point, I don't think that environmental groups have figured this out. And I think that the right is so much more effective at getting people emotionally charged. And I think evidence of this is if you look at some of the local communities where these fights are happening over clean energy, even though there's so much information out there on the benefits of clean energy and the problem of climate change. In the example I saw most recently of a community in Michigan, last week, this community polled at like 55% of people support clean energy in their community.But someone sent me an image of the township meeting where they were voting on it, and there was hundreds of people packed in an auditorium and this Person told me...David RobertsWere they old and white, Michael?Michael ThomasThey were all old and white, and only three of those hundreds of people were there to support the clean energy project. So I think that speaks to how much emotion plays in this. Like if you hear about how clean energy has some benefits and it might provide some tax base for your school — it's like you might feel like you support it, but you're not going to feel as emotionally charged as if you see a picture of a wind turbine on fire or think that it's going to cause your kids cancer. And unfortunately, that's what the right is doing.David RobertsI've said this so many times on this podcast, might as well say it again, intensity wins in politics. This is a point you're sort of making again and again. Like a large group of mildly supportive people is useless in the face of a small group of intensely motivated people because intensely motivated people make noise and politicians hear noise. Politicians cannot distinguish large groups from small groups. All they hear is noise. And if you make a lot of noise, you win. And this is something I talked with David Fenton, the left PR guy on a pod a while back, and this is something he told me again and again.Like in the green groups, there are millions, hundreds of millions of dollars floating around through these groups and they produce endless sort of studies and white papers and reports and do sort of behind the scenes policy work, but they just don't spend on propaganda — to use the charged term for it. They don't go out and spend $20 million buying Facebook ads. And the point he made is like, it's not that expensive to buy a bunch of ads on Facebook to buy an ad in the New York Times or Wall Street Journal to buy ads to carpet the sort of metro stations in DC where policymakers are walking around. It doesn't cost that much and they have a bunch of money.They just are not habituated to act that way. And so I hope that, among other things, your work here sort of showing how this ecosystem works and showing how well it works, will just, like, knock someone's head together who's funding these left groups and cause them to get in the business of communicating and trying to change the public's mind instead of just putting out facts like you say, like good reports, like spreadsheets on the tax impacts and just hoping people take those facts and translate them themselves into emotion. You've got to give people the emotion. You've got to do some communicating and propagandizing and we're doing none and they're doing an amazing amount coordinated across the entire country.Michael ThomasCan I ask a question of you and see what are your thoughts on an effective version of this on the left that I've seen that's very controversial?David RobertsOh, sure.Michael ThomasSo I haven't made up my mind on this debate. But something that has been hotly debated in the climate community over the last year is a lot of the rhetoric around the world is ending; climate change is going to wreak havoc on the planet; your kids lives are going to be terrible because of climate change. These like kind of over the top types of rhetoric. I listened to Adam McKay on your podcast — he came on a couple of times — and the second time when he was talking about Build Back Better, I was just struck by how he was kind of taking this extreme stance of climate change and at the time I was thinking Build Back — or the Inflation Reduction Act rather — was a great bill.But after this conversation I'm wondering if that rhetoric is needed and if the sort of emotionally charged language is maybe more effective than some of the debates around permitting reform around the policy and all that. But I guess just to ask the question, do you think that some of that rhetoric and the exaggeration maybe of how bad climate change will be, is effective?David RobertsI, like you, am ambivalent about it. I think my take is it's a little bit like one hand clapping. I think fear does motivate people. I think the idea that fear doesn't motivate people is just ludicrous. Like fear motivates people to do all sorts of things. But you need — I mean this is — the problem is on both the right and the left, it's just much easier to oppose things and it's just much easier to gin up emotion in opposition to things. This is one of the reasons that the climate activist movement sort of seems drawn inexorably to fighting pipelines and fighting things and fighting wells and all these things because you can get people in the streets for that.That's why the Keystone Pipeline, despite its sort of irrelevance in the grand carbon picture, sparked a whole giant march and a whole giant movement because people are fired up by opposing things. And the riddle to me, which I do not know the answer to, is how, if you're a PragerU or if you're a left wing billionaire, how to spark passion and real fire in favor of things. In favor of building things, right? Because we got to pivot now to building things. You know this we've been talking about this online. The whole movement needs to pivot to building a shitload of stuff like we got to build faster and more than we've ever built in our lives.And so how do you create passionate fired up support such that people will go to these meetings and yell and scream in support of building things? And I just hate to end this podcast on a note of bafflement but I really don't know. Do you have any ideas?Michael ThomasLike you, I am not overly optimistic on some of this but I think there's probably enough cynicism or pessimism out there. So maybe just to end on some inspiring note, I think the most recent abundance movement or supply side progressivism that some of the folks like Derek Thompson at the Atlantic and Ezra Klein at New York Times now are talking about is really important. I think that the left has probably become too skeptical of technology and in some cases for really great reasons. But I think that we need to start talking about a really beautiful and amazing future that we can build.And we need to continue to focus on how much harm there will be from climate change and how bad it could be. Because I do think fear motivates. But we also need to give people that picture of the future. That's inspiring. And I think some nonprofits that are starting to do this in terms of communications and policy or groups like Rewiring America and other groups that are talking about how the clean energy transition represents one of the most amazing opportunities to really build this beautiful, clean future that could raise incomes for people and make all of our lives a lot better.And I don't think that we talk about the benefits of that or paint that picture for people. Because if we built this sort of clean energy utopia that I think is in a lot of our optimistic vision, we would be talking about ideally not sitting in traffic for nearly as many hours as we do if we built great public transit. Like if you've ever been to countries like Japan or the Netherlands, you know that there's this other model that we can have and it's incredible. Like sitting on a train reading a book instead of sitting in traffic sucking up nitrogen dioxide emissions is pretty incredible.And to be able to save millions of lives by reducing fossil fuel pollution and to hopefully use the clean energy transition as a way to shift power and give it to the people who don't have power and who have been marginalized. I think that represents this incredible utopia that we probably don't talk about it enough and I think that that can be motivating and can get some people to act. So I won't put my own but in there — that sort of naive optimism.David RobertsI'm struggling to contain my own but there. So we'll leave it there in a happy place. If there are any liberal billionaires out there listening, that's a good place to channel your money. If not there somewhere else. Please do something. Please witness this network of moneyed groups and intellectual launderers and quasi local groups that have mobilized against you and do something.Michael ThomasAbsolutely. And maybe just to make one more call to action that I think everyone can do — to share a really quick story. Over the holidays, I decided I was finally going to talk about climate change more with my family and talk about some political topics.David RobertsI hope you read all the articles "How to Talk to Your Family about Climate Change". There's about 5000 of those out there.Michael ThomasI did. And I was honestly a little skeptical of some of this, but had been hearing this from people like Dr. Katherine Hayhoe and the importance of talking about climate change. And so I brought this up and also the importance of plant based diets and how bad the conditions for that turkey that we ate were and how it was in a terrible environment, which was a little bit uncomfortable as the turkey was sitting there — to maybe just paint a picture of my Thanksgiving. But my brother pulled me aside the next day and he's much more conservative and hunts a lot and does not talk to people about climate change often so very different politics than me.But he was really pushing back and asking me some questions and I was answering and not really holding back and talking about climate change. And he called me a couple of days later and he said, hey, so I was looking into getting a new car and I was planning on just getting this truck. But after our conversation I got really excited about electric vehicles and so I'm getting an EV and he sends me a text a couple of days later with a picture of this new car. And then I saw him another couple of days later and he says, after our conversation, I was just thinking a lot about the importance of eating less meat.And so I decided I'm going to start eating less meat and I'm going to start talking to my friends about it because they don't really hear about this stuff as much. And I think it's important. And of course, I'm like sobbing happy tears at this point, but it was this really beautiful moment and I think that's something that we can all do, even if we don't have a billion dollars. We can just talk about the stuff and talk about the benefits of climate action and clean energy with our friends and our family.David RobertsYeah. Each one teach one. Thank you, Michael, for diving into this squalid area and wading through bad YouTube videos to bring us all this information. And thanks for coming on.Michael ThomasThanks so much for having me. It was a really fun conversation.David RobertsThank you for listening to the Volts podcast. It is ad free, powered entirely by listeners like you. If you value conversations like this, please consider becoming a paid Volts subscriber at volts.wtf. Yes, that's volts.wtf, so that I can continue doing this work. Thank you so much and I'll see you next time. Get full access to Volts at www.volts.wtf/subscribe

In this episode, scientist Sam Calisch, whose company just introduced an induction stove with a built-in lithium-ion battery, and Wyatt Merrill of DOE, who helped secure funding for the project, talk about the exciting opportunities that stoves with embedded batteries might offer for chefs, consumers, grid operators, and more.(PDF transcript)(a)Text transcript:David RobertsIn the last few months, two separate fledgling companies — Impulse and Channing Street Copper — have announced the upcoming release of a new product: an induction stove with a lithium-ion battery built in. This might not seem like a big deal, but it is actually a peek into a whole new world of possibilities.Embedding batteries into appliances opens up all kinds of intriguing opportunities. A stove with a battery can deliver more power at the point of cooking. It can continue working when the power grid goes out. And it can serve as distributed storage to assist in grid stability.To explore the new world of battery-enabled appliances, I contacted two experts. The first, Sam Calisch, helped start Rewiring America, a nonprofit focused on national electrification. He also worked at Otherlab with previous Volts guest Saul Griffith, from which he helped launch Channing Street Copper Company, where he is chief scientist. Channing’s first product is a stove with a battery (for now, there’s a wait list, and they’re only selling in the Bay Area).My second guest is Wyatt Merrill, who works at the Department of Energy's Building Technologies Office, where he manages programs related to building electrification. He was instrumental in helping Otherlab secure more than $2 million in funding from DOE to help launch the Channing stove project. I am excited to talk to Sam and Wyatt about the merits of embedding batteries in stoves, the things battery-enabled stoves allow consumers to do, and the future grid benefits battery-enabled appliances could yield. With no further ado, Sam Calisch and Wyatt Merrilll. Welcome to Volts. Thank you guys so much for coming.Sam CalischGreat to be here.Wyatt MerrillThanks for having us. A long time. First time.David RobertsAwesome. Sam, I want to start with you putting aside the stove for a moment. Take us back to your work. You've been doing work with Otherlab. You've been doing work with Rewiring America. You're big into the whole Electrification of America thing. You're very immersed in that whole business. Tell us how all that work led to this idea and this proposal.Sam CalischGreat question. So, as you say, I've been spending the last few years really going deep on electrification, both from a technology perspective, which is the majority of my background, but also from a policy perspective, and worked really hard on a lot of the stuff that went into the Inflation reduction act. And so about two years ago, my friend Saul Griffith and I, we were working on this book called "Electrify Together" with our friend Laura Fraser, and we're doing a bunch of data analysis for it, looking at trends in cost of the technologies related to electrification. And the thesis of that book is that we kind of have all the technology we need today and we just need to deploy it.And David, you've done a really good job getting this idea out there. I think you said electrification is the main course. Right. Which I really enjoy. And so it's mostly true that we have what we need today. We just need to deploy it. But there's certainly technology developments that we can do that will make it faster, better, cheaper.David RobertsRight.Sam CalischAnd one of the trends that we were really disturbed about was all these costs were coming down. Like, if you read Bloomberg New Energy Finance, you see battery prices approaching $100 a kilowatt hour, all of this. But if you actually looked at what it cost to install those, to put them on your house or something, those prices weren't coming down. And it was mirroring a very familiar story from residential solar, where now the hardware cost of residential solar is really cheap. It's something like $26 a watt for the actual hardware, but it's closer to $3 a watt to put it on your house.And we were seeing the same thing happen with batteries and to do what we needed to do. Those trends couldn't continue. And so we started thinking about ways to get around that. And this idea emerged what we now call energy storage equipped appliances or ESE, or if you're feeling cheeky, maybe easy appliances where you can put a battery into an appliance in a factory instead of putting a battery on your house. And by doing that, you can do it really cheaply and really safely when you put it on your house in a sort of a bespoke way.You need to have a site plan. You need to get a permit. You need to have someone come out and do custom electrical work. You have to get it inspected. All these things just add tons and tons of cost. So we said, well, what if instead of doing that, we allow batteries to be installed in appliances in a factory at the cheapest possible cost? And then they kind of come into your house, kind of like a trojan horse inside of the appliance, and all of a sudden you have this battery backup, this ability to use more renewables to power your life, this ability to make it easier to electrify.And you didn't have to do all that custom, expensive work.David RobertsRight. You submitted a proposal to the DOE, right?Sam CalischThat's right. So we kind of wrote this idea up, and fortunately, our proposal found its way to Wyatt and some other folks who thought there was some potential inside of it and recommended it for award.David RobertsThat's a good hand off to Wyatt. So, Wyatt, tell us what you're doing at DOE, kind of what your team is doing and how you found this and why it grabbed you.Wyatt MerrillSure. I'll start with, kind of broadly, my role and the role of the team that I'm part of. I'm in the Building Technologies Office. I'm part of the Emerging Technologies Program in the office. And that office is one of a number of tech offices that comprises energy efficiency and renewable energy, or eer under DOE. So it's org charts on charts. So just to give you an idea of kind of where the project lives in DOE, so broadly, what I work on is R&D across a lot of different technologies. This is one project out of dozens that I manage.David RobertsThese are all related to building technology, though?Wyatt MerrillYes, all related to building technologies. And in particular, our Emerging Technologies Program is focused on research and development and sort of pre-competitive, next generation type technologies. So we're always doing like road mapping and analysis for what's coming next to save energy or to make electrification more viable in this particular proposal came as part of our Benefit FOA in 2020. Was the Benefit 2020? I think it was officially on the street in 2021, and that was a pretty broad funding call for a lot of different technology areas. We funded everything from heat pumps to lighting projects and windows and envelope.And there was one topic that I was in charge of for that FOA.David RobertsTell everybody what a FOA is.Wyatt MerrillSorry. A Funding Opportunity Announcement. So there was one topic that was part of that funding opportunity that was a little bit more on the open ended side. But I really wanted to think hard about certain problems that consumers face when they want to electrify. And one of those things was panel capacity and being able to make the upgrades that you might want to make without having to go through the expensive and often time consuming process of upgrading your panel at a minimum, and sometimes even having to run new service and trench new lines out to homes.And that can be a major constraint for certain people. And so I was really looking for creative ways to kind of sidestep this problem. Putting aside questions around national electric code and other kind of bureaucratic constraints, I was really interested in what are some of the technology solutions out there that might make it easier for people to electrify? And when this proposal came across my desk, it was really exciting to me. Not just because, yes, you can get batteries into the home for the purpose of, as Sam said, load shifting and aligning your demand with renewable supply.That's certainly an application. But the big thing that actually I don't think Sam has mentioned yet is you can plug this into 120 volts outlet, which is for many people, a big savings on not having to run, have an electrician come in and run new circuits into the kitchen, and potentially can avoid those panel upgrades.David RobertsHad you heard of or thought of sort of embedded batteries or what was it? ESE easy appliances? Had you thought of that before you saw the proposal? Because this is one of those things which, when I first saw it, I was like, oh, well, duh. But I didn't think of it until I saw it had you heard of it before you saw the proposal?Wyatt MerrillSo I hadn't heard of it specifically in terms of we should put a battery in an induction stove. But there have been some ongoing discussions and we continue to have ongoing discussions around sort of what does the future of home energy storage look like. And a lot of the focus has been on thermal energy storage. And to the extent that we've talked about batteries, it's usually been those larger stationary batteries. But there's been more and more discussion around, well, what if we thought a little differently about this? What if there was a battery in an appliance or in an outlet even?Or how do we take advantage of devices that already have batteries, even, like battery backup systems in, like, emergency lighting? In principle, you could load shift with those if you wanted to. And so obviously there's a lot that goes into that beyond just the technology, the innovation protocols and interoperability standards and code. But in principle, there's, I think, a lot of different ways that you could imagine energy storage taking root in buildings. And so I don't want to say that we thought that this was definitely going to take off. It's been super successful just in the couple of years that we've had the project going, in my estimation.But I think it's one of a number of ways that we're thinking kind of more creatively about batteries. Of course, the other thing is, if you have one in your garage, how do we take advantage of that? With a bi-directional charger.Sam CalischRight?Wyatt MerrillSo there's all these different kind of scales and opportunities, I think, for battery storage that we need to kind of think more creatively about, in my opinion.David RobertsYeah. And one other thing about the DOE program. Is public education a piece of what you do at all, or you just feel like purely immersed in the tech? Because I just wonder, because currently I think it's like 5% of Americans have induction stoves or something like that, 10%. So they're unfamiliar to a lot of people. Is that part of your job or is that somebody else's problem?Wyatt MerrillIt's not a major part of what I work on. I'm mostly focused on the R&D, but it's absolutely part of the broader effort that we have at the Buildings Office and across EERE, and we have partnerships with businesses through Better Buildings and with states and local governments to try to get some of that messaging out. So there are programs that are more focused. I mentioned I was in Emerging Technologies. We have other programs that are focused more on deployment and workforce development and education, for sure.David RobertsLet's talk about the stove. Let's get into the stove.Sam CalischAwesome.David RobertsFirst of all, I know what an induction stove looks like, and I think probably most people do. It just looks like a stove. Where is the battery in the stove?Sam CalischWell, it's funny you say, you know what induction stoves look like? A lot of coverage of induction stove often uses incorrect pictures. It uses pictures of radiant stoves because they actually glow and are sort of more interesting to look at. But induction stoves are just invisible magic stoves.David RobertsI think they're beautiful, like, all the sleek, smooth surfaces. Like I'd love induction.Sam CalischAbsolutely. And then you take them apart, and they're even more beautiful inside.Wyatt MerrillAnd you paint them yellow. Have you seen the stove at Otherlab?David RobertsOh yeah, yes.Sam CalischSo we we've got our demo unit that we take to farmers markets. We cook people grilled cheese and talk to them about induction. This is our version of the public education campaign. It's painted bright yellow and blue, and you can wheel it around the park, and people kind of look at you funny, and that's the goal.David RobertsBut, like, where is the battery in the stove? Is it near the surface? Is it in the back somewhere? I want to get a physical sense of what's going on.Sam CalischOur battery goes down at the bottom. It's kind of where there's a lower drawer underneath your oven.David RobertsRight.Sam CalischThat's the space that we use for a battery.David RobertsAnd how big is it? Can I see the battery if I own the stove? Or is it embedded somewhere where sort of out of the way?Sam CalischYou could definitely see it. I don't think I'll recommend that people go and mess with their batteries or their copper stove, but we're not hiding anything. It's right there down at the bottom.David RobertsBigger than a shoebox. How big is the better physical?Sam CalischYeah, most of the plan form, like, most of the footprint of the stove and maybe like four or five inches thick slab.David RobertsGot it. So pretty big, and I would imagine fairly heavy too.Sam CalischYeah. So that's one reason to put it down low and also to make it kind of a modular component so you can take it off if you need to move the stove around, et cetera. And it's really important to know. These are sealed packs. They've got a robust metal casing around them. So this is about water ingress. This is about making sure they're temperature controlled. But critically, these are lithium iron phosphate packs, which are different than the lithium-ion chemistries that are in a lot of laptops and cell phones. When we think of lithium battery, and you have the vision of fire that's lithium-ion, lithium iron phosphate is an inherently safe chemistry.It doesn't have thermal runaway. It's also an inherently long lived chemistry. You get much more cycles out of it. So the kind of degrating that you experience with your phone is not a feature of lithium iron phosphate.David RobertsWe just had a pod on this on Volts a mere few days ago. So all our loyal listeners are completely up to date on this on LFP batteries. So they're longer lasting, they have a longer charge cycle. They can charge more times. They don't have thermal runaway. They don't catch on fire. Their only really disadvantage, if you call it that, is that they don't have the energy density of familiar lithium-ion chemistries, but in most applications, they have enough energy density. Two separate questions. One is, how powerful is it vis-à-vis cooking? Right? Like, what does it do for your cooking that you can't get out of a non-battery stove?And then secondarily, is it big or powerful enough to meaningfully play a role in, like, if your power goes out and you need some electricity to run your lights or whatever, does it store enough power to be a meaningful part of kind of a larger whole house backup system?Sam CalischYeah. So this battery is about four kilowatt hours in our flagship product. You could think of that as about a third of a Tesla powerwall. And so it is meaningful with respect to your whole homes energy use. Say the power goes out and you have no access to power, you'll be able to run your fridge for about four days. Modern fridges tend to do about a kilowatt hour a day. And depending on how grandiose your meals are during that blackout, you can cook meals for that same amount of time. But the really interesting thing about the battery, or this is actually an interesting thing about our cooking habits generally, so we've taken a lot of data about cooking.You put power meters all over the stove and you measure how much power goes to the burners into the oven, and you get to cook nice meals for the engineering team at the same time. And on average, for sort of like windows of about an hour or so, there's no cooking activities that really draw more than one or 2 kilowatts. That's 1500 kilowatts what you can get from the 110 volts outlet that's already in your kitchen. And so, on average, the power supplied by that relatively meager outlet can totally run all of your cooking activities. It's just these brief moments when we're bringing the pot to boil, or you put the 20 pound bird in the oven, or you really want a lot of flashbang, then you're using way more power.And those short moments are the only reason a conventional induction stove has that huge 50 amp, 240 volts outlet.David RobertsA hilariously familiar story, right? Like, this is the whole electricity system in miniature. Absolutely. You're talking about, right, peak shaving.Sam CalischAbsolutely. And so what all this data collection shows you is that in normal conditions, like, not a blackout condition, in relatively normal conditions, it's basically impossible to run out of battery. We put a big one in there to get you through a blackout, but in normal conditions, there's no sort of range anxiety to worry about.Wyatt MerrillI'll tell you, when we got this proposal in that funding opportunity I was talking about earlier, one of the main things that I heard from the external reviewers because when we go through the process of making selections, it's quite a long process and I won't bore you with the details, but we do have a round of reviews externally. And some people said, what about Thanksgiving dinner? Are people really going to be able to use a stove like this and cook all these different pots and pans on the turkey in the oven all day long? And I think it was sort of an open question at the time that we made the selection.And then, sure enough, this year, if I'm not mistaken, Sam, your team made Thanksgiving dinner on the stove, is that right?Sam CalischWe did. We did a nice pre-Thanksgiving meal with the team and cooked a bunch of really delicious stuff.David RobertsUnplugged, you mean? Because of course you're not going to run out if you're plugged in, right?Sam CalischWell, it's plugged into the 110 volts outlet, the small one.David RobertsRight. So is it the case that you cannot use an induction stove with 110 volts outlet, period? Or is that a hard rule or is that like a guideline?Sam CalischA conventional induction range. So we're talking four burners and an oven. There's no way in hell you would plug that into 110 volts outlet. That would require 240 volts to your kitchen and either a 40 or 50 amp breaker and all the copper through you all to support that amount of current, especially renters looking to electrify. Like, I did this for many years. I wanted induction in my kitchen. And so I just bought a single burner induction. And those you can plug into 110 volts because it's only 1500 watts that you're pulling. And that's okay, even though a single burner on a full size induction range will easily get you up in 3000 watts.And that's just for that flashbang experience of why induction is magic.David RobertsRight? So you've got the battery in the stove that can provide those surges. This brings up a very familiar question, which I'm sure you've heard dozens of times, which is whenever I talk about induction stoves online, in addition to the avalanche of dumb myths about gas stoves.Sam CalischYes.David RobertsThere's also the question of what about my wok? Right. This is the one thing that sort of gas stoves have left. Like the induction stove, especially once the battery is embedded, can deliver more just raw energy now than flame can. So all that's left is the wok. So just for listeners benefit, answer the wok question.Sam CalischSure. I call these the induction whataboutisms, or, you know, more generally, the electrification whataboutisms. And one of our kind of guiding principles at Copper is we're going to solve all of the induction whataboutisms, and that includes the wok. We have some really exciting technology that will let you use a Wok on our stove. And that's about all I want to say about that right now, but yeah, no.David RobertsWell, at least tell me what that looks like. I don't get it. I don't get how it could work because it's about well, there's two things with a wok. One is the curved surface, which is problematic, and the other is you need the really high heat to get that particular kind of flavor and charred thing. So is this an addition to the stove? Is it an extra piece of something?Sam CalischYes, exactly. So this will be an accessory for the stove that allows you to use sort of a wok of your choice.David RobertsOn that theme. As I was thinking about this, if you have a stove that is effectively boosting the power from your wall, it seems like you could design other stuff to plug into the stove. Right. And to run off the stove's battery. So it seems like once you start thinking about this, there's all sorts of accessories you can imagine plugging in to various parts of the stove to enhance kind of the stove's usefulness. Is the wok accessory the only one you've got so far, or is this a family of things you're thinking about?Sam CalischIt's definitely a family of things we're thinking about in the vein of plugging things into your stove. In our flagship product, the pre-order campaign that we just sold out, there is an auxiliary outlet on it which allows you to plug any other thing you want to run on the stove's power system. So kind of the primary use case we think of is plugging your fridge in, and what that allows the stove to do is it can run your fridge when the power is out, and then it could also use that additional load of the fridge for load shifting, for grid support, for things like that. Just having more loads underneath the battery to play with.David RobertsThat's interesting. I guess I was thinking more about cooking accessories, although I don't know exactly what that would look like, but I'm not a cook. Just like it just occurred to me, like you have all this power available, like you could run other power using devices related to cooking off of this thing or integrate them almost somehow. I imagine you don't want to say too much about any of that since it's all in development.Sam CalischYeah, this is a slightly sensitive area, but basically what I'll say is we've got some chefs on staff, we're doing some things I'm really excited about here, and we're going to solve all the induction. whataboutisms? And this is going to be a really great cooking experience that's from the ground up.David RobertsRight. And final stove question, which is just how much is it going to cost? Off the bat, I assume a first in class product is going to be relatively expensive. So what's the cost and what's the story you kind of tell about the cost?Sam CalischSure. Just kind of the facts are for our pre order campaign, these stoves are $6,000. And that may sound like a lot sticker shock, but we got to remember a couple of things. One is that because the battery that's built in is larger than three kilowatt hours, it can qualify for the investment tax credit. That's in the inflation direction act.David RobertsThat's a tax credit for home batteries. Specifically.Sam CalischThat's a tax credit for residential battery energy storage systems.David RobertsGot it.Sam CalischAnd that's a 30% tax credit. So there's lots of issues with tax credits. They are regressive. It's hard for people to claim them, but it's 30% off the top when claimed as a tax credit. Then on top of that, obviously there's local rebates. So in the bay area, bay rent provides $750 rebate for an induction stove. And then the other piece that we have to think about is this cost gets you everything. It gets the stove into your house working. If you go to home depot and buy an induction stove, you then have to schedule an electrician visit, stay home from work, get them to come over and pay them a significant amount of money to run copper from your breaker box to your kitchen for that new outlet.And that's assuming you have the ampacity in your breaker box. If you're upgrading the breaker box, that's a larger project and sort of like chain of potential upgrades start kicking in. So when you factor in those costs in a bunch of cases, this is the cheapest way to get induction. And we're providing all the other sort of energy storage equipped services on top of that, like the ability to run during a blackout, the ability to use renewables, et cetera, et cetera.Wyatt MerrillIt's also perhaps worth mentioning, Sam, I don't know how much you want to get into it, because I know it's still sort of part of the development process in this project. But in principle, if you have time of use rates that you can take advantage of in your area, you could be charging and discharging at certain times, correct?David RobertsRight. I want to talk about that later. Actually, let's let's bracket that for later because I want to talk about the the larger sort of grid questions, just.Wyatt MerrillTo say it has some bearing on the lifetime cost.Sam CalischDefinitely just one last thing on pricing. We've talked to a bunch of municipalities who are running low income housing retrofit programs. These are cities like city of Oakland, city of Berkeley, city of LA, DC. Chicago, New York. They're all running large programs. And we sort of relied on them for some of the data on setting pricing, especially as it involves the cost and complexity of electrical work. And they said if you can sell a stove for $5,000, that's what we're currently budgeting in our programs for induction stove plus electrical work. So coming in at six in the pre order leaves us room to come down for a large buyer like a municipality to be able to take part in those programs.David RobertsRight. And then, of course, if you're involved in public policy, there's also the sort of health benefits of removing a source of pollution from the home. Those health benefits accrue, they're not reflected in the cost of the stove, but they're out there.Sam CalischThat's a great point. A lot of us are familiar with the case for childhood asthma and gas stoves. There's been a really strong link established between these two things. More recently, there's a growing body of evidence for the link between gas stoves and adult dementia. After childhood asthma might be among the most scary things I can think of to have linked to gas stoves.David RobertsYeah, I guess I shouldn't take that for granted. I assume people listening to Volts are probably aware of this. But just to put it on record, there's a large and growing body of evidence that gas stoves inside your home produce indoor pollution that has all sorts of negative effects. And like any form of air pollution, the more it gets studied, the more effects they find. So there's a good reason to get gas stoves out of your home separate from all of these benefits that we're talking about, just to quit poisoning yourself. So you could say there's two strategies here.One is for every home, just bite the bullet, do the big upgrade of the electrical box, of the electrical power system in general, and then just install a big central battery, because you can get all the benefits we're talking about here and more. I think from a central battery you could run things when the power is out, you can provide surges of power when you need extra power more than your outlet can provide, et cetera, et cetera, down the line, all the benefits you could get from a central battery connected to all the appliances in the home. Or the alternative strategy which we're talking about here is sort of bypass that because it's a giant hassle and expensive and then just embed batteries all over the place in homes, in appliances to bypass the need for these upgrades. Does DOE sort of favor one of those over the other?Or do you favor one of those over the other? Or how should we think about those two strategies? Like, does the funding of this mean that sort of DOE is all in on the latter strategy? Or how do you think about the relationship of those two?Wyatt MerrillYeah, sure, I'll do my best to answer and you can tell me if I'm avoiding the question. We are very much in an ongoing process of developing from the buildings perspective, kind of where we're headed with battery storage. There's been a lot of efforts across DOE, of course, when it comes to the battery cell chemistry, when it comes to electric vehicles, manufacturing processes that I'm not really equipped to speak on. And so my answer here is really about batteries in buildings and what that looks like in the future. Speaking personally, I'm sort of agnostic as to how batteries get into buildings.I think it's incumbent on us certainly to think about not only technology solutions but realistic adoption scenarios. And so it's not enough to say like, well, you could do this with a $12,000 stationary battery in your garage and maybe you could do it even better if you had a DC microgrid and you tore it all the wiring and you did everything from scratch. But I want to be creative about thinking about sort of serving all types of buildings and geographies and people in different economic situations. And so that's part of the thought process. The other thing I'll say is that I think it's sort of an open question still whether or not getting batteries into homes is on its face, a decarbonisation strategy.So I think it definitely has the potential to be. But when you think about the entire sort of lifecycle of mining lithium and developing the batteries and shipping them around, you really have kind of a hole to dig out of when you're setting these up in a home. And so my feeling is whether you're talking about a large stationary system or you're talking about some kind of creative integration strategy, like putting it in a stove or putting it you could even imagine it in like a modular wall type construction or outlets or whatever that we're thinking about operationally, how to do the best we can from an emission standpoint. And that becomes a difficult thing.David RobertsIt seems like that would weigh against, not definitively, but at least sort of on the ledger of pros and cons. That would weigh somewhat against multiple batteries, would it not? It seems like you would want from a materials and embedded carbon perspective, you would want to minimize the number of batteries, would you not?Wyatt MerrillThe thing that I come back to is that not all homes need a huge battery in their garage that can island the entire home. In a lot of cases it's really sufficient to control one or two or three peaky loads and make sure that they're not coincidental or make sure that those peaks can be curtailed by a battery. And so oversizing big batteries for the entire home that ultimately have a pretty large embodied carbon component is not to me, always going to be the most effective method for decarbonization. Right? But these things are not just about decarbonization, it's about resilience.It's about economic benefits. If you want to take advantage of time of use rates, as we mentioned, and decarbonization. And I think there's some questions that are yet to be answered about how we can align those priorities and under which circumstances they are aligned.David RobertsRight. So Sam, how do you think about this? Do you think about this as a stop gap until you can upgrade the electricity in your home or do you view it as like a full on different way to go about it, a different strategy?Sam CalischGreat question. And Wyatt roughly just hit a number of the points I was about to make. So that's perfect. This is a full on decarbonization strategy. The way we think about this is we're putting the smallest battery we can at the right place to avoid the most amount of infrastructure upgrades we need to do. So that means targeting the peaky loads like we talked about, and that sets off cascading cost reductions. I've looked at this at a number of places. We're talking a lot about the cost of running copper from your breaker box to your kitchen.There's the cost of upgrading your electrical panel. There's the cost of upgrading the electrical service into your house. Those costs are large. The last one I mentioned, just the electrical service in, I did a study on that and it's estimated to electrify the residential stock of the US. It's a quarter trillion dollars just to upgrade the incoming electrical service for the homes that will need it if we don't do something.David RobertsThat's just new panels for homes that need it. That's it.Sam CalischHonestly, David, that's not even the new panels. That's just the wires coming in. The wires coming in and the distribution transformers on the street.David RobertsThat's a lot.Sam CalischIt's a lot because any time you've got underground wires, you got to retrench. Any time you've got underground wires near natural gas infrastructure, that retrenching is very expensive.David RobertsAnd is there not a shortage of electricians at the moment too? Just to toss that in there.Sam CalischThere's a very large shortage of electricians. You know, electrical contractors would much rather send their workers to larger job sites where they can make a bunch of money. So getting them to roll to your house for your piddley kitchen circuit is going to cost you a couple grand just to get the truck to show up. So we're in the business of hearing horror stories about this because we solve this problem for people, so they like to tell us about it.Wyatt MerrillDavid, I think you can get a lot of similar benefits in terms of a stationary large battery versus maybe a coordinated group of smaller batteries. But if it allows somebody to electrify that wouldn't otherwise electrify, to me, that's sort of a categorical difference in terms of the benefit space. And then one other thing I want to say around the alignment between resilience and decarbonization. It's perfectly valid to want a battery in your home for the purpose of resilience and for the purpose of keeping the lights on or the fridge running or the stove running during a blackout, especially in places now that have scheduled blackouts.And you can count on them like clockwork. That's perfectly valid. But I guess what I want to understand from in terms of the DOE's perspective that you asked about earlier, is, like, if these batteries are sitting idle the other 99% of the time that you're not in a blackout scenario, what can we do with them to really bring some better alignment between supplies from renewable sources and demand? On the other hand.David RobertsYes, indeed. So, Sam, did you have any additions to that?Sam CalischNo. Wyatt said it beautifully, like, roughly, we're looking for the biggest benefit for the smallest battery that's being used most of the time. So we don't want our batteries to sit idle and we don't want to put more batteries than we need.David RobertsGot it. Let's talk about this, then, the ability of batteries to be a tool of decarbonization. I think you sort of raised this earlier and I think it's just worth emphasizing. It's not automatic, right? It's just not automatic that if you just throw batteries out to as many places as possible, you're going to get decarbonization. You need to do certain things and have certain policies in place. And a big piece of that is having the batteries play some role on the grid, not just in your home helping you cook, but that when you're not cooking. And when that battery has some capacity and it's sitting there with power in it and you're not using it.The grid needs to be able to know that that power is there and how much of it it can use and be in dialogue with all those batteries. So tell us just sort of like briefly what policies you think need to be in place to get the most decarbonization benefit out of these distributed batteries that we're putting in appliances and everywhere else.Wyatt MerrillSo I'll say a couple of things and then I'm going to toss it over to Sam, because to be honest with you, I won't be speculating as to policy needs, but I'm happy to let Sam do it. But I will say that there's kind of two things here in terms of aligning the choice to install a battery with decarbonisation. And the first, as we've already touched on, is just, is that battery giving you the ability to electrify that you might not have otherwise had? So, in other words, can you get those direct emissions out of homes?Can you cap gas lines to buildings? And in doing so right away, you've made some impact on the emission picture and then you have to ask, okay, well, what type of electricity is going to be charging this battery? Is it coming from, when does it come from solar? So then the operational carbon becomes an hour to hour question, and it certainly varies geographically in terms of the grid mix. And it's going to vary temporarily over the next ten years as we scale up renewable supplies to the point where this question would not be so pressing. Perhaps in 2035, if all goes well.But it's certainly in the transitional period, we want to be mindful.David RobertsRight, if all the electricity is renewable, a lot of these questions will be mooted.Wyatt MerrillYeah, that's right.David RobertsBut certainly between here and there, we need to use them well. So, Sam, I guess you sort of literally wrote the book on this. So maybe you can take a swing at what needs to be in place for my battery and my stove to be a good grid citizen, a good decarbonizer.Sam CalischI'll start by just noting that even without communicating to the grid, your energy storage equipped appliance is already helping the grid just by your pattern of use. You arrive home, you cook dinner after the sun has gone down. It's likely that in your area this is a peak time of use and you're drawing most of your power from the battery at that point.David RobertsLet me pause you there. When you just start cooking, does it draw on the battery first? Do you have to tell it to use battery power rather than grid power? Or how does it decide?Sam CalischThere are complex control laws that run inside of it to determine what mixture of power sources it gets from where. And so it's not one or the other really, but kind of your ratios and a little bit of it will be user preference. You as a very climate concerned citizen could say, pull no power that was generated during a time likely to be supported by peaker plants and it could implement that. Or you could say, keep me as resilient as possible at all times, keep the battery as full as possible at all times, things like this.So a little bit of this is going to be personal preference.David RobertsYou can program that into the stove somehow.Sam CalischYeah, but the larger point is just that any amount of power sort of absorbed during the day during the solar window and dispensed at night during a peak time is already supporting the grid even before a lot of the more complicated back and forth and price signaling and emission signaling, et cetera.David RobertsOkay, well, that's our baseline, but say we want to go beyond baseline.Sam CalischSure. I think there's a lot of people and to be honest, there's a lot of people that know more about this than me. But doing daily look ahead from the grid operators to know what the projected outlooks of generation mix are going to look like, having those signals dispatched as close to just day ahead is really kind of the stuff we need to make this work really well.David RobertsAnd what about aggregators? Am I still going to be talking directly to the grid or is this mostly going to go through aggregators just for listeners benefit? And aggregators just an entity that makes contracts with dozens or hundreds of small distributed energy resources. Your batteries in your garage or your stove or your car or whatever, anything. All these little behind the meter resources and coordinates them such that they act like a big energy producer or a big energy storage installation, basically like a virtual power plant, it's called. Is that how you see these things working in the future?Are these embedded batteries playing a role in aggregations?Sam CalischYes, absolutely. And so in that case, we would be the aggregator for these devices.David RobertsOh, really? Channing Street is going to get into that biz.Sam CalischYeah. What's interesting, though, is that one of the other main reasons we haven't touched on too much here is that another reason to put batteries into appliances is you then gain access to the much larger market of residential appliances compared to the market of residential energy storage. And so you don't have to have a large market share of stoves. You can have single digit market share of stoves for five years, and you'll have deployed more battery capacity than Tesla has.David RobertsInteresting. You mean Tesla has four home batteries?Sam CalischPer Powerwall, Yes.David RobertsYeah, I hadn't really thought of that. But especially if you can get this so standardized that it just becomes sort of like a standard feature, and people don't have to do it on purpose. They're just buying appliances that naturally have batteries in them.Sam CalischExactly.David RobertsThat's a lot of appliances out there.Sam CalischYeah. These ESE appliances, I think people will buy them for the amazing performance they give. Not necessarily the fact that they have a battery. We didn't touch too much on this. But even outside of stoves, other appliances, there's a lot of really good benefits, even with stoves. You know that annoying buzz some induction stoves make?David RobertsYes.Sam CalischRunning from a battery, you can make that silent.David RobertsWhat, why? How, what?Sam CalischAnd then you get to have the fun conversation that we've now had about EVs about what sounds good in induction.David RobertsRight. So you know the stoves on, right?Sam CalischYeah, exactly.David RobertsHilarious. What makes that noise? PS: Because everybody out there with an induction stove knows what you're talking about, what makes it, and how do you silence it?Sam CalischSo it varies a little bit, depending on the model. But in almost all cases, that noise is an artifact of the fact that that stove is being driven with alternating current, with AC power. So that buzz is the 60 hz signal that you're hearing, making its way all the way through the driving circuitry and into these sort of vibrations of the pan and vibrations of the driving coil, vibrations of the glass. And so when you're running it through a battery instead, a lot of this is happening in a direct current sense, and that buzz can be completely eliminated.David RobertsInteresting. I had not heard that bit. I've heard a lot of people complain about that noise. So this is highly relevant information.Sam CalischThat buzz is terrible. I agree.Wyatt MerrillThis reminds me. I have a separate project, totally unrelated, but looking at interfacing thermal electrics with various appliances, but dishwashers being one of them. And it turns out if you set up a thermoelectric heat pump in a dishwasher, you can eliminate the what do you call it, the mist, the fog that comes out when you open the dishwasher. That, I guess, is a big consumer preference.David RobertsI like that fog.Sam CalischI enjoy it. Yeah, exactly.David RobertsIt's like a little face. So Wyatt and maybe Sam too. But Wyatt first, what other appliances are next? Like batteries are getting small and cheap enough that in theory you could just stick them anywhere, but presumably you'd want to prioritize somehow. So what are the after stoves? What are the next big places where you might want to embed a battery?Wyatt MerrillSo whenever we start a project like this one with Otherlab or Channing Copper, we sit down and we come up with different stage gates that we're going to work on throughout the course of the project. And one of the first ones in that operating plan was to answer the question that you're asking, which is like, which appliances are going to benefit the most from this? And I know we looked at water heaters, we looked at refrigerators. I think it dryers as well. I actually do have some of the results in front of me, but I don't want to steal the thunder of the person who actually did the analysis.So Sam, do you want to speak to that?Sam CalischSure, yeah. So in a lot of cases, the same value proposition can be captured, the avoiding the 240 volts outlet for things that already run on gas. So dryers, good example, gas dryers are common. Gas water heaters are common. Both of these, there's a strong value proposition for avoiding that electrical work. In the case of water heaters, we're already seeing some 120 volts heat pump water heaters hitting the market, Rheem ProTerra unit as an example. It got some buzz earlier this year when it came out, and this is really exciting, but it's important to note that that water heater is not a solution for all climates and all households.It's a warm climate, small household solution. And so there's still a huge unmet need in terms of 120 volts water heaters. And so there's a bunch of room there.David RobertsSo a battery embedded heat pump water heater. That's what we're talking about.Sam CalischYeah. And so the ability to deploy this amazing cost saving heat pump technology without having to rewire your house, the value proposition is strong. The other one I will mention is replacing on demand gas water heaters. If I walk around my neighborhood, it's like every house less than 1000 sqft has a gas on demand water heater on the outside of their building. Those homes don't really have a viable electrification pathway right now. There are electric on demand water heaters, but they are even peakier than stoves. They require three or four separate 30 amp breakers, all with dedicated copper runs.It's cost prohibitive. So if we think about this is an equity issue. If we think about all these houses, they don't have a viable way to get off gas for their water heating because they don't have room for a storage tank.David RobertsSo a battery embedded on demand water heater, then I would think intuitively that the peak demand on an on demand water heater might even be higher than the peak demand from a stove. Or is that wrong? Like, is an on demand water heater a more challenging load than a stove, or are they comparable?Sam CalischIt is actually more challenging generally. I mean, these are generalities. there'll be differences, obviously, but for comparable households, yeah, the peak power running to an on demand water heater is exceptionally high. This can be in the 20 or 30 kilowatt range, whereas an induction range, it might usually be around 10 kw peak.David RobertsBut this is still something you think a battery can handle?Sam CalischYes. Specifically, a battery is a good choice for it because a small amount of battery can really yield a lot of savings because it's these peak times that aren't really that long.David RobertsRight. Wyatt raised this earlier? Why not batteries embedded in your wall, behind your drywall, attached to your outlet, such that anything you plug in the outlet right. Enjoys these benefits?Wyatt MerrillI've seen some proposals for that type of work. I think it's compelling as innovations go. I think there's a lot of questions around fire safety and code that have to be addressed for that to really get off the runway. I hesitate to strongly endorse that approach, but I think thinking creatively about if you can make that installation happen in a factory where they're doing modular type walls, maybe you can do a much better job with all the safety and make sure that it's not going to cause any problems versus somebody doing a custom job on their own home.You might be more concerned embedding that in the wall.Sam CalischWe actually did some design studies on this originally. Fire code is a huge, huge barrier to this. Talk to people who have been through that process and they said, no, no way in hell are you going to get that through. The other point is that this kind of general purpose battery sitting next to an appliance is compelling, but particularly for high power appliances, there's a lot of cost that goes into the power conversion and conditioning needed to go in and out of the battery. And in the case of a lot of these appliances, when you integrate directly with them, you can simply skip a lot of those steps because you know exactly what you're going to be driving.You don't need to do as much voltage conversion, you don't need to do as much inversion. So you save a bunch on cost there and you save a bunch on efficiency, because there's a critical efficiency threshold below which it's really not beneficial to store away energy. It's round trip efficiencies of batteries. DC to DC is something like 90%, but if you look at our national fleet of grid connected batteries, it's more like 80% after. It includes all of those other power conversion losses.David RobertsGot it. Otherlab, if I'm not mistaken, did some modeling, trying to assess what is the sort of decarbonization potential of easy appliances. I'm going to try to make that happen. These ESE appliances, tell us about that. What are we talking about when we look at the big if we could spread this across the nation, what could we get?Sam CalischThe overall potential of energy storage equipment, appliances.David RobertsCorrect. How much decarbonization could we get out of them if we made them ubiquitous?Sam CalischYeah, so I did an analysis of this, and the emissions reductions come in kind of three buckets that are when you run the numbers on it, they're roughly equal in size. Roughly. The first is direct combustion, so we're not burning gas anymore in our stoves and our water heaters, et cetera. So there's a savings there. The second bucket is in methane leaks, which this is another thing where the more we learn about this, the worse we find out it is. And because methane is so potent, as the news cycle is starting to remind us more and more, which is good, little leaks are big problems from a climate perspective.And so avoiding the leaks of the methane supply chain and of the appliances themselves is another huge bucket. And then finally there's what I call the marginal grid emissions or the avoided emissions of the electricity sector that comes from having this additional battery storage supporting it. And when we add all that up, we find that in the US. It's approximately 330,000,000 metric tons per year of technical potential for energy storage equipped appliances.David RobertsWhat are some sort of like, consumer pain points here that we could concentrate on?Wyatt MerrillI don't know if we've covered it thoroughly enough, but I do feel like it's not talked about enough in general. Is this constraint around panel upgrades, and that I think you have an idea in your head of what something might cost you in terms of the end use, but then the infrastructure needed just to supply power to that end use is often not part of the equation. And then when you find out, oh, by the way, it's going to take months and months of permitting and before we can get an electrician to come out and your furnace kicked in the middle of the winter, a lot of people are not going to wait around for that to happen, even if they can't afford it. And a lot of people are going to have trouble affording that upgrade.David RobertsJust to emphasize what you just said, because I meant to mention this earlier, it's well known that people tend to be replacing appliances under stress because their appliance died. And if you have a dead water heater or a dead stove, the idea of waiting several weeks for a panel upgrade is even more of a pain in the ass.Wyatt MerrillYeah, I think that's a big one. And I think a lot of the sort of studies around electrification challenge, if you will, just kind of sweep that under the rug sometimes and then they'll also just upgrade the panel at the same time. And that'll just be just tack on another five grand, and maybe it'll be five grand. Some places it's less than that. In some places it's a lot more than that, especially if you need new service. But then there's also that time factor of, like, not in the middle of the winter, they won't.David RobertsYeah. And honestly, the more I have sort of studied and thought about and read about any sort of upgrade or difference or thing to do in the household that you rely on a consumer to do, you just have to dial back your expectations for what they will do. They don't want to do anything. They will default almost always to the easiest default choice. Even if you're just asking them to make a phone call or just like one extra step, you lose enormous swaths. It's absolutely got to be as easy as possible.Wyatt MerrillYeah. So I have a separate project, not part of the Otherlab work, but a separate project with a couple of our national labs, NREL and Lawrence Berkeley Lab. And it's got a number of partners as well. And the whole point of that project is really to get our arms around this upgrade question of what I think of as the gray area. Right? Because there are certain homes that, yes, no matter how you cut it, they're going to have to upgrade, and there's no way around it. There are some homes that don't need an upgrade, that have plenty of capacity and that might be like newer construction or newer renovations, and then there's people who might be somewhere in the middle there.And my sense is really that that gray area in the middle is not very well defined from the current kind of analysis landscape that's out there. There's been a couple of studies that try to quantify this, and I think we can do a better job. And that's what we're doing right now. So we have this project that I mentioned with a number of components. Part of that's analysis, part of it is looking at even future grid mix and then maybe making recommendations for national electric code revisions to try to make some of these transitions more viable.And then also there's a lot of really interesting ideas around load management, especially digital load management, that, again, might not be code compliant in all places, but have a lot of potential from a technical standpoint to make sure that your dryer and your EV are not charging at the same time. Right. So you run into a situation where you can come up with a lot of creative ideas around avoiding those upgrades, and then there's kind of what's going to be permissible from a code standpoint. What are consumers actually going to want, as you say? What are they going to put up with or do to make the upgrade possible?So that's the big one for me. I'm sure there's a bunch of others we could talk about.David RobertsSam, what do you go you've been immersed in electrifications. I'm sure you've heard every what-about that there is what are some other others on your list?Sam CalischWell, there's the classic, but will the grid handle it? And there's a lot of precedent here that we can lean on, but also we're going to have to do things like distribute storage in order to avoid all of the upgrades that might otherwise be necessary. The one I tell folks a lot is between 1950 and 1970, we quadrupled the amount of delivered electricity in the US. And that was largely through consumer education campaigns. That was Ronald reagan hosting a show sponsored by GE and Westinghouse talking about all his electric appliances in his house. And we don't even need to do that much.We need to deliver two and three times the amount of electricity we do today in our electrified future, and we need to do it in 20 years. So we've already done more than what we need to do. So that's one we can lean on. But not to make it sound trivial, it's going to require a massive build out, particularly of transmission, and we need to rely on things like distributed batteries to avoid all the upgrades to the distribution network that we might otherwise have to do.David RobertsRight. And what about I bet you've heard where I live, grid mix is mostly coal anyway, so how is this helping decarbonization I'm sure you've heard that one.Sam CalischOh, definitely. And the answer there is these electric appliances are inherently efficient. And so in most cases, even if you're exclusively powered on coal, your EV contributes less than your gasoline powered car, your heat pump contributes less than your gas furnace. I think I'm probably preaching to the choir here, though.David RobertsYes. One of my favorite statistics that your friend Saul uses all the time is just the efficiency gains of switching from fossil fuel to electric appliances and cars and everything else. That almost cuts in half the amount of raw energy that you need to put into the economy, which is wild. That is just wild. Which means you can either do 50% more stuff for the same amount of energy right. Or you can dramatically cut the amount of energy necessary. Which is why I think those sort of, like, charts of total energy that's gone to renewables are somewhat misleading.You're just not going to need as much energy.Sam CalischExactly, yeah, completely misleading. A couple of percent of all of our energy needs are spent just moving around natural gas and pipelines. The mining, refining, and transportation of fossil fuels are responsible for a massive amount of our energy expenditures as a nation.David RobertsRight. You don't have to electrify that. It just goes away.Wyatt MerrillIt's also just a very sort of defeatist attitude to say, well, my electricity is coming from coal, so I'm not going to get fossil fuels out of my home. It's like, well do you think it's always going to be coming from coal forever? It kind of suggests that it will always be that way and I think we know that's not the case.David RobertsRight. grids everywhere are improving and the way I try to put it is that like if you have an EV, if you buy a gas car, it's basically the same dirty for its lifetime. Right. It is a set amount of emissions per mile. But the EV you buy because the grid is getting cleaner and cleaner. Your EV is getting cleaner and cleaner every day. You have it, you don't have to do anything. It just is magically getting cleaner all the time. Same for any electric appliance.Sam CalischYeah, it's an appreciating asset. But as you rightfully point out, to get consumers to do stuff, we got to give them multiple reasons. So the climate reason is a great one, the saving money reason is a great one. But I think we also just need to deliver better experiences and luckily electric appliances tend to do that. I just put heat pumps in my parents' house where I'm currently visiting and previously we'd burned wood to keep the house warm my whole life. And this house is more comfortable than it's ever been in my entire life and especially with my aging parents not having to chop and haul firewood.It's the benefits are huge.David RobertsYeah. And I'm curious, this thing is coming out under the market for you. It's a big shift I would think from being a sort of data analytical nerd to being a consumer facing consumer interacting product company. A company with products. Right.Wyatt MerrillI got to tell you David, I actually met Sam for the first time in a program at Cyclotron Road called the Lab Embedded Entrepreneurship Program. So he's actually got all kinds of hidden talents for this stuff. But Sam, you should speak to that.Sam CalischWell, I appreciate that way. Yeah. My background is in the technology but I've always had a passion about the energy data stuff and a lot of that goes back to being friends with Saul and geeking out on data sets together. But additionally there's just hire a great staff to do this. So I'm just so excited about the team we're building. We've got folks who have background building kind of mass mobilization campaigns. So I think there's really exciting stuff that's going to happen and I'm thrilled that we have a great team to do it.David RobertsWell, the purpose of that question and this will be we can wrap up with this question which was just we've discussed benefits in actual cooking, right? Like you can get a surge, you can get really fast, tightly controlled surges of energy so you can do your wok cooking with your mysterious accessory. You can boil water super fast faster than anything else. There's the cooking benefits, there's the resilience benefits. Meaning if power goes out you still can run your stove and potentially your refrigerator and other stuff. There's the sort of money saving benefits, avoiding the panel upgrade, maybe even getting a little extra income if you can hook up with time of use or time shifting if your utility is smart enough to do that stuff.Behind all that, there's the climate benefit. My question is just if I opened a browser window in a year and saw an ad for Channing Street Copper Stove, what is your top line message to consumers? Which of all those benefits are you centering and sort of hooking your hopes on in terms of just sales?Sam CalischI think this is one of the reasons I like calling these things energy storage equipment, ESE Appliances. I want to hang this on, this being a new class of appliance that delivers just a large number of benefits that are incomparable to existing appliance offerings. So you've got the climate benefits, the resilience benefits, the better performance. So I'm doing a good job not answering the question.David RobertsI think if you have an advertisement with a bullet, with a bullet pointed list, I don't think it's going to sell very well. What's the sizzle here?Sam CalischThat's why we have targeted ads. But I will say in our customer research, the things that really motivate people are the resilience aspects. And so being able to be prepared for what comes is a really strong motivator for people. And it cuts across party lines, it cuts across affiliations in a real way. So if you're going to force me to pick one, I might have to pick that one. But in truth, it's the portfolio.David RobertsEspecially in California where you're starting, there's a lot of blackouts. The resilience thing is big in California.Sam CalischYeah, PG&E shuts off my power once every couple of weeks.David RobertsAnd actually, as usual, I lied about the final question. This is the final question. When are you starting out in the Bay Area? As I understand it, just selling stoves in the Bay Area. Do we know or have any idea when the rest of California or the rest of the country might have access?Sam CalischYeah, so we did a pre-order. We sold it out quickly, and we're going to deliver on that pre-order. And as you said, that's just in the Bay Area. And that's to make sure that we can provide really excellent support for the folks that chose to support us early. And then I would say I don't want to be bound by this, but I would say within 2023 we'll be in a broader market.David RobertsInteresting. Well, this is super fascinating. It's just one of those little areas of electrification where you peek through the keyhole, you're like, oh, there's like a whole world of interesting questions in there. So thank you guys for coming on and maybe we can reconvene in a year or two and see if easy appliances, see if our phrase is caught on and see how far they've spread.Sam CalischWell, thanks so much for the interview, David. I really appreciate it.Wyatt MerrillThank you.David RobertsThank you for listening to the Volts podcast. It is ad-free, powered entirely by listeners like you. If you value conversations like this, please consider becoming a paid Volts subscriber at volts.wtf. Yes, that's volts.wtf, so that I can continue doing this work. Thank you so much. And I'll see you next time. Get full access to Volts at www.volts.wtf/subscribe

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David Fenton has just released a new book — The Activist's Media Handbook: Lessons from Fifty Years as a Progressive Agitator — that is a combination biography, photo journal, and accounting of lessons learned in the PR business. He tells the stories of his numerous campaigns over the years (alongside pages and pages of vivid images) and tries to boil down what works to capture media attention and advance progressive causes, and what doesn't. I chat with him about it. Get full access to Volts at www.volts.wtf/subscribe

The Ukraine war has seen Germany's supply of methane gas from Russia cut off. Energy prices have spiked as it scrambles to make up the deficit. Some people have taken this to mean that Germany was wrong to move away from fossil fuels as quickly as it has. Others have said it shows that Germany needs to double down on its transition to renewables. To get a better sense of Germany's current situation and what it says about the choices it has made on energy, I contacted Professor Claudia Kemfert, one of Germany's top energy analysts. Get full access to Volts at www.volts.wtf/subscribe

Despite well-meaning pledges to the contrary from a wide array of countries, banks, and other institutions, new coal plants are still getting financed, putting global climate targets further out of reach. I talk with Ted Nace of Global Energy Monitor and Paddy McCully of Reclaim Finance about the channels through which coal funding is passing -- and how to close them. Get full access to Volts at www.volts.wtf/subscribe

The transition to clean energy is going to radically increase demand for a key set of minerals, many of which are mined today in social & environmentally destructive ways. In recent years, attention has turned to the floor of the Pacific Ocean, where those minerals are found in abundance. I talk with journalist Daniel Ackerman about the opportunities & dangers of deep-sea mining. Get full access to Volts at www.volts.wtf/subscribe

When we look across the broad sweep of human history, what needs explaining is not times of rebellion and upheaval, but the much more common periods of unjust rule facing little resistance. Why do people so often internalize the ideologies upholding systems under which they suffer? Why do they fail to fight back? Psychologist John Jost has an answer. I talked it over with him. Get full access to Volts at www.volts.wtf/subscribe

The massive coming surge of electric vehicles (EVs) could destabilize the grid -- or, if properly managed, become a crucial tool to maintain grid stability as more renewable energy comes online. The key is getting EVs to communicate with the grid, and vice versa. Amanda Myers Wisser and Smriti Mishra of WeaveGrid are working on that. We chat about how it's going. Get full access to Volts at www.volts.wtf/subscribe

Emerging economies represent huge potential demand for distributed energy (solar power and microgrids) but to date the markets have been too fragmented to attract large-scale investment. A company called Odyssey has set out to create a platform that can standardize and de-risk these markets so big money can move in. I talk with the CEO. Get full access to Volts at www.volts.wtf/subscribe

I was recently a guest on My Climate Journey, a podcast that features various climate types discussing how they got where they are and how they currently think about the climate crisis. Host Jason Jacobs and I had a fun conversation about my road into journalism and how my views on various perennial climate debates — optimism versus pessimism, green growth versus degrowth, technocracy versus spiritual change — have changed over the years. Get full access to Volts at www.volts.wtf/subscribe

In this episode, lawyer and activist Ruth Santiago discusses Puerto Rico's latest electricity crisis, as the island struggles to restore power in the wake of Hurricane Fiona. In the wake of Hurricane Maria five years ago, the grid was privatized, but the promised rebuilding still hasn't occurred. Santiago covers what's gone wrong and what can be done. Get full access to Volts at www.volts.wtf/subscribe

Geothermal power has conventionally been viewed as a baseload, always-on resource, like nuclear. But new research suggests it could play a much more dynamic & valuable role on the grid than that -- and expand much faster & farther than previously estimated. I chat with one the co-authors. Get full access to Volts at www.volts.wtf/subscribe

A newly published research paper out of Oxford suggests that a rapid energy transition will not "cost" anything -- it will save nearly a trillion dollars relative to the no-transition case. And the faster we move, the more money we save. I talk with complex-systems scientist and co-author Doyne Farmer about his optimistic projections. Get full access to Volts at www.volts.wtf/subscribe

Two veteran climate experts -- analyst Hal Harvey & journalist Justin Gillis -- have released a new book that seeks to home in on the climate policies that offer the most impact for the least effort. I talk with them about learning curves, performance standards, industrial policy, & more.  Get full access to Volts at www.volts.wtf/subscribe

In this episode, Wall Street Journal reporter Katherine Blunt discusses her new book, California Burning: The Fall of Pacific Gas & Electric — and What It Means for America's Power Grid, in which she details PG&E’s decades of setbacks and missteps.(PDF transcript)(Active transcript)Text transcript:David RobertsReporter Katherine Blunt was still new to The Wall Street Journal when 2018’s devastating Camp Fire broke out in California and she was swept into the biggest story of her career. Alongside colleagues Russell Gold and Rebecca Smith, she wrote a series of pieces on the ongoing travails of Pacific Gas & Electric, or PG&E, the utility whose power lines had started at the Camp Fire.The Journal's coverage was a finalist for the 2020 Pulitzer Prize, and Blunt has now expanded it into a new book: California Burning: The Fall of Pacific Gas & Electric — and What It Means for America's Power Grid. It is a rollicking tour through PG&E’s decades-long series of disasters and their roots in the early 20th century.I am a longtime critic of utilities, but even I was stunned to see all of PG&E’s incompetence and malfeasance gathered together in one place, alongside its well-meaning but serially failed attempts to put things right. It’s a story of failure and redemption, except the redemption keeps being interrupted by more failure. I couldn't put the book down, so I am eager to talk to Blunt about how the utility’s travails began, why is has struggled so mightily to take control of its fate, and what might come next for the electricity sector’s favorite punching bag.So, without further ado, Katherine Blunt. Welcome to Volts. Thanks so much for coming.Katherine BluntThank you so much for having me.David RobertsThis book, Katherine, is a bit of a mindblower. I mean, I probably, because of my job, followed this stuff as it was happening, closer than the average Joe or Jane, but it is still stunning to see it all put in one place. As far as I can tell, for the entirety of the 21st century, PG&E has been in one of three states: either a) causing some disaster that kills a bunch of people, b) dealing with the blowback and lawsuits that come as a result of the disaster that killed a bunch of people, or c) implementing an ultimately failed and useless attempt to mitigate the disasters that killed a bunch of people and prevent future disasters.There has not been a period of just normal operation of PG&E for decades now. It's all its perpetual crisis. How how much of that did you appreciate going into this story? How much of that? I mean, it's just such a dumpster fire. I can't believe I wasn't more aware of it. And I can't believe, like, the public's not more aware of it. How aware were you going in?Katherine BluntYeah, it's totally true. These last 20 years have been just exceptionally bad for the company. I had some idea of this going into it because of my coverage at the "Journal" that, as you say, I had collaborated on with two close colleagues. And one of the final stories that we did together was a really big picture narrative that tried to take readers through the last 20 years and what that's meant for PG&E. But as I got more into the details, I, too, was really surprised at some things and how bad it was.David RobertsWell, let's go back into the recesses of history. One of the most sort of telling tales from the beginning is that the original merger of PG&E with Great Western, another utility. This is the merger that ended up sort of saddling PG&E with all these power lines, that it never really understood. And that, to me, is kind of like the original sin, like the seed of everything that came after us. To tell us a little bit about the story of those two utilities and how they ended up as one.Katherine BluntThere's a couple of ways to think about this. It is a really fascinating part of PG&E's history. So, as I'm sure at least some listeners know, PG&E is a very old company, more than 100 years old at this point. It's got roots dating back to the Gold Rush. It only ever had, in the early days, one real competitor, and that was Great Western Power. Both PG&E and Great Western were competing to build systems to serve San Francisco to support the population growth there. And around this time, you're beginning to see the solidification of the conventional wisdom that utilities should be these monopoly companies. Because, of course, this industry is very capital intensive. And the idea was you shouldn't have a bunch of companies building duplicative infrastructure. And you're beginning to see the regulator emerge to oversee all of this.David RobertsThere's some wild quotes from that period where people are like, "nothing scares customers more than an outbreak of competition among you." It's just such a weird perspective based on our current way we talk about markets.Katherine BluntYeah, absolutely. There was a lot of kind of colorful stuff that I managed to dig up, like a lawyer for PG&E and a lawyer for Great Western, like, almost got into a fistfight at what was known as the Railroad Commission, which is now the California Public Utilities Commission. Pretty funny. So they competed for a while, and then they ultimately merged and it formed the big Northern California monopoly that we know today. And so there's a few consequences of this. So it really did give this company a lot of economic might, this merger, and it allowed it to exist as a pretty good company for most of the 20th century. It did a lot to invest in its system. It helped electrify different parts of the state. It supported economic growth. It was largely run by engineers.And as we will discuss in depth, this really begins to fall apart in the 21st century. And quite literally, in that, one of Great Western's power lines, one of the earliest transmission lines that this company built, that PG&E ultimately inherited, failed and started the Camp Fire. The component of the line that broke was literally 100 years old. It was installed somewhere around 1920, and it hung there ever since.David RobertsYeah, it's wild. Great Western built these lines, and then PG&E sort of inherited them in the merger and never really had good documentation of them, or, like, never really did particularly good monitoring of them. It's kind of a gimme for a utility to do well in the 20th century, since mostly what they were asked to do, during the 20th century, is build stuff. And they love building stuff, and that's how they make money. And now we reach the age of maintenance and everything falls apart.So before we actually get into the specifics, I wanted to, this is a bit of an axe I have to grind, so I have to emphasize it up front, but I thought your book was just this exquisite extended illustration of a point about utilities that I've been hammering for over a decade now — which is that investor-owned utilities make money by building new stuff. They get a rate of return on investments in new stuff. They do not get a rate of return on maintenance, on spending money, on monitoring and maintaining existing infrastructure. And that's just, that force, you see that at work throughout your entire book. Like, tell us, you know, that the one sort of engineer mentions, in the electricity department mentions, like, "if I spend $100 on a new line, we get 120 back. If I spend 100 on maintenance, that's it." So just, like, spell that out a little bit, that sort of disparity that sort of works its way into PG&E's operations throughout this whole century.Katherine BluntYeah, absolutely. So, of course, as I'm sure many listeners know, the argument for the investor owned utility model is that having this profit motive allows for greater access to capital. It's a capital intensive business. Okay? And I guess if we're talking about the balance between capital spending and maintenance spending, and the fact that strong financial performers are good at minimizing expenses to free up money to invest in capital, I guess, theoretically this is possible without compromising safety. But PG&E did not do this well. It didn't do this well at all.And a really big issue happened in 2010 in which a natural gas transmission pipeline exploded in San Bruno, which is south of San Francisco, and that results in this big federal investigation of PG&E gas transmission operations. The company, I think, provided the prosecutors something like 10 million pages of documents or something like that. And in those documents was evidence that the company had been under great pressure, in kind of the early 2000s to around the 2010 time frame, to reduce expenses. There were a number of reasons for this, but it found that, in particular, gas transmission faced major expense pressures, at the time that the company was still able to maximize its authorized rate of return. As a matter of fact, it exceeded is what some auditors had found. So it had been investing a lot of capital, making pretty substantial returns, and also underspending on operations and maintenance and gas transmission, far less than the company told regulators it had planned to spend.You can't draw a straight line between that finding and the fact that the pipeline blew up. But I mean, it's all part and parcel of the conclusion that it had basically broken federal law in the way that it was running its gas operations. And so what was striking to me, in kind of really delving into the underlying issues with the Camp Fire, as we discussed earlier in the program, is that there were a lot of parallels here. The Electric Transmission Division also faced a lot of expense pressure for various reasons. And the consequences of that were just devastating.David RobertsLike we were saying, it's kind of built in. Like, if you want to be a growing, you want to be on Wall Street, you want to be a traded company, you want to, you have to demonstrate growth and all that. And all spending on maintenance does nothing for that, does nothing to grow you, does nothing to make you any profits. Like, from the perspective of investors, every penny you spend on maintenance is basically just dead-weight loss.With that structure in place, the Feds can come along and say, "that doesn't mean you can't spend on maintenance. You still have to spend on maintenance." But like, you can say that all day long, but the financial forces point the way they point. And as you say, the San Bruno explosion was an early example of that. And after the San Bruno explosion, in the court case and everything, one of the things PG&E was forced to do was sort of, and this becomes a familiar story as well, after the disaster, there's this scramble. Like, we've got to do a major assessment of our gas pipelines. Now that the explosion has already happened, we need to go down and see if it's going to happen again. So tell us about what they found when they went down and looked.Katherine BluntSo they did find a lot of problems. One of the issues leading up to San Bruno is that the company was supposed to do more to test the integrity of welded pipes, who seems to have the potential to have some sort of issue. The best means of doing that is draining the line of gas, and filling it with pressurized water, and monitoring the pressure of that water running through the pipeline. And if you can see if there's any sort of rupture, or at worst an explosion...obviously, that takes a lot of time, takes a lot of money, and it's inconvenient for customers, for the company. Not a preferred mode of doing things for a while, but then they had to go back and do it.And there were several other pipelines that had issues with their scenes, and at least three, I think, exploded when they were hydro tested. It was also just like other stuff within the division that was antiquated, antiquated systems, antiquated trucks. And so they did a pretty big overhaul. But one thing that's frankly scary, and this is not just scary in PG&E's case, I think it's common for utilities across the country, it does take some sort of disaster to reveal the extent of the problems. And you made reference earlier to kind of someone talking about moving money around.Yeah, the CPUC had a really interesting day-long affair in which they had a bunch of experts talk about safety culture within utilities. And there was one guy who was like, "if you invest a dollar in capital, you get 120 back. If you invest a dollar in maintenance, it's just a dollar out the door." So you have this kind of slow decision making over time. All of a sudden, it's a dollar ten in capital and $0.80 in maintenance. And so it goes. And the consequences of that, initially, are next to nothing. There's no immediate consequence.David RobertsRight.Katherine BluntSo that's scary, frankly.David RobertsIt is scary. And this is another thing that comes up a lot in the book, in the court cases around this stuff, in the gas explosion and later the fires from the electricity transmission. There's this question of what exactly PG&E can be convicted for and whether it can be convicted of second degree manslaughter. Which first degree is, "I'm setting out willfully to kill you." Second degree is "I'm acting with willful disregard to your safety in such a way that I can reasonably predict the results." And so there's a lot of sort of discussion about, you talk about this long effect on decision making over time.No single person, no single manager is thinking, "let's break the law, even though I know it's going to kill people to save a buck." It's just a little incremental decision here, a little incremental decision there, a little decision there, and these things sort of snowball on themselves. And you get the sort of aggregate effect of willful ignorance of maintenance without anyone in particular being responsible for it. It brings up all these weird questions about how to hold companies responsible.Katherine BluntYeah, absolutely. And honestly, this is one of the more interesting questions that I tried to explore in the book. The idea of corporate liability is not intuitive. And so after these disasters, everyone's asking, who is culpable? And the answer, almost inevitably, is like, nobody and everybody.David RobertsRight, we want a bad guy. But there's no bad guy here. There's never a bad guy in the whole book. There's not a single truly malign actor in the whole book.Katherine BluntThat's true, I think. So the trial that came after the San Bruno explosion was a really interesting exploration of this question. And so I kind of tried to go deep in sort of the legal theory that underpinned this whole thing. And I won't, obviously, get too much in the weeds on this, but it was just fascinating to — what the prosecutors did was they brought forward a lot of employees who had some knowledge that the company was not abiding by regulation. And they also knew that they weren't doing enough and spending enough as a result of expense pressure to do inspections that could ensure these pipelines were truly safe when they were running at higher pressures.So, of course, you have to prove some level of intent to convict anybody, or a company, of a crime. And the idea of this intent was that, I think the exact definition was that they were, "acting with willful indifference to the regulations requirements," right? And so it gets kind of technical.David RobertsWell, it gets kind of philosophical too, right? Because by definition, a group of people doesn't have intent in the way we think about intent. Like intent is always sort of implicit, right?Katherine BluntYeah, it does get pretty philosophical. And, in the case of the Camp Fire, it was similar in that PG&E was ultimately convicted on 84 counts of involuntary manslaughter, as you were referring to earlier. And the idea was that the company, or a group of individuals within the company, knew that there was fire risk within the Feather River Canyon, and that specifically the transmission lines posed fire risk, and that they didn't do nearly enough to mitigate it. But in that, though, I think that what you have to understand is that the employees didn't understand the extent of the risk because they hadn't been doing enough to really understand that. So it is remarkable, and it's a lot to think about.David RobertsYeah, it's one thing to convict a person, or a company, of something they did on purpose, but these are like counterfactuals, like something you should have known not to do or what you should have known in the counterfactual case. It gets super complicated. But as you say, they convicted them. They convicted PG&E in the San Bruno case, which sort of, I think, was a shock and a bit of a terror to probably not just PG&E, but probably to lots of other utilities too. So just a side question.In the wake of the San Bruno explosion, as you say, this guy, I can't remember his name, was brought in to basically shape up the Gas Division because, in addition to the lack of inspections, there's just antiquated equipment, antiquated documentation, paper and boxes, information, and all these different offices not coordinating, et cetera. And he sort of tried to whip it into shape. And my impression from the book is that he more or less succeeded in that division. Now, which is the smaller part of PG&E, kind of got its act together. Is that true? Does it remain together?Katherine BluntYeah. So I think that it was widely acknowledged that — Nick is his name, Nick Stavropoulos — did a lot to help ride the ship, and the division operated much better as a result of the actions that he and his team took to modernize everything and to do proper inspections, proper testing. Of course, no one's perfect. Nothing's perfect. I'm sure that there are still some issues within the division. I'm sure some have even emerged since he left, but they haven't had any major issues since then. And so that's good. I mean, it certainly raises ... we're talking about sort of like underlying problems that affect all utilities. There's always questions to be raised, let me just put it that way. But they've not had any major issues since San Bruno.David RobertsYeah, well, I mean, sort of one of the darkly comic chapters in the book is there's San Bruno explosion, horrible publicity. And so the company is like, we're going to devote all this money and time to shaping up the Gas Division and do so. But even as they are doing so, they are electing not to do so in the Electricity Division, and they are cutting back on inspections in the Electricity Division.And this is like one of several parts of the book that reads a little bit like a horror story. Like the girls going up the stairs. You're like, "no, don't go up the stairs." And of course, immediately before the gas explosion bruhaha has even really fully wrapped up comes basically the equivalent on the electricity side of uninspected lines now starting fires, deaths, liability, the whole cycle starts all over again. So you have to sort of wonder, like, even if they got the clue on the gas side, they clearly didn't get the larger clue of a larger safety culture across the board, right?Katherine BluntYeah. And I think a notable detail in the book is that the Gas Division brought in Lloyd's Register, the British risk management firm. Anyway, so to basically assess where they were kind of immediately after the explosion and how far they'd come after they got everything into shape. And then I think Nick suggested to some colleagues on the electric, within the Electric Division, that they, "how about you have Lloyd's take a look at what you guys are doing?" And they said, "not necessary." That was the response, "not necessary."David RobertsYeah. It's wild how many times, especially early in the book, they're like, "fires are for the hot, dry Southern California. We're up in Northern California. We don't really have to worry about that." Which just seems so darkly ironic in light of subsequent events for the Electricity Division, I want to go back a little bit to deregulation. This is a sort of legendary story in California lore already, sort of deregulation and then the subsequent energy crisis, and Enron and all the rest of it. And obviously I don't want you to tell that whole story again. There are plenty of books to be written about that, but sort of talk about how it affected PG&E specifically. Sort of like how PG&E emerged from that mess.Katherine BluntYeah. So I think in my view, there are two major consequences for PG&E. One is that it resulted in PG&E's first bankruptcy. So after the energy crisis, the company seeks bankruptcy protection. It emerges in 2004 time frame, and they then get a new CEO to kind of lead the company into this new chapter. And he is very, very intent on establishing the company as a strong financial performer, basically regaining goodwill on Wall Street, delivering to shareholders. We've already discussed how companies often deliver to shareholders. So there's a lot of expense pressure during this time. His tenure basically ends with San Bruno.David RobertsThat's Darby, right?Katherine BluntThat's Peter Darby. Yeah. The other consequence is that as a result of deregulation, utilities in California no longer played the same role in building and operating power plants. They sold most of them during the deregulation push, with the exception of nuclear and hydro. And so that means that as California becomes really determined to bring a lot more wind and solar online, the utility companies are going out and contracting for this power. They're not building the wind and solar farms themselves. And as we know, wind and solar are some of the cheapest forms of generation today. They were not back when the utilities really began pushing on this, so they were signing a lot of really expensive contracts. Those costs were passed on to customers as expenses. This is not something on which the company earned a return. And I think that ironically, served to increase, added a further layer of pressure on the expense side.David RobertsRight. So you have sort of two forces working coming out of this post-deregulatory bankruptcy. One, the CPUC is forcing the company to contract for a bunch more quite expensive clean power. So rates are going up. So there's a lot of pressure on the utility to cut back. And then secondly, post-deregulation, this is a privately traded company on the market. And the way you make it healthy is draw new private investment. So the way to do that is to show returns, show quarterly, good quarterly performance. So that also is another huge pressure to cut expenses.And all that pressure together, like as we were discussing what expenses get cut, it's the expenses that don't bring in any money. It's the expenses that don't bring in any return. And that's maintenance of this truly gigantic, sprawling infrastructure. So talk a little bit about, I found this really amusing, in a very early 2000s/2010s way, Darby's sort of idea of transformation. And he brought in Accenture. Tell us a little bit about the Accenture chapter, which I found you have to laugh.Katherine BluntYou really do. And also I'll just quickly shout out to my colleague, I guess former colleague. She just retired, Rebecca Smith, who she covered the company during this time, and she knew a little bit about the transformation, and so she did a lot of digging for us at the "Journal" and really kind of helped bring that to light. But then as I started getting even deeper into it, I mean, like, it was both terrifying and funny at the same time.So the idea was to transfer on the business. I'm actually looking at a little, foam pyramid that has the goals on it right now. It's delighted customers, rewarded shareholders, and energized employees. Our vision, the leading utility in the United States. So at its core, the ultimate goal is 8% annual EPS growth. That was the goal. And the goal was to bring in Accenture to figure out ways basically to cut expenses. That was the idea. And Accenture, it was a bunch of them. I mean, they hired a lot of these consultants, and PG&E employees called them the greenbeans. And they come in, and they're looking through PG&E's records and data and stuff, and they're like, "hey guys, we're trying to do some benchmarking, and this is really hard because you don't have very good data."David RobertsI know.Katherine Blunt"Okay, well, proceeding on, we could cut expenses in all these areas because it's been outpacing inflation over a ten year period. So here's where you should be cutting costs." But the thing about, pretty much all of the initiatives that Accenture helped implement were just disasters for one reason or another. And payroll got bungled. Employees were mad. I think they were trying to use some new mapping tool that didn't work at all. So employees literally had to rely on Mapquest when they were trying to figure out where to go.David RobertsThis is like every corporate transformation effort in a nutshell. It's like a parody of them. Like whizzbang new systems that nobody understands or likes, ignoring people, ignoring maintenance, producing these elaborate reports. Just, like, it's so early, it's so of that time.Katherine BluntIt was. It really was of that time. And ultimately, it was just a really expensive bust, is how you sum it up. And it was distracting. It made employees angry. And I think so. I've heard various estimates for how much it costs. Like, some people believe it cost a billion dollars. I've settled on the number $300 million, and PG&E ended up negotiating like some sort of discount because they were so mad.David RobertsBecause they didn't get anything. What was the guy's quote? He's like, "it's not like you shopped for a Jaguar and got a Volkswagen. It's like you shop for a Jaguar and didn't get a car."Katherine BluntYeah, that's what he said.David RobertsAnd so all of that process, aside from the rest of the fiasco, is the expenses that were getting cut were predictably maintenance and monitoring of this vast system of transmission lines. And then the other thing that starts happening, the other thing that's very of our time, that starts happening in the early 2000s and 2010s, California starts getting drier and drier, goes into these mega droughts. The winds comes. Basically, fire danger starts steadily rising even as PG&E is sort of cutting expenses monitoring it. And the sort of predictable result is a bunch of fires start based on failures of their transmission system.And so this brings us to an interesting law in California which holds utilities 100% responsible for fires. They start tell us a little bit about that law, like how did that law end up on the books? It turns out to be incredibly consequential law. Why does California have this quirk?Katherine BluntYeah, so what we're referring to is, the wonky, official name is "inverse condemnation", and it sounds really complicated, but it's not so complicated. So you think about eminent domain, right? If some sort of governmental agency wants to build something serving the public good, they have the right to take your private land if they compensate you properly, right? The flip of that, I think is why it's called "inverse condemnation", is that if that thing built to serve the public good results in some sort of property damage, you, the property owner, are entitled to compensation.And initially this really applied only to publicly owned utility companies, right, governmental agencies. But in the early 90s, there was a case that went all the way to the Supreme Court of California, I think, involving a power ignited by one of Southern California Edison's power lines. And the court determined that the privately owned utilities are substantially similar to their publicly owned counterparts, and, therefore, are subject to inverse condemnation as well.David RobertsAnd this sort of sets off this cycle. So California gets drier and drier, and PG&E has all these old power lines crisscrossing the state. And a fire happens on their watch, and it's huge, and the damages are enormous, and suddenly they have to compensate these enormous ... because they're completely responsible for under this law. They have to come up with, there's all these lawsuits, people arguing, coming to a settlement, finally. And then as that's happening, another fire starts.And it's almost comical, and tell me if you think I'm wrong about this, but we have this law holding them responsible for the fires, and PG&E sort of ongoing health, or even existence, depends on not starting any more of these fires. But it simply can't not start these fires. I mean there's no, nobody at any point in the book has a serious plan for how PG&E could eliminate that risk.Because just like talk a little bit about the extent of what it would really require to genuinely send out people to go put eyeballs...I mean, this is saying, like you talk about it's pretty labor intensive to test these natural gas pipelines in a proper way. And it's similar with the transmission lines. It's a labor intensive thing to truly inspect them. You're supposed to go climb, literally, climb the tower and look at all the little hooks. Put your eyeballs on all the little hooks. The cheap way is just to drive a helicopter pass. But to really do it, it's quite labor intensive. So just give us a sense of like, what would it take? How many of these lines are out there? What kind of workforce and money would it take to genuinely do the kind of inspection that would reduce this risk, appreciably, close to zero?Katherine BluntYeah. So I think that at the end of the day, getting to zero is about as close to zero as it gets because in some ways the risk is inherent throughout the system. So there are two primary risk modes, right? There's the risk that a tree branch or a tree limb or something could touch the live wire and ignite a fire. And so the way that the company tries to get ahead of this is to make sure that it sends out vast numbers of contractors to trim or remove trees that have the potential to contact the wires. But as we know, in Northern California, seasonal winds occur, very strong winds in the fall, maybe it lifts a branch from 50 yards away, and that branch gets tangled in the power line. I don't know how you account for that.David RobertsYeah, and trees are quite legendarily growing all the time.Katherine BluntThey are in, most of them, in a constant state of growth of some kind. Yeah. And so I liken this Sisyphus rolling the rock up the hill, right? I mean, that's what vegetation management is. You roll it up, and then it falls back down, and then you go do it again.And so then of course, the other risk is that the transmission line itself could fail in some way because of an issue with the equipment, whether that be like a tiny piece of hardware like a hook, or an issue with the wire itself, or the structure. And so that requires inspections to make sure that there hasn't been substantial deterioration of some kind that puts that asset at risk of failure. And the good news is that, I think, historically speaking, climbing the tower or the pole has been the best way to get a look at all of this stuff. They are doing more with like drones, and lighter technology, and things that make it so that you don't maybe have to do that all the time. But just to contextualize all this, the company's service territory is 70,000 square miles.David RobertsYeah. There's like hundreds of thousands of miles of lines we're talking about.Katherine BluntCertainly hundreds of thousands of structures. I think probably tens of thousands of miles of lines, but it's still, it's enormous. Yeah.David RobertsOnce again paralleling that the gas episode. Like they have this fire. They're found liable. There's all this backlash, and then there's this scramble to like, "we're going to fix this. Let's send people out inspecting and tree cutting." And they go out and find, just as they went out and found with the gas network, like, it's a disaster. There are decaying lines all over the place ,and trees all over the place. They just go out and discover, yet again, what a daunting and enormous task it is in front of them.And they're sort of, like, frantically doing this. And as they're doing it, there's another fire, and there's another whole round of this. So let's talk about the final settlement with fire victims, because you spend some time on this, and it's really wild. If PG&E were literally on the hook to pay all the victims of all the fires that started, the full value of what they lost, PG&E simply does not have that much money.Katherine BluntRight.David RobertsThere's no way for it to settle that. So talk about what they end up giving of victims in this final settlement.Katherine BluntYeah.David RobertsSeems like a twisted irony to me there.Katherine BluntOh, it's completely. This is one of the saddest parts of the book. So I should say, at the outset, after a spate of 2017 fires that that resulted from trees touching PG&E's power lines, and then, of course, the enormous 2018 fire that resulted from the failed transmission line, PG&E estimates it faces about $30 billion in liability costs.David RobertsWild.Katherine Blunt30 billion. Yeah. So there's three classes of claimants. The first is, like, governmental agencies, other public entities that incurred some costs as a result of the fire. The company reaches a settlement with them first. It's $1 billion in cash.Now, predictably, during this bankruptcy, which was enormously complex, you've got all these savvy financial players, the really kind of savvy, distressed investor types, descend upon this whole disaster. And I say that because the second class of claimants is insurance companies that are eligible to seek compensation from PG&E because they paid claims to homeowners that the fire is actually PG&E's fault. So this is a result, again, of "inverse condemnation". So that said, a lot of these companies, these insurance companies, didn't want to wait around for a settlement, so they sold these claims on the secondary market to, basically, the hedge funds. There was one in particular that bought a lot of them at a very steep discount and stood to make a lot of money here. And PG&E reached the second settlement with this group, and this was $11 billion. And the group demanded that it be in all cash.And so now the company is out $12 billion in cash. It doesn't have enough cash left to reach, what would be the largest settlement, which is with individual fire victims and business owners that actually lost property.David RobertsYes, we paid off the hedge funds, and now we're a little short.Katherine BluntYeah. And so it also gets more complicated because there was competition between the company shareholders that didn't want a restructuring plan that would result in a huge equity raise that would dilute the value of their holdings. And the bondholders who were fine with doing that. They could issue equity all day long. And they had a plan that would have basically issued enough equity to compensate fire victims. But ultimately, the company, the shareholders, won. I'm just going to leave it at that. The shareholders won this battle.And so what happened was the company settled with the last class of claimants, the individuals, for 13.5 billion in the form of a trust that was funded with half cash and half with shares in the company. So at the time the trust was funded, it was given enough shares that it held, like, a 21% stake in the company. So the irony is that they can't liquidate these shares quickly to compensate victims because doing so would sink the share price.David RobertsYou're tying victims compensation to the ongoing health of the company. So now the risks PG&E faces are in part adopted by the victims of its previous risks.Katherine BluntExactly. Exactly. When the other two settlements had no risk. That's what happened. And of course, you know, it's after, you know, a year plus after emerging from bankruptcy, PG&E's share price hadn't really rebounded at the time the trust was funded. It it wasn't actually enough to be valued at that full 13.5 billion. It was actually less. It was something like 10 billion.David RobertsRight, it was premised on an increase in the share price.Katherine BluntIt was. That did happen.David RobertsYeah. It's so twisted that these victims now have to be cheering for PG&E to do well to get their money back. It's wild. And also, it just seems to me, the risk, I even feel like calling it risk almost, is a misnomer. It is...given the volume of power lines out there, and the lack of inspections historically, and the sort of backlog they face on inspections, and monitoring, and tree trimming, and all that stuff...it is, to a first approximation, a certainty that they're going to start more fires, right? I mean, it's just with the drought going on and climate getting worse and worse, it's not even risk. It's just we know this is — we know it's going to happen again. There's no reason to think anything would be different this time, right? Like, there's no more prepared, there's no better system in place. It's just going to keep happening over and over again.Katherine BluntYeah. A couple of things there. I think that it's also worth noting that we often talk about these huge catastrophic fires that are ignited by PG&E's power lines, because they're very consequential, obviously. But these are not the only fires.David RobertsRight, of course.Katherine BluntTheir lines ignite hundreds of fires every year, and it just becomes a question of, "is it going to spread into a catastrophic wildfire?" Sometimes they're very small and easily contained. Other times, as we've seen, they are definitely not. The question only gets more consequential as the climate changes, as the drought gets worse, as the consequence of a single spark becomes much higher, or potentially higher, I should say. If there's any good to take away from this story, at least PG&E is now more aware of the risk than it ever has been, and it has probably never worked harder in its long history to address it.David RobertsYour book kind of ends in the middle of this saga, ongoing. Like, there's been the latest round of fire lawsuit compensation, but we're almost certainly cruising toward the next one. Do you have any reason to believe, a) that there's not just going to be another fire, another round of the same thing, or b) that PG&E has changed in any fundamental way?Katherine BluntSo I think that on the day-to-day, they're doing a lot more to try to manage the risk, and they're doing it in a few different ways. I mean, better inspections, more tree trimming, and they're also preemptively turning off the power.David RobertsNot popular.Katherine BluntNo, it's not popular, and it's not a long term solution. It's like, at this point in time, the company can't safely and reliably provide power at the same time all the time, especially during the fall when the winds pick up. And this is really frustrating to customers, obviously, because we are incredibly reliant on electricity and are only becoming more reliant on it for obvious reasons.So here's something that I find to be very interesting, and it remains to be seen how the company deals with this, but they got a new CEO in January of 2021. Five-ish, six months later, in the middle of the summer in July last year, a tree fell on a distribution wire that was not far from Paradise, which was destroyed in the Camp Fire. It ignites to become the second largest wildfire in California history. It, like, rose all around some of Great Western's old infrastructure, ironically. And so the new CEO goes up to Butte County, where the fire was blazing, and says, "we've got a new strategy that I'm announcing today, and we're going to underground 10,000 miles of distribution wire."David RobertsYeah, she kind of dropped that on everybody. On the shareholders, too.Katherine BluntYeah, yeah. She had just told the board the night before that she was going to go public with this, and it was risky because the company hadn't really fleshed out the plan. It really hadn't decided which circuits need to go underground, hadn't really talked with the CPUC about what this is going to entail. They had a rough estimate that this is going to cost $20 billion over the course of the next decade or so. This is really interesting to me because we're talking about how a tree is inevitably going to strike a line somewhere, and a tower or a pole is inevitably going to have a problem somewhere, right? You can never completely reduce that risk. Undergrounding is basically the only way to eliminate the chance of the line causing a fire. Like that's it.David RobertsYeah, in theory, it's possible to reduce the risk to almost zero, it's just with what money.Katherine BluntRight, and so this is an expensive plan, especially. She made this announcement in July of 2021. Since then, everything has only gotten more expensive, right? We're living in a very expensive period. Labor is going to be more difficult and more expensive to come by. So the real challenge here, aside from the engineering challenges, is the cost management. Rates are already really high in California. There's a bunch of proceedings on affordability at the CPUC. So how the company is able to pull this off from a money standpoint is going to be really critical to watch.David RobertsThis is something that the company argues throughout the book, which is infuriating, but not total BS, which is that if you impose too many costs on it or impose too high compensation for victims, such that you basically impoverish the company, then it won't be able to remain financially robust, and it won't be able to attract private capital. And if your model is that private capital is supposed to do the work, then you do need a company that can attract private capital. So that it's like limits on how much you can really punish PG&E, right? Because it does, at least the way the current model works, it does need to stay at least relatively healthy just to keep doing basic day-to-day stuff.Katherine BluntIt does, it does. And for most of the show we've been talking about the trade off between capital investments and safety spending that now PG&E and other utilities struggle with. It's possible, I mean, theoretically, that undergrounding actually threads this needle, right? It's something on which the company can earn a return, and it does a lot to improve the safety of the system at the same time. Instead of building a bunch of stuff they don't need or goal plating, their substations are actually able to earn a return on a real safety investment. But still, I haven't heard of any sort of shareholder sharing mechanism associated with this plan, so it will be recouped through customers. And this is a really challenging time to be passing more costs through.David RobertsThe final question I wanted to come to, and to me, the most important and interesting question that emerges out of all this. You have at the root of this the infrastructure in place. It is what it is. The costs for properly monitoring it and maintaining it are what they are. And those costs are incredibly high. And you see over and over again through the book how the need to produce returns for investors, siphons money away from that, siphons money away from maintenance and safety.And so on one hand, you can sort of blame the for-profit model, right? You can sort of say, like, the investor owned utility model, this is intrinsic to it, this conflict, and you're always going to get shortcuts on safety and so on and so forth. But on the other hand, and you address this a little bit towards the end of the book, like if, for instance, California took the dramatic step of buying PG&E and making it a publicly owned company, all those maintenance and safety costs still exist, and they're still huge, and all that liability still exists, and it's still huge.Katherine BluntRight.David RobertsSo if California bought the company, and then it caused the fire, the company would still be liable for all the damages to the fire. And instead of private investors paying that out, it would be California taxpayers. So, in other words, if it became a public company, all these costs would fall very squarely on ratepayers and taxpayers, and they're huge. So, like, bills would go way up, and that would be politically disastrous. So I guess I'm asking you an unanswerable question, which is just it doesn't seem like private capital covering this massive backlog of costs that don't produce any returns is a good model, but it also doesn't seem like taxpayers or ratepayers understand it well enough to take it over and then take on much, much higher costs upfront.So this is like the question I come to at the end of the book. It's just like, where does the money come from? The money you have to spend to make this system safe is what it is. Somebody's got to pay it. What is the right system for paying it? Nobody wants to pay it.Katherine BluntRight. Yeah, exactly. The only argument for an ownership change is to remove the profit motive, right? But it really doesn't solve a number of other problems. It's either, basically, the taxpayer becomes responsible for upkeep of the system as well as the liabilities that result from inevitable system failure. Yeah, a lot of people focus on the ownership question. So there's certainly that sort of philosophical debate to be had about what is the right model.But then there's also the practical reality of the fact that PG&E is not for sale, right? PG&E is not selling its assets. And it'd have to be a really contentious some, like forced takeover that would be really unpopular and definitely a protracted fight. So we're stuck with this. I don't mean that disparagingly, but this is the model. The cake is baked, so to speak, right? This is what we have.And I think probably the better question becomes, like, okay, so then how do we make it workable? How do we make it so that there's better oversight of spending both within the company and within the regulator? How do you improve compliance? How do you drive down inspection costs? These kinds of things. And I think that everyone I will say that I think everyone who's kind of relevant in answering this question is trying to do so and is trying to do more. But as it's very clear in our discussion, there are problems and challenges of an enormous scale.David RobertsYeah, and not particularly unique to California. And I just come back over and over again to the notion that as long as this basic, misaligned incentive exists in investor owned utilities, which is the only way to make money is to build new stuff and maintaining your current stuff is dead weight loss. You can push back against that incentive via really good regulators that are paying close attention, are new specific rules, but, ultimately, it just feels like you're kind of pushing against the tide there until that basic core incentive has changed somehow.Katherine BluntYeah, that's a very excellent point. This is not just a PG&E problem. I think a lot of utilities across the country have historically mismanaged spending or mismanaged risk in some way, and because of this tension between private interests and the public good that's inherent within the system, and maybe they did so with little to no consequence. But my view is that that's really starting to change. We're seeing more extreme weather events that's putting more stress on a system that's aging anyway.David RobertsYeah, I mean the bill was going to come due at some point. You can't get away with it for a long time. From some perspective, it's friggin amazing that we built infrastructure in 1920 or whatever, 1915, that is still operating relatively reliably. I mean, all things considered it's crazy, but, like, of course that bill is going to come due.And I don't even think it's just in utilities either. Like, you look at critics of suburban sprawl say basically the same thing. Like you build new suburban sprawl, you get a sort of immediate infusion of new money, immediate infusion of new investment, which allows you to go build the new thing. But sooner or later the bill comes due for maintaining all that stuff you build, and it's just not producing enough tax revenue to pay the maintenance costs. And who's going to pay the maintenance costs? All the shenanigans with corporate shuffling money about and shuffling liability about.In the end you come to the question of like you just need a certain amount of money to maintain the stuff you built, and somebody's got to cough up that money. And it seems like America built a bunch of infrastructure and has been coasting on it. And now in all these different areas, the bill is coming due. And like, a) we've got corporations that are just not structured to pay it, and then b) we've got a public that has no idea that this dynamic is going on and would not react favorably if suddenly presented with the bill for all this maintenance. So we're just putting it off, in electricity and everywhere else.Katherine BluntYeah. And if there's one takeaway, I hope it's that PG&E is a good lens through which to view a lot of these challenges nationally. I think we're going to be talking a lot more about in the years to come.David RobertsThe book stops more or less in the middle of these cycles: fire, lawsuit, verdict, scramble to improve things, another fire, more lawsuits. You more or less just stop in the middle of that cycle. a. do you have any predictions about how this will settle out, or even if it will settle at all? I don't know what even settling would look like. But b. are you going to write a sequel?Katherine BluntI won't rule it out. But I'll say not immediately.David RobertsYou need a little break from book writing.Katherine BluntMaybe a little more content. We'll see what...we got to see what's next for the company.David RobertsOh, you know, they'll comically screw up sooner or later. Start your watch.Katherine BluntI'm sure that something really unfortunate will happen. But I will say this, I am cautiously optimistic that things will be somewhat better going forward. It remains to be seen how quickly that becomes the case and whether that is sustainable. So certainly keeping a close eye.David RobertsRight. The race between modest improvement and then things getting worse via climate change. Like, how do those two things balance out?Katherine BluntYeah. This book is a story of systemic failure and the convergence of kind of almost an unfathomable number of risks.David RobertsThat's the story of our time. Well, thank you so much for coming on, and I really enjoyed the book. Even for someone who lived through all that stuff and wrote something about, it's a real page turner for me. There are tons of details I didn't know anything about that are quite fascinating.Katherine BluntSo glad to hear that. I really am. Thank you for having me. This was a really fun discussion.David RobertsThank you for listening to the Volts podcast. It is ad-free, powered entirely by listeners like you. If you value conversations like this, please consider becoming a paid Volts subscriber at volts.wtf. Yes, that's volts.wtf, so that I can continue doing this work. Thank you so much, and I'll see you next time. Get full access to Volts at www.volts.wtf/subscribe

As part of his price for agreeing to pass the Democrats’ Inflation Reduction Act, Senator Joe Manchin extracted a promise from Senate Majority Leader Chuck Schumer to pass a "sidecar deal” addressing the issue of permitting reform. Earthjustice president Abigail Dillen thinks it's a bad deal. I called her to talk through her reservations about the deal, her larger take on permitting reform, and her thoughts on how to build the renewable energy needed to address climate change. Get full access to Volts at www.volts.wtf/subscribe

A few years ago, Melissa and Chris Bruntlett and their two children moved from Vancouver, Canada, to Delft, a small city in the Netherlands where 80% of journeys are taken by foot, bicycle, or public transit. Their new book, Curbing Traffic: The Human Case for Fewer Cars in Our Lives, is about what it's like to live in a truly low-car city, and how other cities can capture some of the same benefits.Reading the book was a joy for me -- it reinforced so many of my priors! -- so I was excited to talk to Melissa and Chris about how to design streets for people, the connection between urban infrastructure and social trust, the flourishing that Dutch children enjoy, and the myriad evils of cars. Get full access to Volts at www.volts.wtf/subscribe

In this episode, director Adam McKay returns to hash over some of his reservations about the Inflation Reduction Act and the larger political situation in the US. I try to persuade him to be happy about the IRA. Get full access to Volts at www.volts.wtf/subscribe

In this episode, energy modeler and expert Jesse Jenkins is back yet again, completing our two-part discussion of the details of the Inflation Reduction Act. This time around, we get into the tax credits, the green bank, the methane fee, and much more. Get full access to Volts at www.volts.wtf/subscribe

In this episode, professor and energy expert Jesse Jenkins returns to the pod to dig further into the details of the Inflation Reduction Act. We discuss what the models can and can't tell us, the ugly fossil-fuel leases embedded in the bill, and what to think about the carbon capture provisions. Get full access to Volts at www.volts.wtf/subscribe

In this episode, it’s just me by my lonesome, sharing some thoughts about the history and context of the Inflation Reduction Act, the most significant climate legislation ever passed by the US Congress. Get full access to Volts at www.volts.wtf/subscribe

When it comes to reducing transportation emissions, two main ideas compete for mindshare in the climate space. First is switching out internal combustion engine vehicles for electric vehicles. Second is improving the built environment to make walking, biking, and public transit easier, to reduce the amount of miles traveled in cars and trucks altogether.The conventional wisdom is that the former is faster. There are a few key policy levers that can be pulled to get massive numbers of EVs on the roads, whereas urban improvements proceed one at a time, each facing its own bespoke set of challenges.But there are people out there at the city level working to increase the speed of those improvements. One of them is Warren Logan, currently a partner at Lighthouse Public Affairs, but before that, policy director of mobility in the Oakland, California, mayor's office, a senior transportation planner for San Francisco, and an intern in the transportation office at Berkeley, California.In his time working on transportation projects, Logan has given a lot of thought to, and done a lot of work on, improving city processes to make safety and walkability improvements faster and less capital-intensive. He wants cities to free themselves up to make fast, cheap changes that can have big impacts without an enormous investment of time and money.As listeners will have noticed, I have been somewhat obsessed lately with urban design and transportation issues. I hope you will indulge me in another conversation about the nature of resistance to urban improvements, the kinds of changes that can be made quickly to dramatically improve safety, and the larger need to avoid over-reliance on EVs. Get full access to Volts at www.volts.wtf/subscribe

Volts subscribers are well aware that the US, like most places, badly needs more long-distance power lines. Such lines unlock the potential of regions where renewable energy is abundant but people are scarce. They lower system costs for all customers on the grid. They make the grid more reliable and resilient.However, it is incredibly difficult to build these lines. The process is a bureaucratic tangle, with ubiquitous controversies over how to allocate costs and benefits, and the pace of building is woefully short of what will be needed to help the US hit its carbon emissions targets.But a ray of sunshine pierced that generally gloomy situation last week, when the market monitor of the midwest wholesale electricity market — the Midcontinent Independent System Operator, or MISO — announced the results of its Long-Range Transmission Planning Initiative. It laid out a roadmap that would involve $10 billion worth of investment in some 2,000 miles of new transmission lines, which MISO anticipates could unlock more than 50 gigawatts of pent-up renewable energy.To someone like me, so accustomed to stories of failure around transmission, it came as a bit of a bolt from the blue. But it is, in fact, the result of years of long, steady work by advocates, stakeholders, and experts — including my guest today.Lauren Azar is a longtime attorney and consultant working in the electricity industry. During her time as a lawyer, she has also worked as a senior advisor to the US secretary of energy on electricity grid issues, a commissioner on the Wisconsin Public Service Commission, and president of the Organization of MISO States, which was deeply involved in the last round of transmission planning in MISO. There's nobody in a better position to explain what has just happened in MISO and what it means for the larger field of transmission planning, so I'm extremely excited to welcome her on to the pod today. Get full access to Volts at www.volts.wtf/subscribe

In this episode, two Volts favorites — Princeton professor Jesse Jenkins and UC Santa Barbara professor Leah Stokes — join me discuss the Inflation Reduction Act, the somewhat miraculous last-minute agreement between Senators Joe Manchin and Chuck Schumer. It represents the tattered remains of Build Back Better, but many if not most of the climate and clean energy provisions remain intact. We discuss what's in the bill and reasons to be excited about it. Get full access to Volts at www.volts.wtf/subscribe

Listeners, today at Volts we've got something a little different, a little off our beaten path. It’s an episode about one of my favorite music festivals. It might not seem obvious to you why you should care about a small music festival in the far northwest of the country, but I think if you are patient and listen for a little bit, you'll get a sense of why I’m spending time on it (beyond self-indulgence).By the time 2011 rolled around, I was more or less done with music festivals. I love live music and have been to many great concerts, but most festival experiences were so hectic, stressful, crowded, dirty, and exploitative that it just no longer seemed worth the effort. (That has only gotten more true in intervening years.) So I was a little skeptical when a friend told me about the Pickathon festival, held every year about 20 miles outside of Portland, Oregon.For one thing … “Pickathon”? Sounds like one of those twangy festivals with crunchy hippies playing mandolins and banjos. That is not my bag. But he assured me that the lineup is diverse, from all genres, focused on acts that are about to break bigger. He talked me into going. And listener, it blew my mind. For one thing, the land itself is gorgeous — it is held at Pendarvis Farm, a sprawling area of pastureland and wooded hills that is used only once a year for gatherings, only for Pickathon. Every attendee camps (the festival lasts three days), but not in some crowded parking lot. Rather, there is a whole network of trails running through the woods, with established camping spots that have been used and reused since 1999 when the festival started. Then there’s the crowd. It wasn't jam-packed. You could always get food or drink with very little line. You could always see the band, no matter which band you wanted to see. There were tons and tons of families and children and almost no backward-baseball-cap bros. It felt oddly wholesome.But perhaps the strongest impression I took away that first weekend was how weirdly, anomalously clean the festival was. One staple of festival life is giant, overflowing trash cans, with food wrappings and disposable cups strewn everywhere. At Pickathon there was none of that. There was virtually no visible trash. Water was free, available at spigots across the grounds.It all struck me as so intensely human, so humane, that I fell in love and attended almost every year thereafter. (Here’s a 2013 story I did for Grist and a 2017 story I did for Vox, in which I interviewed 20 artists in three days.)Pickathon is back this year after a two-year hiatus, so I couldn’t pass up the opportunity to talk with festival founder Zale Schoenborn about how the festival has evolved since 1999, what's next on the sustainability front, and what's new at the festival this year. Even if you don't happen to live in the Pacific Northwest and can't attend, I think you'll enjoy hearing from someone who has put so much thought into into bringing humans together to commune and celebrate in a socially and environmentally sustainable way. Get full access to Volts at www.volts.wtf/subscribe

It now seems fairly clear that no climate legislation is going to pass this Congress before the midterm elections. After the midterms, Democrats are highly unlikely to retain control of both houses, so there likely will not be any federal climate legislation in the US for many years to come. This is, obviously, to the country's immense shame.That means Biden finds himself in the same situation that Obama ended up in: if he wants anything at all to get done on climate change during his term, he's going to have to do it himself, through executive action. He has already begun announcing some executive orders.However, there is a case to be made that the president has the power to do much, much more. Two senior attorneys at the Center for Biological Diversity — Jean Su, director of CBD’s energy justice program, and Maya Golden-Krasner, deputy director of its Climate Law Institute — have been aggressively making that case for the past three years, laying out a broad suite of actions available to a president and accompanying them with arguments rooting those powers in statutory authority.They've just released a new report called “The Climate President’s Emergency Powers,” which digs into what it would mean for Biden to declare a state of emergency over climate change and what sort of statutory powers that would grant him. In this moment of utter legislative failure, I wanted to talk to Su and Golden-Krasner about the kind of things Biden is capable of doing, which actions he ought to prioritize, how he should think about the hostile Supreme Court, and the political optics of governing so aggressively and unilaterally. Get full access to Volts at www.volts.wtf/subscribe

Back in 2020, I wrote an article about some eye-popping new research on air pollution which found that the damage it is doing to human health is roughly twice as bad as previously thought, and moreover, that the economic benefits of pollution reduction vastly outweigh the costs of transitioning to clean energy.It seemed to me then that the findings should have gotten more attention in the press, and I wasn't the only person who thought so. Journalist David Wallace-Wells, who made a splash a few years ago with his terrifying book on climate change, The Uninhabitable Earth, also dove in to new air pollution research and produced a magisterial overview for the London Review of Books last year. Recently he revisited the subject for his New York Times newsletter, asking why social mobilization against climate change, which promises millions of deaths in decades, is so much greater than mobilization against air pollution, which kills 10 million a year today.It's a challenging question, and I'm not certain I have a great answer, so I wanted to talk to David about it — what the new research says about the mind-boggling scope and scale of air pollution’s damage to human welfare, how we ought to think about it relative to climate change, and what scares him most about the process of normalization that allows us to live with 10 million deaths a year. Get full access to Volts at www.volts.wtf/subscribe

It is a dark time for climate activists. The immense hope they felt at the introduction of the original Build Back Better bill has curdled. It is still possible that some kind of deal might emerge from the Senate in this final month, but if it does it will be a pale shadow of what it once was.Meanwhile, the Republican-dominated Supreme Court has just taken away one of the EPA's principal tools for addressing greenhouse gases. And that is, of course, only one tiny sliver of the damage that the court has done and is continuing to do. A Supreme Court that is hostile to climate action seems fated to be a fact of life for at least a generation.It is not clear what climate activists could have done differently to avert these grim outcomes. And it is not at all clear how they should proceed from here. They have no way of encouraging West Virginia Democrat Joe Manchin to be a decent human being and once the reconciliation bill is done, the midterms will be upon us, and all signs point toward disastrous Democratic losses that will take legislation off the table entirely.What should climate activists be doing right now? How should they be maintaining hope and momentum?To discuss these difficult questions, I contacted Lori Lodes, the head of the nonprofit advocacy organization Climate Power, which was created by John Podesta and others in the run-up to the 2020 election to ensure that climate had a place on the Democratic agenda. Lodes is a veteran of several difficult Democratic fights going back to Obamacare and is a self-proclaimed lover of political combat, so I was eager to hear from her on what climate activists should be doing, how they should feel about whatever emerges from the Build Back Better negotiations, and how they should move forward in a world where federal action has become all but impossible. Get full access to Volts at www.volts.wtf/subscribe

On June 30th, the Supreme Court handed down a ruling in the case of West Virginia v. Environmental Protection Agency. There was a great deal of dread in the climate community in advance of the ruling, and a great deal of hyperbolic coverage in its wake. But what did it actually say?Volts listeners will already be familiar with the case thanks to a pod I did on it a few months ago with Jack Lienke and Kirti Datla, and they will recall that it was somewhat bizarre for the court to take this case at all, since it regards a set of regulations that never were and never will be put into effect. Rather, the court seemed eager to pass judgment on the legal justification that it anticipates EPA might use when regulating greenhouse gases under Biden. It was, in other words, an advisory opinion, which the Supreme Court is not supposed to do.Nonetheless, it took the case and now it has ruled. The headline is that the majority opinion is not as bad as many anticipated, especially in the wake of the unhinged Dobbs decision that overturned Roe v. Wade. This was a Chief Justice Roberts special, carefully parsed and hedged.To get clear on what the ruling does and doesn't actually say, I contacted one of the lawyers on the case, Jay Duffy of the Clean Air Task Force. Duffy was responsible for several of the key briefs and arguments in the case, so I thought he would have a good read, not only on what the Roberts decision says, but what it portends for subsequent cases. Get full access to Volts at www.volts.wtf/subscribe

Charles Marohn — “Chuck” to his friends — grew up in a small town in Minnesota and later became an urban planner and traffic engineer in the state. After a few years, he began noticing that the projects he was building were hurting the towns he was putting them in — subtracting more tax value than they added, forcing everyone into cars, breaking apart communities and saddling them with unsustainable long-term liabilities.He began recording his observations on a blog called Strong Towns. It quickly caught on, and over the years, Strong Towns has grown into a full-fledged nonprofit with an educational curriculum, an awards program, and a rich network of local chapters working to improve the towns where they are located.Marohn has since written several books, most recently 2021’s Confessions of a Recovering Engineer and 2019’s Strong Towns. Intellectually, he sits somewhat orthogonally to most of the contemporary urbanist community. He’s an avowed conservative and opposes many of the state and federal solutions to the housing crisis favored by today’s YIMBYs. But there is arguably no one alive in America who has done more to get people thinking about what makes for a healthy community and how the US can begin to repair its abysmal late-20th-century land-use choices. I was excited to talk to Marohn about why suburbs are money-losers, the right way to think about NIMBYs and local control, and why the city planning profession is so resistant to reform. Get full access to Volts at www.volts.wtf/subscribe

Readers, I am keenly aware that you subscribed to this newsletter to get articles and podcasts about clean energy, not to hear about my life and travails. And I’ve already sent you one life-and-travails message this year. So I debated with myself a long time about whether to send this one, especially given all the other horrible stuff happening in the world.But, in the end, there is an unavoidable intimacy to this format and that is one of the things I like about it. I don’t have any bosses or advertisers or funders to report to — there’s just me, trying to create good content, and (some of) you, paying for it. Given that life events are currently affecting my ability to work, I feel I owe you some explanation.Attentive readers may recall that I’m supposed to be in Italy right now, vacationing with my family to celebrate my oldest son’s high school graduation and impending departure to college. As fate would have it, that vacation has been canceled. Why? Well, part of it is that, as followers of my tweets may already know, my entire family has Covid at the moment. But the other part, which I haven’t yet shared, is that I also have cancer. Specifically, I have a relatively rare cancer called urothelial carcinoma — a 4.5-cm mass in my right kidney cavity. It was identified via a CT scan about a month ago. A few weeks ago, I had a procedure: a right ureteroscopy with biopsy and ureteral stent insertion. They also fired some lasers at the mass, which I found oddly gratifying. The good news is that, somewhat to everyone’s surprise, the biopsy indicates that the cancer is low-grade. The bad news is that the mass is so big that it’s got to come out regardless; my surgical options are no different than if it were high-grade. Because it has gotten so big, trying to laser it to pieces could take two, three, or even more full surgeries, followed by a lifetime of vigilance, since this type of cancer tends to recur in surrounding tissue via the “field effect.” Recurrence in my kidney or ureter would be bad; recurrence in my bladder (which I only have one of) would be worse.The other option is just to have my right kidney taken out entirely, which is what I’m scheduled to do next month — what the official documentation refers to as a “nephroureterectomy, robot-assisted,” which I also find oddly gratifying. I like having robots and lasers on my side.Having a kidney out is not a small thing — it’s a serious surgery — but there are very good chances of full recovery. People lose or donate kidneys all the time and go on to live long, healthy lives. My colleague at Vox, Dylan Matthews, donated one of his kidneys out of pure altruism and wrote a detailed account, which has been a great comfort to me. To be clear: I’m in no pain. The cancer itself is causing me no symptoms outside of hematuria (bloody urine), which admittedly is no fun, but it was the only way this thing got caught. A tumor in your kidney lining (as opposed to the cavity, where mine is) can grow for a long time and cause no symptoms at all. It’s a good thing my tumor made a ruckus.Suffice it to say, in the vast hellscape of possible cancers, I could have done a lot worse. I am, in the grand scheme of things, quite lucky.That said, losing the vacation is a real bummer. For one thing, it was all set up: the plane tickets were bought; the lodgings were booked; the train tickets were reserved; the cars were rented; the tours and outings were all lined up. It was going to be magic. But what really hurts my heart is not getting to send my son off with some indelible memories of his final summer with us. I wanted that time with him so badly. As a sad, sweet gesture, Mrs. Volts made us reservations at an Italian restaurant in Seattle for last Monday night — the night we were supposed to leave for Italy — but then, over the weekend, the older boy tested positive for Covid. He isolated immediately, but the next day I tested positive and the day after that, Mrs. Volts and the younger boy. To summarize: rather than nibbling gelato and sipping espresso at a street-side cafe in Florence, we are at the end of a week spent slumping around our house, coughing and snorting and unable to do much but watch TV. (The Old Man is really good.)One additional downer: remember a while back I told you about my aching wrists and elbows? Yeah, that’s worse than ever. I can type for short bursts, but holding my hands steady in any position for more than about 30 seconds brings sharp pain. This means I can’t really sustain concentrated work on longer writing. I can basically … tweet. And given that tweeting is already what I do when I’m anxious, I’ve been tweeting a lot lately. It’s not great.I tried some voice control and transcription programs, but I found them weirdly enervating. It is exhausting to talk all the time! But I’m going to have another go at them, since this doesn’t seem to be going away and I still can’t think of a practical way to take six months away from a keyboard to let them rest. Anyway. I have lived, on balance, an extraordinarily fortunate and privileged life, and I’m still living one, but I tell you — when it rains, it pours. I will get my kidney out; Covid will pass; I will figure out how to deal with the tendonitis. Some day soon this will all be behind me and I will get back to full productivity, including writing the long explanatory articles that I desperately miss writing. I want to bring in more guest pieces, do more deep dives, and set up some regular features and themes. But in the meantime, while I am navigating this crapstorm, there might be some slow weeks and months around here. I’m going to try to keep up the podcasting, but it may be a bit more sporadic.As I said last time, if anyone feels like they’re not getting what they signed up for and wants to unsubscribe, I understand and do not begrudge. Subscriber growth slowed considerably when I shifted from writing to podcasting, as I suspected it might, but it hasn’t yet ever gone down. Y’all have stuck with me and I can not tell you how grateful and humbled I am to have you all here. In the meantime, my prognosis is good. My health-care providers are good. My insurance is good. My wife is a superhero. I don’t need or want for anything. I just thought I should let y’all know where I’m at. Volts is one of the things that keeps me going, so thank you for reading and listening and just being out there. Get full access to Volts at www.volts.wtf/subscribe

In the US, the movement to get cars out of cities is … what’s the nice word? … nascent. But in Europe, where many cities were built before cars and big-box sprawl never completely dominated, there is growing agreement that cars need to be reigned in. It’s partly about fighting climate change, but beyond that it’s about quality of life — living without air and noise pollution, using your legs to get around, and enjoying public spaces.More and more European cities are discovering what Copenhagen found when it studied the problem in earnest: every mile traveled on a bike adds value to a city, whereas every mile traveled in a car subtracts value. The pushback against cars in the Europe has been going on for decades now, but there has been little effort to catalogue and rank the various policies and initiatives involved. What works and what doesn’t? What should other cities prioritize?Into that breach came a recent research paper in Case Studies on Transport Policy that dove into the academic literature (surveying 800 papers) to rank the top car-reducing strategies. It was co-authored by Paula Kuss (based on her master’s research) and Kimberly Nicholas of Sweden’s Lund University Centre for Sustainability Studies. Nicholas later wrote a summary of the research for The Conversation that received an enormous amount of attention. As it happens, driving cars out of cities is one of my enduring obsessions, so I eagerly accepted Nicholas’ offer to review the research, discuss the themes evident in the top-performing policies, and ponder whether such policies could ever take hold in the US. Our conversation was enlightening and heartening, despite making me want to move to Europe. Get full access to Volts at www.volts.wtf/subscribe

You probably know Dan Pfeiffer best as one of the hosts of the wildly successful Pod Save America podcast, part of the growing Crooked Media empire of which he is a co-founder. Or perhaps you know him as the author of the Message Box newsletter, where he dispenses communications advice to left-leaning subscribers. But before he was a new media mogul, Pfeiffer was in the thick of politics as a top aide on Obama’s campaign and then in Obama’s White House, where he ran communications and strategy.Pfeiffer has seen the media war between the parties play out, and he has seen Democrats lose messaging battles again and again. He has first-hand experience of the growing power of the right-wing media machine to spread disinformation, set the agenda for the rest of the media, and deflect accountability.Now he has written a book on the subject: Battling the Big Lie is an extended examination of the growing imbalance between the conservative movement’s massive media megaphone … and the left’s lack of one. Listeners know that I have been obsessed with this imbalance for as long as I’ve been following politics, so I was super geeked to talk with Pfeiffer about how right-wing media grew, how it successfully intimidated both mainstream media and social media companies, and how Democrats can begin building a comparable megaphone of their own, before it’s too late. Get full access to Volts at www.volts.wtf/subscribe

Say you’re a private individual (or a company, or a foundation) who cares about climate change and has some money to spend on it. What’s the best way to spend that money? How can you ensure the largest possible impact?Similar questions about maximizing philanthropic impact have led to an entire field of study and practice known as “effective altruism,” which seeks to apply logical and empirical rigor to do-gooderism. But it is only very recently that effective altruists have turned their attention to climate change. One of the leading EA voices on climate is Johannes Ackva. He’s a researcher at Founders Pledge, an organization through which business owners and entrepreneurs donate a portion of their earnings to charity. For years, Ackva has been thinking through the puzzle of how best to channel climate philanthropy, given the structure of the problem and the politics around it. If you’re interested in what groups Founders Pledge has chosen for its donations, you can find a list on the website, but I was more interested in the thinking that led Ackva to those recommendations. Given the enormous spatial and temporal scales involved in climate change, the many social and political complexities, the extensive and irreducible uncertainties, how can a well-meaning donor have any confidence in their choices? I found our conversation quite enlightening — a new lens through which to view this familiar problem — it and I think you will too. Get full access to Volts at www.volts.wtf/subscribe

Geoengineering — using large-scale engineering projects to directly cool the Earth’s atmosphere — is an intensely controversial topic in climate circles. On one hand, such schemes strike many people as dangerous hubris, interfering with large-scale systems we don’t fully understand, risking catastrophic unintended consequences. On the other hand, there is good reason to believe that even a wildly successful program of decarbonization will not be enough to avoid devastating levels of heat in the atmosphere.Dr. Ye Tao was early in his career as a researcher at Harvard’s Rowland Institute, working on nanotechnology, when he became gripped by the problem of climate change. As he dug into the research, he concluded that even rapid decarbonization — especially insofar as it reduces the aerosol pollution that temporarily cools the atmosphere — would leave the Earth roasting in levels of heat hostile to most life forms.As he reviewed available options for carbon capture and geoengineering, he realized that none of them were safe or scalable enough to do the necessary cooling work in time. So he came up with a technique of his own: mirrors.The MEER project — Mirrors for Earth’s Energy Rebalancing — is a nonprofit established to advance Tao’s vision, which involves covering some mix of land and ocean with fields of mirrors. The mirrors would reflect solar radiation, and thus heat, back up out of the atmosphere. If 10 to 15 percent of developed agricultural land could be covered with mirrors, Tao has calculated, it would return Earth’s heat to safe preindustrial levels, providing a range of local benefits to agriculture and water in the meantime.It’s a brash idea, somewhere between crazy and obvious, and I was excited to hear more from Tao about why he thinks it’s necessary, how it would work, the materials that would be required, and how the MEER framework changes the way we view carbon dioxide in the atmosphere. Get full access to Volts at www.volts.wtf/subscribe

I often reflect on a particular moment in the summer of 2015. It was not long after the Supreme Court made gay marriage legal across the nation in Obergefell v. Hodges. And America was in the middle of one of its regular fights over Confederate monuments and flags, which were being pulled down by progressives across the country.One afternoon I ran across a cartoon — I think it was on Facebook? — showing a Confederate flag being lowered and the LGBTQ flag being raised in its stead.Hot damn, I thought. Maybe we really do get it right eventually.I now think back on that moment as the peak of my belief in what you might call the Obama creed, which the nation's first black president repeated in one way or another in virtually every speech: that the essence of America is its continuous struggle toward the egalitarian ideals of its founding. Again and again it delays and falls short and takes two steps back, but it never stops striving, improving, bit by hard-fought bit. The arc of history is long, but it bends toward justice.To a first approximation, everything that has happened since then has sucked. We fell into the ugly 2016 Democratic nomination fight, followed by the ugly presidential election, then four years of daily insults to dignity and compassion by Trump, then a plague that we bungled in countless ways and that has killed more than a million of us, and now, the Supreme Court is systematically dismantling the pillars of the modern administrative state while Biden and the Democrats fumble their way through a slow-motion catastrophe, setting up an openly seditious Republican Party to seize near-total power in the coming two elections.To put it mildly, these developments have been rough on the Obama creed, at least for me and many people I know. Much of what Obama himself did was crushed or reversed by Trump, and Biden has barely begun rebuilding from the wreckage. More than that, America's reactionary minority seems ascendent. And its intentions are clear: to follow Viktor Orban's lead in Hungary. To whittle democracy down until it's entirely hollow, one-party rule in all but name. It finds echoes in similar reactionary backlashes currently rising in nations across the globe.Is America redeemable? Is white Christian patriarchy ready and willing to destroy the country before it gives up power? Is the arc of history bending, or is it merely flailing back and forth, with no larger purpose or pattern? Is modern multi-racial, multi-cultural democracy still a viable long-term project?To help ponder these weighty questions, I've turned to the inimitable Chris Hayes, who, as they say, needs no introduction. You've seen his shows on MSNBC, you've listened to his podcast, you've read his essays and books, you know that he is one of the leading liberal voices of our time. He’s also a friend. We are part of the same generation of journalists, living through the same dumpster fires, seeing the same patterns, and our paths have crossed regularly over the years. I’ve also been on several of his shows! We go way back.I’ve always felt that Chris and I share similar political and intellectual instincts — one of the few people at the commanding heights of US journalism and punditry about whom I can say that — so I’m curious to hear how his political outlook has changed since 2015, whether he still believes in the Obama creed, and what he thinks is coming in America’s near future. Get full access to Volts at www.volts.wtf/subscribe

California has long been known, nationally and internationally, as a leader on climate policy. The sheer scale of its economy and the stringency of its emissions targets have made it a model for other states with climate ambitions. As a role model, its successes (and failures) reverberate far beyond its borders.So it matters a great deal whether California has a practical plan to meet its aspirations. This year offers something of an answer, and … it’s not great. Volts is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.Every five years, the California Air Resources Board (CARB) issues a “scoping plan,” laying out how it intends to meet the state’s targets. The last one, in 2017, raised serious questions about whether the state’s cap-and-trade system could do the emission-reduction work that the state planned to require of it through 2030. This year’s draft scoping plan (there’s still time for public comment) answers none of those questions, and instead, looking out to 2045, raises new questions about whether carbon-dioxide removal (CDR) can do the work the state plans to require of it.That’s a lot of questions. To hash through them, and get a sense of just how prepared California is to meet its climate targets, I called up Danny Cullenward, a long-time policy analyst in the state. (Volts fans will remember him from one of the very first Volts posts.) He is currently policy director at the nonprofit CarbonPlan and a research fellow at American University’s Institute for Carbon Removal Law & Policy. Cullenward and I discussed what policies have worked to reduce emissions in California, whether the cap-and-trade program can do what’s asked of it, why the current scoping plan leans so heavily on CDR, and whether there’s still time to improve the plan before it’s locked in for five years. Get full access to Volts at www.volts.wtf/subscribe

Back in 2012, the Obama administration levied tariffs on solar panels from China, to punish the country for unfairly subsidizing its panels in an attempt to corner the market. In the ensuing years, US imports from China fell off sharply and imports from Cambodia, Malaysia, Thailand, and Vietnam rose just as quickly.Early this year, a tiny California-based solar manufacturer, Auxin, filed a trade complaint with the US Department of Commerce, alleging that China is effectively laundering its solar supply chain through third-party countries, thereby illegally circumventing tariffs. It asked Commerce to apply commensurate tariffs on imports from those countries. (Canary Media has extremely thorough coverage of the case, if you want to catch up.)Commerce is investigating. Meanwhile, the industry has been thrown for a loop — imports have fallen off, projects are being cancelled, and projections of growth are being revised radically downward. The tariffs could be anywhere from 30 to 250 percent, which would radically change the economics of big solar projects, and if applied, will be retrospective over the past two years, which means even existing contracts are in jeopardy. The uncertainty has cast a pall over the entire sector.The Solar Energy Industries Association (SEIA) has been advocating against tariffs from the beginning and is calling on Commerce to dismiss the complaint. I contacted Abigail Hopper, the head of SEIA, to talk about the merits of the case, whether building a domestic solar supply chain is a good goal, whether tariffs work, and what other policies might be preferable. Get full access to Volts at www.volts.wtf/subscribe

Americans are struggling with two related problems: one, there’s general inflation, which means pretty much everything is expensive; two, there’s energy price inflation, which means that energy in particular (specifically, oil and gas) is expensive.This has led some politicians, mainly Republicans-and-Joe-Manchin, to propose a dual solution: cut back on government spending (to tame inflation) and increase domestic oil and gas production (to tame energy prices). This approach is wrong-headed and counter-productive on both counts. The reasons why are laid out in a new issue brief from the Roosevelt Institute, the first in a series called “All Economic Policy Is Climate Policy” (which, hell yes).Lauren Melodia, deputy director of macroeconomic analysis at the Roosevelt Institute, and Kristina Karlsson, the institute’s program manager for climate and economic transformation, argue that fossil fuel prices are inherently volatile, and that volatility has serious macroeconomic effects; on the flip side, electricity prices — specifically renewable electricity prices — tend to be far more stable and manageable.It follows that government spending to build out clean-energy infrastructure is itself anti-inflationary; it removes a source of price instability and replaces it with stability. This argument is my favorite kind — it put words to something that’s been rattling around in my head for years — so I was excited to talk to Melodia and Karlsson about the volatility of fossil fuels, why we’ve come to accept it as an inevitable fact of life, and why it is, in fact, a choice that we could make differently. Get full access to Volts at www.volts.wtf/subscribe

Recent years have seen an explosive rise in distributed energy resources (DERs) — energy devices that are located “behind the meter,” on the customer side, like solar panels, batteries, electric vehicles (EVs), and smart appliances.Distributed energy has the potential to change the grid for the better, making it cleaner and more resilient, but as things stand, there’s a problem.Consider an EV. The customer has a relationship to it, a way to see its capacity and behavior; it wants to operate the EV in a way that best serves their own transportation needs. The aggregator — an entity that gathers DERs and treats them as a single entity, to sell their services — has a different relationship with the EV; it wants to operate the EV to meet contractual requirements. The distribution utility has a different relationship; it wants to operate the EV to maintain grid stability. And the market manager (ISO) has yet a different relationship; it wants to operate the EV in the way that best serves the market.All these entities want different things from the EV, but they’ve all built bespoke systems to track it — systems that do not communicate with one another. Consequently, most DERs are wildly underutilized. This can not last. Confusion and crossed wires will only grow with distributed energy. What the world needs is a common, transparent, trusted way to track DERs, their capacity and interaction with the grid. That is what Energy Web, an international nonprofit, aims to provide: “an operating system for DERs” that will assign each DER a record on the blockchain (yes, the blockchain), allowing all interested entities to have a common source of information and tracking.I am a bit of a skeptic of toward blockchain hype, but this seems like an excellent use of it, which could unlock a much more sophisticated and resilient grid. I’m eager to talk to Energy Web CEO Jesse Morris about what the product is, how it can help DERs, and where we might see it adopted next. Get full access to Volts at www.volts.wtf/subscribe

It’s well-understood that the modern US conservative movement is a mix of two primary forces, fiscal and social conservatism. (See: fusionism.) Put more crudely: it’s the oligarchs and the evangelical white nationalists. The left’s pushback to social conservatism — anti-racism and civil rights more broadly — is well-developed and richly articulated. But what about the oligarchs and their stated mission to, in Steve Bannon’s words, “deconstruct the administrative state”? Where is the left’s defense of the administrative state, or as it’s less fondly known, the bureaucracy, or even less fondly, the “deep state”? Who will speak up for the deep state?The left has an ambivalent relationship with bureaucracy (which, after all, only overlapped with democracy for the last century or so) and has largely failed to articulate a coherent defense, even as Biden’s administration scrambles to rebuild the agencies Trump decimated. The right has told a clear, consistent story: government bureaucracies are corrupt, inefficient, incompetent, and expensive. It has been repeated to the point that it is folk wisdom. To this day, the left does not have a similarly clear and consistent counter-story about the merits of bureaucracy, or, to use a less loaded term, administrative capacity.State administrative capacity may not be well-theorized on the left, but it is nonetheless a necessary condition of virtually all progressives’ solutions to contemporary problems, climate change chief among them. The wealthy can not be taxed, corporations can not be forced to follow the rules, and wealth can not be transferred to those in need without a robust, competent administrative state. My guest today, Doug Thompson, an associate professor of political science at the University of South Carolina, has been thinking and writing about bureaucracy lately, as part of a larger book project on authoritarianism in America. He wondered why aspiring autocrats invariably degrade administrative capacity the second they are able — what they know about it that small-d democrats don’t seem to — which led him to an investigation of bureacracy that traced through Tocqueville and du Bois.Anyway, I’m excited to geek out with Thompson about the intense oligarchic hatred of the administrative state, America’s rich and somewhat surprising history with bureaucracy, and the kinds of positive arguments that can be made on behalf of administrative capacity as such. Get full access to Volts at www.volts.wtf/subscribe

One of the greatest riddles of the decarbonization effort is the residential sector, responsible for about 20 percent of US energy-related carbon emissions. There are about 142 million housing units in the US, around 83 million of which are “owner-occupied.” Substantially changing them involves dealing with 83 million separate owners, each with their own circumstances and preferences.Residential decarbonization seems incredibly difficult to scale up, and attempts to date have not been particularly successful. At the rate we are going, it will take hundreds of years to decarbonize America’s housing stock. The crew at New York-based climate tech company Sealed is trying something new, imported from the commercial efficiency market. Rather than trying to persuade homeowners to buy and install things with their own scarce resources, Sealed covers all the upfront costs and coordinates the work with trusted contractors. Homeowners pay the retrofit back out of energy savings, which means Sealed only gets paid if there are, in fact, measurable energy savings. This kind of pay-for-performance arrangement is called an energy services agreement (ESA). Listeners of my pod with Rob Harmon will recognize the concept: customers are paying for metered energy efficiency, in the same way they would pay for energy. Sealed started small but is growing quickly, so I’m excited to talk to its president and co-founder Andy Frank about the frustrations and failures of residential energy efficiency to date, what he’s learned about homeowner preferences, and what kind of benefits come along with having a fully electrified home. Get full access to Volts at www.volts.wtf/subscribe

One of my long-time gripes about the climate-economic models that outfits like the IPCC produce is that they ignore politics. More broadly, they ignore social change and the way it can both drive and be driven by technology and climate impacts. This isn’t difficult to explain — unlike technology costs, biophysical feedbacks, and other easily quantifiable variables, the dynamics of social change seem fuzzy and qualitative, too soft and poorly understood to include in a quantitative model. Consequently, those dynamics have been treated as “exogenous” to models. Modelers simply determine those values, feed in a set level of policy change, and the models react. Parameters internal to the model can not affect policy and be affected by it in turn; models do not capture socio-physical and socio-economic feedback loops.But we know those feedback loops exist. We know that falling costs of technology can shift public sentiment which can lead to policy which can further reduce the costs of technology. All kinds of loops like that exist, among and between climate, technology, and human social variables. Leaving them out entirely can produce misleading results. At long last, a new research paper has tackled this problem head-on. Fran Moore, an assistant professor at UC Davis working at the intersection of climate science and economics, took a stab at it in a recent Nature paper, “Determinants of emissions pathways in the coupled climate–social system.” Moore, along with several co-authors, attempted to construct a climate model that includes social feedback loops, to help determine what kinds of social conditions produce policy change and how policy change helps change social conditions.I am fascinated by this effort and by the larger questions of how to integrate social-science dynamics into climate analysis, so I was eager to talk to Moore about how she constructed her model, what kinds of data she drew on, and how she views the dangers and opportunities of quantifying social variables. Get full access to Volts at www.volts.wtf/subscribe

In this episode, Nan Ransohoff, head of carbon at Stripe, discusses the company's new spinoff, Frontier, which will pool money from partners and make it available to early contenders in the carbon dioxide removal (CDR) market. We chat about that market, the technologies that show promise in it, in the role of private industry in accelerating it. Get full access to Volts at www.volts.wtf/subscribe

In this episode, Google’s director of energy, Michael Terrell, explains the company's new goal of supplying all of its facilities with clean energy 24 hours a day, 7 days a week, 365 days a year. We discuss how its going, what kinds of new technologies will be needed, and what new policies could help move things along. Get full access to Volts at www.volts.wtf/subscribe

In this episode, I discussed swappable, rechargeable batteries in two-wheeled electric scooters with Horace Luke, the CEO of Gogoro. Luke’s company is selling subscriptions to batteries in bustling emerging-market cities like Taiwan. We talked about consumer requirements for swappable batteries, the other kinds of technologies that might use them, and his plans for expansion.Full transcript of Volts podcast featuring Horace Luke, April 22, 2022(PDF version)David Roberts:Electric vehicles are all the rage these days, but at least here in the western world, most of the attention has focused on four-wheeled passenger vehicles, first Tesla and then all the companies trying to catch up with Tesla. However, across the globe, more than 50 percent of commute miles are undertaken on two-wheelers — scooters, mopeds, and the like. China, India, and Indonesia alone contain more than 500 million two-wheelers; anyone who has visited big cities in those countries has seen the vehicles swarming the streets.And they are dirty as hell. Their two-stroke motors emit as much as five times the pollutants of the average new car in the US. Millions of people have died from two-wheeler pollution, to say nothing of the climate impacts.But two-wheelers are difficult to electrify. Their owners tend not to have extra cash; theft is a constant danger; and urban density makes plugging in, especially in a place sheltered from the elements, difficult.Today’s guest, Horace Luke, set out to solve this problem with his company Gogoro, founded in 2011. The idea was simple: consumers would own the scooters, but Gogoro would own the batteries, which would be made available in stations across the urban fabric, such that riders could easily find one to swap. Consumers would subscribe to the service, effectively ensuring that they would always have a charged battery available. The company took a different course than he expected — Gogoro ended up building its own scooters, stations, and batteries, doing far more hardware than the software-minded Luke had originally envisioned — but his persistence won out and the model is taking off, preparing to expand from Taiwan (where it started) to a range of other burgeoning megacities in emerging economies. It’s a clever model, a mental shift that opens up all kinds of new possibilities, so I was excited to chat with Luke about the problem of two-wheelers, the consumer experience of subscribing to Gogoro, and the other kinds of things, outside of transportation, that cities might be able to do with thousands of distributed, swappable batteries. So without further ado, welcome, Horace Luke, to Volts. Thanks for coming. Horace Luke:Thanks, David. David Roberts:I'm so taken by this whole idea. Tell us a little bit about the problem of two-wheelers: where they are, how dirty they are, and how big a part of the climate problem they are.Horace Luke:  Most of the people in the audience probably don't realize that more than 50 percent of all commute miles done globally every day are done on two-wheelers.While we in the United States look at it as more of a recreational or very short-distance commute, in the East – Vietnam, Thailand, China, India, Indonesia – you can't cross the street without being hit by one if you’re not careful. They're just everywhere. In China, India, and Indonesia alone, there are more than 500 million two-wheelers roaming around every day – taking people to school, to work, to the market. They are the absolute utility dependency vehicle that people look for when they're moving around town, and people on average ride somewhere between 300-700 miles a month. Unfortunately, because of the economics of it, the chance of them being clean is not very high. When compared to a gasoline vehicle in, let’s say, California, there are five times more pollutants coming out of the tailpipe per kilometer, easily. On top of that, you have people not using premium fuel and other carelessness that makes owning a two-wheel vehicle extremely polluting. On top of that, they're usually being used in densely populated cities where thousands of people are living on top of each other. If you're walking down the street, you can definitely smell them, you can feel the heat from them. It is a central problem that we need to solve.I grew up on the west coast of the United States. I worked for Microsoft, where I was one of the original founders of Xbox, then eventually was fortunate enough to lead the Windows XP user experience and product experience side of the business. Eventually I moved to Taiwan, where I worked for a company called High Tech Computer (now HTC). I created some of the world’s first Android phones – the T-Mobile myTouch, the Verizon Droid – and was pretty successful there. At age 40 I was traveling around Asia, thinking, “I made that company number one in the world, shipping 43 million phones a year – now what? As the world is moving to 5G and then to 6G and beyond, is that really the end game? Is human computing to make humans more efficient and more productive really the way of the future, or is sustainability?” So I picked sustainability. I think that this is the decade of sustainability. Mobility plays a huge role within that, and trying to figure out how to get the eastern hemisphere to adopt electric was the essential problem that we needed to solve. With Gogoro, we did that. David Roberts:   So cities are choked with these two-wheelers, which have some of the dirtiest engines possible, and you're trying to think about how to solve this problem. One way would just be to go electric, the same thing we've been doing with cars. Why isn't that the intuitive solution, to make electric versions of these scooters?Horace Luke:  In most areas of the world where two-wheelers are massively adopted, people live in stacked apartment buildings. Thousands and thousands of people live on top of each other, and these vehicles are being parked on the side of the road in a very ad hoc kind of way. You've got nowhere to park, so you really don't have a solution for nighttime charging. During the daytime commute, some technologies are emerging for fast charging – something like 10-15 minutes for about a 50 percent charge. Maybe that's doable, but in a two-wheeler, you don't have the comfort of a sofa, you don't have a stereo system, you don't have an environment where you're protected against the natural elements. If you're in line in front of me and somebody else is in front of you, we're talking 30-45 minutes exposed to rain, to heat, to sun. That just makes it almost impossible. Plus there’s the economics of it. You've got batteries, you've got a fast charger – now you're trying to figure out how much the vehicle actually costs. By removing the battery from that purchase equation, we help the user adopt the electric solution much quicker. Instead of buying the battery and charging it yourself, you stop by one of our GoStation battery swapping stations and just swap out the battery.David Roberts:   Back in 2011 when you first started Gogoro, did this vision – that you take the battery out of the scooter and make the batteries interchangeable, a quick swap rather than having the consumer own the battery – just come to you in a flash? Is that what the company has always been about? Horace Luke:  The company has always been about that. We started the company with 27 desks; we were thinking that we were a software company helping to create the algorithm and efficiency of swapping and managing these batteries. One thing we knew was that how and when you charge the batteries is very important to managing their lifespan. If you're starting a company thinking about sustainability, it's not about greenwashing or riding the electric hype – it’s about how you take the resources and minerals that are out of the ground today and extend the lifetime of use for as long as possible. That's the thesis from which we started. Then we were looking for people to build the vehicle, build the motor, build the station, etc. To be honest, it sounds like a broken record – a lot of companies start very small and eventually find out “hey, that's something nobody can do, so let's go do that.”Now we're fully stacked, we build our own smart batteries. We took the technology that we did with smartphones and we turned it upside down. Think of our battery as a smartphone that doesn't have a big screen on it. We took the ability to update and wirelessly connect and created perhaps the world's most powerful little battery that can power two- and three-wheelers.David Roberts:   So you eventually got into making the scooters, the batteries, and the battery banks that the batteries are stored in, just because you couldn't find anybody else to do it any better.Horace Luke:  Absolutely. I have this policy in our company where you ask twice, and if you ask three times, that means that you should have done it yourself. The first time you ask somebody “hey, can you help me with this?” and they're like “no, that's kind of impossible,” then you go to the second guy. And if they say, “you’re crazy, you can’t make that happen, that energy density is not something we can do” – if our science and our math work out that you could, we try and do it ourselves. So we built the world's most powerful and dense small, compact motor for mobility today, a tiny little motor that powers about 7 kilowatts, about 10 horsepower. It's a replacement of the popular 125cc or so. We've got our own batteries, we've got our own station, we even design our own charger. We subcontract out the bidirectional inverter that's in our station today. We even geek out on tires; a lot of energy is lost on tires. I sit down with the team to look at the compound of the tread pattern, the profile of the tire, so that we can save energy on tires to go as far as we can go. We're a curious bunch that just want to make electric mobility a possibility in these big cities.David Roberts:   If I'm a citizen of Taiwan and I need a scooter for my business or my personal life, what is the consumer experience like? What do I do, where do I go, what do I sign up for, what do I buy?Horace Luke:  By the way, in Taiwan, there are 14 million two-wheelers on the ground for a population of slightly more than 22 million people. If you don't count old and young people, you literally have a vehicle per person.Before 2015, when we launched our first vehicle, electric solutions were less than 1 percent of the overall sold in Taiwan. (In comparison, Tesla in the United States is about 3-4 percent.) We ended last year with about 26 percent in Taipei; in the overall market, we're somewhere between 12-13 percent. What's amazing is that our battery-swapping system accounts for 90-95 percent of all the electric vehicles. So we not only grew the market ten times, but at the same time we became the de facto standard when it comes to people adopting electric. That’s because we partner people not only with our own brand vehicle, but also with Yamaha, Suzuki Taiwan, Aeon, and PGO.David Roberts:   So if I'm going to replace my vehicle with an electric and I want to use the Gogoro battery system, I have different brands of scooters to choose from that can all accommodate your battery.Horace Luke:  Yeah, not only brand but design and functionality. Think of us as the Android of EV, or the Windows and Intel of computing. We're 47 different models across 10 different brands, so lots of shops around town.You choose the horsepower and design you like, you choose the form factor, you choose the brand, because at the end of the day each has different performance and different affinity to the brand. You buy the vehicle, and then you subscribe to our battery swapping system. The subscription is kind of like a mobile operator plan, for those of us who are old enough to remember those. You used to have fixed minutes and fixed messaging; you buy the bundle pack up front and the more you buy, the less you pay for overage per minute or per message. Same thing with us. We have plans ranging from all-you-can-ride, where you pay and you can go crazy and ride all you want. Or you can buy a little bit, start with something like $10 and about 60 miles, and then anything more than that you pay per kilometer on overage. The more you pay up front per month, the more you get. We even have carryover miles, just like you had carryover minutes. We apply the mobile operator model to battery swapping usability.David Roberts:   If you translate it into American dollars, what is an average monthly fee?Horace Luke:  The average monthly fee starts from about $10. You get about 60 miles, or 100 kilometers, and for every kilometer (or 0.6 mile) overage, you pay about three pennies or so. Then you find yourself snapping to the next plan, which is about $16-$17, and for that, you get a little more kilometers on a pre-bundle. And you just keep going up on the mileage.David Roberts:   So I've got the subscription, I'm riding around with one of your batteries, I'm getting low, I look for a battery bank – what do these things look like? What's the user experience of swapping a battery? How long does it take? And how common are these battery banks, how easy are they to find?Horace Luke:  In Taiwan, we've been going at this for almost seven years, and we are now at about 2,200 locations. In the metropolitan area, we're more dense than gas stations. By the end of this year, we will definitely have more locations than there are gas stations across the island. We have slightly more than 11,000 cabinets. Think of them as ATM machines or vending machines. We put them in places like convenience stores, cafes, universities, train stations, bus stations, supermarkets. Instead of gas stations, where you need a huge plot of land with a safe circumference around it, we can place them underneath your apartment building, wherever is most convenient for people.David Roberts:   They're common enough that if I'm running low, there's probably one close by.Horace Luke:  Literally, you're within a quarter mile from each one. The average distance that our consumer rides is about 40-50 miles, so they swap maybe every 3.5 days or so. Range-wise, we’re about 60-70 percent of gasoline vehicles, but with a lot more convenience than the gasoline vehicle. We can swap out batteries in less than a couple of seconds. But when we do that, people think our system is broken, that we didn't do the bill right or we spit out the wrong battery.David Roberts:   So I lift up the seat, I pull out the battery, and I put it in one of the empty holes in the bank. When I put it in, does the system know it's me somehow? How is it tied to my account?Horace Luke:  We wanted to make that user experience as seamless as possible. One of the things that we absolutely needed to do is to make it so much better than gasoline from a user experience perspective, so that people would want to switch over. So no credit card, no phone, nothing needed. You put your battery in, and because our battery has NFC on it, it carries your credentials – who you are, how many kilometers you’ve ridden. You put your battery in and it calculates whether you paid your bill, how much is needed for this time, how you rode and how much energy you used, then picks the right battery and spits a new one out for you that is fully charged. That battery is then programmed for you. So if I stole your battery from your vehicle and I put it in my vehicle, it won't work. The security system is tied to you. Essentially, you can feel confident having these expensive batteries in your vehicle; it won't be stolen because it just simply doesn't work. A stolen good is no good if you can’t resell or reuse it.David Roberts:   You're cutting out theft at a stroke there.Horace Luke:  You're cutting out theft on the battery; you’re also cutting out theft on vehicles. If I go to your desk and steal your key and ride your vehicle away, you just call our customer center and say, “Somebody stole my bike, can you put an alert on your network?” We put an alert on the network, so when the guy that stole your bike puts a battery in to swap, that battery is locked. Your vehicle handle lock is locked, so all you can do is push the vehicle in circles. And we know exactly where it is, so we can send a guy out to pick up the bike. There literally has been no theft on our network, because you can't steal it. Even if you steal it and you don't swap, you're talking about a circumference of no more than 60 miles. When a consumer takes a loan out from the bank, the bank gives a low rate because the system can be locked. If the guy doesn't pay his bill, we know exactly how to lock the battery or slow down the vehicle. If you don't pay your bill on time, we don't lock your vehicle right away; we make it go really slow first, so you can go to the bank. There are a lot of interesting bits that we've been able to do with the system, and it's just a bunch of us sitting around the table adding feature upon feature. Think of it as a smartphone, except with wheels on it, that’s electric. David Roberts:   These batteries you make are modular, so you could theoretically have a vehicle that requires two or three or four or more. You can imagine a lot of different vehicle form factors. What are the varieties that are out there now using your batteries? Horace Luke:  We're working with Yadea in China to ship low-cost e-bikes that use a single battery, but the speed is not great. It’s like 17-18 miles per hour top speed; that's a regulation in China. That battery can go pretty much forever, a really long distance.In Taiwan we have one that is about 50cc, a single battery. But the most popular vehicle in Taiwan, or across Asia, is 100-125cc, and that requires two batteries. We also have three-wheelers that we ship now with two vehicle makers; one is more just a quick last-mile delivery vehicle – think of it as Pizza Hut or Domino’s – and that's a three-wheeler with two batteries. We also have a vehicle maker that’s building a wet market big utility three-wheeler that uses four batteries. We recently announced the world's first solid-state battery prototype for swappable batteries. That added about 40 percent energy density into our battery pack. As energy density increases, form factor variety can increase. To swap batteries on a four-wheeler today, you might have to swap out eight of them, and that’s kind of exhausting.David Roberts:   I imagine once you get up to four you're spending a lot of time swapping.Horace Luke:  Anything more than a six-pack is a little troubling. As energy density gets up to, let’s say, 3 kilowatt hours, now we're talking about ability to create a variety of different form factors. Our system is also interoperable, so our battery can be placed into a Yamaha vehicle, and the one that's shipped with the Yamaha can be placed into the Gogoro vehicle and the Suzuki Taiwan vehicle. We've had three generations of batteries, three generations of stations, refining, working out all that needs to work out in the system. But the very first vehicle can use the latest battery, and vice versa – the very latest vehicle, that literally just shipped yesterday, can use the very first battery. And we've now manufactured 1 million batteries, so it's really a scale in numbers. As we get more and more vehicles and batteries out in the network, the more efficient it gets. If you go on our website, you'll see our vehicles are fun, colorful, and very eye-catching. The reason why we made them eye-catching is because, unlike a smartphone that you put in your pocket, every vehicle in the intersection is an advertisement. We wanted people to realize “hey, that guy's using something new, that guy is adopting electric, that's pretty cool.” We wanted to build that momentum as we built up the population of vehicles on the ground.David Roberts:   You've recently had a few experiments using the batteries in other urban things that need low, constant power, like parking meters. Is that a big direction you want to go, or just a side benefit at this point?Horace Luke:  Again going back to the word “sustainability,” it’s about taking whatever you need out of the earth. It's not about wearing nothing, eating nothing, sitting there with nothing. It's about the world becoming modernized, safer, smarter, and more efficient, attracting people coming into the cities of tomorrow. Our batteries are great for their first life, which is you and me grabbing onto each other and zipping a bike up a mountain, going out for a ride. At some point in the future, the battery can no longer propel such a heavy vehicle with the energy demand that a vehicle needs. Instead of retiring those batteries and recycling them, we find a second use for them.David Roberts:   In cars I know that's once you degrade it down to about 80 percent of original capacity. Is that roughly the same for two-wheelers?Horace Luke:  Roughly the same. The energy demand of the battery on a two-wheeler is actually much higher than that of a four-wheeler. It's just the sheer amount of energy you have in your car. Your vehicle is probably 70-80 kilowatt hours; we have literally 3.4 kilowatt hours to propel you and your friends up a hill. It’s called a C-rate; the discharge rate coming out of a little battery is much higher. The draw on the battery is much more demanding. Now, that said, once it retires at 80 percent, what are we going to do with these batteries to extend the life instead of recycling them? One of the things it’s great for is portable swappable power. You mentioned the smart parking pole. We're doing a couple thousand smart parking poles in Taiwan this year as a pilot. Just like we piloted our battery swapping system for scooters back in 2015, we're piloting a swappable battery system for smart poles. A city like Taipei is not very orderly. In order to create parking poles, to get organized, it's not like you just paint on the ground and say “you park here.” You have to try and find ways to penalize and also charge people money for it. So we are putting our batteries into the smart parking pole that does not require you to dig up the ground and draw power from the ground; you just use the battery and we swap it out every 27 days or so. In a matter of hours, a non-monitored street can become a smart street. As we think about all these batteries, there is going to be a lot of opportunity to not only turn smart devices to be powered on in cities, but also, as we most recently announced, a power backup. In a place like Taipei or other cities across India and in Southeast Asia, rolling blackouts are common, and the most dangerous part about rolling blackouts is an intersection. We're working to develop a system where we use our battery to back up the streetlights for three hours. Again, swappable power – coming up to three hours, we go and swap those batteries out so it continues to operate the intersection safely. Everything from crosswalks to red, yellow, green lights, we're able to help cities become smarter and safer. Those are the extended uses that can continue the lifespan of that battery for another half a decade to a decade, easy.David Roberts:   So you can use them all the way up before you recycle them.Horace Luke:  To give you a philosophy of how we think, the other day we were sitting around a table going “okay, now we got second life figured out – what's third life? What do we do with it before recycling?” Wouldn't it be great to power education in places like the slums of Mumbai, where the family is not able to access energy for cooking and it results in wood stove burning or garbage burning in order to cook? Imagine these batteries are now fully exhausted when it comes to depreciation, when it comes to the cost of these batteries. If we can do that before we recycle, that would just light me up. That's something that we want to do to further humanity.David Roberts:   One of the really interesting aspects of this network to me is that you're not primarily putting the computing power and intelligence and tracking in the scooters; you're putting them in the batteries. The batteries are the smart part of this. With batteries going in and out of all these different scooters and banks, you're gathering an immense amount of information. What is the intelligence making the batteries smart? What does that allow you to learn about what your customers are doing, and what does it allow you to offer in terms of features?Horace Luke:  Think of the battery as really a smartphone. It can collect as well as it can dispatch. You're absolutely right, there's an immense amount of effort that we pay attention to when it comes to machine learning and AI and control systems on the backend side. When we want to upgrade a swapping station, we literally do a FOTA (firmware-over-the-air update) to all our stations, and from there we can update the battery; the battery can carry a package and update the vehicle. With consumer consent, we can add features. A couple of months ago we rolled out “rain mode” for our consumers. By looking at the weather report in the area that you happen to be at with your phone, it will say “hey, it looks like it's raining outside, do you want to turn your vehicle on with rain mode today instead of the regular high-power mode?”David Roberts:   Rain mode is just a little slower and safer?Horace Luke:  It’s basically less torque, less jerk when it comes to the rear wheel so you don't slip when you accelerate. That feature wasn't available on the first day, but over time, we continue to add features to the vehicle. All consumers have to do is say “I want it” and all of a sudden the vehicle is updated with the battery pack.David Roberts:   Those come with a subscription price? You get those updates as long as you're a subscriber? Horace Luke:  We try to get the consumer as many updates as possible. It puts a smile on their face.That vehicle will sing “Happy Birthday” to you on your birthday. If I bought a vehicle secondhand from you, David, the second I registered, my server knows that I now own the vehicle and my birthday is in May instead of your birthday, and it’ll sing “Happy Birthday” to me on the right day. Little delights that you put in there because it’s a connected system. The vehicle data is also collected by the battery and in turn, taken back to the swap station and fed back to the cloud. We know how you use the vehicle, how much you deplete the battery, how often you swap. Those are all data that we use to make your experience better so that you can predict when you're going to go to the next station, how much energy you're going to bring back, and what's most likely your preference of battery – do you care about durability, or do you care about high performance and thrust?  On top of that, recently we launched our usage-based insurance. The first step is through mileage, but eventually what we want to work toward is, if you are a safe rider – you turn on your blinkers all the time before you make a turn, you don't hard brake on your vehicle – we would like to know that data so that we can collect it and give it to the insurance company on your behalf so you can save on your insurance premium. Those are things that a connected system can do that other people cannot.David Roberts:   This seems like an immense amount of data exposure. Can customers opt out entirely? How do you safeguard privacy?Horace Luke:  Absolutely.  We don’t take your GPS location of where you park your vehicle unless you grant us access to it. We all came from working on smartphones, so you can only imagine the scrutiny that my team and I are well aware of and practice every day. We only do it with the consumer’s consent. Everything from subscribing to the battery to letting us know where you swap or letting us know where you park is with user permission.David Roberts:   Is this the kind of thing, though, that's buried somewhere in a long agreement that I just click “yes” to in the process of subscribing? Or is there something more granular and in your face? Horace Luke:  Take a look at the insurance one. Without you granting us permission to work with the insurance company specifically on that feature, we do not do it. We do not take your data and share it anywhere else. That said, though, we do look at whether or not your vehicle tipped. For example, if your vehicle crashed or you dropped it on the left side, our gyro sensor inside the vehicle registers. That's not for the insurance company, but for our workshop. By the time it can come in and the guy takes your wireless key – or our latest vehicle uses an NFC card so you don't even need a user key – we swipe the NFC card, your log comes up in the service center and sees that you tipped your vehicle on the left side and the mechanic needs to pay more attention to the left side of the vehicle to make sure that the brake lever has not been bent, make sure that everything is in tip-top shape on the left side of the vehicle. It's for customer safety, but within a confined use. Not really related to privacy, but related to safety and servicing.David Roberts:   We've become familiar in the tech space with platforms, networks, and the way that the first mover company can get these network effects that make it very difficult for competitors to come in. Facebook is the classic example of this. If I'm imagining all these different vehicles from all these different brands, but everyone's using your batteries connected to your central banks and with your information, that looks a little bit like a monopoly. How do you not abuse that power? Is it possible for other networks to come in and compete?Horace Luke:  Oh, absolutely. You ask a really good question. The first thing we need to do is make sure that we practice with fairness and with the consumer’s interest first and foremost. To be honest with you, the company today is EBITA positive, but at the same time, we are still losing money to build out the technology and build out the investment it needs for the network. We're 95 percent market share because of how fast we've built it out and how much we've built out in Taiwan alone. That said, though, we have to make sure that the consumer always has a pricing grandfather ability. When you buy a vehicle, if you don't change your plan, your cost of owning that vehicle remains the same until the end of that vehicle's life. We maintain that to make sure that the consumer feels like they're not being strung along in any sense. That's the first thing that we need to make sure we do.David Roberts:  You don't raise subscription rates on individual consumers in the middle of their subscription.Horace Luke:  Exactly. We raise it, however, because our cost does go up – electricity costs go up, or recently with electronics components, everybody's well aware of the inflation that's happening globally. Prices do go up on components and costs of us running the network, so we grandfather the existing customer, but we raise it for new customers instead. As a consumer comes in, they can feel confident that what they signed up for is what they get. That's really important.David Roberts:   That is great that you do that. But if you have 95 percent market share, maybe someday you retire and a less benevolent CEO takes over – what would stop them from changing that policy, once you've got everybody locked into the network? That’s the whole problem with a monopoly. Horace Luke:  Will I retire one day? Probably in the distant future.We enable a plan on our network called the Flex Plan. When you're looking on your phone for a charge station, we have an app that shows you all the stations and, more importantly, shows you which stations are stressed and which stations have extra energy that is ready to be distributed, and for that we’ll give you a discount. We will continue to invest in things that allow the consumer to have flexibility, to in some way game the system so that they can get it even cheaper if they want. Our company is about 2,000 people at the moment, about 100-200 in the management team and the back office, and the engineers make up about another 400 or so. The culture is so strong. We have a slogan that says “do good, do well, and have fun doing.” So “do good” is the first thing we need to do. Not just about sustainability, but we need to do good as far as building something that's fair, something that's great for the consumer to have. Brand credibility is all we’ve got. The second that people say “hey, you know what, this guy has me strong-armed,” the escape cost of getting out of that vehicle is only a couple hundred bucks. It's the residual value on the vehicle. So it's not hard for a consumer to get out. David Roberts:   I could get out of your network, but are there competing networks? Are there other companies even trying to do this? Is there another swappable two-wheeler battery that I could go to if I for whatever reason wanted to leave Gogoro?Horace Luke:  In Taiwan there is another company, created by the largest gas vehicle maker in Taiwan, that has built up their network. They continue to do promotions to attract consumers to go over to their side, to the point where they were offering free rides. Literally you can swap batteries for free. You just buy the vehicle and only have to pay a dollar for subscription. You mentioned network effect; network effect is both from a business perspective and also from a convenience and user experience perspective. We have so many batteries in so many stations on the ground today that although the other guys are cheaper and more aggressive when it comes to throwing dollars at it, at the end of the day, it's not just about how much you're charging the consumer; it’s about the value the consumer gets.That's an important part that people need to understand – we're not competing dollar for dollar. Giving something away only lasts so long, but we have to create a user experience that is so unique, that is so much a game changer when it comes to owning a mobility solution that you can say, “I want that.” “Want” doesn’t mean it's a dollar amount; “want” is something that is more emotional. It’s heartstrings that we are plucking in Taiwan, and it’s definitely worked very well so far. In addition to that, we also created probably one of the most efficient ridesharing networks, called GoShare, on our system. So our platform not only allows for that user experience when you own the vehicle, but we have about 6,000 vehicles rolling around Taiwan today that allow the consumers to use an app, kind of like Bird and Lime, short term rental. But the difference is there is no range anxiety, because we have so many swapping stations in the network that the consumer just picks up a vehicle and at the beginning of the ride or mid-ride, they can swap out a battery. We've had people take a vehicle for two days and ride around the island of Taiwan. More than 70 percent of refueling on our ridesharing network is swapped by the consumer. Think of it as a hotel room that cleans itself. The maintenance cost is really low, the OPEX cost is really low, and it allows the consumer the identical user experience as the vehicle they own. Maybe this time they're hanging out with friends to go drinking, so they don't want to ride their own vehicle; they ride one of our GoShares to the bar, and on the way back ride a taxi or hail an Uber instead. It allows for a lot of flexibility when it comes to what we call a platform to enable a number of solutions on the market.David Roberts:   So ridesharing is built into the whole model, in addition to ownership.Horace Luke:  Exactly. We have an overlap of consumers. People that buy our vehicles love riding a Gogoro, love swapping batteries as a means of refueling, and then they just sign up to GoShare and off they go. Same user experience, same type of vehicle, except sometimes you ride your own, sometimes you rideshare when there's one on the street next to you.David Roberts:   An EV fleet is an enormous amount of distributed energy storage, and in the US there’s a lot of talk about trying to hook those batteries up to the grid such that they could, in addition to serving their primary purpose, also be relied on for grid stability – store excess energy in them when you need to, take energy from them when you have a shortage. It occurs to me that these battery banks that you have all over Taiwan are all themselves big batteries, so you are building yourself a giant distributed storage network. Are you talking to grid operators, trying to hook those things up to the grid such that they could serve this ancillary purpose of grid stability? It seems like it would be incredibly useful for the grid, in theory.Horace Luke:  That's something that we've been working on and prototyping with a grid provider here in Taiwan. The stations that you see on our website are bidirectional ready. Today in our network we have close to about 200 megawatt hours of batteries on the grid at any time.Whatever EV you’re talking about – a Tesla, a Porsche, a Bolt – it’s a battery that is not owned by the provider and doesn't come home often. It's the consumer's choice. The difference is, we actually have that battery back on the rack every couple of days. At any time we have close to about 200 megawatt hours of batteries literally on the rack. We're working on things like being bidirectional, so when the grid needs it, we can push that energy back to the provider, _____ charging of energy. We’re also working with Enel X, the world's largest virtual power plant provider, to do demand response. So the grid performance is at about 65 Hertz; all of a sudden, we see a surge coming, people need to stop. Whoever can stop gets paid, and our stations can instantaneously swap the stop, all of them. We're able to then participate in that model. Extra revenue from that today is not very meaningful; we're still developing the technology. But one day it could be. As we become the de facto standard and massively deploy the batteries that we're talking about, that revenue stream can become very meaningful.David Roberts:   With EVs, like you say, with every consumer owning their own battery, the big challenge to vehicle-to-grid coordination is the coordination itself, those soft costs of trying to network everyone together and coordinate and talk with everyone about what they're willing to do. But you have that problem solved out of the box – all your batteries are already connected, you're already in communication with all of them, so it's primed and ready to hook up to the grid.Horace Luke:  Also, for example, about a month and a half ago Taiwan had a huge blackout; 40 percent of all households experienced a power outage. During that time, most of our stations, except the very early ones, can back up energy anywhere from 48 to 64 hours. Even if there's no power, it can still swap out a battery. Battery-to-battery charging is something that we're working on, so that eventually somebody can say “hey, you don't have extra energy, I'm going to put it back on the station so that somebody else gets to have enough energy to go pick up their kids and go home.”I always say to my team that energy is at the center of all human innovation. The fact that you and I are talking to each other on a podcast, the fact that we get to record it, the fact that I have earbuds on, it all has to do with energy. If we think of what Gogoro is making as portable, distributed, connected, smart energy units, and mobility being just one part of it, and smart cities being another, the limit is on the imagination on what we can do with it. It sounds weird, but everything you mentioned, I'm working on. It really is just a matter of focus and getting it done. Stations that have batteries can do demand response to the grid, can do battery-to-battery charging that can take two half-charged batteries and provide one fully charged one. We can also have stations and ___ charging that energy back to the grid. In Taiwan today, ___ charging doesn't make a lot of money, but if you ever deploy in Brazil, ___charging can be as much as 30:1. I can buy energy at $1 and at the right time sell it back up to $30 for a kilowatt hour. There's a huge amount of opportunity for us to do good and provide a modern, safe, connected energy system that powers mobility; at the same time, the business needs to be sustainable. If we can create a sustainable business that actually does sustainability, everything then makes sense. Too many times I find companies that are trying to do greenwashing or riding on the sustainability trend, but when you look at the mathematics, it just doesn't work. Unit economics on a business, it has to fundamentally work, and if you look at what Gogoro is today, every individual that comes on the network is contribution margin positive on our battery swapping network.David Roberts:   Also, every increment of cost decline you get in batteries, you're not just doing the things batteries were doing more cheaply, you are opening up new applications, new ways to use them. I've been waiting a long time for both solar generation and energy storage to get so small and modular and cheap and ubiquitous that they're infused throughout the city. Then, like you said, you could let your imagination run. What can you do with a city that has energy storage infused throughout?Horace Luke:  That's exactly what we're working on. Having these stations placed almost at a frequency of ATM stations across town, and being able to have these energy stores accessible literally within seconds by the consumer, makes turning over to smart, connected electric a lot easier than if you are demanding somebody to charge and have to sit out there in the rain and wait for it.I own an electric vehicle, too, a four-wheeler, as well as several Gogoros. Charging and sitting inside a car is easy because you can plug it in and you can do email, you can listen to music, I even watch a movie sometimes. But that luxury or that privilege cannot be had with the masses. I still remember, when I was growing up, I had a poster of the Lamborghini Countach, my dream car. Today, what the next generation has on the wall is the Tesla Roadster or the Porsche Taycan. How many people can actually own a Lamborghini Countach? Not many. And how many people in emerging countries can own the Tesla Roadster or the Porsche Taycan? Again, probably, not very many. But definitely the trend of electric is here to stay. As you think about us pivoting to this decade or two decades of electric mobility and sustainability, these young folks now in their teens are going to grow up to be the decisionmakers of tomorrow. If they can access these vehicles that are even cooler than a plug-in charging two-wheeler, a four-wheeler, wouldn't that be cool? That is the market that we're going after, a market that has half a billion installed in Asia, getting ready to pivot to electric. In Taiwan, for example, where there are 14 million vehicles on the road, government a couple of weeks ago made an announcement that by 2040, no gasoline vehicles can be sold, so that by 2050, all vehicles on the road will be electric. And there are milestones to that: in 2030, 35 percent; 2035, 70 percent; 2040, 100 percent of what’s sold has to be electric.David Roberts:   Speaking of the future, you recently announced a prototype solid-state battery, which is much more energy dense; you can fit a lot more energy into your battery. Everything we've been talking about that you could do with this distributed energy storage would be ramped up and accelerated if you got a 30-50 percent bump in your energy density. How close is that to reality?Horace Luke:  When it comes to solid-state batteries, you see ideas coming out of a lab, or startups creating a membrane of film that allows solid state to happen in a small package. We’re the first in the world to package it into a battery pack that actually is functional.David Roberts:   It looks and is shaped like your other batteries.Horace Luke:  Identical, but with energy density that we're targeting in several years to be 40 percent higher.  We're commercializing probably in the later half of this decade.Is it feasible? That's the next question – can we get to a system where you see a shift to complete solid state? I think it's going to take time, just like hard drives and solid-state drives. In the middle, you’ll probably see some sort of hybrid system – guys that are using solid state but for very premium cases, and then hard drives continuing to have the density that rotational batteries have. We are definitely staying ahead. As a company, we always look at new technology and always look at the application of such new technology to make sure that we're looking out for the best interests of the consumer. Because if you can provide that for the consumer at an earlier time, that will only translate to a happy consumer, and that translates to a happy Gogoro. To give you a short answer, you’ll see some momentum in the solid-state battery space in the second half of this decade, but is it fully feasible and commercializable in the masses? I think it's going to be a tad longer than that, just because of how much capacity is built up in lithium ion. Our suppliers – LG, SDI, Panasonic – have built up a tremendous amount of capacity in the US, Europe, and in Asia. It takes time for that capacity to ramp down, and the cost economics are going to get better and better because of the amount of capacity they are.David Roberts:   You require a certain amount of urban density for the network to work. Where are you now? Where are you going? And is there a single city in the US that is dense enough that you think you could pull this off here?Horace Luke:  A lot of my friends are from the US. I grew up in the US, the early part of my career was in the US. Lots of people raise their hand and say “I want this in my city.” One of the most essential things that we have to do as a company is to focus on the biggest challenge and opportunity ahead; with every challenge comes a great opportunity. We're now, in China, the world's largest two-wheel market with the number one electric vehicle maker Yadea and partnering with the number one gasoline vehicle maker in China, ____. We’re also working on the second largest market in India, looking to deploy end of this year or early next year. We're also working with Indonesia.David Roberts:   At this moment, how many cities are you operating in?Horace Luke:  All the cities in Taiwan. We're in China, in Hangzhou, Wuxi, Kunming, and several more to come very soon. We are in Seoul, Korea, mainly for food delivery. We're in Japan, with tourism rentals of two-wheelers. We are also in Germany with a ridesharing service, providing our vehicle and swapping solution. We have a pilot in Jakarta with GoTo and Gojek; GoTo has about 2 million riders on a network that's looking to turn electric through battery swapping probably by the end of this decade. So a lot of conversation, a lot of pilots, and a lot of expansion. We just listed on the NASDAQ under the ticker GGR. The reason we got listed on the NASDAQ is to get ready for expansion. We needed the capital, we needed the transparency, we needed to grow the team. Going on the NASDAQ and getting to be a publicly traded company enables us to now go very fast into those regions. We dabble in energy storage; we are wholly focused on battery swapping for mobility; we've got portable energy for smart cities solutions, and smart parking poles, and safety. We've got ride sharing, we’ve got rental, we’ve got food delivery. So Gogoro goes back to the thesis that energy is at the center of all human innovation. We can take what we're doing and enable different businesses to enable what they care about to become real now, because of our platform.David Roberts:   I didn't hear any US cities on your list.Horace Luke:  We're working on it. I would not say never. We’ve looked at places like Austin, Seattle (where traffic is terrible), San Francisco. We continue to see them, but it's a question of resources. We're 2,000 people, we're about to attack three of the largest markets in the world with several of the largest partners, and focus is really important for us.David Roberts:   Thank you for coming on and taking all this time. It's fascinating. The whole world of two-wheelers is something I don't have a lot of occasion to think about. Horace Luke:  If you ever come to the east side of the hemisphere, you'll see that most people travel on two wheels. In India, 80 percent of all commute miles done every day are done on two-wheelers, and 60 percent of all gasoline that is spent every year is on two-wheelers. That's how big the market is, but most people don't realize that in the West. We live on one blue ball, right? If Europe becomes better, if the US becomes better, Canada is good, but what about everything else? If everything else is not good, then that would eventually creep over to the West, and that is a problem that a lot of us moved to the East to solve. That's something that we're adamant about – we have to make the planet a better planet so that our next generation can have one.We are now at this critical point where innovators and business leaders have to put their resources and their time on sustainability, not just because it makes good business sense, but it’s essential for humanity. That's something that we as a team are so passionate about.David Roberts:   Thanks so much and good luck with all your expansions. Horace Luke:Thank you, David. Get full access to Volts at www.volts.wtf/subscribe

For years now, I’ve been dithering about getting an electric vehicle (EV). Much of that dithering has been done in public, on Twitter and for various sites I’ve worked for — just a few weeks ago I subjected you to my handwringing about an EV test drive — so I figured I might as well document how the journey finally ended.Long story short, we bought a used 2017 Chevy Bolt. That is about the least sexy sentence one can write about EVs in the year of our lord 2022, but there you have it. We thought about leasing or buying one of the fancy new EVs, the Kia EV6 or the Ford Mustang or a Tesla. But we’re pretty cheap and didn’t want to pay that much. And we felt slightly guilty about buying a new car. And those cars feel like statements. As Mrs. Volts put it, “I just don’t want to say that much with my car.” The Bolt (along with the Nissan Leaf) is the closest thing to an econo-box option in the EV market, and that’s more our speed. We paid $25K — considerably more than we would have paid for the same car 12 months ago, thanks to lingering supply issues, but less than half of a tricked-out, new version of any of the fancier models. In terms of value, though, there’s a twist — the “cheat code” of the current EV market. As you probably know, there has been a massive recall of Bolt batteries. Every battery in every Bolt from 2017 to 2022 will be replaced, at no charge, by Chevrolet. That means, at some point in the next year (my local Chevy dealer estimates seven months from now), they’ll call me, I’ll drop the car off at the dealership, they’ll put in a brand new, 260-mile-range battery, and I’ll get it back the next day. Given that the rest of the car is in good shape (~57K miles on the odometer), this will effectively be like getting a new EV for the cost of a used one. Score.The econo-box of EVsThe car itself is somewhat spartan, if comfortable. It has the “premier” trim, so I got my beloved heated steering wheel, Mrs. Volts her beloved heated seats. It has one-pedal driving and lane assist and parking assist and all-around cameras and Android Auto. The only fancy-pants feature I notice missing is wireless phone charging (which I got used to real quick in the Mustang). As for acceleration, even if it isn’t the insane road-rocket the Mustang was, it is considerably zippier than either of our aged current vehicles, more than zippy enough to make it fun getting around the city. (It has a “sport” mode, with higher torque and lower range, but I haven’t had occasion to use it yet.)The interface is lower end, which means it involves more physical buttons and knobs and less screen real estate than newer EVs, but to be honest I like that much better. There’s less occasion and temptation to look at the screen. I can find most stuff I really need with my fingers. There’s not enough console space and the Bluetooth interface with phones is somewhat janky — listening to music on my phone involves a lot more button-poking than I’d like — but it’s tolerable. As for accessories, I bought a back-seat cover (for the dogs) and a level-two charger (we had a 220-volt outlet already installed). I can’t think of much else we need. We are now driving (semi-)guilt-free. Getting an EV is easier than everOne final note: early in this process I was contacted by a company called Link that is devoted to making it easy for people to get EVs. You can use their site to shop for the EV you want — they offer an advisory service — and then they’ll arrange the lease or purchase for you.After wasting way too much time shopping around, I told Link I wanted a used Bolt. For a few weeks, they sent me notices of Bolts (that had been inspected) as they came on the market. When we saw one we liked, they did all the purchasing and transferring of titles. They mailed me the paperwork (including detailed inspection reports), I signed and mailed it back, and then the car was dropped off in my driveway. I never had to haggle or talk to a salesperson. All I had to do is register it at the DMV and let the Chevy dealership know I had it. It could not have been easier. Link is mostly operating on the West Coast for now, but if you have been dithering about an EV like I was, I can’t recommend it enough. (I know other services like this are springing up — it’s a big and eager market, I would think.)Anyway, that’s the story of how I finally got an EV. You’ll hear no more dithering from me. Instead I’ll to go back to daydreaming about living somewhere where I don’t need a car at all. Get full access to Volts at www.volts.wtf/subscribe

In this episode, sociologist Elizabeth Popp Berman discusses her new book, Thinking Like an Economist, about the “economic style of thinking” and how it took over in US policy circles in the post-war period. It remains embedded there to this day, but alternatives are beginning to emerge. Get full access to Volts at www.volts.wtf/subscribe

In this episode, Carnegie Mellon professor Paulina Jaramillo discusses the IPCC's working group 3 report, “mitigation of climate change,” of which she was a co-author. It's the most comprehensive look to date at the economic sectors that emit greenhouse gases, the strategies and technologies that can reduce emissions, and the state of play in climate policy around the world. Get full access to Volts at www.volts.wtf/subscribe

Earlier this year, I stumbled on the news videos from the team at Some More News. They are like The Daily Show, but longer, smarter, more in-depth, more profane, and free of Jon Stewart’s unfortunate navel-gazing centrism. But still funny as hell!In other words: they might as well be targeted directly at me. I’ve been gorging on them for months. (You could start with this one on critical race theory.) Anyway, imagine my delight when I discovered that Some More News also has a podcast, Even More News, and they wanted me to come on it! So that’s what today’s episode of Volts is: an episode of Even More News that the team has graciously allowed me to send to you on the Volts channel. We talk about IPCC stuff briefly, but I also got to let loose on Joe Manchin, lament Dems’ general media fecklessness, and heap scorn on Elon Musk’s Twitter moves. It was fun to get away from the wonky stuff for a while and just riff. It’s a different side of Dr. Volts! You can decide for yourself whether it’s better or worse. You should definitely subscribe to Some More News and support the team via Patreon. The left needs much more of this kind of thing — new ways of reaching people where they are. Also! Last week I was on PBS Newshour to discuss the new IPCC report and the state of clean-energy technology. You can watch here:I always underestimate the reach of PBS — it’s wild how many people saw this and contacted me! And how many saw it and contacted my parents. Love you, PBS. Back later this week with some nerdy pods of my own! Get full access to Volts at www.volts.wtf/subscribe

Economist Noah Smith runs the excellent substack Noahpinion, where he writes and podcasts about … pretty much everything. Economics. Politics. The war. Housing. Technology. On and on. The guy is ludicrously productive. This week, he interviewed me! We talked about the new IPCC reports, the state of technology, some dumb tweets of mine, and NIMBYs, among other things. It was a fun and wide-ranging conversation. Check it out! (And subscribe to Noahpinion.)The video is below. The audio is posted as a podcast above. Get full access to Volts at www.volts.wtf/subscribe

In this episode, activists Matthew Metz and Janelle London discuss their new report on gasoline “superusers” — the subset of drivers who drive long distances each year — and the policy recommendations around EV subsidies that it contains. It's a clever idea I haven't been able to stop thinking about. Get full access to Volts at www.volts.wtf/subscribe

In this episode, activists and entrepreneurs Audrey Schulman and Zeyneb Magavi discuss their audacious plan to replace the nation's natural gas distribution infrastructure with a series of networked geothermal heat pumps. Basically, neighborhoods would be heated by warm water rather than natural gas. It would be the most efficient collective heating option available in the world. Get full access to Volts at www.volts.wtf/subscribe

In this episode, entrepreneur Rob Harmon discusses his new method for tracking and monetizing energy efficiency in commercial buildings. Traditionally, efficiency policy has consisted in subsidizing equipment up front. Harmon explains how to get reliable numbers about actual performance and begin to build a market around them. Surprisingly fascinating. Get full access to Volts at www.volts.wtf/subscribe

In this episode, MIT Professor David Hsu discusses a paper he wrote that charts the history, evolution, and current fortunes of community choice aggregation, a tool whereby a community can take ownership over its own energy procurement. It is the rare example of energy democracy breaking out in America's monopoly-dominated system — a good news story in an era of bad vibes. Get full access to Volts at www.volts.wtf/subscribe

(Hey y’all — I’m attempting to dictate this post rather than type it, so please forgive any sins of grammar or structure.)My family and I own two extremely old cars, a 2001 Honda Odyssey minivan and a 2009 Toyota Prius hybrid. The van is literally falling apart, so we have been looking around lately for a new vehicle. Obviously, we would prefer an EV.A representative from Ford saw me musing about it on Twitter, contacted me, and offered to loan me a Ford Mustang Mach-E electric vehicle for a week. I've been driving it for a few days and I thought I would report my early impressions, along with some larger reservations.Holy s*** EVs are fun to driveI should note up top that I’m not a car guy. I don’t know much about them, don’t much like them, and don’t much like driving them. I never learned to drive a stick shift or change the oil. I don’t drool over muscle cars or know what “hemi” means. Truth be told, I kind of hate car culture.I should also note that I have only ever driven two EVs in my life. The first was the Kia EV6, which I test-drove last week. The second is this Ford. I can say very little about the fine differences in EV driving experience.In short, I am the least qualified car reviewer on the planet.As I said, both of my current cars are extremely old, so I am easily impressed by modern vehicular technology. I still get a kick out of remote key fobs. With this car, when you approach, it lights up, unlocks, and projects a picture of a Mustang on the ground next to the vehicle.There are heated seats, a heated steering wheel, a wireless phone-charging pad, and a giant touch screen with about 50 menus. It all feels like a spaceship to me.The first thing anyone notices when they drive an EV for the first time is the acceleration. With either of my gasoline vehicles — even the Prius when it’s driving in electric mode — there is a lag between pressing the accelerator and speeding up. You are always thinking a second or two ahead, about what speed you'll need to be going, and trying to anticipate. With the EV, acceleration is instant. You are going the speed you want to go the second you want to go it. It is wild.And when you use one-pedal driving mode, when you let off on the accelerator, you immediately slow. It’s difficult to put in words, but it adds up to a sense of much more precise control.I was driving home from a restaurant on Tuesday evening and fiddling with the Spotify menu when I drifted slightly onto the middle line between lanes. With a tiny little push — boomp — the car nudged me back into my lane, as though it were semi-sentient. I hadn’t even thought about the driver-assist features before that, but my one experience with them so far was reassuring, albeit faintly creepy.I’m one of those old guys who resists getting a Tesla because I don’t want to be forced to do every-dang-thing with a touch screen. Give me something physical, with feedback that goes beyond a haptic buzz. I like knobs! Ford’s screen has one giant knob toward the bottom, for volume — it’s better than nothing. In general, Ford has done a pretty good job with its screens and interface. Crucially, unlike in the Tesla, there’s a second screen just under eye level with key information like speed and range. On the bigger center screen, finding the basic stuff is painless. And there are some cool things if you poke around — you can save different profiles (mirror and seat positions, music playlists) that attach to different key fobs. Or you can use your phone as a key fob. I haven’t used any of these features enough to know how they’ll age, but it’s all pretty dazzling. The ride is smooth and quiet, the stereo system kicks ass, and that heated steering wheel … I mean, I’ve found nothing to complain about. And I’m pretty good at complaining. Car & Driver named the Ford Mach-E its EV of the year in 2021 and far be it from me to disagree.It’s not clear Americans can handle this kind of powerHowever! As I was driving home, hands blissfully warm, thinking I might take the long way so I could drive more, I started feeling some reservations. I started thinking about what it would mean for EVs to become dominant, the default choice, with most people driving them.For one thing, they make driving much more fun, even for someone like me who has a deep-seated antipathy toward cars and has never enjoyed driving. All the electric gizmos and screens and features, combined with the unbelievable torque and acceleration, make driving feel like a game in which you’ve just leveled up. It's difficult to believe that if driving is more fun … people won't do it more. And electric or not, less driving is better.The other thing is, the acceleration puts an enormous amount of power in your hands. For someone like me, who drives fairly carefully and pays attention, it can feel more precise and controlled, and thus safer. But it's not difficult to see how this kind of power could be misused. These cars can leap across intersections, going from standing still to 20 or 30 miles an hour in a second or two. If drivers aren't paying attention, it's a lot easier for an idle mistake to grow more consequential, involving more speed. And the constantly available torque is an invitation to try crazy passing maneuvers on the highway. The US already has notoriously pedestrian-hostile infrastructure. If that stays the same, if nothing else changes, more torque and power in everyone's hands is going to lead to more collisions.Driver-assist features might offset this somewhat. I do feel safer knowing that my car will keep me in my lane in normal driving conditions. But there's only so much software can do in the face of bad infrastructure. Lacking much data, we are all going on our guesses and impressions and priors, but my gut feeling is that putting tons more power in drivers’ hands without changing anything else is going to lead to an even more hostile environment for everyone not driving.Ultimately, my fondest wish is that I lived somewhere where I didn't want or need a car at all. I hate cars. I hate driving. I really hate other people's driving, and other people's cars. EVs are such an enormous leap forward in environmental terms that it feels somewhat perverse to question them, but nonetheless, despite all the hype, despite all the fun, it's worth remembering that the top priority — not just for climate hawks but for humanists of all sorts — should be reducing the need for, and number of, cars.The top priority should be making land use and planning choices that encourage walkable communities, with amenities mixed in, so people can get out of cars and get onto their feet or bicycles. EVs are fun to drive. But no kind of driving is better than walking in the fresh air, getting exercise and mixing with your neighbors. I hope EVs don't pull our attention away from that fact. Get full access to Volts at www.volts.wtf/subscribe

In this episode, two Clean Air Act experts — Jack Lienke, regulatory policy director at the Institute for Policy Integrity, and Kirti Datla, director of strategic legal advocacy at Earthjustice — discuss the recent Supreme Court decision in the case of West Virginia v. EPA, which would dramatically curtail EPA's powers based on legal justifications that are, charitably, underbaked. Get full access to Volts at www.volts.wtf/subscribe

In this episode, Dartmouth professor Erin Mayfield discusses some new modeling on the Build Back Better Act, showing how and where it would reduce emissions in the US economy, how it would affect inflation, and how many jobs it would produce. Get full access to Volts at www.volts.wtf/subscribe

Hey, y’all, just a short note to catch you up on my current situation and my plans for the coming weeks.Long story short: I have tendonitis in both arms. I’ve had problems with pain in my forearms for years, but it always faded or went away after a while and was manageable. A few months after quarantine started, in 2020, it started getting worse, to the point I had to give up playing bass guitar — my one non-computer hobby. Then, a few months ago, it started getting a lot worse, quickly. I have been to see two physical therapists, done stretches and exercises, received regular therapeutic massage, bought a split keyboard and a vertical mouse, worn compression sleeves during the day and braces at night, iced both arms every day, taken a bunch of goofball supplements (hoping for some placebo effect at least), and even ordered one of these widgets. Nothing has worked, at least not yet; it’s just gotten worse and worse. It feels like a boulder rolling downhill. Nothing slows its momentum. (And don’t bother suggesting resentment and self-pity — I’ve tried those too.)One result is that typing has become a chore. I can get through about a paragraph before my wrists and forearms start to ache and I have to take a break. What’s worse, it has messed up my thinking. Over many years of writing, the act of laying my hands on a keyboard has become a somatic cue that triggers my thinking; I can not write without it. But now it involves pain, and the pain is clouding the thinking. This has made it difficult to write the next piece in my minerals series. It’s made it difficult to write anything. Just contemplating writing makes my arms ache. Of all the advice I’ve gotten, one bit seems reliably true: the only thing that fixes this problem is rest. I’ve got to stop doing the repetitive motions that damaged the tissues. In my case, that means I need to cut way back on holding my phone and typing. I’m told these things take from four to six months to heal.Four to six months of no typing obviously presents something of a challenge for someone who makes his living with a newsletter. Quite a challenge indeed. [eye twitches]So, just to be fully transparent about it, here’s my plan:Next week, I’m taking the week off. It’s winter break and my 16-year-old and I are heading down to Bend, Oregon, to see friends and do some snowboarding/skiing on Mt. Bachelor (where it hasn’t snowed in weeks, sigh). I’m going to endeavor to get through the week with a minimum of screens.After that, I am going to shift — at least temporarily — to doing more podcasting and less writing. This pains me. As much as I make writing a misery for myself, I love it. But working my way into a permanent state of diminished capacity is not something I’m ready for at the tender young age of almost 50. Six months of no typing sounds bad; 20 years of no typing (and no bass playing) sounds way worse. I’m also going to have a go at dictation software; if I can’t type, I can always speak. I admit this fills me with horror. I hate Siri. I hate Alexa. I hate talking to computers. It’s … demeaning. This has been one of my stalwart Dad Things for years; it’s a running joke in my house. But I’m going to bite the bullet. (By the way, Dragon no longer makes dictation software for Mac and apparently nothing else is as good. Let me know if you’ve heard of alternatives. I’m aware that Mac has built-in dictation, but trust me, it sucks.)I’m also going to start doing hot yoga again. I did it regularly for years and it was a blessing. It cured my lifelong back pain and generally warded off the decay of my aging body. I stopped doing it early in the pandemic, and it feels like, in the last year or so, all that aging I held off for those many years has found me at once.Hopefully I can recapture some of the magic. Or at least keep from puking or passing out in my first class back. So, that’s what I’m thinking, at least for now. I don’t know how this will ultimately impact Volts and I’m somewhat reluctant to make any promises at this point — this thing could get worse or it could get better. I need to put my health first. If any of this, now or going forward, affects anyone’s subscription decisions, no worries, I get it. We here at Volts management apologize for any inconvenience.With that said, I’m going to sign off, pack for my trip, and try to forget about my arms for a while. I hope you have a pleasant week and that when I return, the climate parts of Build Back Better will have passed. Get full access to Volts at www.volts.wtf/subscribe

In this episode, Gerald Butts and Catherine McKenna discuss their experiences passing a carbon tax in Canada, as advisor to prime minister Justin Trudeau and minister of the environment respectively. In particular, we focus on a key feature of the Canadian tax: all the revenue collected goes back to the province from which it was collected, mostly as per-capita dividends. Butts and McKenna believe that feature was central to selling the public on the policy.Full transcript of Volts podcast featuring Gerald Butts and Catherine McKenna, February 16, 2022(PDF version)David Roberts:In 2015, after nearly a decade of conservative rule, Justin Trudeau and his Liberal Party won a majority of seats in the Canadian parliament and control of the federal government. Part of Trudeau’s election platform was a carbon tax.The proposed tax had a few key features. First, it would only be imposed on provinces that did not have their own pricing system that met a few minimum requirements. And second, all the money collected from a province would be returned to that province as carbon dividends.After years of vigorous advocacy and negotiations, Trudeau’s liberals got the tax passed through parliament. It was implemented in early 2019, just before another federal election that became widely seen as a national referendum on the tax.Liberals won again. The carbon tax was affirmed. It’s going to stick — and rise to a whopping $170 a ton by 2030. This is a startling success story for climate policy that was largely overlooked in the US. We, uh, had some other stuff going on. But it’s worth taking a closer look at how Canada pulled it off.Two people at the core of the tax pitch were Gerald Butts, who was principal secretary to the prime minister from 2015 to 2019 and Trudeau’s closest personal advisor, and Catherine McKenna, who was the minister of environment and climate change during the same period.Butts and McKenna were in the trenches and they have the scars to show for it. Both of them noticed the piece I published on Volts in January on carbon tax refunds — and they objected to the conclusion that dividends did not make the carbon tax more popular in Canada.So I had them on the pod! We talked about how the carbon tax was conceived, what enabled it to secure majority support (yes, they say, refunds were important), and where the politics of carbon pricing stand as we move into the 2020s. Not only were my spirits lifted — it’s nice to know there’s a sane country out there somewhere — I learned an enormous amount. I think you will too. Without further ado, Catherine McKenna and Gerald Butts, welcome to Volts. Thanks for coming.Catherine McKenna:Very happy to be on.Gerald Butts:  It's great to be here.David Roberts:   When Justin Trudeau announced his candidacy [for prime minister of Canada] in 2015, the carbon tax was part of his initial pitch. How far back does the carbon tax idea go? Who got it in Trudeau’s ear? How long had it been bouncing around up there before it made its debut on the national stage? Gerald Butts:  The first time it was a real issue in Canada was during the federal election campaign in 2008. Important for the context of the story, for reasons I'll go into later, is that the Liberal Party proposed something called the Green Shift, which was an elaborate take on a carbon tax, under the leadership of Stéphane Dion. But it was easily caricatured as a regional wealth redistribution program, because the revenue from the tax was paid into the consolidated revenue fund at the federal government, and it was redistributed by the federal government to programs of its own choosing, not all of which were environmentally related. To me, there were a lot of reasons beyond the Green Shift that the Liberal Party lost the election in 2008, but that was the fundamental flaw in the policy.David Roberts:   The idea is that you're just taking wealth from carbon-intensive provinces and redistributing it elsewhere.Gerald Butts:  Absolutely. That, of course, has a history in this country that goes back to when the current Prime Minister Trudeau’s father was prime minister and he created the National Energy Program. The conservative government in 2008, under Stephen Harper — which, to be diplomatic, was not inclined to climate action — easily caricatured this as the second coming of the National Energy Program in Western Canada in particular, and made it out to be that the Liberal Party was after Western money to pay for Eastern programs, which is always death in politics in Canada. When we designed our program, there were lots of people within the party who thought we should stay a million miles away from it, because they were convinced that they lost the election in 2008 because of carbon taxes. We were very careful to make sure that any of the revenue collected went back to the province from which it originated. That, I think, was what unlocked the political constituency for carbon pricing in Canada.David Roberts:   So that design — money goes back to the province from which it is gathered — was there from the very beginning, as you were working it out. Catherine McKenna:  I came in as first minister of climate change and was given this mandate, and it was very clear that was going to be the hardest thing to land as part of our climate plan. For the first time ever, we went to Paris, we worked really hard to get an ambitious Paris agreement, but then we had to go home and do the work. I was stuck with the unenviable task of meeting with provinces and territories all the time and going through interminable discussion on carbon pricing. There was not a lot of appetite, and everyone would bring all the reasons not to do it. We needed to think hard about how we were going to land it. It's important to know there were some provinces that had pricing. At that time, Alberta had a progressive government that had brought in a price on pollution. Quebec was in a cap-and-trade system with California, as was Ontario, and BC had a direct price carbon tax. So we came to the table with that. Gerry and I spent a lot of time talking about the design. There were a lot of people who at first shied away, didn't want to do it, but when they decided maybe we could do it, they still thought it was okay to take the money and distribute it as the government saw fit. And I knew I couldn't land it, I knew there was no way. As liberals, as progressives, people believe the worst — that you're going to take this money and you're going to have your special things you want to do, which might be really dumb in the perspective of others. It was pretty clear, but it was a fight internally, too. Saying all the money was going to go back in a transparent way was just critically important to me. I knew I couldn't land it otherwise. It was still very hard, we had to do good comms, but it was critically important that we could talk to people and say, “you're going to get more money back.”David Roberts:   How did it play in the 2015 election, Trudeau’s big triumph? I'm curious how central the carbon tax was in his campaign and in the election generally.Gerald Butts:  There were bigger forces in 2015, to be brutally honest. The cornerpiece of our 2015 election campaign was something called the Canada child benefit, which was a progressive benefit given according to family income to people directly in cash. That's what we ran on in 2015: the middle class has been screwed by 25 years of supply-side economics and we're going to do something about it because we know you're hurting. Everything else built out from there. In 2015, climate helped us consolidate a progressive community behind the Liberal Party. This is an important piece of the context in Canada. There are a variety of options on the left, one of which is the center left, one of which is the Green Party, which has diminished its political viability over time as the Liberal Party has absorbed progressive environmental policy. Everybody wanted to get rid of Stephen Harper in 2015, and there was a debate over whether it was going to be us or the NDP. We put a more progressive policy platform together than they had, and climate was a huge part of that. I have no doubt that it helped consolidate the progressive community and has kept it there through some difficult times. David Roberts:   The Canadian carbon tax is designed as a backstop, which means provinces with their own carbon pricing systems that meet certain minimum thresholds are left alone, and only provinces that don't have a sufficient price have this imposed on them. Was that structure also part of it from the very beginning?Gerald Butts:  Definitely. There are two things that Americans can be forgiven for not thinking deeply about when it comes to Canadian politics — probably more than two, but for the purposes of this discussion, there are two. One of them is, all of the revenue collected from the carbon price in Canada goes back to the provinces. None of it is spent on federal programming. There were lots of provincial governments who opposed it on ideological grounds but said they were in favor of it in public. But that's that's what we did, and some people, as Catherine said, were not in favor of it. That's the first thing. The second thing is, we were coming into power at a time when the four largest provinces already had carbon pricing schemes in place. They were acting in the absence of federal leadership during the Harper years. Had there been no carbon pricing anywhere in Canada, it would have been easy to put a uniform system in place. But we had to create this concept of equivalency, because we didn't want to punish the governments that had led on climate action at the subnational level in Canada. Those two things are really important contextual pieces of the Canadian politics of the time to understand.David Roberts:   Was there a lot of debate over what the backstop levels are? Because what you choose as your bottom line effectively chooses which provinces are going to get overridden. What was that process like? What are the minimums?Gerald Butts:  Catherine could speak to that better than I can. But from my perspective, conceptually, this is why a carbon price was important in the first place, because there would have been nothing to use as a benchmark and nothing to uniformly compare across the country as equivalency. When we say equivalency, what we really mean is an equivalent carbon price through some mix of policy measures at the provincial level.David Roberts:   Catherine, how was that hashed out? If you're putting together a baseline that provinces have to meet, you can imagine a baseline being quite elaborate and complicated, or you can imagine a very simple one. Was that done in dialogue with the provinces?Catherine McKenna:  At the end of the day, hard things are hard. I sat in so many meetings and we went nowhere. We didn't know where the four provinces that had a price were at. Cabinet ultimately decided we're going to start at $10, because that meant the system that existed would be acceptable for the four provinces. Now, two of those provinces changed governments, so we lost the pricing that they had, but it showed resilience. This is the way we decided it made sense. It was a lot of design work. This is an across-the-board carbon price with all these different jurisdictions, and then we have an output-based pricing system for major emitters as the backstop, and also there's a benchmark on that. Environmentalists would probably love us to go into details. I won't go into details of the design, but in the end, one day, you have to just announce it. You have to do it. The provinces were trying to delay. This was in 2016. In 2015, Paris Agreement; 2016, we have some major challenges with you folks, and we're trying to land carbon pricing, but it was clear it wasn't going to happen. Gerry and I had a conversation and I said, “I can't land this on my own. I need the prime minister to be totally with me on this.” I was at a meeting of my provincial and territorial counterparts. It was quite a useless discussion, going around the table again, people restating their positions like they do,  negotiations are maybe going backwards. And I said, “you know what, it's been a great discussion, you might want to tune in to the House of Commons because the prime minister is just announcing now that there's going to be a price across the country and it’s starting at $10 and going to $50 in 2022.” (Obviously, I'd talked to some of the key provinces to reassure them that their system was going to be acceptable as long as they continued to go up. Stringency is really important.)A number of people stormed off. All hell broke loose at the table. It was quite a lot of drama. But that's when it got real. We had many discussions, but suddenly, front page of newspapers: “there's going to be a carbon tax across Canada.” That’s the interesting part of this article, which suggests that even giving all the money back can't save a carbon tax. We've been through two elections, and it's held. In the last election, the Conservative Party, which has been extremely difficult, even brought in a weird system that was a fig leaf, maybe, of a carbon tax. In 2019, the majority of Canadians supported a party that had a price on pollution. So we were able to land it, but there was a lot of drama between 2016, when it was announced, and getting it done in 2019. There was talk about “technocratic dreams” and “policies can't transcend politics” — but what's missing in that is people. Actually, people are reasonable. We have a prime minister who said this, Jean Chrétien: “Canadians are reasonable, so be reasonable.”David Roberts:   The structure of the tax is that 90 percent of the revenue goes straight back to households in the province from which the tax was collected. What about the other 10 percent?Catherine McKenna:  That goes to business, indigenous communities, and other organizations, but in a transparent way.David Roberts:   For those of us who are not up on Canadian politics, what does it take to pass a law in Canada? Presumably Trudeau can't just stand up and say, “we're doing this now.” It has to be an act of the legislature. Is that just a single majority vote in parliament, or is there more to it than that?Gerald Butts: The situation is much more straightforward if you have a majority government, which we did. We’re a parliamentary democracy, derivative of the British parliamentary system. If there's a majority party in the House of Commons that forms the government, generally they can rely upon passing their own legislation. Our Senate is not elected and therefore doesn't have the democratic authority to question the central purpose of any legislation — so essentially, if it passes through Parliament, it makes it. The big caveat is, anybody can litigate any piece of legislation that goes through Parliament in the courts.David Roberts:   Just to be clear: not a supermajority in the parliament — you just have more votes for than votes against, and the law passes. Any American listening will be incredulous.Was there ever a realistic chance that enough members of parliament from your own coalition would rebel against this? Was there ever real doubt that if Trudeau put up a real bill it would pass?Gerald Butts:  No. There was doubt that we could manage the politics internally to get a real bill tabled, and that had to do with the federal-provincial dynamics at the time. But it also had to do with the internal management of caucus and cabinet — generally, the disagreements are behind the scenes. People were jumpy. David Roberts:   I bet they weren't making arguments against their own party in the Wall Street Journal, though. Gerald Butts:  No, they were not. David Roberts:   The reason I emphasize this is that, in terms of setting a political context, something that is a fait accompli, definitely going to happen, brings out a different dynamic than something that you might be able to block. Gerald Butts:  Once it's tabled, David. This is a really important distinction. Canada is not this lovely, magical land of unicorns where everything is easy and progressive. That's not the way it works up here. A lot of hard work was done behind the scenes. Remember the context: we had come from third place, in an almost extinction-level event for the Liberal Party of Canada, and gone on to form a government for the first time in the country's history. It had never happened before. There were lots of people in that caucus who were veterans of the 2008 election, and members of staff in senior roles who were like, “do we really have to do this?”Frankly, it was Catherine's leadership, along with the finance minister at the time, Bill Morneau. Finance tends to be the place where people gather to make things not happen; it's like our own Congress within the federal government. Bill was clear from the get-go that he 100 percent stood behind what Catherine wanted to do, and we were going to make it happen come hell or high water. Of course, it goes without saying the prime minister was behind it too. David Roberts:   If you go to a provincial official and say, “all the tax we collect from your province will be returned directly to the people of your province, and most of them will come out ahead financially,” that sounds like a political home run to a sensible person. So what was all the jumpiness? What were the objections and counter-arguments?Catherine McKenna:  I should make a distinction. Caucus was jumpy; provinces were angry. They were just … conservatives. It was the weirdest thing, because I designed — with the support of Gerry, Bill Morneau, the Finance Committee, and a bunch of officials — the most small-c conservative policy you could do. I remember meeting George Shultz, and that came up; there are obviously Republicans who supported fee and dividend. I wanted to get the politics right, so I gave these folks an opportunity. I said, “go fill your boots, design your own policy.” To be clear, if the provinces that didn't already have a pricing system designed their own, they could keep the revenues. They didn't even have to give it back to the people. They could decide they were going to take the money and put it to their pet projects, that wasn't going to be our problem.David Roberts:   If you're going to reject that, you're going to reject any carbon price. You can't get more flexible than that.Gerald Butts:  You put your finger right on it. That was precisely our objective. Political context at the time: there were a bunch of conservatives running around Canada saying, “we believe that climate change is happening and it's a bad thing and we should do something about it … but not a tax.” Our objective was to take all of the objections that have been leveled against previous attempts — be it regional redistribution, tax grab by the government, some nefarious global plot sponsored by the left and George Soros, whatever nutbar theory people wanted to level at it — and say, “no, this is a simple thing. We're going to collect the revenue, and we're going to give it back. If you're against that, you're against everything.”David Roberts:   To my question, then, what were their purported objections to this seemingly very reasonable policy?Catherine McKenna:  Well, they just lied. It's not a very nice thing to say, but they did. They were so opposed to liberals that they just said it was a cash grab. I looked at your article and I said, “this is not the narrative.” It was so important to deal with the lies, to spend a lot of time selling that all the money was going back. Take Ontario — very important province politically, it's the largest province by population. To be able to say, “this is the amount of money that the average family's going to get back, which is more than you're going to pay” was super important. It was decisive. David Roberts:   In terms of public opinion, you mean?Gerald Butts:  Part of my objection to the article is the definition of public opinion. If you ask someone their views on something in a poll, and it's a theoretical prospect, they're going to have one opinion of it. But when they go to decide which political tribe they belong to at the ballot box, that's where the rubber hits the road. I never like to have fights with environmentalists, especially in public, but this is a really important thing — the authors of the study were looking at publicly available data. I can tell you from what we were doing internally, within the government, that there was a 25-point difference among voters in support for a carbon tax and a carbon tax with a rebate. Twenty-five points. David Roberts:   Let me back up one second. These conservatives are saying in public, “it's a cash grab, it's going to hurt families, blah blah blah,” all the predictable things conservatives say. But presumably, they're not dumb, they knew what you were telling them, that they're going to get all the money back. So what are they saying to you in private? Catherine McKenna:  They're saying the same things. I couldn’t even believe it. I would say that to them and then they immediately go to a microphone and they're like, “I just told the minister that this is a cash grab.” It was not super fun, because it was a fight a minute. It ended up becoming a real security issue for me, because people hear things from politicians, and you can inflame people if they think you're going to take money and people are just trying to pay the bills. So I'd have to rush to the mic, too, because they didn't care. I remember, in a conservative province where they have a provincial sales tax and generally people don't like taxes, I got someone to do the math for the premier. I said, “you could get rid of your provincial sales tax; you can bring this in. Here's your sales pitch!” And he was still against it.This is why it's so important, us telling this side of the story. They thought it was a winner to rile people up and lie, saying “you're going to pay more money and you can't understand this anyway.” They would have ministers go fill up their tank and take a picture of them at the gas station, then say, “this is going to cost an average family this much by 2022,” but they wouldn't talk about how you're going to get more money back. It literally was a comms war. We would be on the airwaves, I had to be out getting pounded.David Roberts:   You became the face of the whole thing for a while. I imagine that was unpleasant.Catherine McKenna:  I'm Irish, I’m a competitive swimmer, I can take it. I didn't love it, that's for sure, but I believed in it. I believed that we needed to take serious climate action, and I felt like I could not lose it. I felt personal responsibility, which was a heavy weight, and I was very worried.We had this output-based pricing system, which is very complex, because you have to look at particular sectors — cement, aluminum — and design in a way that you're not sending these companies offshore. It took a while; we literally brought it in in 2019, which is the year of the election. The reality is, to paraphrase David Axelrod, hard things are hard, and you're always going to take flak, so go do the really hard things that matter. We could have done a crappy, wimpier version, and they didn't care — these guys were going to be out there. (And by the way, it was all guys, a bunch of guys calling themselves the resistance to Justin Trudeau. And Catherine McKenna, I suppose.)It was a fight worth fighting, but we had to enlist people, and not just environmentalists. (I will give a shout out to our good friend Kat. We all are big fans of Katharine Hayhoe.) Of course we had environmentalists putting out the message. But we got young people, and it was good because at that time you had Greta, and young people marching in the streets. We got doctors, there was a whole campaign of doctors to support us. I got Arnold Schwarzenegger to do a video — as a Republican, he brought this in in a bipartisan way. We were just doing whatever we could so that Canadians could hear the message. There was some emphasis on how Canadians didn't know exactly how much money they're getting back. That doesn't matter. Like Gerry said, the fact that you asked them, “do you know exactly how much money you got back?” — that wasn't the thing. In the end, we were able to make carbon pricing a necessary part of a serious climate plan where it wasn't the exact amount you got back that mattered. David Roberts:   One thing I really despair about in the States is our abysmal media situation. Basically, our right wing has captured a large portion of the population and facts don't penetrate at all. I know you have some terrible Murdoch-sponsored media up there, too, but do you feel like when you put a coordinated effort into it you were able to get over the heads of that media machine and reach the public?Catherine McKenna:  We have media that fought this the whole time, but it actually goes to our broader strategy. We had to get to real people. As many op-eds as you put in the papers, how many people are reading them? We did them, but I didn't wake up every day thinking about op-eds. I spent a lot of time looking for clips for social media. In the election, the Liberal Party did a lot of social media to reach regular people. A really interesting thing happened that was surprising to me, but important. I had pushed to have a check back every month. I wanted someone to arrive at your door and hand you a big fat check. That would be the best, but we couldn't do it. But helpfully, we got a lot of free advertising from accountants, because at tax time they would literally advertise “come get your climate action incentive.” (We put a lot of effort into “climate action incentive,” what we wanted to call this thing you’re getting back. It had to be about climate, it definitely couldn't say tax rebate!) So you had all of these accountants and accounting firms saying, “We’ll do your taxes, get your climate action incentive, you're going to get this much back in the province.” I would go there and do events, we had local members of parliament doing events to promote it. At tax time people like money back. So that's the good news. I spent all my time trying to think about who I could get to sell it.Gerald Butts:  Again, we are not the land of unicorns up here. Two-thirds of our daily newspapers are owned by an American hedge fund, the same one that owns American media, i.e. the National Enquirer. They had no shame in how they opposed the carbon price — they printed lie after lie after lie about it. But it didn't work, because one thing we do have going for us in this country, at least so far, is that we're not tribal when it comes to our partisan affiliation. Most Canadians have voted for different parties at different points in their lives. Some people even vote for different parties at different orders of government simultaneously. I think that's a good thing. Partisan adhesion is not as sticky in Canada as it is in many places.David Roberts:   Do you explain that just by reference to the fact that it's a parliamentary system and there are multiple parties, so there's not this constant binary forced on everything?Gerald Butts:  No. It's part of it, for sure. What explains it more is that we have more or less built and maintained an excellent public education system that 93 percent of Canadians send their kids to. You're looking for the secret sauce in Canadian policy and why everything from immigration to climate action is possible here? It's because of that basic fact that everybody goes to school together.David Roberts:   Carbon pricing was run on in 2015, passed in 2018, and then elections in 2019, so there was no getting around this being at the heart of the election. I was just reading an account of the 2019 election which basically said the big winner was the carbon tax. Two-thirds of voters voted for a party that supported the carbon tax. If you’re a liberal and a fan of the carbon tax and involved in doing it, you have incentive to play up the extent to which the election was a referendum on the carbon tax, but was it really? Were there other bigger forces, or was it really mainly about the tax this time?Gerald Butts:  It was the showdown at the OK Corral about climate in Canada, for sure. There were other things, some of which it's still too soon for me to remember. You may remember a certain story that came out about the prime minister in the middle of the campaign — that took over the news cycle for a few days. The conservatives had been elected in major provinces (not that there are any minor provinces, coming from Nova Scotia) — they had the governments of Ontario, Alberta, more or less Quebec. And everybody, including of course the leadership of the Conservative Party federally, was saying “we are going to scrap the tax.” There were probably two or three things that decided the 2019 election, but there's no doubt in my mind that that was number one.Greta Thunberg drew I can't remember how many hundreds of thousands of people to the streets in the middle of Montreal, literally in the middle of the campaign. The prime minister marched in the rally. And more importantly for this discussion, there's no way we win that fight without the rebate.David Roberts:   So the fact that the money goes back to citizens did play a big role in the debate.Gerald Butts:  It was decisive.Catherine McKenna:  It was key. You could call it out. It was a reasonable policy. They could just say it was a tax grab, and the response had to be, “it's not, and by the way, this is what you get back.” In a way it's kind of good in elections when you have one issue — it doesn't feel good, at the time I was very nervous — but it was good, it focused the mind. Carbon pricing also became, like, do you want to act on climate? Because the conservatives were so against it.David Roberts:   To what extent was public support about the details of this policy, and to what extent did it just become a proxy battle of, “we care about climate change and they don't?”Gerald Butts:  It's a great question, David, because this wasn't a detail of the policy — this was the policy, the price and rebate. The difference of one side saying “it's a tax grab” and the other side having to say, “well, look at all the things we're going to spend the money on,” and one side saying “it's a tax grab,” and the other side saying “they're lying to you” — when it's a live-action, kinetic political battle, one of those arguments is winnable, and the other one is not.David Roberts:   I feel the need to insert here, just to make myself feel better: not that there's anything wrong with the federal government taxing people and spending money on public purposes.Gerald Butts:  Absolutely. Our universal public healthcare system and the public education system that I just alluded to would be impossible without those things.David Roberts:   So you win in 2019 on the carbon tax. Is the feeling in Canadian politics now that the main issue is settled, we're just arguing over the details? Or are your right wingers like our right wingers here in the US, that never give up? Are they still after it, or is this a settled question in Canadian politics? Catherine McKenna:  I think the Canadian public bought into a price on pollution — that's what we call it, not the carbon tax. But the conservatives apparently are going to kill themselves over this again. It's kind of funny, the number of stories that have been written about the conservatives tying themselves in knots over this, and conservatives themselves, the more reasonable ones who want to get elected, saying “you do this again, you're going to lose again, can you learn some lessons?” It's going to happen, but I don't think that means it's a lost policy. I think that the conservatives are a lost cause. Having said that, you always have to be vigilant. You can’t take it for granted. As the price goes up, you have to continuously emphasize you're getting more money back, but you also need to do the other things: make sure that your economy is growing and you're creating jobs and you're showing that you're taking real climate action. It's part of a bigger piece. Gerald Butts:  Yeah, I don't think it's settled. I had hoped it would be settled in the last election. The conservatives had a weird policy that nobody believed they would ever really implement, that they would go to a first ministers’ meeting and say, ”hey, we tried, and now we're going to get rid of the old plan.” I don't think they ever had any intention of implementing it. It was, by my view as someone who has spent a lot of time in government in this country, unimplementable. But that's for them to answer. You mentioned the forces of the right wing in the United States — they're the same forces. Catherine and I are both phoning into this lovely discussion from Ottawa where we have MAGA flags and Confederate flags flying on Parliament Hill.David Roberts:   I want to hit on the Supreme Court case. Several provinces sued over the tax; the substance of the lawsuit was that this is an unconstitutional power grab by the federal government over things that ought to be provincial, and the Supreme Court ruled in March of last year that, no, it's constitutional. Pretty much settled that. How nervous were you about that? Was that case a big deal, or was it a frivolous lawsuit? Gerald Butts:  It was a pretty huge deal.Catherine McKenna:  We definitely needed to win or else it was going to be really bad. We are a federation, so we had to demonstrate the reasonableness that the environment is joint jurisdiction between the federal government and the provinces. By saying, “you can do a direct price or you can do cap and trade and design it how you want but you have to meet the benchmark,” we knew that was going to be important, legally. We didn't just say, “okay everyone, too bad, whatever your system is, we're getting rid of it” or “you have to design it just like this.” We were reasonable. That was important. But also, the Supreme Court said climate change is a threat of the highest order to the country and indeed to the world. That was critically important, because it was going to be ridiculous at the most basic level if the federal government couldn't attack greenhouse gas emissions within the country. How are you going to have a climate plan? We couldn't comply with the Paris Agreement! If you have a target and you can’t actually reduce emissions because provinces get to do whatever they want and they can continue to slowly [increase emissions], that was going to be a huge problem. But the Supreme Court was very reasonable and they actually recognized that pollution doesn't know any borders. We had tailored it in a way that it was narrow, and that was important because they did look at, is the federal government going to come in? This was some of the arguments by conservative provinces, that we're going to regulate everything. We'd have these conservative premiers saying, “they're going to regulate how often you can drive your car.” We had to be careful. It was also a very important decision because it does now make it clear that the federal government can take action to regulate greenhouse gas emissions in potentially broader areas where it's in the national interest. I didn't really think we had a chance of losing. David Roberts:   You were pretty confident in the case and in the court itself. What's the situation with partisanship on the Supreme Court in Canada? Catherine McKenna:  It's not a thing. Stephen Harper probably tried to put people that might have been conservative. But the legal profession is different here. How we appoint judges is different. David Roberts:   And the court is trusted by the public as a neutral arbiter. That must be nice.Gerald Butts:  As the prime minister said many, many moons ago when he kicked off his leadership campaign in 2012, this country did not happen by accident, and it will not continue without effort. It is a constant struggle, David.Catherine McKenna:  The Supreme Court — I wouldn't overstate it. Which sounds like a funny thing to say, it was obviously critically important that it be found constitutional. But at the end of the day, a new government can always change policy. That’s why you can't get distracted in some ways by some things. That was really important, because otherwise, you'd have to go back to the drawing table, or win a majority, or get new legislation. But end of the day, you have to convince regular people. Maybe 2019 was unusual, because it was such a significant issue, though fought on a variety of different fronts. But I actually think Canadians have come a long way, not just on carbon pricing, but on climate. The town of Lytton literally exploded, it just burned down. We're seeing massive floods, forest fires, droughts, our Arctic is thawing. That doesn't mean that a particular policy will be resilient, but if you talk about it as a reasonable person, and it is well designed — it has to be well-designed policy, you can’t sell something that sucks to the regular person — but we are in a different place from where Canadians were at in 2015.Gerald Butts:  And we're at a different place than where Canadians were in 2011. Canada did not look much different on climate change; in fact, in some ways, the Obama administration looked way better than the Harper administration did on climate change. I guess that's the point, David, of this whole discussion, and why it raised our Canadian version of Irish when we read this study. People can change things in democracies. Sometimes the cards are stacked against you, and sometimes it feels like nothing good can ever happen, but if people put their whole heart and soul into it, they can make change happen. That is possible. It's still possible.David Roberts:   Well, we’ll have to agree to disagree about that. When people talk about the difference between the US and Canada on this issue, there's a lot of hand-waving about public opinion and who's sensible and who’s not, but to me, in the end, it all comes back to structures and procedures. You [Canadians] can have a majority that wants a policy, and that will result in the policy passing. We [Americans] have a majority that wants a policy, and we have a situation where 30 percent of the population can elect senators that can go literally block anything. So I think it's less the intangible stuff and more prosaic: we have really stupid rules, and kind of a stupid Constitution. I don't know how you get around that. We've done the work trying to change public opinion, it has changed, and we've come up with good policies — we did all the things we’re supposed to do, and now we're facing a situation where one dude from West Virginia, who partly owns coal plants, is literally deciding what and whether we do anything at all on climate change. It’s absolutely absurd.Gerald Butts:  That, to me, is one of the central differences between the Canadian and American political systems: the centrality of money. It's insane to me how much money — I remember David Axelrod asked me how much money we were going to spend in the 2015 campaign, and I said “it's probably going to be around $35-40 million.” It ended up being $42 million, in the longest election campaign in modern Canadian history. David said, “I spent more than that in the Democratic primary in Florida.”David Roberts:   One of the things that fee and dividend proponents are constantly saying is that it's very important that the rebates be visible, that people know they're getting them. They all are advocating this idea of sending the big Ed McMahon check to the door every month. But Canada went with a tax rebate that, unless you're pretty on the ball, would be very easy to not notice. That's the research that was written up in that paper — lots of people just aren't noticing it. So why bury it in tax rebates? What prompted the decision to shift this summer to mailing checks? Do you anticipate mailing checks to make a big difference?Catherine McKenna:  I don’t know why we weren't allowed to. I actually said, “I'll deliver it. I'll go to every Canadian and bring it.” For whatever reason, the bureaucratic system could not do these mailed-out checks. We weren't able to win that. We’ve won it now, in the sense that we recognize that this is important.Some of it was that people didn't know how much they got. Half of the people didn't know they got a check. To the extent people cared, they would be able to hear the conservatives say, “it's a tax grab,” and then they'd hear me and others saying “actually you’re going to get more money back.” It was very important, I can't emphasize enough. We could not have won if we had said, “actually, you know what, we put it into general revenue and we're going to do this green thing where we're going to give it to green stuff in different places, and I don't know what your provinces get.” That's not sellable. I don't want to be too depressed about the situation in the United States because we did live under Donald Trump — being the environment minister, it was hard for us. I actually went to Miami and Houston and hung out with the mayors there and did videos for Canadians to say, “but look, these guys are doing stuff on climate!” You’ll always have the states and cities and businesses that are acting. You’ve got to be crafty. We could have done the easy thing. It didn't really occur to me, because I wasn't going to back down on it, but people did want us to not do this, including internally. Some people will just wait out the clock. But we were crafty. I know it's much harder in the United States. Comms matters, designing things in a way that can uphold a constitutional challenge matters. I get your Supreme Court, you have challenges, working with states, litigating everything and knowing that it's going to be in place while it's litigated. You have to be crafty, too. I'm hopeful that the US is able to land things.I'm going to be at Columbia with Jason Bordoff, working on carbon pricing and border carbon adjustments. Maybe the enticement of border carbon adjustments will help on the pricing. The IMF is working on a minimum price floor. So there's action. I'm a realistic optimist or an optimistic realist some days, but I don't want to give up on you guys doing things.David Roberts:   One of the things that's not publicly appreciated in these discussions about carbon taxes, because they're so big politically, is that, especially at the level that they're being talked about, they're macroeconomically not that big a deal. If you look at macroeconomic assessments, it's like 1 percent GDP one way or the other, with a lot of uncertainty.I can understand completely why dividends serve as a great political argument, and also that people in practice maybe aren't that aware of them, because the amount you're paying in tax is not yet very big and the amount you're getting back is not yet very big. The actual amount of money, as opposed to the political symbolism of it all, is relatively modest. That said, the tax is about to go way up, to the point that we’ll pretty soon be at levels that Canadians will start noticing the costs, and maybe start noticing the checks back, too. The amounts on both ends are going to get bigger. Is there a next test of the tax?Gerald Butts:  I think there’s going to be an annual test. You're right that people are going to feel $170 a ton a lot more than they feel $50. There's no way you'd maintain a political consensus for it if that money weren't being rebated to people, because while you're right at even $170 a ton, at the maybe $3 trillion the Canadian economy will be at the time, it is not that much. But for individual families, it is a lot. David Roberts:   Are you pretty confident that the checks will increase the salience of the dividends? Has there been any testing or polling on that, or is it just gut common sense?Gerald Butts:  I can't speak to that, because that policy was announced after I joined the private sector, but I suspect that was the reasoning. There's no reason to believe it won't be the case, but it's going to require a continuous commitment to communication. Of course, 2030 is sooner than it used to be. But it's still a couple of election cycles away, and anything can happen.David Roberts:   Well, thank you guys so much for doing this thing in the first place, which, despite your admonitions, still has unicorn vibes to me. Catherine, I wish you all the best in joining the fight down here in the US; we could use some new energy and optimism. Thanks to you both for coming on today. It was really fun. Catherine McKenna:It was great.Gerald Butts:  It was  a real pleasure. Get full access to Volts at www.volts.wtf/subscribe

In this episode, Rebecca Dell, who runs the industry program at the ClimateWorks Foundation, offers a comprehensive overview of the problems of industrial decarbonization, the most promising technological solutions in steel, cement, and chemicals, and the kinds of policies that could accelerate progress. Incredibly informative.Full transcript of Volts podcast featuring Rebecca Dell, February 11, 2022(PDF version)David Roberts:For most of the carbon-intensive sectors of the economy — electricity, transportation, buildings — we have a pretty good sense of how to eliminate carbon emissions. None of those sectors will be easy to decarbonize. Every one is an enormous practical challenge. But in each case, the basic path to zero is clear, and it mostly involves switching out fossil-fueled machines with machines that generate or run on clean electricity. Then there’s that other wedge on the pie chart, the one that gets less attention: industry. Manufacturing, mining, construction, and waste processing are responsible for about a third of global carbon emissions (about a quarter of US emissions).The path to zero emissions in heavy industry is much murkier than it is for other sectors. Low-carbon alternatives are early in development and commercialization; in some cases, there are no alternatives except to capture and bury the carbon when it’s emitted.In future pods, I might get deeper into some specific industries (like steel). But for this one, I wanted to attempt a broad overview: What You Need to Know About Decarbonizing Industry.Nobody knows the sector and its challenges better than Rebecca Dell, who runs the industry program at the ClimateWorks Foundation. Dell previously worked at the Department of Energy, where she helped coordinate Obama’s climate action plan, and before that was a research scientist at Scripps Institution of Oceanography. She’s a researcher, author, and, as more attention turns to industry, an increasingly frequent podcast guest. (She was on Canary’s Catalyst pod last month.) It takes a while — okay, almost two hours — but Dell and I manage to cover all the big industrial sectors, why they emit so much, prospects for reducing emissions, and the policies that could make it happen. If you’re looking for a one-stop-shopping primer on industry and climate, this is for you. Without further ado, Rebecca Dell, welcome to Volts.Rebecca Dell:  Thanks so much for having me. I'm really happy to be here.David Roberts:I'm excited for this. We are going to attempt to cover a lot of ground. I want to try to give a 30,000-foot overview of industry and decarbonization; obviously any of the subtopics could be podcasts of their own. Among the Volts audience, people are probably basically familiar with the famous Energy Information Administration pie chart of where US greenhouse gases come from. There are wedges for transportation, electricity, buildings, agriculture — I think people mostly have their heads around how to decarbonize those. Then there's that big wedge that just says “industry.” My sense is that, to a lot of people, that is a bit of a black box — it’s not clear what's in it or how to approach decarbonizing it. Historically, that has been the neglected stepchild of the decarbonization conversation. But am I right in saying that attention on that little wedge has rapidly increased in recent years?Rebecca Dell:  Yes, and for people who work on this area, it's been exciting to see how much new interest has come in the last year or two. David Roberts:Do you have an explanation for why?Rebecca Dell:The phenomenon that is more in need of explanation is why so few people were looking at this area until the last year or so, considering that the industrial sector globally, under the most parsimonious accounting, is responsible for a quarter of all greenhouse gas emissions, and under a broader definition, it's responsible for more than a third.David Roberts:   Does that roughly echo the US pie chart? Or is the US different because we have deindustrialized a little bit?Rebecca Dell:  The US is a little lower in terms of the portion of our emissions that come from the industrial sector. But if you add back in the greenhouse gas emissions that come from manufacturing products in other countries that will be consumed in the United States — you can think of those as our imported emissions — then you get back to something pretty close to the global average.David Roberts:   So let's say about a third — that's a lot of emissions to neglect for this long. When we say industry, what do we mean by that? What does that category inclue? What are the boundaries? And what, in terms of greenhouse gas emissions, are the top line items?Rebecca Dell:  That's a really important question, because when we talk about “industry” in the climate community, it’s a piece of stealth jargon. It’s the worst kind of jargon: it's a word that sounds like a normal word, but it actually is a jargon word. Basically, what we're talking about when we talk about industry is everything that's not agriculture or energy, which is to say, it's the material economy. It’s mining, manufacturing, construction, waste processing. It's physical stuff, as opposed to energy. As you might imagine, there are a lot of fields of human endeavor that are included in that very broad set of activities. It's a very heterogeneous sector. But for all of the millions of different types of activities that are included in the industrial sector, there's an astonishingly short list that are responsible for the overwhelming majority of the greenhouse gas emissions.David Roberts:   That's very useful for our podcast purposes.Rebecca Dell:  It is. It allows one to simplify one's focus considerably. There are three real standouts here: steel, cement, and commodity chemicals. The chemical industry itself is, again, varied and heterogeneous; they produce a lot of different products. But there are about 10 chemicals that are basically the precursors for two products — plastic and fertilizer — that dominate those emissions. You can think of this in four product categories: cement, steel, plastic, and fertilizer. Just making those materials is responsible for two-thirds of all the greenhouse gas emissions from the entire industrial sector.David Roberts:   Insofar as you figure out how to decarbonize those, will those lessons be transferable to all those other varied applications? Or are they so heterogenous that you have to do it one by one?Rebecca Dell:  The sources of greenhouse gas emissions are different in other areas. For example, a lot of the emissions in the waste processing area are what's called landfill gas: anaerobic digestion of poorly sorted solid waste trash leads to methane emissions. So that's in the one-third that's not accounted for. But a lot of it is manufacturing. It’s from lighter manufacturing activities: lower temperature processes, electric drive processes, cooling, motors, that sort of thing. A lot of that will be taken care of as the grid gets cleaner and as things that are relatively easy to electrify become more electrified.David Roberts:   If tomorrow, by magic, all electricity became clean, how much of that one-third of emissions would vanish?Rebecca Dell:  That's pretty much the difference between the one-quarter and the one-third numbers that I cited. For the one-quarter, the more parsimonious definition is “we are only looking at greenhouse gases that are coming out of smokestacks at factories,” what are called direct emissions. If you add in the greenhouse gas emissions from generating electricity that is consumed at industrial facilities, that gets you from a quarter up to over a third.David Roberts:   In terms of that quarter, how much of industry is devoted to fossil fuels themselves: mining, drilling, processing, transporting, refining, etc.? If we shift away from fossil fuels over time, how much of a chunk does that take out of the industry pie?Rebecca Dell:  None. The numbers I cited to you, the quarter and the third, those are global numbers. Here in the United States, we have a very unusual convention of including the fossil-fuel extraction industries as industrial activities. In the whole rest of the world, when people are doing their greenhouse gas inventories, they don't count that as an industrial activity; they count that as an energy transformation activity, so they lump those emissions in with power generation. If you look at that pie chart from EIA, or EPA — if you look at a strictly US source — that will include your refining and fossil-fuel extraction emissions, but global numbers don't include any.David Roberts:   That seems like a complication in comparing across countries, doesn't it? It's kind of a big chunk to have misfiled in one place or the other.Rebecca Dell:  Yeah, but we're America, and we like to do things our way.David Roberts:   Why do steel, cement, plastic, and fertilizer produce so many GHGs? Rebecca Dell:  First, because we make them in larger quantities than we make anything else. These are the materials that we make other things out of. We make steel and cement in increments of billions of tons per year. We make commodity chemicals in increments of hundreds of millions of tons per year. These are the only products that we make in those volumes, so of course these are the products that have the biggest greenhouse gas impact. Second, all of these industries are a variation on the following theme: you dig something out of the ground and the first thing you do with it transforms a raw material into a useful molecule; everything that's downstream of that in your supply chain is arranging your useful molecules in different combinations and sizes and ratios. But all of that rearranging takes a lot less energy and emits a lot less greenhouse gas than making the useful molecule in the first place.All of these industries are what we call primary commodity processing industries. In fact, if the big three that we talked about — steel, cement, chemicals — are the highest emitting industries, four through seven or eight are also primary commodity processing, just smaller ones. They're things like aluminum.David Roberts:   Let's look at those four: steel, cement, plastic, and fertilizer. Why does making steel specifically produce so much greenhouse gas? What is the traditional steel-making process?Rebecca Dell:  Steel emissions are so big because we make 2 billion tons of it per year. That's the best part of a thousand pounds of steel for every human being on Earth, every year. It sounds insane until you look at a suspension bridge, or a runway, or anything in our built environment. Then you have to think, oh yeah, I guess we do use an incredibly large amount of steel. We make everything out of it.David Roberts:   What is the raw material, and what is the processing that sends off so much greenhouse gas?Rebecca Dell:  With steel, we start with iron ore. Iron ore is iron oxide — iron atoms chemically bonded to oxygen atoms. Your audience may be more familiar with iron oxide by its common name, which is rust. Everybody knows that rust does not have the valuable material properties that steel has, so what we're doing when we make steel is stripping off those oxygen atoms and turning it into metallic iron, with a little bit of other elements mixed in to improve its properties. Steel is almost all iron by weight.The main way we do that chemical reaction today is to use coal. We combine the iron ore and the coal together in a reactor called a blast furnace. We use metallurgical coal, which is also called coking coal. It's a special kind of coal, but it's still a lump of carbon. In the blast furnace, part of the coal gets burned for thermal energy to help the reaction go faster. All of those carbon atoms are a more attractive place for the oxygen atoms to go, so the oxygen atoms move from the iron oxide over to the carbon, and we get carbon dioxide. So we're getting carbon dioxide from two different sources. This is another theme that we'll see throughout the industrial sector: you have the energy emissions — the coal that you burn to get your reactor hot to make the chemical reaction go — but you also have a set of chemical reactions that are going on in there that are not combustion reactions. They're a different kind of chemical reaction that's also producing greenhouse gases. That’s what we call process emissions: any greenhouse gas emission that comes from doing anything except combustion.David Roberts:   My intuition tells me that energy emissions are going to be the easier ones to eliminate, because we have alternative sources of energy that don't emit greenhouse gases. Is that accurate?Rebecca Dell:  In many cases, yes.It would be useful at this point to give a typology of solutions that applies across industries. There are a few buckets of decarbonization pathways that we can use across all of these industries. Bucket number one is material efficiency. We can just use less of this material in order to make the products and deliver the services that we want. David Roberts:   Traditionally that's the cheapest, right? It's just changing your behavior, changing your processes, changing design.Rebecca Dell:  Yeah, that's a big one. The barriers there are typically not technical. They're barriers that have to do with incentives and social systems and cultural norms. That's very important, and we should definitely do it. Bucket number two, carbon capture and storage. You keep doing pretty much what you're doing now, but you figure out a way to collect all the carbon dioxide and put it underground. You don't have to like it, but you have to acknowledge that it exists and is a possibility.David Roberts:   I'm very familiar with capturing carbon dioxide off of combustion; that's the standard CCS model. Is capturing the carbon dioxide off of process emissions notably different or more difficult?Rebecca Dell:  There's a dumb version of carbon capture where you just take your flue gases at the end of the pipe and put them through some scrubbers and then put them through some amine sorbents, and you can do that on any flue gas. You could imagine doing that on the end of almost any pipe, but each industry has its own version of smarter carbon capture that is engineered to optimize for this industrial process. That varies a lot. Bucket three is hydrogen. As your recent guest Panama Bartholomy said, it is the answer to every question in energy before it has even been asked. Bucket number four is direct electrification. Bucket number five is bioenergy. Those are your five buckets across all of these industries.David Roberts:   Is there significance to the order you put them in?Rebecca Dell:  No. Well, I suppose I put bioenergy last because bioenergy cannot ever be more than a small part of the solution. There’s no way to provide enough biomass to do a large portion of the decarbonization in these industries. The IEA estimates that our current total biomass available for energy use on Earth is something like 55 or 60 exajoules of energy. The chemical industry today uses almost 50 exajoules of energy. The steel industry uses another 30 exajoules of energy. There’s just not enough to go around. Bioenergy might show up here or there, but it can't be the bulk solution, because there just aren’t enough joules there.David Roberts:   Bucket number one, material efficiency, applied to steel: I can imagine us using less steel. Rebecca Dell:  One point on that: in the United States and in other high-income countries, we already use less steel. As countries get richer, their demand for steel tends to tail off. The reason for that is that as you become a middle-income country, that's when you build out an electric transmission and distribution system that actually gets to every house; you move your entire population into modern housing; people start having private vehicles for the first time in significant numbers; you build sanitation systems and aqueducts that bring clean water and public health to people. Once you've done that, your demand for steel is largely a function of population growth and replacing things as they wear out. We in high-income countries might have a lot of opportunities to reduce our demand for steel in order to be more material-efficient in our use of it, but there's this huge latent demand for more steel that is represented by the couple billion people on Earth who are still in poverty and have an entirely legitimate desire to have modern housing and sanitation and all of those things.The other thing about steel, though, is that it's quite recyclable. As you have a lot of stuff for a long time, you develop a stock of steel that you can recycle. If current trends continue, all of the additional demand for steel that's going to come from countries emerging out of poverty can probably be met with recycled steel. The current volume of new steel production probably doesn't have to go up in order to continue to meet global needs, but it probably doesn't have to go down either.David Roberts:   Are we currently on a trajectory to hold it steady?Rebecca Dell:  If current trends continue. But I don't think I've actually said out loud yet in this interview how much greenhouse gas is emitted by the global steel industry. It’s 3.5 billion tons of carbon dioxide equivalent per year. It's more greenhouse gases than are emitted by any entire nation except the United States and China. Even if we're just holding current production constant, that's still an enormous problem to solve.David Roberts:By the same token, if you reduce it by even a small fraction, you are reducing a lot of tons.Rebecca Dell:Yes.David Roberts:What does smart carbon capture look like in steel? Rebecca Dell:Frankly, there's not a lot of interest in steel CCS around the world right now. I'm happy to explain how it might work and why it would be hard. David Roberts:   My attitude toward CCS is, don't do it unless you have to. If you're telling me you don't have to, I'm happy to put it out of my mind. Rebecca Dell:  I think we can confidently walk past. Let’s move on to hydrogen. Hydrogen is where a lot of the excitement in the steel industry is right now. In my mind, the best argument for hydrogen is that making steel using hydrogen is the smallest increment of technology that we need to get to zero-greenhouse-gas steel.David Roberts:   Can you just substitute hydrogen into existing refining processes, or there's more to it than that?Rebecca Dell:  No. Today, more than 90 percent of what we call primary steel — steel that's made from iron ore, not recycled — is made with a blast furnace using coal. There's not a lot you can do about the blast furnace on the hydrogen front. But about 7 percent is made with an alternative process called direct reduction that uses methane instead of coal. We think that the hydrogen process might be quite similar to direct reduction and use quite similar equipment, so we don't have to start from zero. This direct reduction process is only 7 percent of global production, but that still makes this a fully commercial, mature technology. You can call up the Midrex Corporation and say, “hello, I would like to buy a shaft furnace,” and they will make you one. Basically what we're talking about is reengineering this existing technology of the shaft furnace to use only hydrogen instead of what it currently uses, which is a mixture of hydrogen and carbon monoxide. If we're going to do that as our main route, we're going to have to build a lot more shaft furnaces. So the next option — direct electrification.David Roberts:   My favorite.Rebecca Dell:  There are a few different ways to do this. The one that's most advanced is something called molten oxide electrolysis, which is pretty much what it sounds like. You take your oxide (iron ore), you heat it up enough to melt it, you put a giant electric field across it, and the electric field is strong enough that it pulls apart the iron and the oxygen. This is pretty similar to how we currently make aluminum, so it's not crazy. It's a thing that should be able to be made to work. It's a pre-commercial technology, though — it's not ready for primetime yet. There are some companies that are working on it, it might be ready soon.David Roberts:   Are we to a demonstration project yet? Is it happening somewhere?Rebecca Dell:  Give it a year and there may be something exciting to announce.David Roberts:   Is that the cheapest form of direct electrification, or the most practical?Rebecca Dell:  That’s the one that’s closest to being ready to do. People are also thinking about low-temperature forms of electrolysis that you can do without having to melt the iron oxide first, but the one that I just described is the most mature. The biggest advantage of the hydrogen route is that it is the smallest increment of technology to get us to truly green steel. The biggest advantage of the direct electrification route is that it will require the least energy. If you are using green hydrogen — taking electricity and converting that into hydrogen — and then using that hydrogen to convert your iron ore into iron, you lose a lot of energy in that extra conversion. If you can just use the electricity directly, you get to keep another third of the energy.The amount of energy that's involved is enormous. This industry uses a similar amount of global energy to its portion of global greenhouse gases, which is 7 or 8 percent.David Roberts:   None of these, except for carbon capture, seem to address existing blast furnace steel production facilities.Rebecca Dell:  Yeah, and this is incredibly important for the politics. In the steel industry, as in a lot of these industries, the reason why the facilities that we have today were built in the places that they were built is because they had the best access to raw materials and energy. Why did we put the steel mill there? Because we could get metallurgical coal to that place really cheaply. Also like a lot of these industries, most of the production is done at a relatively small number of very large facilities. I've visited a lot of steel mills over the years, and it's not unusual for a steel mill to have 10,000 employees. The biggest one I ever went to had 48,000 employees at one facility. It's the size of a city. David Roberts:   So these are not things that you can move around easily. Switching geographies is not practical.Rebecca Dell:  It creates a lot of problems and a lot of social dislocation. The steel industry might not be a huge part of the total US economy today, but for the communities and even the states that are hosting these facilities, one facility is a really important part of your employment. People will fight really hard to keep these facilities, because they're so concentrated and the local community is so dependent on them. If you're moving from a coal-based process to an electricity-based process, frankly, the places that have the best access to metallurgical coal are not typically the same as the places that have the best access to cheap electricity.David Roberts:   So CCS is something you can offer these communities and these facilities to say, “you don't have to change anything fundamental, you don't have to move, you can continue to exist here and just bolt this thing onto your facility.”Rebecca Dell:  You can potentially maintain existing industrial economies, but it's not easy. One of the reasons why CCS is tough in the steel industry is that at what are called integrated steel mills, the traditional type of steel mills that have blast furnaces at them, typically you'll have three or four really big carbon dioxide sources — your blast furnace, some other major process furnaces, and things like that. Together, you have a lot of carbon dioxide coming out in one place, so you can see how it could be cost-effective to collect it all. But all of that together is often only half or maybe 60 percent of the carbon dioxide that's coming out of the facility overall. The rest of it is all these small sources — little process heaters here and there — that are distributed by the dozens all over a facility that's the size of a town. Thinking about how you would collect all of the carbon dioxide from all those distributed sources and do that cost effectively is really hard.David Roberts:   I came into this interview riding on a wave of green-steel hype, and nothing I'm hearing you say is justifying any of it.  What is all the excitement around steel? It sounds to me like we have no good options. Rebecca Dell:  I didn't say anything nasty about hydrogen, did I?David Roberts:   I mean, it's going to substitute for that 7 percent with a special kind of furnace, right? Which is not nothing, but blast furnaces are most of the furnaces. Rebecca Dell:  All of them are going to have to be retired.David Roberts:   That sounds like a brutal social and political process.Rebecca Dell:  I'm not going to claim that it will be straightforward, but we do have 30 years. Industrial equipment doesn't typically last longer than that. We don't have to do this all at once. But I have never seen a good idea for how we have a climate-safe blast furnace. We are in a process of closing most, if not all, of the coal-fired electricity stations around the world, and we all accept that this type of industrial equipment, this particular coal-fired type of furnace, is just not consistent with a climate-safe future. That is also true of blast furnaces.David Roberts:   So insofar as there's an elevator-pitch answer in steel, it is shutting down blast furnaces and building new facilities that either can work with hydrogen shaft furnaces or are some directly electrified process that we don't quite have worked out yet.Rebecca Dell:  We're getting close, though. That's probably how it's going to go. There are some interesting reports that came out in the last few months looking at pathways to steel decarbonization. Several different organizations have done this kind of analysis over the course of the last year, with different methodologies and approaches, and all of them basically come to the same conclusion: no new blast furnaces, and we're going to have to start shutting down the existing blast furnaces in pretty short order.David Roberts:   I'm guessing these new, less standardized and commodified processes are more expensive. What kind of delta are we talking about?Rebecca Dell:  This is a great question, and there are two answers. First, yes, we do expect that green steel and other green commodities will be more expensive than existing dirty means of producing them. Depending on who you ask, and depending on exactly which process you're talking about, those price premiums range from 20 percent up to 200 percent. That's okay — we pay for environmental performance all the time. Cars with catalytic converters are more expensive than cars without catalytic converters; we still think it's a good idea to put catalytic converters in our cars.David Roberts:   But if you're telling a country that's emerging out of poverty that it's going to be 200 percent more expensive for them to do so, that's not nothing.Rebecca Dell:  This leads me to the second point, which is that these industries — steel, cement, commodity chemicals — are incredibly valuable. The whole rest of the economy relies on the material that these industries produce. However, from an economic perspective, they are extremely low-value-added industries. They have very tight margins. These are your classic commodity industries. The cost of these materials represents a very small part of the cost of the finished goods that are made out of them. From the perspective of the guy who owns the steel mill or chemical plant or cement kiln — sometimes it’s a girl, but usually a guy — he's like, “I have commodity-sized margins here. There is no room in my margin to pay for any kind of decarbonization.”I would encourage you, however, to look at this through the other end of the telescope. Don't look from the perspective of the guy who owns the steel mill; look at it from the perspective of the person who's buying a car made out of steel. Even at a relatively high additional cost for decarbonization, that's only going to add a couple hundred bucks to the cost of your car. The average new car in the United States costs $37,000; $37,200 looks a lot more manageable.David Roberts:   This must have political economy consequences, too, right? If the steel mill owners can't get the car buyers on their side to rebel against this, how much power do they have on their own to politically resist these sorts of things? Rebecca Dell:  The real political and economic problem here is not, “how do we afford to pay for decarbonization?” We can 100 percent afford to pay for decarbonization of steel and all of these other industries. The problem is, how do we pass the costs efficiently through the supply chain so that the place they land, the final consumer, is the person in the supply chain who can actually afford to pay.David Roberts:   They’re more dispersed the more you pass them down the chain too; less concentrated on any one constituency that might rebel against it.Rebecca Dell:  Yes. The policy challenge here is about how you pass those costs through. Ways that you can do that are things like product standards. Why do we have catalytic converters in our cars? In a practical sense, it's because you're not allowed to buy a car that doesn't have one. If you want to make sure that the costs of decarbonization get passed all the way through the supply chain, one way to do that is to have standards that require that products use clean materials.David Roberts:   Of course government procurement is always a huge piece of this too. Government can start that process. Rebecca Dell:  Yes, the government can start by applying the standards to itself.David Roberts:   That's basically end users voluntarily taking on the cost, right? Rebecca Dell:  I don’t think there's anything voluntary about my catalytic converter.David Roberts:   Well, policymakers deliberately choosing to put the costs on the final user so that it's less concentrated. The steel mill owners are all equally affected; none of them are being priced out relative to the others.Rebecca Dell:  To be philosophical for a second, there are only two pots of money in society: consumer dollars and taxpayer dollars. The question is, what ratio of consumer dollars to taxpayer dollars do we wish to use? That is going to change depending on circumstances, but that's the question.David Roberts:   This helps me have a more realistic view on steel, although it’s slightly dimmed my enthusiasm.Rebecca Dell:  I don't want to give you the impression that nothing's happening on steel. The Swedes have a project called HYBRIT, a hydrogen reduction steel project, which is the most advanced in the world. They recently announced that they made one of their mining vehicles entirely out of green steel — the first vehicle in the history of the world to be made out of green steel. It’s only one vehicle, but the distance between one vehicle and two vehicles is a lot smaller than the distance between zero vehicles and one vehicle, and that distance keeps getting smaller over time. We're making real progress. We're not there yet — it's definitely at an earlier stage than our colleagues who are working on power or transportation — but we're making progress.David Roberts: Let’s move on to cement. What is the raw material and what is the basic processing?Rebecca Dell:  The raw material is the main constituent of limestone. Limestone is a very common kind of rock; you can find it pretty much in any country. The main constituent of limestone is something called calcium carbonate. The main ingredient in cement is something called calcium oxide. You can hear right in the words — there is carbon in the limestone, there is no carbon in the cement. You dig up the rocks and cook them at 1,500℃, roughly 2,600℉. About 40 percent of your greenhouse gas emissions come from burning fuel to get your rocks that hot, and the other 60 percent, on average, is from burning off the carbon that was in the rock. The carbon coming out of the rock is your process emissions.David Roberts:   Once again, it's fairly easy to imagine the energy coming from a different low-carbon source, but the problem comes down to process emissions. When the carbon comes off the limestone and is released, is there some way of capturing it? Is there some way of doing this without releasing the carbon? What are the green cement options?Rebecca Dell:  Even if we decide that we don't want to use CCS in any other part of our economy, the place that we are most likely to end up relying on CCS as our primary decarbonization pathway is in the cement industry.David Roberts:   Are the emission sources more concentrated in cement than they are in steel?Rebecca Dell:  A cement kiln is a much simpler place than a steel mill. We were talking about steel mills with thousands of employees; if you go to a cement kiln, the typical number of guys on shift is maybe 25. You just have one big pipe in a cement kiln, so CCS is a lot more straightforward there. People do have ideas for alternative raw materials or alternative cement chemistries that might be able to address this process emissions problem without CCS, but it's probably going to be CCS. Part of that is my assessment of what the technical alternatives are, but an even more important reason is that cement and the thing we like to make out of it, concrete, are foundational to our buildings. It is literally the thing we make foundations out of. Almost every structure in our society relies on concrete, and the type of cement that we use, which is called ordinary portland cement, was first patented in 1824. We're coming up on its 200-year anniversary.This is a material we feel very comfortable with. We know its material properties really well. And for obvious reasons, the construction industry is incredibly risk-averse about the structural properties of the things that it's building. Even if you have great ideas for alternative cement chemistries, the likelihood that the global construction industry would feel comfortable wholesale shifting over to them in 30 years time is a pretty tall order.David Roberts:   I can't imagine the process you would have to go through to demonstrate that your concrete would hold up buildings in every conceivable situation. Rebecca Dell:  We do have performance-based standards for concretes and ways that we test different types. I don't want to say that there's nothing to be done here. The main ingredient in cement is something called clinker, and we already use a big range of different clinker factor — that's the percentage of clinker — in different cements around the world. Almost all the carbon dioxide comes from making the clinker. A lot of cement is 95 percent clinker, but it's also very common to use 65 percent clinker cements. You can cut 30 percent off your greenhouse gas emissions by using low-clinker cements, and those things are already technically mature and well-demonstrated — there are big structures made out of them that you can go and visit around the world. So there’s an opportunity to make at least 30 percent greenhouse gas emissions reductions, on average, just by going to the lowest clinker factor that's appropriate for whatever you're using. There's no technical barrier. It usually is cheaper. We should do it tomorrow — there's no reason not to. But a 30 percent emissions reduction still leaves you with 70 percent.David Roberts:   What about bucket one, using less? Is there a practical way to use a lot less cement? Rebecca Dell:  Oh my god, we are so wasteful in the way that we use concrete. People have gone out to actual commercial and multifamily residential buildings and looked at how much structural material, primarily concrete, these buildings are using compared to how much structural material would be needed to support all the loads. They typically find that there is something in the neighborhood of twice as much structural material as is needed to comply with the very safety-protective building codes. Almost all of the studies that I've seen have been in Europe or the United States, so it's mostly in high-income countries that these numbers come from. We think the situation is probably even worse in developing countries. I live in the San Francisco Bay area. For a commercial or multifamily construction site in this area, certainly it's more expensive here than in other parts of the country, but it's not radically different. Depending on the size of the building, the typical payroll for one of these construction sites might be $5,000-$10,000 an hour. To get one of those mixer trucks full of concrete delivered to your construction site — we're not talking about fancy concrete here, just normal commodity concrete — that's about $1,000. So if you can save five or 10 minutes of time on your job site by wasting a truck full of concrete, you just saved money. This goes back to what I was saying about looking through the other end of the telescope. Why would you use materials efficiently when they are so cheap? For private construction here in the United States, the average amount of a construction project that is represented by the cost of the cement is less than 0.5 percent.David Roberts:   So cement is so cheap that people overuse it to save time, to save soft costs …Rebecca Dell:  To save anything. Everything is more expensive than cement. If you take an 18-wheeler and you fill it up to the statutory maximum weight for driving on an interstate highway in the United States, it will have approximately $2,600 worth of cement in it. It will have a one nice laptop worth of cement.David Roberts:   This does seem like an area where markets could work well. You want to put a higher price signal on it and then trust people to figure out how to eliminate some of it. Is that right?Rebecca Dell:  It's a good news / bad news situation. Because cement and all of these materials are so cheap, it is very hard to persuade people to use them efficiently. It is very hard to persuade people to value them in terms of the actual value that they provide to their lives. It's a little bit like water or electricity that way. However, because they're so cheap, the good news is that even if the green version is a little bit more expensive, or even a lot more expensive, than the dirty version, that doesn't actually make the products that these materials are made out of more expensive.If we go back to this commercial building I was talking about, 0.5 percent of its costs are cement. Let's say we mandate dumb end-of-pipe CCS, the most expensive, worst engineering option that we can think of, for our cement decarbonization. We involve only lazy engineers in our project. Even under that circumstance, maybe we'll double the cost of the cement — that only adds 0.5 percent to the cost of the building. In fact, it adds less than 0.5 percent to the cost of the building, because all of the construction costs that I've been citing don't include the cost of the land, which is often the most expensive thing.David Roberts:   So I was precisely wrong — it's probably going to be difficult to put a pure price signal high enough to make the market work. But you can get away with mandates, because it's not going to affect consumers much.Rebecca Dell:  Yes. This is part of what I was saying earlier — these industries are incredibly valuable, but because they're low-value-added, compared to the prices that consumers actually face, these materials are not typically an important line item.David Roberts:   Let's talk about chemicals. I know it's a varied category. Are there simple things to say about why chemical processing produces so much greenhouse gas, or does it vary a lot also?Rebecca Dell:  The chemical industry is very diverse. I remember talking to a colleague who was a senior sustainability person at BASF, the German chemical giant, and she told me that BASF has an 80/20 problem when it comes to their greenhouse gases. BASF makes approximately 100,000 products. Eighty percent of their greenhouse gases come from not 20 percent of their products, but from 20 products. Again, these are the basic materials that are the ingredients for all their other products — mostly fertilizer and plastic. For fertilizer, primarily we're talking about nitrogen fertilizer, so making that cleanly is mostly about making hydrogen cleanly. People do have some ideas for how to make nitrogen fertilizer that's not made out of ammonia, but the main idea is, if you want to make clean ammonia, you just need to start with clean hydrogen.David Roberts:   If you solve the green hydrogen problem, you solve the fertilizer problem downstream?Rebecca Dell:  Yep. There's not a whole lot to making fertilizer besides making hydrogen.David Roberts:   That's convenient. Plastics, I assume, are more difficult.Rebecca Dell:  Yes. With plastics, you have the same buckets of solutions we were talking about earlier. We could use less, and definitely we should. Plastics are interesting, because they’re carbon-based molecules; they're made out of a carbon-based material. When we make plastics out of fossil fuels, some of the fossil fuels are burned to provide energy, but for more than half of the fossil fuels that we use in plastics production, we're actually taking the carbon atoms and the hydrogen atoms that are in the fossil fuels and we're putting them into the plastic product. We're making the product out of the fossil fuels.David Roberts:   So every piece of plastic is, in some sense, carbon sequestration.Rebecca Dell:  You know, Shell says that all the time.David Roberts:   I take it back. Does it release the carbon when it breaks down?Rebecca Dell:  There is a scenario in which, if you collected all the plastic at the end of its life, and you made sure that it was clean and dry and well-segregated, and you put it in a nicely lined hole in the ground, it would be inert in that hole for a very long time and technically you could call that carbon storage. But that's not actually what we do with plastic at the end of its life, and the way that we actually treat plastic at the end of its life leads to a lot of greenhouse gas emissions.David Roberts:   What do we do? Do we burn it?Rebecca Dell:  Some of it we burn. That's like burning fossil fuels directly, and that's a very popular option around the world. Here in the United States we mostly put it into mixed garbage. When you have plastic and organic material mixed together in your garbage, the organic material, food waste, will decompose anaerobically. All the carbon atoms that were in that organic material will then leak out as methane instead of as carbon dioxide. Methane, depending on the timeline you're looking at, is somewhere between 30 and 85 times more potent of a greenhouse gas than the carbon dioxide that you would get if you properly composted your organics. So even if the carbon atoms in the plastic are not decomposing quickly and turning into carbon dioxide, they are leading to methane emissions from trash, which are an important source of overall greenhouse gas emissions.David Roberts:   It seems like here, bucket one is the lowest-hanging fruit by far. We're so wasteful. Plastic is so gross and overused.Rebecca Dell:  In the United States, the EPA estimates that only 8 or 9 percent of plastic is even collected for recycling, and of that, only about half is actually recycled in any form at all. Almost always, the recycling process is that you have a wide variety of mixed plastic, you melt it down, and when you lump all of these different materials together you get very, very low-quality plastic, radically downcycling. Most of the plastics we use are, in theory, infinitely recyclable. If you have a high-purity waste stream, you can melt it down and get new, first-quality products that are just like the old ones. But we don't do that. We need to use less plastic, but we also need to have tight regulations on exactly what types of plastic can be used, so that there are only a few types out there and all plastic packaging is the same couple of types, so they can be easily segregated and meaningfully recycled. David Roberts:   We can change the way we design plastic products and the types of plastic we make to encourage more recycling, but obviously you're never going to get to zero that way. Is there a way to avoid, bucket two, or are we stuck with CCS here? Are there real alternatives on the horizon to carbon plastic?Rebecca Dell:  Bioplastics are real. I occasionally will encounter a PLA fork or something like that. They're not a meaningful portion of current plastic production. And as we were talking about before, there's just not enough biomass to go around to make large quantities of plastic out of biomass, so that's going to be a niche item forever. We can take carbon atoms out of carbon dioxide and turn them into plastic; it requires an eye-watering amount of energy. This is important for carbon-utilization conversations generally: imagine we started with these big, exciting, highly energy-dense fossil fuel molecules; we had a combustion reaction, where we took out all of the energy that was stored in those molecules; and what we were left with was carbon dioxide, which was a combustion product. It's what's left over after you take out all of the energy. If you want to turn it back into one of these big exciting molecules, you have to put more energy back in than you got out in the first place from burning it. The chemicals industry is the most energy-consuming industry of any industry in the world. It's only the third-most greenhouse gas emitting, because a lot of that energy is stored in the product and doesn't go directly into carbon dioxide.A couple of years back, the big pan-European chemicals industry trade association published this fantastic report where they said, “okay, you guys want us to decarbonize, let's get serious about what that actually would be. Let's go through one process at a time and talk about the energy and feedstock requirements for the green alternatives in every case.” What they found was that to produce the basket of chemicals that they were currently producing and to do it using carbon dioxide as their primary source of carbon would require something like 1,900 terawatt-hours per year of clean electricity. The IEA estimates that in their Paris compliance scenario in 2050, the total amount of electricity that is generated and used for all purposes on the continent of Europe is only about 3,400 terawatt hours per year. More than half of all the electricity would have to go to the chemicals industry if you wanted to make all of your carbon-based chemicals out of carbon dioxide. So, it can be done, but we are really in too-cheap-to-meter territory with our electricity if we're doing that.David Roberts:   None of those sound like good options. What's your favorite for plastics? Rebecca Dell:  It's got to be using less, material efficiency. I have seen no scenarios where you can get 1.5℃ or even 2℃-consistent reductions in emissions from the chemicals industry without dramatically reducing the amount of plastic that we use and dramatically increasing the quantity and quality of recycled plastic.David Roberts:   With steel, you mentioned that when you're developing as a country there are a lot of big one-time uses and then your usage tails off. Is there an arc for plastics?Rebecca Dell:  Not that we’ve been able to find. It’s just up and up and up. Since 2015, the rate at which total global plastic production is increasing has stopped accelerating.David Roberts:   I guess that's good news?Rebecca Dell:  The problem is not getting worse faster. It's just getting worse at the same very rapid rate that it was previously getting worse at. That's the nicest thing I can say about the trend for plastic production volumes.David Roberts:   I do want to touch on some policy options. It sounds like if we're looking big picture, at industry decarbonizing by 2030, the most difficult area is plastics. Is that roughly accurate, or they're all difficult?Rebecca Dell:  I don't like to think of any of them as difficult. I find that framing both unhelpful and inaccurate, because people just started noticing the importance of the industrial sector about a year ago. I often tell people that where we are in our decarbonization progress in these sectors is similar to maybe where the power sector was in the late 90s. I don't know, I was a kid then, but I'm assuming that in the 90s the concept of completely decarbonizing the power sector probably felt pretty hard to people who were out there trying to get solar panels installed and being called silly hippies. We have 20 or 25 years of progress that we've made since then. It's not going to be easy, it's not going to happen by itself, but we have a line of sight to where we're going. We see how it's going to happen.The situation in the industrial sector is not that it's somehow inherently harder. We're just at a much earlier stage in our decarbonization journey.David Roberts:   We waited a long time to get started, though. We do have to go faster in it than we did in electricity, arguably.Rebecca Dell:  That is true. We did take our sweet time to get started.David Roberts:   You're closely in touch with political and policy angles on this — do you see urgency around this commensurate with the scale and speed necessary to do it? Rebecca Dell:  I mean, obviously not. Even the parts of the climate challenge that we're doing the best at we're not on track, and this is not one of the parts that we are doing the best at.It is very clear to me that what we need to do to decarbonize these industries is entirely within our capacities here in the United States and also globally. Please don't interpret what I'm saying as any disrespect to the efforts of the Biden administration. The people who are doing this work in the Biden administration are very, very clear about what the scale of the challenge is, and they are attempting to move as fast as they possibly can. But they would probably be the first people to tell you, “what we're doing is not enough.”David Roberts:   Let's look at what we are doing, then. We had executive actions early on, we had the Recovery Act, then we got the Bipartisan Infrastructure Act. Are there big pieces of good policy on this that have already been passed? Secondly, are there good pieces of policy on this in Build Back Better that we, like everyone else, are sitting around waiting forever for action on? Rebecca Dell:  The biggest thing that was in the bipartisan infrastructure law is a serious pile of money for commercializing and demonstrating clean industrial technologies. Most of that is going through the Department of Energy, and the way that the money was allocated is pretty flexible. The DOE currently has a lot of discretion about exactly how they spend that money, and there are a few different pots of it, so it's hard for me to give you a dollar amount that will go to the industrial sector, but it will be somewhere between half a billion and a few billion dollars. That's a serious amount of money.David Roberts:   It does sound like in some of these markets or sub-markets we are at that point where a visibly successful demonstration project could be triggering, could unleash things.Rebecca Dell:  It’s a thing we need really badly, and it's a thing that absolutely requires public money. There's a certain amount of technology risk that the private sector in these industries, in particular, is simply not going to pay for. David Roberts:   What about Build Back Better? Is there some pot of gold at the end of that?Rebecca Dell:  It’s a much larger pot of money in Build Back Better. We go from a minimum amount of industrial decarbonization demonstration projects of $0.5 billion currently up to a minimum amount of $4 billion if Build Back Better gets passed. Then the upper limit, depending on how you count it, goes up commensurately. The other important thing is that Biden issued an executive order last month on federal sustainability which included for the first time direct instructions for the federal government to buy low-greenhouse gas building materials — read: steel and cement — when it builds stuff with federal money.David Roberts:   That’s not a small thing. That's a very big customer, right? Rebecca Dell:  We call the family of policies where the government buys low-greenhouse gas building materials “Buy Clean.” If you look across all levels of government — federal, state, and local — almost half of all the cement in the United States is purchased with taxpayer dollars.David Roberts:   In other words, Buy Clean government policy could do a lot.Rebecca Dell:  If it's well-structured and aggressively implemented, it could make a huge difference. Build Back Better, in addition to demonstration, has a bunch of money in it to facilitate the implementation of Buy Clean.David Roberts:   Just at the federal level, or helping states or cities too? Presumably, government at any level could do a little bit of this.Rebecca Dell:  There are a lot of spillover benefits. If the federal government says, “we're going to do this,” that makes it much cheaper and easier for state and local governments to do it, even without direct federal subsidies. For example, the federal government has to put in place the measuring and reporting frameworks for the greenhouse gas intensity of different products; they have to make sure that the low-carbon products are available wherever federal construction is happening. All of the fixed costs of getting the system up and running can be accepted by the federal government.David Roberts:   All of which makes it easier for the next person to do it.Rebecca Dell:  There's also a lot of exciting stuff happening at the state level. California was the first state to pass a Buy Clean law, but since then, five other states have passed Buy Clean laws of one type or another.David Roberts:   Mostly cement and steel?Rebecca Dell:  The specific set of materials that's covered varies from state to state. Some states it's cement only; some states have steel, cement, and other things; in California, unfortunately, it's everything except cement. The cement industry had good lobbyists.David Roberts:   Is this the sort of thing where if enough states get in on this, they're eventually going to force a sea change?Rebecca Dell:  These are concepts that need to be proved out. If you can have a state policy that leads to widespread use of comparatively very low-greenhouse gas building materials, it becomes a lot easier for the EPA to start regulating related issues. The goal here is to create a virtuous circle of greenhouse gas ambition.David Roberts:   On one side you have investment for demonstration projects and setting up these systems; on the other side, for demand-pull, you have Buy Clean. Are there other big-ticket policy items that have not yet been tackled?Rebecca Dell:  There are a lot of different ways to structure the investment side. You can do credit subsidies; you can do direct subsidies; you can also do direct federal investment, which we have done a lot of in years past and in fact, the Defense Production Act allows us to do an almost unlimited amount of, if we wanted to. There are a lot of good arguments to be made for direct federal investment in clean production. All of those things are really important. There are also some important governance issues. A lot of these industries and markets have had pretty poor enforcement of existing regulations, both around non-greenhouse gas pollution and around labor standards. We have some pretty good rules on the books that are very poorly enforced. If we want the energy transition and the clean transition across the economy to be sustainable politically, we have to be showing people real, direct benefits in their lives and their family's health. That has to be an important part of this conversation. Also in the governance bucket, the United States is very bad at industrial policy. It was not always true, but for the last 40 years or so, we've had this weird fantasy that we don't do industrial policy. We definitely do industrial policy, but it's incoherent and easy to be captured by the covered industries because we’re pretending that we're not doing it. One of the consequences of this is that we have entirely hollowed out the expertise and the governance infrastructure of industrial policy, particularly at the federal level. There's hardly anybody whose job it is to think about these things in the federal government, compared to other countries whose manufacturing sectors we would like to emulate.David Roberts:   Look at Germany. It's all very explicit. It's right up front. They're very clear about what they want to do and how they're going to do it. It's so much more sensible.Rebecca Dell:  And they spend a lot of money on it. The main applied R&D in the manufacturing sector that's from the German government is a system of things called the Fraunhofer Institutes. They spend almost 3 billion euros a year on the Fraunhofer Institutes.The analogous thing in the US government is the Advanced Manufacturing Office, which has an annual budget of $400 million. Our economy is five times larger than Germany's, so compared to the overall size of our economy, we are spending less than 5 percent of what they are spending on applied R&D. And that's the piece of industrial policy that we feel most comfortable with!David Roberts:   That cuts across every sector, right? We constantly talk about goals and targets, but the capacity to do things on purpose with our economy has been hollowed out. Rebecca Dell:  This is particularly true in the manufacturing sectors.David Roberts:   Is that largely because we exported so much of it? Rebecca Dell:  I might make the causal relationship go in the other direction. One of the reasons why we had a lot of deindustrialization was that we didn't have a concerted effort to maintain a vibrant industrial economy. For example, Germany still has most of its steel mills.David Roberts:   If anything, we deliberately accelerated the reverse process with trade deals and things like that. That seems like a long-term project, reversing that process. Rebecca Dell:  And an important part of that is rebuilding our governance capacity. It blows my mind that the highest-ranking person in the federal government whose job it is to think about the future of the US manufacturing sector — the head of the Advanced Manufacturing Office at DOE — has the rank of Office Director. There isn't a single Assistant Secretary anywhere, in any department, on this beat. That is wild. There are 20 million Americans employed in this sector.David Roberts:   The final piece I want to look at is international trade. Presumably either we or other countries are going to start using trade deals as an instrument of decarbonization in industry. Is that something we're trying to do, or that people are talking about?Rebecca Dell:  It is. You may recall that Donald Trump, when he was president, put tariffs on steel and aluminum, just because he felt like it. Late last year, around the same time as the big climate meeting that happened in Scotland, the US and EU made an announcement about how they are working together on a deal to transform those tariffs into something that is mutual and linked to greenhouse gases. There's definitely a lot of work happening in this space. We have not yet settled on what the best policy tools are to promote decarbonization. For solar panels, some people say “we should have free trade in solar panels so that there are cheap solar panels and everybody can have the cheapest possible clean electricity.” Other people say “no, if we want to decarbonize we should have high tariffs on solar panels so that countries can have employment and manufacturing and broader social benefits, which will make the whole country more supportive of solar power.”We still have a lot of work to do to figure out what a truly climate-safe vision for trade policy is. There's a relatively narrow set of policies that are traditional trade policies. In most cases, for things like tariffs, that's often less important than, what are the international reverberations? What are the trade consequences of purely domestic policies like subsidies and procurement policies? David Roberts:   In terms of stimulating global movement toward industrial decarbonization, our biggest tools are probably still domestic. Doing it as fast as we can and making those products cheaper, rationalizing the industry, etc., is probably going to be a bigger deal than any tariffs we put on.Rebecca Dell:  Our goal is usually not that the trade policy itself will promote decarbonization, but that we can put in place trade policies that will prevent international trade from undermining our purely domestic policies, so different countries can push their industries to decarbonize faster without having to worry that dirty production from overseas will flood into the market.David Roberts:   How do you prevent industry from just moving, or shifting production? Rebecca Dell:  This is one of the reasons why things like procurement policy are so fantastic, because when the regulation is on the product, not on the facility, there's no incentive to move the facility. The market-creation policies allow you to sidestep some of these difficult questions. People talk a lot about how businesses hate regulations. Businesses don't hate regulations; businesses hate regulations that they have to comply with, but their competitors don't. David Roberts:   Well, I can not thank you enough. I know 10 times more about this now than I did when we started, so I really appreciate you taking all the time. Maybe someday we'll drill down a little deeper into one of these many, many rabbit holes that we tripped so lightly over in this conversation.Rebecca Dell:  I would be more than happy to talk in greater detail in the future. As you can probably tell, talking about this is one of my favorite things to do.David Roberts:   It's so fun. Thanks so much, Rebecca. Get full access to Volts at www.volts.wtf/subscribe

In a previous post, I offered a broad overview of the problems related to minerals needed for the clean-energy transition. To recap: * clean-energy technologies are more minerals-intensive to build than their fossil-fuel counterparts; * the growth of clean energy will rapidly raise demand for a set of key minerals;* mining and processing of those minerals is geographically concentrated, often in countries with weak labor and environmental protections;* mineral mines and processing facilities often pollute water, scar landscapes, and impoverish communities;* production may not be able to expand fast enough to keep up with demand, which could cause supply constrictions and price fluctuations and slow the transition away from fossil fuels.That’s the big picture. In today’s post, I want to take a take a closer look at some of the biggest clean-energy technologies and the minerals required to build them. Specifically, I’ll cover batteries, solar PV, wind, geothermal, concentrated solar, and carbon capture and storage (CCS). I’m not going to get too deep into any one of these — just a quick tour.I’ll be drawing heavily on a 2020 World Bank report that projects demand for key minerals under rapid decarbonization scenarios from the International Energy Agency (IEA) — specifically the RTS (reference technology scenario, or current policy), 2DS (2-degree scenario), and B2DS (beyond 2-degree scenario, aiming for 1.5). (The World Bank and IEA use the word minerals to refer to the mineral and metal value chain, and I do the same in this post.)This tour will reveal which minerals are expected to be most in demand — which ones are certain to be needed and which depend on the direction taken by particular technologies. It will help focus attention on possible supply stress points. It will also reveal that there is enormous uncertainty about the pace and scale of demand growth for specific minerals and minerals generally. Much depends on unpredictable developments in technology, policy, and politics. Epistemic humility is called for, along with policy focused on resilience. (More on policy in the next post.)One fact that is certain: the more ambitious the world’s decarbonization efforts, the higher mineral demand will rise. Here’s an overview table of energy sources and technologies and the key minerals they use:Let’s start the tour with the 800-pound gorilla of minerals demand: batteries.Batteries are the biggest growth sector for minerals demandOf all the clean-energy technologies set to boom in coming decades, none will put a strain on minerals supply like batteries, shown as energy storage in the chart above. They account for about half of the projected growth in minerals demand over the next two decades in a rapid decarbonization scenario.In large part, this has to do with the expected rise in battery-powered electric vehicles (EVs), which represent 90 percent of battery demand growth; the other 10 percent will come from growth in stationary storage, used to balance out wind and solar on the grid. If the world targets 2°, minerals demand from energy storage will double from the baseline scenario; if the world targets 1.5°, it will more than double again.Batteries, readers of my battery series will recall, are composed of two electrodes, a cathode and an anode, and an electrolyte through which they exchange ions. (The outlier is redox flow batteries, which pump a liquid electrolyte past electrodes.)Depending on what those three parts are made of, batteries require different minerals. Many EVs still use lead-acid batteries, which use lead and sulfuric acid, but lithium-ion batteries (LIBs) are expected to rapidly take over the market, so demand for lead-acid batteries won’t grow much.As for LIBs, most use graphite as the anode, which means graphite will be the most sought-after mineral in energy storage. Cathodes vary more widely. The most common use nickel, with various mixes of cobalt, lithium, and manganese also common. (It should be noted that lithium is used across all LIBs, not just for the cathode.)It should be noted that these projections out to 2050 are to a large extent guesses, just an extension of the “average” LIB into the future. In fact, LIB technology could evolve a number of different ways, and other storage technologies could play bigger roles in subsequent decades. “The assumption that Li-ion batteries dominate both the mobile and stationary market for the next decade is conservative,” the World Bank writes. “Post-2030, the scale of uncertainty is much greater, with a wide range of options in both markets.”Consider the options for LIBs. For cathodes, NMC111 batteries use one part nickel, one part manganese, and one part cobalt, while newer NMC811 batteries use much more nickel and less cobalt. Tesla and other automakers are trying to eventually eliminate cobalt from their batteries; it’s too early to say how far they’ll get.Right now, almost all anodes are graphite (a market dominated by China) but there is active development of zinc-air batteries that use air as the anode, sodium-ion batteries that use hard carbon as a anode, and solid-state batteries (which replace a liquid electrolyte with a solid one) that use lithium as an anode. What mix of technologies will triumph is still an open question, which means the precise trajectory of graphite demand is tough to predict.If manufacturers seek to minimize cobalt, demand for nickel will rise. If solid-state batteries catch on, they could reduce demand for graphite. If zinc-air batteries catch on, they could dent demand for lithium, graphite, nickel, and manganese.Post-2030, other storage technologies like flow batteries or a wide array of long-duration storage techs could become competitive. It depends on the evolution of policy and the electricity mix. Also worth noting: the practice of using second-life EV batteries as a form of grid storage could take off, which would trim total demand for new batteries.)Finally, LIBs have made substantial advances in materials efficiency and those will likely continue, which could effect how sharply demand rises. (Read this RMI report for a bullish take on improvements in LIBs’ energy density.)In terms of how geopolitically concentrated and environmentally destructive they are, the big minerals to watch here are graphite, nickel, lithium, and cobalt, but it’s impossible to know their precise mix in advance.Solar voltaics love aluminum and copperSolar is another technology that we are confident is going to grow like mad in coming decades, but it’s difficult to predict the exact trajectory of minerals demand. The World Bank paper looks at four common PV technologies: crystalline silicon (crystal Si), which makes up about 85 percent of the current market, and three different “thin film” technologies that can be printed on flat sheets: copper indium gallium selenide (CIGS), cadmium telluride (CdTe), and amorphous silicon (amorphous Si). All four are made primarily with aluminum, copper, and silver, with different additional minerals contributing to different technologies. In terms of overall size, aluminum and copper are the biggies:In the comparison below, the World Bank includes two scenarios from the International Renewable Energy Agency, which tends to be more bullish on PV and batteries than IEA — a renewable energy roadmap (rapid decarbonization) scenario and a reference scenario. In IRENA’s roadmap scenario, demand for both minerals rises 350 percent from baseline through 2050. Depending on which scenario you favor, demand for aluminum and copper from PV is either going to grow a boatload or a mega-boatload.Aluminum — not itself a raw mineral, but a product of bauxite reduction that produces alumina, which is then smelted — plays a role in almost all energy technologies, but solar is the biggest source of demand in the energy sector, by far. When it comes to copper, clean-energy technologies — batteries and solar, but also transmission and distribution systems — are the fastest growing source of demand. In a 2-degree scenario, clean energy’s share of total copper demand will rise from today’s 24 percent to 45 percent. It’s going to drive a lot of new copper mining. Demand for aluminum and copper will likely be robust no matter which way solar PV evolves, but for some minerals, the direction the technology takes has bigger consequences. For example, almost all (97 percent) of the indium used in the energy sector is for solar PV — specifically, thin-film solar PV. “The current literature expects this subtechnology to grow, and in the model, the three thin film subtechnologies — CIGS, CdTe, and amorphous silicon — are assumed to grow from 20 percent to 50 percent of solar panels,” writes the World Bank. If that doesn’t happen, if old-fashioned crystal-Si panels continue to get ludicrously cheaper and crush all competition, it could cut energy sector demand for indium to very little. Other minerals like silicon, gallium, and tellurium are also sensitive to the direction of PV markets. Anyway, in PV, aluminum and copper are the biggies, but several rare earth elements are in play too, depending on future technology choices.Wind turbines are big on steel Wind turbines are made mostly of steel for the turbines (the manufacture of which, depending on the details, can involve nickel, molybdenum, titanium, manganese, vanadium, or cobalt), with lots of copper for cabling and iron for other parts. Most of those materials are common in other clean-energy technologies. The one mineral for which wind is the primary demand is zinc; wind would boost demand at least 80 percent in a 2-degree scenario. Most onshore wind farms use geared turbines, which “use a gearbox to convert the relatively low rotational speed of the turbine rotor (12–18 rpm) to a much higher speed (1,500 rpm) for input to a generator,” the World Bank writes. Around 80 percent of current global wind capacity is geared turbines, attached to generators that use lots of iron and copper. In direct-drive turbines, the generator is affixed to the rotor and turns at the same speed. These are more common in offshore installations, due to their lower maintenance requirements. They often use permanent magnets with rare earth elements.Some minerals will be greatly affected by the ultimate balance of onshore and offshore turbines, like neodymium, a rare earth element used only in permanent magnet direct-drive turbines. A 2-degree scenario in which offshore wind grows faster than expected could spike demand for neodymium almost 50 percent relative to the base case; if onshore grows faster, it could sink neodymium demand by almost 70 percent. (Read this piece for the bullish case on direct-drive turbines. Another big unknown is the possible penetration of “switched reluctance motors,” which are both cheaper than current induction and synchronous motors and don’t need a gearbox or rare earth elements for a magnet. See here for more on that.) So for wind: lots more steel, zinc, iron, copper, and, depending on the evolution of turbine technology, a few rare earth elements. Geothermal, concentrated solar, and CCS are small mineral playersGeothermal power is a relatively tiny portion of global electricity capacity and is likely to remain so even under optimistic growth scenarios. As it grows, it will demand special steel alloys designed to resist heat and corrosion, which involve several rare earth elements. It also requires nickel, chromium, copper molybdenum, manganese, and titanium.The only mineral for which geothermal is likely to be a significant chunk of demand is titanium; it is the main user in the energy sector. In a 2-degree scenario, demand for titanium for geothermal will rise 80 percent or more.Concentrated solar power remains a fairly niche technology — more expensive and geography-dependent than PV — and is expected to grow, but not much. The only minerals of note that it uses are copper and silver, and it is not likely to represent a substantial portion of demand for either. Carbon capture and storage uses chromium, cobalt, copper, manganese, molybdenum, and nickel, but no one is sure which CCS technology will win out or how much will be built, so it’s anybody’s guess how much.The big pictureThe World Bank’s figures “demonstrate an overall increase in demand for as many as 11 minerals used across a variety of energy technologies, with iron and aluminum showing the highest absolute increase, followed by copper and zinc.”Here’s a graphic that shows relative increase in demand for a variety of minerals (on the left) and absolute increase in demand on the right.As you can see, graphite grows by the largest percentage and by the second largest total amount — as a key component of batteries, it is key to the transition.For some minerals, though demand does not increase a huge amount in absolute terms, they are starting from a small base and markets will grow by close to 500 percent, including lithium and cobalt, or around 200 percent, like indium and vanadium. Those could be stress points. Some minerals will grow substantially in absolute terms, but relatively little in percentage terms, like copper and zinc, which are used widely outside the energy sector. (Although note: the World Bank analysis does not include copper for transmission lines, which could be a big source of growth.)And then there’s nickel, somewhere in the middle.To try to get all this information in one place, the World Bank created a risk matrix for minerals under a 2-degree scenario. Importantly, the matrix doesn’t capture risks related to environmental dangers or possible supply constraints. It only captures demand dynamics.The horizontal axis — “weighted coverage-concentration index” — measures how cross-cutting a mineral is. To the left are minerals used in fewer energy technologies, whose fates are tied closely to the fate of those technologies; to the right are minerals common to many technologies, for which demand is likely to rise no matter which technologies win out. The vertical axis — “2018-2050 production-demand index” — is a weighted measure combining relative and absolute demand growth. It captures, roughly, how much demand for the mineral is expected to grow. On the top are minerals that will experience large demand growth; on bottom, less growth. The four quadrants of this matrix provide a way of categorizing minerals and their demand risks. Quadrant one contains medium-impact minerals. They are used in a small number of clean-energy technologies and their overall growth will be modest. These include zinc, silver, titanium, and several rare earth elements. Quadrant two contains high-impact minerals. They are only used in a handful of technologies (principally batteries), but demand is expected to increase rapidly and substantially. These are graphite, lithium, and cobalt — which are among the most environmentally nasty of the bunch in terms of mining and processing.Quadrant three contains the highest-impact minerals, which are both crucial to a wide array of technologies and expected to grow quickly. For now, that only describes aluminum. It comes from bauxite mines, which are not great (no mines are really great), but it is one of the most recyclable and recycled materials in existence. Almost 75 percent of the aluminum made in history is still in use.Quadrant four contains cross-cutting minerals, which won’t see dramatically rising demand like quadrants two and three but are vital to a broad array of technologies, which means growth in demand is quite certain and predictable. Copper is the big one here, used in pretty much every clean-energy technology, but nickel is going to grow even more. Lead, chromium, molybdenum, and manganese also qualify. So that’s the risk matrix. It points to which minerals will be most in demand.It turns out, as we saw in the previous post, that some of the most important minerals to the clean energy future are geographically concentrated and mined under socially and environmentally dubious circumstances. Processing is almost entirely dominated by China. What should we do about that? More on that in the next post. Get full access to Volts at www.volts.wtf/subscribe

In this episode, Jigar Shah, the recently appointed head of the Department of Energy’s Loan Programs Office (LPO), discusses how he and his team have reformed the office and pulled into into the modern age, the kinds of help LPO is offering entrepreneurs, and the frontier technologies that have him most excited.Full transcript of Volts podcast featuring Jigar Shah, February 2, 2022(PDF version)David Roberts:Back in 2010, the Department of Energy’s Loan Programs Office (LPO) briefly became what kids these days call the main character, the focus of a storm of controversy and media attention, thanks to the bankruptcy of Solyndra, a solar company that received the very first loan guarantee under Obama’s Recovery Act and then promptly gone bankrupt. Despite that wildly overhyped controversy, the LPO did reasonably well under Obama. It ultimately turned a profit for the government and was arguably crucial to the explosive subsequent growth in markets for utility-scale solar and wind. Under Trump, the LPO basically went dormant, doing little beyond shoveling money into the ill-fated Vogtle nuclear plant in Georgia. Now the LPO is being revived, reformed, and reinvigorated by new director Jigar Shah. Shah has a long history on the business side of clean energy — he was the co-founder and president of Generate Capital and before that founded “no money down” solar pioneer SunEdison — but he’s perhaps best known to energy nerds as the co-host of the late, lamented podcast The Energy Gang. (The team behind The Energy Gang now has a new show: The Carbon Copy.)He wants to streamline the process of getting loan guarantees from LPO and rethink how the office approaches risk. And he’s got about $40 billion to work with, more if Build Back Better passes. (For the best account of Shah’s new approach, read these two Canary pieces — one, two — from Jeff St. John.) Under Shah’s leadership, the LPO has been doing due diligence on the hundreds of applications that have flooded in since the office reopened for business. In December, it issued its first new conditional commitment for a loan guarantee, to a plant in Nebraska that will transform methane into hydrogen and carbon black. Many more loan guarantees are in the pipeline.I’ve been looking forward to chatting with Shah about how the office is reforming under Biden, how to think about risk and communicate it to the public, and the kinds of clean-energy technologies that have him excited these days. Without further ado, Jigar Shah, welcome to Volts.Jigar Shah:  Thanks for having me.David Roberts:   I'm a longtime fan of your career and your many podcasts, so it's great to finally get you on here.Jigar Shah:  Well, the feeling's mutual.David Roberts:   Give us the elevator pitch: What is the Loan Programs Office, what does it do, and what is it meant to accomplish?Jigar Shah:  The Loan Programs Office was originally conceived of by Senator Pete Domenici in the 2005 Energy Act. It was first funded in 2009 during the Obama stimulus. The main rationale for its existence is that the Department of Energy does so much great work on basic fundamental research; it gets all these technologies to what they call Technology Readiness Level 7, which means that you can actually verify that the technology works; but then they leave them there waiting for the private sector to pick them up and take them the rest of the way. And the private sector is saying, “we're happy to do it, but we can't get any debt for these technologies because the commercial banks are saying, ‘we don't want to spend the effort to understand all the nuances of this and get all the expertise lined up for one project, so until there are 100 projects to do, we’re not in.’”David Roberts:   This is the famous “valley of death”?Jigar Shah:  That's right. In this case, it's a valley of death that focuses on debt. The vast majority of valley-of-death conversations focus on equity: raising venture capital or raising private equity. In this case, you're talking about debt. When you talk about solving climate change, you're generally talking about trillion-dollar scale, and trillion-dollar scale only exists in infrastructure. In venture capital, we had a banner year last year; it was about $60 billion. That's not trillion-dollar scale. What does it take for the trillion-dollar-scale people to get comfortable with a technology? That's a commercial debt conversation. How do we underwrite a deal for commercial debt? I talked to most of the money center Wall Street banks last year and they said, “Jigar, one thing we will confirm is that the due diligence that comes out of your office is of such high quality that we know that a technology is ready if it gets through your office.”David Roberts:   That's one thing that maybe average people don't understand: you're not just handing companies money. The whole process of assessing the company and its technology is a long and labor-intensive process. The bulk of the service you're providing the industry is not even so much the money as the due diligence itself, so they don't have to do it, right?Jigar Shah:  That's exactly right. The government process that we take companies through is a lot more efficient and a lot shorter than it used to be, so we've made a lot of strides there, but no one would subject themselves to it if they could walk through the front door of one of these big banks and just get a standard commercial loan. They're going through that process and subjecting themselves to the detailed diligence and the 10,000 expert scientists and engineers we have with the national labs because they know that this is the best way for them to get a loan. An average loan size for us is $500 million.David Roberts:   Backing up a little bit: the loan office has been, let's call it “dormant,” for the last four years.Jigar Shah:  That’s certainly what the Secretary of Energy called it during her confirmation hearing.David Roberts:   Dumping money down the giant Georgia nuclear plant was the only thing it did, I think. Before that there was the whole stupid Solyndra controversy. But as I understand it, the Loan Programs Office under Obama did well overall — ended up revenue-positive, spurred a lot of new industries. I’m curious what you take from that experience, and in what ways you're trying to improve. What needs to change to make it more modern and more suited to current circumstances?Jigar Shah:  There’s a series of questions implied there, so let me take them one by one.First, Solyndra was one of the first loans that we issued out of the office. The office was very young when we did that loan, and since then, the office has matured greatly. We're up to 170 people from probably 20 people at that time, and we have a lot of processes and procedures. Solyndra wouldn't pass the office in the same way that it did in the past. The office has improved its processes tremendously. Even with the Solyndra losses included, we did about $35 billion worth of deals; we've had roughly $1.02 billion of losses, inclusive of Solyndra. That track record is something you would put up against any commercial bank in the space, let alone one that focuses on hard-to-finance deals. There are a lot of people who suggest we're not taking enough risk. In terms of what we're doing differently now: in the Obama era, we had a financial crisis, so we actually had a lack of access to commercial debt. When you look at Elon’s famous story of Tesla, he also had a problem getting equity. The money wasn't flowing like it is today with SPACs and etc. Fast forward to today: if you have a rock-solid 20-year power purchase agreement with a utility company, you're generally not going to come to the Loan Programs Office, unless you've got some weird long-duration storage technology or something else that has never been commercialized. We have to do a lot of things differently. The type of deals we see are far more diverse than just electricity. We see deals in the industrial decarb space, in the broader transportation space. The markets are less formed. For instance, people sign power purchase agreements in the electricity space; remember a lot of that came from PURPA, which is what all the coal plants were based on. But when you look at transportation fuels, for instance, people don't generally sign a 20-year fixed-price contract for aviation fuel. We have to change the way that we underwrite deals to figure out how we support those kinds of projects as well as the merchant market. When you look at the Low Carbon Fuel Standard credit program in California, which is driving a lot of projects, the price that gets set for those credits changes every month. So we have to come up with a new way of evaluating those projects and figuring out how we support them. The Loan Programs Office has gotten far more sophisticated about how it underwrites risk than it was forced to be, frankly — not that they were not capable of it in 2010, they just didn't have to do it in 2010.David Roberts:   Is that reflective of changes in technology, or of a change in approach at the LPO to take a broader look at technology, or both?Jigar Shah:  All the above. In general, LPO could get away with doing standard, easy-to-finance deals in 2009-2010 because you had a historic credit crunch, and people needed our money. Today, those standard, easy-to-finance deals aren't coming in to the office, so we have to evolve to be relevant. But second of all, there were historic amounts of money invested during the Steven Chu era and Moniz era around new technologies, and a lot of those technologies are now mature enough to be able to come to our office. They made a lot of investments in industrial decarb. We had a lot of high-profile failures in carbon sequestration and storage in that era, but the new approaches are being built upon the success stories that we had. One of the success stories that came out of that era was the ADM Class VI wells, which continue to bury 1 million tons of carbon dioxide a year in Illinois.David Roberts:   The topic of risk is interesting, especially when it comes to an arm of government. The right-wing critique of the office was, “it's taking too many risks and it's losing money.” But the more educated energy-expert critique was, “it didn't lose enough money. The whole point is to take risks; that's why the thing exists, to take risks that private capital or banks won't take.” Talk a little bit about how you think about risk. Is there a percentage of losses that you're targeting? How do you target the right level of risk?Jigar Shah:  It's a great question. As a government appointee, your ability to take risk is defined by the amount of support that you're getting. The secretary mentioned the Loan Programs Office in her confirmation hearing and has been talking about it ever since, so we're clearly getting a lot of support. That means the world to all of us, and it gives us the freedom to make the decisions that we think are right for the country and not just right for the political moment. That's valuable. We don't view risk on a portfolio basis like that, although it does turn out that we check it that way. We view it on a deal-by-deal basis. Everybody in the office gets the same interest rate, which is Treasury’s plus three-eighths of a point, so that's 1.8 percent. Then we add a risk-based charge on top of it, based on the percentage chance that it loses money. The vast majority of our projects are not investment-grade. When you look at the other lending institutions within the government — whether it's the USDA programs, or TIFIA, or some of the other ones — they generally do investment-grade credits. These are people that have triple B or better credit ratings. Our average credit rating in the office for new projects is double B or single B, because it's by definition misunderstood; otherwise, it wouldn't be coming to our office. Those projects generally have a risk of failure of 15 to 20 percent, depending on all the variables. We then add an interest rate adder to the interest rate to be able to compensate the government for that risk of loss. Let's say we'll add another four percentage points to the interest rate, so now it's not 1.8 percent, it's 5.8 percent. That extra money goes into the US Treasury Department. Then we do view our performance on a portfolio-wide basis. Today, the program adds about $500 million of interest payments per year to the US Treasury — so we make money for the government. There's a separate component to that: on a portfolio basis, you charge interest rates above the US’s cost of borrowing, to figure out whether we're earning enough “excess” interest to be able to cover any losses we have. Then, separately, Congress sometimes appropriates loss capital to us; it's called a credit subsidy. For ATVM, the Advanced Technology Vehicle Manufacturing program, the Congress has determined that some of these projects are clearly going to be risky, because you’re taking an “if you build it they will come” risk; even if they make a great car, it could be that it's a terrible design and nobody wants to buy it. In that case, they actually allocate cash from the Congress to our program, and we pay that credit subsidy on behalf of those applicants. That basically forms a loan loss reserve in the US Treasury Department for those projects. To summarize all that, on balance, we’ve reserved almost $6 billion in loan loss reserves at the US Treasury, and have had a total of $1.02 billion in losses, and we don't expect very much more loss out of the existing $30 billion portfolio.David Roberts:   That's the operational way to view risk; the semi-separate question about how to communicate risk and loss and the chances you're taking is … maybe not your job, maybe that's the job of the secretary. But do you feel like the office itself, or the Democratic government culture in general, has learned anything about how to communicate risk? As we saw with Solyndra, it’s so easy to demagogue, and it takes some time to explain why risk is actually a good thing. Have you given that any thought?Jigar Shah:  On the political risk side of it, clearly sometimes political arguments move away from logic, and then you end up in a place that's — whatever it is. Sticking to the logic side of things, where I'm more comfortable, the way that we've talked about risk is we've talked about opportunity. Think about the sea change that has occurred in the thinking of automakers. Ford Motor Company stock has gone up tremendously in the last year, simply through the firm announcement that they're moving to electric vehicles. That all comes from the risk that we took in 2009 and the opportunities that it has created for millions of Americans as a result. The way that the president and the secretary have been talking about it is that this is the single largest wealth-creation opportunity America has in front of it. If we do it correctly, not only do we get to use our technology that we have ourselves invented through our dollars that we put in out of DOE, and we manufacture the products here, and we create the jobs here — but we also help hundreds of countries around the world decarbonize through the export markets for our technology companies. I mean, Tesla is the single largest exporter in California, which itself is the fifth-largest economy in the world.David Roberts:   Tesla serves so many contradictory symbolic roles at once. But one of them is definitely: you give Big Money (or Big Debt) permission to come into these markets and that spirals out globally. It's difficult to trace all the consequences from that. Jigar Shah:  Absolutely. The same thing is true for utility-scale solar and wind, which of course is a more boring story. At the time, Europe had a feed-in tariff, which meant it had a guaranteed payment from the government, although it used the utility to pay it. That was not the case in the United States. We had some power purchase agreements, but in general, the whole concept of a feed-in tariff really there. There was a tax equity portion with tax credits. When we offered our loan guarantees for solar to SunPower and others — who will tell you that they were essential to be able to build those plants — Bank of America and Citibank and all those banks had not yet gotten their arms around how to support solar and wind, even though Germany and Spain and everybody else had had these big years in 2007-2008. You were sitting in 2012 with $1.5 billion projects such that those companies were forced to sell those projects to Warren Buffett and MidAmerican. And Warren Buffett and MidAmerican always make money. It wasn't until 2014 that there was a modicum of a competitive market, that SunEdison had created with the REIT that they created with TerraForm. Then in 2016, you got a lot more liquidity in the market. It wasn't until 2019 that you had full acceptance by all institutional investors such that the interest rates went down to 2.5 percent.David Roberts:   There's a certain amount of money set aside in the LPO for fossil fuel technologies like carbon capture. There's a certain amount of money set aside for nuclear. Then everything else competes for the remainder, which is smaller than the amounts set aside for fossil fuel and nuclear. What is the logic of that setup?Jigar Shah:  Unfortunately, the truth is that we just used up the renewable energy money. All of our allocations were received in 2009; there was a little bit of reshuffling since then, but most of it's 2009. We had $20+ billion of renewable energy and efficiency money; that money was largely used. We never issued a fossil fuel loan, so that money is all unused. The nuclear part was bigger too — but then of course we had the Vogtle nuclear plant that’s used up a lot of the money — so that money is still there as well. What I would say without getting into trouble is that Congress is very supportive of what we're doing. They basically said, “there's a lot of support for the loan program on both sides of the aisle, so get the thing working again. Show us that it's actually working before we allocate more money to that bucket.”I don't think that's as controversial as it appears, and we are getting it working. We've got 170 hardworking men and women and they've done a great job of fixing the foundation of the program. It resulted in one conditional commitment in 2021, and we'll have a lot more this year. But that belies how much fixing that we did in 2021 so that the foundation was strong enough to have a big year in 2022.David Roberts:   Speaking of politics and money, what did the bipartisan infrastructure bill do for the LPO? Secondarily, what's in the as-yet-unpassed Build Back Better bill that relates to the LPO?Jigar Shah:  The bipartisan infrastructure legislation has a number of provisions in it that broaden our authority. It took the ATVM program and said, you now can do heavy trucks, light duty trucks, airplanes, battery chargers, locomotives. Somebody even included Hyperloop, which I thought was interesting, but it is what it is. I haven't seen any good Hyperloop applications coming in. We also got a broader level of authorities around carbon dioxide pipelines. A lot of the work that we're doing, for instance, is on these industrial hubs, where you're taking some of the places that have the most pollution in the United States, like the LA basin or the coast around Texas or Louisiana, and decarbonizing those. The hydrogen hubs, which are also in the bipartisan infrastructure legislation, marry with the carbon dioxide pipeline authority that we have to be able to help decarbonize all that heavy industry. There's also one other provision which was little noticed in the legislation that says that if a state entity supports the applicant, it actually moves away from the innovation requirements of our office. That's an interesting nugget that we're trying to figure out exactly what it means. Senator Murkowski had a big role in putting that in.David Roberts:   But no new money in the bipartisan bill.Jigar Shah:  Yeah, exactly. The new authorities were put into the bipartisan infrastructure legislation, and then the additional money comes into the House Build Back Better bill. Obviously the Senate's working on it. Because we make money for the federal government, the Congressional Budget Office has largely determined that new authority that goes into Title 17, in particular, only costs 1 percent in deficit spending of the loan amount we receive. So if we wanted to do an extra $100 billion of loans, it would cost $1 billion of deficit spending.David Roberts:   So it wouldn't take very much additional appropriation to vastly increase the amount of capital you have to work with.Jigar Shah:  That's right. Again, that's tied up in folks saying, “guys, prove to us that the office is working. Get some conditional commitments out the door and get some of the companies that are in our districts to tell us that you really are open for business. I understand that you're telling me you're open for business, and I see this big graphic that says you're open for business, but I'd like to hear confirmation from our constituents.”David Roberts:   Say Build Back Better passes or Congress got excited about this and dumps a bunch of money on you: are there capacity constraints for how much you can get out the door? How much could you possibly deploy before January 2025?Jigar Shah:  We've spent a lot of time on that in the office the last five months. The office initially was extraordinarily optimistic about what it thought it could accomplish, which frankly is amazing to see that level of risk-taking from the federal government staff that we have. It's really inspiring to see. But we've been a little more realistic about it in the delivery phase in January. We've got about 77 applications that have come in as of December 31, representing roughly $60 billion of requests. I do think that we can get a third of those applications through the system, mainly because the applicants are sophisticated and competent enough to go through all of our stage gates efficiently. Then half of the ones that can't do that quickly will also get through our office, it'll just take them an extra period of time to cure the defaults in their applications. We can actually move quite a bit of volume through the process. Note that if we obligated $30 billion of capital, which is a big number, that would make us the single largest provider of this kind of capital in the world. It's not like JPMorgan Chase or some of these other companies are chomping at the bit to do first-of-a-kind deployments; they're coming later in the process. It really is significant. When you think about the numbers in relation to each other, the venture capital community put $60 billion to work last year into companies; those companies need to put first-of-a-kind projects out the door. They would take $30 billion from us, they would match it with probably $30 billion of their venture capital as equity, and we put in let's say 50 percent debt. That would be $60 billion of first-of-a-kind projects. That would then cascade into second through fifth projects, EPC excellence, learning curve, the six cumulative doublings of experience. And a lot of that learning curve actually comes from a mixture of state and federal policy. The federal government generally likes to give them tax credits and maybe some demonstration dollars, which we have in the new Office of Clean Energy Demonstrations; then the state is the one that does more of the mandates. For instance, you're seeing California, New York, and New Jersey right now looking at green cement mandates, which then allows us to fund green cement manufacturing facilities.David Roberts:   Let's talk about some of the technology areas where you are focusing. When you are choosing technology areas, are you choosing purely based on an analysis of what you think is going to be needed? Or is it mostly, what among that set of technologies that will be needed are facing this first-mover problem and specifically need us? Big Solar and Big Wind, I presume, have now grown past the need for you. So what are the on-the-verge-but-not-quite-first-big-demonstration-yet technologies that you're looking around on? Jigar Shah:  For our process, we looked at all of the different sectors where we thought that the technology itself was actually mature and commercialization was the problem, so we needed to lean in. These are things like low-impact hydro; advanced geothermal; some of the battery chemistries that have been around for some time, you’ve seen them SPAC; hydrogen; carbon sequestration storage in some forms; sustainable aviation fuel; small modular reactors. All these sectors we tapped down, went across DOE and said, what's ready for primetime? Then I went to all the trade associations for those groups and said “get me all your CEOs on the phone, hold a meeting, invite me to speak, and let's talk about it.”Some of them were ready. We’ve gotten $10 billion worth of applications from the sustainable aviation fuel and biofuel space; roughly $10 billion of applications from the advanced nuclear space; $5 billion of applications in from the carbon sequestration side; several billion dollars of applications in from transmission, etc. There are some places where they weren't ready. I've gotten almost no applications in for geothermal or for hydro.David Roberts:   “Ready” means “have their shit together enough to be able to go through the due diligence properly?”Jigar Shah:  No, they actually are prepared to go through the office, but they don't have projects ready to go. You can't come in and say, “I have this dream.” You have to say, “I have a utility, I've received the allocation from the Bureau of Land Management for this land, I've got this, I've got that.” Therefore you have something to evaluate. Some of the sectors we don't have projects in not because the technology is not mature, but the developer community has not yet developed the projects for us to evaluate. We haven't given up on those sectors; we continue to educate them and make sure that the trade associations and others know what services we offer.David Roberts:   Do you think geothermal will come along and be ready for you at some point? Do you have a capsule assessment of that?Jigar Shah:  The California RFP for 1,000 megawatts of geothermal is useful. Anyone who wins that RFP will probably come to our office. In general, the biggest problem with geothermal — and you see this across all the flexible-baseload technologies, it comes out of the UC Berkeley study or the Princeton study — is that in general, all of them need 7 cents a kilowatt hour. That 7 cents a kilowatt hour is completely justified. So when you look at the modeling, to build more solar and wind at 1.8 cents or whatever it is, you have to build more transmission to transport it from where it blows to where it's needed. That transmission is hard, and if you want to move hard to fast then you have to pay extra for it, so you pay double the cost of the transmission. The alternative is you pay for technologies that have more like a 60+ percent capacity factor on existing transmission, and then that's 7 cents. But when you look at the decarbonization strategies that are finally starting to emerge from these utilities who have determined that they're going to be net zero or whatever it is by X date, they have now determined that there is some mix of variable renewable energy and flexible baseload that they need, and that they actually can afford to pay 7 cents for part of their portfolio. That has led California to put out this RFP, and you're seeing Nevada and a few other places go “wait a second, we should actually be putting in some of these flexible baseload technologies, because the alternative is we put in natural gas, and then natural gas prices almost doubled, and we're stuck.”Part of this is not that the technology is not mature but the markets haven't been mature, and LPO does play a big role in that. We've hired people on our platform that have engaged with the utilities in their Integrated Resource Plan process and their other processes and said to them “hey, you should be looking at these types of resources, because otherwise, you're just not going to get there.”David Roberts:   Right, unless you build an absolute boatload of transmission, which is more politically and regulatorily difficult in some ways than any of these new technologies.Jigar Shah:  More expensive, not more difficult. I'll give you an example. When we came into office, the Department of Transportation announced that they were going to let federal highways be used for right-of-ways for transmission. I said, “huh, what would that cost?” And people are like, “I don't know.” So we hired NREL to figure that out. They'll come up with a paper or something on this, but they showed me their preliminary results. They mapped every single highway and they said, “these highways have very limited obstruction, so it may only be 1.2 times the cost of normal transmission” — which, of course, “normal” transmission doesn't exist, because it's hard to build — “and these highways have tons of four-leaf clovers and tons of issues so you have to underground under all those; you can't go over. That's going to cost more like 1.9 times normal.”Now I have a number, I actually know what it costs. Someone could say “that's too expensive, I don't want to pay for it.” But you can't say that it's impossible to build. You can just say “we can't afford to pay that.” Now you can actually do real trade-off analysis.David Roberts:   The model here is a big, capital-intensive project like the one that got your first loan guarantee: the Monolith pyrolysis carbon black / hydrogen project. But of course, one of the trends in energy these days is distributed energy; thousands and thousands of small-scale projects. Intuitively, it doesn't seem like that matches your mission or your capacity that well, but you are trying to figure out how to get some LPO money behind distributed energy. Say a little bit about conceptually how that works.Jigar Shah:  Let me give you a little history. In 2009, when we did the rulemaking, these distributed projects were not really contemplated. The rulemaking and the solicitation around this program didn’t cover these kinds of projects. Then in 2015 we had a substantial residential solar company come in and try to use the office, so a lot of thinking was done there on the legal side around how to shoehorn — it was very Apollo 13, “here's what we have, figure out a way to make this work,” which was great. There were other folks too, like there was a FIT RAM program in California, so one of the companies came in to do distributed CNI (commercial and industrial) solar. When I came in, I said, “we're going to get a lot of applications that look like this; let's start revving that back up and figuring it out.” The harsh reality of the situation is that the government doesn't do things in a vacuum very well, so we had to convince some people to apply to the office. We luckily got a couple of people to apply, and I warned them, “you are going to be a guinea pig here, so it's going to take a while to process your loan.” As a result of them applying, we were able to get the nitty-gritty details around what they needed and where they ran afoul of our existing rules. Then we were able to review those existing rules and see whether those were in the statute, meaning they came from Congress, or whether they were self-imposed restrictions. It turns out that the vast majority of them were self-imposed restrictions. We have gone through a long process to rewrite the solicitation and to broaden and update it for modern times. It hasn't been substantially updated since 2009. That then allows us to do a lot more of these. We still have an innovation mandate, so you can imagine I can't just do standard solar and wind projects that are distributed in nature, or whatever it is. It's the applicants’ responsibility to prove to us what innovation is; we can't make it up for them. But what they have pitched us, which has been very fascinating and very relevant, is DERs, DERMS – distributed energy resources, demand flexibility work.David Roberts:   The people applying presumably are aggregators of large numbers of small projects?Jigar Shah:  Sure. We've said to them that they have to be innovative, and the innovation that they pitched us is this participation in the FERC Order 2222 markets, which allows for demand flexibility to get equal standing in the wholesale power markets as natural gas peaker plants. Then a lot of utility companies have also offered these demand flexibility programs; California, New York has used them to save the grid multiple times. You see companies who’ve SPAC’d that specialize in this; EnerNOC in the old days, Voltus recently, and others. You're starting to see a lot of investor interest as well in these companies. So they've come into the office and said, “the underlying technology might be solar plus battery storage and a thermostat and water heater and bidirectional charging using wallbox — but if we're aggregating all these assets up and opting them into a DER framework, which then provides a huge amount of extra reliability to the grid at one-tenth the cost of today's natural gas peakers, does that qualify? And we’re like, “huh, I guess it does.”David Roberts:   None of those pieces are particularly innovative. All of those technologies exist now. It's the aggregation and playing in the market that's the innovation.Jigar Shah:  The underlying hardware is not innovative, but the software continues to innovate. I was one of the first investors in battery storage behind the meter in my previous role, and that software has dramatically changed every year, such that some owners of batteries have hired a new platform to operate their batteries every year, because the software is changing so quickly.David Roberts:   It seems like those markets for distributed energy aggregators depend so much on politics and regulation. This is not a free-market situation; you can do that where regulation has permitted you to do it. In a sense, the market is limited by things that you can't really affect. You can help them succeed under those circumstances, but you can't bust the market out of those circumstances. It requires regulatory changes.Jigar Shah:  You're right, and that's true for everything, right? The advanced geothermal market isn't going to work unless someone pays 7 cents a kilowatt hour with a dedicated RFP. But we do have the ability to nudge in ways that are quite influential. For instance, in this case, the vast majority of the repayment obligation comes from FICO score, not from markets. People are agreeing to pay a fixed price for their new water heater or bidirectional EV charger. Even though they are now registered to operate in these demand flexibility markets, they're agreeing to pay a fixed $20 a month in loan payments to pay us back. We can, on the one hand, get a reasonable prospect of repayment without the regulatory changes. On the other hand, the companies that borrow the money from us go to the regulator and say, “I'm adding 20 megawatts a week of load that I control now, you guys should put that into the regulation.” So there's some circularity to this, and someone's got to go first. Clearly, the DOE Loan Programs Office should be the one that goes first.David Roberts:   One of the big problems facing clean energy expansion is the availability of minerals. Their production is concentrated in certain countries, which are not necessarily great; processing is concentrated in China, which is not necessarily great. So there's a big focus on finding them, mining them better, refining them better, moving those domestic supply chains, and recycling. Are any of those on your radar?Jigar Shah:  They're all on our radar. The one big initiative that was added during the Trump administration was a focus on critical minerals. We have improved a lot of the legal justifications in others. We've mapped out every single opportunity in the country that we believe to be commercially ready. A lot of people have mapped out where the minerals are in the United States; we've overlaid that with people who are actively getting the permits and doing all the work to start it. I would say every one of those folks is in our pipeline, and we've already received about $3 or $4 billion worth of loan requests in the critical minerals and battery recycling space.David Roberts:   How excited should I be about battery recycling? Is there cool stuff going on in the recycling space, generally?Jigar Shah:  Recycling is a big deal, and it's one thing that the US has, frankly, done a terrible job of over the decades. Even in the steel market, or the copper market, we send gargantuan amounts of raw materials to China by accident because we don't want to recycle it here. We just stick it in a shipping container to Malaysia, Malaysia recycles it, and it happens to go to China. Why are we doing that? We should do that here. Steel, for instance: we have a huge amount of steel that we could actually melt using an electric arc furnace. For brand new steel, you need pig iron and you need the HYBRIT process and all that, but we could substantially increase the amount of recycled steel we use in this country. We just haven't invested in the infrastructure to do so. The same thing is true with battery recycling, copper, heavy metals, cell phone recycling — there's lots we can do here. And that's all eligible within the Loan Programs Office.David Roberts:   Looking back now on the performance of the LPO during the Obama years, we can trace pretty clearly that it played a big role in the explosion of a couple of key markets: utility-scale solar, onshore wind, arguably batteries. If I'm in 2032, looking back on the LPO’s performance under Biden, what two or three markets could you envision exploding in the same way due to your work?Jigar Shah:  It's a great question and one that I will partially answer and then leave you wanting more for our next podcast session. In general, what I have said to my colleagues at DOE is that we actually know how to do this. We have written a lot of white papers out of the Loan Programs Office that have been shared widely across government around what we think the formula is on how to do it. If we agree with the way in which we do it, that forms the new approach to American commercialization. Instead of being jealous of Canada or Germany or other countries, we should actually admit that we're really damn good at this, and we should stop self-hating and start owning what we do. It's a combination of tax credits, Loan Programs Office, state regulation; and we should do it in a way that's more methodical than what we perceive to be haphazard, but isn't haphazard.David Roberts:   This is uniquely American, I feel like, the way we think about industrial policy — which every country does, and always has, but we're vaguely embarrassed about it, so we don't look directly at it, do it behind our backs. I agree, that's silly.Jigar Shah:  Yeah, but not anymore. If you look at the big pots of money in the bipartisan infrastructure legislation: you've got hydrogen, we will make that work. Instead of hemming and hawing around green and blue and pink and whatever, what we should be focused on is that we use 10 million tons of hydrogen a year; all 10 million tons of that will be turned into low-carbon hydrogen. We have a pathway to do that, the secretary has laid it out, and with all the applications I've already received in the office, I'm fairly confident that we have a pretty clear pathway of doing it. The same thing is true in direct air capture and CCUS, even though a lot of people love to hate it. The Class VI wells that we have in Illinois, which are being replicated in Wyoming, North Dakota, and other places, do work for industrial emissions. I am not going to say that I know how to capture carbon dioxide from power plants and put them into Class VI wells, but from ethanol plants or chemical plants, we know how to do that really well. Direct air capture, too. It's like $500 a ton, but we know how to get that down to $200 a ton, and the secretary has announced the Carbon Negative Earthshot which gets it to $100, and there are several people who are telling me that they think they can get it done before 2030. So we're pretty on track there as well. One other area that I'm super proud of is the virtual power plant / DER / DERM area. There are millions of Americans who've been left out of this revolution and we are going to get them in, and it's going to be pretty damn cool to watch.David Roberts:   You mean lower-income people having access to DERs?Jigar Shah:  Lower-income people, people in multifamily housing; a lot of people control loads that they can contribute into these virtual power plants and get paid to do so. Ten percent of our entire electricity bill is used to pay for these reliability / resiliency balancing services. Why pay the natural gas peaker plants for this when you can pay people to have flexible demand for this?David Roberts:   You think that's going to overcome all of its many logistical, regulatory, financial obstacles? It's such a tangle.Jigar Shah:  It's 90 percent cheaper than what we're doing now, so it literally makes no sense for anyone to ignore it. Why would you not pay the money to individual ratepayers as opposed to paying it to the owners of natural gas peaker plants?David Roberts:   Well, Jigar, thank you for coming on, and thank you for taking the reins of this thing and whipping it into shape. I'm super excited to see what happens over the next few years.Jigar Shah:  My pleasure. I’m in the luxurious position to evaluate other people's work and not have to do it myself. I appreciate all the hard work that the entrepreneurs are actually doing. David Roberts:   Thanks again, Jigar. We'll talk again soon. Jigar Shah: Thanks, Dave.  Get full access to Volts at www.volts.wtf/subscribe

In this episode, Panama Bartholomy, head of the Building Decarbonization Coalition, discusses the need to decarbonize buildings, the many challenges facing the effort, and the cities and states that are making progress. You better believe we get way into heat pumps and induction stoves. Full transcript of Volts podcast featuring Panama Bartholomy, January 28, 2022(PDF version)David Roberts:Fossil-fuel combustion in buildings — mostly natural gas for space and water heating — is responsible for around 10 percent of US greenhouse gas emissions. Getting to net-zero will require heating, cooling, and powering all those buildings with carbon-free energy.It’s an enormous challenge — or rather, a huge thicket of challenges. There are technical issues, political issues, public-opinion issues, and policy issues, all of which decompose into dozens of discrete issues of their own. To help me wrap my head around all of it, I’m eager to talk to Panama Bartholomy, who is, I promise, a real person and not a Dr. Seuss character. Bartholomy has been wrestling with building decarbonization for decades, at (in reverse chronological order): the Investor Confidence Project, the California legislature, the California Energy Commission, the California State Architect, and the California Conservation Corps. He’s served on a variety of boards, collaborated with various expert organizations, worked on climate issues in over 30 countries, and all kinds of other stuff, but if I tried to include it all I would never get to the conversation.Bartholomy is currently running the Building Decarbonization Coalition, a multi-sector alliance of companies, nonprofits, and government agencies working on buildings, so he’s up to date on where progress is being made (think New York and California), the biggest political impediments (think the natural gas industry), and whether heat pumps really work in cold climates (think yes, they do).Without further ado, Panama Bartholomy, welcome to Voltscast.Panama Bartholomy:  Thanks, Dave. Good to be here. Long-time listener, first-time caller.David Roberts:   Let's talk about buildings. There's so much to get into here, but I want to start with a few broad scene-setting questions. Just to orient us, tell us where buildings fall on the climate policy hierarchy of needs. What portion of the problem are our buildings?Panama Bartholomy:  Maslow's hierarchy of needs for buildings and climate, I love it. We — by which I mean the building sector — come in right about 25 to 30 percent of overall emissions nationally, and about the same globally. Depending on the state you're in and the grid mix of your electricity, it may be a little higher or lower, but we’re right about in that sweet spot of 20 to 30 percent. One of the challenges is that in this sector, unlike industry or the electricity sector or even the transportation sector, you have millions if not billions of little machines that have a lot of consumer choice. You can't just shut down a coal plant and all of a sudden get a lot of benefit. You have to involve a lot of players in this.David Roberts:   Yes, this seems like the decarbonization sector that involves the most logistics and the most high-touch human interaction. You have to think about sociology and psychology. It's a tangle.Panama Bartholomy:  It is, and that's why I appreciate you spending some time in our funny little corner of the climate world. We need a lot more attention to it. Every time somebody buys a new furnace or a gas water heater or stove, they're locking in 20 or 25 years of carbon emissions from there. So attention is one of the key things that we need on this issue.David Roberts:   In recent years there's been something of a consensus forming in carbon circles that electrification is the premier decarbonization strategy. When we look at buildings, is electrifying them the whole game? How far will electrification get us and how big is the remainder once you're done electrifying?Panama Bartholomy:  We haven't seen a lot of good alternatives at this point. When you think about electrifying buildings, you’re talking about space heating, water heating, cooking, and probably clothes drying. You do have some arguments with people about their gas fireplaces and their pool pumps, but that's a pretty small amount, all in all. When you look at the alternatives, are we going to pump incredibly expensive renewable natural gas through pipes to power those? Are we going to replace the entire gas system with a new hydrogen system to do that? I don't think so. These are pretty low-level technologies, when it comes down to it, in the use of energy, and using expensive fuels just doesn't make sense either from an economic perspective or a climate solutions perspective. So electricity is the path we need to go down on buildings. They're making cold-weather heat pumps that can operate well down to -15 degrees, so here in 2022, we have much if not all the technology we're going to need for electrification of buildings. It gets down to an issue of scale and deployment, and how are we going to do it fast enough to meet our climate goals.David Roberts:   Here’s a philosophical question: If we are going to electrify all the buildings and then we're going to supply that electricity with zero-carbon renewables or other clean energy, then why do we need efficiency? Why do we need to use less energy in buildings if the energy we're using is clean?Panama Bartholomy:  Because even if we're using clean electricity, we don't want to use a ton of it. I consistently look forward to a Star Trek future when we don't have to have conversations about appliances and energy and where it comes from. But the reality is that electricity does cost money here in our reality, and if you're running even a highly efficient heat pump off of a very clean grid in a very cold climate, you just want to use less energy to heat your house. In particular in the colder climates, it's to save money.David Roberts:   So we could imagine your Star Trek future where renewable energy has gotten so cheap that we no longer feel the need to ration it. In that theoretical future, will efficiency just fade out, or is there some intrinsic worth to efficiency beyond saving a scarce resource? Panama Bartholomy:  I was raised in California and then Hawaii, so I have a primal fear of being even slightly cold. My wife did her undergraduate work in Minnesota, so whenever I complain about being cold, she mocks me, and I say, just because you were colder at one point in your life doesn't invalidate my feelings and discomfort right now. The benefit is going to be one of comfort moving forward. When you talk to the leaders in the energy efficiency community that actually sell efficiencies successfully — and there's only two — they'll say that that's usually what sells efficiency: it’s comfort, it’s air quality, it's a better quality of life, rather than the marginal savings you get from it. In the colder and the hotter climes, efficiency is always going to have a role to play, but increasingly people are recognizing that it's less important in the timeframes that we're talking about for addressing climate change than getting off of fossil fuels. We can't just be using less fossil fuels, we need to stop using fossil fuels.David Roberts:   I want to talk about the impediments to building decarbonization in three different areas. First, putting aside politics and regulation, what is the biggest technical barrier to building decarbonization? Are there still practical and engineering and technological problems to solve? Or is this all about policy and investment?Panama Bartholomy:  What you have is a situation of the technology itself and then market awareness or market familiarity with the technology. When you look at low-rise commercial buildings, low-rise multifamily residential buildings, the technology is there. As I mentioned, we have incredibly performing cold-climate heat pumps, and a heat pump is just an air conditioner that runs in reverse, so anybody that installs an air conditioner knows how to install a heat pump. Heat-pump water heater — it's not crazy Vulcan technology. The technology is there for that, and there's enough familiarity with it that if we can put in place the right market signals and the right policies, it'll be an easy shift for the industry. For the high-rise, we have a few more challenges. You have the “starchitects” and the good engineering firms that are familiar with doing central hot water heating systems with heat pumps. But by and large, that's one technology where — even though it exists, it's being deployed in countries all over the world — particularly here in America, there's less awareness and history of designers doing central heat-pump water heaters. So that's one area where we still have to come up to speed. Then the biggest barrier on the technical side right now is just home wiring and home electrical panels.David Roberts:   Upgrading to prepare for electrification, that kind of thing? Panama Bartholomy:  Exactly: undersized electrical panels. If you're adding four new appliances and maybe an electric vehicle, you're going to have to upgrade your electrical panel. Which isn't bad in itself, and for a lot of homes there’s a safety benefit to it as well. The challenge is that in our world, what usually brings that about is a failed furnace or a failed water heater, so it’s an emergency.David Roberts:   So these decisions are made under duress, usually.Panama Bartholomy:Yeah, exactly. David Roberts:What about the biggest political impediment? Is it consumer ignorance or consumer sentiment? Or is it, as I tend to suspect, opposition from the natural gas industry? Panama Bartholomy:  The biggest political barrier right now is fear. It's the fear of politicians to set out agendas in line with their stated climate goals. Even leadership states like California and New York that have strong climate goals — you think of all the different sectors that are emitting, and well, pretty soon here, we’ve got to stop burning fossil fuels in buildings. Yet you see a hesitancy of leadership to set out that vision, and that results in market confusion. You have the manufacturers, the installers, the builders all saying, “well on one hand, it's pretty obvious what you're going to have to do to us through regulation if you're going to meet your climate goals, but on the other hand, you're still allowing new buildings to hook up to the gas system; you're still providing energy-efficiency incentives for gas appliances; you're still putting out billions of taxpayer dollars into affordable housing and school construction and you have no alignment of those policies with your climate policies.” So right now it's fear to step up and set bold policies for buildings that is holding it back. You mentioned where that fear may be coming from, and largely it is gas utilities, who don't see themselves in a low-carbon future; in particular, the unions that work within those companies and lay those pipes, or unions that lay pipe in buildings. What we are seeing in both New York and California right now is organized labor starting to come to the table. They use the same language every time we sit down at the table with them: they say, “we see the writing on the wall; we know where this is going, and so we're coming to the table to begin to negotiate what a just transition actually looks like beyond just a slogan.”David Roberts:   What is the biggest financial impediment? Is it just a lack of government money, or is there a lack of financing and funding models?Panama Bartholomy:  I've spent about 20 years in energy-efficiency policy; I'm a recovering bureaucrat, spent about 15 years in state government in California. Part of the beauty of working in our space is that we are working with technologies that are not a choice for consumers. A lot of people think about building electrification, they draw parallels with the solar industry or the electric vehicle industry or lessons learned from energy efficiency. And while there is stuff to learn from that, the reality is: you don't need to have solar panels in order to stay warm in your house. You don't need an electric vehicle in order to be able to provide hot water for your family. So we're dealing with technologies that people fundamentally have a lot of urgency around when they break. The beauty is, they break, and absent any of our electrification goals or our climate goals, that person was going to spend anywhere from $7,000 to $15,000 on a new furnace and air conditioning system. They were already going to have to spend money, think through what financing options are available to them, etc. So what we need to do in this space is figure out how to add just enough money and just enough access to financing to be able to shift that decision around to the technologies we want. We don't need to pay for the entire water heater; what we need to do is pay a few hundred to a thousand-and-a-half for that water heater in order to help consumers choose a heat-pump water heater rather than going back to another gas water heater. We need some incentives, particularly over the next decade, to be able to make it so that the electric choice is the cheaper choice. For low-income and moderate households, we need to be focused on accessible financing models for communities that have historically been left out of capital markets. We've done a big report about what that could look like: how to use tariffed on-bill financing in an effective way to both protect consumers but allow far more people, lower-income and renters, to be able to take advantage of financing to make these upgrades.David Roberts:   When I talk about building decarbonization, one of the first questions that always comes up is about renters: unless my landlord has good intentions and is excited about this, there's not much I can do. Is there agency for renters? What should they do? How do you get to landlords?Panama Bartholomy:  There's water heating and space heating, and then there's cooking. Water heating and space heating, landlords are generally looking for the cheapest option; something breaks, they need to replace it. What I mentioned in the last answer about making the electric choice the cheapest choice and having good financing for high-efficiency electric appliances: that's what's going to help landlords make the better choice, that they're able to save money up front on these technologies. The same incentive programs and financing that help homeowners are also going to help landlords help renters with that. Now, key to that is that we also have in place policies that protect renters so that landlords don't install this technology and then try to raise the rent on them. It’s a key conversation happening right now. But I wanted to pull apart cooking, because cooking may be an area where there is more agency than what we've historically expressed, because of the air-quality impacts of cooking with gas. There's now a good 40 years of research showing that there are potentially significant air-quality impacts of burning gas in your home and around your family, and there are laws in this country around habitability that landlords have to follow. They need to provide good environments. So if a landlord is providing an environment that does not have good venting over a stove and/or has a stove that you can test and show is emitting dangerous levels of pollution, we are now starting to work with a number of groups across the country about, how do you then turn that into policy? How can you empower local governments to include that in their habitability requirements, which would compel landlords to then make the shift to either a different kind of stove and/or venting?David Roberts:   Is that about passing new policies upgrading the habitability standards? Or is there some way to interpret or use existing habitability standards to get at stoves? Are the tools there already?Panama Bartholomy:  We believe that the tools are already there, that the habitability standards cover this, and it's a matter of somebody stepping up and testing it. We're engaged with a number of groups doing air-quality testing over a period of time, working with tenant groups, and working with local governments to be able to say, look, this is the data right here. We're potentially having higher pollution coming from stoves in people's homes than the highways or ports next to them; as much as we need to address those, we also need to be addressing this. We haven't yet had the first city go ahead and adopt it, but we're in conversation with a number of them and I hope in the near future to be able to talk to you about that.David Roberts:   When we talk about building decarb, minds go to the operational emissions: you're running your furnace, you're heating your house, etc. But the other half of the equation is what's called embodied emissions — the emissions represented by the manufacture and transport of the materials used in the building. This seems like something that consumers have very little control over. Who needs to understand embodied emissions, and where's the right lever to take action on that?Panama Bartholomy:  The Carbon Leadership Forum, out of your area of Washington, has been the leading voice on the issue of embodied emissions. They've done a ton of good work on this. It's a combination of factors, and it gets down to individual theories of change about how we're going to address climate change. For me, I think we need to be doing as much as we can in the 2020s to invest and incentivize and educate. Then we're looking at a series of regulations in the 2030s that bring along everybody that wasn't incentivized or didn't fall to our education. On embodied carbon, it's going to be the same thing. Right now, a lot of the focus on embodied carbon is on the design and construction community: how do we get the specifiers in all these firms, largely on the commercial and multifamily and institutional side, to start to specify different materials? You have leadership systems like LEED and the Living Building Challenge incorporating greater transparency to product design and product development.David Roberts:   If you're a big builder, I'm guessing your primary sentiment about this is that you just don't want to waste a bunch of time on it. You don't want to have to do the research on the materials yourself. Is there an easy way for a builder to say to suppliers, “you must meet X standard?” Is there a standard out there yet that they can pin their supply on?Panama Bartholomy:  Absolutely. LEED and the Institute for Living Futures have been the two leading groups on this, enforcing through their rating systems a system for manufacturers to be able to report on the environmental impacts of their products. We're getting beyond just recycled content or emissions, we're now getting into a lifecycle analysis of the product. They're providing the model right now for products to be measured against. The other place we're seeing it is at the local and state level, but they haven't been able to get much beyond cement, to be honest with you. David Roberts:   Well, that's a big one.Panama Bartholomy:  It is. But we need to be getting into steel. There are a number of different large systems. California a couple years ago passed a Buy Clean California bill that required state government to start to reduce the embodied carbon of steel, glass, and a couple other products that they purchase for their own buildings. At the local level, we're seeing local governments pass embodied carbon ordinances that are mostly focused on cement and using low-carbon cement in both public and private buildings. But it is nascent and we haven't seen anywhere near the attention on embodied carbon that we've seen on operational emissions of buildings. Folks like Ed Mazria out of Architecture 2030 make a compelling point that the bigger carbon problem is the embodied carbon than the operational.David Roberts:   Looking down the road at our imaginary future: if you reduce your operational greenhouse gases to nothing through clean electrification and sealing and all that, and then you secure low-carbon materials, you can imagine buildings not just zeroing out their emissions — you can imagine buildings becoming carbon sinks, carbon stores, negative carbon. Is that something people are thinking about, or is it a 2050 type of thing?Panama Bartholomy:  No, people are talking about it. It sounds like you are hanging out with some of those starchitects I mentioned earlier. It's not enough to be net-zero anymore, you need to be a carbon-positive community. The science is there. You sequester carbon in certain materials that you use in a project, and if you use enough of it, and you zero out your operational, you should be able to do it. Again, we need to get it beyond the starchitect buildings to the mainstream, and that's where I fundamentally feel that government has to play a role. The most important thing they can do in 2022 is say to the market, where are we going? How are we going to help create the market to allow the regulations to work when they come into effect?David Roberts:   The pandemic has brought a lot of attention to the fact that air quality and ventilation are fairly abysmal in many existing buildings. Now this is becoming a public health issue. Are good ventilation and filtering and air quality in tension with efficiency? Are those necessarily going to mean more energy? How do you see those fitting together?Panama Bartholomy:  They're necessary. For 40 years out here in California we've tightened up the building envelope; I say that the folks over at the California Energy Commission belong to the the church of the envelope because of their dedication to it. When you do that, you necessarily start to trap any emissions in your home: all your aerosols, all the furniture you bring into your house, and then microplastics — I think I'm probably one-quarter microplastic at this point because I have two young kids. For our world, it's really the pollution that comes from the stove, so potentially dangerous levels of nitrogen oxides, carbon monoxide, and formaldehyde coming out. If you don't have venting, and you have a tight envelope, and you're cooking in winterm and you don't want to open the windows, you have a potentially dangerous situation there for your lung health, and, with carbon monoxide, for your overall life. So it's a critical piece of energy efficiency, and we're starting to have a pretty brutal conversation in the energy-efficiency community particularly around some of our low-income weatherization programs. What is the morality behind tightening up some of these homes and providing comfort and saving money without addressing some of the pollutants inside those very homes?It's absolutely critical that we deal with ventilation and removing sources of pollution. We know that stoves are a critical source of pollution, and we know that we have much better technology that just blows the doors off of gas stoves to replace it with.David Roberts:   Does this just come down to building in ventilation and airflow standards into our regulations? Is that the long and short of it?Panama Bartholomy:  On new construction, yes. Last year, the Energy Commission in California adopted its new building code that'll go into effect in two years, and it's the first time in the world we've seen a building code that's differentiating the ventilation standard it requires based on the type of fuel you're using to cook food. They're saying if you have a gas stove and you’re new construction, under this code you're going to have to have a higher ventilation standard, and therefore a more expensive ventilation system, than an electric one. It's the first time we've recognized in a code the inherent health benefits of cooking without gas. For existing buildings, whether you're talking about waste or water treatment, source control is always your best bet, the most affordable way. You just want to find a way to get the gas stove out of the kitchen and get an electric one in there. You're still going to have some emissions from just cooking and, depending on how good a cook you are, from burning. So you do want some ventilation for that, but at least you don't have what are known criteria pollutants from the EPA being emitted into your kitchen in that case. I say that because in some situations, these homes are just built in a way that is going to make ventilation systems very hard to retrofit in, and landlords unwilling to do something about it.David Roberts:   So you create an incentive for builders or retrofitters: get rid of the gas stove and thereby save money on ventilation spending.Panama Bartholomy:  Exactly. The Energy Commission's done that small step; they didn't say “no more gas stoves,” but they said “we recognize gas stoves are dangerous, and therefore you're going to have to deal with it.” So yes, it is a regulatory incentive.David Roberts:   I think we can agree that nothing like the scale of action we'd like to see is happening, but there are places that are taking big steps. In New York, the governor laid out some big talk; I'm curious what she said and what authority it carries. What else needs to happen to make it move forward?Panama Bartholomy:  Yeah, very impressive first State of the State from Governor Hochul on the environment. I think Politico called her a political juggernaut. Unfortunately, her hometown bills couldn't quite get over the hump last weekend. But she put out some big goals for buildings, and it matches well with what's happening in the state right now, which is the beginning of a public process for their big climate scoping plan that's been under development for years, about how they're going to meet their climate leadership legislation. What the governor announced is a laundry list; I could take up the rest of the podcast to go through it, so I'll just be brief. She released a comprehensive package of proposals in the State of the State: some that can be carried out through her Public Service Commission, some that will need legislation, and some that will be addressed in the budget.David Roberts:   And she has a supportive legislature?Panama Bartholomy:  She does. She hasn't really had to test it yet. But what we've seen from the last governor, whose name shall not be spoken, is that he was able to “work well” or bully legislature into carrying out the agenda. We'll see if this governor has a similar success rate with the legislature. But it seems like it. There's been three great pieces of legislation immediately introduced around building electrification, so I think there's a lot of action on it. But to your original question, the governor proposed how to bring about 2 million climate-friendly homes by 2030, with at least 1 million of those being all-electric and 1 million being electric-ready, pre-wired so next time any of your gas appliances break, you're ready to go with electric appliances.David Roberts:   Does “climate-friendly” have a concrete definition?Panama Bartholomy:  I've never seen “climate-friendly” in law yet. I think it was a turn of phrase that her media folks developed for this one.David Roberts:   It can mean a lot of different things in practice. Panama Bartholomy:  Yes, indeed. I'm sure the gas companies have a lot to say about “climate-friendly.” She called for all new construction in the state to be zero emission no later than 2027, which is in line with what New York City just adopted for all buildings being built in New York City at the end of last year.David Roberts:   That's operational, not embodied, emissions?Panama Bartholomy:Correct, that's operational emissions. David Roberts:So does that mean the resulting building will not produce carbon on an ongoing basis, or the construction process itself is somehow zero carbon?Panama Bartholomy:  The resulting building. We'll see how it all gets played out. It's a lot of platitudes and speeches for the State of the State address. There's a piece of legislation currently working through the legislature that actually sets 2024 as a zero-emission date for construction. If that one passes, there's a series of definitions in there, but that is from operational emissions rather than embodied or construction emissions. She also put up a green electrification fund to electrify low-income homes, about $25 billion for a five-year plan, which is far more visionary than we've seen from anybody else. There's a certain law called “obligation to serve”: utilities that provide gas, usually monopolies, are obliged to provide that gas or electricity to ratepayers if requested. If you're far out in the country, you may need to pay for some of that infrastructure, but the utility is obliged to provide it to you. It's a real barrier when you're looking about starting to trim the gas network. So the governor in her address actually proposed to end the “obligation to serve” for existing customers.David Roberts:   Just to be clear about this, say you are trying to eliminate part of your gas network and electrify everything in that area; all it would take is one citizen to say to the natural gas company, “I would like to be served by gas” and then basically you can't get rid of it? Is that the legal situation right now?Panama Bartholomy:  Yeah. We're seeing it out here in California. Pacific Gas & Electric, largest utility in the country, fourth-largest distributor of natural gas, they are trying to go through figuring out how you can operationalize electrification. They've been doing some pilot programs around going to whole neighborhoods where they have old pipe that's coming up for replacement. It’s going to be millions of dollars in replacement, they've done the analysis, and they said, “okay, if instead we just electrify all the homes on this pipe extension, it's going to be cheaper for us and for ratepayers.” So they go to every single one of those homes and they ask each homeowner, “hey, would you like a free all-electric home?”We've seen two case studies they've done on this. One of them, it worked. They saved $400,000 on the project compared to the gas pipeline replacement, and it was great. On the other one, out of 150 homes, two people didn't want to give up their gas stoves. PG&E had to go ahead and spend millions to replace pipes that are going to have a 60- to 80-year lifespan, that if we're going to meet our climate goals, we're going to have to early retire, and who's going to pay for that? It's going to be ratepayers paying for that early retirement.David Roberts:   So this would be a law to get rid of that obligation.Panama Bartholomy:  This would be a law. A piece of legislation has now been introduced in New York legislature to remove that obligation to serve. She also has called on the PSC to take a look at the whole approach to pipeline maintenance in New York: how we grade it, how we decide whether or not to replace pipe or look for non-pipe alternatives to it, such as electrification — completely changing our approach to just assuming that we're going to replace old pipe with new pipe. I could go on and on. She has a bunch of stuff for training programs for New Yorkers to get a lot more people in. One of the two exciting areas I'll bring up is, she's talked about needing to convene private capital markets. No better place than New York to be doing some of that convening, to be able to bring them in to figure out how they can support this. Lastly, she's proposed 1,000 clean, green schools. This is an opportunity to clearly be able to get organized labor more to the table, to be supporting building electrification as well as providing better ventilation and air quality in schools.David Roberts:   I always thought that was political gold, just waiting for someone to pick it up. The respiratory health of kids, what's more on people's minds right now?Panama Bartholomy:  Exactly. I live in fire country out here in California — we used to call it wine country — and increasingly, our schools and our public facilities are being used as resilience centers in heat waves and firestorms. Getting these schools with solar, batteries, all electric, with great ventilation systems, is unfortunately going to be a critical need as we deal with and potentially adapt to climate change.David Roberts:   We could stay on New York forever; it's amazing what's going on there. But what about California? That's the other big state that's come up recently. California is going to just spend a bunch of money on it?Panama Bartholomy:  Yep, that's the proposal at this point. Sadly, probably nowhere near as much as we need to, but it's a good start. What I would say about the difference between what we're seeing in New York and in California is that in New York, you're seeing some high-level leadership coming directly out of the governor's office. In California, the leadership is bottom-up. We have 54 cities across the state that have adopted local gas bans or local building codes that discourage gas. We have agencies like the Air Board and the Energy Commission and the Public Utilities Commission adopting piecemeal policies that are all building toward the direction of requiring electrification and incentivizing it and building the market. But until January 10 of this year, we didn't see anything coming from the governor's office about, “we need to start electrifying, we need to start getting off of fossil fuels.”On January 10, the governor released his proposed budget for the year and he proposed just over a billion dollars for building electrification, with two-thirds of that going toward existing building low-income housing retrofits. We're starting to see some significant investment, more so than we've seen in the past. But at this point, I’ve got to say, I think if you put a UFC championship belt on any governor right now, it's Governor Hochul. David Roberts:   New York and California are the leaders on so much carbon and climate stuff. Are they the leaders in this respect too, on buildings? Or is there anyone else that's taking comparable action?Panama Bartholomy:  There are. I mentioned local governments, and that's a theme we've seen in addressing climate change for decades now: the locals are the ones that are the most exposed to voters, and yet across the world they have been taking the biggest swings on climate change. They see both the benefits and the risks of climate change more directly than state or federal levels. Other states, I would say that Massachusetts, Illinois, and Colorado are stepping up. I'll throw Washington in there as well. Massachusetts is just about to vote on the next three years of their energy-efficiency program, and they have nearly completely shifted the focus of the energy-efficiency program to make it much more electrification-focused.David Roberts:   This is a big thing, right? Because efficiency conventionally conceived is not necessarily aligned with electrification or cleaning up sources. Often in tension. I feel like this is something not a lot of people are aware of outside the space.Panama Bartholomy:  It very much is, and I think a lot of it is because the energy-efficiency mindset came out of the oil crisis of the 70s — it's just about saving more energy, it's not about ending emissions. The shift to climate-is-existential, I think it's been hard for folks that have been working in this space for 30 years or so. So that'll be great in Massachusetts. Colorado and Illinois both passed overall climate legislation last year that had buildings as a specific part of it, and in implementation they're going to be developing comprehensive roadmaps for how to deal with buildings. In Washington they're actually adopting a new building code, and for commercial and multifamily buildings they're proposing electrification mandates within that building code. So your home state up there is one of the leaders. The odd thing is, they're backing off on single-family homes, where it's the easiest to do it, and it's largely because of stoves.David Roberts:   It's easier to electrify residential. Big buildings and commercial buildings, industrial buildings, that's doable, it's just more expensive? Or the incentives are wrong? What's the status of bigger buildings? Is this something we know how to do?Panama Bartholomy:  It's very much doable, it's being done. I can point you to buildings in Seattle that are all-electric tall towers. One of the leading consulting firms, Ecotope, is out of the Seattle area. It is very possible and being done all over the world. The key thing there, though, is awareness. We haven't asked our bread-and-butter design and construction community to care this deeply about climate change before, so they've been focused on efficiency and not on these central heat-pump water heating systems. The HVAC systems — again, heat pumps are basically air conditioners that can run in reverse, so it's not complicated to design that, but there are some differences in a boiler-based water heating system versus a central heat-pump water heating system. It's nothing crazy; it's not Star Wars technology. It's just familiarity with it and being able to design around it. Unfortunately, I think we're going to do a ton of education and incentivizing in the 2020s and then have to require it in the 2030s. It's very doable. It's being done. For the folks that know how to do this, we're not seeing a price premium for building all-electric versus building with gas. In fact, Point Energy out of San Francisco did a big study for the University of California system, which has adopted a carbon neutrality by 2025 target, about what it costs to build and operate a building with gas and electric versus just electric. They looked at residential towers, office buildings, and labs, and found that the electric buildings cost the same or cheaper to build and operate than the gas buildings across all three of those building types.David Roberts:   Is this one of those things where it's more capital-intensive up front but then you save on operations over the long term? I used to be very taken by that story, but then I realized that, as nice as that thought is, it’s not really what motivates a lot of behavior in markets. People overweight those upfront capital costs. Is that still the situation?Panama Bartholomy:  Not in this space. You never want to make generalizations about construction. Every project is different; every time you interact with a supply chain is different than another time interacting with the supply chain. But by and large, our members, who are design and construction folks in this space, that know how to do this, say they don't see a cost premium for the construction of these projects for large, commercial, institutional.David Roberts:   There are a lot of states now that are, let's say, pushing the other direction. One of the ways they're doing that is by passing laws that preempt cities from passing gas bans; it's popped up in a lot of red states. Is there anything to say about that other than, “they should stop doing that, that's bad, we should elect somebody who won't do that”? If you're a city who's in one of those states, are there ways around it? Are there other things you can do? How should they deal with that?Panama Bartholomy:  That's a great question. What it fundamentally comes down to is taking away local governments’ choice about how to address climate change.David Roberts:   By the party that champions local government. Weird.Panama Bartholomy:  Yes, weird times, almost like it's disingenuous. When you look at what cities can do on climate change, usually transportation and buildings are the largest emissions; it just depends how much infrastructure or industry they have in their boundaries. Transportation emissions are tough; a lot of it is consumer choice. Your land-use choices take a long time to have a big impact. Public transportation is tough and expensive. So buildings are one of the key areas where local governments can actually do anything. When you take that tool away, you're really crippling local government's ability to do anything on climate change. What we're seeing right now is some creative ways to look around it. Some of the states that have adopted this have focused in on building codes, so you have some cities looking at planning law, health and safety law, instead of our building code law, which has now been preempted by state government. You are seeing some cities trying to look for creative ways around this. Ultimately, you know, I love all of our 50 states equally. But when you look at the top 10 states by gas demand, only Texas and Ohio have adopted these bans. The other eight states are climate leaders. They all have climate laws, they have climate targets, and they collectively represent over half the gas demand in the United States in buildings. I think what you're going to see is a coalition of those states changing the marketplace. Smaller states with smaller gas demand are just going to have to deal with the implications of those market changes.David Roberts:   A little bit like fuel economy, right? You get enough big states going in the right direction, they end up dragging the market with them. Panama Bartholomy:Very much so.David Roberts:I know Biden has done an executive order on federal buildings, and I know there's some money in the infrastructure bill. Are you excited by what's happened so far federally on buildings? Are there particular pieces we should be aware of?Panama Bartholomy:  There's more than we've ever seen. And that's great.David Roberts:   That's always such a low bar in these conversations.Panama Bartholomy:  When you work in climate, you have to be an optimist. Maybe not if you report on climate, but if you work in climate, you have to be an optimist. The numbers are just too stark. The fact that we appointed somebody in the White House, Mark Chambers, formerly from New York City, to be the lead on building emissions for the Council on Environmental Quality is amazing. The fact that you have Secretary Granholm going around giving big press events around cold-climate heat pumps and people yelling from behind her, “heat pump nation!” is absolutely incredible. DOE is moving forward on regulations that manufacturers of heating equipment say are going to be pushing the market to electrification. We're seeing a lot of what we need to see. It's our fundamental belief that you don't see significant federal action until you see a lot of state action. Federal is the bank, and then the caboose on regulations. We need significant investment from the federal government, and then that investment will help locals and states be able to adopt regulations that will transform the market enough that actors of all colors will come back to Washington and say, “listen, this is too haphazard and patchwork, we need some level of consistency across the country.”David Roberts:   If any of us need to feel additional anxiety about Build Back Better, is there anything big on buildings in Build Back Better that you are hoping makes it through this twisted process?Panama Bartholomy:  There is, much of it thanks to former guests on this podcast who have done great work in this area, particularly Saul and the folks over at Rewiring America. There's $17 billion in there for federal buildings, which I have a hard time getting too excited about when I think about taxpayers looking at it. “Great, so you're going to do a bunch of stuff that you should have been doing the whole time, and now we're supposed to get excited about this? What about the $17 billion to help me with my water heater?”But there's $12 billion for residential electrification, and that'll be split: about $6 billion coming out of the Department of Energy to provide direct rebates for the whole suite of electrification technologies (water heating, space heating, cooking, and clothes drying); then there's $6 billion that'll be implemented through state energy offices. That'll be focused on what is one of the biggest movements in energy efficiency right now: performance-based energy-efficiency measures.David Roberts:   Can you give the capsule summary of what that means?Panama Bartholomy:  Historically, we've had widget-based or “deemed” savings for energy efficiency.David Roberts:   You just incentivize them to buy the equipment. Panama Bartholomy:  Exactly. And even worse, we give installers money just because they installed the equipment — not necessarily the quality of the installation, the performance of it. How does it perform on the grid when we have grids that have very different greenhouse gas profiles depending on the time of day that the power is being drawn? A performance-based energy-efficiency program gives some money up front for an incentive, but the majority of the incentive is paid out based on the actual operations and performance of those systems. How efficient? How much energy did it save? How much carbon did it displace? How many emissions did it avoid? There's $6 billion currently in the Build Back Better bill that would go toward supporting states to set up those programs, and that would be run out of the state energy offices in each of the states.David Roberts:   And technologically we have what we need to be able to track performance in a way that you can bank on it?Panama Bartholomy:  We do. It's amazing some of the technologies out there. Leading firms like Recurve are providing fantastic tools for utilities to be able to pull apart the dynamics around a kilowatt hour saved, and why that kilowatt hour, normalizing for weather, normalizing for occupancy. It's incredible what computers can do nowadays. David Roberts:   I want to take a minute just to talk about heat pumps. They have gone from nowhere to people chanting, “heat pump nation!” It's a thrill. But when I bring them up and talk about them, immediately I hear, “I installed one 10 years ago and my house is always cold,” or “I can't afford to install one because I'd have to get fossil-fuel backup with it.” This actually happened to me. Seven or eight years ago, we were going to replace our original oil furnace in our house, which had been there since 1954: big, giant, peach-colored. We wanted to get rid of it. I would have loved to get a heat pump, but the contractors were baffled and resistant, and assured us, if you get a heat pump, you have to get a natural gas furnace to back up the heat pump, and all told it would have been an additional $8,000. So I ended up, to my great and ongoing regret, installing a natural gas furnace. I feel like that's a pretty representative experience in terms of a) people not knowing b) contractors not knowing what the hell they're doing, and c) this question of whether heat pumps can do the job, and in what climates. Can we get some clarity on that? How good are heat pumps these days?Panama Bartholomy:  Heat pumps are great these days! We have, through the leadership of the Northeast Energy Efficiency Partnership, or NEEP, a whole database of cold-climate heat pumps. They pioneered a cold-climate heat pump specification years ago and have been working with manufacturers since then to make sure there's a suite of different cold-climate heat pumps available. These are heat pumps where the heat pump part of the heat pump can operate down to 14 degrees below zero before electric resistance kicks in, or if you have a gas backup, before that gas backup kicks in. The technology is there. What you're talking about is your interaction with the contractor, and that's going to be one of the hardest things about this transition. Try to call up a plumber or an HVAC installer right now: people are just flat busy. They were flat busy before the pandemic, and now we're in the pandemic, everybody wants to renovate their home, which is now their home office, and they're busier than ever. There's no reason contractors should change what they're doing if they're selling and they're booked months out in advance. It's going to be up to us who are concerned about climate to give them a reason. It's not going to work to require it right now, because of the shock to the system that'll create for this workforce. It's going to have to be incentives, and then regulation.David Roberts:   Let me pause on the shock. Are there just not enough people trained to do it? Or is it about heat-pump manufacturers not being ready to ramp up quickly? Or logistics? What would be the shock if you tried to push it too fast right now?Panama Bartholomy:  It's a great question, because there's this fallacy out there that we don't have enough trained workers. The reality is, again, we're not installing crazy alien technology here. A heat pump is an air conditioner that can run in reverse. A heat-pump water heater is a tank of water with a heat pump on top. This is not complicated stuff. Electricians know how to electrician; they know how to run wires. It's not an issue of a lack of workforce, it's an issue of incentivizing the workforce in the right way. Right now, the major thing that installers want to avoid is callbacks. They want to be able to go in, put in something, and then not be called back out, which will prevent them from doing another job. If you historically have not cared about the performance of the HVAC system or water heating system that you're installing, it can be a change to all of a sudden now have to care about that performance. What we're seeing is a gradual transition of this workforce over to electric installations, but until we send some clear market signals, there's no reason for them to make that shift. You have all the myths that you ran into, like “they can't operate in even Seattle's mildly cold climate; you need gas backup; these things just don't work.” One of the other things is, we're just going to have to accept the difficulty of living in the first wave of addressing climate change, and that things are going to be better next decade. Things are going to have a lot of friction and be pretty hard this decade as we help to transition this industry.David Roberts:   When I hear pushback against electrification, this is the main thing I hear in terms of substantive objections: If you go to cold climates like the Upper Midwest, and you replace all their oil and natural gas furnaces with electric heat pumps, then in the winter you’re going to get enormous electricity demand that's brand new. You have these electricity systems built for summer peaks suddenly having enormous winter peaks, three times bigger than their historic peaks. Some people argue we're simply not going to be able to radically upgrade the entire electricity infrastructure in all these places fast enough; we're going to need, in some places, some alternative to electrification, which usually amounts to some zero-carbon liquid fuel, some hydrogen variant or biomethane, whatever it is. Basically, we are going to need to keep combustion in some areas because we just don't have the capacity to handle that much winter electricity demand. What do you make of that?Panama Bartholomy:  God, I wish that was a real problem. If we were installing so many electric appliances that we were actually causing grid disruption anywhere in the next decade — man, I could go home, that's it, retire, done, we succeeded. The reality is, we're not going to stop maintaining the distribution and transmission grids. We're not going to stop building generation in any part of this country. We're not going to have mass-scale electrification at the speed we need in the near-term. We're going to have some time to adjust. The people who think electrification is going to happen in a silo have not seen how electricity systems have worked for the whole history of electricity systems. It is an integrated planning effort, and demand is forecasted and then supplied. Now, at some point we can talk about rolling blackouts and weather events, but on the normal, this should be something that grid managers can absolutely handle with the rate of electrification that we could see, even if we had significantly more electrification.David Roberts:   Do you think it's fair to say, though, that if you're in one of those cold-weather climates and you see electrification on the horizon, you need to start bulking up your electricity system now? Those things are not fast to accomplish.Panama Bartholomy:  Yeah, if you are committing to electrification, you should be incorporating that into your demand models and looking at generation. And, getting back to the beginning of our conversation, you should be thinking about how to incorporate energy efficiency into those projects as well, to limit some of that new demand and ease building electrification into this high winter peak. To be honest with you, I think our bigger challenge is going to be electric vehicles — the doubling and tripling.David Roberts:   They're additive, right? You get a bunch of electric vehicles in a cold-weather climate alongside a bunch of electrification of heat and cooling, then you're talking about a lot of electricity.Panama Bartholomy:  It is. But with cars, average car ownership is about seven years, water heaters about 15 years, furnaces about 20 years. We're going to have quicker turnover of the vehicle fleet than we are of the water heater and furnace fleet.David Roberts:   Do you feel confident saying that, in the end, nowhere in the United States will need liquid fuels for heat? You think electrification is going to do it everywhere?Panama Bartholomy:  I'd say that for buildings, not necessarily for industrial, or transport. That is a hard decision that we need to make immediately: if you look at trash gas, or cow-crap gas, the rainbow of hydrogens — these are all precious, and they're all expensive. Is the highest and best use of that gas in my moderately efficient water heater in my basement? Or should we be spending it in those areas where it is going to be hard to electrify for the foreseeable future, such as industrial purposes, freight, aviation? That's just a better use for it.David Roberts:   So you wouldn't even be into some blending or mixing as an interim measure, to reduce emissions while we wait for electrification?Panama Bartholomy:  The challenge there is the expense to ratepayers. You're maintaining two infrastructure systems moving forward, and ratepayers are paying for it. Instead of making some of these decisions and clipping off the branches of the gas system and relieving ratepayers of that, you are just paying and upgrading it — and these upgrades to gas systems, as I said, 60- to 80-year lives for the materials that are used. These are long-term investments, and even if the whole neighborhood is only using gas for cooking, you still have to maintain that gas system to a high level of safety. David Roberts:   It’s interesting to think about the gas system as binary: you either have it or you don't. And if you have a single gas appliance, you have the whole gas infrastructure. It's a sticky dilemma. Speaking of that, let's talk for a minute about stoves. Where are we on education? I'm seeing it talked about more. I'm seeing a lot of concerted pushback — natural gas utilities and natural gas businesses out propagandizing all over the place, hiring advertising agencies and Instagram influencers to cook on gas stoves. Where do you see the battle for hearts and minds on stoves?Panama Bartholomy:  It's no accident that the gas company is choosing stoves. What's interesting is, it's probably their area of greatest vulnerability.David Roberts:   In the grand scheme of things, stoves are not a huge source of demand for natural gas, are they?Panama Bartholomy:  Nope — 3 to 5 percent of the average home’s natural gas demand. It's not big, but every mixed-fuel utility that provides both electricity and gas will tell us that their nightmare is that they have to run a gas system just because people aren't willing to give up their gas stove, and charge everybody $180 a month just to cook with gas. It's no accident that they're focusing on this. We've been part of a number of studies that have looked at people's attachment to different appliances, and unsurprisingly, those appliances that you interact with the most are the ones you have the greatest attachment to. Water heaters: pretty low level of emotional response. Stoves: really high. And people have had some bad experiences with electric resistance, the coil stoves of the past.Generally, the two things home or professional cooks care about the most are power and control, which are usually at the heart of all bad relationships. The good news is that we have an alternative that beats gas on both of those things. But we have this impression that gas is better, and you have these things coming from consumers, saying things like, “I deserve a gas stove. I finally saved up enough money, I can finally get a gas stove.”David Roberts:   It's definitely seen as a luxury, as an achievement, still.Panama Bartholomy:  Very much so. Part of this movement is going to have to be exposing some of the inherent dangers of gas stoves: the air-quality dangers, the safety dangers, whether you have a small child or older relatives in the house, and then just the dangers of piping gas around all of our communities. Like electric vehicles, the good news is that we have the high-powered electric vehicles of the kitchen as an alternative. It'd be a bummer if we were like, “no, come back to this coil stove.” That's not going to work. I can’t wait to see the marketing campaign around that.But gas stoves, because of the air-quality impacts, are also one of the gas company's greatest vulnerabilities. As you start to see more and more attention paid to that, more groups speak out about it, governments begin to address it, their last gasp from a marketing perspective could turn into the final dagger. With induction stoves, it's fantastic that we have a product that, once you test drive it, people's hair gets blown back. It's incredible. It's three times as powerful as the best-in-class gas stove, twice as good a control on it, incredibly easy to clean.David Roberts:   When I talk to people, that's the first thing I mention. I'm lazy, and I’m the person who cleans the kitchen. We were in a rental for a few months recently and it had a gas stove — god it was a pain in the ass. I was like, how do people live with this? There's so many nooks and crannies; it gets gross so quickly. Induction is this perfectly smooth surface. It really made me appreciate my stove.Panama Bartholomy:  Yeah, you just wipe it. We have all these pictures of my two-year-old cooking on the induction stove, putting his hand right next to the pan and cooking eggs. It's fantastic technology. So the good news is that we have a technology that's better. It's a matter of getting people out there to test drive these things, and getting it in the Home Depots and appliance stores, getting little pop-ups at farmers markets to begin this transition.David Roberts:   It doesn't quite carry the air of fanciness of a gas stove, though. We bought a commodity-level, relatively cheap induction stove; there's no fanciness to it. I don't know what you can do about that. You can't really make a high-end one, either, because magnets are magnets; they're all doing the same thing. Even the lowest-end induction stove basically has exactly the power and control. There's a lot of consumer psychology at work here that's difficult to puzzle through.Panama Bartholomy:  We need the Ford F-150 commercials for induction stoves. Big man turning big dials! Big power, lightning bolts shooting into the pan!David Roberts:   But you don't get any flame. Flame is so darn manly, magnets don't quite do it. Where's the industry on this? Do they have a preference what kind of stoves they make?Panama Bartholomy:  At this point, they don't. At this point, they have been happy to sell whatever stove a consumer wants to get. They are standing up and taking notice when you have 54 cities in California, most of the Bay Area, basically say, “you're not allowed to build with gas anymore.” Denver, Seattle, for certain building types in New York City now. That's making them take notice. It's been interesting to watch, because this is an appliance area that hasn't had to deal with efficiency and energy and environmental regulations a lot. The HVAC and water heater folks, this has been bread and butter for them for 40 years. But the stove folks, they're just like, “whoa, we're a target? Where did this come from?” Just out of nowhere.David Roberts:   One of the most outrageous things about this — and I don't know if a lot of people appreciate this — is that in a lot of cases, it is natural gas utilities running these propaganda campaigns, and they are paying for those propaganda campaigns with ratepayer money. In a lot of cases, if you have natural gas, you're paying for that anti-electrification propaganda. Are there legal remedies for that, or what's the right way to deal with that?Panama Bartholomy:  There are if your local PUC, PSC, BPU has a spine. The area where we've seen that be expressed the farthest is out here in California, where you've had groups like Earthjustice bring forward motions against companies like Southern California Gas Company around using ratepayer dollars to both lobby against electrification as well as run consumer campaigns against electrification. And you've had, after months and months of delay, mealy-mouthed responses from the Public Utilities Commission that at worst, slap them with a small “don't do it again” penalty, or at best say, “well, technically, under current law, there's nothing that we can do about this.” The good news is that you're starting to see a change in leadership at the gas companies. In October, Southern California Gas Company, the largest distributor of gas in the country, released a new report called their Clean Fuels report, and it said that widespread electrification of buildings is the future of California. It's the first time we've seen a gas utility anywhere make these sorts of statements. They think that by 2040, up to 90 percent of all of the space and water heating will be electric in California. Then, at the end of the year, they joined PG&E in a filing to the Public Utilities Commission that is on a proceeding that would take away incentives to extend gas lines from gas mains to buildings. They’re called line extension allowances; basically, we use ratepayer dollars to give money to builders to pay for some of the costs of extending gas from the gas main in the middle of the street to a house or a new commercial building. It's a perverse incentive from a climate perspective; we're using ratepayer dollars to put into place infrastructure that’ll make it harder for us to meet our climate goals. So the PUC in California has opened up a proceeding to recommend doing away with those, and PG&E and Southern California Gas Company came in and said, for residential buildings, we agree that we should stop incentivizing this. First time in the country.David Roberts:   I can understand how an electric and gas utility could come around to the light on this. But if you're a natural gas utility, it's pretty much existential, isn't it? If there's no natural gas, there's no reason for you to exist. Is there a big political difference on those kinds of utilities?Panama Bartholomy:  What is the answer to every question in energy right now, before it's asked? Hydrogen! If you read through the Clean Fuels report, and you read through most any clean fuels report from a gas company in America right now, they're betting big on hydrogen. It's very much a “don't look behind the curtain” type of scenario, because you don't want to talk about the fact that you're going to have to replace the entire gas system to be able to pipe hydrogen, or how expensive the hydrogen is going to be to produce and use. But what Southern California Gas Company has said is, we need to start refocusing on supplying industrial and commercial clients with cleaner gaseous fuels. David Roberts:  Interesting. That's not crazy.  Panama Bartholomy:  Not crazy. Residential makes up 30 percent of their revenue, so it'll be a big cut.David Roberts:They're inevitably going to be smaller, if they survive at all.Panama Bartholomy:  Yeah, but hydrogen is the hope. It’s the hopium of our time.David Roberts:   The most common question I hear about all this is: I'm a homeowner, I'm confused and overwhelmed, what's my priority list? If I'm making an electrification checklist, what do I do first? Panama Bartholomy:  It's going to depend on the age of your appliances. You're looking at your four major appliances: water heater, furnace, stove, and dryer. If you use gas, you want to look at how old those systems are, and you want to replace the oldest one first, if you're looking at it purely from a climate perspective. If you're looking at it from a health and safety perspective, you probably want to go with your stove first, because your stove is likely emitting levels of nitrogen oxides, formaldehyde, and carbon monoxide that would be considered illegal if they were found outdoors.David Roberts:   What if I'm weighing appliance replacement against efficiency upgrades on my envelope, or solar panels on my roof? Are the appliances job one?Panama Bartholomy:  It's going to depend a lot on your climate zone. If you're living up in Upper Minnesota, I highly recommend you do some envelope work along with your heat pump. But it's just going to depend on the life expectancy, how much longer you think that furnace or water heater is going to be kicking.This stuff can be confusing for people. The good news is that we've recognized that consumer education is a critical part of this, and with about 15 other sponsors, we’ve partnered on a campaign. It’s called The Switch Is On campaign. It's just in California as of now. It provides all the basic information you as a consumer need, like, what is a heat pump? What would it cost to put it in? It has all of the rebates available to you based on your zip code, utility, government, etc. We pre-screened hundreds of contractors that know what they're doing on electrification and won't talk the Daves of the world out of putting in a heat pump.There's about seven other states that are standing up campaigns like this. We also are talking to folks in British Columbia and Australia with similar campaigns. It's a recognized need, and we're trying to provide some of the early resources that consumers need. So yeah, visit the website if you want to see what version one of the electrification consumer education looks like.David Roberts:   If you're a city policymaker, mayor or town council, same thing. What's your priority list? What are you going after first? What's the big fish?Panama Bartholomy:  There's three things, and in order, but they're interrelated. Number one, we need to stop digging the hole. We should not be building any new buildings with gas connections. Every new one you're building is just creating a problem for your community down the road.We need to deal with existing buildings. So the second thing is, you need to set a date for when you're no longer going to allow gas appliances to be sold in your jurisdiction or in your state.David Roberts:   You're going after the supply side.Panama Bartholomy:  Exactly. And there are lots of arguments: is it building performance standards, is it time-of-sale requirement. We believe that with a set of complementary policies around it, to build the market and protect people, that appliance bans are the solution we need across the board. The key thing is the third thing: we need to build the market so that you can support a ban. We've built up enough of an educated workforce, we've switched electricity rates around, and we’ve brought the cost down so it's comparable or cheaper than gas, etc., to be able to make a mandate work when it goes into effect. Those are the three for us: stopping new construction with gas, setting a date for the phaseout of sales of appliances that use gas, and then building the marketplace for electrification. They're all interrelated to each other.David Roberts:   Awesome. Well, this is fascinating, I'm sure we could go on for another hour, but I don't want to test my listeners’ already legendary patience. Thanks so much for coming on, and thanks for all your work on this.Panama Bartholomy:  Absolutely. Thanks for coming to our funny little corner of the clean energy world, Dave. Get full access to Volts at www.volts.wtf/subscribe

Arguments over carbon taxes go back as far as discussions of climate change itself. Economists have long insisted that pricing carbon is the most efficient way to reduce greenhouse gases. For years, they hijacked the climate discourse, with untold money and effort put behind proposals for various increasingly baroque pricing schemes, to very little effect.Over time, political experience with carbon taxes has highlighted a truth that should have been obvious long ago: carbon taxes are taxes, and people don’t like taxes. People don’t like paying more money for stuff. More broadly, carbon taxes are an almost perfectly terrible policy from the perspective of political economy. They make costs visible to everyone, while the benefits are diffuse and indirect. They create many enemies, but have almost no support outside the climate movement itself. All the political intensity is with opponents. (More here.)One response to this critique that has grown increasingly popular in recent years is the notion of refunding the tax revenue — giving the money back to voters. Various ways to do this have been proposed, the simplest being an equal dividend to each taxpayer. Some proposals have all the tax revenue refunded; some have a limited portion refunded. The idea is that the tax would discourage carbon-intensive activities, while the dividend would mute political opposition. In most of the proposed schemes, the lower half of the income scale comes out ahead — dividends are larger than tax burdens — and in some cases, up to 80 percent of taxpayers come out ahead. A refunded carbon tax is basically large-scale wealth redistribution from the biggest fossil fuel users to middle- and working-class citizens. This kind of “fee and dividend” framework is endorsed by the Climate Leadership Council (centrist/bipartisan elites), the Citizens’ Climate Lobby (left-leaning grassroots campaigners), and one-time presidential candidate Andrew Yang, though they differ on important details.The logic of the policy is compelling to proponents — and to many people who first hear about it — and they feel deeply confident that it will compel the public too. The evidence, however, is mixed. Do refunds increase the popularity of carbon taxes? At last, some field research.There are numerous studies showing that, in a polling or focus-group setting, the inclusion of refunds increases public support for a hypothetical carbon tax — see here and here, among others. But that kind of polling has not translated into victories in, for example, Washington state, where a fee-and-dividend policy lost badly in a public referendum in 2016.More to the point, because there have been so few fee-and-dividend policies implemented in the real world, there’s been very little field testing of the public’s actual response to it.That brings us to a new paper in the journal Nature Climate Change by political scientists Matto Mildenberger (UC-Santa Barbara), Erick Lachapelle (University of Montreal), Kathryn Harrison (University of British Columbia), and Isabelle Stadelmann-Steffen (University of Bern). They do something novel: look at public opinion in the places where carbon fee-and-dividend policies have been implemented. It turns out there are only two. Switzerland established a rebate program in 2008. The carbon tax reached 96 Swiss francs (about $105) per tonne in 2018; about two-thirds of the revenue is rebated on a per-capita basis, with everyone (including children) receiving an equal share. Canada established a rebate program in 2019 as part of its national carbon-pricing strategy. So far, the scheme covers four of 10 provinces, with more than half of the national population. The price was initially set at 20 Canadian dollars (about $16 U.S.) a tonne, rising to CA$50 by 2022; recently the government released a new schedule that would target CA$170 by 2030. The refund, or Climate Action Incentive Payment, is based on the number of adults and children in the household, with a 10 percent boost for rural households. It is highly progressive; 80 percent of households get more back than they pay.The Nature Climate Change paper looks at public opinion in both countries. In Canada, it draws on a longitudinal study, which surveyed the same residents — “from five provinces, two subject to the federal carbon tax (Saskatchewan and Ontario), one with provincial emissions trading (Quebec), and two with provincial carbon taxes (British Columbia and Alberta)” — five times from February 2019 through May 2020, during which time the scheme was proposed, debated, passed, and implemented. In Switzerland, the paper draws on a survey of 1,050 Swiss residents in December 2019.So what do these surveys tell us? It’s not great.Refunds don’t change opinions much; many recipients don’t know they exist In Canada, throughout the period in which the refund was hotly debated, passed, and implemented, public approval … didn’t change much. What’s more, opinions on the policy were divided primarily not by who got a refund and who didn’t, or who got a bigger refund. They were divided by (say it with me) partisanship:By wave 5 [of the survey], 75% and 81% of Liberal supporters in Ontario and Saskatchewan respectively supported carbon pricing, compared to 32% and 13% of Conservatives in these same provinces.Perhaps more importantly, Canadians remain confused and in many cases ignorant about carbon refunds. When asked whether they got one at all, “many Canadians did not know, including 17% in rebate provinces and between 33% and 36% in non-rebate provinces.”When asked how big their carbon refund was, many in non-rebate provinces reported positive amounts, while those who did receive one underestimated it by as much as 40 percent on average. “Only 24% of Ontario respondents and 19% of Saskatchewan respondents estimated a rebate amount falling within the correct $100 dollar range of their true rebate.” (Perhaps unsurprisingly, Conservatives underestimated their rebate more than Liberals.) You might think, well, Canada’s program is new. What about Switzerland, where they’ve been receiving rebates for over a decade?It’s … even worse. Only 12 percent of Swiss respondents know that part of the carbon revenue is refunded; 85 percent did not know they’d gotten a refund at all. D’oh! Additional information about refunds often doesn’t helpYou might think, well, the problem is how these countries administer their refunds. In Canada, it’s a line on your tax return. In Switzerland, it’s a discount on your health insurance premiums. Both are clearly marked, but lots of people don’t exactly scrutinize those documents and keep track of every line item. Surely support would rise if people are made aware of the refund they are receiving, yes?Er, no. In both countries, a portion of survey respondents were given individualized rebate information — that is to say, they were shown, on the documents in question, exactly how much they had received in annual carbon refunds. In Canada, this treatment did not raise support for carbon pricing at all. In fact, respondents who were shown what they received were less likely to believe that they had been made whole (this trend was also more pronounced among Conservatives). “Canadians who learned the true value of their rebates,” the paper reports, “were significantly more likely to perceive themselves as net losers, even though most Canadians are net beneficiaries.” D’oh!Maybe Switzerland? There, information about rebates mildly increased support for the current policy (“around one fifth of a standard deviation”) but it did not increase support for an increase in the tax at all. And in fact, in a June 2021 referendum, the Swiss voted against an increase in the tax and the rebates. In short, the available evidence suggests that carbon refunds don’t do much to reshape public opinion on carbon taxes, even among voters with accurate information about the refund they receive. CaveatsPerhaps support for these policies will increase over time. Perhaps it would increase if voters didn’t receive just one-time information about refunds, but consistent, repeated information. Perhaps it would increase if the rebates were sent via check rather than buried in bureaucratic documents. (We’ll find out about this — Canada is switching to a checks-by-mail system this summer and researchers are planning more surveys.) Perhaps support would grow if the rebates substantially increased in size.We can’t know what would happen in these counterfactuals; anything is possible. We can’t know whether some sort of carbon refund scheme might catch on and grow popular at some point. But the current evidence is fairly discouraging for the thesis that rebates will ipso facto increase support for carbon pricing. The lessons of this researchThere was a popular theory among pundits (myself included) when the Democrats took control of the federal government in 2020: the one thing you can’t propagandize voters on is their own lives. If Democrats could improve voters’ social and economic circumstances in tangible ways, it would cut through the disinformation haze and increase public support.In retrospect, I think that was naive. You can propagandize voters about their own lives. Or, to put it more academically, all of our experiences, even our experiences of our own life circumstances, are mediated. We interpret them through schema and worldviews shaped by our tribes and the stories they tell. These days, we get that stuff through electronic media, with which the world is saturated.Most people are not aware of exactly how much they pay in gas or carbon taxes a year. Most people do not closely scrutinize their tax returns or health insurance forms. And above all, most people are unaware that they already receive a variety of government benefits, which are often buried in the tax code or otherwise hidden from view. (The best book on this is Suzanne Mettler’s The Submerged State: How Invisible Government Policies Undermine American Democracy.)Outside of a focus group, out in the real world, people’s assessments of a carbon refund are less likely to be informed by careful economic cost-benefit analysis than they are to be mediated by identity affiliation. And these days, identity has been subsumed by partisanship. “[I]n the two federal-tax provinces, supporters of the Liberal Party of Canada were 3 to 8 times more likely to support the carbon tax than Conservative Party supporters,” the paper reports. “Similarly, in Switzerland, left-leaning voters were 48% more likely to support rebates relative to right-leaning voters.”People’s assessments of a policy tend to echo their tribe’s assessment, which they absorb through media and peers, not through an accounting spreadsheet. The amounts of money generally being discussed in carbon refund policies are not large enough to be life-changing for voters. The signal is not big enough to break through the noise of partisanship. Mildenberger summed it up for me over email:The entire [carbon refund] logic requires that large parts of the public understand that they make more money from their cheque than they are paying in taxes. But this is not what we see in Canada. And it's no surprise. As long as one group of actors spends its time sensationalizing and dramatizing the costs of carbon taxes, then many people will think they are not being made whole. Why should we expect — in an American society where even basic facts are politicized and vast portions of the public accept outright misinformation — that carbon taxes will be immune to this? What matters is not the actual material reality of people's circumstances, but their perceptions of those circumstances. (my emphasis)That last line squarely identifies something that Democrats have long been loath to accept. In a sense, carbon refunds are the latest expression of a long-time technocratic dream: that a policy can be so sensible, such a net benefit for so many people, that it will transcend politics. It will argue for itself and its logic will be irrefutable.But if we’ve learned anything in these past few years (and I fear we haven’t), it’s that nothing transcends politics. Nothing is experienced directly by voters, not even money showing up in their bank account. Everything is mediated.Politics in the US has been nationalized and fully subsumed by the culture war. No policy, no matter how cleverly designed, can get around that. In our present partisan and information environment, the measurable effect of a carbon refund on voter finances may carry less weight than advocates hope. Get full access to Volts at www.volts.wtf/subscribe

Recently, there’s been a lot of talk in the energy world about the minerals needed by clean-energy technologies and whether mineral supply problems might pose a threat to the clean-energy transition. To hold warming beneath 1.5°C over pre-industrial levels, the world must cut greenhouse gas emissions in half by 2030 and reach net zero by 2050. To do that, it must radically ramp up production of solar panels, wind turbines, batteries, electric vehicles (EVs), electrolyzers for hydrogen, and power lines. Those technologies are far more mineral-intensive than equivalent fossil fuel technologies. “A typical electric car requires six times the mineral inputs of a conventional car,” writes the International Energy Agency (IEA), “and an onshore wind plant requires nine times more mineral resources than a gas-fired plant of the same capacity.” (The IEA report uses the word minerals to refer to the entire mineral and metal value chain from mining to processing operations, and I do the same here.)Power transmission and distribution require aluminum and copper. Batteries and EVs require cobalt, lithium, and nickel. Wind turbines require rare earth elements. And so on.In its encyclopedic 2021 report on the subject, IEA estimates that “a concerted effort to reach the goals of the Paris Agreement would mean a quadrupling of mineral requirements for clean energy technologies by 2040. An even faster transition, to hit net-zero globally by 2050, would require six times more mineral inputs in 2040 than today.”Some individual minerals will see particularly sharp jumps. The World Bank says, “graphite and lithium demand are so high that current production would need to ramp up by nearly 500 percent by 2050 under a [2 degree scenario] just to meet demand.”A clean-energy transition sufficient to hit 1.5° will mean an enormous rise in demand for these minerals.This fact has been seized on by a variety of people to raise questions about the speed and sustainability of the clean-energy transition. Are we just trading one resource curse for another?So I looked into it. It’s a complicated subject — each of these minerals poses its own specific challenges, with its own specific suppliers, supply lines, customers, and possible pain points. There’s no neat single story here.Nonetheless, I’ll try to summarize what I found, starting at the end, with what I think are the key big-picture lessons. In the next post, we’ll get into specific technologies and minerals.The clean-energy transition will be an environmental boonYes, it is true that demand for minerals will rise and that several of those minerals are currently produced in environmentally and socially problematic ways. This is a real problem — or rather, a whole nest of problems, which warrant concern and concerted action.That being said, it’s important to keep in mind that, even under the grimmest environmental prognostications, the transition to clean energy will be a boon for humans and ecosystems alike.It will certainly involve lower greenhouse gas emissions. The World Bank says that, under a 2 degree scenario, through 2050, renewable energy and storage would contribute approximately 16 gigatons of carbon dioxide equivalent (GtCO2e) greenhouse gases, “compared with almost 160 GtCO2e from coal and approximately 96 GtCO2e from gas.”If the concern is material intensity, energy researcher Saul Griffith has done some back-of-the-envelope calculations that put the transition in perspective. Here’s what he told me:Assigning all 328 million Americans equal share of our fossil fuel use, every American burns 1.6 tons of coal, 1.5 tons of natural gas, and 3.1 tons of oil every year. That becomes around 17 tons of carbon dioxide, none of which is captured. It is all tossed like trash into the atmosphere. The same US lifestyle could be achieved with around 110 pounds each of wind turbines, solar modules, and batteries per person per year, except that all of those are quite recyclable (and getting more recyclable all the time) so there is reason to believe it will amount to only 50-100 pounds per year of stuff that winds up as trash. That is a huge difference: 34,000 pounds of waste for our lifestyles the old way versus 100 pounds the new, electrified way. These are only illustrative figures, but they show that the scale of resource extraction in a decarbonized world will be vastly, vastly smaller than what’s required to sustain a fossil-fueled society. Close to 40 percent of all global shipping is devoted to moving fossil fuels around, a gargantuan source of emissions (and strain on the ocean) that clean energy will almost wipe out. In a net-zero economy, there will be, on net, less digging, less transporting, less burning, less polluting.The fact is, fossil fuels are a wildly destructive and inefficient way to power a society. Two thirds of the energy embedded in them ends up wasted.That inefficiency has been rendered invisible by fossil fuels’ ubiquity and the lack of alternatives. Now that alternatives are coming into view, it’s clear that any shift away from mining, drilling, transporting, and combusting fossil fuels will dramatically ease human pressure on the biosphere and the atmosphere. Again — I can not emphasize enough — this is no reason to ignore or gloss over the very real environmental impacts of mineral mining, processing, and transport. Though overall environmental pressure will ease in a clean-energy world, it will be concentrated in new places, among people who may not necessarily enjoy the benefits of the transition. There are ugly and cruel ways to go about an energy transition, and there are sustainable and equitable ways to go about it. I’m strongly in favor of the latter and encourage everyone to do what they can to bring that about.Nonetheless, either way, the broader cause is environmentally righteous.These minerals are not rare and there’s no shortage of themAnother common misconception is that the clean-energy transition could fall short because there simply isn’t enough of certain minerals — this especially comes up around the somewhat misleadingly named rare earth elements (REEs). It’s not true. Known reserves of all these minerals, including REEs, are much higher than demand, and “despite continued production growth over the past decades, economically viable reserves have been increasing for many energy transition minerals,” IEA writes. Reserves will rise further with new exploration and detection methods. Currently, demand is forecast to grow much faster than supply. As that happens, there are bound to be chokepoints and price fluctuations. But those stresses will be temporary, especially if policymakers anticipate and prepare for them. New caches of minerals will be found and recycling will increase in scope and effectiveness. There will be supply problems, but there is no Supply Problem, no global scarcity of any mineral that will put a hard limit on the transition. Minerals do pose risks to the transitionTemporary minerals shortages or disruptions could result in “more expensive, delayed, or less efficient [energy] transitions,” IEA says. Here’s how it summarizes the risks to the transition posed by minerals supply:(i) higher geographical concentration of production, (ii) a mismatch between the pace of change in demand and the typical project development timeline, (iii) the effects of declining resource quality, (iv) growing scrutiny of environmental and social performance of production, and (v) higher exposure to climate risk such as water stress, among others.None of these risks is prohibitive, but if they are not managed, they could slow the transition. Let’s go through them one at a time.Geographical concentrationProduction of the minerals needed by clean energy technologies is currently more geographically concentrated than oil and gas production.No single producer dominates in oil and gas markets the way the Democratic Republic of Congo (DRC) dominates cobalt, China dominates graphite and REEs, and Australia dominates lithium. Similarly, processing of these minerals — refining and preparing them for industrial applications — is highly concentrated, but mostly in one place: China, which processes around 40 percent of copper and nickel, around 60 percent of lithium and cobalt, and around 85 percent of REEs.The US, like most developed countries, has become highly import-dependent in minerals. According to a recent commentary from scholars at the Colorado School of Mines’ Payne Institute for Public Policy, “of the 35 critical minerals identified by the US today, 14 had a 100% net import reliance in 2020, and 14 additional minerals have a net import reliance of greater than 50%.” The risk of this concentration is not so much that any one country will try to pull some kind of Bond-villain crippling of the world economy, but simply that the fewer producers or processors involved, the more it matters when any one of them runs into regulatory changes, trade restrictions, or political instability. When there’s a robust ecosystem of producers, one country’s bumps can be absorbed. But when there’s only a handful, any bump ripples out as rapid fluctuations in price. These markets are relatively small, but will grow quickly under decarbonization, so more and more countries will be vulnerable to price fluctuations. In the oil and gas world, there are energy-security measures in place, including strategic stockpiles of some fuels, but there’s not much of that in place for minerals, at least not yet. And markets for minerals are in many cases much more opaque than markets for oil and gas, lacking a shared set of metrics and transparent pricing. At least through 2025, IEA does not expect the level of concentration to change much.Aggressive investment in alternative supplies can decrease concentration eventually, but in the short term, solutions will involve drawing producers into more transparent market frameworks, pressuring them to improve social and environmental performance, and developing some buffer reserves of critical minerals.Timing mismatchDemand for minerals is already rising and will accelerate rapidly in coming years. Unfortunately, exploration, discovery, and exploitation of new mineral resources are marked by substantial lead times, in some cases over 15 years.“These long lead times raise questions about the ability of supply to ramp up output if demand were to pick up rapidly,” IEA writes. “If companies wait for deficits to emerge before committing to new projects, this could lead to a prolonged period of market tightness and price volatility.”To keep up with demand, investors need to think ahead. And lead times need to decline, which will involve substantial investment and governance help from wealthy consumer nations to poorer producing nations. Declining resource qualityIn recent years, two trends have driven down the average resource quality of many minerals: first, the known high-quality deposits have been mined, and two, technological advances have allowed the mining of ever-lower-quality resources. “For example,” IEA writes, “the average copper ore grade in Chile has decreased by 30% over the last 15 years.”As resource quality declines, the emissions intensity of mining rises, as does the amount of waste. Concerted action and investment will be needed to counteract this trend.ESG scrutinyA growing chorus of consumers and investors is calling on the mining sector to take action on its labor and environmental standards and rising carbon intensity. They want companies to disclose concrete plans on environmental, social, and governance (ESG) issues. This is a big deal in the sector, as the majority of production of many key minerals now takes place in countries with low governance scores and/or high emissions intensity. This is something clean energy advocates have been loath to talk about, but given the coming boom in minerals, silence is no longer an option. The Payne commentary says, “reports have found as many as 255,000 artisanal cobalt miners in the [Democratic Republic of Congo], 35,000 of whom are children working in exceedingly harsh and hazardous conditions to produce the materials many people use in their $100,000 electric vehicles (EVs) and other ‘clean’ technologies.” Lithium, cadmium, and REEs are all produced in ways that damage soil and water and release hazardous chemicals that threaten miners and surrounding communities. ESG pressure from governments and the private sector could have a salutary effect on social and environmental performance, but it could also place upward pressure on prices and additional burdens on small-scale artisanal miners, which could pose political problems in some countries.Exposure to climate extremesProduction of clean-energy minerals is increasingly exposed to climate extremes. Lithium and copper are perhaps the two most important minerals in an electrified world. Over half the world’s lithium production takes place in areas under high water stress. In Chile, 80 percent of copper output comes from arid or water-stressed regions. Other producing regions like Africa, Australia, and China have seen increased extreme heat and flooding. Expanding demand could push production into even more vulnerable areas. Anyway, those are the risks. In a later post, I’ll get into strategies and policies that can help address those risks. Minerals are the new geopolitics: like oil & gas, but notRight now, clean energy is a fairly small source of demand for the minerals discussed above, but its share is projected to grow rapidly under a Paris-compliant scenario, to well over half of global demand for lithium, cobalt, and nickel by 2040.Just as clean energy will be more important to minerals markets in coming years, so too will minerals be more important to clean energy. The rapid deployment of technologies crucial to decarbonization is going to depend on supply chains that are in many cases dominated by one or a handful of countries, fed by mines with low labor and environmental standards, exposed to rising climate extremes, and vulnerable to political and economic disruptions. All of those risks could slow the transition.The race for minerals courts some of the same dangers that came with oil and gas. Minerals will become crucial to the global energy system and their distribution — both production and consumption — will shape geopolitics. Unplanned supply disruptions could have global consequences, just as with oil and gas. But it’s also important to remember that minerals are different from oil and gas in crucial respects. The most important is that fossil fuel technologies require continuous fuel input. If there’s a disruption in oil markets, it is experienced by every driver as an ongoing increase in gas and diesel prices. Minerals are only essential to building of clean energy technologies, not to operating them. They are a materials input, not a fuel input. Supply disruptions or price fluctuations will affect markets for the technologies, but they will not affect existing users of those technologies. Solar energy from existing panels will not get more expensive just because copper does. This insulates minerals somewhat from the volatile consumer politics of fossil fuels.Secondly, every country in the world has an established relationship to oil and gas — it’s a producer or it’s not — but minerals and mineral markets are much more varied and dispersed. Countries could consciously decide to become producers by exploiting new reserves; they could invest in processing or manufacturing; supply chains will shift and morph. “Individual countries may have very different positions in the value chain for each of the minerals,” IEA writes. This makes the geopolitics of minerals more complicated than fossil fuel geopolitics.As we’ll see in the next post, the exact course of minerals markets is difficult to predict in advance, because there is rapid development and innovation going on in clean energy. Exactly what minerals will constitute the final balance in a clean-energy world is unknowable at this stage. But there are predictable stresses ahead and policymakers should strive above all not to do what they’ve so often done with oil and gas — namely, stumble blindly into crises that end up having terrible economic and political consequences. The speed and success of the clean-energy transition depend on a thoughtful and cooperative approach to minerals supply. Get full access to Volts at www.volts.wtf/subscribe

Hey Volties! As you know, last week I interviewed Don’t Look Up director Adam McKay for the podcast. Then the talented folks at Canary Media’s Carbon Copy podcast (which you should subscribe to) interviewed me — about the movie, climate change in art, and McKay — and interweaved bits of that interview with bits of my interview with McKay.The result is the first-ever Volts/Carbon Copy crossover episode! They did an amazing job. Even if you’ve already listened to my interview with McKay, I think you’ll get something out of it. If you didn’t have time to listen to that 90-minute conversation and would prefer the 30-minute highlight reel … here it is!Let me know what you think and if you’d like to see more crossover episodes in the future. Get full access to Volts at www.volts.wtf/subscribe

In this episode, international scholars Jason Bordoff and Meghan O’Sullivan discuss the geopolitical tensions that could be caused or exacerbated by the clean-energy transition, including supply constrictions in oil and gas and the geographical concentration of key clean-energy minerals. This episode is a great antidote to the notion that clean energy is going to make for smooth sailing in geopolitics.Full transcript of Volts podcast featuring Jason Bordoff and Meghan O’Sullivan, January 19, 2022(PDF version)David Roberts:When one contemplates the thorny geopolitics of oil and gas — with its century-long string of crises, conflicts, and moral compromises — it’s easy to think that the transition away from fossil fuels to clean energy will usher in a saner and more peaceful world. And that may happen, in the long term, once the transition is complete. But the road from here to there, over the course of the next few decades, is likely to be bumpy. Policymakers need to start planning for the predictable disruptions headed our way.That is the message of a recent essay in Foreign Affairs by Jason Bordoff, director of the Center on Global Energy Policy at Columbia University, and Meghan O’Sullivan, longtime foreign policy operative and professor of international affairs at the Harvard Kennedy School. Bordoff and O’Sullivan outline a number of risks the world faces in the short- to mid-term as it endeavors to ramp up clean energy and ramp down fossil fuels. Investment in fossil fuels could decline faster than demand, which would perversely strengthen the position of Gulf states sitting on the cheapest oil. Production of the minerals needed to build clean-energy technologies is highly concentrated, often in countries with unstable politics and poor or no labor standards, like the Democratic Republic of Congo. Processing of almost all clean-energy minerals is heavily concentrated in China, giving it enormous leverage and exposing world markets to economic or political upheavals there. Trade sanctions or tariffs could slow the spread of innovations. The US’s inability to get its act together could sour relations with the EU, which is moving ahead with ambitious, coordinated policy. And so on. Clean energy will eventually diminish the sway of fossil fuel geopolitics, but the transition will create its own geopolitics, its own tensions, disputes, and chokepoints. I’m eager to talk to Bordoff and O’Sullivan about some of those risks and what might be done to prepare for them. Jason Bordoff and Meghan O'Sullivan, welcome to Volts. Thanks for coming.Jason Bordoff:  Great to be with you. Thanks for inviting us.Meghan O'Sullivan:  Thank you, Dave.David Roberts:   I want to begin by quoting your great piece in Foreign Affairs. You say: “Talk of a smooth transition to clean energy is fanciful. There is no way that the world can avoid major upheavals as it remakes the entire energy system, which is the lifeblood of the global economy, and underpins the geopolitical order.” In a sense, the whole piece is addressed at a naive view of what the clean energy transition is going to involve. A lot of people think there's all this messy, nasty geopolitics around oil and gas, and if we just subtract that, then you have a world that's running smoothly and at peace. Can you, at a high level, describe why people have that naive view and why you think it's wrong?Jason Bordoff:  You describe the motivation for the piece very accurately. I recall sitting a few years ago at a round table at the Munich Security Conference, talking about Nord Stream 2, a pipeline very much in the news these days as the US and Russia try to see if we can prevent conflict in Europe. There was a comment that I remember: “Why are we spending so much time on this? It won't matter soon anyway, because the geopolitics of oil and gas is simply going to fade.”That struck me — and Meghan as well, because we've talked a huge amount about it — as simplistic. The geopolitics of energy since at least the Arab oil embargo in the early 1970s, probably much longer, has largely been about oil and gas, whether it's the concerns about OPEC’s control over oil markets, or Russia's gas supply into Europe, or anything else. So it's a hopeful vision to say, when we decarbonize and move away from oil and gas, those geopolitical risks will become a thing of the past. We were making two points in the piece. One is that, that end state of beyond oil and gas is pretty far away. There's a multi-decade period when you have the new geopolitics of clean energy layered on top of the old geopolitics of oil and gas — and even a net-zero world is not zero oil and gas, necessarily. But also, there will be new risks created by the emergence of clean energy, from critical minerals, to trade conflicts, to new zero-carbon fuels like hydrogen and ammonia that might move around by ship — a range of new issues that we want to make sure people are thinking about, because our concern is that those geopolitical and national security risks, if we're not addressing them, might actually undermine our ability to move as quickly as we need to to decarbonize.Meghan O'Sullivan:  Intellectually, in the foreign policy and climate communities, when we first started talking about geopolitics, there was this focus on “what does success look like” — imagining a world, say it's 2050, where the global economy is fully decarbonized. I was part of that effort, along with some of Jason's colleagues from Columbia, and focused on painting that picture. Jason and I both agree that it's feasible, when the world is fully decarbonized, that maybe the geopolitics of energy will be more copacetic. But what the piece does, and the focus of Jason’s and my work these days, is to say, that almost feels theoretical. What matters for the short and medium term — not discounting the long term — is what is going to happen in between. Here we're going to have, not the geopolitics of oil and gas gradually and incrementally giving way to the geopolitics of new energies, we're going to have them, as Jason said, layered on top of each other. November/December was a great example of this, where you have the COP, and all the enthusiasm and energy around faster decarbonization and how important it is for the world, at the same time where you had an energy crisis unfolding in Europe, where Russia was playing the same old cards in the old geopolitics of natural gas. This is going to be the screenplay of the next couple of decades, where both of these things happen simultaneously.David Roberts:   One of the risks you bring up is that, due to social pressure in the developed world and changing social mores, there's a lot of pressure to shut down [fossil fuel] production in some countries. There's a risk that production could decline before demand declines, which will have the effect of empowering those countries that are still producing. Say a little bit about what that might look like in the short term.Jason Bordoff:  We're seeing it right now. There is a lot of concern that in the next several years we're going to go through a supercycle of commodity prices — in part because of underinvestment, not entirely because of the energy transition and social pressures, but that's certainly part of it. Also, the pandemic and how quickly you can ramp up investment and supply chains and all the rest. We had the IEA tell us very clearly in their landmark Net Zero report that if we were on a pathway for net zero by 2050 — which sadly, we're not, but if we were — we would not need investment in new oil and gas supply. Those broad messages, along with social pressures and divestment pressures and everything else, have some impact, along with the uncertainty over, what is the outlook for oil demand? When is it going to peak and start to decline? That pulls back capital, or maybe raises the cost of capital. But oil demand is still going up each and every year. Natural gas demand is still going up each and every year. If you look at the data, the last two years we have been investing as much in oil and gas as we should be if we were on track for net zero by 2050. The problem is, if we were on track for net zero by 2050, we should be investing more than three times as much in clean energy as we are. So we are not investing enough in energy to meet demand. Ideally, we would do that not by dramatically ramping up oil and gas spending, but by dramatically ramping up clean energy spending. But it's hard to scale it that quickly, especially if the policy support is not there. So there is a risk that underinvestment could lead to energy crunches and price spikes. Again, you see the political response in Europe where there's an energy crisis this winter, in high gasoline prices in the US and the need for the administration to feel it has to release the SPR in response to oil prices that weren't even that high, $80 a barrel. That kind of public concern about higher energy prices risks undermining support for stronger climate policy, I fear.David Roberts:   Not just passively undermining. We're seeing this today: every time there's one of these fluctuations or disruptions or price spikes, there are a lot of people out there who want to blame it on the clean energy transition.Meghan O'Sullivan:  I’ll add something to Jason's response about the real problem of underinvestment and how this could create some of these imbalances. Your question was about empowering old producers. The underinvestment story is the big story there, but there's also a wrinkle that doesn't get as much attention.When we look at the scenarios, including the IEA’s net-zero 2050 scenario, they all acknowledge that there will still be some role for oil and gas, even in a fully decarbonized global economy — those carbon emissions should be taken care of by carbon removal or some other technologies that still need to be developed. But that's generally part of the picture. So the reality is that there are going to still be some oil producers — a smaller number, collectively producing a smaller amount of oil — in the future. Who are those producers going to be? It's likely going to be those producers that have the lowest-cost production; the oil that has the lowest carbon footprint. Those tend to be the big producers in the Gulf: Saudi Arabia, the United Arab Emirates, maybe even Iraq. So even in a fully decarbonized world, those countries are still probably going to have some geopolitical influence, because they're going to be producing a larger share of a much smaller pie.Jason Bordoff:  You made an important point, Dave: you're right that often people do point to dislocations and energy crises and attribute everything to the clean energy transition, and that's not right. The Texas energy crisis was blamed on wind, and we know with post hoc analysis it was mostly about failed natural gas production and infrastructure. Some of that's true in Europe as well. But I do think there's a broader harbinger of risks that may be to come. A point we make in the piece is that it's hard to imagine why we think it should be smooth to take the global energy system, which is something at massive scale, and turn it on its head almost overnight. Vaclav Smil's work and everything else tells us a quarter century to get to a net-zero economy is really fast by standards and energy history. We're going to make missteps. We're going to get policy shifts — we go from Obama, to Trump, to Biden. We're going to get certain technologies wrong. There's not a master planner, so we have individual decisions by individual utilities, individual investors; we build parts of the grid, and then maybe we retire parts before the system's ready to handle it. We have to think about how to build more tools in to smooth volatility, because we're going to get some things wrong in this transition. To the extent we get them wrong and that leads to price spikes or geopolitical risks, again, that's going to undermine our climate ambition.Meghan O'Sullivan:  To underscore the point that Jason just made, one of our concerns is that the geopolitical impacts are not sufficiently understood and that there is risk that these geopolitical impacts end up being the greatest risk to a successful transition. People thinking that high oil prices are because of the clean energy transition haven’t been very accurate thus far, but the perceptions often shape the policy. We think about how trade became such an incredibly divisive political issue here in the United States. A lot of the job displacement was actually because of technology and automation — but that doesn't really matter. When we're looking at transition, that's going to be dominantly driven by policy. We want to try to make sure that doesn't happen.David Roberts:   Let's pause for a moment and talk about Russia. I can imagine the role the rest of the world plays in the clean energy transition and a happy ending for them at the end of that story. But with Russia, they're totally dependent on gas for their geopolitical power and influence. They're already actively involved in trying to undermine the Western democratic order. As this transition proceeds, it seems like it's going to get pretty existential for Russia. There's a lot of potential for bad things to come out of that: a new Cold War, or for Russia to redouble its efforts at undermining other countries. I can almost figure out how to handle any other country, but what do you do about Russia?Meghan O'Sullivan:  This is a good point, and it's particularly apropos today, when we have the US and Russia meeting about geopolitical tensions. If you ask anyone who is likely to be a loser in the energy transition, Russia is always at the top of that list, and there's good reasons for that. As you mentioned, the dominance of oil and gas in Russia's economy has only grown since Putin became president. It's been pretty stark, and there is very little indication that the Russian leadership, Putin and the oligarchs around him, have any aptitude for doing the tough reforms that would be required to accommodate Russia to the new energy reality. The power structure now has a lot to do with oil and gas, and that's likely to continue. But I'd say there are two important caveats. The first is, as we just discussed, that in the long run this looks pretty bad for Russia — there are a lot of things that we might want to plan for in terms of contingencies — but in the short-to-medium term, it's not necessarily looking so bad, because of the continued need for natural gas and because of Russia's ability to supply that gas at cheap prices. The second is that Russia is not like some other countries that we might talk about. It does have areas where it could become quite important and influential in the energy transition and have it be lucrative and also have it be geopolitically influential. The two that come to mind are, first, hydrogen. Russia could become a hydrogen power; it would require a lot of strategy and investment. The second is nuclear, where Russia already plays an outsized role in global development. Clearly, if the energy transition is going to be successful, there's going to have to be greater use of nuclear power around the world. Russia could find that to be economically useful, and also geopolitically useful. To answer “what do we do” directly: the base case that I would plan for if I were still a policymaker would be to game out and prepare for Russia being a spoiler of the energy transition going forward. We saw that when we were looking at the shale gas unconventional boom in the US and the interest in Europe in recreating it there — Russia deployed a lot of tools to undermine the chances of countries in the EU developing their own shale gas. I imagine that, seeing this as existential, Russia would go to even greater lengths.Jason Bordoff:  I agree with what Meghan said about nuclear power. I wrote a column in Foreign Policy just a few days ago about why nuclear may finally be having its moment. Part of that is we need all zero-carbon tools on deck, and even then, it's going to be incredibly hard to get where we need to get to. But also a foreign policy consideration, which is that if the US doesn't exert more leadership in nuclear power, China and Russia are building the world's nuclear power plants, and that is a national security risk. Meghan’s point that Russia stands to be a loser and therefore will perhaps try to stand in the way of the transition is borne out by history and how it's participated in international climate negotiations and COPs in the past. The only thing I'll add is oil. Russia gets more revenue from the sale of oil than it does from the sale of natural gas. We wrote in the piece about why the potential for underinvestment — if that underinvestment in supply gets ahead of demand, you could see more price volatility, more price spikes — could mean we may need OPEC more before we need it less, to manage the energy price spikes that are harmful economically and politically. One of the interesting developments in the last several years has been Russia's stepping into a leadership role, where Saudi Arabia and Russia are now positioned as the head of the so-called OPEC Plus alliance — OPEC and a bunch of new member countries. That means if we want OPEC to help at certain points put more oil in the market, which is what the Biden administration has called for in the last year when energy prices went high, you're not only calling Riyadh; what happens in Moscow matters too.David Roberts:   This is almost the scariest possible answer: that Russia will be empowered in the short-term and mid-term and fearful of the long-term. That's a recipe for trouble. That's a good segue to the next broad topic. One of the things you write about is that the transition to clean energy is going to create new energy powers on several metrics. The first one you mention is one that people maybe don't think about very often, which is the power to set standards for the clean energy economy. Say a little bit about what this means and why standard-setting is a form of power.Meghan O'Sullivan:  This is an area where the Chinese have been very forward-looking and active. The United States only recently came to appreciate the power that comes in setting the standards, which is somewhat ironic, because the US has set so many of the standards globally. Maybe it just took it for granted that it could stay in that position. Setting the standards in the clean energy revolution has to do with compatibility, safety, materials — there are all kinds of examples we could use. But if we think about electricity and transmission grids and connectivity: around the world, there are many places like the United States that are going to have to revamp their energy architecture, but there are many countries that are going to be building energy infrastructure for the first time. In doing so, depending on what country or what body is governing that infrastructure buildout, and who is most influential in the setting of those standards, you could see how one country may get a competitive leg up. This could be a commercial advantage, but it could end up having political advantages as well, if it puts a country — say China, being potentially the most obvious — in a position of denying that country certain inputs that it needs for its energy infrastructure. It could go so far as cyber connectivity and allowing one country to harvest the data of another country. When we think about the clean-energy transition, we obviously are thinking about societies that are even more electrified than the societies we live in today.Jason Bordoff:  We highlight one place where it's particularly important; it’s part of the reason we would be concerned about Russia and China building the world's nuclear power plants, setting the norms for nuclear nonproliferation, setting the operational and safety standards. So that matters a lot. We know that in the clean-energy transition we're going to have a much more digitalized economy, a range of digital tools that help optimize the electric grid; we're going to need more demand-response tools. There could be commercial advantages if certain firms develop the standards and others have to play catch-up. There's also, of course, a host of cybersecurity implications as we see a much more interconnected grid.David Roberts:   The second form of power in the clean-energy economy is minerals and materials supply chains. Right now, countries who happen to be sitting on a lot of oil and natural gas get a lot of geopolitical power out of that. But when we transition to clean energy, we're going to need a few key minerals and materials: lithium, cobalt, copper, etc. Currently, supply chains for those minerals are highly concentrated; I think 80 percent of cobalt comes out of the Congo. China dominates the supply chain for lots of minerals, but also dominates the early processing of minerals; 80-plus percent of processing of all those minerals takes place in China. What's the danger? What do we worry those countries could do with that power?Jason Bordoff:  It's not just clean energy, of course; those critical minerals are essential in lots of technology and electronics applications. We've seen this with semiconductors before. China's embargo on the export of critical minerals to Japan in 2010 tells us what could happen. Global trading of critical minerals is going to skyrocket. In IEA’s scenario of what net-zero 2050 looks like, global trade in critical minerals goes from about 10 percent of all energy-related trade to about 50 percent. We're going to need a lot more of all those minerals you just talked about, and they're much more concentrated, so that's important to keep in mind. As much as we worry about the role of Saudi Arabia or Russia in the oil market, the top three oil producers — the US, Saudi Arabia, and Russia — each produce about 10 percent of the world's supply. When it comes to lithium and cobalt and rare earths, the top producer in each of those produces more than 50 percent of the world's supply. And as you said, the refining and processing is even more concentrated, namely in China. So in that sense, you worry about what that kind of dominance of a necessary input to clean-energy technologies could do if there was a conflict. We’re worried about what China might do in Taiwan in the years to come — if there was a conflict of that sort, if they were to cut off that supply, what implications it would have for the global supply chain. It's a real worry. We acknowledge it. It is different from oil, however, in a few important respects. One is that these critical minerals are not the daily flow of fuel without which the heat in your house turns off and you freeze in the cold, or your car doesn't work; it's an input to a finished good. So if we didn't have a supply of lithium, it would cause the market for new electric car sales to slow, it would be bottlenecks in the supply chain and everything else; it wouldn't affect your ability to get around today. It's not the electricity your EV needs, it's something that building the next EV needs. So you don't derive the same geopolitical influence from that. Also, whereas oil is to be found in certain places, geologically, there are a lot of these critical minerals around the world. It does take time, it's not easy. It's a 10- or 15-year process to develop new mines. But over time, you can diversify the supply chains, build refining capacity elsewhere, the technology to do recycling is getting much better. My engineering school colleagues at Columbia and elsewhere are pretty optimistic that the technology is going to improve where you can use much more plentiful minerals to develop batteries. So maybe our dependence on these things will decline over time as well. But if we get on track for net zero or anything close to it, the amount of clean energy that we have to deploy is so massive that we're going to need a lot more of these minerals and materials to come.Meghan O'Sullivan:  What we've written about, and the answer that Jason just provided, should bring down people's blood pressure about this in the medium- to long-run. I would underscore in the short- to medium-term, China does have a pretty significant advantage in terms of its dominance of supply chains of these minerals. I do think that is something that is rightly getting the attention of policymakers; it’s going to be a tougher challenge before it becomes an easier challenge. The one thing I sometimes hear that we can probably discount a bit is this idea that there's going to be an OPEC, a cartel of these countries that have these kinds of resources. There may be market conditions which could allow for that, but a cartel is also underpinned by common political objectives. So if you think about lithium, what do Bolivia and Australia have in common in terms of, what are they going to bound together on and hold the global economy hostage? It's hard to imagine exactly. Secondly, it's interesting to think about countries like the Democratic Republic of the Congo, which produces more than 70 percent of the cobalt in the world today. I don’t imagine the Congo is going to challenge the United States directly, but it probably will be able to use that reality to shine a light on some of its needs and problems, to up its priority in terms of where resources from the rest of the world go when they go to Africa, the attention given to the conflict there. Those things are likely to happen. So they are going to influence foreign policy, but maybe not in the hostage-taking kind of way that our instinctive reflection back to 1973 makes us think about.David Roberts:   When you think about the history of oil and gas, the history of colonialism is highly related. We've seen poorer countries who discover oil or gas basically become resource colonies for the West — they get terrible governance and poverty and we get the resources. If you look at something like Democratic Republic of Congo with 70 percent of the cobalt … seems like a pretty good prediction that we're just going to create a new set of resource colonies. Are there ways in advance to head that off?Meghan O'Sullivan:  That is a legitimate concern. I don't have the numbers on the tip of my tongue, but I seem to recall that from what we can discern, the terms of the contracts of the Chinese investment in the Democratic Republic of the Congo for the cobalt there are really, really unfavorable to the people living in the DRC. So there's legitimate concern for that.There's another thing that warrants even more concern and it's directly related, and that is this whole idea of the resource curse. Some of the resource-curse material has to do with foreign powers coming in and taking advantage of countries that are less well positioned to negotiate on behalf of themselves. But it turned out that, over time, the resource curse experience and literature focused a lot more on the huge influx of foreign currency that comes suddenly to a country, and their inability to be able to absorb it. Just because of the nature of foreign exchange into many of these economies, which don't have very developed industrial sectors, it creates all kinds of havoc in the economy. A lot of it is exacerbated when the country has a large population working in agriculture, or there's a history of conflict, all of these things that many of these countries actually do have. This phenomenon is called the Dutch disease. It's possible that a lot of these countries will be unable to handle that. To answer your question about what we might be able to do about that, I would say in the last 20 or 30 years, there's a lot more awareness of the fact that it doesn't have to be a resource curse, that there are a whole series of policies that a government can adopt to mitigate these negative effects. The problem is that it comes back to governance, and a lot of these countries don't have sufficiently well-developed institutions, governments that are willing to create constraints on their own behavior. That's what is needed in order to ensure that these kinds of economic dislocations don't happen.David Roberts:   The influx of a bunch of money also reduces domestic pressure to build a more diversified and stable economic base.Jason Bordoff:  It's the risk a lot of petrostates face now, trying to think about what a world where they can rely less on petrodollars will look like. They're trying to diversify their economies and as we're seeing, that's hard to do — the resource curse issues, the human rights issues. You can hopefully develop global standards. Maybe the best example of this is the Kimberley Process for diamonds. If you have standards and some oversight — that's hard to do — we can avoid some of those issues. The other piece of critical minerals is not just the human rights and colonialism concerns, but also the environmental impacts. This is mining, and it does have environmental impacts, and we have to do it at such a larger scale. When you look at how much lithium we need, it is hard to do that level of extraction without environmental impacts.David Roberts:   Another source of possible concentration of power is the manufacturing of the components of the clean energy economy. You say in the piece that this is a less-firm sort of power, since manufacturing can and often does spread out, and lots of countries are pursuing their own domestic manufacturing right now. But it made me wonder whether we know any historical precedent about this. Is it going to be a natural process for the manufacturing of these clean energy components to spread out and become a diverse global market? Or do you think there will in the end be manufacturing superpowers that have some geopolitical power as a result of having a lock on manufacturing?Meghan O'Sullivan:  There are a couple of interesting and important aspects to this. If we thought of a world where it was just about competitive edge and what was going to advance the energy transition the most quickly, you probably would have countries that would emerge — I don't know if you would call them manufacturing superpowers, but I think the best example is solar panels and China's dominance of that market. Now, if we didn't care about politics and we didn't even care about economics, we just cared about the energy transition, that wouldn't necessarily be such a problem. But there are going to be — we're already starting to see them — political efforts to try to ensure that countries are not reliant on one producer or one manufacturer of particularly critical inputs or elements of the clean energy technologies. A pertinent example of that is India. Starting this year, India is putting high tariffs on anything solar that comes from China. The purpose of this is twofold. One, India is incredibly sensitive about its geopolitical relationship with China, particularly after the hot war that threatened to erupt on their border in the last year or so. Secondly, India also wants to build a manufacturing base. It wants the jobs that it perceives will go along with that. So what we'll have is maybe more manufacturers, but it'll be less efficient and more expensive and will likely make the energy transition slower than it would otherwise be. Again, it's balancing these two things.David Roberts:   The one other source of power you mention, which I thought was intriguing, is that everyone anticipates a huge explosion in the market for zero-carbon fuels derived from hydrogen. You anticipate the emergence of “electrostates” that dominate the production of hydrogen fuels. What everybody wants to see is a transition to green hydrogen, which is hydrogen derived from renewable energy. So you might look to states with copious renewable energy to get into that. But the easier and cheaper route into hydrogen is through so-called blue hydrogen, which is made from natural gas, with the emissions allegedly captured and buried. I worry about countries with copious natural gas getting into the blue hydrogen game, making plentiful, cheap, blue hydrogen, and then having both economic and political incentive to delay the transition to green hydrogen. How do you see all that playing out?Jason Bordoff:  I find this particular dynamic interesting, because you do have to bend your mind a little bit to think about the world, not today, but in the future. Hydrogen is a topic du jour; you couldn't walk five feet at the COP in Glasgow without tripping over a hydrogen display or a new hydrogen company. Because we know that we have to electrify a lot of things, but some things are going to be hard to electrify: steel and shipping, maybe some other things like heavy duty trucks, we'll see if batteries win there. Again, I'll just refer to the IEA net-zero scenario, which finds global energy-related trade in hydrogen ammonia going from almost zero today to about a third. We need a lot more. We need fuel — molecules as opposed to electrons — but then we need those fuels to be zero-carbon. That's where you talk about hydrogen and ammonia, both blue and green. A big part of what we were trying to do in this piece is deconstruct how an end state of net zero might look vs. the pathway to get there, and how it could be different and how it could be rocky. In zero-carbon fuels, it comes into play in at least two ways. One is, you're talking about the emergence and development of a fairly nascent market. The analogy we gave — and it's not perfect, it bears some resemblance — is the early days of the liquefied natural gas market in the 1960s and 70s. When it was just getting off the ground, you had a few dominant producers, a few dominant buyers, and there was a lot more leverage than you have today in a much more integrated and flexible market. There’s a lot of suppliers, a lot of buyers; if someone threatens to cut off your supply, you go buy it somewhere else. In the early days, Japan has said it's going to be a big buyer of green ammonia; well, what if Saudi Arabia or Chile or just one or two countries supply that? If your entire steel sector depends on shipments from that country, that's a lot of leverage, and we could see some geopolitical risk there. The second is the one you raise, which is the focus on blue hydrogen today. Of course, if we're going to do that — natural gas combined with carbon capture — you have to make sure the oversight is strict, the capture rates are high, the methane leaks are low. You have some states, Qatar and others, that we could see focus on gas as a way to create hydrogen and then either move that fuel around as the fuel, like ammonia, or maybe just build the production facilities to turn the gas into hydrogen ammonia — in which case you still might have a lot of global trade in gas, you're just doing different things with it, you're turning it into a fuel as opposed to putting it in your power sector. I do think over time green hydrogen is going to end up winning, just because the costs will come down dramatically. You're right that states may try to stand in the way. To make green hydrogen work, you need a lot of improvements in electrolyzer costs, improvements in efficiency, and then you need really, really cheap renewable energy, and you need a lot of it. You need a lot of electricity. There are only certain places in the world where you have that much cheap renewable electricity, and those could become some of the dominant states producing low-carbon fuels in the years to come.David Roberts:Those could be not your usual suspects, right? Like Chile or countries in Africa. They have a lot of sunlight down there.Meghan O'Sullivan:  We would be looking at different countries emerging as potentially big actors on this side. Chile is certainly one of them. You need the things that Jason mentioned in terms of having a lot of cheap, renewable energy, but you also need water. Not every place on the earth has those two things in great abundance.Jason Bordoff:  We talked about the resource curse. We do talk in the piece about tensions between developed and developing economies, which were on full display at the COP in Glasgow and I think will be next year at the one in Egypt. When you talk to African leaders, who are worried about the impacts of climate and about not getting the support from developed economies they need to transition — some would like to develop their own hydrocarbon resources and monetize them. So what are the sources of revenue that could come from zero carbon rather than oil and gas? You're identifying one, obviously: lots of good renewable energy resources to produce their own energy, which hopefully will grow as they become wealthier. But it's hard to export electricity as electrons; maybe you can export it as fuels. The other thing that's interesting is, we just saw this Climeworks project in Iceland, the carbon-removal project. Why Iceland? They have cheap, zero-carbon energy in geothermal, and they have good geologic storage capability. A lot of African countries have that too. I was wondering whether you could imagine a source of revenue for some of the developing economies in the world where they are basically building the manufacturing capacity to pull carbon dioxide out of the air. The largest emitters, who are responsible for this problem historically, are sending revenue to those countries — a wealth transfer from rich to poor countries, in part to remove carbon dioxide.David Roberts:   When most people think about the future, they imagine increasing globalization of trade in these resources. But there's also a section of your piece about trends and forces working against further globalization in the clean-energy space. One of them is, as you just mentioned, electricity.The energy game is going to turn to electricity, mostly; electrification is going to be the primary tool against climate change. Every country is going to be trying to electrify, and thereby using more electricity, and therefore electricity is going to be a bigger part of this energy picture. As you note, electricity is not really a globally traded commodity. Very little electricity crosses country lines. I've been thinking about that a lot: as more and more of your energy processes are internal to your country, does that reduce the prominence of geopolitics? How do you see that playing out? There are some other trends working against globalization too, if you want to mention them.Meghan O'Sullivan:  We can imagine the 2050 world, the fully decarbonized world, being one where a lot of forces favor globalization, because of the need for robust trade in energy technologies and clean energy inputs. But in the interim, and to some extent looking even beyond that, there are several factors that are going to pull away from globalization. Electrification, as you mentioned, is one of the greatest ones. We have two statistics in the piece that underscore the point you made. In 2018, less than 3 percent of global electricity was traded across borders. That's compared to two-thirds of oil supplies in 2014. So there's this huge discrepancy. The reasons are simply that it's hard to transport electricity; it's hard to store it and it's hard to ship it.Jason Bordoff:  And it’s a much greater security risk, too. You can store oil in salt caverns, you can buy oil from a different supplier. If you depend on your neighboring country to send you electricity to keep the lights on, that country has a lot of power over you.Meghan O'Sullivan:  Right. But on the question about to what extent this is going to change things, I think there is going to be an element that's going to be more inward-looking. So if a country is providing more of its own energy sources from within its own borders, it won't have to be accounting for those shipments of oil and gas coming from afar. However, it does create some other new concerns. Those have a lot to do with cyber security and the manipulation of electricity grids. Some of these electricity grids will be all contained within countries, but others will cross borders — not in a global sense, but in a sense that may foster more regionalization. So if you think about the Northeast of the United States, we get a lot of our electricity from hydro sources in Canada. You can imagine small countries — think about some countries in Latin America — that if they're going to build electricity grids that are reliant on renewable energy, it probably makes sense for these grids to be large enough to serve more than one country. So suddenly, the politics of your neighbors and your relationship with your neighbors are going to be potentially even more important than they were in a world where you were getting your energy sources from halfway around the world. There will be a lot of effects like that. The other factors that we mentioned have to do with the protectionism that we've started to see go hand-in-hand with some clean-energy technologies. I gave the Indian example, but there are others. David Roberts:   It's worth noting: lots of protectionism in the Build Back Better Act, right? The Biden administration is actively pursuing that.Meghan O'Sullivan:  Exactly. Jason Bordoff:  One other striking statistic, to the original question you framed: we were talking about some of the ways global energy-related trade shifts in the IEA net-zero scenario away from oil and gas to critical minerals or hydrogen. But the other finding is that total energy-related trade in a net-zero world is only 38 percent, a little more than a third, of what it would be if the world were to stay at its current trajectory.It's not surprising, but it is striking that you have much more localized energy. The geopolitics of energy will wane in the long term for some reasons. There'll be new risks created too, but part of that is just electricity is inherently more local and less globally traded across borders. That's just going to reduce the importance of energy as a factor in geopolitics.David Roberts:   Let's talk about China. So vexing. On the surface, one of the conclusions of your piece is that some countries are well-positioned to benefit from the clean energy transition and others are not, and two of the countries that are positioned to be winners are the US and China. You might think the US and China then have enormous incentive, being the two biggest economies in the world and the two potential winners here, to cooperate on accelerating this transition. There's a pot of gold at the end of the rainbow for both of them. Yet an outbreak of cooperation is not what we seem to be witnessing. China is such a black box to a lot of Americans, including me. What do you see as their posture on this? Why aren't they going faster? Why aren't they cooperating more? Why isn't it in their interest to go gangbusters after this?Jason Bordoff:I do think that China takes climate change seriously; there are not a lot of climate deniers in the Chinese government. At the same time, when climate ambition or environmental concerns generally — it's not just climate, it's local air pollution throughout China, which in some major cities has been getting better, partly because of less coal, partly because they've shifted coal to other parts of the country where there are fewer people, which doesn't help the climate — but when that comes into tension with economic growth, economic growth usually wins. So there is this dynamic playing out within China about how quickly they're going to move and what technologies they're going to use. Of course, they use half the world’s coal, so there's no solution without China to dealing with climate. It was encouraging to see their announcement about not financing coal plants overseas — hopefully that will prove to be true. One of the reasons for the difficulty in US-China cooperation on climate — even though there are many reasons; this is the ultimate tragedy-of-the-commons problem, it doesn't matter where a ton of carbon dioxide comes from; if one country does this, it's not going to matter if we don't work together — is whether you can segment the issue of climate from the rest of the US-China relationship, which is incredibly contentious and at its lowest point in many decades. That was the hope, and that was what John Kerry as climate envoy said the goal would be. It's unclear whether China wants to segment climate, whether it says, well, if we're going to act on climate, we have these other concerns with Taiwan, or human rights, or intellectual property, or anything else. It was encouraging to see at the 11th hour an agreement at the COP in Glasgow that the US and China would commit to work together. But the last year would have been better if they'd actually been working together and had something to show for it. Hopefully that will change moving forward. The other factor in this is, if some countries are not moving as quickly as one might hope — and by the way, the US may be in that category; we'll see what happens in Washington in the coming weeks and months — increasingly you are going to see certain countries or groups of countries like the European Union either encourage or try to compel other countries to do the same. The starting point for that, of course, is the European Union saying it's going to put carbon border adjustments in place. But it's easy to imagine those extending beyond a tool to level the playing field on imports of carbon-intensive products to your country, and turning into coercive measures not that dissimilar from sanctions. If you roll the clock forward and say where could this go, those could be applied against China or, if we don't get our act together, maybe against the US one day.Meghan O'Sullivan:  On the point about the bilateral relationship, I do think that the Biden administration, with the appointment of John Kerry, came to this issue thinking: it's so important, we're going to be able to deal with it separately. And the Chinese have resisted that pretty firmly — you're not going to be able to be aggressive on issues like Taiwan, the South China Seas, the Uyghurs, and then expect a kumbaya relationship on climate. That's been a disappointment to lots of us, in the sense we hoped that climate would be this island of cooperation in the otherwise contentious relationship, and also because many of us struggle to imagine how the world is going to successfully transition to a zero-carbon economy if there isn't cooperation between the US and China. David Roberts:   Do you interpret that posture of China’s as a rational way for them to balance climate against their other interests? Or do you think that the rational course for China would be to cooperate on climate where there's cooperation available and segment these other issues? In other words, are they angry and that anger is extending to climate? Or are they, do you think, being rational on a bigger scale? Meghan O'Sullivan:  I think it’s twofold. First, China's looking at this relationship and thinking, “where do we have leverage in this relationship?” One of the areas is in climate. The US is really, really keen for China to decarbonize, and even moreso in a Biden administration, because we all know if China doesn't do it, it doesn't really matter who else does it. So it would seem to def realist strategic thinking to say, “we're going to separate this area where we know we have a lot of leverage from all these other issues which we see as more existential.” They see Taiwan and other things as more existential to the survival of the Communist Party; climate is important, but not the same as Taiwan. So that is probably what has been going on.I'm sure there are people within the Chinese government arguing that they need this cooperation as a strategic leveling point in the relationship. This has always been one of the reasons I've thought cooperation is important, even apart from what it means for the climate. If there's one area where two rivals can work together, it is helpful for all kinds of reasons for the rest of their relationship. Now we're all faced with the reality that we need to envision a successful global transition and not assume that US-China cooperation is going to underpin it. That doesn't mean there can't be some areas of cooperation — the efforts that produced what was produced in Glasgow were are all worth it — but the reality is, this is going to be an area of intense competition, like many other areas of competition between the US and China. Trying to figure out how we can compete our way to success rather than compete our way to stalemate is the challenge going forward. That competition is going to be in technology and talent, inputs and markets and standards, it's going to be across the board. Maybe it can be a force for a quicker transition. I certainly hope so.David Roberts:   With a lot of these dynamics you're talking about, we're framing the long-term promise of a clean energy-based global energy economy vs. the short- to mid-term bumps and difficulties and frictions getting there. On that note, I have been thinking a lot about what it's going to look like if Trump and the Republicans take power again in 2024. We know enough now to have a pretty good sense of what their global posture is going to be. Trump loves Russia, loves autocrats, loves fossil fuels, and has a view of the energy transition which basically says those of us who still have oil and gas should exploit the hell out of it. It seems to me, in terms of solving the climate problem and the clean energy transition, Trump and Republicans taking power would result in the US basically being a rogue nation, an impediment on almost every front. I wonder if either of you have had the stomach to think about what that might look like and how to avoid the worst of it.Jason Bordoff:  I'm sure we've all thought about what the consequences of that would be. The overall future of the republic and our democratic institutions is perhaps even more concerning to me than what it would mean for climate change. But you're right, it would certainly be a massive setback for the United States on the global stage and put us in the category of countries that would be the target of these sorts of coercive measures. Others would reap many of the economic benefits of leading in clean-energy technology, trying to do the right thing by climate change. I don't want to sound Pollyanna-ish or naive, but I'm hopeful that increasingly you do see more on the Republican side of the aisle — and I wouldn't put Trump in this category, but others — who recognize this is a real problem, or recognize that climate change is real and are trying to talk about what the solutions might be, even if those solutions are certainly not at the scale of what they should be.I guess I'll put it this way. Even in that scenario you talk about, the impacts of climate are going to continue to play out in years to come. I work with students every day on a campus, so does Meghan; I know how passionate they are about these issues, I know how much higher it is on their priority list in terms of what they care about when they go to the ballot box — even if elected leaders for periods of time don't demonstrate that. We have this huge gap now between ambition and reality when it comes to climate change. The ambition is getting stronger, not weaker — 2 degrees, well below 2, 1.5, driven by the science — but the reality is not changing: emissions are going up each and every year, pandemic aside. So that gap between ambition and reality has to reach a breaking point. One of the two has to give. Either we're going to wake up one day and say, “this was just too hard, we thought we could do it, but guess we'll just be fine with 3 degrees” or whatever it happens to be — I find that hard to believe, given what we are seeing every day and what we know we're going to see in the years to come, and that sense of urgency that particularly the younger generation has. Then the reality has to change. The longer you wait to get started, the more disruptive it has to be. That's why we try to talk about some of the economic and geopolitical implications of that disruption — we have to manage them, or you're going to lose support for moving as quickly as we need to.David Roberts:   Is there a power out there that could realistically step in if the US basically gives up its leadership role entirely? Does the EU have the geopolitical clout to be the center of leadership on the transition in the way that you would hope the US would be?Jason Bordoff:  The EU has been leading in many respects, and it's a pretty sizable amount of global emissions. So if it works collectively, it can do that. I think other countries, like perhaps China or others, might step in as well. I do want to say that even in the scenario you describe — which is in many respects a worst-case scenario, from my standpoint at least, for US politics and climate ambition — even if that does not happen, we're still pretty far behind the ball. If we pass Build Back Better in DC, which is uncertain right now, that will help a lot; it certainly doesn't get us all the way to being on a pathway to meet our NDCs. We saw just in the last couple of days, the Rhodium Group analysis and some others, emissions and how much they went up last year. So even if it’s not a Trump 2024 scenario, but a Republican more in a traditional model or a Democrat were to win, we're still not doing what we need to do. That has to be addressed too. That's going to catch up to us as well.David Roberts:   This is extraordinarily difficult to answer, but: in the long term, if you are viewing the clean energy transition from a purely foreign policy realist perspective — that is to say, you don’t care at all about global welfare, the interests of the US are your top concern — do you think the US is going to benefit from the clean-energy transition? It's pretty well-positioned in a fossil fuel world: it's a giant producer, it's got a giant military, it's got long-term relationships in the Middle East. If you're just trying to talk to a foreign policy realist, do you think the US will be better or worse off in the world in a clean-energy future?Meghan O'Sullivan:  As you said, it's a very hard question to answer, because it depends how many things we're going to set aside. But my impulse is that the US is better in a clean-energy future. I'm assuming, but you can tell me otherwise, that the counterfactual to your counterfactual would be a world where there is extreme climate change, and that in itself, as we already know, is going to produce all kinds of national security ramifications. One estimate by the World Bank, which is actually a couple of years old so I imagine the estimate has only gotten larger, is that in 2050, there'll be 143 million climate refugees. That is compared to the world today, where there's something like 25 million refugees. So we're talking about this exponential increase in just that one area, which is obviously consequential, but that would have huge implications for the US, its security, its borders, its well-being, its global relationships, all of those things. So I definitely think a world where America has been a leader in climate change is good in terms of peace and security if we're talking about imagining 2050 or beyond. But I also think, domestically, that it can be good for the United States. There is a piece which we started with, which maybe some people find an inconvenient truth, but in a clean-energy future, there's still some role for oil and gas. So position it in a way that this isn't necessarily a fossil fuel world vs. a clean energy world, that it's a world against carbon emissions. When we frame it like that, there's a lot more scope for people to be contributors to a solution rather than detractors. So there are lots of good reasons why this is in the interest of the United States.David Roberts:   I can definitely see why it's in our absolute interest; solving climate change alone is enough. I guess my question was more about our position and power relative to the rest of the world.Jason Bordoff:  Meghan made the most important point; it's hard to disconnect your question from a world that suffers the worst impacts of climate change. Would there be people who lose more than the US in the Global South? Yes, but it's going to be pretty painful for everyone, including the US. To the extent there's been discussion of national security and climate, it has to date often been about the national security impacts of not doing something about climate change, suffering the impacts of climate change, and then the view is, “if we get our act together and have a successful clean energy transition, geopolitics of energy will be a thing of the past.” That's what we were trying to address: actually, it could be rockier than you think. But certainly the consequences of inaction would be much worse. You're right, the US is one of the largest oil and gas producers in the world, it derives a lot of economic benefits from that in states like Texas and others. But it has good resources to lead in a clean-energy economy too. There's no reason the Gulf Coast can't be a leader in global supply of hydrogen and ammonia. We have some of the best capabilities for innovation and new technologies here in the US; there are going to be lots more companies at the scale of Tesla and much bigger. We talked about nuclear as another technology. I think the US is well-positioned in many.Again, in our piece, we talked about the fact that part of dominance in clean energy is not going to come from the geologic trove you happen to have in the ground like oil and gas, but what you can manufacture cheaply, like a solar panel. There are countries that can manufacture things more cheaply than the US, but nonetheless, the US has a lot of assets, a lot of attributes, with good renewable energy resources, manufacturing resources, ports, geologic storage capability for carbon dioxide capture, that could position it to lead in a clean-energy economy too.David Roberts:   It might also be nice for the US to resume a pro-social leadership role in the world; that might also redound to our benefit in terms of gratitude and better relationships. Jason Bordoff:  I wrote a piece on that in Foreign Policy a year or so ago, about the case for green industrial policy. Part of that was some of the economic benefits you could derive at home by leading early in these technologies, like bringing down the cost of green steel, things that have a high green premium today. But it is also a form of climate leadership, because it's just not reasonable to expect some of the poorer parts of the world that are growing their emissions at the fastest rate, like Southeast Asia, eventually Latin America, Africa, to pay three times as much for the concrete and steel they need to build cities. If we can build those industries here and we can help drive the cost down because we're investing early, then that also makes that technology more affordable to others. I do want to say, though, that again, we shouldn't be Pollyanna-ish about this. We should recognize that there are losers to the transition: not just nation-states, but workers and states and certain industries. We do need a just transition. That phrase means a lot of things, but included in that is, we do need to think about people who work in the oil and gas sector in the US, not to mention countries that are dependent on these revenues, making sure that there are public policies in place to help those communities transition and capture some of the benefits of the kind of economy we could grow in the future. That's really important. We don't take that seriously enough sometimes.David Roberts:   Well, thank you two so much for taking all this time. I really appreciate it. I have a feeling this topic will only get more and more prominent and of interest in coming years, so maybe we'll talk again in a few years and see how things are shaping up.Meghan O'Sullivan:  Excellent. Thank you very much, Dave. It's great to be on your show.Jason Bordoff:  Yes, I love listening to it, so it's great to be on. Thank you. Get full access to Volts at www.volts.wtf/subscribe

In this episode, writer and director Adam McKay reflects on the critical and audience reaction to his movie Don’t Look Up. We also talk about making an emotional connection to climate change, some of the other climate-related projects he’s working on (or at least thinking about), and why he ended the movie the way he did.Full transcript of Volts podcast featuring Adam McKay, January 12, 2022(PDF version)David Roberts:The film Don’t Look Up, available on Netflix as of late last month, has become something of a phenomenon. It has drawn wildly varying, often quite personal and intense, critical responses. Its critics’ score on Rotten Tomatoes is just 55 percent.But climate scientists loved it. I loved it. And the public loved it. Its audience score is 78 percent. In the week of December 27, it broke a Netflix record, with more than 152 million hours of streaming. As of this week, it the second biggest movie ever on the streaming service (just behind Red Notice, just ahead of Bird Box).Audiences have ignored critics and embraced the film, which is not something you’d necessarily predict for a thinly veiled climate change allegory about the difficulty of grappling with bad news in today’s information environment, especially one with such a (spoiler alert) bleak ending. It’s not the first successful curveball thrown by its writer and director, Adam McKay. McKay first made a name for himself as head writer on Saturday Night Live. In the early 2000s, he formed a production company with partner Will Ferrell and wrote and directed a string of beloved comedies, from 2004’s Anchorman through 2010’s The Other Guys. But in 2015, he took a turn, writing and directing an adaptation of Michael Lewis’s book The Big Short, about the 2008 subprime mortgage crisis. It, too, was an unexpected hit, scoring McKay an Academy Award for adapted screenplay. His 2018 film Vice, about Dick Cheney, scored Oscar nominations for picture, director, and original screenplay.He has demonstrated that, despite what the chattering class often seems to believe, audiences are hungry to confront real issues. All along, he has wanted to find a way to make a movie about climate change. With Don’t Look Up, he finally figured out how. I’m delighted to get a chance to talk to him, to hear about what he makes of the movie’s critical reception, what his other ideas for climate movies are, and how he navigates the politics of speaking out on serious issues from inside Hollywood. Welcome, Adam McKay, to Volts.Adam McKay:  Thank you, Mr. Roberts, for having me. I've been an admirer of your work for a long time, an avid reader of your writing, and it is a pleasure to be here.David Roberts:   Thanks, I'm an avid watcher of your movies. So we have a mutual fan club here.[Don’t Look Up] has been out on Netflix for a couple of weeks, so we've had enough time now for you to gather some feedback. Let's start with the fact that this movie has gotten more streams than anything in Netflix history. Did I read that right? Adam McKay:  It's a bit crazy. I was shocked by the response from audiences. Netflix uses viewing hours now as their metric — they used to use accounts that signed on, but viewing hours is a more accurate number — and we had the most amount of viewing hours in any single week of any release Netflix has ever put out. I understand we're about to pass Bird Box as the number two all-time movie [on Netflix], and we've got a chance to be number one, who knows. David Roberts:Who's number one?Adam McKay:It's a movie called Red Notice that just came out. It stars The Rock, Ryan Reynolds, and Gal Gadot. If you had told me that our ridiculous-slash-dark climate satire would be contending with Ryan Reynolds, The Rock, and Gal Gadot in an action film, I would have said, “you're nuts.” So it's pretty fantastic. More importantly, the moment-to-moment online responses have been incredible — just seeing people excited by it, laughing, a lot of people moved by the ending of the movie, talking about crying, having emotional moments with it. So that's the thing that's been really exciting is seeing this worldwide response to this movie, and a lot of people having the response of, “oh my god, I'm not crazy.” Really cool.David Roberts:   Or at least, “we're crazy together.”On the other hand, there's the critical response, which has been … all over the place. I don't know what I expected, but it's been such a bizarre range. What do you make so far of the critical response?Adam McKay:  I've never experienced anything like it. We test these movies, we screen them for audiences, and the last three screenings we had played great — people were laughing the whole way through, at the end there was great discussion. Then I saw those critical responses … and in fairness to the critics, I don't expect them to mirror a test audience. They look at it with different eyes. So with all due respect, but some of the reviews were so extreme and angry, and I was like, “whoa, what's going on here?” But once again, they're critics; they’ve got to do what they’ve got to do. But it really took me back. I just didn't see it coming. You make movies, you get hit with bad reviews, so we were just like, “all right, I guess that's that.” Then when the movie came out, the responses were more like what we had experienced. We were like, “oh, good, we're not crazy.” So it was strange. I've never experienced that kind of disconnect from the screening, watching the movie with people, to the critical response. It definitely was the most surprising I've seen. Once again, nothing but respect for critics. But yeah, it was very surprising and unusual, no question about it.David Roberts:   I'm sure you're a self-aware, neurotic guy; you probably have some self-criticisms about the movie. Did any of the criticisms strike home? Adam McKay:  When you make a comedy, right away you subtract 20 points. It's just the way it goes with comedy. So I wasn't expecting us to be lifted on the critics’ shoulders and ticker tape to come down, because I've made plenty of comedies and that's just the way it goes. Which was fine, because we made a direct choice to have this be a comedy. I think the ones that surprised me — there weren't a lot, but there were about a dozen that were really angry, and accused the movie of being smug, and said, definitively, “this movie will not relate to people.” “It's too smug, it's too liberal.” “It's not liberal enough.” “It's playing to a small crowd.” Those were odd, because we hadn't experienced that at all with this movie, in any of the screenings we had done — that was never the slightest response we ever had. With something like our previous movie, Vice, we knew that was tricky. We knew that was not a fun story. So you know, I read reviews, and some of them were like, “yeah, you're not wrong.” But in this case, I was surprised by the timbre of the reviews, the anger of some of them — once again: not all, some. I have to say that over and over again. David Roberts:   Some of them seemed like, “you think you're so smart. You're not so smart.” A lot of critical reviews struck me as, “here are the ways that I am smarter than this guy who tried to make this movie.” It was a weird critical response.Adam McKay:  It was strange, but I think what it points to, now that I've had some time to digest it, is a couple of basic things. Regardless if someone didn't like the movie or liked the movie, there's no question we're living in an incredibly strange time right now. We're looking at a straight shot to American democracy collapsing. The Democrats have face-planted and I don't see much standing in the way of a takeover from the extreme right. So that's going on, while this absolutely catastrophic, giant story of the collapse of the livable atmosphere, that is so mammoth it’s hard for even some scientists to fully get their head around, is happening at exactly the same time. It doesn't surprise me that people would be …David Roberts:   Don't forget the global pandemic. Toss that in there too.Adam McKay:  Oh my god. And by the way, towering, epic income inequality mixed right in. So we have all this stuff going on, and the idea that people would have passionate responses to “how do you tell these stories?” makes sense. The idea that a lot of people would be on different wavelengths of awareness, or no awareness, or somewhat awareness on those stories we're talking about makes sense. By the way, once again, I respect that. I'm not saying that if someone didn't like the movie, it means they don't believe in climate change. Somehow, through the social media lens, it became that I somehow had said that, whereas I never said that. People were piling on — which by the way seems like something directly out of the movie, of course. So I think it makes sense. The reason we made the movie is there are varying degrees of relationships with the idea of the climate crisis, and that's one of the problems we're confronting. So now that I have a little distance from it, part of me is like, “why did I think our movie would be any different?” David Roberts:   I could have told you what would happen. From my perspective, as somebody who's been in this game for a long time: you have this huge problem on your mind, you’re yelling and yelling, and no one else is paying attention but other climate people. So you just end up talking to other climate people. You end up arguing with other climate people, and forming teams and factions within the climate movement, because no one else is paying attention. I think that's become part of the culture of the climate movement: your number one priority is to shoot down this new climate advocate who thinks he's smart. I don't fully get it.Adam McKay:  When you see Chuck Schumer or some politician talk about the climate crisis, you can just tell from the way they're talking about it: oh, they don't get it. They don't really feel it in their bones. Someone hasn't communicated to them the depth and the urgency of this. Even when something happens like those crazy fires in Colorado, where there weren't even trees nearby, the wind blew the embers into the neighborhoods, and the videos are so upsetting; or Kentucky, where it looked like the devil had landed on earth with that massive tornado; Alaska breaking a heat record by 20 degrees; and on and on and on. You see these stories, and then you hear certain people in charge, or even in the media, talk about it, and you're like, “you're not feeling that in your bones.” But when you have a movie, you can't say that, because it sounds like you're saying, “you don't get the movie, so you don't care enough about the cause.” I'm like, “hey, I don't fucking care about the movie. Hate the movie. I don't give a shit.” We're not posturing like, “Oh, look how important we are.” We actually think this is a giant thing! All these actors came together — there are easier projects we could have done. You think when we're saying this is a big deal we're positioning ourselves for awards season? David Roberts:   If you're pulling a money grab, maybe climate change is not your go-to. Adam McKay:  I think that's me splitting hairs, though, because the bigger picture here is the crazy appetite of literally hundreds of millions of people, having this very visceral response, and it's fantastic. The other joy of the movie was seeing a lot of climate scientists say, “oh my god, I feel seen.” Peter Kalmus wrote a great piece where he's like, “oh, that's it. That's what I've been going through.” George Monbiot wrote a beautiful piece about the emotions he's been carrying. So the overwhelming story here is, we're overjoyed with the response. We're overjoyed with the release. At the same time … I already had sympathy for people like yourself, but now I think I get it in a much more personal way.David Roberts:   Also, sympathy for politicians trying to broach this. You get all these weird, intense, super-specific responses, I'm sure any politician who says these words publicly gets that same weird range of blowback. So I have some sympathy for them, too … though less.Adam McKay:  A little bit less. We did it in the movie. For years I've been like, “why isn't a senator or congressman going to a podium and crying or yelling?” George Monbiot did that, he cried on a show — there's clips all over the place of climate people getting emotional on shows. It's funny, because we wrote that in the movie, you’d think I would know that, but the response taught me how deep it is. The challenge of the communication of this is so titanic. How you break through the people framing it as self-interest. “Well, of course, Dave, you have a podcast you do, and you have your own news source, Volts, so of course you think it's a big deal.” It's like, no.David Roberts:   Let's go back in time a little bit. You've said in previous interviews that it was an IPCC report that originally grabbed you and shook you by the lapels and got you freaked out about this. That was 2015 or 2016? Adam McKay:  It's a longer road than that. The Al Gore documentary An Inconvenient Truth was the first time where I was like, “oh, wait a minute, that's no joke.” The famous moment where he shows the graph skyrocketing definitely hit me. I started talking about it, wondering what was going on. But, in those polling categories they use, where I went from the “somewhat concerned” range to the “very, very concerned” range was the IPCC report and several other reports that came out, culminating in me eventually not being able to sleep and my wife being like, “what's going on?” I'm like, ”this is bad. This is really, really, really bad.” I went through a little period where people around me were like, “hey, relax.” I was like, “no, it's really, really bad.” I was late to this incredibly un-fun party. I think you showed up with some onion dip around 2004, but I came in around there, and then every year since it's just been escalating. Reading David Wallace-Wells’ The Uninhabitable Earth — that's definitely what led me to the onramp of, “I’ve got to do a movie about this.”David Roberts:   One of the things I'm fascinated by, and one of the things I wrote about in my review, is the difficulty of making art about climate change, the difficulty of telling compelling stories about it in a way that will appeal to a mass audience. Presumably, once you got freaked out about it, you being a movie maker, you started thinking, “how can I get this into a movie?” You've talked about this a little bit, that you had a few ideas or premises come and go. I'm curious what some of your early thoughts were for how you could cram climate into a movie. Did you have other ideas that were developed at all? Adam McKay:  Well, some of them I'm still going to do. I'm actually working on a show with HBO Max called Uninhabitable Earth. It's a Black Mirror-style show, anthology, hour-long episodes, dealing with the climate crisis.David Roberts:   But fictional, like Black Mirror? Adam McKay:  A hundred percent, yeah. Each one will be an hour long, we'll have different directors and writers come in. I already have the first episode outlined. I'm behind — I was supposed to have the script written a month ago. So we're doing that. But I can tell you a couple of the ideas. The first idea I had — and who knows, I may still do it — was inspired by the movie Greystoke: The Legend of Tarzan, Lord of the Apes that came out in the 80s. I had read that Robert Towne’s initial draft of that script didn't have one single word spoken in it; it was all Tarzan with the apes. Then, of course, the studio made him add all this stuff where he went to England. I actually met Robert Towne about four years ago and I brought that up right away, because I found it really intriguing. The idea I had was that it’s 300, 400 years from now, and it's an area on Earth where the climate crisis has fully blossomed — we've gone to 3.5 to 4, sea increase, most of civilization is gone, but there are little outcroppings of people that have hung on. We focus on one group that lives between a storm and a desert zone. They're in between an area where there's constant tornadoes and hurricanes and another area that's completely arid — let's say it used to be Arizona, New Mexico, Nevada. They're on a runoff area from the storm zone where water flows, and it's created a deep crevasse, and they live in little Anasazi-style cliff dwellings on the side of the crevasse. Because of the water, they have a little civilization of 600 or 700 people. You see the detritus from the former civilization: pieces, scraps of our old civilization that they've used in different ways. Then one day the water stops. We don't say it, but you see from the drawings and the songs that this happens occasionally. They’ve discovered that the person who can handle going through the river of water to find what clogged it, it's best if it's a 17-year-old boy, because they're a little more fearless, they're at peak physical health. So they pick their 17-year-old boy, but there’s a girl who’s in love with him. He leaves to go on the mission, they give him a couple of tools, and she secrets away and follows him. We basically follow these two teenagers as they go through the storm zone, and we have different encounters with different pieces of our old civilization. One scene was where they have to get across this massive lake, and in the middle of the lake — I thought it was a cool image — you see a giant white pole sticking out. The boy goes under the water and you just see the city of Chicago there. It's the Sears Tower antenna sticking up. And they have to swim across this lake. So it's a lot of different episodic encounters. I don't want to give them away in case I ever do this … which, now that I'm telling you, it was pretty cool actually. It was a big 2 hour 40 minute, no-spoken-dialogue, epic film. That was the one I was going to go after. Then I started doing the thing, which I know you probably think about a lot, where I'm like, “well, how is this going to play? How are people going to relate to this?” I kept thinking, “it's a little bit like a lot of dystopic sci-fi movies; there have been a lot of those made. Is it too easy to categorize it as that? Is the impact of it lost because it doesn't relate to our world now?”David Roberts:   In all those movies, the apocalypse has already happened, so you frequently don't learn much about it. They're rarely about the apocalypse itself.Adam McKay:  I had another idea that was about the carbon wars. Twenty years from now, most of the planet knows we have to shut down the carbon release, but there are holdouts. There are rogue nations, and corporations that are basically like nations, that are like, no. So there's a full-on war going on. I had a bunch of cool stuff for that. Then I had another idea that was more like a Twilight Zone episode about submarines from different nations fighting over claiming new land underneath the Arctic Circle that they can drill for oil in. One of the subs gets sunk and then frozen in the deep bottom underneath the Arctic. We go to 200 years later, and it's rescued, and some of the people are able to be defrosted using advanced tech. It's about them living in the future utopia that has solved these problems, which I thought was kind of cool. Yeah, I may still do that. These are all ideas that are still on the table. I don't think I'm giving away too much. But with each one, I just felt like, man, I don't know. When I talked to David Sirota, and he made the joke about how it's like a movie where an asteroid’s going to hit, like an Armageddon, except no one gives a shit, I just laughed, and I like that. I thought: laughter, it’s the best. It does a couple of things. It lets people have a common experience. In order to get a crowd laughing, you have to have a shared, agreed-upon reality. You can't really get 300, 400 people laughing without that agreed-upon reality. So I just thought, even my family members who are very right wing and friends of mine who are very progressive, everyone can agree we are living in absolutely unhinged times right now. I thought, maybe that's a good purchase point with this idea. So I ended up doing Don’t Look Up.David Roberts:   Did you just hear this joke, or this idea, of Sirota’s and go off completely on that? How much was he involved in the story writing? Or was he just the political consultant guy?Adam McKay:  With any idea, you like the idea to not leave you alone. So he said that, I was like, “oh my god, that's perfect, that's exactly what's going on,” and we laughed, and we kicked it around for a second and then I just moved on. I wasn't going to write it. It was a couple weeks later that I was like, wow, that idea keeps coming back to me – why? So I called Sirota and I was like, “Sirota, I think that's the idea.” I liked that it was simple. I liked that it wasn't too-clever clever, that it was a big enough entryway for a lot of people to get into it. I've described it as a Clark Kent-level disguise for climate; it's not really trying that hard, and I like that about it. It was big, and I'm a big fan of execution-based ideas. I don't always love big, clever premises. I like where they're kind of simple. So then I started banging it out, and I would check in with David. He was involved. I would run it by him, what the outline was. He came up with the idea for the movie within the movie, Total Devastation. He and I kicked around the idea of profitizing the comet and aborting the mission; that's when I knew we had a movie. I would show him each draft. David's a very funny, creative guy. He's a firebrand, but he also has a good pop sense, and he's written some scripts in the past. So he was pretty involved, actually, from the get-go.David Roberts:   Is it obvious it’s about climate change? Have you gotten a sense from the viewing public? Because I genuinely don't know. I'm so immersed in climate that of course I see everything through that lens. But if you just walk in as a normie with no background information on the movie, are people thinking “climate change” from this? Do you have any way of knowing?Adam McKay:  One thing I love to do is go on Twitter when the movie opens. You see the second-by-second tweeting. Granted, that's a skewed lens, because it's Twitter, it’s social media. But that, coupled with the testing process we do, the screening process, gives me a pretty good idea of how people are seeing it. What I'm seeing, and what we learned in the screening process, is about 60 to 65 percent right away think climate crisis. Another 25, 35 percent — there's crossover between the two — think Covid, even though the script was written before Covid. But the great news is, everyone gets the idea of a society that's broken, corrupted, careerist, distracted, self-interested, all the different layers. I always say it’s David Simon's The Wire grab bag of societal dysfunctions. We tried to touch all those bases. Everyone gets that. The way we did the movie was, we tried to find the universal dysfunctions across the political spectrum and not dial into the red vs. blue too much, although you can't avoid it. When you talk about the comet denial in the movie, clearly that's hitting the right wing. Overall, the people responding to it as a climate crisis allegory, I've been very happy. Someone tweeted the other day that she started watching it with her kids and within 10 minutes the kids were, “oh, this is like the climate.” I have a 20-year-old and a 16-year-old daughter, all of their friends — none of those people read interviews with me, none of those people read the reviews, and they all immediately were like, oh, climate, Covid, science being run over by capitalism and power. I've been very, very happy with the way that's translated.David Roberts:   I think that’s part of the power of it: if you don't watch it through the climate lens, it works broadly as well. I was thinking yesterday that someone looking back 20 years from now at this movie might think, oh, this was about the coup. This was about the authoritarian takeover of America, which people were yelling about, and other people were ignoring them. It works eerily well for that as well. Adam McKay:  To me, there are three giant, hard-to-emotionally-comprehend realities. (Intellectually, we get it.) The climate crisis is the big one. Then you have the coup, the impending collapse of American democracy. Then the third one, for me, is income inequality at a scale we just never talk about, that is breathtaking, worldwide. As far as size goes, income inequality is like Venus and the impending collapse of American democracy is like Mars. Then the climate crisis is like Jupiter plus Saturn plus maybe the Sun. There are five or six other ones too. There's the opioid epidemic, which we do nothing about. There's the gun death epidemic, which we do nothing about. Someone had said, “hey, relax on calling it a climate crisis, it's really just a snapshot of this time.” I thought, that's a fair point, because the movie is about our reaction to these very fixable crises. As complicated as the climate crisis is, we could deal with it if we wanted to. That's what's so incredibly frustrating. What makes the climate crisis so horrifying is that we do have technologies, we do have strategies that could seriously curb the horror show we're headed toward. So I think it's fair to say that the movie is more about this particular screwed-up moment that we're living in.David Roberts:   I've seen a lot of climate change documentaries and shows and art, and they're generally pretty bad. I went into this with very low expectations, terrified that you were going to get into albedo effect and biodiversity. I was braced. But it's much more about trying to communicate than it is about the details of the crisis itself. I thought the best part of the movie is the way it shows how the newsertainment blob has this capacity to digest everything and let nothing change it. No matter how loud you yell, it just absorbs it. You see it absorb Dr. Mindy, as he becomes unwittingly caught up in it. It just rejects Kate entirely. It has this ability to adapt and absorb and neuter everything. That's to me the most maddening, not just about the climate crisis, but about everything these days: everything is at the same pitch; everything is at the same volume. Everything is the same blur. It's impossible to make anything stick out, to stop or pause on anything or think about anything.Adam McKay:  The moment where DiCaprio as Dr. Mindy says on the TV show, “why does everything have to be so clever or likable? Sometimes we just need to be able to say things to each other.” That's it. It's an emotional movie. It's not a narratively complex movie, it's just the emotion of that. That's exactly it: these formats, these shows, will not let you just say things. It always gets twisted and given a certain color or shading. David Roberts:   It's sitting right there alongside the celebrity love affair — the same tone and same visuals — and the two blur together. I thought another clever part of the movie was that, it's not like Dr. Mindy or any of the protagonists are innocent of this. One of my favorite moments is when Oglethorpe, the head of NASA — who, by the way, Rob Morgan is amazing; he's such an ace up your sleeve in this movie — is talking about Sting. It had nothing to do with the rest of the movie, but I loved that moment so much.But at one point, the head of NASA sitting there watching and getting caught up in this celebrity relationship. He finds himself really hoping they'll stay together. He's not immune to it either. It absorbs you no matter what disposition you come to it with.Adam McKay:  It's impossible to resist. This is the one thing I've been saying throughout a lot of the press: the movie is not over anyone. I'm in the movie. I eat Taco Bell. I was way into Kyrie Irving returning to the Nets the other day. I'm rooting for Jennifer Lopez and Ben Affleck to an unhealthy level. I mean, this stuff is all focus-grouped. It's algorithmically structured. It's like they took the science of slot machines and they've applied it to social media, advertising, the way we consume information. It's irresistible, and we're all part of it. But I think it's important to give ourselves a break to some degree on it. It’s going to get us. Life doesn't operate like an action movie where every waking second you're pointed toward the climate crisis, or gun violence, or income inequality, or the collapse of American democracy. There are moments where you're going to obsess about, why did the general charge you for snacks? That's why we have it in there.David Roberts:   I loved that bit too, by the way. It spoke to me.Adam McKay:  I love the reaction to it. People are trying to figure out why he did charge for the snacks. There are these theories that he represents the military industrial complex, he represents government. So people ask me, and I'm like, “I don't know.” They’re like, “yeah, but you wrote it.” I'm like, “no, I wrote it as that thing that sticks in your head that distracts you.” Comedy — the idea that we can laugh, we can be a little silly — took a lot of the edge off of it and opened it up. It's been cool. Once again, not everyone's going to laugh at the same thing. The funny thing with comedy is, everyone thinks their sense of humor is the gold standard. Which, by the way, I wouldn't change that. That's what's incredible about comedy. But it's funny when, some people love the comedy, some people are like “it's dumb,” and they're definitive about it. That's fine. That's how comedy goes. But it's been really cool: at Netflix, they do crazy amounts of data — pretty sure they know, statistically, within 96 percent, how I'm going to die — and they said that they've never seen a comedy play across this many countries. I think the movie was number one in 87 countries and top 10 in 90. For people that care about the climate and care about the state of the world, I think that's a very hopeful thing, that this current moment in the world is that universal. I've never experienced that before.David Roberts:   Some of the stuff in the movie seems pretty US-specific. The media stuff, at least; I guess I don't really know what media is like in Turkey or whatever, but it felt very America-specific. Adam McKay:  Turns out, it's a lot like it is here. We're doing an adaptation of Bong Joon Ho’s movie Parasite as a miniseries, and he was saying that to me. He said, “I think you're going to be surprised by how well this plays around the world.” I was like, “really? You think so?” and he was like, “oh, yeah. The problems you have in the movie are everywhere.” And he was right. It's landed in a global way that I'd never anticipated.David Roberts:   For me as a moviegoer, this is the first time I've seen these particular dysfunctions put to fiction. They're very specific to our present moment and I've never seen anybody else take them on. I think that's why you're getting these moments of people saying, “oh my god, I feel seen,” because a lot of people are experiencing this. I just haven't seen it portrayed in another movie in quite the same way. Adam McKay:  The models I used for this movie tend to be pretty small. One of my favorite movies of the last 20 years is The Death of Stalin, which I've seen seven times, but that played to a very particular crowd. It's brilliant. We weren't trying to emulate that; our movie is made for a much bigger audience, very consciously. But there's that. There's Thank You for Smoking, which once again, very small audience, brilliant movie, love it. Then you have to really go back to the 60s and 70s, back when movies like this would play big.David Roberts:   Network is the obvious predecessor, right? Network is all over this movie.Adam McKay:  That's probably my all-time favorite movie. There's movies to die for: the Buck Henry movie, which I love; Wag the Dog; Ace in the Hole; Dr. Strangelove is another obvious one. For anyone who wants to jump all over me, I'm not saying our movie’s as good as Dr. Strangelove, but as far as the style and sensibility of it, people forget how slapstick-y Dr. Strangelove was. So I think that's one to look at. But we haven't lived in a time where … I guess Mike Judge would be the guy: Office Space I worship, Idiocracy is brilliant. But neither one of those movies were even remotely commercially successful. They were found after they bombed in their release. So it was definitely something we were going for on this larger scale. With all these actors, we were hoping to bring in a larger audience. It's been very cool seeing Ariana Grande fans watch this movie and respond to it.David Roberts:   I want to ask about the casting and about the crew. It’s A-listers all over the screen, constantly. To what extent did you present this to people as “hey, we want to make a socially conscious climate movie?” Was that part of the motivation of the actors joining up? Adam McKay:  I never framed it like that. I always described the world we're living in right now — it's fun, every time I say it I try and use a different analogy, so what I've been saying lately is, “it's like a bouncy castle full of hyenas and long stem wine glasses.” That's what it's like to be alive right now. So my pitch to all the actors was, “we're going to try and make a movie that's about this time that's never existed, that's crazy, and we want to try and make it funny, but we also want to make it emotionally moving as well. And yeah, it's about the climate crisis” — everyone knew that, they got that — “but hopefully it's going to have a big feeling to it for people.”With our casting director, Francine Maisler, we hit a point where we had a bunch of big-name actors, and I remember Francine and I talked about it and she said, “isn't the point of this movie that you kind of go all the way? That the movie is a comment on what's going on, and the movie should have a breadth?” I said, “Yeah, I totally agree.” So usually we would have stopped, because you don't want the movie to be overwhelmed with stars and be distracting, but in this case, we felt like oh, no, that's kind of the point of the movie. That's when we got Timothée Chalamet to play the part of Yule, and Ariana Grande came in, and, I'm trying to remember the order, Cate Blanchett, Kid Cudi came on at that point. Normally we wouldn't have filled those roles with recognizable actors, but in this case we just said, let's drive straight through the locked gates.David Roberts:   The density of A-listers is so high that it does feel almost like a comment in and of itself. It feels like you're making a point. Adam McKay:  We were joking in the edit, with my editor Hank Corwin, I was saying, “this movie is like a combination of It's a Mad Mad Mad Mad World and Lars von Trier's Melancholia.” That was another part of the movie, too, was the style of how we cut it and put it together. We wanted it to feel kind of jumpy and assaultive, keeping you off balance — sort of like the world feels now, too. David Roberts:   I love the editing. To me, most of the big laughs were from the editing. Adam McKay:  Hank Corwin is one of the great editors of all time. He edited on JFK, he's edited Terrence Malick movies. The guy is a legend. It came from Big Short and Vice: even though those movies had funny things in them, they weren't full-on comedies. I kept telling Hank, “I think your style would work. I think this cut-in-the-middle-of-the-line, this breaking the rhythm of traditional editing, would work really well for comedy.” He's a funny, kind of sheepish, neurotic guy, and he's like, “I don't know. I've never cut a comedy,” and I'm like, “no, Hank, I think it's going to work.” But it's another element of the movie. For some people, they are thrown off by the style. I've seen people complain about it. Some people think it's sloppy unintentionally. David Roberts:   No, every one of them is absolutely perfectly timed. It really gets at the feeling too — you get swept up in these super-intense, crazy moments and then it cuts to this quiet moment where they're trying to digest it afterwards, and you feel the same thing. You're like, “whoa, what was that? Why was I just so worked up?” It's that same whipsaw feeling of modern media.Adam McKay:  That was what we were going for, those montages and slices and images. Hank had the brilliant idea to play the natural world as a character in the movie. It's funny how in the process of making a movie you can actually learn things about the climate. That was something; like, oh, yeah, the natural world is a character in the story of the climate right now. It was amazing how well it fit with the movie, and that was all credit to Hank Corwin. That was his breakthrough idea.David Roberts:   There are these cuts of nature scenes, but they're not the conventional climate-documentary nature scenes of pastoral beauty; some of them are just weird. It's not necessarily natural beauty, it's “look at this weird fucked-up natural world.”Adam McKay:  The one that got me — he just cut this in, I didn't have it in the script — was the shot toward the end of the movie of the bee. Every time we would screen the movie, I would see that bee, I would get teary-eyed. It was like a punch in the gut to me, because the bee is so beautiful-looking, and perfectly constructed, and delicate. Frickin Hank, man, you got me with that bee shot.David Roberts:   Let's talk about the ending because this, I'm sure, is controversial. I guess we're doing spoilers. Adam McKay:  Yeah, we should warn people, if you haven't seen it. Part of the impact of the movie is, most people do not know that ending is coming. Some people do, but most people don't imagine that we would ever end that way. So yep, big spoiler alert.SPOILER ALERTDavid Roberts:   You watch a Hollywood movie, especially a big Hollywood movie with a bunch of stars, you are trained by a lifetime of movie viewing to expect the white horse at the end, to expect the good guys to pull it off. It inches right up to the ending and you're like, oh, well, I guess not! This might be perverse, but I was delighted when I finally realized, “oh, he's not going to do it. Sweet. He's just going to let it play out.” How much did you think about that ending? How early did that come in? What do you think is the larger significance of the ending? What are you trying to say?Adam McKay:  I was just kicking around this idea — and part of it came from reading Sapiens by Yuval Harari — I thought the big idea of that book was when he posed that our ability to create myths and story is what separated Homo sapiens from Neanderthals and Cro-Magnons. It’s a legitimately big idea. I know some people knock Yuval Harari, but that is a heavyweight idea. That got me thinking about what that means, that stories are that important. Obviously, we've talked about stories, and what they mean, and narratives, for years and years and years. The idea was, we've watched 10,000 movies — whether it's Marvel, James Bond, an action movie, Fast and The Furious, the comedies, the stuff I've done — and it's always a happy ending. You just know it's coming. You know Hollywood's going to give it to you. In some ways I started wondering, are we sitting back and watching the climate and expecting a happy ending? David Roberts:   I really think that’s part of it. “Someone, somewhere, has got this. That's how things work, right?”Adam McKay:  DiCaprio told me a story where Elon Musk was at some conference and DiCaprio implored him, “dude, come on, you've got news sources” and Elon Musk is like, “the technology will solve it.” That is terrifying. I hear this from a lot of people: “They're going to figure it out. Don’t worry. They'll get it.” No, we're not. We're now at the point where we're definitively not. So I thought, there's a simple power to going straight down the chute with this ending and not having the white horse ride over the horizon line. I have never been more nervous for a screening in my entire life than the first time I screened this movie. There was a break in the pandemic, it was after the vaccine, and they said if everyone's vaccinated and they wear masks, we safely could do a screening. You have to remember, this is a big movie. It's Netflix, they're a big company, you have these big stars in the movie, and we're going to go to Orange County and we're going to test screen this movie that ends with — once again, spoiler alert — the entire planet dying. I was telling my wife and Hank, my editor, who during the period of putting the movie together I spent equal amounts of time with: “I've never been this nervous for a screening. This feels like we may have screwed up in a profound way.” They test it from zero to 100. The test is not a sciencep you use it as a loose guide rail. But in general, if you get like a 35, that's really bad. You want to be in the zone of high 50s to low 80s. Mike Judge actually told me that Idiocracy, the first time he screened it, he got a 20. A 20! I've never heard of that in my life. He told me how then the studio felt like they were protecting Judge and that's why they buried the movie. I was like, “oh really, that's what happened.” Maybe Spielberg and Scorsese are two people that could score a 20 on a movie and say, “I don't care, put it in 3,000 theaters anyway.” No one else on the planet has the clout to tell a studio, “I know we got a 20 but go with it.” There's just no one. So I'm driving to the screening and I'm like, “oh, shit, oh, shit.” But I love the ending. We've been watching it, we've screened it for ourselves, I think it's beautiful. We screen it … and it's the audience's favorite part of the movie. Universally. Unequivocally.David Roberts:   How does the whole test screening thing work? Do people write responses? Adam McKay:  Everyone fills out a card. There's the 1-10 stuff, but then there's handwritten stuff. You do a focus group with 20 people afterward, they ask in-depth questions. Universally, no question about it, favorite part of the movie: the ending.David Roberts:   Did people say why it was so satisfying to them? Could they articulate it?Adam McKay:  Oh, yeah. The person who leads the focus group is an incredible woman who ran the focus group in Vice. (True story: they ran focus groups on the Iraq War.) She actually runs our focus groups, and she asked them, and they were very clear about it. They said, “we're sick of the bullshit endings.” It was an incredible moment where you realize, oh, of course, the audience is way smarter than we give them credit for. They're totally tuned in to what's going on in the world. They all expressed it. They talked about the climate crisis, about Covid, about all the shit going on in the world. They're fully in line with it. They're sick of constantly getting served fake happy endings.Even though I've done silly comedies, I'm a big fan of never underestimating your audience. The Simpsons is an example of how you can be brilliantly stupid. Even when you're doing silly stuff, try and be top-of-your-intelligence silly. So I've always believed audiences (and voting blocs, and the population at large) can go way further than people think. They're way smarter than they get credit from the media, from the savvy crowd, the gatekeepers. But this even surprised me. Number one part of the movie, unequivocally, no doubt about it.David Roberts:   The whole movie is about us bullshitting each other. It would have been a unique sort of betrayal to have a happy ending to this particular movie.Adam McKay:  There was never one moment where I was going to do it. I just wanted to make sure to balance at the end — that it is a comedy, even though it's this very emotional ending — so I did shoot the joke that we have in the movie that's in the middle of the credits, and then we have a joke at the very end of the credits. I did think that was important too, because some people were really in tears. We had some very emotional responses to the ending. My wife went into her car and cried for 10 minutes after she saw it. Another agent saw the movie when we were first screening it and she was so emotional, she backed her car into a pole when she was leaving the screening. We've seen it in the online responses, a lot of people moved to serious tears. So I did think it was important that you don't want to be traumatized. You want to still be able to laugh, yet have those feelings. That was more the alchemy of the ending, how we were going to balance that. But there was never any chance that was ending any other way.David Roberts:   It’s sad in the context of the movie itself, but I also think part of what's hitting people is that it gives them permission to imagine that in the real world, there's no white horse. Sad endings are perfectly possible in the real world, and once you really start to think about that in the climate context … it's big. It's overwhelming. Adam McKay:  I think it's essential to understanding the climate right now. I think you have to realize this could end poorly and in fact is on track right now to end poorly. That's hard for some people, and that's okay. I'm not saying they're wrong or their reaction to the movie is wrong. But I do think it's hard, and I think you have to realize that what we're seeing right now, it's not going well. It’s not going well at all.David Roberts:   Can you talk about the other ending, the mid-credits scene? Since we're spoiling things: the rich people escape the disaster on a spaceship, find another planet, and then are immediately consumed by the planet's denizens. I couldn't fully tell whether that was just a gag to prevent people from going home and hanging themselves, or if there was more significance, a point freighted in there. What's your take on that? Adam McKay:  It started as the rich people just get away. The original scripted ending was that they land on that planet, and it's beautiful, and they're like, this is going to work out great. And I just ended it.David Roberts:   That's kind of what I hoped it would be. That's what I was rooting for, to be honest. Adam McKay:  Well, we ended up improvising this beat. Meryl’s a great improviser, and she kept saying, “I want to know how I'm going to die.” So she put it in the scene. Then Mark Rylance and I said, well, maybe she gets eaten by a creature on a planet, and he's like, “oh, yeah, we don't know what it means.” We did it, and then it started making us laugh, that maybe we do see her get eaten by a Brontaroc, which was just a name we made up on the day. I was hoping it did both, because you see the pods of the rich people, and they're from oil companies and lobbying firms, and it's got this sting. They walk out and there's this beautiful planet, and then we have this joke, which some people are going to like, some people aren't. Judd Apatow was like, “oh my god, that's my favorite joke ever.” DiCaprio was a little bit like, “I don't know if I love that joke.” So once again, it's comedy. My wife was like, “can’t you just end with the world ending?” and I was like, “we actually tried it one time, and it was tough.” I like the idea of, you get the ending of the world ending, you get that beautiful Bon Iver song, you get to see the Earth undone, and that's an ending. Then we go for a little while longer and there's another little thing that happens, where the rich people get away with it, but then there's the big joke. I actually am a big fan of, you can have an ending and then have another ending, and whichever one you need, you can choose to lean into. Apatow was telling me he leaned in heavily to the president being eaten by the Brontaroc, he needed that. You didn't as much. My wife didn't, DiCaprio didn't.David Roberts:   The whole world ending has one sort of emotional tone; the world ending but all the rich fuckers who made it happen escaping untouched has a very different emotional complexion. I just thought that was an interesting move. If you find out the rich people die, then …Adam McKay:  … it’s a little happy. Yeah. There was another ending I had where the rich people then started saying, “let's get my house built,” and someone's like, “no, the pod with all the workers in it crashed, they're all dead,” and then the rich people started going, “I'll pay anyone a billion dollars who’ll build me a house,” and then another guy went, “I'll pay 5 billion,” someone else goes, “10 billion,” and we just pulled out on that. My friend Tom Scharpling liked that ending. As I'm talking to you I realize, you know what we could have done on Netflix, we could have done three different endings. Some cuts could have had the rich people with no one to work for them, another one could have had the Brontaroc, another one could have just had the rich people get away with it and that’s it. I wish I had thought of this: we could have told Netflix, “every third screening has this ending.” That would have been really cool, actually.David Roberts:   It makes a difference in the context of the movie, but it also makes a big difference in how you think climate change is going to play out, if rich people can survive it.Adam McKay:  They're not going to get away. No way. This idea that they're going to go in bunkers or go to another planet, it’s ludicrous. You saw it when we had the fires here in LA, I think one of Murdoch's homes partially burnt down. They aren’t getting away from this. If we imagine the climate crisis going to its worst degree, maybe you could see some people clinging to the poles to survive. It's debatable if it's an extinction-level event, but it is possible that it’s an extinction-level event. But if people do survive, it's going to be grim. I think the money can help for the first couple of waves.This is me, by the way, just completely theorizing. There's no basis to what I'm saying, let me be very clear about that. I don’t know. But we can kind of guess, right? We know that the whole center of the earth becomes totally uninhabitable from extreme heat and wet bulb events. We know that there'll probably be perpetual giant fires where hundreds of thousands of people die from smoke inhalation, drought, famine, mass migrations, wars, even the poles are going to be nasty. They'll just have to come up with different categories for hurricanes. There'll be Category 10 hurricanes. I was talking to someone online who was saying it is possible we could have a perpetual storm on Earth if this thing really does hit 3-4 degrees Celsius increase.David Roberts:   My even more dystopic possibility is that we half solve it, so it gets bad but not apocalyptic, and bad-but-not-apocalyptic will probably just mean exacerbating existing inequalities. It'll mean an exaggerated, even more grim version of global oligarchy.Adam McKay:  Oh, that's bad. You might be right. We talk about this nonstop, my group of friends who are equally as freaked out as I am and that can talk about it, and one of the things I always say is, the saving grace may be that our civilization collapses, meaning we don't produce more carbon dioxide; that actually, civilization collapsing stops a lot of the emissions. That's a hellish proposition, because that's closer to what you're talking about; we’re at 1.5 to 2 degrees Celsius increase, and we start to see systemic collapse around the planet, wars, refugees, fire, all that kind of stuff, but a billion people have survived and the inequality is more like The Road Warrior. I'm not being flip with that comparison. Literally, that could happen.David Roberts:   Related to this point, one of the critical responses to the movie has been that it’s not an accurate analogy for climate change. Climate’s not a succeed or fail, one or the other proposition: there are all these degrees in between, we're going to land somewhere in the middle. There's an emotional satisfaction to a comet, that either hits or doesn't, that we're never going to get out of climate change. A) Do you agree with that, and b) do you think that's relevant to the quality of the movie? Did you feel like you were trying to do an exact analogy to climate change? Adam McKay:  God, no. Allegories are a sleight of hand. The prodigal son coming back doesn't exactly match the massive emotional bandwidth of loving forgiveness. “Well, the brother was kind of a dick, whereas loving forgiveness knows no bounds and judgment, so I don't know if the prodigal son was the exact allegory.” No allegory is a perfect fit. So yeah, there's a little cheat that we did: we took away the hyper-object of global warming, which is so vast and timeless and slow-moving, and we put in a very concrete event, a comet. So no, it's not a precise match at all. The real story of the movie is that the hyper-object, the hard-to-categorize force, is our reaction to the comet. I would say that's the important story when it comes to the climate crisis. It's about our reaction to the climate crisis, which is pretty horrific to this point, and kind of a disaster.David Roberts:   You’ve said in previous interviews that lately you've gotten a little bit more optimistic about the science and tech side of this, and I think that's for good reason. I feel the same way. The leaps and bounds being made now in clean technologies are amazing; if clean energy just keeps getting cheaper as fast as it's going now, it's going to be dirt cheap in five to 10 years, and utopia awaits. But then you look at this other track of American democracy falling apart, income inequality, etc. … you could tell completely different narratives about where we are in history and where we're going. How do you reconcile the two: the positive tech story about climate change and the total flaming-bag-of-shit-dysfunction political story? If you wanted to make a movie about 10 or 15 or 20 years from now, what does it look like? Do you have the slightest fucking clue?Adam McKay:  Stuff can change so fast. The example I always use, and it's a common one, is that I remember being with my kids when they were young, in the car, and they were like, “Dad, why is gay marriage illegal?” because they had friends at school who had same-sex parents. I was like, “you know, it's weird. Some people are hung up on it. I don't know why they care.” “Is it ever going to be legal?” “You know, it doesn't look great politically.” Then three months later, it was legal, and my kids were like, “you said!” and I was like, “I'm as shocked as you. I don't know what happened. Joe Biden misspoke and then … Obama couldn’t back off? I think that's what just made gay marriage. And it turns out, people were way cooler with it than most people thought.” So I mean, that was a crazy rate of change. I'm working with a group out of UCLA that's got some pretty serious breakthroughs on removing carbon dioxide from the ocean, and it's exciting stuff. They're nowhere near the scale to do it, they'll need like a trillion dollars to really make a dent. But is it possible? Technology doesn't advance in a linear way, and a lot of times happens in spurts. So it's very possible you and I could be talking in a year or two and we could be like, “holy shit, those guys from Carnegie Mellon, what do you know, they had that breakthrough, and there was someone in the Pentagon who was smart enough to go, ‘hey, let's move $100 billion from this B-52 bomber thing and do this,’ and we're actually rolling back some carbon dioxide.” That could happen. But if I had to bet, the will and action and awareness part of it is such a train wreck right now.David Roberts:   Sure. What if that happens and Donald Trump is president and Republicans are in charge of both houses of Congress? Would it even make a difference if there was a tech breakthrough in the woods and no one heard?Adam McKay:  One hundred percent. The US just suddenly becomes not a player in solving the climate crisis. All eyes go to Europe and China, and the US is just out of the picture; we're the bad guys. I'm happy with what's happening down in Brazil and with Chile, that we're starting to see some progressive leaders step in down there, so hopefully, they could be a part of it, too. And is it okay if some other countries get on the stick? The Chinese are not dumb. They know what's coming. Europe clearly knows what's coming. But you're right, if the Republicans take over, which it looks like they're going to, because the Democrats have just completely face-planted — in three years, if the Democrats haven't done anything and the Republicans stroll in, they're not giving power back. We know what they're doing, and that may be all she wrote for the US.But then you may see some private industry. So that's the part that I'm optimistic about. I also am just a big believer in pain. Pain got me to lose 40 pounds. I had a very minor heart attack. Pain got me to stop smoking regularly; I have to confess I still cheat and have one or two on occasion. But that was pain, and I do think there's some pain coming our way with this stuff. There are fires we can't even imagine, storms we can't even imagine. That could shock us into waking up very quickly, in like a three-week period of time. So I guess I just, in a really long-winded way, told you I have no idea.David Roberts:   It's never been easy to predict the future, but it feels so incredibly opaque now. I don't even know the basic valence. Dystopia or utopia or somewhere in between, I couldn’t begin.Adam McKay:  I like your guess of somewhere in between. Man, if we solve some of this and it becomes just crazy robber baron 3.0, like an 1880s Gilded Age, I'm going to be frickin’ pissed. That's just the grossest outcome, and you're probably right, they're going to try and swing it that way. I don't think you're wrong. David Roberts:   I feel like this is the history of America: when things get so bad that the working class is about to revolt or go communist, they'll give a little; they'll do a New Deal or whatever, just enough to keep the basic system in place. That's what I could envision happening on a large scale here.Adam McKay:  I think that's a good guess. Do you remember the Arab Spring, when those revolutions were spreading? There's a story as part of that that not enough people talk about, that Saudi Arabia just cut checks for 25 grand for everyone in their country and handed them out, and people were like, cool, and they didn't have a revolution.David Roberts:   Is it that far off from what we did with the Covid relief bill?Adam McKay:  No. I just wish goddamn Biden would do it with student debt. It's the only button he's got left to push, and they just won't do it. They will not do it.David Roberts:   I want them to get the comet’s-hitting-in-2024 mindset. We need to spend all the money we can, as fast as possible. Adam McKay:  All of DC is designed not to let that mindset happen. Every restaurant hallway, every bit of muzak playing is like, “don't let anyone have that mindset.” But we'll see.David Roberts:   Let me ask you about Hollywood. I'm sure poor Leo DiCaprio probably has answered this question 4 zillion times — it's obligatory, you're asked every time you are interviewed at this point — but there will be some people who say, “the last thing I want is a bunch of rich, Hollywood, carbon-intensive-lifestyle, private-plane-flying, etc. trying to act like they care about climate change. If they cared, they would sell their yacht or whatever.” How do you process all of that? How do you think about that general critique?Adam McKay:  People think of Hollywood as some bizarre foreign country. I wake up every morning, I swim in my pool with my three dolphins, I get in my helicopter, I fly to my solid glass pyramid office. No. I would say this: if it's a good faith argument, yeah, give us shit. I know Leo doesn't fly private anymore. We all are as green as we can possibly be, making as much noise as we can. I'm trying to do a bunch of different things; I'm not going to list them because that just sounds pathetic. If someone's saying that to just avoid the subject, then fuck that. That's bullshit. But if someone's really saying, “hey, you hypocrites, what about this? What about this?” I'm here for it. Give us shit. Is there something we can be doing better? Is there something we can be more aware of? I think we have to get used to that being a part of how we talk to each other, without being defensive. If you told me right now, “hey, you guys never have done this with your movie shoots, but you could do X, Y, and Z,” I think I've got to be like, “oh, shit, I never thought of that. You're totally right.” So I think it's good when it's done in good faith. When it's done in bad faith as a way to just shuck off the whole discussion, then I roll my eyes at it.David Roberts:   I think it's the latter most of the time, but who knows? Adam McKay:  I'm playing a little bit dumb because I do go on social media and 90 percent of the time, it's the latter. No question about it.David Roberts:   In terms of climate’s presence in your own life, do you talk to your kids about it? I have an 18-year-old and a 16-year-old. All my life I've been talking about 2030, 2040, 2050, this or that has to happen. They're going to be alive during those years, in the prime of their friggin’ lives. I have gone back and forth about how to think about that a million times. How do you think about that? Do you talk to your daughters about it? How do they process it?Adam McKay:  Yeah, we do. They saw the movie, obviously. My older daughter was very emotional about it. Younger daughter loved it. It was emotional. David Roberts:   If I made a work of art that my 18-year-old showed open emotion in response to, I’d be parading around the fucking streets like a king.Adam McKay:  I don't think they've ever had a reaction to anything I've done like this. Going through the years, they’ve mostly tolerated what I've done. Though they discovered the early comedies, their friends like the early comedies, so they love Stepbrothers and Anchorman and stuff.But the way I talk to them is mostly the way we're talking right now. What I say is, “this is very, very serious. It's the biggest issue of our lifetime. It's huge. It's no joke. It's not like a normal issue, it's a 1,000-times issue. However, we have technology and science, and people can do amazing stuff when they have the will and the direction. So don't get hopeless about it.” During the pandemic, we couldn't go in our backyard because it was filled with smoke from the Pasadena fires. Their aunt lived up in Oregon, she had to evacuate her house because the AQI was around 550. So they've already encountered this stuff. It's already part of their life. I just tell them, “you don't have to solve it all by yourself. Just find a couple little things you can do. Make sure to talk about it, make sure to feel it in your bones, and you'll find your way you can pitch in, and we're going to do what we can do.” I think the trick is not to freak out. Even though many times I am fully freaking out, my mantra is just, we can only do what we can do. So if I ever get too freaked out, I remind them, or remind myself, we can only do what we can do. That instantly calms me down. I make movies, so we made a movie. We have probably more money than we should, because our society is broken and screwed up, so I'm going to try and use some of that money to do some other stuff. We'll make little personal choices. We'll talk about it. That's what we can do. A lot of it's about emotional tone and providing the right perspective and sense of the moment. But it's tricky, no question about it.David Roberts:   When you pivoted and did The Big Short, you out of nowhere went from comedies that are dumb in a smart way to something that's smart in a smart way and about an issue of substance. I think you baffled people; a lot of people thought that was going to fall on its face, and it didn't, and you've kept at it, and you've kept succeeding at it. So I'm just wondering, what's the temperature among your peers in Hollywood about making more of an effort to engage with social issues? It's so fraught, for all the reasons we've discussed, but you're making a go of it and succeeding. Is anybody going to follow along? Have you talked to other filmmakers about this?Adam McKay:  One of the coolest things I heard as a reaction to this was that a couple of other filmmakers were like, “hey, can I talk to you about an idea that I have?” I actually did get some of that. I think they saw, if I can take the right crosses that came with those reviews and the savaging I took online and then in the end have the movie find an audience like it did, I think they're like, “shit, if he can do that, we can do that.” Vice, when all is said and done, will probably break even, but Big Short made a nice chunk of change. Succession — obviously very different, because Jesse Armstrong writes that, but still a show I direct the pilot, produce on — that's a very different tone. We did Q: Into the Storm, the docuseries which was very successful, got very high ratings for HBO. So I think what people are starting to see is, you can make money doing this. It's not some altruistic thing. Audiences want to hear what's going on, and it's a good thing — you can talk to people about the real stuff that's happening and they're excited by it. So it doesn't have to be altruistic, it doesn't have to be pure business, there is this nice middle ground. Yeah, for the first time, three people actively reached out to me that want to talk about ideas. I think it's bound to happen. You can't live in the world we're living in right now and pretend it's not going on. I think you're going to see more and more people going for it, whether it's in a subtle way, an overt way, a funny way, a horror movie. There are a thousand different ways to tell the story of right now, and I think we're going to see more of it.David Roberts:   I hope we don't end up in five years thinking, “oh, man, I wish we hadn't told all those filmmakers to talk about the social issues. What were we thinking?” I often think that when people start talking about climate change: “oh, man, I miss when people weren't talking about climate change.”Adam McKay:  Weren’t those good days? The year I always say is 1997. Do you remember 1997? It just felt like no one gave a shit about anything. I know Clinton kind of sucked, there was stuff on the horizon, the Republicans were starting to get a little crazy, there was bad shit, but oh my god, it felt like my seventh birthday party, 1997. Oh, I miss it.David Roberts:   Final question, and I'm 75 percent serious about this: Have you thought about making a movie about a reactionary movement that takes hold in a democracy and grows and exploits weaknesses in media and institutions to eventually take over and institute a one-party autocratic state? Just spitballing here.Adam McKay:  I have my idea for my next movie, and it's not that, but it's a close neighbor of what you just said. It's about two blocks up and one block over. I will tell you this: from doing this movie and from doing Vice, The Big Short, Succession, and Q: Into the Storm, it does seem to always come back to big loads of dirty money clogging up our system. If Don't Look Up, Vice, and The Big Short were about heart attacks, dirty money is the plaque. It's what's blocking the arteries. I think I have an idea that's kind of funny and interesting; I haven't started writing yet, but I'm interested in it. As far as the autocratic rule, we have a bunch of projects at our company that are in development that circle around and get near that. We're constantly looking for ways to play with that.David Roberts:   My other topic I want somebody to take on, that I have also been thinking is un-fictionalize-able: A lot of the problems in our country now are because the electoral college is fucked up, and Senate representation is skewed, and gerrymandering; all these very boring, procedural, structural, institutional issues are playing a huge role in this minority being able to basically control the country. How on earth do you get the American movie public excited about filibusters? Adam McKay:  We're doing a movie called Rat Fucked, starring Paul Dano, that's about how they gerrymandered America — the story of who came up with the idea. We've sold that, that's happening at Hulu. Another idea I'm thinking of gets into a lot of that procedural stuff, and I think I’ve found a way to wrap it in a fun bow. That stuff is wildly interesting. I think it's just how it’s told to the public; it's presented as boring. David Roberts:   What you need is Margot Robbie in a bath talking about filibusters.Adam McKay:  We need the “Margot Robbie in a bubble bath” channel where all the news is read. But yeah, we are working on one about gerrymandering that's actually already sold and set up, and then this other one gets into a lot of that procedural stuff. That's exactly why we started this company, Hyperobject Industries. I believe that stuff is interesting, and that there is a way to do it. We have a lot of projects circling around exactly what you're talking about.David Roberts:   Awesome. Well, I will look forward to those. It’s a good time for geeks in the movie world.Adam McKay:  Absolutely. We've always been pretty comfortable in the movie world. Movie world’s always been kind to geeks.David Roberts:   Yes, but usually geeks trying to appeal to the vaguely imagined jocks of their youth. Now they're just straightforwardly appealing to one another.Adam McKay:  I do have to tell you, full disclosure, I've been lifting weights this entire interview. David Roberts:Are you getting swole?Adam McKay:I'm so swole. I'm all swoled up, bro.David Roberts:   It's time to go in front of the camera.Adam McKay:  Well, man, thanks for having me on. This was a pleasure. I can't believe this is the first time. Like I said, I've been reading your stuff and following you for a long time. Thank you for everything you do.David Roberts:   Well, likewise, thanks for making this movie. Wow, did it stir things up. You achieved that.Adam McKay:  It did. I hope it continues to. Honest to god, that was maybe the most enjoyable conversation I've had during the entire press run of this. I'm not kidding. I needed that badly. My soul needed that.David Roberts:   I'm sure you've been going through it. Good luck enduring the rest of it.Adam McKay:  Absolutely, man. Be well. Get full access to Volts at www.volts.wtf/subscribe

My last substantial post of last year was a summary of where things stand with Congress and climate. I ended by reiterating my confidence that Sen. Joe Manchin (D-WV), who has been such an impediment throughout the process, would find his way to supporting some form of the Build Back Better Act, the Democrats’ last and only hope of taking substantial action on climate change. Mere days later, Manchin threw up his hands and said, “I can’t get there — this is a No on this legislation.” So much for that prediction. However! As we head into 2022, there are signs that Manchin’s tantrum was less apocalyptic than it appeared. His objection to BBB — which, to be fair, was his objection for months; the Democrats just thought they could eventually get through to him — is that the bill contains a bunch of new programs that are only funded for a year, or a few years, and since they will inevitably be renewed (according to Manchin), the bill’s price tag is deceptive. He wants to include only programs that are funded for the full 10-year term of the bill, under the artificial budget cap he himself imposed. That would mean stripping a number of popular programs out of the bill. The process blew up because the other Democrats refused to believe that he was serious about doing so much damage to the legislation. However, as Eric Levitz writes in New York magazine, as anachronistic, stupid, and cruel as Manchin’s views are, he’s not willing to move on them. For any bill to pass, it will have to conform. Insofar as there’s any good news in this young year, it is that Manchin seems positively disposed toward the climate portions of the bill. “The climate thing is one that we probably can come to an agreement much easier than anything else,” he told reporters on Tuesday. Other Democrats have expressed confidence that the climate portion of the bill will survive in some form. This is in part because Manchin already stripped the bill of any sticks, anything that might penalize fossil fuels (most notably the Clean Electricity Performance Program). What’s left are $555 billion worth of carrots: grants, tax breaks, and other money showered on every form of clean energy, from R&D through demonstration projects through commercialization — very much including carbon capture at fossil fuel power plants, a Manchin fave. “There’s a lot of good things in there,” he said.Somewhat oddly, Manchin also supports some of the reforms to federal oil and gas leasing that are in the House version of the BBB. All of this seems to at least imply that he’s still open to some kind of bill. What he appears to want is a version of the BBB that, at a minimum, strips out the Child Tax Credit — which can not possibly fit under his cap on spending ($1.75 trillion), at least not when funded for 10 years, at least not if the bill is to contain anything else. The Child Tax Credit kept millions of children out of poverty last year and could potentially cut child poverty by almost half. It ran out at the end of the year, and now at least 50,000 children in West Virginia stand to slip back into poverty. Manchin is choosing to allow millions of children to suffer a little more based on vague and ill-founded worries about inflation. It’s ghoulish and unforgivable.Nonetheless, it is what it is, so Democrats will need to put together a diminished form of the BBB that protects the climate provisions. They still need to try; the stakes are too high not to. “If they can’t pull this off, then we failed,” John Podesta told The New York Times. “The country has failed the climate test.”There are no signs of any such efforts thus far. “There is no negotiation going on at this time,” Manchin said on Tuesday, the same day Senate Majority Leader Chuck Schumer (D-NY) said, “I've talked to Sen. Manchin numerous times during the break.” Oof. Still, also on Tuesday, a group of senators expressed renewed determination to get the climate portions of the bill over the finish line. "We're going to get this done, come hell or high water,” said Sen. Brian Schatz (D-HI), “and right now, we have both hell and high water.""Frustration isn't a strategy,” said Sen. Tina Smith (D-MN), in what I can only interpret as a direct attack on yours truly. “We have to get it done." Volts is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.The senators even made a point of noting that Sen. Kyrsten Sinema (D-AZ), who has been such a problem on other parts of the bill, is “nothing but supportive of the climate provisions here," as Schatz put it. Schumer, as usual, seems determined to press on. He said, “I intend to hold a vote in the Senate on BBB, and we’ll keep voting until we get a bill passed.” Good, I guess?Meanwhile, what Senate Dems are actually moving forward on is some kind of filibuster reform or exemption intended to enable them to pass a voting rights bill without Republicans. In a letter to colleagues, Schumer said:Over the coming weeks, the Senate will once again consider how to perfect this union and confront the historic challenges facing our democracy. We hope our Republican colleagues change course and work with us. But if they do not, the Senate will debate and consider changes to Senate rules on or before January 17, Martin Luther King Jr. Day.Here, again, Schumer seems confident he can move Manchin and Sinema, despite no sign from either that they are willing to budge. "Anytime there's a carve out, you eat the whole turkey,” said Manchin. He said he would rather exhaust his ability to negotiate with Republicans, and from all indications, his capacity to negotiate with Republicans is infinite. Meanwhile, there’s been no word about any of this from Sinema, who was last on record opposing any changes to the filibuster. At least for now, there’s no reason to think that this isn’t just wheel-spinning symbolism, which is going to delay moving forward on BBB. On the other hand, the fate of the republic is at stake, so maybe a little symbolism is warranted. If Manchin and Sinema think the filibuster is more important than the right of every American to vote, let them say so affirmatively and publicly, on the record. On the other other hand, the fate of the atmosphere is also at stake, and if Democrats dump all over Manchin for blocking filibuster reform, it might piss him off and make him even more recalcitrant on BBB. In the coming weeks and months, there will be votes on both these bills and we will have a much better sense of where things stand. The path to (some measure of) success, on climate or much of anything else, is narrow and getting narrower, but it isn’t closed off yet.In the meantime, we begin the year where we ended the last one: in deep uncertainty and anxiety, as matters of unfathomable significance are decided by a small handful of vain old white guys. So much fun.Anyway, I apologize to the political obsessives on the list — I suspect there are quite a few of you — if you knew all this stuff already. I thought it would be worth getting everyone on the same page, with a clear view of the stakes. I’ll be back next week with some wonkery and a very fun podcast guest. Get full access to Volts at www.volts.wtf/subscribe

In this episode, messaging expert Anat Shenker-Osorio — a researcher, campaigner, author, and speaker — discusses the elements of an effective message, what’s required to spread messages, and the right way to test whether they’re working. We also get into the best way to craft climate messages and the current debate over “popularism.”Full transcript of Volts podcast featuring Anat Shenker-Osorio, December 20, 2021(PDF version)David Roberts:People involved with politics are obsessed with messaging: what to say, and how to say it, to sway voters or politicians to their side. Everyone has strong opinions about messaging, but almost everyone’s opinions are drawn from their personal experiences, preferences, and priors, which are rarely reliable guides to what works in practice. There are, however, people down in the trenches doing real message testing in the field, as part of real grassroots campaigns, like Anat Shenker-Osorio, head of ASO Communications and author of the book Don't Buy It: The Trouble with Talking Nonsense about the Economy. She helps campaigns communicate for a living, and she discusses the lessons learned from successful campaigns on her podcast Words to Win By. Shenker-Osorio is a co-founder of the Race-Class Narrative project, which is developing a coherent response to America’s familiar racial dog-whistle politics. She has advised several environmental campaigns and done a lot of thinking about the right way to message around climate change, as well as its place in the race-class narrative. As long-time readers know, I have a love-hate relationship with the subject of messaging, so I’m happy to dig in with Anat to figure out what we really know about good and bad message testing, the elements of a good message, how to actually get messages to voters, and how to talk about climate change in a compelling way. Without further ado, welcome, Anat, to Volts. Thanks for coming on.Anat Shenker-Osorio:  Thanks for having me.David Roberts:   I'm excited to talk about messaging. I want to start with a distinction. The side of messaging that people think about most often is word selection: choosing your words, slogans, catchphrases, and verbiage for your ads. But the other side of messaging is about the infrastructure that allows you to get the messages you've developed to voters: the spokespeople, institutions, media outlets, social media pages, civic groups, all the mechanisms that allow those messages to reach their intended audience. It's always seemed to me that it is on this latter side of messaging where the left is really getting its ass kicked. It seems like the right has a robust ecosystem that's very coordinated and capable. If they have a new message — you know, “Critical race theory is taking over schools” — they can get that to the ears and eyes of every single conservative in the country basically at will. The left, it seems to me, lacks that ability. What does it need to do to build that kind of infrastructure? Anat Shenker-Osorio:  There are so many ways into this question. First, of course, I agree with you. That's something that I have remarked upon myself, frequently: A message nobody hears is, by definition, not persuasive. It doesn't matter how fancy your survey or RCT or field test, everything that you did to create that thing: If nobody hears it, it didn't persuade them. I think it is too simple a distinction to put those things in two buckets, and here's why. Part of the problem we have is, if your base won't carry the message, then the middle isn't going to hear it. Yes, it would be amazing to have an actual functional media that would properly do its job. Yes, it would be amazing to have a left-wing specialized media infrastructure of the size and capability of Fox News and OAN and conservative talk radio and all the rest of it. Yes, those would all be great things to have, and we would be much, much better off. But we do have the knowledge that a message is like a baton that needs to be passed from person to person to person, and if it gets dropped anywhere along the way, it is, by definition, not persuasive. Why was it possible for the left to spread the message “love is love” and “love makes a family” and with it shift culture, shift perception of gay and lesbian unions (what used to be called gay marriage and is now properly called marriage equality)? Why was it possible in city after city and then state after state to spread a message of Fight for $15? Why was it possible in the post-election for us to create content, with a crackerjack team of designers and artists, that said Count Every Vote? Those memes were viewed more than a billion times, and that's just a domestic US audience. There are times when we have broken a signal through the noise, despite all of the disadvantages that you point to — and those have been the times when we have properly attended to that wording question. So again, I don't disagree with your diagnosis, I just think that the way that we resolve this issue actually has to do with the messages that we're putting out, at least partially.David Roberts:   Let's talk about how we figure those messages out, then. Another one of my longstanding beefs with the endless messaging talk that I hear — and I'm mostly coming from a climate perspective — is: I frequently read studies and survey groups telling me how people react to messages when they see them in isolation, one at a time, in the calm of a focus group, or assembled by an academic. Then they take the different ways that people react to these messages in that context and vastly over-interpret them regarding what kind of messages work out in the world. It's pointing out the obvious, but the way people encounter messages in the wild bears no resemblance to that whatsoever. When people encounter messages in the wild, it's in the midst of the noise and chaos of our modern information system. They get partial messages, and the messages are surrounded, often, by counter-messages from the other side. So the way people encounter and absorb messages in the real world seems to me so distant and different from the way these focus groups are done that there's just not a lot to learn from the latter about the former. So how do you messaging experts, or testers, figure out how a message will perform not just in isolation, but in the scrum of an actual political fight in the actual world?Anat Shenker-Osorio:  I feel like you are an audience plant for me, raising up all of my core beefs and things I yell and scream and write and tweet and bang my head against the wall about. Yes, you're absolutely right. In-channel testing is any kind of empirical test where you are providing stimuli to the respondents and asking for their feedback about that stimuli in the same moment at which they are receiving it. So that's a telephone survey, that’s an online dial test; even more sophisticated processes like using a randomized control trial (RCT) and not a sequential survey is still in-channel testing. Same with focus groups. First of all, you are literally paying them for their attention. That is what you are doing: providing them a financial incentive to listen to your thing, watch your thing, and tell you about your thing. You have their undivided attention — or at least you have their somewhat undivided attention, because remember, a lot of this testing is happening digitally, which means that, like in the way when people are on Zoom calls, they also have seven tabs open. So you're still getting some level of distraction, because people are not just listening to you. The same goes for when they're taking a phone survey; they're also making dinner and yelling at the kids or whatever's going on. But yes, it is what you say. So how do we deal with that? We understand that each tool is useful for its purpose and not for another. Things like in-channel testing — qualitative and, more importantly, quantitative — can be used in order to understand whether one frame is more effective than another, or whether one frame is more comprehensible, logical, clear than another. What it can't be used to do is determine effect size. You can't see an effect size in an in-channel test, say, “This moved people 8 percentage points,” and believe that that's actually what's going to happen in the field. That's not true, for the reasons that you say.Number two, you can design those tests to be closer to the real world by making them legitimate combat tests, having people in the survey exposed to more opposition messaging than our own — which, of course, is what is happening in the real world — and testing our messages against what the other side is saying. This is one of my 5,700 beefs with a lot of academic research, that they do this test-tube experiment where they don't expose folks to opposition messages. Next thing you can do, you can be a lot smarter about what you are rating the message to do. That's when we're doing message testing, which, by the way, is not what's happening most of the time. What's happening most of the time is that people are doing polling; they are doing research to take the temperature, not doing research to change the temperature (metaphorically speaking). That, of course, is the way that the right wing approaches all of this testing. They don't say, “let's figure out where people already are on our issue.” Something that I say frequently is that it's not the job of a good message to say what is popular, it is the job of a good message to make popular what we need said. So apropos the example that you offered, they started their critical race theory attack, and even today, most people don't know what critical race theory is. They have no idea about it.David Roberts:   They certainly didn't start by polling and finding out that Virginia parents were natively concerned about critical race theory. Anat Shenker-Osorio:  Because they weren't. They were like, what is that? Is that the name of a coffee shop? A new kind of NASCAR race? What is that? They decide where it is they want to take people, and then they use message testing to figure out the articulation that is going to be most effective of the path that they have already decided to walk. They do message testing to try to change the temperature; they don't do testing to take it. When we're doing message testing, it means not asking for facile self-reported ratings like, “did you like this message? Did you find it convincing?” That is asking people to have a conscious response about something that is happening unconsciously.David Roberts:   Right. This is one of my beefs about polls and surveys too: People are not necessarily the best judges of what's going on inside their own heads. Anat Shenker-Osorio:  They are definitively not. People only tell you what they think that they think. Because most of thought is unconscious, so we don't actually know why it is that something moves us or doesn't. So what does it mean to structure a better test? It means, for example, to structure a test in which you ask people a pre-question like, “would this make you want to convert the entire electricity grid to solar, even if it meant you had to pay this much more in taxes?” Why do we ask that that way? Because we don't want it to be a unicorns and rainbows question where people are like, sure, whatever.David Roberts:   Do you like good things? So many poll questions are like that: Do you like positive things? People say yes, and then they send out the press release: People love this thing!Anat Shenker-Osorio:  Right. So you ask a higher-bar-ask kind of question, and then you expose people in different treatment groups, relative to a control that doesn't get any message, to a single message, and then you ask them a post-question. Or, you don't ask, you do a control, and you just ask the hard question after, so that you can attribute a difference between the control group that got no ad or message or slogan to the treatment group. Then you can say, “the people in treatment group C, who got message C, they had this however-many-point shift.” You can just do better research. Then finally, the gold star is to do in-field testing, to use in-channel testing to get the lay of the land, understand what is probably best, and then do much better research — if you can afford it, because in-field testing is expensive. Instead of asking for people's self-reporting, you do something like send 100,000 postcard A to voters in this block, and send 100,000 postcard B, and then you actually measure the voter file. You're not asking people, you're checking.David Roberts:   That seems much more likely to give you good information.Anat Shenker-Osorio:  Yeah. People who know what they're doing do a combination of all of those things.David Roberts:   Good segue to my next question, and I guess we can use the critical race theory example to get at this question too. It seems to me one of the reasons that they were able to start from nothing — parents having no idea what critical race theory is — to parents freaked out about critical race theory in an incredibly short period of time is that they were not starting from nothing. The background presumptions of the critical race theory message — Blacks are getting unfair advantage, whites are constantly criticized, whites are the most discriminated-against group in America today, they're trying to program your kids to be socialists at school — that foundation has already been laid through 40 to 50 years of repetition, of having institutions and politicians and media outlets say that over and over and over again. So when you come along with this new example, most of the persuasion job is already done. The parents who have been hearing your stuff all those years are primed to believe this new example. Similarly, I think back to the cap-and-trade debate in 2009-2010: All the right had to do was say, “oh, this is a tax,” and that got them 95 percent of the way they needed to go, because the foundation was already in place. Everybody's been told for 50 years now: taxes are bad, they're unfair, government’s incompetent. All of that’s already in place, so it's pretty easy to just apply it to the next thing. In contrast, the left has not spent the last several decades laying that kind of foundation. There are, as far as I know, no left think tanks or organizations devoted exclusively to telling Americans that government works, government is good, lots of the things we have in our society are traceable to government. So because that foundation isn't laid, they're just starting from scratch every time, with every new messaging battle. In the cap-and-trade example, the other side is saying “tax!” and then the left is saying, “well, no, you see, we set the emissions at x level, and then you divide it up into permits, and you can trade the permits, but over time the cap on the permits … blah, blah, blah …” People tuned out a long time ago. Total asymmetry there. The right has been doing messaging about its foundational worldview, repetitively, over and over again, through multiple channels, over decades, and the left just isn't doing that. It approaches every new issue or every new piece of legislation or every new fight from scratch, and it's constantly on the back foot. So my question is a) do you agree with that diagnosis, and b) if so, how can that be remedied? Whose job is it to be laying that basic foundation, the basic left worldview, beneath all the more specific points?Anat Shenker-Osorio:  I definitely agree that that is an exact characterization of what the right has done successfully — that they basically have one message, or very, very few messages. What you're describing is essentially the oldest political trick in the book: divide in order to conquer. The right-wing use of dog whistles, of racially coded speech … not just in this country. I just came home from Brazil: it's Bolsonaro; it’s Duterte; it's Orban in Hungary; it's Brexit, Boris Johnson; I lived in Australia, it's the discourse of the right wing there. There's nothing new under the sun. Basically, there is one storyline they have, and it is to pick some Other to vilify and tell aggrieved white people, white men in particular: this is the source of your pain and problem, and here, we are going to alleviate it for you. We are going to deliver to you this wonderful vision of a world in which we “Make America Great Again.” We will take you back to a time when you were on top of the pecking order: women knew their place, and Black people did too, and so on and so forth. They accomplish all this magically, through the use of this racially coded speech, without actually explicitly naming race, thereby maintaining some measure of plausible deniability, and acting affronted that we dare to say that they've somehow made racist remarks. They say, “I never mentioned race. I just talked about illegals,” when, of course, when they talk about “illegal immigrants,” what comes to mind is not the Swedish backpacker who has overstayed their visa. This is exactly what they've done. It's why critical race theory fits so seamlessly; they just keep remixing the exact same story. That is why it is so effective. And it is absolutely true the rest of what you say, that the left: we are very smart, and we're very creative, and we like to make a brand new thing for each thing. David Roberts:   We are so clever — way too independent-minded to ever just go around repeating what other people say, goodness no.Anat Shenker-Osorio:  There is an entire thing I call “not-invented-here syndrome,” and partly, that is structural. Look at anything that used to be a mass movement — the labor movement, the women's movement, civil rights — that has gone through the maturation process all of these things go through and become professional organizations. I don't want to use any one example, because it sounds like I'm impugning that sector, when this is just part and parcel of the architecture. If you're going to be a Sierra Club, a World Wildlife Foundation, a National Resources Defense Council; if you're going to be a Planned Parenthood, a NARAL, a National Women’s Law Center: you need to have your own message, your own branding, your own campaign. Otherwise, what are you showing to your funders to say, “look what we did! This is what we did this year” or “this is what we did this quarter. This is why you should give us more money.” Responsible nonprofit executives want to pay their employees’ salaries. That is not a bad thing to want to do; you should want to be able to pay the people that work at your institution. So the incentive is against having an echo chamber. There is a financial incentive on the left toward this cacophony of differentiated messaging, which is completely and totally anathema to persuasion and mobilization. It is a visible contrast to how things used to be when we didn't have professionalized organizations: we had a women's movement in which undifferentiated people were in the streets all chanting a similar thing, just to take one for instance.David Roberts:   The right has professional organizations, but does not seem to have this problem. What is the difference between our billionaires and their billionaires?Anat Shenker-Osorio:  Their billionaires cut checks for general operating. The end. It is a nested set of ironies that they believe in this highly competitive, highly individualistic, highly unconnected worldview, and yet the way that they operate in political space is through an incredibly clustered, pro-social, collective endeavor. The way that organizations, think tanks, spokespeople, etc., are funded on the right is that they are given money to just do their thing and are not required to produce justifications. I have 7 billion critiques, and one of them is of progressive philanthropy. Philanthropy is, at its core: If you're giving people money, that is supposed to be about the redistribution of power; otherwise, it is meaningless. If you give people money and you are still saying to them, “well, how did you spend my money? What did you do? What was the outcome? What was the output? What were you planning? What was this accounted for?” That's no different than me giving you a sweater for your birthday and every time I see you, being like, “why aren't you wearing my sweater? My sweater is so much better than what you're wearing! Why are you wearing that thing?” That's not a gift, if I am asking you endless questions. You're either giving away your money and therefore your power, or you are simply pretending and still wanting to retain your power by asking endless questions and not allowing the work to get done. So that is my giant diatribe. To your actual question — who is doing this on the left, who is responsible for this — obviously, I am not objective, but there are examples. There are campaigns where we have successfully done this. Let me just start with one. In 2018, after having done a giant body of research that we call the Race-Class Narrative (RCN) — which was created in part and in partnership with a legal scholar named Ian Haney López, who wrote the book Dog Whistle Politics and is one of the originators of this idea — we did this giant messaging project, which we have since implemented in many places, starting most robustly with Minnesota in 2018, with a campaign that we named Greater Than Fear. As part of Greater Than Fear, we had scripts about taxes, public education, driver's licenses for undocumented immigrants, solar panels, etc. What that meant was that not only did we have Greater Than Fear posters and memes and social media channels and ads, organizers who were going door-to-door during that midterm campaign were echoing each other. It was successful enough that the politicians in the state — Tim Walz, who was running for governor and now is governor, the two senators who were running, folks at the state level — they adopted that messaging. Several of them had a closing get-out-the-vote tour which they named their Greater Than Fear Get Out the Vote. So there are times we've done that. We've done that with Fight for $15. We've done that with “love is love” and “love makes a family.” We've done it with Red for Ed, the educator strikes that swept in a wave in 2018. There are times we have done this; it's not that we never have. When we have done it, it has been because organizations — unions, civil society, candidates, parties (to the extent that it is legally permissible, obviously not across the firewall) — have pre-agreed that the most important thing is that we need to be able to break a signal through the noise. They have suspended ego. They have gotten funders to recognize that this is incredibly important. We did the same thing in the post-election. The message was “count every vote, count every vote, count every vote, count every vote” — instead of saying “let's call it a coup” or “let's talk about Trump” or “let's talk about authoritarianism.” Then the message shifted to “voters decided.” That seems like an facile and simple thing; it was actually incredibly well-structured, well-coordinated, and well-executed, and that message got across.David Roberts:   It seems like a sane movement, or let's say a sane billionaire, would be seeking such successes and then trying to fund the organizations behind them so that they can build on those successes in the future and repeat those same narratives in other contexts to the point that those basic narratives become very familiar. That just doesn't seem to be happening.Anat Shenker-Osorio:  I agree with you, although you might want to rethink the phrase “sane billionaire,” because I don't know if that's a thing. David Roberts:   Ours have a different kind of insanity than theirs, I guess. Ours are the wrong kind of insane. Anat Shenker-Osorio:  But also, how does one become a billionaire, which is an entire separate conversation. There is no innocence in capitalism. That aside, I only know what I know, and what I've done, and what I'm fighting to do more of, and it's the reason why I emphasize campaigns we have won and how we have won them. It is doing exactly what you have described: having a simple, coherent message that recognizes that politics isn't solitaire and that messages don't land in a vacuum. People are hearing relentlessly from the opposition. If we're not attending to what they're saying, then our message isn't going to work. The message has to be engaging to the base. But the answer, at least from my vantage point, about why people aren’t doing this, is because there is still a live debate, unfortunately, going on in left and left-of-center parties — again, not just in the US, but I also work abroad — around what it is that works. There is a level of fear, people clinging with their fingernails to what little we have, what little gains we've made. When people are acting from a place of fear, their behavior is never that great. People are terrified to try new things. The truth of the matter is that a lot of what passes for polling and message testing on the left is the world's most expensive form of copy editing. People are essentially testing ecru against offwhite against eggshell. They're testing a series of messages which are largely the same argument but with tiny wordsmithing details. Then it's a garbage in, garbage out problem; message D or message E or message whatever is marginally better, but it's not that distinct from the other ones, because people are not considering the range of ways we could make that argument. The reason for that, which you already know, is because the kinds of solutions that you advocate, that I advocate — the kind of world that we know that we need — is not the kind of world that a lot of people who are in charge presently actually want. So it is challenging to do projects, to do testing, to develop messaging that makes an impassioned, interesting, engaging, humorous, base-mobilizing case for true economic prosperity, for a livable planet, for an end to poisoning ourselves voluntarily in order to make a handful of billionaires richer. People don't want to do that. The basic truth of the left is that we have to beg the master for money to buy tools to take down his house.David Roberts:   That is very well put. In the spirit of thinking through these foundational left messages that can undergird more specific case-by-case messages, you refer to the race-class narrative. That's become a big thing in recent years. Can you explain what the basic building blocks of the race-class narrative are and talk a little bit about how it can be applied to climate change?Anat Shenker-Osorio:  The race-class narrative is a messaging architecture. It is a way of talking that has a very deliberate order and structure, and that order and structure is built off of years of testing what is more and less persuasive. So first, let me talk through the structure, and then I’ll give you an illustration of what it sounds like in language. You begin the first sentence with a shared value that explicitly names race, or explicitly names any kind of difference that the right wing has been exploiting in order to divide us and impede our progress. So you start off with: say what you're for, say what you're for, say what you're for — in contrast to a standard leftist message, which is almost always either, “boy, have I got a problem for you,” “this is the Titanic,” or “we’re the losing team, we lost recently, so you should join us.” So far we have not seen a lot of efficacy out of those three hellos that the left is keen on. So it begins with a shared value. It then moves from value to villain. It names the problem that we're confronting second, not first, and it does so identifying a clear cause, as opposed to saying things like “homes were lost,” “the gap between rich and poor is growing,” “children of color are experiencing the least qualified teachers,” or, to get into your area, climate change has now in our language become personified to a degree that, “climate change is raising sea levels. Climate change is making the weather weird. Climate change is creating these deadly storms. Climate change is this and climate change is that.” The issue with that sentence structure is that you can't actually pass a law on climate change any more than you can pass a law to make it be high tide at 10:30 a.m. You can pass laws about human behavior. So what we find is that climate change itself has become this frozen phrase which is unhelpfully meaningless and seems to be a causal agent, instead of talking about what actually matters to people, which is air you can breathe, water you can drink, and a statement that at least implies causation, like “damage to the climate.” Damage to the climate suggests that someone is actually doing the damaging, as opposed to “this thing is occurring.” As opposed to, it is some sort of self-inflicted wound, or climate change itself is an agent. It's a little bit like talking about “systems and structures.” There's no fucking “system and structure,” there are people making decisions, and those people have addresses. Unless you talk about it in those terms, you don't have an organizing model. Are people supposed to mass mobilize at systems and structures’ house? Are they supposed to do a Twitter storm at systemic inequality? There's no organizing to be done around that kind of problem definition. So step two is that it names the problem with a clear villain. Then step three, it resolves the cognitive dissonance intentionally created in that contrast between the shared value opening and the villain problem statement second, and that closing vision statement is one of cross-racial solidarity toward the kinds of outcomes that almost every single one of us desires. What does that actually sound like? For example: “No matter what we look like, or where we come from, most of us want to care for our air, land, and water and leave things better off for those to come.” Second sentence: “But today, a handful of politicians and the fossil fuel CEOs that fund them are trying to divide us from each other, hoping that if they can distract us from the fact that they are profiting off of poisoning, our families will look the other way, while they put the clean energy solutions we know work out of our reach. By rejecting their lies and joining together across race, across origin, across ZIP code, we can make this a place that we're proud to leave our kids for generations to come.” Something like that. I mean, I would wordsmith it and make it shorter, but that's basically it in a nutshell. In the middle, you have to call out what the other side is doing and ascribe motivation to it. Otherwise, you are not guarding against the efficacy of their lies.David Roberts:   And what they're doing is always some version of dividing us so that they can screw us.Anat Shenker-Osorio:  Pretty much. If they can convince you that Juan is taking your job, when Juan is in fact sitting in front of Home Depot trying to get some day labor — and, by the way, does not possess the means to make public policy, because he's denied even the ability to vote in the country in which he lives and works and contributes — if they can convince you that Juan is taking your job, then you will not notice that, in fact, Jeff Bezos took your job. There's nothing new under the sun. If they can freak you out about “law and order” or crime, or if they can make you believe that the problem is “those people who just don't want to work” or “those people who just don't come in the right way” or “those people who just won't teach their children the right thing,” then you can be made to hate and resent government and to be against collective solutions, because your understanding of government is as an evil force that takes away from “hardworking people,” who are coded as white, and gives it away to “profligate people,” who are coded as black and brown. Then you resent them, and you don't like the government, and you're willing to vote against it. Everything is some big government socialist program that is evil and taking away your freedom.David Roberts:   It's sort of hilarious that they've been at this anti-government thing for so long now that government spending is self-evidently bad in their world, government regulation is self-evidently bad in their world – and that's what governments do. That pretty much covers the waterfront. So governments doing what governments do now is self-evident evidence that something nefarious is afoot, on the right.Anat Shenker-Osorio:  Completely, and that government acting, having collective action, is somehow an abrogation of your freedom. In point of fact, I don't know about you, but when I go to a restaurant, I'm not really keen to be on the hook for deciding whether or not the kitchen is full of salmonella. I don't know much about that. I would like when I enter a building for the roof to be load-bearing; I know absolutely nothing about how you check that, I just like to have it happen. When I flush the toilet, I'd like the stuff to go away. So partly, it's been on us. One of the other messaging mistakes I point out frequently is that we like to sell the recipe instead of the brownie. We like to have our policies be our message, and that is a very bad idea. People like paid family leave, don't mistake me, but you know what they like even better? When we say, “you're there the first time your newborn smiles.” They like clean energy, but you know what they like even better? “You can feel great about the water you drink and the air you breathe.” We have to sell things in terms of the payoff, in language that gets at the lived experience of being inside that better policy.David Roberts:   Let's talk a little bit more about some of your work you've done on climate messaging. One of the things I found interesting is what you found out about the Green New Deal. Tell us what results popped up when you tested that.Anat Shenker-Osorio:  I say this gingerly because of the point that I made earlier, which is, again: it's not the job of a good message to say what's popular, it's the job of a good message to make popular what we need said. So to the extent that the left could make the Green New Deal a thing, it's important to have an undergirding, galvanizing slogan that is central and so on. That said, what we have seen in the research is that, at least the last time we tested it, “Green New Deal” is not a particularly effective thing to say. Just the name of it, without knowing other details — which most people do not and never will because most people do not have the bandwidth to be paying attention to that degree — it signals not that ambitious, not that much. A deal is a bargain. It doesn't tell people “your life is going to be better,” as a phrase.David Roberts:   It's hard not to draw the comparison here to critical race theory again. “Critical race theory,” to most people, was an empty phrase, and they introduced it with the explicit goal of filling in that phrase with everything that made parents nervous or anxious. The emptiness of it at the beginning was almost part of the point, because they could just paint whatever they wanted into it. You could imagine the same thing happening with Green New Deal: We introduce this empty phrase, and then the entire left mobilizes to fill it in with everything good that people associate with clean water and all the rest of it. But instead, we introduced this phrase, and instead of filling it in, the right filled it in, and the left poll-tested it and found that it was already filled in, so they retreated from it. So the right did the “critical race theory” thing to it, too. I always thought the Green New Deal was incredibly powerful because it was mostly empty at the beginning and it could have been associated with all the positive things we want to put in this new world — but we just didn't have the wherewithal, the institutions, the mentality. It's such a telling contrast, those two cases.Anat Shenker-Osorio:  You were just making a more succinct articulation of what I was trying to say, which is that if you have a vessel and there's some utility to that vessel, then yes, it should be your job to fill in that vessel for people. I was simply reporting to you people’s present evaluation of the vessel. That was not, “do this, don't do that.” I was delivering information.David Roberts:   Yes. It's not filled in yet. Or filled in mostly negative. Anat Shenker-Osorio:  So the choices are: Do you say, this is enough of a vessel, there is enough agreement among organizations, institutions, politicians, etc. on the left that this is our boat and we're in it, so we better make it the nicest possible boat? In which case, yeah, let's do it, and let's be very clear and good about instead of selling the recipe, selling the brownie; instead of selling the names of policies, actually selling the outcomes, which is a big part of the problem in the way that the Green New Deal has been described. It's been very much taking your policy out in public, which is unseemly, should not be done. Or you can say, no, we need a vessel that is more clearly positive, which — just to give you a shot in the dark, out there illustration — would be something like the Freedom to Thrive Act, which at least suggests to people, oh, that sounds like a thing I want. I like thriving, I like freedom. Freedom is a value that's closely associated with the US. That is true across demographic groups. When you ask respondents, “what value do you most closely associate with the US?” across the board, without exception, the number one thing named is freedom. That is a value that the right wing has claimed as their own for a long time, when in point of fact, it is a deeply contested concept. Core to marriage equality, the freedom to marry; core to the civil rights movement; core to the women's movement. There's a lot in freedom that is very much a progressive idea. And not for nothing: the renamed bill is Freedom to Vote. That was a very deliberate choice.David Roberts:   Getting back to these core narratives, one of the elements of the right’s core narrative is negative liberty: freedom means people will leave you alone. Freedom means fewer rules, fewer restraints. There’s this other way of looking at freedom, which is by taking collective action and structuring markets or societies in certain ways, we enable people to have things they otherwise wouldn't have been able to have. So they have the freedom to get a good education; a good education provides you a certain kind of freedom, but it's a positive freedom. It's a freedom of new opportunities, not just people leaving you alone.Anat Shenker-Osorio:  In fact, in this project that we just wrapped up, looking at how to make a full-throated positive case for public education, soup to nuts, in the era of this anti-CRT nonsense, the name of our messaging guide is Freedom to Learn. Because one of the things that popped up as most potent and effective, besides saying most of us believe that our children should be taught the truth of our history, the good and bad, so they can reckon with the mistakes of our past and understand our present …David Roberts:Do most of us believe that? Anat Shenker-Osorio:  Yeah, in fact around 80 percent of people do. David Roberts:   I guess the other percent are loud. Anat Shenker-Osorio:  That's exactly what's going on. But what I was going to say is that Freedom to Learn, this idea that our kids deserve the freedom to learn who they are, where they're going, where they've come from, is very powerful, and an effective rejoinder to this CRT thing. What the right does so incredibly well is avail themselves of one of arguably the most persuasive things that anyone has in their arsenal, which is social proof. So it looks to the average person who is not paying attention to political details when they turn on their local news and see a bunch of parents yelling and screaming at a school board: “Huh, I guess people who look like me, who have kids that are like mine, think this way.” When in point of fact, both in our polling and in all of the publicly released polling, 80 percent, 83 percent, 85 percent of parents (it depends which poll), when you ask them, want kids to be taught the truth, the good and bad of history. They don't want books censored. They don't support these things. It is not a popular position. But the right doesn’t care what is popular. They understand that the job of the message is to keep their base engaged and enraged. Because as long as that base — even if it is only 15 percent, 12 percent, 20 percent, depends on the issue — is yelling and screaming, that is what is persuasive to the middle. The middle is reading social cues to understand what is common sense and how the world works. Meanwhile, parents on the left, the vast majority of whom actually do support a clear, honest, race-forward, inclusive public education curriculum, they're not out there saying anything.David Roberts:   Yes, this is such an important point. I feel like the left, especially Democratic leadership, doesn't get this. A lot of people don't know that if you look at polls from the early 1960s, you find that most people were fine with equality, most people thought racism was bad, most people were ready for the Civil Rights Act. In terms of mass opinion, it was in the right place. But everybody thought that everybody else was still racist. Everybody thought that they were the exception or the minority. So how do they find out that they're not? How do they find out that they actually have the majority? It requires someone standing up and yelling. So this will on the right to suppress the people who actually are in the majority from standing up and yelling and signaling to one another, they can keep minority opinions in place. You can see that happening now, too. I bet it's the same on climate change. If you get people in isolation and ask them, “Should we go for it? Should we clean everything up?” most people will say yes, but that's just not who they see yelling when they turn on their TV. I think that's so important. Anat Shenker-Osorio:  It’s absolutely the case that we are not just creatures driven by emotion, we are creatures driven deeply in our political beliefs by our identity, and our desire to preserve, protect, and maintain identity. So we are constantly reading in our environment social cues that tell us, what does my kind of person think? Take a very specific case. It is common and frequent for folks on the left to do a lot of hand wringing and to verbalize, “oh, XYZ demographic group aren’t voting: young people aren't voting, Latinos aren't voting, African-American turnout is down.” We can see through experimentation — this is not self-reporting — that when you send the message to demographic groups, “your demographic group isn't voting,” it lowers voting. Similarly, talking about vaccine refusal increases vaccine refusal.David Roberts:   That's like the thumb trap: the harder you try to get out of the trap, the more you're in it. If you watch what consumes political dialogue on a day-to-day level, it's constantly the right acting, accusing, establishing things, and constantly the left talking about what the right is saying: fact checking it, refuting it, but talking about it, constantly. So it's what gets talked about.Anat Shenker-Osorio:  My standard joke is that if the left had written the story of David, it would be a biography of Goliath. We talk about our opposition all fucking day and then we're like, “oh, why don't people want to be motivated?” Because the truth of the matter is, the thing that we see in test after test, is that believe it or not, our opposition is actually not the opposition. It's cynicism. It's not that people don't think our ideas are right, it's that they don't think our ideas are possible. So why bother even trying, when we speak relentlessly about our opposition? Talking about Trump in 2016 is how we got Trump.David Roberts:   What a nightmarish thought that is. We conjured him into the presidency through our fear.Anat Shenker-Osorio:  When you take your kid to a pool and your kid is running, a competent lifeguard will yell, “walk!” because if you yell “don't run!” at a kid, they will run, either out of defiance or because you literally just yelled “run” at them. The core messaging lesson when I do presentations is, “forget everything else that happened today, I just want you to remember one thing: Say what you're for. Say what you're for. Say what you’re for.” You have to tell people what we want them to do, and stop telling them what we don't want them to do. We have to yell “walk!” not yell “don't run!” In the climate space, I know, for example, from my work in Australia, the percentage of jobs in the coal industry is something like 0.1 percent. But when the average Australian is asked to take a guess what proportion of jobs are in coal, people guess anywhere from 5 to 20 percent. I would guess if you asked Americans, it would be the same. They wildly overestimate how many jobs in our economy are in the coal industry. Why is that? It's because we talk about coal all the fucking time. We talk about coal every goddamn day. So it is no wonder that people routinely overestimate its centrality, importance, size, contribution, and number of jobs.David Roberts:   One of the big things that lefties in the climate space who view themselves as virtuous talk about a lot is a just transition for coal workers. They think, by making that a common point of discussion, they are signaling their good intentions and their virtue, that it's safe for coal workers to embrace this, blah, blah, blah. But I worry that we're having the effect you're describing, which is vastly overstating the significance and number of coal workers in the world and making the transition more difficult. Now you’ve got everybody thinking about this beleaguered group that's going to get ground up by the transition and overestimating their size, etc. How do you navigate that?Anat Shenker-Osorio:  The way you navigate that is by having more of an overarching message. I'm wordsmithing it on the fly, so forgive me, it's not going to be copy edited, but it would be something like: “Whether we're Black or white, rural or urban, young or old, we all want to be able to care for our families and do work that we're proud of that leaves things better for those to come. But today, a handful of politicians and the fossil fuel CEOs that fund them want to keep people tied to a wage they can't live on and a job that is hurting their families, our air, and our water. By joining together to demand both clean, reliable energy that's homegrown, made from the wind and the sun, and jobs for people coming from any industry, we can make this a place …” You just do it like that, more broad strokes, instead of zeroing in on, “we're going to specifically rescue you from the coal mine,” which does reinforce this idea that we're talking about several million people, and we're not.David Roberts:   I want to get to popularism before we're done. The idea behind popularism is that the commanding heights of the Democratic Party have been overtaken by young, educated, urban liberals, but the majority of Democratic voters are still non-college-educated white men. The idea is that all these effete urban liberals are pushing organizations to message and talk in a way that flatters their worldviews and their sensibilities. They cite “defund the police” and all these policies that only resonate among that crowd, but do not resonate among the non-college-educated white men that Dems still need to win. The idea, I think, is Dems need to readjust their messaging to appeal to the great, not particularly progressive, non-college-educated white masses, the way that used to be very en vogue. That was Bill Clinton's whole thing. Obama, to some extent — this is an argument popularists make that has some merit — really did go overboard in almost every case to at least rhetorically check that box, to acknowledge the worldview and fears and sensibilities of non-college-educated white people, even as he was pushing for liberal progress. All the messaging organs have been taken over by these educated liberals, and they're out of touch with the masses, and that's why the masses are turning to Trump or tuning out. So we're going to end up with an entirely urban, educated demographic, which, because of the various distortions of the American constitution and governmental system, are clustered in cities and cannot form majorities. Basically: the left is screwing itself. You want to be tuning your message to the sensibilities of the bulk of your audience, and we're not doing that right now, and we should do that, say the popularists. What's your take on all that?Anat Shenker-Osorio:  Oh, boy. First of all, have you ever taken The New York Times “guess my political ideology” quiz?David Roberts:   No, not yet. Anat Shenker-Osorio:  You take that quiz. The first question it asks you is your race, and if you tell the quiz that you're white, the second question that it asks you — do you want to guess what it is? It's trying to figure out political ideology. It's taking you through essentially a decision tree; what's the second question you think it asks?David Roberts:   I would think it would be about education.Anat Shenker-Osorio:  But you'd be wrong. Because in point of fact, education is not the strongest predictor of political ideology. David Roberts:   Wait, second guess: the population density where you live. Do you live in a city or a suburb or rural area?Anat Shenker-Osorio:  Good guess, but it’s religion. It’s religiosity.If we want to operate in a simplified world where we only look at people as two variables, or we only look at white people as one variable — which is a silly thing to do — the most determinative single variable is not education level, it's religion. So first of all, this idea of education polarization as the most meaningful data point is demonstrably false. There's some veracity to it, obviously, we're talking about tendencies, etc. But if you're trying to reduce a massive population, which is white men, then the way to cut through it, if you're only making one cut, is whether or not they're evangelical. That's the first thing. The second thing is that, what the popularists fail to understand is what we spoke about earlier: that politics is not solitaire. If we choose to be silent about race, about police, about immigration, about all of these things that are purportedly anathema for us to talk about, that doesn't mean those conversations go away. It means that the only thing our voters hear is the unrelenting race-baiting of the other side, which means our economic promises cannot cut through. We've seen this over and over again, when we go to our voters and say, “I'm going to increase your wages, you're going to have better working conditions,” the voter has just been canvassed two hours earlier by some right wingers saying, “Juan is taking your job” or “you can't even drive into the city because it's too dangerous and you're going to be murdered and there's crime.” Our economic promises have no ability to break through and penetrate because the right wing is engaged in this unrelenting scapegoating and fearmongering, and if our messages are not attending to that, they don't work. Number three: Let's take Obama as an example. Let's take, more specifically, his attempts to appease frightened, anxious white people, these non-college white people, by deporting more people than any previous president and using the discourse of getting tough on the border and cracking down and deporting and deporting and deporting. I'm just stating facts. That is what occurred. It’s not a message, that is what happened. Republicans still said he was for open borders, still said he was creating this entire ethos and era. Obama himself said that he had to be tough on the border, he had to crack down, he had to deport. Same with Clinton cracking down on welfare — this idea that you have to genuflect at the altar of the terms the right puts on you.David Roberts:   And worse, that policy is the right way to respond. As though policy will change the rhetoric, as though policy will change the discussion. One of the first political posts I ever wrote in my entire life was yelling at Obama about this. You can change policy all you want, but people's political opinions are only tenuously connected to policy realities, if at all. That's just not the lever. If you want to change politics, you don't pull the policy lever, you pull the politics lever. You do politics.Anat Shenker-Osorio:  How else do you explain that the former senator from MasterCard, who is now our president, is a “socialist?” How do you explain that Chuck Schumer reportedly wants to defund the police? The point is that regardless of what Democrats actually say and do, people's opinion of Democrats is not made out of what Democrats say; it is made largely out of what Republicans pillory them with. How would it possibly be the case that public opinion about what someone stands for and does would actually just be made out of what they said? That would be great, but that is not the reality. So the entire idea is a house of cards. It exists only inside of the rarefied environment, like you said earlier, of a survey; it doesn't stand up to the real world. I forgot what point I'm on because I could make 67 other points. This is just so deeply absurd. It really is as facile as your financial advisor saying to you, “you know, you should make more money and spend less money.” How is this a theory? “You should do popular things.” That is very “Deep Thoughts with Jack Handey.” David Roberts:   It seems to me it involves the implicit admission that Democrats are powerless to change what is popular.Anat Shenker-Osorio:  And that somehow people's opinion of Democrats is made out of what Democrats say and do, which, again, it isn't. And then number … whatever number I'm on: again, going back to our earlier conversation, if your words don't spread, they don't work. The fact of the matter is that the Democratic base is largely people of color, and if we are not attending to issues of racial justice, climate, women's rights, immigrant rights, etc., we have a mobilization problem. We have people not turning out. Something people do not realize is that Biden won 2016 voters by around a 1.5 to 2 percent margin; he won 2020 first-time voters by 12 points. It matters to turn out new people. Those voters that turned out in 2018 and 2020, in those unprecedented turnout elections, I call them vital voters.That’s it. If we are going to hold on in ‘22, our only hope is to engage in what I call “re-turnout” — get those people back. The way that we get those people back is speaking authentically and full-throatedly to the things that they care about in their daily life. For a Democratic base, that means that they should be able to wander through their neighborhood and make it home without worrying whether or not the police are going to kill them. If we are not standing for people's basic human rights, why would they turn out to vote for us?David Roberts:   I am trying to imagine the paradigmatic non-college-educated, white, exurban man who was going to vote against Democrats, but then Joe Biden says something implicitly racist, and the white guy says, “hey, well, he seems like a guy like me, I'm gonna vote for him instead.” I am having trouble envisioning this swingable group of voters in the middle that are going to respond to signals like this relative to how they respond to economic conditions or other big forces. I have trouble seeing these messaging tweaks having the large-scale effects that the popularists seem to think they will.Anat Shenker-Osorio:  Completely. Again, they're testing these things inside of this fake environment where you're paying people for their attention. They're not actually attending to the fact that you have to get your base to carry that message. Let's take a concrete example. For years and years, there was this advice that we should talk about raising wages in terms of, “we should raise wages because we have a consumer-driven economy and people need money so they can be customers in our stores.” Or, “hard work should be rewarded; we can't survive on $7.25.” The issue with both of those narratives is that they eclipse from view the fact that the money to pay people comes from their work. It doesn't come from the magical money pants of the “job creators,” which is a term that was deliberately selected in order to mirror that biblical creator who may or may not reside in the sky. So this language that “we should pay people more so they can be customers in our stores,” which is language that was created in order to make us seem like the reasonable people in the room, the adults in the room who get things done and are practical and are not asking for outlandish things — I don't know about you, but I don't wake up in the morning like, “I'm going to check on the GDP, I'm just really passionate about economic growth. I'm super excited to go take to the streets to march for the GDP.” People aren't going to go and act on behalf of that. Instead, in the Fight for $15, the message swapped to, “people who work for a living ought to earn a living,” which is a fairness frame. It's a moral high ground. People would go strike and march on behalf of that. They would not march and strike on behalf of, “this will increase GDP growth.”David Roberts:   This better approach to messaging, with better research and a more proactive, aggressive mindset: Is that catching on with young activists? Because if there's one thing we've learned over the last few years, it’s that existing Democratic leadership, whose average age is 137, seem completely at sea in the modern information environment. Is there a young vanguard coming up that's better at this?Anat Shenker-Osorio:  Yes, absolutely. You see them on your TV; they're called the Squad. There are definitely folks who are much better and who are making an impassioned, full-throated case for legitimate multiracial democracy, a livable future, everything else, the whole list. But I self-identify as pathologically optimistic. I can not do my job unless I'm optimistic; I have no choice, I have to believe that something else is possible.I am also in a dark place, mostly because what the GOP learned from 2020 was that it was far too easy for people of color to vote and far too hard for them to cheat, so they've set about fixing both of those “problems,” and Democrats seem to be pearl-clutching and finger-wagging in response.David Roberts:   Can you be a deer in headlights for four solid years? Apparently, yes.Anat Shenker-Osorio:  Unless we can still have elections in which everyone could potentially vote and all of those votes could potentially be counted, I'm not really sure how we do everything else. That said, yes, there are people who are doing much better. There is greater sophistication. There are people who are being more thoughtful and deliberate about engaging the base, understanding that that is, in fact, the way that you persuade the middle. Even if your only aim was to get white people in Midwestern diners to flip, still the way that you would do it would be to engage the base, because in point of fact, social proof is real. We know that what moves white people in Midwestern diners is seeing other white people out marching, for example, during the summer of protests after George Floyd's death. David Roberts:   The Women's March was so powerful in that respect. Anat Shenker-Osorio:  People's minds change when they're like, “oh, people who look like me think this. Okay, I guess I think this. Cool.” But the main thing is these vital voters of the surge in ‘18 and ‘20. That is what distinguishes 2022 from every previous time that we've been in a midterm, in which (spoiler alert) the incumbent pretty much without exception gets a shellacking. But this time around, what is different is that we have just come off of two cycles in which we mobilized an enormous number of new people and got them to the polls. So it is an arguably easier lift, because it is not turnout, it is re-turnout. We have a lot of hard evidence of what did it, so we simply need to recreate it.David Roberts:   You see a debate now in Democratic circles. One side is saying, “our election messaging in 2022 and beyond needs to be about the concrete changes that Democrats have made to make your life better — our ‘kitchen table’ issues.” (I'm so sick of hearing about the kitchen table.) “What we do for you,” not, “why they’re bad.”The other side says, “the fact that the other side is explicitly, right out in the open, planning to steal the fucking election seems relevant. That is something we ought to convey to voters, because for the vast majority of them, they don't know, even though it's happening right out in the open.” It's social proof again. I can understand the average voter looking out and saying, “they seem to be openly talking about putting election officials in place that are willing to steal the thing for Trump; it seems bad, but I don't see other people freaking out, so I guess I'm not supposed to freak out.” So the other side of the messaging fight would be: people need the social proof that yes, this is a freaky, bad, apocalyptic thing coming down on us. They need to see that it's okay to freak out about it. This is the quintessential messaging debate of ‘22, and ‘24, I expect. Where do you come down on that?Anat Shenker-Osorio:  It definitely is. First of all, I think it's just — real talk — going to be very, very hard to sell a topline message which is, “Democrats delivered for you. Aren't Democrats lovely?”David Roberts:   Reality does constrain your message somewhat. Anat Shenker-Osorio:  That's tough. Unless we come back in ‘22 and we're in a completely different reality, which, hey, I would take. I would love that. Maybe they have some deep thoughts and reflection over the new year and they come back and actually pass things. That'd be cool. Yes, I'm aware of the filibuster, and yes, I'm aware of the 60 vote threshold. I know all of the things, so I'm preemptively striking against that. Whatever. People view Democrats as being in the majority, and that is the level of detail that they understand, the end. So first, it's very hard to sell the “Democrats delivered for you” message. Right now what we are seeing in nightly focus groups — like weekly testing, we're testing stuff all the time — is basically “a plague on both your houses.” “All of them are useless.”  “There's no good here.” Or, “politics, I’m just going to look away from it.” David Roberts:And guess who that serves? Anat Shenker-Osorio: Yeah. So the message is a little bit of both, and this is the distinction that I want to draw: first of all, it can't make Democrats the protagonist. It has to make voters the protagonists. Always, you want to talk to people about what you want them to do, not about the candidate or the party or whatever. So, “in ‘18 and ‘20, you turned out as vital voters to defend our democracy and move us forward together.” And yeah, you can do a shout-out: “And that means we lifted blah-blah-blah kids out of poverty, and we delivered these stimulus acts, and we did blah-blah-blah” — whatever you can lift up — but make it the accomplishment of the voter, the audience that you're targeting, and say, “now you are going to do it again.” The message that they used, for example, in the Georgia runoff — hot off the heels of Georgia swinging in 2020, they had a runoff in January — they said, “Our work is not done yet.” That is what they said to their voters. “Our work is not done yet. You did this historic thing. You're the reason. You delivered, and you're going to do it again.” Obviously, it was also about Warnock, and Ossoff, and “Mitch better have my money,” but even “Mitch better have my money” is a voter agency message. It's saying, “you have the power here, and you're going to make this happen.” So first of all, voter as the protagonist. Then, with respect to the shitty, terrible things that we say about these shitty, terrible people, is inspiring defiance instead of fear. That's the distinction I want to draw on the negative side: It's really, really important that we not give in to fear-based messaging, but rather have the negative emotion that we evoke be anger and defiance. Fear is an inhibiting emotion in most people. It evokes fight or freeze, but for the majority of people, it's freeze, not fight, and it only evokes fight in people who are already activists, not in people who need to engage. So what is the difference between fear and defiance? That's the difference between saying, “if Republicans are in power, it's going to unleash a new wave of Covid, you're going to get sick, you're going to die. Fuck. Holy shit.” Or, “Republicans are going to create these armed insurrections and they're going to come with militias.” Fear, fear, fear. Instead, a message that says, “if Republicans think they're going to silence our voices and block our votes, they’ve got another think coming.” “We showed up and we showed out in 2020, and we're going to do it again.” “Not on our watch, not in our state, not in our country, back the fuck up.” That's the distinction.David Roberts:   Well, your lips to their ears, let's hope. Thank you so much for coming on and taking all this time. This is so incredibly relevant right now. Communicating well is always important in politics, but we are at a juncture where it's so vital and being done so poorly in so many places. So thank you, and good luck with your work, and we will probably chat again sometime; maybe we'll reconnect in a year or two and see how we can message about the wreckage. Anat Shenker-Osorio: Wow.David Roberts:I mean, the surprise victory.Anat Shenker-Osorio:  Exactly. You have to manifest.David Roberts:   Positive thinking. All right. Thanks so much, Anat.Anat Shenker-Osorio:  Thank you. Have a wonderful holiday. Get full access to Volts at www.volts.wtf/subscribe

The year is coming to a close, which means us bloggers are obliged to do a year-end post, looking back on the year’s events and looking ahead to what’s next. I’ll be honest, I had second thoughts about whether to publish this post at all — my outlook is pretty gloomy and I don’t want to be a spreader of gloom — but I figure you pay me for the straight scoop. So here it is.The broad story is that, as bad as it sometimes felt going through it, we are coming to the end of the most productive year of federal climate politics that any of us are likely to experience for a long, long time. I’m not sure it ever really sank in with most people, including Democrats in Congress, but this was the last big shot. After the Build Back Better Act passes (if it passes), that will be it for federal climate legislation. After that, those of us hoping for climate progress will have to forget about first-best solutions and begin thinking in terms of guerrilla actions, in states, cities, and the private sector. That’s a very different mindset than the push for a centralized solution.Let’s begin with a quick review of the events of the last year.Democrats’ inevitably disappointing legislation limps toward the finish lineJoe Biden entered his first term as president in an impossible situation. He was swept into office on a wave of high hopes, given total Democratic control over the federal government, in the wake of an election marked by expansive policy promises and record voter turnout. At the same time, his majority in the Senate — salvaged by the two miraculous Democratic wins in Georgia — is razor-thin. Given the effectively automatic use of the filibuster by Republicans these days, absent filibuster reform, Democrats simply can’t pass bills under regular order. They can only pass bills through budget reconciliation, and even on that, they need the votes of every single one of their senators to do anything. Given that basic structure, disappointment was inevitable. Biden and the Democrats started strong out of the gate. Congress delivered the Covid relief bill. Biden issued a flurry of executive orders. Vaccination rates began rising. As long as Democrats were doing stuff, taking action, controlling the news cycle, Biden’s approval rating held up.Around July-August, two things happened. First, Biden withdrew US troops from Afghanistan, after which the Taliban quickly took control, sparking an extended wave of hysterically negative mainstream press coverage. (Coverage of Biden in right-wing media was, of course, hysterically negative on day one and has been ever since.)Second, legislative action ground to a halt and segued into months of frustrating negotiations, which continue to this day.They split their big bill in two, allowing a bipartisan group of senators to hash out a roads-and-bridges infrastructure bill (the bipartisan infrastructure framework, or BIF) while leaving everything else to a second bill. The idea was to give Sens. Joe Manchin (D-WV) and Kyrsten Sinema (D-AZ) their bipartisan achievement, but to require that they pass it alongside a Dems-only reconciliation bill, the Build Back Better Act (BBB). At the time, Democrats from Biden and Senate Majority Leader Chuck Schumer (D-NY) and House Speaker Nancy Pelosi (D-CA) on down pledged that the BIF would not pass without the BBB. The bills were a single package, they all emphasized. “It's going to be either both or nothing,” Sen. Bernie Sanders (I-VT) said.What happened instead is that the bipartisan group put together a relatively bare-bones bill and got it passed through the Senate. That put immense pressure on the House to follow suit, despite everyone’s pledges. The progressive caucus, led by Rep. Pramila Jayapal (D-WA), held together and refused to pass the BIF for as long as it could, but in November, it relented and the House passed the bill. Progressives voted for the BIF based on a promise from Biden that he could secure Manchin’s vote for the BBB in something close to its present form. By all appearances thus far, that promise was worth very little. Manchin showed no sign at the time, and has showed no sign since, that he’s willing to vote for BBB as it stands. In fact, before and after the BIF passed, he has done nothing but talk down the BBB, set arbitrary limits on its total size, and demand that elements be eliminated (like the Clean Electricity Payment Program) or radically pared back (like paid leave).Sinema has been frustrating throughout the process, but at least for now, it looks like she got what she wanted — protecting Pharma from price competition and corporations from higher taxes — and is now ready to vote the bill through.Manchin, on the other hand, has been nothing but a jerk, from the very beginning and at every stage. He’s been more of a jerk than is explicable even given the red lean of his state, even given his outlandishly corrupt conflicts of interest. He’s been a vain, inconstant, ill-informed font of conservative economic gibberish, theatrically sticking his thumb in the eyes of the other 49 members of his caucus. He’s still being a jerk, calling for a “strategic pause” on the bill and citing inflation as a justification. (Economists say that the BBB will alleviate inflation.) He’s out peddling a fake Congressional Budget Office report from Sen. Lindsey Graham (R-SC), using it to go after the child tax credit, which is just about the most ignorant and malicious thing he could conceivably be doing.Schumer keeps setting deadlines to vote on the BBB, but they keep blowing past with no agreement and no repercussions. Last week he was saying Christmas; now they’re talking about some time early next year.As Biden’s approval rating continues struggling — the negative coverage that began with Afghanistan never ceased — and inflation drags on, Manchin is more and more empowered. He loves where he is right now: at the center of attention, the man in the middle, the Democrat who screws over other Democrats. He’ll stay in that spotlight as long as he can.And that brings us up to date on the big picture. What about climate policy?Build Back Better is still good climate policyOn climate, it’s been a roller coaster. Heading into the election, Dems across the party seemed united around an ambitious policy vision. The climate plans of the leading candidates reflected it, including, eventually, Biden’s.When elected, rather than retreating from that agenda, Biden embraced it. He brought climate activists into the fold to help shape policy. He hired superstars for key energy-related positions. He said all the right things.When the Covid relief bill was passed and attention turned to the BBB agenda, Sanders led with a $6 trillion proposal that was, among other things, a climate policy buffet. That was in June. Ever since then, Democratic climate plans have diminished. The $6 trillion proposal became a $3.5 trillion proposal. Before the election, Manchin was saying he would support $4 trillion just on infrastructure, but in his new role as Jerk-in-Chief, he decided he would only support $1.5 trillion. Of course, even after Dems cut down the bill to please him, he kept whacking. He took out the Clean Electricity Payment Program, the one energy policy in the bill that had some financial penalties alongside its rewards. He’s currently trying to kill the EV tax credit bonus for union-made vehicles (the Toyota plant in West Virginia isn’t unionized). He’s jacked up the size of the carbon-capture tax credits. Who knows what else he’ll do. But it is notable that, when the $3.5 trillion bill was cut to a $1.75 trillion bill and then a $1.5 trillion bill, the overall size of climate spending, around $555 billion, remained almost the same. Clearly Democrats are prioritizing climate. Despite all the frustrations along the way, it remains true that if the BBB passes in something like its present form, it will represent the biggest investment in carbon mitigation in US history. As with all climate policy, how you rate it depends on what baseline you choose to measure against. It’s obviously much more than would have happened if Trump had won, or if Democrats had lost in Georgia. That is to say: it’s more than nothing. It’s much more than the US has ever done before, including in Obama’s 2009 stimulus bill, which prompted enormous growth in clean energy. It’s more than I would have predicted the day after the Georgia elections.Equally obviously, it’s far short of what’s needed, which is in the tens of trillions over the next several decades. It is unbalanced policy, consisting entirely of carrots (tax breaks and subsidies) with no sticks (regulations or fines) whatsoever. And it’s much worse off, its effects less certain, after Manchin got done with it. Princeton did some modeling using the House version of the bill and found that, while the BIF alone would yield almost no emission reductions, and BBB + BIF + CEPP would reduce emissions enough to hit the US 2030 emissions target, BBB + BIF would … fall somewhat short, but be a hell of a lot better than BIF alone. The three big lessons to draw from the modeling are a) the BIF alone is, from a climate perspective, basically worthless, and b) Manchin did serious damage to climate policy by removing the CEPP, however c) BBB remains remains America’s only real hope of staying even close to a safe climate trajectory. It desperately needs to pass. What’s gonna happen?My guess is, Manchin will continue being a jerk, whittling down the BBB well into spring, generating more stories about Dems in Disarray, frustrating and demotivating Democratic activists, driving down Biden’s approval rating, and rendering final passage of the bill (I do think something will ultimately pass) a sour affair about which no one will feel particularly excited. Democrats will celebrate and tout the bill. At least some BBB money will begin reaching voters relatively quickly. But that alone will not be nearly enough to overcome the enormous headwinds facing Dems as they head into the midterms. One of the only reforms that could make a real dent is the Freedom to Vote Act, which would give judges the power to reject overtly imbalanced redistricting. Without that reform, extreme recent Republican gerrymandering will remain in effect for a decade. It alone will guarantee the GOP the House in 2022, even if every voter votes the same as 2020. But voting reform requires filibuster reform, and despite some recent buzz, Sinema appears immovable on the subject. Between her and Manchin, filibuster reform seems unlikely, which means voting reform is unlikely, which means Democrats are probably heading for a crushing defeat in the midterms. They stand to lose dozens of seats and control of the House. Whether they lose the Senate depends on the size of the wave, which depends somewhat on events over the next year, particularly what happens with gas prices. If things go just right, Dems could hang on to the Senate. If things go poorly, they could lose it.Either way, without the House, there will be no more federal legislating for Democrats — not in the last two years of Biden’s administration, likely not in the next 10 years, if not longer. If they keep the Senate in 2022, Dems can stave off an impeachment (at least a successful one), install more good judges, and allow Biden space to pursue his executive agenda. If they lose it, some kind of impeachment effort becomes likely (Republicans will make something up). Certainly the final two years of Biden’s presidency will be defensive.Controlling the House will allow Republicans to launch endless bogus investigations and subpoena Democratic lawmakers in retribution for the Jan. 6 panel. It will allow them even greater control over the news cycle. But most importantly, it will allow them to throw the 2024 election to Trump, no matter how many votes he receives.As the Jan. 6 investigation has made extremely clear, Trump and his allies tried their best to steal the 2020 election. They were stopped by a few key Republican officials and (oddly) Vice President Mike Pence. They have been busy ever since clearing those obstructions, stocking key state election offices and legislatures with loyalists, gerrymandering safe districts in the House, and passing voter suppression laws across the country. They intend to accuse Democrats of cheating and steal the 2024 presidential election — they aren’t even particularly hiding it. In short, US democracy is lurching toward one-party authoritarianism and I don’t see forces on the horizon capable of stopping it.That’s a grim place to conclude our year in review, I realize. I don’t want to bum everyone out. Obviously, everyone should do everything in their power to prevent this outcome. Nothing is written in advance; there is always a chance the tide can be beat back. But at the same time, it’s worth thinking through how Biden and Democrats can maximize the coming year to minimize the damage.And it’s worth beginning to think about how, if the federal government is taken off the board, climate progress can be made through subnational governments and the private sector.I’ll have more to say soon on the positive story unfolding outside the federal government. And more to say about what four more years of Trump and Republicans could mean for the climate effort. But for now, I’ll just conclude by saying: the BBB must pass, no matter what. Everything depends on it. Get full access to Volts at www.volts.wtf/subscribe

Matt Sheffield started his first conservative media website, bashing news anchor Dan Rather for liberal bias, way back in 2000, and in subsequent years became a key figure in right-wing media criticism. But the rise of Trump left him disillusioned and he has since become a prominent critic of right-wing media. He now runs a site called Flux dedicated to accurate, inclusive journalism.Last week, Matt and I got together on one of these live Twitter Spaces things — a glorified conference call, basically, to which people can tune in and ask questions — and had a wide-ranging conversation about the disinformation crisis, how it manifested in climate change, and what can be done about it. The audio was archived, available exclusively to Flux and Volts subscribers. I hope you enjoy it. Get full access to Volts at www.volts.wtf/subscribe

One of the most devilish aspects of climate change is that it resists good art. But Adam McKay, director first of comedies like Anchorman and later of more serious fare like The Big Short, has cracked the code. Don’t Look Up (in theaters today; coming to Netflix on Dec. 24) is the first climate movie — the first work of art about climate change of any kind — to hold my rapt attention from start to finish. It is fantastic.One reason it’s so good is that it isn’t really about climate change at all. It’s about a pair of scientists, played by Leo DiCaprio and Jennifer Lawrence, who discover that a large comet is heading directly toward Earth and will strike, and wipe out all life on the planet, in just over six months. They try to tell people. It does not go well. Don’t Look Up attempts to capture, not so much climate change itself, but one of the most vertiginously weird aspects of understanding climate change: you know this terrible thing is coming and yet … no one’s acting like it. You end up feeling like the ranting guy on the street corner waving a sign about how the end is nigh. The movie is about having knowledge but being unable to make the knowledge matter, being unable to make anyone hear or act on it. By compressing the timeline to six months and making the threat a singular force, visible in the sky, it brings the absurdity of the situation to the surface. It’s hilarious, and if you’ve spent years banging your head against a wall trying to get people to pay attention to climate change, you will find a great deal of catharsis in the laughter. Before we get to the movie, a word on climate and art.Climate change makes for bad artBy its very nature, climate change is abstract, the sum of millions of observations and long chains of reasoning. It unfolds slowly, over the course of decades and centuries. Its effects are felt incrementally, across the globe, in disparate ways. In short, climate change isn’t a good villain. It has no plans or intentions. It’s not even a singular force, it is simply the descriptor we apply to the panoply of changes happening around us. The magic trick of good art is that it uses specificity — particular people, places, and relationships — to evoke universal human feelings. We have been designed by evolution to feel most intensely about things that are close to us, within spatial and temporal boundaries that are legible to us. We’re not designed to feel anything about a projected 50-year change in global average temperature.We can know and understand that forecast in an intellectual way, but to really feel it, to integrate it into one’s basic narratives and worldview, requires conscious cultivation. It does not come naturally; it is not universal.That makes climate change a lousy subject for art. Over the years that I have been writing about it I have been exposed to many, many songs, poems, documentaries, short stories, and novels about it. They are all like vegan food: the intentions are commendable, the spirit is good, it even looks on the outside like normal food, but the taste … let’s just say, it feels like I’m supposed to be eating it, and if I weren’t supposed to, I’d be eating something else that tastes better.(Vegans: I love you. Please do not write me angry emails.) So too with climate art. It runs into one or more of four main dangers. One, it can be treacly. This is most climate documentaries: swelling orchestral music beneath shot after shot of Natural Beauty Under Threat. Two, in order to compress climate change into something dramatic on a human time scale, it can mangle the science, as in 2004’s The Day After Tomorrow, wherein a key scene finds our heroes fleeing from an oncoming wall of, uh, freezing. It’s not that I’m a stickler for strict scientific accuracy in art, but once you make climate change into a disaster fit for a disaster movie, you’ve changed all the structural features that make the climate crisis what it is. You’re not illuminating anything about the reality.Three, it can be overly oblique, a metaphor for climate change that is so generic — “nature is good” (Avatar); “dystopia is bad” (Snowpiercer) — as to say nothing about climate change in particular. Fourth, it can end up being didactic or educational. Though it is by all accounts informed and magisterial, I could could not get through Kim Stanley Robinson’s The Ministry for the Future. After an intense first chapter, it became a series of white papers teaching me stuff I already know. If I wanted to read PDFs I’d just read PDFs. Climate is perilous territory for art. That brings us to Don’t Look Up.Don’t Look Up defies the trendI went into this film with extremely low expectations. I’ve seen the subject of climate change humble too many eager artists and storytellers to have much faith that anyone in Hollywood would get it right. When I heard the basic setup — an analogy that everyone in the climate world has pondered at some point — my expectations did not rise. There are so many ways a story like that could go wrong. It could be broad or ham-handed; it could be overly clever; it could be didactic and preachy. But somehow it’s great. I suppose that’s what happens when you get this idea in the hands of smart writers (politics’ own David Sirota helped with the story; McKay wrote the screenplay) and an unbelievably stacked cast. DiCaprio and Lawerence convincingly shrink into nebbishy scientists, he with a middle-aged gut, she with unfortunate bangs. The MAGA president and the boozy cable news host could easily have been caricatures, but Meryl Streep and Cate Blanchett are incapable of a false note. Every role down to the most incidental is played by marquee performers who fill their screen time with thoughtful choices. Every performance lands, keeping the proceedings grounded even as they grow more ridiculous. It’s extremely funny, but not with rat-a-tat jokes. These are recognizably human characters, not broad types, stuck in absurd situations; the laughs arise out of the structure. There’s an editing technique used again and again: just as a scene is in the midst of its manic peak, there will be a hard cut to a new, quiet scene, often characters trying to process what happened. It made me laugh every time. (Credit to the venerable Hank Corwin for editing.) Though it flirts with it at times, it never descends into farce. It’s just that everyone finds themselves lost in the same disorienting information environment, unable to connect. Also? About two-thirds of the way through the movie, Timothée Chalamet wanders in as a character with no obvious connection to the plot and no clear reason to be there, but who is nonetheless an absolute delight for every second he’s on screen. The film manages to be funny and allegorical and human all at once. But I think long-time climate hawks will take special pleasure in it.So many climate feels, captured for the first timeI have no idea how normal people — people who haven’t spent most of their adult lives immersed in the subject of climate change — will process this movie. Will they see the climate analogy at all? It could just as easily be read as an analogy for Covid, or biodiversity loss, or nuclear war.But if you’re a climate hawk, there’s no mistaking it: McKay has clearly been involved in this subject for a while. He captures a whole series of feelings and experiences that are painfully familiar.There’s the feeling of telling the government about a threat and having it shrugged off. There’s the feeling of telling the press about the threat and having it subsumed and lost in the flattening stream of 24-hour content. There’s the feeling of being mocked and memed for being alarmed. There’s the feeling of needing to prove people wrong on the internet. There’s the feeling of watching a body of science become the target of wild conspiracy theories and a partisan culture war. There’s the feeling of seeing the most obvious solutions to the problem delayed and deferred over corporate profits. There’s the feeling of seeing people jump straight from denial to nihilism, without any being-helpful stage in the middle. There’s the sinking feeling of watching people who have accepted the threat turning to glittery promises of future high-tech solutions.There’s the feeling — which DiCaprio captures in a mid-movie rant that I, at least, found incredibly emotional — of hoping against hope that someone in charge, despite all the appearance of venality and stupidity, knows what they’re doing, has a handle on this thing. And perhaps most acute of all, there’s the feeling that we simply can’t communicate any more, that there’s no way to establish a shared reality or shared priorities. Everything is absorbed by the information/media/entertainment machine, blasted out at the same volume as dozens of other daily clickbait outrages, and soon forgotten, like all the rest. Nothing lands, nothing sticks. There’s no way to cut through the noise.“If we can’t all agree at the bare minimum that a giant comet the size of Mt. Everest hurtling its way toward planet Earth is not a fucking good thing,” DiCaprio cries, his voice cracking, “then what the hell happened to us? I mean, my God, how do we even talk to each other? What have we done to ourselves? How do we fix it?”The movie does not offer answers to these questions. Without any spoilers, I can say it’s a pretty pessimistic take on our capacity for collective action. But I found it incredibly cathartic just to see my specific brand of anguish portrayed with such insight, more than I ever expected from a big-budget Hollywood movie. Back here in the real world, climate remains stubbornly uncathartic. It has no six-month deadline; it will play out slowly over our whole lives and beyond. There will be no final moment of recognition and no clear line between success and failure. The result will be an unsatisfying muddle at every stage, with more suffering than there should have been but less than there could have been.Still, we know that, in some sense, the comet has already begun striking. We’ve already lost some stability, some biodiversity, some lands and lives, and we will lose more, no matter what we do. It’s baked in at this point. We are living in the most stable climate we will ever experience. Every decade from now on will get warmer — more of the comet will strike. We can only control the scale of the damage.After I watched Don’t Look Up (thank you Netflix), as I was eating dinner with my family, I couldn’t stop thinking about DiCaprio’s final words in the movie, as he is surrounded at the dinner table by family and friends: “We really did have everything, didn’t we?” Get full access to Volts at www.volts.wtf/subscribe

On Dec. 7, 2020, one year ago, I sent out the first Volts post. At the time, I was extremely nervous. I had left behind a stable job at Vox and had no idea if a newsletter dedicated to clean energy and politics would find any readers, much less readers who would pay. Over the last year I dug into carbon markets, transmission systems, lithium-ion batteries, and 24/7 carbon-free energy. I profiled new clean-energy legislation in Washington state, Colorado, and Illinois. There was a little philosophy and a lot of politics and policy. For the podcast, I talked to researchers, analysts, activists, and politicians. I have reason to believe Volts has reached the corridors of power, though Joe Manchin has by all accounts remained immune to its charms. I have a long list of topics for next year: clean-energy materials and recycling, embodied carbon, hydropower, hydrogen, and the possibilities for political progress under a dysfunctional (and possibly soon fascist) national government.Anyway, one year in is probably too soon to draw any definitive conclusions, but from what I can tell, it’s working. I am absurdly grateful. I try not to indulge in too much navel-gazing — mostly I keep that stuff confined to my neurotic inner monologue — but in this post I want to reflect a little bit on why I started Volts and what to expect from it in the coming year. And I want to ask you, if you haven’t already, to sign up for a paid subscription — or, if you have a subscription already, to purchase one for someone else, perhaps as a holiday gift. So: why did I start Volts? Two basic reasons.Writing for my people …One, although Vox gave me tons of latitude, there are limits to what you can do at a general-interest, ad-supported publication. You have to aim wide, to try to snare as many people as possible. Readers are likely to encounter your headline floating on Twitter or in their Facebook news feeds — you can not assume they know anything about you, your past work, or your subject matter. So every new piece has to be an introduction. You can’t use any allusions to your previous work. You can’t reference any inside jokes. You can’t take anything for granted. (I can’t count how any times I had to explain that renewable energy is good because it reduces carbon emissions, which is good because it slows climate change, which is bad.) And you can’t be too weird or idiosyncratic. Ultimately, though it is much more flexible than many publications, Vox needs every piece to be, at a basic level, a Vox piece. It has to represent the brand. That’s true for any publication or institution.There’s nothing wrong with that — Vox has a great brand! If you visit, as I regularly do, you’re guaranteed to find a bunch of good Voxy pieces. But I got tired of writing for everyone and no one in particular. I was ready to write for my people, to gather them up and take them with me so that we could learn together, follow ongoing themes and narratives, develop some in jokes, and shower the appropriate amount of love and attention on my dogs.I’m well aware that I reached more people at Vox than I ever will at Volts. My gamble was simply that there would be enough of my people, and that they would be generous enough, that I could make a living writing for them — just them, not any “average reader” or editor or boss or publication. I wanted to strip everything else away — the pressure to please higher-ups, the imperatives of attention-hunting in modern mass media — and focus purely on adding value, being of use.… rather than The ManThe second reason I started Volts is that I am, at heart, a child of Gen X: I don’t want to work for The Man. I don’t want to make money for Comcast, or any giant media company, or any company at all, really. I don’t want to feel beholden to any advertiser or sponsor. I don’t want to be a representative of any faction or institution.At Volts, I have only one incentive: to provide a service that you, my readers, find valuable enough to pay for. There’s no one here but you and me. That feels like an honest living. It feels like something solid I can hang on to in increasingly turbulent times. Volts survives entirely through subscriptionsI am editor-at-large for Canary Media, a relationship that allows my posts to be reprinted and reach more readers. But I live or die through paid subscriptions to Volts. There are certain things I could do to boost my revenue that I’m not willing to do. I don’t want to put content behind a paywall — I want to be as useful as possible to as many readers as possible, even those who can’t afford a paid subscription. And I don’t want to hassle my mailing list with reminders and special offers and fundraising drives and bonus content. That stuff feels squicky to me.But I do need to make enough money to live. And I’d like to make enough to be able to expand Volts and bring on new features and guest writers. So I’m asking you, if you value what I do here and are in a financial position to do so, to sign up for a paid subscription or buy one for someone else. For a year, you’ll pay about what you’d pay for one solo night out at a decent restaurant. You will get the ability to comment on posts and discussion threads, to be a part of the growing (and incredibly sharp and helpful) Volts community, but more than that, you will make it possible for me to keep doing this, to continue being of use.Volts is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.I’ll do this as long as I can survive doing it. I hope it’s of service to you and you’ll support it. Get full access to Volts at www.volts.wtf/subscribe

When I first started looking into 24/7 carbon-free energy (CFE) — a company or city matching its electricity consumption with clean electricity production on an hourly basis, throughout the year — I intended to write a single post on it. That worked out about as well as usual.Below are summaries of and links to each of the 24/7 CFE posts. Above is a 24/7 CFE mega-pod, with the last three pods strung together into one podcast. * An introduction to energy's hottest new trend: 24/7 carbon-free electricityWhat it would mean to supply a company or city with clean energy for every hour of its electricity consumption, every day of the year; why a company or city would want to do that; what kind of technology could do it; what market reforms are required to enable it.* Is 24/7 carbon-free energy the right goal?Critics say that companies would be better off focusing solely on reductions in carbon emissions — after all, from the atmosphere’s perspective, no company’s emissions are more significant than any other’s. But proponents say 24/7 CFE accomplishes things beyond reducing carbon emissions.* The long-term promise of 24/7 carbon-free electricitySome new modeling of 24/7 procurement out of Princeton reveals what it will do to carbon emissions, how much more it will cost, and the innovation and development it could spark in clean energy. Volts is free of ads or sponsorships; it runs entirely on reader subscriptions. If you value this kind of explanatory journalism, please consider becoming a paid subscriber to Volts, or giving someone you know a subscription as a gift. I appreciate you all. Get full access to Volts at www.volts.wtf/subscribe

Over the course of the last few days … [checks calendar] … er, month, I’ve been digging into the new trend in voluntary climate action: procuring 24/7 carbon-free electricity (CFE), matching consumption with production every hour of every day.In my first post, I introduced the idea and explained what motivates it and what it entails. In my second, I puzzled through the biggest controversy around it, which is about whether it’s the right goal at all — whether companies and cities ought instead to focus solely on reducing emissions (with no regard to who produced them, or where). This post will make a great deal more sense to you if you’ve read those.Today, in the final post in this series (promise), we’re going to look at some new modeling of 24/7 procurement from Princeton’s ZERO Lab and see if it can shed some light on the trade-offs among different procurement strategies. Then we’ll wrap up with some provisional conclusions.The modelZERO Lab models three scenarios for voluntary corporate clean-energy procurement, with 10 percent participation from the commercial and industrial (C&I) sector: no procurement (as a baseline), procuring for 100 percent annual match on a volumetric basis, and procuring for 24/7 match. Each scenario is run in two separate markets, California and the PJM Interconnection (an electricity balancing area that covers 13 Northeastern states and DC). Modeling in two markets helps tease out how 24/7 could unfold differently depending on how clean a grid is to begin with — high penetration of variable renewables in California vs. a relatively dirty grid in the Northeast.The model is premised on the idea that participating C&I customers aggregate their demand and pool their purchasing power, effectively acting as a miniature balancing authority. This may or may not be how things play out in the real world. Customers could act on their own, disaggregated and uncoordinated. The lab’s going to model that kind of scenario soon.Note: The lab did not model a procurement strategy optimized to reduce maximum carbon emissions. (Jesse Jenkins, who leads the lab, refuses to use the word “emissionality.” He insists on “carbon-optimized procurement.” Don’t worry, he’ll crack like the rest of us.) Modeling carbon-optimized procurement would have been a lot of extra work and the funder of the research, Google, did not ask or pay them to do it, so if you’re a wealthy corporate or philanthropy out there reading this, pay the lab to model it!Let’s look at a few of the findings.24/7 procurement reduces the carbon intensity of a company’s energy portfolioAs companies push their CFE scores higher — meaning, as they match more and more of their hourly consumption with hourly production of CFE — they reduce the carbon intensity of their portfolio. At a certain level of CFE, they reduce it beyond what they would accomplish with 100 percent annual matching.Take California. It already has a fairly clean grid — every company starts with a minimum CFE score of 64 percent, just by being located there. If a company procures the cheapest clean energy to match 100 percent of its annual consumption, its CFE score gets to 75 percent. There are still 25 percent of hours in which it is drawing on at least some fossil energy. As a company’s CFE scores rise beyond 75 percent, the emissions rate of its portfolio falls further, steadily to zero at a CFE score of 100 percent.(Another note here: “Current technologies” means wind, solar, batteries, and, at least in California, conventional geothermal. “Advanced technologies, no combustion” includes advanced geothermal and nuclear, along with long-duration energy storage. “Advanced technologies, full portfolio” includes all of the above, plus natural gas with carbon capture and sequestration [CCS] and combustion turbines running on zero-carbon hydrogen fuels. The reason the green bar never fully reaches a zero emissions rate is that there are residual emissions associated with natural gas and CCS.)PJM is a different story. It’s pretty dirty — participants there start with a baseline CFE score of just 22 percent. So a simple strategy of 100 percent annual matching results in a huge drop in emissions rate, though it only gets participants to a CFE score of 62 percent. Once again, as participants raise their CFE scores beyond that, the emission rate declines to zero. However, 24/7 procurement does not just reduce participants’ own emissions rates.24/7 procurement drives more system-level carbon reductions In California, if 10 percent of the C&I sector participates, 24/7 procurement would reduce more system-level (as opposed to participant-level) emissions than a 100 percent annual matching strategy, starting at a collective CFE score of 88 percent. There are two explanations for this. The first is a volume effect — participants doing 24/7 matching simply have to buy more CFE, and with more CFE, more fossil generation is displaced. The second is a timing effect — participants doing 24/7 matching procure resources that better match demand patterns, thus displacing more fossil generation. Here’s PJM:PJM starts out with much less solar and wind. That means that, while the volume effect does advantage 24/7 once CFE scores reach 90 percent, the timing effect isn’t very pronounced (the marginal generator is basically always fossil), and the net difference doesn’t amount to much. So 24/7 procurement reduces more system-level emissions than 100 percent annual matching, but only at relatively high CFE scores and not by a huge amount. 24/7 procurement comes at a relatively steep cost premiumThere’s no two ways about it: 24/7 procurement costs more. And the costs rise as CFE scores get closer to 100 percent, especially if only current technologies are available. Here’s California.Note that covering that last 10 percent, getting from 90 to 100 percent CFE, sees costs rapidly escalate, especially for the last 2 percent. If only commercially available technologies are put to use, 24/7 CFE is 64 percent more expensive than 100 percent annual matching. If a full portfolio of technologies is available, it’s only 39 percent more expensive.The current technology costs are easy to explain: it’s extremely expensive to cover the last 10 percent of consumption with only wind, solar, batteries, and conventional geothermal. But why is the green line so much lower than the blue line?The difference between blue and green comes down to which clean-firm sources are available. The “no combustion” set — long-duration energy storage, advanced geothermal, and advanced nuclear — has high fixed costs (labor and construction) and low variable costs (operation and maintenance). But the “full portfolio” set includes combustion-based sources like natural gas with CCS and turbines running hydrogen fuels, which have lower fixed costs but higher variable costs, and that turns out to be much cheaper when the sources are run at low utilization rates, as these will be. In PJM, the cost differential is even greater:With only currently available technologies — which, remember, do not include geothermal in PJM — the cost of 24/7 procurement is 139 percent higher than the cost of 100 percent annual matching. Yikes. But with the full portfolio, 24/7 is only 54 percent more expensive. In PJM, “procuring clean firm generation or long duration energy storage technologies can significantly lower marginal abatement costs, particularly at higher CFE scores.” It really helps, on a dirty grid, to have some clean-firm sources that cover the last few percent.OK, let’s pause here and assess what we’ve learned. We know that 24/7 procurement can reduce and eventually zero out the carbon intensity of a participant’s own portfolio, though of course, from a climate perspective, that’s basically irrelevant. In system terms, 24/7 procurement reduces emissions more than 100 percent annual matching, but only a modest amount — and that modest amount comes at a substantial cost premium.Here the emissionality perspective taps us on the shoulder. It points out that, in either case (100 percent annual or 24/7) companies could reduce more emissions with the same amount of money by directing that money to dirtier grids. Companies are spending extra money to reduce “their own” emissions when the atmosphere doesn’t care whose emissions are whose. Emissionaries (ha ha, another new word!) might ask, what’s so great about 24/7 over and above 100 percent annual matching? Why are the companies procuring for 24/7 willing to spend so much more money for so little additional emission reduction? Why don’t they spend that money on dirty grids where it will reduce more emissions?The main answer from proponents is that 24/7 procurement will do more to prepare the way for, and reduce the cost of, full grid decarbonization. It is playing the long game. 24/7 procurement drives early deployment of clean-firm sourcesWhile procuring for 100 percent annual matching generally means buying only wind and solar, procuring for 24/7 matching will necessarily include, depending on local prices and technology availability, not only batteries but “conventional and advanced geothermal, advanced nuclear, natural gas power plants with CCS, gas plants using zero-carbon fuels, and/or long duration energy storage.”Here’s 24/7 procurement in California with 10 percent C&I participation in 2030 with current tech, advanced tech with no combustion, and the full portfolio:In the first and second cases, the story is about solar, geothermal, and batteries. But with the full portfolio, geothermal drops out almost entirely, replaced by natural gas with CCS (and a few zero-carbon-fuel turbines), which will be considerably cheaper. This is not likely to be a popular result — I can’t say I like it — but it looks like, on grids with high penetration of variable renewables that need some low-utilization clean-firm generation to fill the gaps, natural gas with CCS may be the cheapest option.Here’s PJM:In the current-technologies case, it’s all about solar and batteries — and as we saw above, it’s expensive AF. In the advanced-tech-no-combustion case, advanced nuclear steps in and vastly reduces the total amount of CFE required, thus shaving off a big chunk of the cost. In the full-portfolio case, natural gas with CCS once again replaces most other clean-firm generation, including nuclear, reducing costs further. Summing up: “If 10% of C&I customers participate and reach 100% CFE, 1.9-2.3 GW of clean firm generation and long-duration storage capacity is deployed in California and 5.9-7.1 GW in PJM by 2030.”That’s a lot! Enough to kickstart those markets. “Just as 100% annual matching helped transform wind and solar PV from expensive ‘alternative energy sources’ to mainstream, affordable options for the world,” the report says, “24/7 procurement is likely to have similar transformative impacts on clean firm resources.”Here’s a chart of what different procurement strategies can accomplish:What’s the right time horizon for voluntary climate policy?So where does this leave us on the debate between 24/7 and emissionality? Should companies reduce their own hour-to-hour emissions or should they just reduce the most emissions they can, regardless of location and timing? Of course, there’s no real reason to pit them against one another. Companies can do one or the other or a mix, depending on their particular values. Nonetheless, it’s an intriguing question, and I admit to remaining torn. I frequently argue that post-2030 decarbonization is, if anything, drawing too much attention from policymakers, corporates, and tech types, at least relative to the prime directive of climate policy: rapidly reducing emissions in the coming decade by driving fossil fuel power plants off the grid with cheap wind and solar. That core task is by no means accomplished. Most grids in the US remain much dirtier than California’s, with plenty of room for more wind and solar. Before they get too excited about advanced nuclear and CCS, everyone needs to make sure that wind and solar are growing fast enough to mostly decarbonize the grid by 2030. I worry that 24/7 procurement is part of this trend: turning our eyes to the 2040-2050 horizon, the last 10 to 20 percent of grid decarbonization, before we have the first 80 percent locked in.That said, I don’t worry about that too much. Getting to 24/7 CFE will involve buying plenty of wind and solar along the way. Long-term power purchase agreements will remain the gold standard; hourly trading of renewable energy certificates will be used to fill in the gaps with balancing resources. And all the companies pursuing 24/7 procurement will be invested in their local grids building more wind and solar — it raises their CFE baseline.What’s more, I think the socio-technological process of stimulating innovation and development in these gap-filling clean-energy technologies is going to turn over all kinds of rocks and uncover all kinds of insights. We’re still somewhat guessing about which technologies will best play the clean-firm role. Reality could surprise us. The sooner we run that investigation, the sooner we’ll have a better grasp of exactly what we need and how to craft policy around it.So for now, I remain excited about 24/7 CFE and I can’t wait to see more companies and cities jump on the bandwagon. People are beginning to think about full decarbonization now. The engineers and accountants are running the numbers. We’re going to see some really cool stuff happen soon. Get full access to Volts at www.volts.wtf/subscribe

Last week, I wrote an introduction to the hot new trend in energy: 24/7 carbon-free energy (CFE), i.e., matching a company or city’s power consumption with production of clean electricity throughout the day, every hour of every day. If you haven’t read it yet, you’ll want to check it out before reading this post.Today, I want to talk about a big debate around 24/7 CFE, regarding whether it’s the right goal for companies and cities to adopt at all. Exploring that debate will help us get our heads around what 24/7 CFE can and can’t accomplish.But first, a quick refresher. Here’s the idea: right now, in addition to generating electricity, renewable energy projects generate renewable energy certificates (RECs), one for each megawatt-hour. They can sell the RECs to any entity looking to buy renewable energy. For instance, a company or city that wants to go “100 percent renewable” can simply buy enough RECs to cover its yearly electricity consumption.At least two changes would be required to make 24/7 CFE possible. First, “renewable energy” would expand to “carbon-free energy.” Any generator putting out electrons without carbon emissions, including nuclear or natural gas with carbon capture and sequestration (CCS), would qualify. And second, RECs, rather than coming in month- or year-long chunks, would be issued in time-stamped increments of an hour, so that buyers could target procurement at the particular hours of the day when they need CFE. Eventually, each hourly REC would contain information about avoided carbon emissions, so buyers could tally up the carbon impact of their purchases. That’s the vision.In this post, I’m going to discuss an objection to 24/7 and some counter-arguments to the objection. Then, in my next post (yes, this is turning into 24/7 Month), I’ll look at some new modeling of the impact of 24/7 procurement and try to draw some conclusions. We’re going to have a good time.Measuring carbon is mostly doableAn intrinsic part of the 24/7 CFE vision is that each hourly REC will be tagged with a certain amount of avoided carbon. This will allow buyers to make procurement decisions that take emissions into account.There are some issues and controversies around calculating avoided carbon, though they’re not the ones I’m going to focus on today. Some carbon counters have proprietary formulas (like WattTime) and some are trying to develop open-source methods (like EnergyTag). The numbers they produce are not radically different, but they do differ. They vary in how they calculate the marginal (most expensive) energy source on the grid at a given moment — the marginal generator is the one that will spin down to make room when the CFE is produced. They differ in how to draw the geographic boundary of analysis, which can affect results. And other stuff like that. “To go from the generation data to the local carbon emissions data is not trivial,” says Toby Ferenczi, founder of EnergyTag, “because you're trying to model the flow of electrons. Until you can track a single electron through the system, there will always be different types of approximations.” There’s also the question of how distributed energy resources (DERs) are treated. Right now, grid operators tend to have little visibility into or control over DERs; energy generated locally, on a distribution grid, is viewed by grid operators as reduced demand on that grid. Bringing DERs more fully into the picture as deployable resources is an important long-term challenge.There are data issues too. If you look at electricityMap, which seeks to track the carbon intensity of every grid in the world, at every hour, you will see that there are still big holes, areas where utilities have not made the data public. New regulations and laws requiring grid operators to make these numbers available is another priority.Anyway, I’m not going to dig into these technical issues. I have faith that, if an hourly REC market gets going, these kinds of questions will be ironed out. The general sentiment is that it is more important to have a common set of numbers than it is for those numbers to be accurate down to the decimal. Instead, let’s turn to the more fundamental challenge to 24/7 CFE.24/7 vs. emissionalityUnlike air pollution, which concentrates where it is emitted, carbon dioxide diffuses completely into the atmosphere. It doesn’t matter where it is emitted; all tons are the same, from a climate perspective. One company or city’s emissions are no different than any others. There’s nothing about your hourly emissions that make them special.It follows that, if you’re a company that wants to reduce carbon emissions, the thing to do is buy clean energy on the dirtiest grid possible, wherever it will displace the most carbon-intensive energy and thus prevent the most emissions. If you take an international perspective, that will probably be somewhere overseas, in Asia or Africa; if you take a US perspective, it will be in states like West Virginia, Wyoming, and Kentucky.The best way to do this is with bundled RECS — RECs purchased together with the energy that produced them, through long-term power purchase agreements (PPAs) — because that’s the approach most likely to actually lead to new clean energy projects being built. But “most organizations are not in a position to sign long term PPAs,” says Ferenczi. “All they know is: I want to buy good electricity, not bad electricity.” For them, unbundled RECs are the only option.Either way, if you want to reduce emissions with your CFE procurement, it must be guided not only by what’s most likely to lead to new projects (“additionality”), but also by what will reduce the most emissions (“emissionality”). This word emissionality is a terrible neologism — the latest of many out of the energy world — but I’m living with it, because it’s a helpful way to refer to the quantification of carbon emission reductions.Now, take note: optimizing your clean-energy procurement for emissionality is different from optimizing it for your own 24/7 consumption. The former strategy maximizes emission reductions. The latter does not. In some cases, optimizing around your own consumption could fail to reduce emissions or even increase net emissions, despite increasing your share of CFE. One simple example: imagine one company has signed a bunch of solar PPAs and thus has more hourly RECs during the day than it needs to cover its consumption, but it has a shortage at night; another company has signed a bunch of wind PPAs and thus has excess hourly RECs at night, but a shortage during the day. The companies can simply trade hourly RECs. Each has increased its CFE score, but no new clean energy was built and no carbon emissions were reduced. Another example is how companies choose to deploy batteries. Mark Dyson, an energy analyst at RMI, explained it to me this way:A battery optimized for 24/7 would charge when a buyer has procured “excess” renewable energy in a particular hour, but in most grids, for the foreseeable future, a fossil generator will usually be the marginal unit at the system level — so charging storage increases carbon emissions in that hour. Discharging the battery later would offset generation from another fossil generator and reduce emissions, but there’s no guarantee the difference in efficiency of those power plants is greater than the round-trip-efficiency penalty of using the battery, and thus total emissions can actually increase.In other words, optimizing battery deployment to cover 24/7 consumption will be different from, in some cases contrary to, deploying them to optimize emission reductions. Nobody has yet modeled exactly how much these two strategies would diverge, or how frequent cases like the ones above might be, but no one disputes that they would diverge. A strategy built around emissionality would, by definition, reduce more emissions than any alternative strategy built around any other goal.And this is the critique of 24/7 CFE: emissions are emissions. Reducing any one company’s emissions is of no particular benefit to the climate. Just reduce emissions wherever you can — that’s the climate imperative.This same debate expresses itself in several different forms. One way to think of the distinction is between “attributional” and “consequential” carbon accounting. Critics (see, e.g., this paper from WattTime) say attributional accounting — purchasing energy with a REC attached — is fine for statutory or voluntary clean-energy requirements. But when it comes to reducing carbon emissions, companies should use consequential accounting, i.e., purchasing energy that has the most short-term emission-reduction impact. The same debate crops up again between “hourly average” and “marginal” carbon measurement. One can either assess a unit of CFE based on its effect on the hourly average emissions on the grid in the hour it is produced or based on the carbon intensity of the marginal generator it displaces. Hourly averages are, for a variety of reasons, easier to determine, and can be used to boost your own CFE score, but a marginal approach (measuring “nodal marginal emissions”) will tell you which energy purchase will maximize short-term emission reductions.All these debates are forms of the same question: why not focus on carbon emissions? As Henry Richardson of WattTime put it to me, “measure emissions, not megawatt hours.”The emissionality critique — that emissions, not any company’s particular emissions, are the proper target for procurement strategies — is worth taking seriously. Everyone in the space has wrestled with it. Let’s run through a few possible responses and counter-arguments.Volts is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.Industrial policy vs. carbon policyWhen I talked to Princeton energy modeler Jesse Jenkins — who contributed to the modeling of 24/7 CFE we’ll look at in the next post — he suggested a helpful analogy to the debate between emissionality and 24/7: the debate between a carbon tax and more sector-specific standards and investments, i.e., industrial policy.A carbon tax is the most economically efficient way to reduce emissions — it will go after the cheapest emissions first. But by doing so, it will leave untouched many sectors of the economy that we will eventually need to decarbonize to get to 100 percent net-zero.If we leave them untouched for too long, we’ll run into a wall. “We need to be thinking about the total solution,” says Melissa Lott, research director at the Center on Global Energy Policy. “Otherwise we're going to get halfway down the road, have to take a hard left, and it's going to be painful and expensive.”The emissionality vs. 24/7 debate takes the same form. An emissionality approach would reduce emissions at a lower per-ton cost — it would go after the cheapest reductions first, usually by adding wind and solar to dirty grids. But a 24/7 approach will direct investment toward technologies that fill the gaps left by wind and solar. “And there are gaps,” says Lott. “These gaps aren't eight or even 100 hours, which can be solved with different battery technologies. They're eight to 14 days.”To cover those gaps will require “clean firm” generation, many sources of which are still in nascent forms of development. The pursuit of 24/7 CFE will stimulate innovation and growth in the entire suite of technologies needed to smooth out variable renewables — sources all grids will eventually need and many already do. (California power providers are already putting out solicitations for clean-firm projects.) In fact, says Brian Janous, Microsoft’s director of energy and renewables, even the early talk of 24/7 CFE has gotten people thinking about solutions. “We're seeing more and more utilities, and more and more energy service providers, come to us and say, hey, we think we can solve this problem for you,” he says.Companies pursuing 24/7 CFE are undertaking voluntary industrial policy, channeling attention and investment to gaps in current clean-energy technology, bringing down the costs so that other companies can use them more easily. That could have impacts well beyond their own emissions. Here’s how Jenkins put it to me:The heart of 24/7 carbon-free procurement is the pursuit of transformative impact on electricity systems via accelerated innovation. Think about the indirect emissions impacts from helping accelerate the time to maturity (or enable in the first place) one or more clean firm technologies or long-duration energy storage technologies that can go on to widespread adoption and make reaching 100 percent carbon-free electricity easier for the world. Leadership isn't just about doing one's part. It is about making it easier for others to follow. For a company, even one as large as Google, this impact is likely to far outpace any direct emissions reductions they achieve via procurement.24/7 CFE needs to be seen in its full contextNone of the entities pursuing 24/7 CFE today see their own achievement of 24/7 CFE as the ultimate end goal. The goal is grid decarbonization.“We break it into three pillars,” says Michael Terrell, Google’s director of energy. “First is transacting,” i.e., contracting with developers to ensure Google’s own 24/7 supply of CFE. “Second is advancing technology, both on the demand side and the supply side,” i.e., the industrial-policy piece. “Lastly is policy and grid decarbonization,” i.e., advocating for clean-energy policies before state public utility commissions (PUCs) and legislatures, to hasten decarbonization of the grids in which it operates.“For us, it's not a win if the only way we get to 24/7 in each place is by transacting,” he says. “We want to get the grids moving in that direction, too.”When it comes to the standard way of getting to “100 percent clean energy,” companies can just buy cheap RECs from distant grids. They don’t need to get involved beyond that. “That was a concern of ours,” Terrell says. “Companies were getting to 100 percent without having to consider the future of the grids where they were operating or do any policy.” In contrast, if a company is trying to cobble together a 24/7 supply of CFE on its local grid, it becomes much more invested in the state of that grid. The more CFE is on the grid, the higher the baseline from which it begins transacting for its own CFE. That will get companies involved in pushing utilities to make clean-energy commitments, pushing PUCs to clear away anachronistic regulations, and pushing legislatures to pass clean-energy policy.“We are trying to drive massive system change well beyond Google,” says Terrell. “The idea behind 24/7 is, you want corporates to have a stake in every grid where they operate. You want them to be banging the table, driving system change on these grids, getting these grids to carbon-free as fast as possible.”Janous says that Microsoft also wrestled with the 24/7 vs. emissionality debate as it determined its next steps. “Ultimately, we determined that local influence is still important,” he says. “Our ability to influence PUCs and local utilities, and do that worldwide across dozens and dozens of different markets, was more important than taking a pure-play emissionality approach in one market.”Time will tell how strong that local influence proves to be. What happens if progress on local grids is slow? Lott thinks the pursuit of 24/7 will move forward some tough calls. Entities pursuing 24/7 “are going to have to make a decision here in the next few years,” she says. “Do we keep our data center in this location where we don't see a clear path to [24/7], or do we move it? Do we shift investment somewhere else? This is going to be an interesting tension that will play out around 2025, ‘26.”This is an aspect I think critics of 24/7 CFE tend to miss: the social dynamics. If it becomes the new standard for climate-conscious companies and cities, there will be dozens, maybe hundreds of them doing it, spread out across all of America’s many balkanized grids. Each will have reason to serve as a local clean-energy emissary. Each will be invested in the others’ success — one company’s PPA boosts the grid mix for every other company on that grid. Companies will be incentivized to pool their resources for greater impact, as many are already doing through the Clean Energy Buyers Association (CEBA), which organizes and accelerates voluntary clean energy procurement. (A telling tidbit: until quite recently, CEBA was REBA, but “renewables” have given way to “clean.”)In short, the movement to 24/7 has the potential to drive social and political change in a way that traditional REC markets never could and arguably a pure emissionality approach couldn’t either.Emissionality can inform a hybrid approachThe choice between 24/7 and emissionality does not have to be a stark either/or. It is possible to use both perspectives for different jobs, or to blend them.Take the hourly-average vs. marginal debate. “All of these accounting systems have their advantages,” says Terrell. If you’re thinking about offsetting the consumption of a large facility, “you want to be looking long term, at the 10-to-15-year roadmap of that grid, and average emissions is fine for that,” he says. On the other hand, if you’re thinking about offsetting the emissions of product supply chains and product use — which are spread out across the country — there are no local consumption concentrations to target, so you might take a marginal approach to seek the cheapest, fastest emission reductions. Put another way: you can use hourly averages to offset your scope 2 emissions and marginal to offset your scope 3 emissions.Microsoft, Janous says, takes emissionality very seriously:The way I think about it is, there are three stages of impact. The first one is attribution — it's just buying RECS. Then, five years in, we moved to we would call additionality — it's not good enough for me to have this attribute, I need to have an attribute tied to something that I actually did. We're now getting into this third era, which is what I would deem consequential — not only do I need to say that I caused it, I need to be able to demonstrate that I'm materially changing the makeup of carbon on the grid.With that in mind, he says, Microsoft has developed a “hybrid form.” By pursuing 24/7, “we are going to look at each grid where we operate and we're going solve for that,” he says. “If we can achieve 100 percent decarbonization of our energy supply across our portfolio, we've demonstrated that you can do it just about anywhere.”“By virtue of taking that grid-level approach, we are not going to have perfect optimization for emissionality,” he says, “but we're going to apply [emissionality] within that grid context.” In other words, within the grids containing Microsoft’s local loads, Microsoft will purchase the CFE that reduces the maximum emissions.In this hybrid approach, neither 24/7 CFE nor emissionality is perfectly optimized, but both are pushed forward together.“We feel like the principle [of emissionality] is still extraordinarily valuable,” Janous says, “even when you do it in this hybrid way.”Other values could supplement 24/7 as wellJanous, Terrell, and pretty much everyone else I spoke to emphasized that there are other values beyond emission reduction that are important to integrate into procurement decisions as well, most notably environmental justice.Last year, Salesforce released a white paper, “More Than a Megawatt,” explaining its evolving view on large-scale corporate procurement. It wants to go beyond emissionality to assess potential clean-energy projects based on a whole range of criteria, from equity to land use to impacts on wildlife. There are always trade-offs among these metrics, so Salesforce has developed a “procurement matrix” that will help weigh all these factors and determine which projects best optimize for multiple values. (A similar whitepaper was recently released by LevelTen Energy, a renewable energy procurement platform.)Notice that the more of these values enter your procurement matrix, the farther you are from a pure 24/7 play. Instead of optimizing for any single value, you are — as in life generally — trying to balance multiple competing values under time and resource constraints.That can be complicated. It will help if big players like Salesforce create some standardized tools and metrics that make it easier for mid-sized companies to follow suit. Individual companies and cities can decide for themselves how much weight they want to give to 24/7 CFE relative to other values. Anyway! This post, like the last one, has gotten way too long. If you’ve stayed with me this long, you are definitely a Volts reader and should purchase a subscription!In my next post, we’ll have a close look at some new modeling of 24/7 procurement from Princeton’s Zero Lab and then see, based on that and all that has come before, whether we can draw some provisional conclusions about 24/7 CFE.Notice that the more of these values enter your procurement matrix, the farther you are from a pure 24/7 play. Instead of optimizing for any single value, you are — as in life generally — trying to balance multiple competing values under time and resource constraints.That can be complicated. It will help if big players like Salesforce create some standardized tools and metrics that make it easier for mid-sized companies to follow suit. Individual companies and cities can decide for themselves how much weight they want to give to 24/7 CFE relative to other values. Anyway! This post, like the last one, has gotten way too long. If you’ve stayed with me this long, you are definitely a Volts reader and should purchase a subscription!In my next post, we’ll have a close look at some new modeling of 24/7 procurement from Princeton’s Zero Lab and then see, based on that and all that has come before, whether we can draw some provisional conclusions about 24/7 CFE. Get full access to Volts at www.volts.wtf/subscribe

Hey y’all, just a quick thing today (as I work on my follow-up to Friday’s post).I was on Pod Save America last week:One of the things I talked about is the COP26 climate summit in Glasgow, Scotland, which wrapped up last week with a final agreement that … say it with me … represented real progress but fell short of what’s needed. Just like all the other COP agreements.I had a pretty deflationary take on the whole thing on the pod. Given the melodramatic rhetoric around COP26 — the same rhetoric that attends every international climate summit — I thought I’d briefly explain why I don’t think COP26 is worth getting down about. By way of background, remember that there were effectively two climate events at the COP, as there always are. One was the COP itself, the business of the United Nations Framework Convention on Climate Change (UNFCCC). The other was a kind of climate festival-cum-trade-show, featuring governments, nonprofits, and private-sector actors announcing all kinds of new campaigns and initiatives alongside the UNFCCC process — and protestors marching outside.First event first. The Paris Agreement continues to play outThe actual business of COP26 mostly involved negotiators from various countries in cramped conference rooms hashing out technical details of elements of the Paris Agreement — about monitoring and verification, about who is contributing how much to the climate fund for poorer countries, about how often countries will report new targets, and so forth. None of that stuff was particularly dramatic; it was all the usual incremental, too-slow movement forward. There was some drama at the last minute when India — which had started COP26 with a bang, promising to hit net-zero emissions by 2070 — demanded that a provision on a global coal “phase-out” be rewritten to say “phase-down.” (This was disappointing, but keep in mind this is the first time fossil fuels have been specifically mentioned in a COP agreement at all.)Much was made of this and other shortcomings of the final agreement, but there’s a weird kind of disconnect around this commentary. What people seem to forget is that the UNFCCC has no real power to enforce anything and there isn’t the unity needed among participating countries to create a binding target with real consequences. This was the origin of the Paris Agreement: the realization that the best the UNFCCC could do is structure and publicize voluntary national goals and commitments. The idea was to do with transparency and peer pressure what decades of adversarial negotiations couldn’t: steadily increase ambition.A shorter way of saying this is that a COP agreement can’t make a country do anything. Whether and how fast India phases out coal has nothing at all to do with what its diplomat says in Glasgow and everything to do with domestic Indian politics, which have their own logic and are only faintly affected by international politics. The utility of the Paris process is that every few years it provides the equivalent of a giant camera flash, revealing where everyone stands. That is useful. International transparency and peer pressure can sometimes move national governments. But it is a mistake to invest any particular hopes for change in the UNFCCC process — it can’t really do anything. It can only illuminate what is being done.What is being doneThe good news is, we’re making progress. A decade ago, we were on track for 4° to 6° Celsius average warming by the end of the century, which would have been species-threatening.As this report from Climate Action Tracker shows, thanks to actions taken by national governments since then, we have “bent the curve” on climate change, as it were, and brought the average expected warming down to 2.7°C. That would still be devastating. But we’re not going to stop there. Progress is only accelerating. If every country that has submitted a 2030 carbon target in the Paris process — an NDC, or nationally determined contribution — hits that target, average warming will be 2.4°C.If all short- and long-term targets submitted thus far are achieved, it’s down to 2.1°C. In CAT’s “optimistic scenario” — in which all targets announced by anyone anywhere are met — the average is 1.8°C. As the CAT report emphasizes, that’s still short of the Paris goal. There’s still a credibility gap between what countries say they want to achieve and what they are willing to offer. There’s certainly no reason for complacency. But the trajectory is in the right direction. There’s still plenty of reason to fear where we are currently headed, but at the same time, there’s no reason to think that five years from now, at the next major Paris “stocktake,” we’ll still be headed there. We’re bending the curve and lots of forces and institutions are lining up behind the effort. Speaking of which …Climate WoodstockAlongside every official COP is a kind of international festival where everyone who’s doing anything on climate goes to talk about it. Bi- and multi-lateral coalitions, states, cities, nonprofits, corporations — everyone gravitates to the moment when media attention will be most intense. There was a bit of a sour taste at the festival this year, given that fossil fuels were abundantly represented and the poorest and most vulnerable were, thanks to Covid, unusually under-represented. Nonetheless, amidst the unsavory optics came all kinds of heartening news. There was a global treaty on methane, brokered by the US and the UK, which has been signed by more than 100 countries. A group of renewable energy players created the 24/7 Carbon-free Energy Compact in partnership with Sustainable Energy for All and UN Energy (see my explainer on 24/7 clean energy).A group of governments and private funders pledged to spend a total of $1.7 billion on Indigenous peoples and local communities (IPLCs) protecting local biodiversity. Over 100 countries pledged to stop deforestation by 2030. A group of philanthropic and development organizations and governments called the Global Energy Alliance for People and Planet (GEAPP) pledged $10.5 billion toward helping emerging economies transition from fossil fuels. Similarly, the Glasgow Financial Alliance for Net Zero (GFANZ) pledged over $130 trillion of private capital to the energy transition. And so on. What this shows is an immense amount of will in the world to address this problem, struggling to organize. There’s so much going on.Another thing I said on Pod Save America is that national governments are often going to be in the caboose of this train — civic groups, the private sector, and subnational governments are leading the way. That’s distributed all over the world, less easy to see and sum up, but it shows that the caution and intransigence of national governments are not the whole story.COP26 was a snapshot of a world — agonizingly slowly but with gathering speed — moving to address a crisis. There’s no reason for anyone to stop pushing, but there’s also nothing wrong with acknowledging and celebrating the progress that’s been achieved by all the pushing so far. Things are moving! Get full access to Volts at www.volts.wtf/subscribe

When a company or city claims to be “100 percent powered by clean energy,” what it typically means is that it has tallied up its electricity consumption, purchased an equal amount of carbon-free energy (CFE), and called it even.That’s fine, as far as it goes. But now, the next horizon of voluntary climate action has come into view: a brave few companies and cities aspire, not just to offset their consumption with CFE on a yearly basis, but to match their consumption with CFE production every hour of every day, all year long. Running on clean energy 24/7 — that’s new hotness. The list of entities in the US that have committed to 24/7 CFE is short: Peninsula Clean Energy (a community choice aggregator in California) has committed to it by 2025; Google, Microsoft, and the Sacramento Municipal Utility District have targeted 2030; the Los Angeles Department of Water and Power and, somewhat anomalously for this California-heavy list, the city of Des Moines, Iowa, have targeted 2035. Ithaca, New York, is rumored to be contemplating something similar.That’s it for now. But the idea is catching on quickly and drawing tons of attention. In September, a broad international group of more than 40 energy suppliers, buyers, and governments launched the 24/7 Carbon-free Energy Compact, “a set of principles and actions that stakeholders across the energy ecosystem can commit to in order to drive systemic change.” Biden’s original American Jobs Plan contained a promise to pursue “24/7 clean power for federal buildings.” That language has fallen out of the Build Back Better budget reconciliation bill in Congress, but rumor has it Biden may issue an executive order on the subject soon.There are already efforts afoot to standardize hourly tracking of clean energy and build it into markets, as well as numerous active discussions about how to update markets and policy to accommodate it. Anyway, it’s getting to be a big deal. It’s time to wrap our heads around what’s going on. Happily, it turns out to be a fascinating story with all kinds of twists and turns. Let’s dive in!A history of “powered by clean energy”To understand what “100 percent powered by clean electricity” has meant to date, you have to understand at least the basics of renewable energy certificates, or RECs.Originally, RECs were a mechanism that utilities used to comply with statutory requirements for deploying renewable energy. A wind or solar farm that generated 1 megawatt-hour of renewable energy also generated 1 REC, which was submitted to regulators as proof of compliance. Then voluntary REC markets came along. In a voluntary REC market, a power generator can “unbundle” its REC from the megawatt-hour of energy it generates and sell it into a market where it could be traded numerous times before being retired, or taken off the market. (For accounting purposes, whoever retires the REC gets to claim the environmental benefits.) Corporate, institutional, and government entities could purchase, trade, and retire RECS. The idea was that the ability to sell RECs as a second income stream would induce developers to build more clean energy projects. And it worked for a while, as long as solar and wind came at a cost premium and RECS were relatively expensive.But then, wind and solar started getting super-cheap: the cost of an unbundled REC went from $5 in 2008 to under $1 in 2010 (where it stayed through 2019, though it has risen back up to $3-$5 in the last couple years). Voluntary REC markets became quite robust but it became clear at a certain point that all these unbundled RECs were not actually driving many new renewable energy projects. A 2013 study found that “the investment decisions of wind power project developers in the United States are unlikely to have been altered by the voluntary REC market.” To their credit, corporate and industrial (C&I) buyers took notice. In 2014, Walmart stated that it would no longer offset its energy use with unbundled RECs, and many other buyers followed suit. The market began to trend toward long-term contracts — power purchase agreements (PPAs) — through which a buyer pledged to buy both the energy and the RECs (“bundled” RECs) from a prospective project for 10 to 25 years. That gave developers more confidence and has prompted a surge of building of clean energy projects. In 2020 alone, C&I buyers in the US procured 10.6 gigawatts of renewable energy, which represents a third of all renewables capacity added in the country. Voluntary procurement by the C&I sector has become a major driver of the energy transition.There are still plenty of entities buying cheap unbundled RECs and claiming carbon neutrality, but the leaders in the space are generally bundling them under PPAs. But there is still a problem with RECs, even the good ones.Volts is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.The problem with RECSWhen a C&I buyer purchases a REC, whether bundled or unbundled, it knows how much renewable energy was generated (a megawatt-hour), but not when it was generated. But it turns out that, when it comes to energy sources that come and go with the weather like wind and solar, the timing of generation matters quite a bit. If participants in voluntary REC markets continue to buy the cheapest wind and solar RECs, sooner or later, the grid will become imbalanced. During periods of high sunlight or heavy wind, there will be too much renewable energy, pushing prices down. But in periods when the sun is down or the wind flags, there isn’t enough renewable energy, so demand must be covered by expensive natural gas peaker plants. Prices and supplies swing wildly. Markets don’t like it. And more wind and solar only exacerbate the effect.What’s needed is CFE that’s available when sun and wind fall short. A megawatt-hour of additional CFE is much more valuable during those times than it is during times of high solar and wind output. The timing matters.But right now, RECs contain no information about the time of generation. It is impossible for buyers to know if any particular generator covered or will cover any particular hour of consumption. Buyers have no way of buying CFE specifically in the hours that they most need it. Think of a monthly REC as an extremely low-resolution image of renewable energy production. In temporal terms, it’s one giant month-sized pixel. C&I buyers purchase these low-resolution images, overlay them on their consumption, and hope for the best.But when you look at a higher resolution image of renewable energy production, one with hour-sized pixels, you see that it does not overlap perfectly with consumption. Not even close. The mismatch between “100% CFE” and “100% CFE 24/7”Google broke ground in this area with a 2018 white paper called “The Internet is 24x7. Carbon-free energy should be too.” (See also this 2020 white paper and this April blog post from Google CEO Sundar Pichai.) It has produced some visuals that allow us to clearly see the mismatch between renewable energy supply and demand.Google has dozens of data centers. It tracks energy supply and demand by the hour and gives each data center a CFE score: how many hours of its operations were powered, in real time, by renewable energy. A quick word about how the CFE score is calculated. For each hour, the baseline CFE score is the grid mix. So if the data center is drawing on a grid with 20 percent CFE (wind, solar, nuclear, whatever) and 80 percent fossil, it begins with a CFE score of 20 percent for that hour. Google then adds any energy being produced during that hour by projects with which it has signed PPAs on the same grid. That can push the CFE score up, theoretically to 100 percent. Anyway, with that in mind, let’s check out some data centers and their CFE scores. The first is from the company’s data center in Iowa. Google buys more than enough wind power in Iowa to offset the data center’s consumption in volumetric terms. But is the data center actually running on wind power, from hour to hour? Not entirely. To be precise, 74 percent of its demand was matched, on an hourly basis, by CFE. It has a CFE score of 74. Below is a stripe representing the data center’s consumption for every hour of the year. Each column is a day (there are 365). Each row is an hour, beginning with midnight at the top. The shade of the square represents the amount of CFE powering it during that hour.In most hours, there’s enough Google-contracted wind power coming onto the Iowa grid to cover the data center’s consumption. However, for a period in late summer, wind speeds decline, wind power drops, and fossil fuels step in to provide the power. How can Google get this data center’s CFE score up to 100 percent? The first thing to note is that it can not simply buy more Iowa wind power. It is already getting all it can get out of wind. It doesn’t matter how many wind farms it has contracted with if the wind isn’t blowing in a given hour. In Iowa, Google is going to have to procure something else — something that can fill in the gaps left by wind.One way to do that is by buying both wind and solar, which tend to have complementary profiles. Below is a similar stripe representing Google’s Netherlands data center. On July 1, a bunch of new Google-contracted solar came online; from that point on, the middle of the stripe — daytime — is much greener. Solar fills in some of the gaps left by wind. Unfortunately, solar leaves gaps too. It doesn’t matter how many solar farms you’ve contracted with if the sun is behind clouds or, you know, down. In the Netherlands, Google is going to have to procure something else — something to fill the remaining gaps left by solar and wind. In some sense, these are nice problems to have. Here’s the Taiwan data center:Oof. What little CFE there is on Taiwan’s grid comes from nuclear power plants — when they go out, it’s all fossils.Google has given all of its data centers CFE scores (which was no mean feat, since in many cases this data was not easily available). Here they are:These graphics help illustrate Google’s 24/7 CFE challenge, which isn’t just one challenge but a slightly different challenge in each of the dozens of grids in which it operates. At each of those data centers (except maybe Oklahoma and Oregon) it needs to buy a bunch more wind and solar. But it will also need to buy something else — something to fill the gaps.What might that something else be? The technology needed to fill the gapsPart of the great promise of the movement to 24/7 CFE is it will draw attention and investment to all those things needed to balance out cheap wind and solar. For big consumers like Google, there are, roughly speaking, three ways to smooth out the fluctuations in wind and solar and maintain a steady hourly supply of CFE. They are, from least to most expensive: demand management, energy storage, and clean-firm generation. Demand managementDemand management begins with load reduction through efficiency. Google has aggressively pursued energy efficiency at its data centers, with dramatic results: “Compared with five years ago,” the company said in 2018, “we now deliver more than 3.5 times as much computing power with the same amount of electrical power.”After load reduction comes load shaping — managing daily operations to push more consumption into high-CFE hours — and load shifting, which refers to moving consumption around in smaller increments, responding to hour-to-hour fluctuations in CFE. “We got our start by looking out over a 24-hour period, getting a forecast of what the grid CFE would be, and then shifting compute loads back in time during that period, things like feature upgrades or backups,” Michael Terrell, Google’s director of energy (and the author of the 2018 white paper), told me. “Now what we started doing is shifting loads spatially, from one data center to the other. Theoretically you could envision compute following the sun [around the globe], if you took it all the way.”Adapting demand to supply rather than vice versa — load reduction, shaping, and shifting — is almost always the least expensive way of accommodating variable renewables. There is still a ton of innovation to come in this area. “It's a space where we haven't even really gotten started,” Terrell says. Energy storageStorage, currently dominated by lithium-ion batteries, is great for smoothing out the day-to-day supply curve, taking some excess wind from windy hours and saving it for lulls, or saving excess solar from the daytime for nighttime. However, while batteries are a good balance for renewables’ variability, their hour-to-hour fluctuations, they aren’t as good for balancing its intermittency, the occasional days, weeks, months, even years of unusually low wind or sunlight. Germans call a period like this a Dunkelflaute. It is extremely difficult and expensive to cover one with only batteries to supplement wind and solar. Clean-firm generationThe third option is “clean firm” generation, i.e., energy sources that can be turned on at will and run for days or weeks on end, but emit no carbon. The two big conventional examples here are hydro and nuclear power, but there isn’t a ton of new hydro available to most buyers and new nuclear (at least in the absence of next-gen nuclear tech) is prohibitively expensive.There’s also geothermal, which (as I wrote here) is getting a lot of interest and active development. The first bit of clean-firm that Google plans to acquire is geothermal, from a company called Fervo. For now, affordable geothermal is only available in certain areas of the country, but technological advances are close to changing that.Other clean-firm sources include:* long-duration energy storage, which is technically a form of storage, but competes directly with other clean-firm sources;* advanced nuclear, which has been just over the horizon for years but might finally be getting close;* biomass, some versions of which may qualify as zero-carbon; * power plants running on hydrogen (or hydrogen-based fuels), which are currently being tested in the UK and elsewhere; and* natural gas plants with carbon capture and sequestration (CCS), which are currently both nonexistent and wildly expensive, but may (with the help of a boosted 45Q tax rebate in the Build Back Better bill) become more cost-effective soon. One reason energy nerds are excited about the 24/7 trend is that it’s going to pull forward in time a bunch of questions (and investment decisions) that were going to face grids trying to reach 100 percent CFE anyway. Perhaps the biggest and most important of those questions is: how far will we be able to get with demand response and batteries? How much clean-firm will we need in the end? With a bunch of companies and cities competing to reach 24/7 CFE, we’ll find out sooner than we otherwise would have. And the clean-firm sources that are necessary will receive much-needed investment, bringing their costs down and benefiting other decarbonizing grids across the world.The market products needed to fill the gapsIf companies and cities want to fill in their hourly gaps, they need access to time-stamped CFE. As previously mentioned, current RECs only come in low-resolution form, in chunks of a month or year. They aren’t precise enough to target specific hours. The answer — simple to propose but devilishly difficult in practice — is to supplement and eventually replace current RECs with some kind of hourly RECs. As it happens, there’s a bunch of work going on to figure out how that would work. If you’re interested, the place to begin exploring is this white paper from M-RETS, a nonprofit organization devoted to the tracking and trading of renewable energy.Working with Google, M-RETS is pioneering and testing a product called Time-based Energy Attribute Certificates (T-EACs), which are effectively hourly RECs. One monthly REC would be replaced (for a 31-day month) with 744 T-EACs, each representing one hour of the month, each encoding exactly how much CFE was generated in that hour. For now, in the Midwest, T-EACs are being offered alongside RECs and Google is buying and retiring them. But there’s a long way to go between that test and a fundamental restructuring of REC markets. Says Google:For T-EACs to be adopted worldwide, we’ll need to standardize the certificates and integrate them into existing tracking systems and carbon accounting programs. Also, grid operators will need to enable customers to access and understand their hourly energy data. That’s why we support policies that mandate publication of grid data, and why we serve on the Advisory Board for EnergyTag, an independent non-profit pioneering a global tracking standard for T-EACs.This is a big task, which amounts to rebuilding a rather large plane (REC markets) while it is in flight. But the information necessary to do it exists. That’s phase one of M-RETS’ plan: make hourly RECS available and reliable. Phase two is a little trickier.Measuring the carbon impact of renewable energy procurement is vexed but vitalPhase two is to integrate carbon information and accounting into T-EACs, to reveal precisely how much carbon was avoided by the clean energy. This information can help buyers prioritize the T-EACs likely to displace the most emissions. It can also allow companies to more precisely track their scope 2 emissions. For those who don’t remember this bit of jargon: scope 1 emissions are from direct, on-site combustion of fossil fuels; scope 2 are the off-site emissions represented by on-site consumption of electricity; scope 3 (a much broader category) are all the emissions caused by a company’s supply chain and products. To date, companies have been able to offset their scope 2 emissions with REC purchases. But as we’ve seen, RECs are almost always mismatched to actual hourly consumption, and a company that relies on RECs to offset its scope 2 emissions is likely exaggerating its actual reductions. Hourly carbon-emissions data attached to T-EACs would allow a company to precisely measure the amount of emissions it reduces through its contracts and thus precisely offset its scope 2 emissions. There are technical issues around how to properly measure avoided carbon, but we’re going to pass those by for now. There’s a ton of work going on in this area: for companies trying to provide reliable hourly emissions data, see Singularity Energy, electricityMap (formerly Tomorrow), WattTime, and Kevala. In partnership with several energy companies, Kevala recently released a white paper proposing “a methodology for measuring carbon intensity on the electric grid.”In addition, there are organizations working to develop standards and common definitions, including the aforementioned EnergyTag, “an independent, non-profit, industry-led initiative to define and build a market for hourly electricity certificates that enables energy users to verify the source of their electricity and carbon emissions in real-time,” and LF Energy (the energy division of the Linux Foundation). The ultimate vision: electricity markets in which each hour of CFE is available as a discrete product, with reliable carbon data attached to it. Within such markets, any buyer — a building, a data center, a city — would be able to know precisely what its real-world carbon footprint is and exactly how much progress it has made in reducing it.Is 24/7 CFE the next step in carbon commitments … or a distraction? Let’s be honest: governments ought to be doing this, through policy. The federal government should pass a clean energy standard (or, ahem, a CEPP) targeting a net-zero electricity sector by 2035, like Biden wanted. On some level, all of this voluntary stuff is a suboptimal response to government failure. Nonetheless, the C&I sector deserves credit for pushing things forward even when governments won’t. It is responsible for enormous amounts of new renewable energy on the grid over the last decade.Now it is trying to focus attention on filling the gaps left by wind and solar, to achieve full, around-the-clock clean energy. This is a challenge every decarbonizing grid will face eventually. Google et al. are effectively volunteering to explore and chart it in advance. Nevertheless, there are real questions about whether this is the best climate strategy. A company procuring CFE to raise its own 24/7 CFE score is not necessarily going to procure in a way that maximizes carbon reductions; those two goals rarely overlap perfectly. Critics of the 24/7 trend say that companies ought to be focused on reducing the most carbon possible as quickly as possible, and that hourly T-EACs are in some ways a return to unbundled RECs, with all the same risks that accounting gimmicks will substitute for real emission reductions. These are complicated disputes that are worth spending some time on. And this post has already gone on for too long! So for now, I will leave it here, with the introduction I promised. In my next post, I’ll get into the questions around whether 24/7 is the right goal and how it might actually affect emissions. It only gets nerdier from here on out, y’all! Get full access to Volts at www.volts.wtf/subscribe

In this episode, journalist and researcher Amy Westervelt discusses the history of the public relations industry in the US and the ubiquitous, if largely unacknowledged, role it has played, and still plays, in shaping how Americans think about the environment. Amy has tons of great stories!Full transcript of Volts podcast featuring Amy Westervelt, October 27, 2021 (PDF version)David Roberts:In recent years, there’s been a lot of talk about America’s polluted information environment — the ubiquity of disinformation — driven by social media and “fake news.” What is less discussed is that purposefully crafted disinformation designed to shape public opinion to the benefit of the wealthy and powerful is nothing new. In fact, it’s almost as old as the country itself. Amy Westervelt, a long-time, award-winning environmental journalist, has spent her career uncovering disinformation and exposing the methods of those who generate and spread it.She’s perhaps best known as the host of Drilled, a “true-crime podcast about climate change” that has spent six seasons (so far) exposing the propaganda generated and spread by the fossil fuel industry. And she’s editor-in-chief of the Drilled News site.She’s also the founder of Critical Frequency, a woman-run podcast network, as well as the co-host of the climate podcast Hot Take with climate essayist Mary Annaïse Heglar (it’s currently on hiatus; returning next year), the co-host or producer of several other podcasts (including Scene on Radio and Crooked Media’s This Land), and the author of Forget Having It All, a 2018 book on the challenges of motherhood in the US. Now Westervelt has a new project, launching today: Rigged. The foundation of the site is a treasure trove of original documents, some dating back more than a century, about the founding and growth of the modern public relations industry and its development of tools of mass persuasion.Atop that database is a series of pieces charting the landscape, offering a glossary of disinformation techniques, profiles of the (anti-)heroes of the business, and stories on various inglorious chapters in disinformation history, from chemicals to railroads to tobacco to fossil fuels. It is equal parts fascinating and horrifying — fascinating that the tools of disinformation are so well and publicly documented; horrifying that they are still working so effectively. Here’s just one fun fact: Edward Bernays, one of the pioneers of early 20th century opinion shaping, coined the term “public relations” because the Germans, he said, had “given the word propaganda a bad name.” You can also thank Bernays, Sigmund Freud’s nephew, for men wearing wristwatches, women smoking, and bacon being a standard part of American breakfast. These stories are wild.I’ve been admiring Westervelt’s work from afar for years, so I was psyched to talk to her about Rigged, the long history of disinformation, the many ways the fossil fuel industry has shaped public opinion, and why the US left seems so incapable of dealing effectively with disinformation to this day.Amy Westervelt, welcome to Volts.Amy Westervelt: Hi, thanks for having me.David Roberts:   Glad you could squeeze me in between your dozens of projects. Let's start with the newest one. Tell me about Rigged: How did you come to be doing this, why are you doing it, and what would you like it to accomplish?Amy Westervelt: A little more than a year ago now I did a season of my other podcast, Drilled, looking at the history of fossil fuel propaganda. When I first started Drilled, I was just going to do one six-part season about the origins of climate denial. Then, in the course of doing that, I started thinking, climate denial is such a dumb tactic; why did it work? It's dumb to just be like, “Nuh-uh.” It's not a genius strategy. Of course, it's telling people what they want to hear, like this problem might not be that bad and maybe we don't need to do anything drastic. But I also felt like there must be more to it. So I started to look at what the industry was doing before; it's not like they just started doing PR when global warming was researched. The more I dug into that, the more I realized that they really spent a lot of time and thought to shape how people view the world in general, and especially how people view environmental issues, for a really long time, before anyone was talking about climate change. That has a lot to do with, once this issue appears, how we actually process and deal with it. But in the course of doing that, I also found all this stuff about what the PR firms and the PR people who were working for Big Oil were doing for all these other industries at the same time, and it seemed important to me for people to understand that this is a longstanding system and set of strategies that really was created to circumvent democracy. The modern PR industry comes about when you have journalists criticizing America's captains of industry for the first time, you have the vote expanding beyond just land-owning white men; this is the late 1800s and early 1900s, the dawn of the 20th century. The US government passes its very first regulation on business in 1887. So there are all these reasons that industry across the board is saying, “Oh, wow, we really need a way to get a handle on this thing that's getting away from us.” I call it “creeping democracy.”A lot of these early PR guys are working for coal and rail and oil and tobacco all at the same time, and then quickly, chemicals joins that list, too. So the reason that we see these strategies replicated in multiple industries is not that an oil executive is studying the moves of a tobacco executive; it's that they're using the same PR firms. In the case of oil and tobacco, John W. Hill was working for the American Petroleum Institute and all the tobacco companies at the same time, and he encouraged them to talk to each other. He got the tobacco guys to join the API. The oil companies were co-defendants of the tobacco companies during the tobacco litigation, because they helped to create the cigarette filter. That was all brokered by their PR and spokespeople. I felt like all this documentation sitting on my desk wasn’t doing anyone any good there. I started to digitize a lot of it, and I thought, DocumentCloud is kind of hard to navigate, so I should put this on a website that guides people through it. Then I thought, there's a significant number of people who, even if they believe we should act on climate, will never listen to a climate podcast, because they have a certain idea in their minds of what that means; so I'm going to do a companion podcast that looks at how disinformation is created and how it became an industry in and of itself in the US, a long time before we started talking about Facebook and Twitter, or climate change and climate denial.David Roberts:   When this industry and approach was first coming together, what were some of the early victories that helped put the template in place for what these guys could do for an industry?Amy Westervelt: This is fascinating to me, because they're all these things that people take at face value as just a cultural shift that happened in America. It's really nuts. One of my favorite examples of this is Freud's nephew, Edward Bernays, who integrated a lot of Freud's theories into his work in the 1920s. He lived to be more than 100, so he was working from the 20s through the 70s. He had a watchmaker come to him who was concerned about the fact that, apparently, it was considered feminine to wear a wristwatch, so men were not wearing wristwatches. Real men had pocket watches. So Bernays starts to think about who are the manliest of men, and he lands on soldiers. Bernays was a frequent user of commissioning an expert to do a study; whether or not that study was valid or not is very suspect, but at the time, it was considered an expert study. So he commissioned a study to look at how many soldiers were killed while lighting a match to look at their pocket watch. Then he goes to the Army and says, “you could have a 25 percent reduction in the number of men being killed if you just made wristwatches standard issue.” So they did. He got the Army to make wristwatches standard issue, and that effectively broke this taboo about it being feminine to wear a wristwatch.David Roberts:   Clever. He did a reverse thing with women in smoking, which I also found fascinatingly devilish.Amy Westervelt: Yes. In the case of smoking, American Tobacco came to him with a similar kind of gender taboo: it was considered uncouth for women to smoke. So he had this idea to call up some of his friends’ young socialite daughters and have them stage a protest, walking up and down Fifth Avenue smoking, and say that it was a women's empowerment thing. Then he called all of the newspapers and told them about the protest, and they all covered it. It was in all the national papers. He called cigarettes “torches of freedom.” He also really tapped into Freudian stuff about women and penis envy and etc. He was quite a dude. Within six months or so, this taboo had been totally broken down and the tobacco industry had doubled its customer base. I'm sure most people at the time just thought that it was a women's empowerment thing, but it was all manufactured.David Roberts:   Another thing that people think of as a modern phenomenon is attacking the media as biased or fake news, or trying to bully the media into doing a both-sides approach of what ought to be a clear issue. Turns out that goes way back too; that's not an invention of modern Republicans.Amy Westervelt: No, it is not. Bernays did a bit of that. Even Ivy Lee, who was the very first modern publicist who worked for Standard Oil, did that. Then in the 60s and 70s, my favorite, Herb Schmertz, the VP of public affairs for Mobil Oil, really hammered that home. He was famous for bullying journalists and threatening them with pulling ads if they didn't cover Mobil’s point of view on things, which he did actually do with the Wall Street Journal for a significant number of years. He even went one step further and refused to give them access to things like quarterly earnings reports.David Roberts:   In one of the interesting stories I read on Rigged, someone successfully bullied a journalist into saying “changes” rather than “reforms.” It's amazing how vulnerable to this journalists are and have been.Amy Westervelt: That was Ivy Lee; he shifted the language around railroad labor requirements. Back in the late 1800s, they were wanting to require trains to have additional staff, because they were very negligent and having massive crashes and killing lots of people. They were told, “you guys are understaffing these trains, they need to be properly staffed.” Ivy Lee shifted the language around from it being a minimum number of staff to additional staff, which is a really key thing when you think about it. I was just thinking about that today, with how the oil industry talks about methane. Everything is a methane “leak,” which sounds accidental: oopsie! But you guys are letting it rip constantly, sometimes just because you want to burn off gas. David Roberts:   “We've been having this accident happen consistently every day.”Amy Westervelt: Industries of all kinds spend an enormous amount of time and money choosing the exact right wording. They've been doing that forever. A guy named Earl Newsom, who worked for Standard Oil from the late ‘20s to the late ‘60s or ‘70s — also worked for Campbell's Soup, and GM, and Ford, and all the big American companies — was using Elmo Roper to do early polling, in the ‘20s, and then using that to inform his PR plan. I found all of the invoicing documents in his archives and some of these companies were spending millions of dollars on PR in the late ‘20s, already.David Roberts:   It seems like, early in the game, when these things were new and no one had any defense mechanisms, they were wildly successful. That's an incredible payoff for a little bit of investment.Amy Westervelt: The very first press release, which Ivy Lee created and sent out to The New York Times, ended up getting printed word for word, because they were so caught off guard by the fact that the company was disclosing all this information.David Roberts:   It's easy to condemn the corporate side of that move, but the response of journalists is a little bit more muddy. You can see why it’s effective on journalists, because they do want to be fair. Objectivity has become a parody of itself, but the impulse is real; I understand why, as journalists, we're subject to this.Amy Westervelt: Totally. It effectively weaponized good intentions.David Roberts:   How can we harness a basically good impulse to horrible effect?Amy Westervelt: It was very smart. In the early days, part of what they were organizing against was the muckraking journalism that Ida Tarbell and Ida B. Wells and Upton Sinclair and all those folks were doing. Part of the strategy was to paint this picture that those journalists are really activists — they're biased, they have an agenda. You don't want to be that type of journalist. Which I still see today, constantly.David Roberts:   One of the most useful things on Rigged is this glossary of techniques that have come into use since the late 1800s. It's a bounded set of techniques that they come to again and again and again. I thought we could look at a couple of them through the lens of fossil fuel companies, because that's my personal obsession. Some of them I think people understand already, like astroturfing: the making of fake grassroots groups. Most people get making up of fake experts, or starting your own think tank, or buying a friggin’ academic department and having them crank out studies for you. But some of these are less obvious. One of the things I found amazing is how involved the fossil fuel companies have been in school curriculum, going way, way back.Amy Westervelt: They started that. They did that before any other industry. Standard Oil put out the very first corporate-sponsored curriculum for schools in 1928. They did these pressed albums that they sent to schools; it was called the Standard School Broadcast. It seemed on the face of it like it had nothing to do with oil. That's the genius thing; they are very good at doing this in a subtle way. This program was music appreciation and history. So on the face of it, seems fine.I actually went on a little bit of a spending spree buying up old vinyl from the Standard School Broadcast. I have one that's all about the Industrial Revolution. It's classic. They do these radio vignette-style stories in between the music, and there's one where they have this very shrill-voiced woman being the consumer protection person. They give her some name that sounds annoying, like Ms. Snap. It’s setting up this whole thing of, well, do you want to give up your car and live like the aboriginals do? This one that I'm referencing in particular came out in the ‘40s. So they've been setting up this idea that anyone who suggests government intervention that would interfere with profits in the name of public safety or the environment or anything like that — that is a backwards thing, it's not sensible.David Roberts:   Something the corporates do better than the good guys is, they don't just go in and say “oil is great.” It’s much deeper: corporate capitalism is the nature of the world. It’s propaganda on a deeper level than just their interests. They're trying to convey a worldview.Amy Westervelt: Yes, very much, and when you put that worldview in a classroom or in the mouth of a teacher that young children are taught to trust and believe, that is an insidious form of propaganda that is very hard to shake. It’s wild. I spent the last several months looking at the school stuff, because we did a series with Earther on school curriculum. What I wanted to focus on was the non-science part. We've gotten to this point where everyone thinks the problem with climate is political will, not lack of understanding of the science — but we haven't really looked at where that problem with political will has come from, and just how far back it goes. These guys were investing in shaping a very specific worldview.David Roberts:   And making you feel like, if you object to part of it, you are basically standing up against industrialized modern life.Amy Westervelt: Yeah, that you're backwards, you're a communist, you're not American. It's tied to all of that. It's insane to me how much you see that messaging today. In all the coverage of Manchin and the Build Back Better stuff, I'm seeing this pitting of the environment against the economy, or environmentalists as some sort of special interest group that just cares about trees. That is still so prevalent now.David Roberts:   If you get those narratives in people's heads when they're young, they don't think of them as narratives; they just think it's how the world works. It becomes so deeply rooted that any amount of contrary facts just bounce off the narrative. Those narratives are so much stronger than evidence.Amy Westervelt: This is why science denial was such a slam dunk, because it reinforced the narrative that people had already been brainwashed with for decades.David Roberts:   Some of the older school tactics are, to our modern eyes, quite crude; presumably now school administrators would not be handing out Shell comic books about how oil is great. But fossil fuels are still at it in schools, so what's the modern version?Amy Westervelt: When we did this series with Earther, Dharna Noor and I worked on it together, and Dharna found a guy in Cambridge, Massachusetts, at a Montessori school — so not a red state, or a red area — whose kid had come home with a bunch of coloring and activity books from a natural gas company, all about how natural gas is great and it’s your invisible friend. It was suggesting that kids go and talk to their family members about how they use natural gas. The other persistent thing, which is so effective, is just reminding people how much they use this stuff, how complicit they are. Look at all the ways you use natural gas in your home, all of the things it delivers to you.David Roberts:   The more tied up it is with your identity, the more resistant you are to the idea that it's bad, because then you're bad, right? They want to link you to it. I don't feel like the left does this very well. When people think about fossil fuel influence, their minds go to lobbying and money. But actually — and I feel like these early stories help make this very clear — they've been laying the groundwork in culture for decades. It's fertile soil on which they can plant a lobbying campaign; the ground has been prepared.Amy Westervelt: For a century. That's not hyperbole. It's actually slightly more than a century.David Roberts:   Are there things you found out that fossil fuel companies are doing or have done that shocked or surprised you, that you think most people aren't aware of?Amy Westervelt: The thing that blew my mind the most was in the Earl Newsom archive. So he, again, was a publicist for Standard Oil. I should mention, in respect to him and all of these folks: They make a very clear delineation between what they do and what they would call “press agents” do, which is get media coverage and things like that. When they say public relations, they mean being the intermediary, mediating the relationship between the company or the industry and the general public, but also multiple other publics: legislators, moms, students, whatever. Earl Newsom in particular saw himself as sort of a consigliere to CEOs. In some of his files, he's weighing in on whether or not they should accept a particular award, what connotation that would have. It’s to a level I don't think the left even understands, never mind knows how to do. In his files, I found one box from the Standard Oil archive that was confidential, and there were all these plans in there around free enterprise. This was in 1944, as World War II is coming to an end. This guy is meeting with his big clients, not just Standard Oil, but also GM and Campbell Soup and all of them. He's like, “We have a big problem coming down the pipeline here, and it's not war. It's not even the fact that the government's not going to be buying stuff from you anymore. Americans have gotten very comfortable with the government running things; the government has done a good job, and Americans are starting to like it a little too much. So we really run the risk here of Americans turning away from the free market approach that we have come to rely upon in this country. This is a huge problem for business. We need to coordinate a campaign that reminds them of why free enterprise is actually the best thing for them. We cannot use the words ‘free enterprise.’ We cannot coordinate this through the US Chamber or the National Association of Manufacturers, because everyone knows they're just shills for business.” This is in the 1940s. They're already saying this. “We have to coordinate but it can't look coordinated. We need a full court press here. We need ads that are focused on cool gadgets that we're coming up with in our research and development departments. We need to be talking about the high wages that we're paying. We need to invest in universities.” This is when they start going really big on investing in universities, because they want educated people to be coming out of universities with a fixed idea about how important free enterprise is to the country. It is comprehensive. David Roberts:   That post-war era is so interesting to me. When you learn about it in history, you learn about these big structural forces: the war was ending, there was a war surplus, all this economic vitality, and then out of that grew roads and giant corporations — as though it was just an unfolding of history. But right in that post-war era was such a flurry, a concentration of people trying to take hold and direct the US in particular directions. It was propaganda flourishing. Amy Westervelt: It really was. The thing that made my head explode was that shortly after that, I found stuff in the Bernays archive where he had been giving almost the exact same speech to his clients, at the same time. Between the two of them, Earl Newsom and Edward Bernays were working for the top 100 companies in the country at that point, and if they were sounding the alarm about this and getting their clients to coordinate, that would have been a pretty effective campaign. I grew up with this idea of the war surplus, and we have all this infrastructure that we need to use, and all these people that we need to put to work, and also, Americans are just so grateful that the war is over that they're just in the mood to buy. But really, these guys have been trying to sell us on the idea that convenience and “modernity” are the most important things for forever.David Roberts:   Another section of the site profiles some of the people of the propaganda movement. Let's talk about Richard Berman. It’s fascinating how effective he's been and all the things he's invented, but I also just find him fascinating as a person; I have an unhealthy fascination with awful people. What was his signature achievement?Amy Westervelt: He is supposedly the person that the main character in the movie Thank You for Smoking is based on. He worked for Philip Morris for a long time, trying to work the public and legislators during the ‘90s tobacco litigation. They gave him a bunch of money to start a PR firm. With that, he created this incredible web of front groups: The Center for Consumer Freedom. The Center for Responsible Science.David Roberts:   My favorite was, when the Center for Consumer Freedom somehow became well-known as a front group, he changed the name to the most spectacularly generic name. I literally can't remember it, because it’s just a bunch of buzzwords. Amy Westervelt: The acronym is CORE: the Center for Organizational Research and Education.David Roberts:   I love it. That could be anything. Amy Westervelt: He was an early mover on astroturfing and these front groups, and he also figured out that he could very easily hide the funding behind them. I think the Center for Consumer Freedom is technically a nonprofit, the sort of nonprofit that doesn't have to disclose much, so their main payment outgoing every year is to Rick Berman.David Roberts:   If any of these groups come in for any sort of legal or any other kind of trouble, it's equally easy just to scrap them. Amy Westervelt: He just scraps them and makes a new one. He's got five or six that are all about unions. The thing I find the most entertaining about him is that he was given the nickname Dr. Evil by “60 Minutes” in the early 2000s, and he was so delighted by it that he actually includes it in his requests for funding now, as a proof of how successful he is.David Roberts:   He loves being called Dr. Evil. This guy, and these other guys, too: Are they evil, and they know they're evil, and they don't care, and they like being evil? Or do you think on some level, they have a story that they tell themselves about themselves where they're the good guys, fighting on the right side of things? How conscious is the evil?Amy Westervelt: This is what fascinates me about them. What makes these people tick? A lot of people think it's just money. I think that's true for some, but in my experience, people can only do something just for money for so long before they have to create a narrative for themselves. In Berman's case, and in a lot of these guys’ cases, I think they have completely drunk the Kool-Aid on how important it is to protect capitalism as part and parcel of freedom. I think they just 100 percent believe that if you don't have capitalism, you don't have freedom, and anything that erodes capitalism erodes freedom.David Roberts:   But the funny thing is, if you read the theoretical foundations of capitalism — why it's supposed to work and why it's supposed to be so virtuous — part of the theory is transparency. Part of the theory is people knowing what other people are doing, and what things really cost, and everyone having the same information. That’s central to the theory. So it's bizarre what capitalism has become in the heads of some of these guys.Amy Westervelt: Rick Berman fascinates me too because his tactics are so crude. They're so dumb.David Roberts:   He's an early version of what we all ran into with Trump: wait a minute, you don't have to be smart. You don't have to really be clever. Your tactics don't have to be subtle. You can just be big dumb, and it works.Amy Westervelt: It totally works. There was this tape that was leaked of Berman to The New York Times in 2014 or 2015, when anti-fracking was starting to grow. He got brought in to give a talk to the Western States Petroleum Association. He said, “You don't have to convince people to like fracking. You don't even have to convince them that it's not bad. You just have to get a tie. All you need is a tie. A tie is a win for you.”It’s so true. That's the big problem, right? If your client is the status quo, it's much easier to get that. If you're trying to push for change, you actually do need a win. You need to get people to a point where they're willing to act.David Roberts:   Yes. Which is not just neutral; it's way beyond neutral. You have to build a lot of energy to do anything good or constructive, and it's so easy just to sap a little bit of that energy.Amy Westervelt: It's so much easier to sell complacency than change.David Roberts:   Why is there no Dr. Good? Where are the climate left’s Machiavellian operators who are doing PR and propaganda? Amy Westervelt: I find this very puzzling. One, I think that the left gets into this trap of thinking that this stuff is dumb and silly and doesn't work. Which is not true. Then there's this whole false sense of nobility: “They go low, we go high.” Well, or are you just bringing a spoon to a knife fight? The left, at least on climate, is outspent ten to one on PR and lobbying. So there's way less money, but it's not because it doesn't exist. There are people with money on the left. There's been a choice made not to invest in this for some reason. I've talked to a few of the folks who are experts in the climate psychology realm, and they say, “I know that my counterpart on the right is being hired by every PR firm in the country.” So, I don't know why.David Roberts:   I have somewhat of a theory. The intellectual vanguard, the left's talkers and thinkers and spokespeople, are hyper-educated; they go to nice schools; they love words. They love the idea that public life is determined by dialogue and persuasion and who's got the best argument. (I’m talking to myself here.) And doing this PR and lobbying is an acknowledgment that in fact, people are irrational, and public opinion is shaped. It involves admitting a lot of things about the world that are disturbing to people who have been trained in words.Amy Westervelt: I think that's very true. There's this sense that appealing to people's lizard brain is talking down to them, or is beneath me as an educated person. We've seen this in the climate movement; up until maybe the last five years, it was never okay to include any kind of emotion or exaggeration in any kind of climate appeal. But the right isn’t doing that. You're trying to combat the most primitive poking of the fear button with fucking charts and graphs. It’s not going to work.David Roberts:   I used to get into arguments with people: I'd say, so you agree that climate is an existential issue, species on the line, literally nothing could be more important, but … you won't lie? You won’t get mad about it? You won't use emotionally manipulative language — that's too far? Just how seriously are you taking climate change, if your intellectual virtue comes first? It's an argument I have with myself. Amy Westervelt: That is a big part of it, and that is what scares the shit out of oil companies about the youth climate movement. I got leaked this report maybe two years ago that was internal VP marketing strategy about the emotional authenticity of the youth climate movement and how they have not figured out how to deal with that.David Roberts:   In addition to the story the Youth Climate movement is telling, which is about emotion and Earth and protecting youth, there's this other story we could also be telling from the tech community: Look at all these cool gizmos that are being suppressed and denied to you by these lazy incumbents who are politically entrenched. You could be living a cool whizbang life, with your solar panels, your EV, your cool electrical panel that's smart and has fucking 5G, but you're being held back in primitive technology by incumbents.Amy Westervelt: That's a great message. That's exactly what the oil industry messaged in the 50s. We should absolutely do that.David Roberts:   Another thing I wanted to ask about is the development of social media. We've all heard these critiques by now: what works on social media is negative emotions, it's outrage, it's anger. That just says to me that social media, even more than traditional media, is practically built for misinformation. It's so fruitful and helpful for these guys. Amy Westervelt: That's absolutely true. I interviewed this woman a while ago who was talking about how the rapid corporatization of social media companies was driven by industry's fear of the early freeform internet. They thought, “If there's this giant, open public messaging machine where people are just sharing stories and ideas, we don't get to control it.” That is the origin story of the social media industry as we know it. It’s very much about giving that control back to the people who've always had power in this country.David Roberts:   We have all these early internet pioneers out in public saying, “We had such big dreams. What happened? It just went the wrong way.” It didn't just go the wrong way, dude. They made it go that way.Amy Westervelt: There's this pendulum all throughout history. The muckrakers said, “I'm going to just tell the truth and we're going to get these guys,” and they very quickly mobilize and come up with PR to stop that. In the 60s, you have the social justice movements rising up, and they very quickly mobilize with new PR techniques to stop that. Then you have the internet — in its very first stages, perhaps the most democratic thing we ever had — no, that's not going to stand, they aren't going to let it. It's important for people to understand this, so that they know why it's important to fight for genuinely free press. David Roberts:   Is there any positive story to tell about social media? Amy Westervelt: The complicated problem right now is that social media needs to be regulated. That's the reality. It's not going to happen with self-imposed fact checking processes or whatever the fuck they're using. It’s never going to work. What's happened is that social media has been allowed to behave like media, but without any of the same regulations on it. Actually, podcasts fall into this too. I looked into this last year, because I was hearing all of these over-the-top ads from Exxon in podcasts about the amazing potential of carbon capture; they were vastly overstating it, like, “We're going to capture 90 percent of the emissions from factories.” I was hearing it on the Science Friday podcast, or Invisibilia, all these NPR science podcasts. So I reached out to the folks at NPR to ask them, because NPR has extremely strict standards about what kinds of ads they allow on broadcast. I said, “Why is this so not in line with what you would allow on the radio?” And they said, “Because it doesn't fall under FCC requirements.” I said, “Don't you just have the same guidelines?” And they said, “No, it's not governed by the FCC.” I said, “So just to be clear, your ethics policy is ‘anything that's not illegal goes?’”That's where we're at, with social media and podcasts and a lot of websites. They're under the Federal Trade Commission, not the FCC. There are technically guidelines that you're supposed to follow, but they're not enforced. Even just to file an FTC complaint is a giant pain in the ass, and then it could go nowhere. There's no reason why, if you're going to basically become a publisher, you shouldn't follow the same rules as an actual publisher.David Roberts:   You suggest two solutions to this problem of misinformation, and I have to admit that I have low hopes on both. One is media literacy, people being trained to recognize these things. With the tide of information and BS that is crashing over every single human head right now, teaching everybody, individually, to be out there in this jungle and survive on their own seems too huge and daunting, like nothing you could ever accomplish. The other is regulation of social media. But someone needs to be making the judgments about what's okay and what's not, what's true and what's not. I don't know that I want social media companies making those judgments, but then, is it government? Because right now, if it's a Republican government, Democrats don't care; if it's a Democratic government, Republicans don't care. We’ve lost any brokers or institutions that are widely trusted, and without that you're screwed. Amy Westervelt: I don't think you're wrong. We haven't even talked about the fact that, sadly, I think a lot of the regular media has been worked by this too. How many stories come straight from a press release? Let's think about that.David Roberts:   Even subtler, little narrative things. Kyrsten Sinema is tanking her president and her party's agenda to keep taxes on rich people low, and in every story about her, she's called a moderate — “moderate,” like she's in-between the parties. One of our normal human heuristics is that medium, in between the two extremes, is good.Amy Westervelt: Yes. It's gone on for so long that the media self-censors in this weird way. I was working as a stringer for the Washington Post for a while, and because I live in California, I would get sent to cover wildfires all the time. For one of the stories, I had talked to the California fire chief, and he gave me this very succinct explanation of exactly how climate change makes wildfire worse. He said, “I've been fighting fires for 30 years in California. This is climate change. What's making this so much worse is that we're not getting the increased humidity and the cold temperatures at night. Nighttime used to be when we would get on top of a fire, and now we're not getting that, so it's just burning at the same intensity 24 hours. That makes the fire worse, but it also burns out our crew.” He’s not a flaming liberal by any stretch — 30-year firefighter from Redwood City or whatever. My editor at the time wanted to remove the mention of climate change, because he said, “This is a disaster story, not a climate story.” This was not that long ago, maybe seven or eight years ago. But because I had the background that I had, I said, “That's a total fossil fuel framing. We don't need to be scared of letting a fire chief mention climate change for fear of it turning into a policy story.” He very quickly said, “Okay, no, you're right, that makes sense.” But he didn't get a call from a PR guy at Mobil about it; it’s internalized. Everybody has internalized this “liberal media” trope — which is, if you look at who actually owns the media, completely not true.David Roberts:   The analogy I sometimes draw is to the filibuster. We've gone from the right filibustering everything, to now, all McConnell has to do is send a memo saying, “We're probably going to filibuster this.” They don't force the confrontation anymore. It's the same with media; all the corporations have to do is say, “We're going to make climate change a partisan thing,” and editors immediately say, “Got it, I will use scrupulously neutral language.” They don't even have to be browbeat into it anymore. The whole machine is already built.Amy Westervelt: One of the solutions I've seen is more people like yourself, like myself, saying, “I'm out. I want to be able to report this accurately, and it's hard to do that in the confines of the media.”David Roberts:   One of the best things about going independent is that I no longer have to muddle through these metaphysical questions. What is journalism? What is and isn’t fair? Now I can just say what seems to me to be the truth — which it seems like more people ought to be able to do. You've been a climate journalist for quite a while now. What do you think climate journalism is not doing or needs to do more? What is your critique of climate journalism specifically?Amy Westervelt: I wish that people would get beyond science denial being the only thing that the fossil fuel industry pushes. In being so focused on that, I feel like they're missing, and actually perpetuating, all these other frames that also come from the fossil fuel industry. They think if it's not science denial, it's not a talking point. The other thing, at the other end of the spectrum, is buying every climate solution hook, line, and sinker, regurgitating what's been told to you. Also the idea that activists have agendas, but CEOs don't. That needs to go. Diversifying source lists. And I hope this doesn't sound like I'm just being a whiny freelancer, but I thought by this point I would not be having to do Climate 101 for every editor I work with. I'm surprised at how many times I hear from someone saying, “I'm the new editor of this climate vertical, but I don't have any background in climate.” I wish that the powers-that-be in media would actually start taking climate as seriously as they've been saying they're going to take it for a long time.David Roberts:   Part of me wonders if the public is a little bit ahead of the editorial class at this point. Editors still think long stuff is boring, people don't care about wonky science, you’ve got to do the inverted triangles, all these myths and habits of journalism that don't seem applicable and don't seem to reach the intended audience anymore.Amy Westervelt: I think that's true. I wish more people would interrogate where the information they're getting is coming from, journalists included. I went to this podcast conference a few years ago, and there was a speech that was done by Chenjerai Kumanyika and Sandhya Dirks, who are both really great podcasters; Sandhya is a reporter, Chenjerai is a professor at Rutgers. The subject of the talk was, “Every story is about power.” It was so good! I wanted to make every journalist I know listen to this. They did such a good job of showing how it shows up in even the dumbest stories. They did a story about Dunkin Donuts bringing back a favorite donut, which you wouldn't think was a massive investigation of class structure, but it totally was. So yes, just thinking about it in that way: who's sending me this information, and for what reason, and who does it benefit? David Roberts:   Like you say, the right spent a long time trying to shape the way science was presented in media, but I think now they're spending more effort trying to shape how the solution sets are presented. I think they've given up the ghost on denialism; they know what's happening, they know we're going to do something about it. Now they want to take control of how we react, and what our assumptions are about the parameters of a response — what we can and can't do, what's allowed and what's not allowed.Amy Westervelt: The reason it’s so effective now is, that's what they've been doing all along. They started narrowing the parameters of how we're allowed to think about environmental issues 50 years before climate change came on the scene. So they're just going back to that.David Roberts:   I used to say this around the Waxman-Markey fight all the time: Here's Democrats saying “We're going to issue these certificates, and then you can trade them, but the total amount of certificates” … already 99 percent of people are tuned out. And what's the right do? “Tax. It's a tax. Boom!” The whole ideological infrastructure is already built. It's there. You only have to invoke it. Amy Westervelt: You see it in the Manchin stuff now. SEP, 4 percent, blah, blah, blah; all the right has to do is say, “It's expensive, though. Oh, $3 trillion. A lot of money.” That’s it.David Roberts:   Yes. “It will raise your costs.” Literally, I can list a dozen studies and models showing very specifically that doing this will reduce consumer energy costs, and it just doesn't matter, because “it will raise your costs” has transcended to a realm where it's true regardless of the details. It’s written in the heavens.Amy Westervelt: That one killed me, because if the Democrats had led with that before the right could even say anything about the price tag, how much better would that have been than “infrastructure, but we're also going to do climate”? Come on.David Roberts:   Yes. How about, “We have designed a bill here to reduce your energy costs. If you want to know the details we can get into them. But mostly, that's what's going to happen.”I'm curious whether you think the fuckery of industry, and PR, and propaganda, and the public's unknowing acceptance of it, are worse in the US? If so, why?Amy Westervelt: Actually, that's been studied. Definitively, yes. One of the researchers I go back to again and again is a woman named Melissa Aronczyk at Rutgers — she's Canadian. She looked at the difference between how the media and PR industry evolved in the US vs. in Canada and some other places. Her take is that the entire way that Americans understand the environment is shaped by PR, so it becomes impossible to disentangle Americans’ thinking on environmental issues from PR. In the early days of the US, Teddy Roosevelt had two advisors on natural resources: John Muir and Gifford Pinchot. They had very different ideas. Pinchot’s whole thing was that natural resources are basically an economic resource to be managed for the benefit of the economy — and he totally won out. He created the whole US Forestry Service. All of the initial thinking on environmental stuff comes from him. He wrote textbooks, too. David Roberts:   “The world is literally composed of resources for us.” I think about that in the same way I think about racism: We've made enough progress that you can't really say that out in the open in public anymore, but if you scratch just a little bit, especially on the right, it's just beneath the surface. I've had people say it to me on Twitter before; whenever I write about species loss, I get at least one right winger responding, “So what? We don't need them.” Amy Westervelt: Right. If it’s not benefiting us, and we don't need them, it doesn't matter. It's interesting to me in the context of climate, too, because I feel like one of the big missteps of the climate movement for a really long time was to leave people out entirely.David Roberts:   But on the other hand, given what you were saying earlier, it could be that a lot of people talked about people, and then some people talked about polar bears, and because the environment archetype in the US imagination is so strongly associated with “that stuff out there” … that’s what people heard. It’s less about what you say than what people are capable of hearing. I think about this in climate narratives. People say we should talk about it in terms of caring for God's creation, or national defense, or economic opportunity; people have been talking about that a lot, for years now, and it just doesn't get picked up.Amy Westervelt: The military one drives me nuts. I know that we've been talking about that for a long time, because I remember getting assigned stories on that 20 years ago.David Roberts:   Every editor thinks, oh, this is a novel thing. It's really going to catch people's ear. And it just doesn’t, because they don't have that archetype. They don't have those stories.Amy Westervelt: That frame is so rigid in people's minds. We actually found a presentation that this guy had been giving to various industry groups about why it was important to get involved in school curricula, and one of the things that he really hammered home was, you need to consistently restate this framing of environment vs. economy, and environmentalists as a special interest group that only cares about pristine nature. It’s so present today, still.David Roberts:   Yes, and another thing that all the word-drunk liberals think they're better than is repeating themselves over and over and over again, which is the sine qua non of effective PR.Amy Westervelt: And across multiple organizations. This is where I feel like the right really has the left beat: when you look at these networks of interconnected foundations. You’ve got the Bradleys and the Kochs and whatever else; the messaging is so consistent; they are military about it.David Roberts:   The capital is so patient. They just set these organizations up and let them run in the background, churning this stuff out. I can list 10 think tanks that are specifically devoted to the wonders of free markets. Is there, on the left, an organization that is devoted exclusively to propounding the benefits of government? No. They all have their own specific little thing that they want government to do, but who's out there defending democratic self-governance through the mechanisms of government? Nobody is telling that story.Amy Westervelt: It makes me think of this push as World War II is ending to make sure that Americans embraced free enterprise. Where's the counter to that?David Roberts:   Final question: Not only do you do three different podcasts, you also are executive producing a bunch of others, you’re running this podcast network, you’re a parent and wrote a book about how ridiculously difficult we've made parenting in the modern world. Now you're doing this new project … and some other new project. I literally was losing count. Can you share your drug cocktail or meditation techniques? How do you do this?Amy Westervelt: Two things. One, only in the last five years did I realize this is not how everybody reads, but I have that thing where I just look at a page and absorb all the information on it at once. Very handy. The other thing is, I feel like everything I'm working on right now connects to the other. So it seems like it's ten different things, but it's mostly one: disinformation and power.I've been really obsessed for a long time with why America is so uniquely bad on all these fronts, and going back to how American individualism was conceptualized, and all of the underpinnings of that, is just fascinating to me. So I feel like I would totally be nerding out on a lot of this stuff whether it was my job or not. David Roberts:   Well, thank you so much for all that you do and for taking so much time today. It's been a delight.Amy Westervelt: It was great to talk to you. Thank you. Get full access to Volts at www.volts.wtf/subscribe

Last week, Sen. Joe Manchin (D-WV) finally stopped playing games and said that he will not vote for a budget reconciliation bill that contains the Clean Electricity Performance Program (CEPP).You can read my interview with Sen. Tina Smith (D-MN) for more on the CEPP and this post to understand why it is so centrally important to serious climate policy. I won’t get into all those arguments again. Suffice it to say, it’s a good policy and losing it is bummer.Insofar as Manchin has offered any reason for killing the CEPP, it is an alleged concern over “using taxpayer dollars to pay private companies to do things they’re already doing.”But that is just incorrect. Utilities are not “already doing” what the CEPP requires, i.e., increasing their share of clean energy 4 percentage points year-on-year, every year. Only a tiny handful of the nation’s thousands of utilities are on that trajectory.The sector as a whole is slowly decarbonizing, but the whole point of the policy is to accelerate the process to meet US carbon targets. Manchin knows that. It’s precisely what he’s trying to prevent. He told CNN flat out, “I'm not going to sit back and let anyone accelerate whatever the market's changes are doing.”Why not? Well, he wants to keep fossil fuel power plants open, which is incompatible with Biden’s publicly stated goal of 50 to 52 percent carbon reductions from 2005 levels by 2030. Manchin is standing up for local fossil fuel interests (including his own) against the president, 49 of his colleagues in the Democratic caucus, a majority of legislators in the House, a majority of voters, and even a majority of West Virginia voters.He also wants to slash the child tax credit. He’s just a jerk. It is what it is.At this point, it’s unclear what will and won’t survive into the final Build Back Better Act (or whether there will be a final bill at all). Reports are that staffers are scrambling to find ways to make up the lost emission reductions through other policies.The question is, how big of a hole are they trying to fill? How big a hit is it to lose the CEPP?A few analyses released in the past week are helpful in getting our heads around this.Energy Innovation says the loss of CEPP could cost the bill up to 35% of its emission reductionsThe first is from research firm Energy Innovation, which uses its Energy Policy Simulator to determine how much emissions would be reduced by the policies in the House Democrats’ version of the Build Back Better Act and the bipartisan infrastructure bill that was passed by the Senate over the summer. Obviously, predicting circumstances a decade hence is a fraught undertaking. Energy Innovation ran four scenarios: a business-as-usual scenario, with only existing policies, and low, moderate, and high emission-reduction scenarios based on different assumptions about the price of energy and the efficacy of various provisions in the bills. They didn’t model all the policies in the bills, just the ones that are relatively easy to quantify. Some emission reductions have gone uncounted, so the estimates Energy Innovation produced are almost certainly a lower bound. Here are the topline results:In the high scenario, clean energy reaches an 85 percent share of US electricity by 2030; in the moderate scenario, it’s 80 percent; in the low scenario, about 70 percent. As you can see in the moderate scenario below, by far the biggest tranche of emission reductions (about half) would come from the combination of the CEPP and clean-energy tax credits:The good news is that passing both bills could, “with supporting state and regulatory policy,” at the high end of the high emission reduction scenario, just barely get the US to its 2030 target. That’s if everything is included in the bills. The question now is, what do those numbers look like without the CEPP? Luckily, Energy Innovation ran a couple of variations of its moderate scenario with no CEPP (a high one, which assumes tax credits are maximally effective, and a low one, with lower take-up of tax credits).Long story short, “emissions are likely to be 250 to 700 MMT higher per year in 2030” than they would be with the CEPP, “which could eliminate more than a third of the total emissions reductions under the Infrastructure Bills.”As the scenarios show, a great deal depends on factors that can’t be precisely predicted: the price of fossil fuels, the cost curves of clean technologies, and the efficacy and impact of the clean-energy tax credits and other BBB policies. The loss of the CEPP could reduce the emissions impact of the bill anywhere from 20 to 35 percent. Resources For the Future agrees but says a carbon fee could make up for itEnergy Innovations’ findings jibe with the second analysis, from Resources for the Future (RFF). RFF modeled three policies, in various combinations: * the clean-energy tax credits, which it calls CEAA for the “Clean Energy for America Act,” a bill from Sen. Ron Wyden (D-OR) that is largely included in the BBB Act;* the Clean Electricity Performance Program (CEPP); and * a carbon tax (er, fee) — the “central” carbon fee “starts at 15 $/metric ton and increases gradually to 30 $/metric ton by 2028, followed by a $10 annual increase through the end of the modeling period (2045).”The CEAA tax credits alone, without the CEPP, gets the electricity sector to a 69 percent clean energy share by 2030. That is roughly in line with Energy Innovations’ high-end estimation of the tax credits’ impact.The CEAA plus the CEPP gets the sector to 78 percent clean energy — a 9 point bump. The CEAA, CEPP, and the central carbon fee together get to 91 percent. RFF’s model, like Energy Innovations’, shows that the tax credits are doing the bulk of the work. From a baseline (no policy) scenario, the tax credits take the clean-energy share in 2030 from 46 to 69 percent (+23); with the CEPP, it goes from 69 to 78 percent (+9). Notably, in RFF’s modeling, the tax credits plus a central carbon fee get the number to 79 percent — in other words, a carbon fee pretty neatly substitutes for the CEPP, emissions-wise. Nonetheless, despite some recent chatter, Manchin has already put the kibosh on the prospect of a carbon fee as well.Rhodium Group says the US climate target is still within reach Can the US get on track to its 2030 target without the CEPP? For some insight on that we turn to the other recently released analysis, from the research firm Rhodium Group. It sets out to determine whether the US can hit its target (again, 50 to 52 percent reductions from 2005 levels by 2030) with what it calls a “joint action scenario,” which includes “actions by all key actors in the US federal system, including legislation under construction in Congress, regulations and other actions that can be taken by the Biden administration and key departments, as well as actions by climate-leading states and corporations.”Importantly, though it is capacious, the joint action scenario is deliberately conservative about policy out of Congress, given Manchin’s well-known Manchinness: “We include tax credit extensions, clean energy grant programs, and spending on agricultural programs, but do not include a carbon or methane fee or the CEPP [my emphasis].”The good news is that the CEPP-less joint action scenario gets the US to its goal, or at least close to it. Even without the CEPP, it is the electricity sector that provides most of the reductions:One reason there are so many reductions in the electricity sector — and this brings us to what I suppose is the bad news — is that the joint action scenario includes a lot of policies, including standards on new and existing power plants from EPA. Getting to the US target requires all levels of government and the private sector to act with immediate ambition. This is the action required by Congress: This is the action required by the executive branch:And this is what’s required of “subnational groups,” i.e., states, cities, and companies:If all of that comes together, then the US can hit its 2030 climate target without the CEPP. Rhodium stresses that the joint action scenario is not the only path to that goal — the final section of its analysis suggests a range of other policies that could also help — but any path to the goal involves coordinated action taken on numerous fronts at once … and a lot of luck.Where does this leave us? For years now, it’s been one of the climate world’s great rituals: after every new setback, delay, or disappointment, there’s a rush of articles and models showing, “We can still do it! It’s not impossible yet!”I suppose this is another one of those posts. Even without the CEPP, the two infrastructure bills passed together would reduce emissions considerably. The loss of the CEPP would take a big chunk out of those emission reductions — more than a third, if things go poorly — but there’s a chance some of that can be made up with other policies. This is assuming the BBB bill doesn’t get worse. Manchin may not be done screwing it up yet. The top priority now should be protecting the full range of clean-energy tax credits and ensuring that a) they extend at least 10 years and b) they are fully refundable. And other policies must be protected as well. Here, according to Energy Innovation, are the next most effective policies after the CEPP + tax credits. The second strongest provision is the fee on oil and gas methane emissions, which contributes about 12 percent of total reductions, or 165 MMT in 2030. Incentives for electric vehicles (EVs) and charging equipment are next, at 115 MMT in 2030, or 9 percent of total reductions.I tend to doubt Congressional staffers will be able to find anything new that’s big enough to compensate for the loss of the CEPP, but Biden can also gain back some of those reductions through aggressive use of the EPA and other agencies. We’ll see if he has the moxie to do that.The US doesn’t need to worry that hitting its target is unaffordable. All three analyses show that decarbonizing the electricity sector will reduce consumer energy costs, and that’s not even including the enormous benefits of reduced air pollution, which themselves would easily pay for the transition. Nonetheless, rapid decarbonization is a huge, wrenching socioeconomic transformation. Hitting our target would be a heroic feat. The fastest the US has ever reduced emissions, outside of a recession, is 4.1 percent in 2012. To get to 50 percent reductions by 2030, Rhodium says, “requires a 5.2-5.6 percent year-on-year cut in emissions every year.” We have to go faster than we’ve ever gone, every year from now through 2030. And that’s only the first, and arguably easiest, step. The first 50 percent of reductions will be easier than the last 50 percent, which we need to eliminate by 2050. That will require new policies, technologies, and industries.In the grand scheme of things, the loss of the CEPP is not the end of the world, as irritating and indefensible as it is. As long as Manchin doesn’t do any more damage, as long as staffers scrabble together a few compensatory policies, as long as Biden uses executive agencies aggressively, as long as states, cities, and businesses continue acting ambitiously … well, as long as all of that happens, we still have a shot. Get full access to Volts at www.volts.wtf/subscribe

In this episode, longtime carbon market analyst and strategist Kingsmill Bond explains why he is so optimistic about the future of renewable energy. Though it remains a small portion of total global energy, its rate of growth and declining costs indicate that it is on the precipice of enormous, rapid expansion. Markets and geopolitics will be transformed by it. (There is also an abridged version of our conversation available on Canary.) Full transcript of Volts podcast featuring Kingsmill Bond, October 11, 2021(PDF version)David Roberts:It seems like good news is difficult to come by in the US these days, what with democracy on the verge of crumbling and the last big chance to address climate change held in the fickle and ill-informed hands of the Senate’s most conservative Democrat, who lives on a yacht and literally makes money off of coal plants. As it happens, I have a stash of good news I’ve holding in reserve — a guest I’ve been meaning to talk to forever, but have been treating like a break-glass-in-case-of-emergency thing. I felt grim enough this week that I finally called him up.His name is Bond. Kingsmill Bond. (Sorry, had to do it.) He’s an energy strategist at the think tank Carbon Tracker, where he arrived after decades of doing market analysis and strategy for big financial institutions like Deutsche Bank and Citibank. Bond’s experience and research have led him to the conclusion that the shift to clean energy has become unstoppable and that it will be the dominant force shaping financial markets and geopolitics in the 21st century. He argues that we are on the front end of a massive, precipitous wave of change to rival the industrial revolution — one that will unfold even if policy support is weak and erratic, purely on the strengths of economics and innovation.We need to update our mental model of climate mitigation, he says. It’s not about pain, about how to distribute extra costs and who will be the most altruistic. It’s about gain, about which countries will benefit most and fastest from the tapping of almost limitless new markets and opportunities for growth. There are no fundamental limits to the spread of zero-carbon energy. There’s more than enough renewable energy, accessible with today’s technology, to supply the world’s energy needs. Not only do we know how to get there, it is where we are headed, based on current market and technology trends. The key to succeeding on climate change is simply accelerating what is already underway, pushing a rolling boulder a little faster. Like I said, I’m in need of good news like this, so I was excited to talk to Bond about the cost of renewable energy, the peak in fossil fuel demand, and the inevitability of a 100 percent clean-energy system.Without further ado, Kingsmill Bond, welcome to Volts.Kingsmill Bond:  Thank you for having me on the show, David.David Roberts:   Kingsmill, I've been following you for years and you've been a reliable source of good news. You recently published an article arguing that we need to flip our story on climate change mitigation: It's not one of pain, about distributing costs and sacrifice and who's going to be more altruistic; it's about gain, about who's going to claim the giant rewards that are waiting. So before we dive into the specifics, give me the elevator-pitch version of why people confronting the daunting task of addressing climate change should feel better than they generally do.Kingsmill Bond:  Well, thanks very much for putting it in those terms. The point here simply is that we have got this new, enormous, cheap energy resource in solar and wind that we've unlocked with technology, and we're just starting to be able to apply it. As we apply it, it gets cheaper, because it's on learning curves. Therefore, we've unlocked an enormous cheap source of energy that can be used to provide all of our current energy demands and, indeed, the energy demands of those who have very limited amounts of energy. It's an exciting opportunity and moment to do that.David Roberts:   The center of that story is the learning curves for renewable energy. You single out four different technologies on steep learning curves that, if we project them continuing, bear all kinds of good news. Tell us what those technologies are and what the curves look like right now.Kingsmill Bond:  The four most clear technologies which are on established learning curves are solar PV for producing electricity; wind for producing electricity; batteries for storage; and electrolyzers to convert that electricity into hydrogen. All four of them have been the subject of a recent paper by Oxford University looking at their learning curves, that is to say, the amount that their costs drop for every doubling in deployment. All of their learning curves are between 16 and 34 percent, which was already fairly well known. But the additional point that's being made by this paper is that when technologies get onto learning curves, they tend to stay on them for very long periods. When you're trying to project future costs of these technologies, the most logical assumption is that those learning curves will continue. This is extremely significant, because we all know that they are growing very quickly, and if you assume that that growth continues — and there's no reason why it shouldn't — these technologies will get incredibly cheap. This is kind of an academic debate, because you're already getting solar PV being produced between $10 and $20 per megawatt hour in certain favored locations, so it is, in fact, already incredibly cheap. That cheap energy source is a) going to get cheaper, b) going to spread globally, and then c) be followed up by these other technologies, also on learning curves, which will then provide us with the energy that we need at much lower cost.David Roberts:   The electrolyzers seem like the newest of those four technologies. Solar and wind and batteries are pretty established, but electrolyzers have just recently come in for a lot of innovation. How confident are we in that particular learning curve? What's the state of our knowledge there?Kingsmill Bond:  In the paper that the Oxford team did, they looked at about 500 or 600 different technologies over long periods and they noted that, actually, very few of them get onto learning curves. As you say, the electrolyzer data set is shorter, but it still goes back a couple of decades, I believe. This is, from their analysis, another technology also on learning curves, and it seems to be already exhibiting the same learning characteristics that we've witnessed in solar, wind, and batteries. First of all, in order to make green hydrogen, you need solar or wind electricity, so half the story is already on learning curves. Then the question simply is, can you get the electrolyzer itself onto learning curves? What's special about this technology is that it's also what they call granular and discrete. That is to say, you can have very small pieces of equipment, they're easily replicated, and they can be built at any size. Many people can innovate, and that's indeed what they're now doing, as we now see huge amounts of capital flowing into hydrogen strategies across the world, from Chile to China to Morocco to the United States. It seems extremely reasonable to imagine that the costs of electrolyzers will also continue to fall.David Roberts:   As a snapshot of the present, where is clean energy relative to fossil fuels? Is it still too glib to say clean energy is cheaper than fossil fuels? How nuanced is that story right now?Kingsmill Bond:  The debate goes like this: Advocates of clean energy such as myself say, look, it's incredibly cheap, its price is down to $10 or $20 per megawatt hour; the global average, depending how you calculate, is between $40 and $50. This is the LCOE we're talking about. And this is a great story. The counterargument is, people say, well, you're only talking about the LCOE, you’re not thinking about intermittency. OK, it's cheap in certain locations, but there are other locations, most notably parts of sub-Saharan Africa, where it remains extremely expensive, because the cost of capital is high. Therefore it's not a fair comparison and it's not a substitute for fossil fuels. The way to reconcile those two perspectives, I would suggest, is this point about learning curves. As the costs get lower and lower, this debate kind of fades away. It is fair to say that LCOE is not necessarily the best way to calculate costs, and there are other issues to account for in intermittency, but when costs get incredibly low and you can overbuild, then that debate becomes much less significant. Furthermore, as this Oxford paper points out, the country on the 10th percentile of cost today — that is to say, the most expensive countries today — will have the same price solar and wind electricity as the cheapest countries today in 10 years, because they're on these learning curves. So I would suggest that these learning curves solve the problem.David Roberts:   They brute force it, in other words. It gets so cheap that you can start being profligate with it.Kingsmill Bond:  You can be profligate with it, but in fairness, there are also other solutions. There are certain countries and regions which today have penetration of variable renewables of over 50 percent — most notably Denmark, South Australia, and northern Germany — and are aspiring, as in the case of California, to 100 percent renewable energy-based systems. What's been notable throughout this debate, for the last 20 years, is that the ceiling of the possible is constantly rising. If you go back to how the debate was being held about 20 years ago, you'll see these very fancy letters from the Irish and German grid operators saying that variable renewables could never be more than 2 percent of the system, for a whole series of technical reasons which are beyond me. But what's happened continuously is that people have come up with new solutions, be they demand-side management, supply-side management, bigger grids, batteries, interconnectors, better software, digitalization, smart meters, so on and so forth. There have been a whole series of different solutions. The point we really want to make is that that ceiling is a rising ceiling.David Roberts:   Intermittency is the number one mental block people have about this, in my experience. So you're right: one obvious point is that the amount we're allegedly going to be able to integrate onto the grid keeps rising. People set these very confident limits, and the limits get busted through. But looking out, the conventional wisdom is that the closer you get to variable energy providing the majority of your energy, the higher the cost of that variability, and the more difficult it is to address. How confident are you that that gap from 80 to 100 percent is bridgeable at reasonable cost?Kingsmill Bond:  There are two answers to this. The first is that this is an absolutely academic debate, because today, solar and wind are 10 percent of the global electricity supply. To worry in 2021 about how we go from 80 percent to 100 percent is completely academic. I often use the analogy that it's like sending my daughter to kindergarten, aged five, and worrying about how she's going to pass her university maths finals. Sure, she's going to have to get there eventually, but there's an awfully long way between now and then. History suggests that we will keep on coming up with ways of solving this. So I think the first answer is, it's not a fair question. The second point is that, if you assume these learning curves continue and we do get incredibly cheap sources of renewable electricity, then it's absolutely inevitable that we will find ways of using it. Perhaps I can step back for a second. It's often worthwhile going back a century and asking yourself: Had you been trying to think about the future in 1921, when we were on the cusp of a quadrupling of global population and a 10-fold increase in energy development and so on and so forth, could you ever have predicted all of the new technology innovation that was going to come? People sit in darkened rooms in Paris in 2021 and seriously think they can forecast the innovation genius.David Roberts:   But in fairness, we're a lot farther away from 1920 than 2050 is from us. We definitely need to compress the amount of time in which we have to do this. You might say that the solutions ought to at least be visible by now. Kingsmill Bond:  Actually, that’s the point: the solutions are visible. You do have detailed plans being made in Australia and California, in Northern Europe, for electricity systems based on 100 percent renewable electricity. You also have work done by people like the great Mark Jacobson: he's basically tried to figure out the solution for every single country in the world. So it's not like there are no solutions ahead of us; there are plenty of solutions, at different levels of granularity.David Roberts:   This story depends on the cost curves continuing, as you’ve said. On the one hand, you can look at history and say, cost curves tend to continue once they start. But you can come up with all kinds of stories about things that might impede or slow these cost curves: materials shortages, lithium becoming problematic, mining becoming more problematic, supply chain problems (maybe even caused by climate change), space constraints, NIMBYs who want to stop construction. How confident are you that none of those will gain enough purchase to slow things on a macro level?Kingsmill Bond:  I always smile when people talk to me about limits to growth, because renewable energies are essentially, by definition, limitless, absolutely enormous. The real limits to growth are to the fossil fuel system, which is constrained in terms of the amount that we have, and incredibly constrained in terms of our capacity to burn it. So it's worth standing back for a moment and recognizing that the real limits to growth are with the current system, not with the new system. The second question is, well, are there limits that are insurmountable, that the talent and capital of the world cannot handle? I think the answer to that one is absolutely, obviously no, because we have continuously solved each of these problems as we have encountered them. Then, if I can answer this very specific question about mineral shortage: it's an absolutely bogus problem. You need, for example, 200 kilograms extra of minerals in order to have an electric vehicle, which is more than an ICE car. That sounds quite scary until you think, well actually, an average ICE car uses 15,000 kilograms of oil over its lifetime. Those 200 kilograms extra that you require of minerals by definition can be recycled, whilst fossil fuels, obviously, you burn them once and you never use them again. Let me give you a couple more stats. There is enough lithium, for example, in known reserves today to be able to satisfy more than a century of current demand. There's enough cobalt in the world for 1,000 million cars. If the answer is, that's really scary because we might need 2,000 million cars, then again, it’s an absolutely fake debate. First of all, we can and are engineering technologies to reduce cobalt, as Elon Musk is doing. But even if we weren't, we build the mines as demand increases. Prices go up a bit and people build new mines and reserves increase. These are absolutely fake problems.David Roberts:   Are there no social or moral aspects to this, though, in expansion of mining?Kingsmill Bond:  Undoubtedly. This is why people are saying, I think quite rightly, that we shouldn't make the same mistakes this time as we made last time. In our expansion of these mines to build out the new renewables world, we shouldn't be trashing nature with impunity the way we have done in the past. We should be recycling this stuff in order to minimize our impact on the planet. But let me just come back to the main point, which is that it's a question of degree, right? If you require 100 — or in the case of coal-fired generation versus a solar panel, 1000 — times less stuff in order to generate your electricity, by definition, you're going to be having a dramatically lower impact on the planet.David Roberts:   In your discussion of S curves, you mention something about a 5 percent “salience threshold.” When a product reaches 5 percent market penetration, certain dynamics take hold. Can you say more about that?Kingsmill Bond:  This is actually quite an intuitive observation. We see it, all of us, in our own lives. If you think back to when you got your first smartphone, or the internet, or your first mobile phone, what happens is that, as new technologies get adopted, they move up these S curves. It takes a long time to get the technology good enough for people to adopt it, so to go from 0 percent penetration to around 5 percent takes a long time. But then, when it gets good enough, everyone wants it, demand goes through the roof, learning curves start driving costs down further, it goes very, very quickly from about 5 percent market share to about 80 percent market share. That's the nature of S curves. This is something that is very well documented for many technologies over the course of a century or more. It goes all the way back to cars and electricity in the United States in the early 20th century, and then all the great stuff we've had since then: microwaves and toasters and TVs and now the internet. It's a well-appreciated observation that stuff moves very, very quickly from low penetration to high penetration — when it's cheap enough and when it's good enough. Therein lies the debate.David Roberts:   So where is renewable energy? Do you think it's crossed that threshold? You think we're on that S curve now?Kingsmill Bond:  If you look at the history of deployment of, for example, solar panels, what you will see if you chart it is exponential growth taking place: high growth of between 25 percent and 40 percent growth per annum over the last two decades. There are many other people, including the great Ray Kurzweil, who pointed this out: solar deployment’s been doubling every two years roughly for the last couple of decades, and that's an exponential growth curve. Just empirically, that's exactly what is happening. What's also notable is that some experts who try to forecast future solar deployment get it completely wrong, the way the IEA famously has done for the last 20 years. They imagine it's linear growth. If you go back 10 years, demand growth was at 10 gigawatts a year and the IEA was projecting forward growth of 10 gigawatts a year for the next 20 years. Then the next year it's 14 and the year after it’s 20, because we're on this exponential growth curve. David Roberts:   This is a subject of some fascination to me. Is this new Oxford paper really the first model that projected cost curves simply continuing in the shape that they currently exhibit? It's remarkable to me and everybody I know that the modelers have gotten these cost projections so wrong in such a consistent way over and over again for 20 years now. What are we to make of this? What's going on there?Kingsmill Bond: You're right. It’s absolutely shocking, and it's not just the IEA, it's almost all modeling of the future. It's interesting: I ask people about why they don’t do this. There’s a series of answers, but the first answer basically is well, it's too complicated. We can't put these learning curves into our models because it’s too complicated. OK, fine, why don’t you just get a bit more computing power, surely it can be done. But anyway, that seems to be one answer. The second answer, linked to that, is that these models are incredibly complex. If you're trying to forecast kerosene demand in Madagascar in 2070, you have to think a lot about that, and you're not necessarily thinking about what's possibly a little bit more important, which is the learning curve of the technology. So, they overcomplicate it. This is why, for me as a strategist, it’s second nature to simplify. That's what the Oxford paper’s done: they've got to the kernel of what's driving change, and it’s those learning curves.Then the third reason why incumbent models have been so reluctant to incorporate these learning curves is that so many of them are, in fact, made by fossil fuel incumbents, and turkeys don't vote for Christmas. That is to say, if you're working for Exxon or Shell or whoever it is, there's very little incentive for you to say, you know what, those battery costs might fall a little bit faster than we think, and EVs’ growth might be a lot faster than we think, and oil demand might be a lot lower than we think, and therefore, I might not have a job. People don't forecast that stuff. The final point is that — and I'd like to come back to this, because it's a completely fake argument — people say, “We want to be conservative. Solar costs have dropped 20 percent a year for the last 20 years, but in the future, we don't want to be too aggressive. We can't forecast the detailed solution, so we're going to be conservative and we're going to say they're going to fall at 2 percent a year.” This is just intellectually incoherent, because why would it suddenly stop falling? Just because you can't see in detail, why would you suddenly forecast a drop in cost declines? The other reason why it's intellectually incoherent is because, as a result of the failure to recognize reality in these fast-growing technologies, people have to make their models balance. They go, “Well, in order to make my model balance to 2050 net zero, I'm going to pop in CCS and BECCS, and Martians coming from space to take away our carbon” and other completely idiotic ideas, which have absolutely no basis in empirical fact. That's the point: You've got to try and rely as closely as you can on the facts.David Roberts:   It seems like, intellectually speaking, the most conservative thing you could do is assume that things are going to continue happening the way they're happening. That's almost by definition Occam’s Razor. And if the learning curves continue the way they're going, then all these forecasts are going to get blown away. It’s a bizarre situation. Kingsmill Bond:  Yeah, it is. Sorry to lean so heavily on Doyne Farmer and his Oxford paper, but it’s great work, and they make exactly this point. They say, look, mathematically, the future is unknown. There's a whole continuum of options between basically no change and incredibly fast change. But the business-as-usual scenario, which is central to so much current thinking, is mathematically a complete outlier. It might happen, but it's incredibly unlikely. We might suddenly stop innovating, costs might stop falling, deployment might stop happening, governments might give up, people and companies and the financial markets might stop trying to do anything, we might decide that we want to go over the cliff of catastrophic global warming — maybe we will, but that's pretty unlikely.David Roberts:   The other area that people tend to cite as a limit, or worry, or outstanding problem is these so-called difficult-to-abate sectors — heavy transportation, industrial processes, steel, concrete. Is the story there the same, that clean energy is going to get so cheap it's just going to bulldoze through those problems? What do you see happening in those sectors?Kingsmill Bond:  The hard-to-abate sectors have been a very loud debate for the last three years. The argument people make is, “Well, you can't get renewable energy into airplanes and cement and steel and shipping, and therefore there will be no energy transition.” There are two problems with this argument. The first one is the point I made earlier, which is that this is the final area that needs to be solved. Today, if we look at the entire energy system in terms of primary energy supply, solar and wind — these variable energy sources on these very fast growth rates — are only providing around 4-5 percent of global supply. These hard-to-solve sectors are about a quarter of global primary energy demand. So this is a very long-term problem which we will need to solve, but it's quite a long way in the future before we actually have to solve it. Then the second point — and this is an argument that we and many other people have been making for four or five years, actually a much more practical observation — is that solutions are already starting to materialize for these hard-to-solve sectors. You have organizations like the brilliant Energy Transitions Commission that identify prospective solutions for every single one of these hard-to-solve sectors. For example, the steel sector three years ago seemed to be a completely impossible-to-abate sector. Now you already have people like Andrew Forrest in Australia talking about taking his iron ore, putting up solar panels and wind turbines in the Australian desert, using that to create hydrogen, using the hydrogen to make steel out of the iron ore, and then shipping that steel all around the world. There are now lots of other companies talking about hydrogen-based steel in the same way. In the shipping industry, we have Maersk now talking about using ammonia as a shipping fuel, which is basically a hydrogen-based solution. This is why we're so excited about electrolyzers being on cost curves. Ultimately, the way that we, humanity, are going to solve this problem is we're going to decarbonize electricity. We have solutions for that. We're going to electrify whatever we can, and new solutions materialize every day. Then the stuff that we can't, we'll use some variant of hydrogen. That very clearly is becoming the answer. So when hydrogen also gets onto cost curves, and people are starting to think about how to put hydrogen into steel and shipping and indeed airlines and so on and so forth, you can see the contours of the new world that will emerge.David Roberts:   Let's shift to another source of good news. I'm not talking about national and international politics, which both seem dismal at the moment. But states and cities and corporations and financial institutions and other subnational entities seem to really be taking the lead in a way that gets more and more glaring every year. So let's talk about some of the things that you see happening at that level that give you hope. Kingsmill Bond:  I think the wider point is that we have to realize that politics follows technology. That is to say, as new technology solutions materialize, politicians use them. The best example of this, famously, is Boris Johnson in the UK, who 20 years ago was laughing at all this green technology and was extremely skeptical about it. Now that you can buy an EV in the UK for more or less the same price as a conventional car, he's already put into place the prospect of bans of the sale of conventional cars. He keeps on bringing forward the date by which, in the electricity sector, we're going to have a renewable system. So politicians will use the technologies that materialize. It's great that it's happening on a local level first, but it also does need to happen on a national level. This is the absolutely key point. When I attend conferences and talk to developers in the field, they don't talk about a lack of capital, they don't talk about technological problems — what they do talk about, all the time, is the fact that the policies are tooled up for the fossil fuel system, not for the renewable system. This is the key point that needs to get through to policymakers: Can they please stop fiddling around, talking about these wonderful strategic visions, and actually do their job, which is detailed amendment of policies, and detailed changes to support regimes for renewables? It's really hard, difficult stuff, and it's not happening. David Roberts:   One of the other perpetual debates in this area is how big the policy lever is, how necessary it is, and how much of the transition has a momentum of its own, just from economic development and technology innovation. I think you have claimed that this transition is inevitable, no matter what governments do at this point, so how big of a space is there for policy? How much can policy do to slow or speed it down? How much does it have a life of its own at this point?Kingsmill Bond:  We recently put out a report which tries to encapsulate this in a very simple framing. The first observation is that everywhere is different, and every sector and technology is a little bit different, right? To state the obvious. Then, secondly, you need different policies at different stages in the life cycle of change. At the start, you do need technological innovation, and government's very good at that. Then, after that, as costs start to fall, you do need government support to these growing industries, as the Germans very kindly did the solar industry 15 years ago. But then, as the costs start to fall towards price parity with the fossil fuel system, the role of government actually changes very significantly. Rather than, as it were, trying to push water uphill, they need to remove the blockages to allow it to fall downhill. That's, I think, where we've now got to, certainly in the electricity sector, and to a degree in the transportation sector: the role of government now is to remove the blockages which are stopping change. I'll give you a good example. I was talking to an incredibly frustrated wind developer in northern England a couple of months ago, and he was saying, I've got a huge offshore wind project I want to bring to bear but I can't do it, because there's one landowner who won't allow my cable onshore, and it's lasted for two years.David Roberts:   A very familiar story all across the world. Kingsmill Bond:  I mean, this is ridiculous. Are we really going to allow our future to be mortgaged for the sake of people who want to block it for whatever bizarre reason? That's exactly now the role of government. Before you accuse me of trying to trample over people's rights, it actually goes deep into the heart of many systems. For example, there was an extraordinary report written by the Institute of Fiscal Studies in the U two weeks ago about how the government taxes electricity at, I think, effective cost of about 100 pounds a ton of CO2, but subsidizes gas use to the tune of 20 pounds per ton. This is just idiotic. Why is it that we give $500 billion a year of subsidies to the fossil fuel industry? There's an awful lot of very detailed work that governments now need to do to remove these barriers to change, and I would suggest that's actually the cutting edge. That's what now needs to happen.David Roberts:   There's a lot of talk these days about financial institutions and the Fed pushing for more pricing of carbon risk, etc. How big of an influence do you think that's having, the discussion that's moved into the financial world?Kingsmill Bond:  The financial world somewhat belatedly is waking up to the systemic risk of carbon, and they should, because we did this study which suggests that about a quarter of equity markets and half of bond markets are in sectors which are either fossil fuel producers, or heavy fossil fuel users. So it's incredibly deeply ingrained inside financial markets. As change happens, as new technologies materialize, you're going to get disruption; you're already getting disruption right across these sectors, and that creates financial risk. So it's quite right, I would suggest, for financial market regulators and participants to look at this risk. What somewhat disappoints us thus far is that, like the IEA modeling we talked about earlier, they’re still fiddling around at the margin, they're not really getting to the heart of the risk. A good example is from the banks. If you talk to most global banks today, and we talked to a few, they will say, “We've got this covered, we totally believe in all this green stuff, we've decarbonized our head office, and we're getting renewable electricity — and furthermore, we continue to lend tens of billions to the coal center and the oil center for their expansion. But don't worry, we've got it covered, because our risk models tell us that there's no risk from this stuff.” You then probe a little bit and it turns out that they've got risk models built up over 40 years of ever-rising fossil fuel demand. So they're doing bad modeling. They don't understand where the risk is, they're not taking account of it. Ceres, for example, has analyzed the U.S. financial sector and figured out that half of the syndicated loans are to fossil fuel linked sectors. They figured out that actually, the banking capital of the US banking system would be wiped out in the event of a disruptive energy transition. So there's a lot of risk which is not necessarily being accounted for. It's great financial markets are starting to wake up to this, starting to think about pricing it in. But let's be clear, there's a very long way to go. David Roberts:   The world knows how to accommodate the rapid growth of a new industry, but it almost seems like the decline of fossil fuels is going to be more disruptive in a lot of ways. You talk about fossil fuel demand peaking in various places already and approaching peaks other places. Tell us a little bit about that: Where have you seen it? Where do you expect to see it? What can we expect those peaks to look like over the mid-term?Kingsmill Bond:  This looks like a very mad argument on our part. Here we are with fossil fuel demand booming, a shortage of coal in China, record high gas prices and coal prices, and so on and so forth. But I will nevertheless stick to my guns because, at the end of the day, this is just maths. What's happening is, you have an energy system which is growing and dominated by fossil fuels. Then you have this new kid on the block of these fast-growing renewable energy technologies. They're moving up the S curves, and, just mathematically, at some stage it will be conceded that the demand for the incumbent technology with 80 percent market share in a low-growth system inevitably must peak. As you get this fast-growing new challenger coming into the market, it must peak and then decline. Mathematically, it will and must happen. The question then is, well, how does this play out? We still argue that you got to peak fossil fuel demand for coal and oil and gas in 2019, and COVID has damaged them so significantly that by the time demand comes back, it won't go significantly beyond that 2019 peak. That's the overall argument. David Roberts:   You’re talking about global fossil fuel demand? You think it peaked in 2019?Kingsmill Bond:  We think it peaked in 2019. The reason why this is a credible argument: If you imagine a global energy system, growing at 1 percent a year, and the challenger of renewables is 5 percent of that system, growing at 20 percent a year — 5 percent times 20 percent is 1 percent. So the moment that solar and wind get to a 5 percent market share in a 1 percent growth system, they will take all of the growth. That's the moment for the peaking of the fossil fuel system. COVID basically brought that moment forward. We had forecast that moment for the mid-2020s; COVID brought it forward basically to 2019. So in 2021, in certain areas, you might get back close to where you were back in 2019. In 2022, 2023, two or three years of bouncing along the top; but as this stuff keeps on growing, you do inevitably get a peak and a decline. To put the current state of affairs into that context, you’ve got a crash, you’ve got a bounceback, and you’ve got lots of bottlenecks and this demand for stuff that people didn't buy that are suddenly twice as much, so you’re inevitably going to get spikes. We had exactly the same thing, famously, back in 2010. But that shouldn't detract from the wider observation that continued growth of this stuff is going to drive a peak. To try and make this more apparent as an argument, it's worth thinking about two mountains. So you've got the Matterhorn, which famously is a V-shaped peak; the Matterhorn’s what happens to discrete individual goods like mobile phones. Nokia's sales can fall off a cliff like the Matterhorn. However, when you think about systems, where you've got embedded demand in a billion cars, then your peaking is going to look a little bit more like Mount Fuji — that is to say, you've got a long, slow slope up; a plateau at the top, for, let's say, five to 10 years, depends a little bit on the detail; then you've got a long slope downwards. That roughly is the pattern for what you see in other technology shifts. If you go back to what data we have for the UK for the shift from coal to gas in heating, or the shift from steam to electricity in power generation back at the start of the 19th century, you see these plateaus. They last for a bit, because it takes time for the new technology to get big enough to really kill the old one. But that's nevertheless the pattern.David Roberts:   So you think we're on the bumpy plateau right now? Kingsmill Bond:  I think we're on the plateau at the top of Mount Fuji. (Although of course, having climbed it myself, I know perfectly well that it is in fact a volcano and you go down again, but let's not go into that.) It is a plateau at the top. The point to me is that people should not mistake a little hillock at the top of the plateau for another mountain ahead. That would be the error right now, to do that. This is one of the reasons why Carbon Tracker talks so much about stranded assets, because the fossil fuel system and its loyal attack dogs persist in seeing continuous growth, then build for that growth, and as the growth fails to materialize, they get stranded assets.David Roberts:   Along those lines, you make the point that you don't have to take substantial market share away from the incumbent to start hurting the incumbent. You just have to stop their growth, then that peak triggers all sorts of other market dynamics. So what happens once the peak sinks in and it's more widely realized what's happening?Kingsmill Bond:  Once you reach that peak, you kickstart a series of positive feedback loops for the challengers and negative feedback loops for the incumbents. We put out this paper where we run through seven areas and then delve into a couple of them in a bit more detail. So you see it happening in costs, technology, expectations, financial markets, society, politics, and geopolitics. Those are the seven. To focus on the first one, think about this. If you are making cars today, go back five years ago. You were sitting pretty. There's 1,000 million cars in the world, sales are $100 billion a year, you're expecting ever-rising growth, and what could possibly disturb that? What disturbs it is Elon Musk and Tesla. They come in and they don't have to replace the 1,000 million; they don't even have to replace the 100 million, because what's happening is that 100 million is growing at, let's say, 2 percent a year. So when Musk and the EV sector take that 2 million a year, you as a car manufacturer suddenly realize that your growth is over in the old system. You then look at the cost curves of the new stuff, and you realize that you're going to have to change. You have to reallocate your capital out of ICE cars and into electric vehicles. Meanwhile, you figure out that you've got continuous decline now coming for your ICE car sales, so suddenly, your ICE factory is a liability, not an asset. Furthermore, as your sales of ICE cars start to drop, you've got to allocate the same fixed-cost structure over a smaller number of cars, and your cost per unit increases. This is economics 101. That's what happens to the old people. What then happens to the new people, Tesla and BYD and the EV makers, is, as they produce more cars, the costs of the batteries fall because of these learning curves. As costs fall, demand increases, and as demand increases, they're taking more market share, and they can then go to the second feedback loop, which is the financial markets. Tesla can go to the financial markets and in an afternoon they can raise several billion dollars and build a new factory in Berlin, which increases their capacity to build at the same time the fossil fuel sector is finding it very difficult to raise capital, and is obliged by investors to change their strategic direction — as we saw, famously, with Engine No. 1.David Roberts:   When this dynamic is underway — when the large incumbent fossil fuel or car companies are dragging around this giant legacy system which can pretty rapidly become a liability — what can we learn from history about the chances that they successfully pivot vs. flame out? Kingsmill Bond:  We don't have to do any original thinking here. It's extremely well-documented analysis over decades. There's even a famous book about it by Christensen, The Innovator’s Dilemma, which says that incumbents struggle with disruptive change and few of them make it. There's another book that I often like to refer people to, by a very respectable financial analyst called Sandy Nairn, called Engines That Move Markets — recently re-released, but it's quite an old book. He looks back at technology shifts and what incumbents did. The answer is, incumbents, first of all, try and resist change. Then they struggle to put capital into these new technologies, because they're not sufficiently profitable. You saw lots of examples of the oil center saying that over the last decade: we're not going to put our money into solar and wind because we can get a 20 percent IRR on oil against a 5 percent IRR on solar. Why would we? The problem, then, is that by the time this stuff does get profitable and starts to eat into their old business, it's too late, and other people have moved into this area. That's exactly what's happening now in the energy system. It's the risk, of course. It's not just a question of solar, wind, and so on challenging the current enormous coal, gas, and oil system. It's also all of their users, don't forget. So we talked about the car companies, but it's the steel companies, the shipping companies, the airlines — they are going to get disrupted by new people coming in with new technology and new ways of doing stuff. They struggle because, precisely as you say, they have this enormous tail of legacy assets. But it's also a problem, as Christensen points out, of legacy thinking. When you've spent your entire life digging holes in the ground to hoik out stuff, you find it very difficult to do something new.David Roberts:   Mostly I'm pretty optimistic about the electricity sector, but one of the reasons I worry about it is that … car companies can flame out and EV companies can replace them; fossil fuel companies can flame out, clean energy companies can replace them; but in electricity, we’ve got these utilities that are basically stuck there by law and regulation that can't just flame out and go out of business. Any business that thought as slowly and conservatively as utilities would probably go out of business, but they can't. So it's hard to see how those dynamics bite as much in that sector.Kingsmill Bond:  I agree with you in theory, but what has been notable is that it's actually been the electricity sector which got disrupted first, most notably and famously in Europe. My former boss Martin Lewis tells a story about how he was working for one of these electricity companies in Europe back in the early 2000s, and they talked the talk and they put turbines on their annual reports, but in private they dismissed this as a threat. Lo and behold, you have the combination of the crisis and politicians putting increasing pressure on them and this new stuff materializing, driven by new players — then they found that they were indeed completely stuck with the old technologies and had to write down, famously, 150 billion euros of assets in the 2010s. So, somewhat to my surprise, it can happen and it is happening. What it does need is political push. Why would a politician push a conservative electricity company to change, and why would they change? The only reason why is if you have incredibly cheap alternatives, and your neighbors are deploying them, and you're starting to get rumblings from the people that not merely do they have polluted air and electricity outages, but they're also having to pay 25, 30 cents per kilowatt hour for their electricity, and their mate in the neighboring country’s getting it for 10. That's what forces change.David Roberts:   Let's talk about geopolitics. I think the line in international negotiations used to be between developing and developed countries, as they used to be called, but you draw this line between fossil fuel producers and consumers, and you say, per geopolitics, those are the two relevant groups. What's happening that's creating that divide?Kingsmill Bond:  When it comes to fossil fuels, you've basically got two groups of countries: 80 percent of the world lives in countries that import their fossil fuels, and 20 percent of the world lives in countries that export fossil fuels. It's actually even more concentrated than that — basically 10 percent of the world lives in countries that are very highly fossil fuel dependent. So the Middle East, Russia, Australia, which have got very large fossil fuel exports. It's a really, really small group of people, 10 percent of the world, living in these fossil fuel dependent countries. Then there's the rest of us who have to import the stuff. Furthermore, the geopolitical environment at the moment confers a lot of power upon the owners of the fossil fuel. There's this very significant geopolitical power conferred upon Russia and the Middle East as a result of their fossil fuel reserves. They’re generating these very large rents of roughly 2 percent of global GDP every year, and they're failing to pay for the externality cost of, call it $3 trillion a year that has been picked up by the poorest in society. So the current system we have is very unfair, and massively favors the fossil fuel producers.Lo and behold, the fossil fuel users — 80 percent of the world, and it’s all of the areas of growth: China and India, most of Southeast Asia, large chunks of Africa are major importers of fossil fuels — are almost all of the expected growth in demand over the next 40 years. They now suddenly have got their own domestic, eternal, clean resource, and it's cheap, so of course they're going to use it. They're going to be very delighted to use their own homegrown source, because what you're ultimately doing is trading rents paid to oligarchs and foreigners for local jobs. Of course they're going to do that. There are many other people writing about the geopolitics of this energy transition, but if you stand back for a second, it's pretty clear that it's going to benefit the big fossil fuel importers and damage the big fossil fuel exporters. The question then is, well, where does the power lie? Right now, in October 2021, the power clearly lies with the fossil fuel exporters, because not enough of this stuff has yet been built. Give it another five years, and the power is going to shift. That's, of course, another reason why people need to get on with building this new energy world, because otherwise, they're going to continue to be subject to the whims of the fossil fuel exporters.David Roberts:   Why do I hear all of this hand-wringing about a new wave of coal plants in China and Vietnam and in developing countries? I feel like I read this headline every few years: despite climate promises, there's a surge of coal plants. How real is that?Kingsmill Bond:  Don't worry too much. First of all — not to belittle the problem, because it is a bit of an issue — it's not as dramatic as it sounds in the headlines. In fact, in spite of these new coal plants which have been built, global coal demand peaked in 2013. So people have been building them and they haven't actually been using them. Global coal utilization rates have now fallen to about 50 percent. So the thing to focus on is not the new capex going on. The second point is that, thanks to the incredibly hard work of millions of people, this tail of new coal plants is constantly being reduced. It used to be hundreds of gigawatts, and now it's being reduced to dozens. So it has fallen a long way and it continues to fall. When it comes specifically to Vietnam, there are things changing literally as we speak, because of the incredible success of their deployment of solar and wind. They're already now canceling their coal plants and stopping their plans for expansion of coal. When it comes specifically to China, the rumor is at COP we might see a bringing forward of that 2030 peaking fossil fuel demand date, but the point nevertheless remains that China is very close to peak demand for fossil fuels. I hesitate to say it right now, but it is incredibly close. To give you a stat, Chinese demand for electricity today, per capita, is the same as Europe. So that incredible ramp of moving from very low demand to develop level demand, that's happened — that's not going to happen again. China is the world's largest producer of solar and wind and all these other new energy technologies, and they're still growing at 20 percent a year. You play with the maths a bit and it's clear that we're very, very close to peak fossil fuel demand in electricity generation in China. When I look at the rest of the world — we recently did a report on this — in 99 percent of developed markets, we've already seen peak coal demand in electricity. Interesting enough, in 63 percent of emerging markets, like China, we've seen peak demand for fossil fuels for electricity. It's not surprising, because there's a new opportunity in town. We have a lot of legacy problems, and we have some inertia, and we have systems which are tooled up for the past, not the future, and so on and so forth — I understand all of that. But as the financial analyst, you need to look forward and look at what's most likely. What’s most likely now, increasingly, is that people will be deploying these new technologies.David Roberts:   You describe the dynamic in financial markets where once you shave off the growth of an industry, it sets all these dynamics in motion. I wonder if there's an analogy in geopolitics. You think of Russia's power and African countries’ lack of power: How much would global energy have to shift away from Russia's natural gas to this plentiful solar that Africa has to set off these feedback loops in terms of geopolitical power and influence?Kingsmill Bond:  Therein lies a question beyond my level of expertise, but it certainly is worth noting that the year of the peak of the British Empire was just after the Treaty of Versailles in 1919, just before it collapsed. Things always look great at the top, and you don't need actually that much; what you need is people to realize that the future is different, and that they can get their own energy. I should have mentioned, incidentally, that one of the reasons we’re so enthusiastic about this story is that if you look at the technical potential of solar and wind, which has been a lot in the last five years, it's 100 times our global energy demand today. Africa, as you just mentioned, is an incredible renewable superpower; they've got 1,000 times as much supply from solar and wind as their current energy demand. When countries are looking for new development tools, rather than reaching to the old playbook of “we must have coal and gas and oil in order to get development,” it’s considerably simpler now. You've got this wonderful distribution system called the sun, which will get you this energy anywhere in the country, and you can harness it pretty cheaply. That, then, becomes the development tool. For me, this is another aspect of the incredibly powerful justice which is driving this energy transition: people who haven't had a lot of energy in the past now can have it and can harness it. That eventually will change the geopolitical calculus. But as I said earlier, we're at the top of Mount Fuji; we're bouncing around, the old is still powerful. The new is yet to be born in sufficient size to really challenge it. But we can't be long.David Roberts:   Biden's goal is to decarbonize electricity by 2035, and for the US to be net zero carbon by 2050. Do you think those are within reach given the amount of policy that's likely to be devoted to them? Kingsmill Bond:  If they're not achieved, the US will be buried by China. If the US wants to continue to be a serious player in the modern world, wants to remain a superpower, then it has to embrace superior, cheaper technologies. It's as simple as that. What's really shocking and embarrassing for me as a fellow Westerner is that for the last decade, China has leapt ahead and is dominating all of these new technologies. How can that be when the US has got all of that incredible industrial, intellectual base? It's pretty simple. If the country wishes to remain serious, then it has to do it. If not, then like the UK before it, it will descend into irrelevance.David Roberts:   How much of that is baked in? Are you willing to put any kind of numbers on how much you think is already inevitable, or how much requires more policy from Biden? I need faux precision here.Kingsmill Bond:  OK, I'll give you faux precision. It’s absolutely achievable. Again, as this Oxford paper points out, the more you do, the cheaper it gets. From their calculations, the cost of the transition, just in purely financial terms, is cheaper than the cost of business as usual. As they and many others have pointed out, technically all of this stuff is completely feasible, but you do need very powerful political action to break through the logjams of the incumbents and the inertia of the current system. I salute Biden and his team, because that seems to be exactly what they're now trying to do. You do need very powerful policy, because this ultimately will happen by 2100, but by 2100, it may well be too late. So in order to drive it faster, and for that to be cheaper and fairer and better distributed, you need to get on with it.David Roberts:   All right. That sounds like a great place to wrap up. Thanks for taking all this time, and for cheering me up.Kingsmill Bond:  Well, thanks, David. I hope I didn't overstate my brief there — it just seems pretty clear to me.David Roberts:   Well, you're making bold short-term predictions. Maybe in a decade, we can do another podcast and check your numbers.Kingsmill Bond:  It's funny because we put out this note in 2018, in a little conference room in San Francisco, talking about peaking fossil fuel demand coming in the 2020s. It got fairly well picked up, but it was one of those completely out-there ideas. Then lo and behold, you get COVID and it's starting to look like actually what is happening, notwithstanding what's happening right now. So, we'll see.David Roberts:   So far, so good. All right. Thanks so much for coming on.Kingsmill Bond:  Thanks so much for the call and for the opportunity. David Roberts:   All right. Bye now.  Get full access to Volts at www.volts.wtf/subscribe

Over the years, readers, I have had numerous occasions to be irritated with economists, particularly economists acting as political pundits. I thought today I would explain why. There are those in climate circles who lay most of the blame for the failure of climate action to date at the feet of economists. I’m not one of those people. I just lay … some of the blame at their feet. The fact is, rapidly transforming the entire industrial base of every country on earth was always going to be difficult — lots of extremely powerful interests stand to lose a great deal of money and power — and was probably going to go slowly no matter what economists did.Nonetheless, I think there’s a good argument to be made that, when it comes to the interface of economics and politics, climate economics and climate economists have blown it pretty comprehensively — and have not necessarily learned all the lessons they should have learned. I’ll start by recounting a notable episode and then contemplate two sorts of lessons that might be learned from it, one of which seems like it’s sinking in and and one of which … less so.The case of carbon pricingThis is a familiar story, so I’ll keep it short.The theoretical benefits of carbon pricing, as explored ad nauseam by economics over the last several decades, are well-understood. If you have all the stocks and flows of an economy in a giant spreadsheet, and you tweak the “price of carbon” variable, changes cascade throughout the spreadsheet. Every column in which carbon plays a part (which is almost every part of the US economy) adjusts.Modern neoliberal economics tends to seek the optimally efficient policy, and on that score — maximum results from minimum intervention in the economy — a price on carbon is the winner. It’s one variable you can adjust to optimize your whole spreadsheet. These arguments on behalf of carbon pricing are, I hasten to emphasize, valid. In a spreadsheet economy, turning the carbon-price knob is the most efficient way to reduce carbon emissions.But the economy isn’t a spreadsheet and carbon pricing isn’t just another knob on some policy console. Carbon pricing faces political-economy problems that are, at this point, almost as well-understood (at least by those who have been paying attention) as its theoretical merits. In fact, the closer a carbon price gets to the economist’s ideal — pegged to the social cost of carbon, equal across sectors, covering the whole economy — the more political-economy problems it faces. Its efficiency varies in inverse proportion to its feasibility.The more sectors are roped in under the carbon price, the more simultaneous enemies the policy makes. Different industries have different levels of power and influence and need to be compensated in different ways for their political acquiescence, but a carbon price applies to all industries equally, so it can not compensate any of them in particular. Thus, it has no friends (except economists).Carbon pricing policies can be and have been tweaked to overcome these difficulties, but with every tweak, optimal efficiency recedes in the rearview mirror. For one thing, pretty much every extant carbon price is the world is too low, well beneath the social cost of carbon. In the real world, other sector-specific industrial policies that are more politically manageable, like feed-in tariffs and renewable energy standards, have prevented far more emissions.Anyway, I won’t rehearse all these arguments again. If you want to read up, start with this piece I did for Vox, this piece from Jesse Jenkins, or this three-part interview I did with David Victor and Danny Cullenward, who wrote a whole book on the subject. For years, economists acted like serious grappling with political-economy constraints was beneath them, and they bullied big environmental groups into becoming economist wannabes, preaching their “market-friendly” gospel. The entire decade of the 2000s was spent preparing for a national climate-pricing push in 2008 that ended up producing precisely nothing. It wasn’t until 2020 that another shot came around at the federal level — thankfully, Dems aren’t repeating their mistake (at least that mistake).The capture of the climate policy debate by carbon-price-obsessed economists in the late 20th century helped send national and international climate policy down a multi-decade cul-de-sac in which very little was accomplished and much precious time was wasted. So what can be learned from that experience? I think there are two broad lessons, the first about the substance of climate economics and the second about the political behavior of economists. Conventional economics has mostly gotten climate change wrongPart of what prompted me to write this post in the first place is this piece by economist Daron Acemoglu about the failures of economics on climate change and some longstanding assumptions that need to be updated. It’s a smart, approachable distillation of some critiques that will be familiar to policy nerds:* Economists have dramatically underestimated the cost of climate damages.* They have treated technology as an exogenous variable, something external that just happens, applied to models at a set rate; models with “endogenous and directed technological change,” which reflects our ability to shape and focus technology development through policy, reveal that much more dramatic emission cuts are affordable. * They have used “discount rates” familiar in short-term market contexts to calculate the value of inter-generational goods. * They have failed to account properly for risk and uncertainty, especially for “long-tail risks,” i.e., low-probability but disastrous outcomes. * They have assessed the costs and benefits of wholesale sociotechnical transformation using utility functions designed to model changes at the margins of existing systems. * They have obsessed over optimally efficient policy in a way that ignores other values and trade-offs. (See Noah Smith and Tom Brookes and Gernot Wagner for other recent fulsome critiques of climate economics.) All these mistakes point in the same basic direction: economists have dramatically underestimated the scale and speed of action needed to address climate change.It’s worth pointing out that, ahem, Not All Economists. There are critiques of climate economics along these same lines that go back decades, from within basic confines of the mainstream — and other critiques from ecological economists and feminist economists and development economists and so on and so forth. Economics is not a monolith. It’s not all or even necessarily most economists that have made these mistakes and arguably the rising vanguard of the profession is busy correcting them.Nonetheless, bad climate economics has reigned for quite a while, long enough that it has developed into a kind of folk wisdom among the US chattering classes, who are convinced that climate change is a problem, but don’t understand how vast the costs of inaction are compared to the costs of action. It will take time to root out all the lingering fallacies and myths in the body politic, and for that, economists share some blame. These failures of economics have created a deficit of trust among climate hawks. Advocates have spent years pushing against economists in pursuit of ambitious industrial policy. That trust deficit is relevant as we contemplate how economists approach current political debates. Policies aren’t abstractions, they are embedded in contexts The other lesson to learn from the carbon pricing experience is that in the unending struggle among rival interests that is politics, optimal efficiency is only one of many valid considerations. One might also hope for a policy to build resiliency and redundancy into important systems, or to be politically durable, or to channel benefits to marginalized communities, or to fit well with the enforcement capabilities of existing institutions.Most of all, in the political realm, the “best” policy is feasible, given the current array of interests — businesses, nonprofit groups, political factions, and others. There are sometimes reasons to push policies that are impossible under the current regime, if only as aspirational targets, but not at the expense of policies that are feasible, certainly not in those rare moments when policy is actually being made. Of course, feasibility is not a binary, it’s a fuzzy judgment, a complex calculation. But for just that reason, to know what the optimum policy is for a particular polity in a particular time and place, one must understand the sociopolitical dynamics of that particular context. Policies are not free-floating conceptual structures that can be compared and ranked in the abstract; they are embedded in social, institutional, and economic relationships among actual, situated people with particular cultures, histories, and habits. A recent paper by UCLA law professor William Boyd, published in the Columbia Journal of Environmental Law, discusses the “instrument choice debate” in Western economics and how it took shape. The paper describes a kind of technocratic turn in economics in the last quarter of the 20th century, during which economists abstracted further and further away from lived examples and histories, increasingly conceiving of policy as a choice of instruments, policy tools, which were characterized according to their abstract design and theoretical merits. It is as though policymakers are surgeons, scrubbed into a cleanroom, choosing which sterilized tool best suits their needs. Viewing the policy space this way has “constrained our conceptions of the regulatory state and its capacity for climate action in jurisdictions around the world,” Boyd writes, and “led to a sharply diminished view of public engagement and government problem solving.”The truth is, policies are not discrete tools in a toolbox, equally at hand. To choose a policy is not to execute an equation in a spreadsheet, it is to invoke a whole skein of institutions, habits, norms, economic interests and counter-interests, and social narratives. We are not in a cleanroom; we are in the opposite. Doing politics, advancing the public welfare, is ultimately a utilitarian game. You are trying to maximize outcomes, to achieve the strongest and most effective policy results possible within a particular set of social and political constraints. In that context, a policy that maximizes spreadsheet results but can not get past the constraints is not “better” than a more limited policy that can pass. The best policy is not the economically optimal policy, it’s the most effective policy that can be implemented and enforced. No specialist expertise can substitute for wisdomIn my experience, climate policy debates frequently find people with technical expertise in a particular area — the hard sciences, say, or engineering, or most often of all, economics — confidently making policy recommendations based on their narrow expertise.When challenged on the political economy of particular policies, they retreat to their credentials: “I’m no expert on politics, I’m just a scientist/engineer/economist.” But here’s the thing. If you’re calculating the optimally efficient policy, you’re an economist; once you go out in public and argue, “legislators should pass this policy,” you’re no longer acting purely as an economist, you’re acting as a citizen, an advocate. You’re no longer merely saying, “this is the optimally efficient policy on paper,” you’re saying, “this is the right policy to push, all things considered.” Economist pundits spent years conflating those two in climate policy, and they’ve inspired a lot of other people to conflate them as well. When you enter the realm of politics and make political arguments and recommendations, you ought to be cognizant of, not merely the likely economic effects of a policy if it is passed and enforced, but the political dynamics that determine its feasibility, the likelihood that it will stay in place if passed, the state’s ability to enforce it, what social and economic interests will gain and lose from it, how equitable its distribution of costs and benefits may be, and how all of it might shape the space of political possibilities in the future. You ought to be cognizant of and feel responsible for the political effects of your intervention — what interests and factions you are strengthening and which you are weakening, where your argument weighs in the current moment, how your words are likely to be used, and by whom. Those are all difficult things to know! And the truth is difficult to glean from the ungainly morass of political journalism and commentary. Unlike disciplines with some academic or professional standards of rigor, political punditry and advocacy are a veritable festival of gut instincts, guesses, bad logic, bad faith, and confirmation bias. Pundits rarely offer empirical evidence; they rarely assess the accuracy of their prior predictions; they rarely change their minds. It drives scientists, economists, and, uh, ex-philosophy students out of their heads. It is tempting to try to claim some authority, to claim that a background in economics (or some other technical field) confers the status of referee, making the final calls on the merits of various policies. But it doesn’t. There are no real “experts” in politics, despite many claims to the contrary. The best we can hope for is to develop a few empirically informed heuristics (including those from economics), to remain open and alive to new evidence, to find trustworthy guides to the current political economy, and to strive toward, for lack of a better word, wisdom. Technical training and specialist knowledge are valuable. Those involved in political analysis and advocacy ought to pull in more from economics, political science, sociology, and ecology, among other disciplines. But those who have technical training should never mistake it for wisdom. Get full access to Volts at www.volts.wtf/subscribe

In this episode, I talk with Sarah Smith of the Clean Air Task Force about methane, the greenhouse gas that falls out of the atmosphere more quickly than carbon dioxide but trap a lot more heat while it’s there. We discuss sources of methane pollution, opportunities for reduction, and recent policy developments. Full transcript of Volts podcast featuring Sarah Smith, September 29, 2021(PDF version)David Roberts:Methane is having a moment. Methane — chemical name CH4 — is a fuel. It is the primary ingredient in natural gas, which generates about 40 percent of US electricity and heats about half of US homes. It is also an air pollutant, a precursor to ground-level ozone, which is toxic to humans. And it is also a greenhouse gas, much shorter lived in the atmosphere than CO2, but much more potent while it is there. Methane in the atmosphere comes from leaks along oil and gas infrastructure, from agriculture (primarily cow burps and manure), and from landfills. Rising concern over methane pollution has culminated in the Global Methane Pledge, announced by President Joe Biden’s White House last week, which would have participating countries (which include the EU, the UK, and Mexico) reduce methane emissions at least 30 percent by 2030. This followed the United Nations Environment Program’s Global Methane Assessment in May, which found that substantially and rapidly reducing methane is the only way to meet the international goal of keeping warming under 1.5°C. Clearly, for those of us who haven’t been paying as close attention as we should, it’s time to tune into the methane debate. The Clean Air Task Force has been tracking methane pollution and advocating for reductions for years. So I was eager to talk to Sarah Smith, the head of CATF’s Super Pollutants program, about the basics of methane: where it comes from, how it can be reduced, and the battles over it in US methane policy. (See also: Smith’s op-ed in Canary.)Without further ado, Sarah Smith, welcome to Volts. Thanks for coming.Sarah Smith:   Thank you so much for having me, David.David Roberts:   For those of us who have not been tracking the details of methane as closely as they might: what exactly is methane? Sarah Smith:   Methane is an invisible, odorless gas that is commonly known as the main constituent of natural gas. It has flown under the radar for far too long. It's currently contributing to about half the warming that we're experiencing today.David Roberts: Methane is a greenhouse gas that traps more heat in the atmosphere than CO2, but for a shorter period of time. What is the climate change potential of methane, and how does it differ from CO2?Sarah Smith:  Every pound of methane heats the climate more than 80 times as much as a pound of CO2. But methane only lasts for about a decade in the atmosphere, which is a big opportunity, because quickly reducing the amount of methane in the atmosphere would very quickly slow warming, whereas carbon dioxide is slowly building up over time and takes much longer to reduce.David Roberts: I’ve seen it compared to stock vs. flow. With CO2, if you stock it up in the atmosphere it stays, so you have to worry about the total amount. Methane is a flow problem; it's constantly coming out of the atmosphere. Is it fair to say that if we reduced the addition of methane into the atmosphere to the rate at which it was coming out of the atmosphere, we would basically stabilize its temperature effect? In other words, theoretically, there is some level of methane emissions at which you're not making things warmer.Sarah Smith:Exactly, and that's the goal: to get back to those pre-industrial concentrations of methane by ensuring that less methane is being added than removed.David Roberts: It is startling that methane has caused half of historical climate warming thus far. How was that discovered, and how did we not know it for so long?Sarah Smith:I ask myself that question all the time. The latest report from the Intergovernmental Panel on Climate Change finally shone a bright light on methane; you saw the CO2 bar next to the methane bar and clearly, methane was causing a substantial amount of the warming, about half as much as CO2. Subsequently, the attention is growing, as it should, and as it has been for years, but finally, we're really reaching a crescendo here.David Roberts:What are the implications for policy? What does this allow us to do if we grab hold of the methane lever?Sarah Smith:   A powerful lever it is. We don't have a lot of time left — perhaps 10 to 15 years, maybe less — to bend the warming curve in order to stave off irreversible changes to our climate, including self-reinforcing feedbacks where the world warms itself, like the loss of the remaining reflective sea ice, which would add the equivalent of a trillion tons of CO2 to what's already been added. There's also the Amazon tipping point, where the Amazon could be canceled out as a carbon sink. And many others. So we're in this race now to slow warming, and the biggest lever we can pull, by far, is cutting methane. We have the technology to quickly cut methane by at least 45 percent by 2030, and that would deliver an astonishing 0.3 degrees Celsius of reduced warming, along with a host of other benefits.David Roberts: When you say reduced warming, you mean relative to baseline, right? Sarah Smith: Exactly. Bending the curve down, reducing the rate of warming. We could reduce this 0.3 degrees C by the early 2040s through reducing methane.David Roberts:  This is the key thing about methane. You could cut CO2 almost to zero tomorrow and the warming set in motion by the CO2 that's in the atmosphere would continue. Whereas cutting methane gives us this lever where we can promise visible results within a reasonable lifetime.Sarah Smith:  Decarbonization is critical for slowing long-term warming, but it doesn't provide any reduction in warming for 20 to 30 years, and we simply can't wait. We have to address methane.David Roberts:  Lately, there's been global attention to reducing aerosols and their negative environmental effects. But one of the things aerosols did, perversely, was thicken the atmosphere and shelter us from some warming. There's worry that reducing aerosols globally, while it will have immediate positive environmental effects on ozone, etc., will actually boost short-term warming. So this brings us back to the need to have a short-term tool to fight that effect.Sarah Smith:   That's an important insight and one that this latest report from the IPCC finally highlighted in clear terms.David Roberts:   Notoriously, there's been a big spike in methane emissions in the last few decades, and it's something of a mystery, as I understand it. Do we know where that methane is coming from? Sarah Smith:  We're certain about the spike. But there is a lot of uncertainty around what's driving the spike.David Roberts:    Do we have a list of culprits? Sarah Smith:  We think fossil is a significant part of the search, but probably not the only contributing factor.David Roberts: In terms of knowing how much methane is in the atmosphere, we've historically relied on self-reporting by companies and countries that maybe can't be fully trusted to do transparent self-reporting. Now, we have satellites that can allegedly detect methane. What are the satellites revealing, and what will they reveal when there are more of them?Sarah Smith: The satellite technology is improving, and it's exciting that several are planned for launch in the next few years. That will give us a much more detailed view from the sky of the emissions all around the world; in the case of the Carbon Mapper satellite constellation, near real-time data for the whole planet. That will revolutionize the policymaking landscape and industry, which will suddenly be on the hook to take this on.David Roberts:  Tell me a little bit more about the satellite network.Sarah Smith:  There's one called Carbon Mapper that will be a constellation, as I understand it, of more than 20 satellites, circling the globe, and providing data every few days. David Roberts: Is there a third-grade explanation of the science behind how, from space, you can detect a colorless odorless gas being emitted on the ground? Sarah Smith: Sadly, I'm not a satellite expert. But scientists in NASA's Jet Propulsion Lab have been involved in developing this technology, so I am confident in its ability to work.David Roberts: It's like the entire world having a curtain pulled away: every single source of methane will be exposed. Do you have any guesses about what that's going to show? Are there going to be big surprises? What might we find out that we don't know?Sarah Smith:  Already, some of the satellites in the sky today — which aren’t as good as what's coming, but give us some early clues — have shown massive plumes of methane coming from oil and gas infrastructure, including pipelines, and have already resulted in some cleanup efforts. So I'm excited about the surprises, and hopeful the big sources will be caught more quickly. What satellites won't be able to do is pinpoint every tiny leak, and we need to try to address those too. But satellites will be able to show us where the bigger emissions are coming from.David Roberts:  We keep hearing about giant methane deposits in the Siberian permafrost, in bogs and swamps. There's this constant worry about a tipping point that unleashes giant methane deposits from permafrost. What's the state of science on that? How worried should we be?Sarah Smith:  Right now, more than half of methane is coming from human-caused sources. We should address that as quickly as we possibly can, in part to help prevent a rise in methane from these “natural” sources, the leading one being wetlands. Right now, permafrost is not a huge source compared to others globally, but as temperature rises, it could bit by bit become a bigger source. But I don't think people should lose sleep over a one-day sudden surge.David Roberts: You think the chances of a big dramatic release are relatively low?Sarah Smith: Yes, that's what the science seems to be saying.David Roberts:I guess we can take some relief in that.Sarah Smith: We still have a lot of work to do, but that's one bright spot.David Roberts:What are the biggest human-caused sources of methane emission, both globally and in the US?Sarah Smith: Overall, they're fairly similar, with about a third of the emissions coming from the fossil sector, including oil and gas and coal mines; about a third, maybe a little bit more, coming from agriculture, with the main sources being livestock, manure, and rice cultivation; and then the final amount coming from waste, including landfills.David Roberts:I think we have a pretty good understanding of how methane builds up in coal mines and releases. But where in the oil and gas process are these leaks happening?Sarah Smith:The sad thing is that they're happening throughout the whole supply chain, from the well pad, where the gas or oil is being pumped out of the ground, where there are leaks; unloading of liquids along with gas from wells; pneumatic devices, compressors, storage tanks, dehydrators. All through the supply chain, many of these devices also exist: the pneumatics, the compressors, the tanks. Then, of course, you have the pipelines. All the way from the production through processing, transmission and storage, and even distribution portion of the industry.David Roberts: So there's not one big spot to focus on; that's a little disheartening. Are there no junctures or concentrations we could target first, if we're trying to prioritize?Sarah Smith:You're pointing out a big reason why this emission problem still exists. It is dispersed. We are talking about millions of sources that can and must be cleaned up.David Roberts: There has been a long ongoing argument in the climate world over the perennial question of how clean natural gas electricity is compared to coal electricity. Some say that there's so much leakage of methane in the supply chain before you get natural gas electricity that it wipes out any advantage natural gas has over coal; other estimates say no, the leakage rate is low enough that it still has an advantage. How confident are we that we know the leakage rate in this process?Sarah Smith: The leakage of potent methane substantially erodes the climate benefit of gas over coal, and depending on where that gas is produced, how far it's transported, and how it’s transported, the upstream emissions can vary widely. All of that needs to be factored in.But I think comparison to coal is letting us off too easy. It's not the ambitious benchmark that we need, which is near-zero methane emissions. Flaring needs to end, venting needs to end, these super-emitter plumes and leaks have to be found and fixed, and that antiquated equipment that vents methane to the atmosphere as part of its normal operation should be phased out.David Roberts: Can you explain flaring and venting? When I tell people about flaring, they have trouble believing that I'm telling the truth. Sarah Smith:  I experience that, too. It is remarkable that billions of dollars worth of gas gets lit on fire every year as a disposal mechanism. It turns out that burning it is better than just releasing it straight into the air, which is venting.David Roberts: Natural gas is valuable, used in a lot of different ways, and we go out to mine it and search for it, but oil wells are throwing tons of it away. What's going on there? Why throw away a valuable resource?Sarah Smith:   The oil producers have not yet been forced to capture and utilize or sell the gas.David Roberts: Couldn’t they make money? Why would they have to be forced if they could make money?Sarah Smith:  Certainly money could be made. The question is, could more money be made in other ways? That short-term profit is what they’re after.David Roberts:What would be involved in not venting or flaring, but capturing and transporting the gas? Is it additional infrastructure?Sarah Smith: A lot of times it comes down to planning in advance and making sure that before the well is drilled, there's capacity to use or get rid of the gas. There are a wide range of solutions, from using the excess gas to make power on site, or making sure there’s a pipeline and a compressor there to get it to market. But companies aren't doing that without being required to.David Roberts:   Liquid natural gas is another big source of controversy. There are people advocating for liquid natural gas export terminals in the US; China is supposedly going to start importing a lot more liquid natural gas. Is liquid natural gas, in terms of the methane leakage in the process of making it, worse than normal natural gas?Sarah Smith: There is energy that needs to be used to compress the gas into LNG and transport it. We're also concerned about emissions during that transportation process: boil-off of gas, leaks, even super-emitter events. We have an optical gas imaging camera that can be used to see the emissions that are normally invisible, and we've taken it to some LNG sites in Europe and seen the pollution. We know it exists, and we're concerned about it. It's an area where little study has been done so far, but all of these emissions do need to be factored in.David Roberts:The US fracking industry is likely to collapse soon, and there are thousands upon thousands of wells all over the place, many of which get abandoned because our laws about holding fossil fuel companies responsible for them are rather weak. Are they a source of methane? How big of a problem are abandoned wells? Sarah Smith:  They are another source of methane, and we're especially worried about the ones where there is no longer a clear owner. Unfortunately, the government needs to step up with the resources and cap these pollution sources. Long term, we have to make sure that oil and gas companies are responsible for their wells.David Roberts: What does that policy look like when they're responsible for their wells? Is it just a matter of bonding some extra money upfront?Sarah Smith: I do think that's key, yes; making sure that enough money is actually bonded upfront that the well can be capped and properly maintained.David Roberts: When we say capping a well, are we literally just talking about going and putting a cap on something? Is it just a concrete plug in a tube, or is there something more complicated involved?Sarah Smith:  Generally, this is plumbing, not rocket science, but it can be costly to properly plug these wells and then ensure that they're checked for leaks over time.David Roberts: What's involved in stopping methane leaks in LNG production?Sarah Smith: Step one, find the leaks: if it's with a camera, or a flyover, or, increasingly, satellite technology. Continuous monitoring sensors are also becoming more popular and lower cost. So detecting the emissions and then fixing the problem, which can be as simple as closing a hatch that's been left open, reigniting a flare that's been snuffed out, or fixing a hole in a pipeline or a tank.David Roberts:  It doesn't sound like it's a difficult technical problem or an intellectual challenge.Sarah Smith:  We have the technology today. In fact, the International Energy Agency says that half of the emissions could be cut from oil and gas at no cost, and 75 percent could be done at low cost with existing technologies. So there's a lot of potential here.David Roberts: How can it be costless?Sarah Smith:In enough of the places, the pollutant is the product too. That’s how the minimal costs associated with finding and fixing these leaks and updating the equipment can be recouped.David Roberts: The second big source of methane that you listed is agriculture. This is cow burps and cow poop? Sarah Smith: Those are two of the top ones, indeed.David Roberts:  What can be done about those?Sarah Smith:  On the cow burps, also known as enteric fermentation, there is no silver bullet, but there are solutions that should be pursued, including feed changes and selective breeding. Whenever we improve productivity and animal health and fertility, that's going to reduce methane emissions associated with the products from that animal. So those are good solutions. David Roberts: Breeding cows that burp less?Sarah Smith: Selective breeding to improve productivity. This is an area that New Zealand has pioneered, and the reductions in emissions aren't staggering — they see a 10 percent reduction, often — but if we could extend that over more of the world, that would start to make a real impact.David Roberts: What can be done with the poop? As I understand it, the poop right now goes into giant lagoons and sits there off-gassing. Is that right?Sarah Smith:A lot of that does occur, yes. Some farms have started to adopt these biogas digesters, which require maintenance but can be an important solution. And again, that gas can be utilized, so that's one solution.David Roberts: Is that the main poop solution, capturing the gas and using it? Or are there other methods?Sarah Smith: There are some other actions that can be taken, like decreasing the amount of time it’s stored before it's used, covering it better. There are some emerging technologies, like powdered additives that can be added to the slurry to reduce the emissions. But more study is needed to understand the effectiveness of some of these newer approaches, and more study should be undertaken, because the ag sector as a whole is a huge source of methane that we absolutely need to rein in.David Roberts: A growing source, right, because more and more people are eating more and more meat?Sarah Smith: That's right — projected to continue in that direction as well.David Roberts:It seems to me that one of the obvious solutions in agriculture is just to eat less meat and raise fewer animals. That would be the most straightforward way to reduce this, wouldn't it?Sarah Smith:That would certainly help. David Roberts:It's funny that we have so much more faith in all the technological solutions than we do in the idea of persuading people to eat less meat.Sarah Smith:That's a challenging case to make, yes, even if it's in their own self-interest and would improve health.David Roberts:Is it safe to say that the reductions in agriculture are a bit more difficult, less thorough, and less fully understood than in oil and gas?Sarah Smith:Yes, that's true. There are steps that we could and should take today, but we won't get to zero overnight.David Roberts:The third big one, then, is waste and landfills. As I understand it, the reason they're off-gassing methane is that they contain a lot of organic material. Do we have any large-scale solutions for landfills?Sarah Smith: No, unfortunately, not really. We could take a substantial bite out of the emissions through existing technologies, like header capping, capturing the gas from landfills and using it, or, if there's no way to use it, at least burning it off so that it doesn't vent directly to the atmosphere. As you said, the methane is a result of organic material decomposing in the landfill, so reducing the amount of organic waste that's winding up in landfills is also a important piece of the solution.David Roberts: Which would be primarily food waste, right?Sarah Smith: Right. Food waste is important to consider and important to try to reduce overall.David Roberts:Landfills are huge. What does it look like to capture the gas coming off of a landfill? Sarah Smith:In order to capture the gas, the landfill has to be covered, and the gas essentially rises and gets captured at the centralized points. David Roberts: So that costs more. For your average landfill, can you make enough off the gas to pay for the process of capturing it? What are the economics there?Sarah Smith:The upfront cost can be a barrier. That's where we need to scale up financing and make sure that municipalities and government jurisdictions that are charged with solid waste handling have the resources to invest in better facilities and facilities that pollute less.David Roberts:   Food waste seems like a difficult problem. Are there technological solutions to food waste, or is this mostly a behavior issue that we need to educate people about? Sarah Smith: One of the groups that works on this is called ReFED; I spoke with their executive director a couple of years ago, and he was telling me that there are policy changes that can help, like shifting dates on packaging to ensure that there's maximal time to use the food while safe, improvements in packaging, technology, and so forth. That can all help, but I'm not an expert in food waste.David Roberts: Tell us about the global methane pledge that President Biden just announced. Is it ambitious enough? Do we think that countries signing the pledge will actually do what they're saying they will do?Sarah Smith: EU president Ursula von der Leyen and President Biden together announced this pledge recently. They called on countries around the world to join them in a collective effort to reduce global methane from all sectors by at least 30 percent below 2020 levels by 2030, and, importantly, also to take comprehensive domestic action to achieve this target. So this is a great step in the right direction.David Roberts: So you think 30 percent by 2030 is a good target?Sarah Smith:I do, especially when compared to the 2020 baseline. This would be a big step toward keeping a 1.5 degree C of warming future in reach.David Roberts:Is this styled like the Paris Agreement, where countries are proclaiming they'll do this and we're trusting them based on their goodwill? Sarah Smith: This is a voluntary pledge, yes. I think of it as the launchpad for deep work in every one of these countries, to ensure that policies are put into place and actions are taken on the ground to get these tons of methane out of the air and try to stave off irreversible changes to the climate.David Roberts:Is it fair to say that there's no way to stop short of 1.5 degrees without getting ahold of methane?Sarah Smith: Yes. We cannot keep 1.5 degrees in reach without wringing all of the methane that we can out of the system.David Roberts: Catch us up on US methane policy. What policies do we have in place, especially with oil and gas? What are the big fights going on right now?Sarah Smith:  Fortunately, the US is poised to lead by example on this issue, through new rules from the US Environmental Protection Agency and through action by Congress this year that could put us on strong footing going into the COP and bring more countries onto this pledge.David Roberts: This fight has been going on for a long time. Obama’s EPA put some standards in place, didn’t it?Sarah Smith:  Yes. President Obama's EPA developed standards for new and modified oil and gas sources, but left on the table emissions from the vast network of existing polluting oil and gas equipment all across the country. That is something that EPA Administrator Regan under the Biden administration has committed to addressing in forthcoming standards that should be out publicly in the next month.David Roberts: So there are no federal standards on existing wells and mines?Sarah Smith:That's right. They are allowed to release unlimited methane right now.David Roberts: Are Obama's standards on new and modified sources still in place, or did Trump mess with those?Sarah Smith: He certainly tried. They were off the books briefly, but Congress took action through the Congressional Review Act and undid the Trump rollback so that the Obama rules are largely back in place. But they need to be updated, because we've learned a heck of a lot about methane reduction since 2015 and 2016, when those rules were written. We now know emissions could be cut in the US by 65 percent at least, using currently available, low-cost technologies.We know more about how to solve the problem from states that have stepped up and taken leadership on this issue, including Colorado, which has gone through several rounds of rulemakings on this, and even the state of New Mexico, which recently took on flaring. Both Colorado and New Mexico now have finalized phase-outs for flaring of associated gas. Producers are going to have to stop routine flaring and capture the gas, except in emergency situations.David Roberts:Has Colorado shown success? Are methane emissions in Colorado declining? Sarah Smith: The latest data I've seen does show a declining leak rate in Colorado, and I expect that trend to continue with the state continuing to take leadership on this issue.David Roberts: I’ve read that the Democrats’ reconciliation bill is meant to include a methane fee. What can you tell me about that?Sarah Smith: This is a modest fee proposal that would reinforce the specific regulatory requirements that EPA is working on. It would raise revenue, much of which would go to EPA and could help the agency implement the provisions of the rules, improve reporting and monitoring, and even fund environmental restoration projects, including in communities that have been most impacted by air pollution from industry and climate change.David Roberts: Is it intended mostly as a revenue raiser? Sarah Smith: That’s the main thrust, but it's important to note that it would also help reduce emissions quickly and provide an incentive for companies to go above and beyond the regulations that get promulgated under the Clean Air Act.David Roberts: What is the oil and gas industry's current posture toward these upcoming rules? Are they still dug in in opposition? Sarah Smith: I would be hesitant to put the whole industry into one bucket on this. The seas are shifting. Some companies, over the course of the past couple of years, have started to support methane regulation. Even API, the industry trade association, has changed their messaging on this to be much more supportive. I think they see the writing on the wall.David Roberts:  I know they're protesting the fee. They say it's duplicative or it's on top of the rules, it's confusing. Do you put any credence in those kind of objections?Sarah Smith:  No, I really don’t. This is an industry that could so easily minimize its pollution, has had a chance to do that, and hasn't acted quickly enough. So it's time for the hammer to come down.David Roberts:It seems like it would be a political and public relations boon for an oil and gas company to say, “we're going to be a different kind of oil and gas company, we're going to be responsible and clean up our methane emissions.” They could do it at low cost and reap such a PR bonanza. Why have none of them done this, not even a single outlier? Do you have any theories about this?Sarah Smith: I wish I could sit each one of the CEOs down with you, David, because that's exactly right. I think it's a case of short-sightedness, and, in some cases, prioritizing short-term gains over long-term gains.David Roberts: Globally speaking, where are the other big methane sources? What other countries are particularly bad on this? Are there other countries taking action like the US? Sarah Smith:Sadly, there are methane emissions coming from every continent, every country. Because they're so dispersed, we need global action on this global problem. Many of the big economies are the bigger sources right now, but not exclusively. In terms of where we're seeing action, it’s exciting to see the US stepping up, and I'll be curious and hopeful to see strong rules coming out this year and finalized next year. The European Commission has a methane strategy that cuts across a range of sectors; they're starting out with some legislation later this year on the oil and gas sector that will, we hope, take action on venting and flaring, leaks, monitoring, reporting, and the topics that we've discussed today. This would be across the EU.Hopefully the EU will also establish import standards for all of the gas it's purchasing. It's currently the number one importer of gas in the world, so that will put pressure on Russia and Algeria and Qatar and some of these other countries that are supplying fuel into the EU to implement these common-sense best practices.David Roberts:I think of Russia as a huge source of natural gas. Is Russia taking action?Sarah Smith: President Putin spoke about the need to reduce methane and called for global action on the topic during the leaders summit that President Biden organized on climate earlier this year, so it'll be interesting to see how that unfolds. Ultimately, we need certification and monitoring to ensure that the practices are actually being implemented on the ground, and the emissions are being prevented. David Roberts: This radical global transparency on methane emissions seems like it's going to be fascinating to watch from an international politics point of view.Sarah Smith:  It will be. We're going to know a lot more about methane sources and a lot more about carbon dioxide sources, too. I hope both can be tackled simultaneously — they absolutely must be to have a chance of maintaining a safe climate.David Roberts: Do you think there will be substantial developments on methane in the upcoming COP?Sarah Smith: I am hopeful that methane could be a bright spot out of this upcoming COP, and that this global methane pledge, when formally launched, will bring together many more countries to rein in the pollution.David Roberts: It sounds like there's more and easier potential action on methane than on CO2, in some ways.Sarah Smith: It is the low-hanging fruit that has been hiding just out of sight for a long time, and I'm hoping that it will start getting plucked.David Roberts:  It would be truly embarrassing if humanity destroyed itself with a pollutant that it could have reduced at no cost. That would be a terrible epitaph. Thank you, Sarah, for coming on and taking the time. It's very clarifying. Sarah Smith: It was fun to speak with you. 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Here’s a question: is it better to drive somewhere or to take a ride-hailing service like Uber or Lyft? I don’t mean better for you personally — faster or cheaper. I mean better for the world, for society, for the air and atmosphere … better, all things considered. A clever new study from researchers at Carnegie Mellon University attempts to answer that question.Ride-hailing services carry more external costs than private vehiclesIn the paper, Jacob Ward, Jeremy Michalek, and Constantine Samaras attempt to tally up the relative costs to the environment and society of taking a trip via a privately owned vehicle vs. taking the same trip in what they call a transportation network company (TNC) like Uber or Lyft, in six of the companies’ biggest markets.This involves two steps in each market. First, they add up how many miles the respective vehicles travel per trip. Then, they add up the total externalities — in vehicle emissions, congestion, crashes, and noise — represented by each mile traveled. (These externalities, notoriously, are not priced into transportation decisions; thus the name.)To understand the results, you have to understand one key fact: TNC vehicles travel more miles per trip. They have to drive between where they drop off one fare and pick up another, which sometimes involves quite a bit of just wandering around. This time spent with no passenger is called “deadheading,” and those miles must be added to their trip miles.Here’s a clear visual representation:Those dotted black lines on the bottom half? That’s deadheading. Those extra miles traveled represent more externalities — more cost to the environment and society. On average, a TNC trip carries 32 to 37 cents more in external costs than a private vehicle trip. (See also this recent MIT study, which found that TNC vehicles increase urban road congestion.)There are three countervailing factors, but only the third is big enough to flip the equation enough to give TNCs the advantage in some limited circumstances.Ride-hailing services reduce air pollutionFirst, though additional miles lead to more greenhouse gas emissions, congestion, crashes, and noise, somewhat counterintuitively, they lead to less air pollution. The secret here is that the bulk of particulate air pollution is generated from “cold starts,” i.e., engines turning over to start up. By contrast, TNC vehicles arrive “hot.” Their engines are already running, so they don’t do cold starts. In addition, TNC vehicles are, on average, newer, and thus cleaner.On average, TNC trips represent a 50 to 60 percent decline (9–13¢ per trip) in air pollutants like NOx, PM2.5, and VOCs.If TNC vehicles electrify faster than private vehicles, that advantage will grow, because EVs generate no tailpipe pollution. But if private vehicles electrify equally fast, the comparative advantage will stay the same.Regardless, the difference is not enough to overcome the other externalities. TNC trips represent a 20 percent increase in costs from greenhouse gas emissions and a 60 percent increase in costs from congestion, crashes, and noise (all told, about 45¢ more per trip). Overall, a 9–13¢ decrease and a 45¢ increase add up to 32 to 37 cents more per trip, on average.Electric ride-hailing vehicles … are still mostly worse than private vehiclesThe second countervailing factor is vehicle electrification. Doesn’t that reduce externalities? What the researchers found is that a) if the TNC car is electric, while b) the private vehicle alternative is an internal combustion engine car, and c) the TNC car charges entirely with zero-carbon electricity, then the overall environmental and social costs of a TNC trip and a personal vehicle trip are … about the same. Of course, those conditions are rarely met. On real-world grids, which are still powered overwhelmingly by fossil fuels, electrification of TNCs reduces the relative advantage of personal vehicle trips by about 16 or 17 percent. It does not eliminate the advantage. And of course, that advantage will shrink as the private vehicle fleet electrifies. So what, then, is the third countervailing factor, the one that can actually make a TNC trip better than a personal vehicle trip? Shared ride-hailing vehicles are better than private vehiclesMaybe you’ve already guessed the answer: it’s ride-sharing. Put two people in the TNC car — i.e., have one TNC trip substitute for two personal vehicle trips — and voilà, you flip the script and your TNC trip is a net positive for the world. “When a TNC trip is known to be pooled,” the paper says, “shifting travel from a private vehicle reduces net external costs by a mean value of $0.60/trip.”Wow, if you pooled three people you could save even more. Or four people. You could even pool dozens of people on large vehicles that travel on fixed routes and timetables. You could reduce all kinds of externalities! I wonder if anyone has tried that. Speaking of which, what if the TNC trip displaced a trip on public transit, where the marginal cost in externalities of an additional passenger is effectively zero? What if it displaced a trip done via walking or biking, where the marginal externalities are, again, zero?The study looked at that too: “When TNCs displace transit, walking, or biking, rather than personal vehicles, the increase in externalities is about three times larger (+$1.20/trip).”What about avoided vehicle purchases?You might think that, with the easy availability of TNCs, it might be possible for fewer people to buy cars, which would count on the positive side of the ledger. However, there’s no such comfort. I asked the authors about this and it turns out they did another study (out on Jan. 6, d’oh) which found that the arrival of Uber and Lyft to a market tends to be correlated with a small increase in car ownership, especially in places where car ownership is already high and there’s not much population growth. Via email, Michalek adds:Even if Uber/Lyft do cause a reduction in vehicle ownership in some cities, I don’t think that alone would change our analysis about the costs and benefits of ridesourcing to society very much, because vehicle production emissions are a small part of overall lifecycle costs. The main costs come from driving.What could change our results is if Uber/Lyft enable travelers to walk and use transit more than they would have otherwise. This could be, for example, (1) because Uber/Lyft enable a traveler to get to a transit line (providing a first mile / last mile solution); (2) because Uber/Lyft can fill in gaps in transit services, allowing travelers to take the train out to a nightlife area and take an Uber home after the trains stop running; or (3) because not owning a vehicle forces the traveler to walk, carpool, and use transit more often than they would if they had a convenient personal car option.Unfortunately, there’s not a ton of evidence for TNCs enabling more transit trips either. Reviewing the studies done to date on the impact of TNCs on transit, the paper concludes: We also find no statistically significant average effect of TNC entry on fuel economy or transit use, but find evidence of heterogeneity in these effects across urban areas, including larger transit ridership reductions after TNC entry in areas with higher income and more childless households.There’s no way to avoid the conclusion: in most places, in current circumstances, all things considered, it’s worse to take a TNC ride than to drive a private vehicle.What all of this meansI hope the implications of this research are obvious: ban cars.Ha ha, I’m kidding. Kind of. But Uber and Lyft aren’t helping anything. They’re making most things worse. Even if they electrify, they’re still mostly making things worse. The most notable finding in this latest study is something we already knew: moving people out of private vehicles (whether they’re driving or not) into walking, biking, and public transit sharply reduces overall costs to society and the environment. The difference that shift makes swamps any differences between the types of private vehicles we choose. The basic problem with cars — whether they’re private, TNCs, taxis, flying cars, underground cars, or autonomous Personal Air Land Vehicles (PAL-Vs) with 5G and lasers — is a simple matter of geometry: they take up lots of space. You can not have thousands of people living close together, each with their own two-ton vehicle, without congestion, sprawl, noise, crashes, air pollution, climate change, and all the rest of the horrors cars bring. That’s true of big cities, but it’s also true of small towns. If everyone has their own vehicle, there’s going to be traffic congestion or sprawl or both.The only way to tackle all of these externalities at once is to get people out of cars. Out of their own cars, out of the Ubers. That means prioritizing multimodal transportation in infrastructure and spending decisions. Creating protected walking and biking corridors that connect across town. Reclaiming lanes and whole streets from cars and turning them over to transit or simply to neighborhood walking and gathering. Upzoning and increasing density, especially around transit stops. Subsidizing electric bikes. (Basically, doing what Barcelona and Paris are doing.) Electrifying vehicles will help on climate change, especially as the grid gets cleaner, but it’s not a solution to cars. Fancy new kinds of cars, even if they fly or go through tunnels or run on unicorn farts, are not a solution. Apps are not a solution. The only solution to the problem of cars is fewer cars. That should be the goal of policy — not just transportation policy, but land-use policy and urban policy and economic policy and climate policy. For those who care about the public good, Uber and Lyft are a distraction. Get full access to Volts at www.volts.wtf/subscribe

In 2016, Illinois passed a decent enough energy bill. It shored up the state’s (relatively modest) renewable energy standard and kept its existing nuclear power plants open. It was a compromise among varied interests, signed into law by a Democratic legislature and a Republican governor. At the time, I figured it was the best any state in the coal-heavy Midwest was likely to do.Well, that will teach me to go around figuring. Just five years later, Illinois has raised the bar, passing one of the most environmentally ambitious, worker-friendly, justice-focused energy bills of any state in the country: The Climate and Equitable Jobs Act. Illinois is now the first state in the Midwest to commit to net-zero carbon emissions, joining over a dozen other states across the country. It is also a model for how diverse stakeholders can reach consensus. What’s changed in IllinoisA great deal has changed since that 2016 bill was passed.First and foremost, in 2018, Democrats gained a trifecta in state government, increasing their lead in both houses of the Illinois General Assembly and putting Democrat J.B. Pritzker in the governor’s office. As I have emphasized numerous times now, Democratic control is a necessary (if not sufficient) condition for ambitious state energy policy.Soon after the 2018 election, negotiations over a new energy bill began in earnest. The state’s labor community was sensitive to the fact that it had largely been left out of the 2016 bill; the legislation contained no labor standards, and recent years have seen Illinois renewable energy projects importing cheaper out-of-state workforces. Labor didn’t want to get left behind in the state’s energy transition, so it organized a coalition of groups under the banner Climate Jobs Illinois and set about playing an active role in negotiations. Renewable energy developers — cognizant of the fact that Illinois is falling short of its renewable energy goals (it’s at 9 percent; it’s supposed to be at 21) and state funding has dried up for new renewable energy projects — organized as Path to 100. Environmental and climate-justice groups organized as the Illinois Clean Jobs Coalition.All the groups introduced energy bills of their own. And then they spent years banging their heads together.But there was another key difference: this time around, utilities were not at the table. Exelon subsidiary ComEd had been caught up in a bribery scandal that left it disempowered and weak, under a deferred prosecution agreement. The scandal also led to House Speaker Michael Madigan, a reliable utility ally, being removed from his position. Utilities were, to put it crudely, on the shit list, allowing political leadership to restrain their historic (and largely counterproductive) influence.Nonetheless, by all accounts, negotiations were difficult; the bill was declared dead several times. Senate President Don Harmon (D) said several times that it is the single most complex piece of legislation he’d ever worked on. There were uncertainties and impasses right up through the final week. But they got it done! It passed with bipartisan supermajorities: 83-33 in the House and 37-17 in the Senate. Pritzker signed it on September 15.One crucial piece of the puzzle was new political leadership, from Pritzker on down. Harmon, who became Senate president in 2018, is a longtime champion of renewable energy. In January 2021, Rep. Chris Welch, a widely respected deal-maker, replaced Madigan as House Speaker. Welch pursued what his office calls “distributed, collective leadership” — key members of the House Democratic leadership took responsibility for acting as liaisons to the legislature’s Black caucus, the environmental community, and coal communities.By all accounts, everyone performed their roles ably, holding an unwieldy coalition together through choppy waters. Illinois politics reporter Rich Miller has a nice rundown of the final passage, which he calls “a spectacular victory.”From the beginning, everyone involved was more or less aligned around rapid growth of renewable energy and full decarbonization of the electricity sector by 2045. The most contentious issue proved to be the schedule for decarbonization. The environmentalists in the Clean Jobs Coalition wanted steady 20 percent reductions every five years, starting in 2026. The labor groups in Climate Jobs Illinois were worried that shutting down fossil fuel plants that fast would lead to the state being forced to import fossil fuel power from out of state, sacrificing jobs to no environmental gain.Particularly thorny was a municipally owned coal plant, the 10-year-old Prairie State Energy Campus in southwestern Illinois, which is the state’s biggest greenhouse gas emitter and a horrendous financial boondoggle that costs more to run than its power is worth. Part of the problem is that the plant, owned by a consortium of nine public power agencies, was largely funded by municipal bonds from the communities meant to receive its power; those communities were worried they’d get stiffed if the plant retired early. (Enviros claimed they could close the plant, use the savings to pay off the bonds, and still come out ahead, but that was met with some skepticism.) To make a long story short: first Pritzker wanted the plant’s retirement date at 2035. Then he agree to 2045. Then Senate Democrats voted through a plan that would have let the plant pump out 100 percent of its current emissions through 2045. That was unacceptable to environmentalists and Pritzker, who wanted interim reduction targets. That flummoxed the process for a bit, but in the end, labor agreed to it. Even after that, there was some last-minute drama from the governor’s office, leading to a stalemate with Harmon; finally, they agreed to kick the bill over the House, where Welch dragged it over the finish line.Anyway, that’s probably more process drama than you wanted. Let’s look at what’s in the bill. Clean energy and good wages, justly distributed: the Illinois energy billI’m not going to cover the entire 900-page bill. We’ll just hit the highlights.Emission reductions and clean electricityToday, Illinois gets about 40 percent of its electricity from nuclear power and less than 10 percent from renewable energy. The new renewable portfolio standard (RPS) will raise renewables’ share to 40 percent by 2030 and 50 percent by 2040, with the goal of a zero-carbon electricity sector by 2045 — and beyond that, a net-zero-carbon state economy by 2050. This is extremely ambitious and a new benchmark for the Midwest. Subsidies to renewable energy will roughly double, to around $580 million per year. An additional $317 million the big utilities had previously collected will be spent on clean-energy projects rather than refunded to customers as scheduled. (It’s a long story.)The popular Illinois Solar for All program, which helps get rooftop solar power to low-income renters and homeowners (as well as public buildings and nonprofits serving environmental justice communities), will have its funding increased from $10 million to $50 million a year. Obviously, Illinois will have much more trouble hitting its decarbonization targets if its nuclear power plants shut down, so the bill provides the Byron, Dresden, and Braidwood plants with about $700 million in subsidies over the next five years. (The size of the subsidy, considerably less than the $5 billion Exelon wanted, was informed by an independent analysis commissioned by the governor’s office.)All private coal- and oil-fired power plants must get to zero emissions (i.e., retire) by 2030. Municipally owned coal plants — Prairie State and Dallman Station — must reduce emissions 45 percent by 2035 (which will mean shutting down one of two boilers) and 100 percent by 2045. All private natural gas plants must reach zero emissions — either by retiring or by switching over to hydrogen — by 2045. Until then, their emissions in a given year can not exceed the average of the previous three years, i.e., can not rise. (Plants can stay open if a government assessment finds that they are necessary for grid reliability.)Importantly: fossil fuel plants will be shut down according to their proximity to low-income and marginalized communities, not necessarily according to greenhouse gases or economics. Every five years starting in 2025, the Illinois Environmental Protection Agency, the Illinois Power Agency, and the Illinois Commerce Commission (ICC) must produce a report on the state’s progress toward its renewable energy goals. The ICC will also begin developing a renewables access plan to increase electricity transmission throughout the state. For the record: a recent study led by former Illinois Power Agency Director Mark Pruitt found that getting to 40 percent renewable energy by 2030 “would deliver over $1.2 billion in lower total electricity costs for Illinois.” Transportation decarbonizationThe bill establishes the goal of getting a million electric vehicles on Illinois roads by 2030. In part, that will be achieved through a $4,000-per-vehicle rebate for EV customers (which, added to the EV credit in the current federal bill, would mean a combined rebate of $16,500). Electric utilities will be required to submit clean-electrification plans to the ICC, showing how they plan to drive EV adoption.The Illinois Environmental Protection Agency will rebate up to 80 percent of the cost of EV infrastructure projects that pay prevailing wages. Forty-five percent of those rebates will be channeled to projects in low-income and marginalized communities. Labor and equity standardsAll utility-scale renewable energy projects that qualify under the state’s RPS must use project-labor agreements; all non-residential clean-energy projects must pay prevailing wages. All projects must demonstrate through diversity hiring reports that they have recruited qualified BIPOC candidates and apprentices. As far as I know, this gives Illinois the most stringent labor and equity requirements of any state clean energy program. Similar policies tying renewable energy projects to labor standards have passed in Connecticut, New York, and Washington, but no other state’s energy policy has as comprehensive a package of labor, diversity, and equity standards.Workforce development and transition assistanceThe bill will create an $80 million-a-year Clean Jobs Workforce Network Hubs Program, which will create 13 hubs around the state to deliver workforce-development programs to low-income and underserved populations. Resources will be put toward outreach, recruitment, training, and placement. The Department of Commerce and Economic Opportunity and the Illinois Department of Employment Security will work together to develop a “displaced worker bill of rights,” with $40 million a year to go toward transition assistance for areas dependent on fossil fuel production or generation. There will be two green bank–style programs. The Clean Energy Jobs and Justice Fund will provide financing and low-interest lending to clean-energy projects in low-income and marginalized communities. The Illinois Finance Authority Climate Bank, more like a conventional green bank, will provide seed funding and develop public-private partnerships to draw more private capital to clean energy projects. A clean energy incubator program will offer support and low-interest capital to small energy businesses and contractors, to the tune of over $35 million a year. There will be a program to train and place soon-to-be-released incarcerated people in clean-energy fields. And there will be a program meant to encourage the development of solar and storage on the site of closed fossil-fuel plants, to help employ laid-off workers.An Energy Transition Workforce Commission will report on the workforce needs of a decarbonizing economy and recommend further changes to workforce policies. The Department of Commerce and Economic Opportunity will create a program to reduce energy transition barriers, a grant program to promote economic development in transitioning communities, and a scholarship fund for children in families of laid-off workers. Notably, companies intending to shut down fossil fuel plants will be required to give affected communities two years’ notice, so that such communities can be identified and receive transition assistance.Consumer protectionsFor low-income ratepayers, the bill eliminates deposit requirements and late fees; it eliminates online payment fees for all ratepayers.Utilities will be required to report their monthly shutoffs and reconnections to the ICC, and the ICC will conduct a comprehensive study of the level and design of low-income rates to ensure that they are working effectively. Utilities will be required to fund the participation of nonprofit representatives in ICC proceedings, to increase community participation. Finally, munis and co-ops will be prohibited from charging discriminatory fees to ratepayers that self-generate solar electricity (as investor-owned utilities already are).Utility ethics and rate reformsSome of these details get technical, but the gist is that the bill contains a range of specific ethics reforms — for example, public officials must declare if any of their relatives work for utilities — and creates a Public Utility Ethics and Compliance Monitor to make sure utilities are implementing those reforms. In addition, each utility must appoint a Chief Ethics and Compliance Officer who reports to the ICC. ComEd is prohibited from forcing ratepayers to pay any criminal penalties or fines associated with its ongoing federal corruption probe.Excitingly for us utility nerds, the bill will end “formula ratemaking” — an opaque process whereby rates are automatically increased based on how much utilities are spending, with no need for approval from regulators — in favor of “performance-based ratemaking,” which ties utility compensation to a series of performance metrics such as “reliability and resiliency, peak load reductions attributable to demand response programs, supplier diversity expansion, affordability, interconnection response time, and customer service performance.” This is good stuff.An independent auditor will assess the state of the Illinois grid and the money spent on it over the last decade. Utilities will be required to file a Multi-Year Integrated Grid Plan that supports the state’s renewable energy targets. They will undergo yearly performance evaluations to track how well they are meeting their planning goals. Finally, and intriguingly, ICC will create a Division of Integrated Distribution Planning, meant to increase public input in local distribution grid decisions.Illinois is showing how democracy should workOver the last three years, climate hawks, environmental justice advocates, renewable energy developers, and labor gathered around a table and worked through their differences about the future of Illinois’ energy system, freed from the usual odious influence of utilities. It was an anxious, fractious, and often white-knuckle process, right up until the very end. No constituency got everything it wanted; each made sacrifices. I expect there’s still quite a bit of residual frustration and some fresh bruises that will take a while to heal. But to my outside eye, representatives from each of these groups can return to their constituents with heads held high. The bill is a model of non-zero-sum cooperation: every group gave a little to get a lot. A special shout-out goes to the environmental-justice community in Illinois, which used three years of relentless grassroots organizing to build an incredible political force, without which the bill couldn’t have passed and wouldn’t have been as equity-focused.For all the disputes at the margins, the resulting bill is momentous, a historic inflection point for Illinois. The state is now a national leader — and a challenge to the rest of the Midwest — in how to transition to clean energy while creating good jobs and lifting up those often left behind. An aggressive transition to clean energy can be good for the economy, good for workers, good for historically marginalized communities, good for the air, and good for the atmosphere. We can have nice things. More and more states are figuring that out. Congratulations to Illinois, particularly to its new generation of political leaders, for figuring it out with such populist flair. Get full access to Volts at www.volts.wtf/subscribe

In this episode, veteran solar advocate Adam Browning reflects on 20 years of running campaigns as the founder and leader of Vote Solar, one of the scrappiest and most successful solar advocacy organizations in the US. Browning, who is stepping down from leadership this year, helped grow the group from four people to 40, and along the way he’s learned a few things about how nonprofit campaigns can succeed against better funded opponents. Full transcript of Volts podcast featuring Adam Browning, September 17, 2021(PDF version)David Roberts:There aren't a lot of positive, hopeful stories competing for attention in the US these days, but one ray of light — if you'll pardon the pun — comes in the form of solar power. During the 21st century it has plunged in price, to the point that it is the cheapest available source of power in most big energy markets. Though it provides just 3 percent of US electricity today, analysts say it could provide close to half by mid-century. Adam Browning has lived through every stage of this extraordinary ongoing story. He co-founded Vote Solar, a nonprofit that advocates for solar energy at the state level, in 2002, to push for solar on public buildings in San Francisco. Since then, he has helped build a team of 40 people that operates across the country and has led numerous campaigns for state policy and regulatory changes. For as long as I’ve been doing energy journalism, I’ve known Adam and Vote Solar to be reliable sources — smart, practical, and results-oriented. I read all their emails, which regular listeners will know is high praise.Now, after 20 years, Browning is stepping back, shifting to an advisory role and handing off day-to-day leadership of Vote Solar. Given his long experience, I thought it would be interesting to talk to him about what he has learned, how much things have changed for solar, and where solar and climate advocacy need to go next. Adam Browning, welcome to Volts.Adam Browning:  Thanks, really pleased to be here.David Roberts:   You’ve been at this for 20 years now. Tell me the Adam Browning origin story. How did you gravitate to this particular field? It must have been relatively soon after you were out of college; it must have been one of the first things you did and stuck with it. Tell us how you got into all of this.Adam Browning:  You're too kind. My youthful demeanor — I’ll have to tell my stylist. It wasn't quite right out of college. I've never had a plan that I put into place; I've always moved from the thing that seemed really interesting to me at the time, and then was open to that next opportunity. After college, I did Peace Corps in West Africa, which was in many ways an incredibly formative experience, a moveable feast that I continue to look back on and think about, and that experience continues to nourish. After that, I joined EPA in San Francisco, the Region 9 office, and worked there for about eight years. The origin story — not of Adam Browning, but really Vote Solar, which is probably more to the point here — was really born out of spending a good chunk of time with the federal government doing environmental protection. I was doing a lot of enforcement and inspecting smokestacks, and fines were exceeding limits in some ways.David Roberts:   This would have been during the Clinton years, yes? Adam Browning:  Yes, and then a little bit of the Bush years. So that experience was a wonderful introduction to how environmental protection works and doesn't work in this country. When I was nearly 30, I had a beer with a college buddy, and he was working for then-San Francisco Mayor Willie Brown. This friend, David Hochschild, is now a California energy commissioner, the chair of the Commission. He had just put solar on his roof at home. At the time, solar was really expensive, and there wasn't much of it; it was very much a hippie pipe dream. But he put it on his house and was enthralled by it. And he was like, “Hey man, we should try to put this on City Hall. We need to have governments take the lead.” Through that beer and subsequent napkin diagramming, we came up with the idea of a revenue bond to put solar and energy efficiency on public buildings in San Francisco and then use the avoided energy costs, the energy payments, to pay down the bonds, so you have long-term, low-interest capital. It all penciled out. That turned into first a campaign to get it on the ballot as a ballot initiative, and then a citywide campaign to pass this ballot initiative. That was Prop B. This is back in 2001. That experience was really galvanizing, transformative for me in a couple of different ways. One: this idea of solar as an emission-free technology. I’d been spending all this time trying to control smokestacks; how about if we just didn't have any at all? That really dropped for me. Secondly, we had this campaign where you could actually do solar — then, again, really expensive — but we could do it cost effectively, the way that we'd had this scoped out. That just gripped the imagination. We had legions of volunteers throughout the city; people were really excited to be a part of something larger than themselves. That ballot initiative passed by 73 percent of the vote, which was really high in those days. Then we started getting calls from around the country — how can we do this in our city? — which was when we decided to quit our jobs and take this grassroots campaign to a much larger campaign. We had this theory, we had analyses that showed that the way to get cheap solar was through economies of scale: you needed to buy a lot of expensive solar, you needed to show a long-term market for this technology, in order to induce the manufacturers and would-be manufacturers to invest their capital into scaling up factories and the whole supply chain.David Roberts:   Solar has changed so fast: the technology, the prices, the social mores around it, how it's viewed. So take us back to 2002: Was anybody even thinking about solar? Was it viewed as just a hippie affectation? How much did it cost? What was the world of solar like in 2002? Adam Browning:  So back then, solar was about $9 a watt.David Roberts:   We're closing in on $1 a watt now, is that right? Adam Browning:  For the actual panels themselves, you're looking at 25 cents a watt. Utility-scale installations are well under $1. So essentially, nearly an order of magnitude less expensive right now. There was 163 megawatts total installed in the US. So, yeah, back in them old days, people knew of solar; I think it was understood as something that had some degree of promise, but again, the cost put it out of reach for being taken seriously as a long-term, significant portion of our energy resource.David Roberts:   So were people planning for it? Like DOE, when they did their projections at the time — were people saying it was going to grow into something big? Or was it viewed as a niche thing for the century? Adam Browning:  I would compare it to the algae that you see Exxon always advertising. It was ARCO and Mobil that had these investments in solar; Shell did as well. There were many really wonderful, well-meaning people involved in that, so I don't mean to diminish the seriousness of their efforts. There were a lot of oil majors that were investing in it. DOE was putting money into serious research and development. But it all seemed very far off. It was this thing that did not yet exist, and we all hoped that someday it would. Solar then suffered from the start-stop-start-stop of market incentives. Particularly in the California Central Valley, there were installations around with the large parabolic troughs, SEGS plants that had seemed promising, and as soon as everybody scaled up to respond to the incentives, they were then pulled. You never could take advantage of that momentum. So the early history of solar, again: a lot of research and development, not a lot of smart, long-term market support to bring it to scale. In early years, that underestimation of solar's potential really helped in many ways. Like when you scored the federal investment tax credit, no one thought it would really take off, so it scored really low, and that was actually helpful for it to go through.David Roberts:   So you have wildly expensive solar that you can make cost-effective in certain limited applications. You have cheap, patient capital and entities willing to wait for it. I'm sure it was just a series of short-term campaigns at first, but at what point did you have a long-term plan? In retrospect, was your plan as optimistic as reality turned out to be?Adam Browning:  I would say no, the plan was not as optimistic as reality turned out to be, although it was very specific and accurate as to what would happen. There are often times when you have policy that promises an outcome and fails to deliver on it; here was something that absolutely, bullseye. We had analyses of comparable technologies. Solar is basically a semiconductor; you had examples of integrated circuits that were developed and funded by the military, who was willing to pay an enormous premium in order to have a technology that was much lighter than the capacitors it replaced, and through that investment really brought down the cost through economies of scale. So we had examples of other technologies. We had this report from KPMG Netherlands that Greenpeace had paid them to analyze; it said, in essence, that if you brought about a global market that could support a factory that would deliver 500 megawatts a year of solar panels, you would be at grid parity. That was directionally accurate, but we now have factories that are much, much larger than that, of course. So the cost drop of solar exceeded expectations, though it was definitely bumpy. Even though we had predicted this effect by virtue of what these policies would do, this whole long-term market demand, at the same time, we didn't really anticipate that we would be passing legislation this quickly that would require 100 percent clean energy. Yesterday, the Illinois House passed, finally, a bill that will require 100 percent clean energy. It's expected to pass through the Senate on Monday. That makes the tenth state; well over 35 percent of the people who live in this country now live in a state where carbon-based electricity is illegal, will be legally mandated to phase out by a certain date. That's on the basis of having this scale availability of cheap, zero-emission power.David Roberts:   It was not that long ago that the idea that any governmental entity of any size would target 100 percent clean energy was absolutely out of the universe. Early in my career, I remember projections that solar would catch up around 2070; coal was still expected to dominate well past 2050. The scale of the changes is really hard to cram in your head. But now the energy wonk community has developed a pretty good sense of how you scale up a technology and make it cheaper. There's a more formalized understanding of that; solar is the model now of how you go about doing it. But of course, back in 2002, you didn't know that. So I'm curious, when you were thinking about advocacy, what was your plan? What was your instinct about what kind of policies would be both politically possible and efficacious at scaling this up?Adam Browning:  That's a great question. In the beginning, when we first launched, we were like, OK, we’ll do a bunch more of these city-led initiatives: the power of energy democracy to drive choice in energy supply. Solar was this perfect technology because it circumvented the decisionmakers; you could put it on your own roof, you didn't have to wait for the utility to make the right decision. You could take that power and do it yourself. So we initially said, we're going to do a bunch more of these city-led efforts. We got our grant from the Energy Foundation, $50,000, our first grant, and we started looking at some of these other cities, and it was like, oh, wait a minute. Actually, there is state-level policy infrastructure that enables people to be able to install solar upon their own roof and generate their own energy, and those were the preconditions for being able to do a city-led initiative. So that caused us to reevaluate our strategy and really focus on the state-level policy infrastructure. When you're looking at a solar market, you're only as strong as your weakest link. It's never the one thing; it is the four or five things that you have to link together. So one of the key insights that we had early on was that the solution was really at the state level; that was where most energy decisions are made, and you're much closer to democracy there. I don't know how to pass anything through the federal government. I don't know that anybody does. But at the state level, on the legislative side, you are much closer to being able to actually influence the outcome of legislative battles. The other large piece of this, of course, is regulatory, through the public utilities commissions. Our first effort was the California Solar Initiative. This was something that a wonderful advocate, Bernadette Del Chiaro, who headed Environment California then, had been working through the legislature for many years, and it kept not being able to pass. We then, in collaboration with others, worked really hard to get it through the California Public Utilities Commission. So you had then-Governor Schwarzenegger, who really stood out as a strong leader for this, establish a goal for a million solar roofs. It was an ability to get it through the public utilities commission to implement that — that ended up being about a $3 billion effort to incentivize rooftop solar with a really elegant market design through these declining incentives that got you down to grid parity, when you wouldn't need any incentives at all afterwards. David Roberts:   When did that pass? What year was that?Adam Browning:  It was around 2004, 2005, that we finally got those through. That was then also passed through the legislature afterwards and confirmed, which was quite helpful. But that was a really big eye-opener for policymakers and for energy nerds everywhere. That was a large chunk of money, designed to last over 10 years; that was this signal to the manufacturers of the world, to the installers of the state, that this industry, this market is going to be around. There is a commitment to it, time to scale up, go big. Then once you have the fifth-largest economy in the world commit to it, it no longer seems so esoteric. Both Japan and Germany then also were really strong leaders as well, so it was definitely a global effort. But California really helped catalyze that in the early 2000s with this type of campaign.David Roberts:   After California — which in terms of progressive policy, is the low-hanging fruit — did you continue on trying to expand in California, or did you move on to other states? What was the plan of attack?Adam Browning:  A little bit of both. There's a story of how you actually run and grow a nonprofit advocacy organization. So you are fundraising; philanthropy is the lifeblood of your efforts, and you have to be able to fundraise in order to feed your ambitions on this. For many years, we were two people, three people, four people. We were very small. It wasn't until 2008 that we were able to open an east coast office.So I would say, over the course of Vote Solar's history, we had a 70/30 split. The majority of our efforts were in places where we thought we could get traction, that there was a political appetite, that we could have a real line of sight to success. Then we spent a non-trivial part of our time in lonely places where there wasn't much going on, but if we didn't help catalyze, if we didn't plant the early seeds, it wasn't going to happen. Somebody needed to do it. We always wanted to be an organization where we weren't just, me too; we wanted to be involved in fights that weren't going to be won but for our involvement. That was why we also put so much investment in places that it took a long time, a long fuse to actually pay off. So immediately after California: Arizona, New Mexico, and some of these sunnier western states, then really invested in a lot of the east coast policy as well. We opened an office in New York in 2008. Then, gradually, a couple of the midwestern and southeastern states. It was the Turner Foundation that brought us into Florida and Georgia, where there wasn't much going on at the time. But we sent one of our best, smartest advocates down to scope out a plan for how we could help catalyze something in Georgia. That campaign was completely different from what we did and what we looked like in California, but in collaboration with some awesome local advocates, we were able to help move the needle there as well. We are now 40 people working in about 26 states across the country; over 20 years, that's been a lot of growth for a very different organization than we started. David Roberts:   To focus in on these early years: Were you 100 percent about advocating for policies? Was there any communications campaigns or, god forbid, awareness campaigns? Or were you a strictly policy advocacy shop?Adam Browning:  I think you've written beautifully about “change doesn't happen just because you're right.” So there's a huge power-building component to this. I can't overemphasize how much collaboration and partnership with local place-based, community-based organizations in everywhere we've worked has been absolutely crucial to success. Vote Solar as an organization brings pretty deep sophistication around solar policy and then brings some campaigning expertise, as well. So our model has typically been this inside-outside game, where if you're doing legislation, passing bills, you really need to power map who can actually get something done, what kind of campaigns are they going to be receptive to, building all the information necessary in order to get it passed, and then, of course, following the lead of the local organizations that have the relationships, that have the local voice, that have the power as to how that actually happens. Similarly, for the regulatory campaigns, these are legalistic processes in public utility commissions. You have to have a lawyer intervene, have standing, create a docket full of math, full of actual demonstration of facts. You never win just because you're right. You also, at the same time, have to build an outside game, a parade that these policymakers can jump in front of and be responsive to. You need to make sure that policymakers know what the public wants and that they feel accountable to answer to them. That takes a lot of communications work, a lot of grassroots organizing work, a lot of partnership with community-based organizations. Increasingly for us, this has been also about environmental-justice communities. Over the past five years, everything that we have done has been with equity groups and environmental-justice campaigners, listening to them, establishing partnerships with them, and following their lead on these campaigns.David Roberts:   Over 20 years, you’ve run a lot of different campaigns in different places with different people you're targeting. If you had to generalize, what is it that makes a campaign successful? What are the markers that distinguish your successful campaigns from the unsuccessful ones? What needs to be in place?Adam Browning:  Winning, for one. But that's a little too flip. I actually love campaigning, and the parts of it I like are finding creative ways to get people engaged. So much of environmentalism has been about no, and not about, but what do we say yes to. So an organizing ethos of Vote Solar was centered on, this is something that people want. In fact, we poll around the country, and this has been consistent over the past 20 years with some fluctuation in the numbers, but directionally, supermajorities of people in this country on both sides of the aisle want to see this transition.David Roberts:   This is something that is utterly remarkable about solar, and, especially in 2021, almost unique: It polls through the roof. It always has. Were you ever surprised by how resilient and broad that support is? It seems to defy political gravity in a way almost no other issue I can think of does.Adam Browning:  It is remarkable, and we always tried to lean into that by letting people bring their own reasons for why they should go solar to the campaign and not defining it for them. In places with different political outlooks, different hues, the words that we used were different. Some places, this is about freedom; some places, it's about jobs; other places, it's about climate. You need to be very thoughtful as to how you talk about the rationale behind it, but we generally tried to leave a space where people could bring their own rationale. They like solar, we're not going to tell them why they like solar. Let them bring that to the campaign itself. To further reflect on your initial question around what distinguishes a good campaign, I think a good campaign engages people. Positive messaging, giving people that positive alternative, what we want to do, a bright outlook — people want to be a part of something larger than themselves. I think that is a core insight into the human psyche. David Roberts:   I've heard a lot of people around campaigning and the activist world say some version of: it's easier to make people angry than it is to get them to support something. It's easier when you have a clear thing you're saying no to. Do you think that's wrong? Or does solar just have some sort of magic fairy dust that switches that over? Adam Browning:  What you describe certainly powers most of my political giving and my presidential election campaigning on my personal side, so I definitely feel you, I get that. I'm not immune to that. We definitely articulate, ”Why aren’t we seeing more solar? Who's blocking it?” and it definitely creates the accurate picture of why we're not seeing more. You can campaign against that. That said, we've done things like had billboards outside of the Capitol that had the tagline, right after the Gulf oil spill, “When there's a huge spill of solar energy, it's just called a nice day. Yes on bill X.” That got in the paper and had ripple effects. We had airplanes pulling sky banners that said, “This is the prescription for oil addiction” at the same time that we had large rallies with people dressed up in doctor outfits. I guess you had to be there, but it was funny at the time. We tried to work in Texas; Texas is a hard place to work. But we were sponsoring a bill and did analysis that showed how many jobs there would be if this bill passed, and then we ran ads in the Midland newspaper saying, “Help Wanted: 10,000 workers for the solar economy. Call the legislature and tell them to pass X.” Again, that then turned into a press piece on witty campaigns that had a much larger impact than the $230 for that help-wanted ad in the Midland Tribune. So those were parts of the campaigns that I really enjoyed.The thing about nonprofit campaigning is, you are always going to be outspent. You are always going to be out-lobbied. You need to figure out how to bring people-power to it. That is the part that I have enjoyed the most: solar in so many ways is democracy in energy and environmental decisionmaking. We’ve tried to make that true.David Roberts:   I have been gritting my teeth waiting for polarization to swallow solar’s popularity too, as it has swallowed everything else in our public life. But as far as I can tell, it's mostly held up. I’m wondering if you’ve seen any movement in that direction; are you seeing it start to polarize? Are you seeing it associated more now with democratic socialism whatever, or is it still defying political gravity?Adam Browning:  I don't think solar is immune, per se, to being attacked, to politicization. Look at Solyndra, which was an absolutely manufactured scare-quotes scandal of an entirely successful program that made money for the American people. That wasn’t organic, that was — as many things in our politicized culture — advocacy-driven, cynically so. But I have not yet seen this. Right before the 2016 election, in September, there was a Pew poll that showed that 87 percent of would-be Trump voters supported solar and 92 percent of would-be Clinton voters supported solar, despite the obvious division between the two. I do think that solar needs to continue to earn and hold its social capital and abandons that at its own peril. I do think part of the pathway forward is trying to recapture manufacturing for just that reason; we cannot offshore our supply chain if we expect solar to supply nearly half the power of this country going forward, which is why I think passing the Ossoff bill is absolutely critical. It's our last hope for reshoring the manufacturing.David Roberts:   That's a great segue to my next question. The solar campaigns focused heavily on state-level policies: net metering to encourage rooftop solar, renewable portfolio standards to ramp up the percentage of solar. Those have been wildly successful; as you say, something close to half the population lives in a state now with these requirements. You have the policy pull for solar in place. So what's the next frontier for solar advocacy? Is it a turn to manufacturing and materials? Where do you see it going?Adam Browning:  There are three main things, and I could keep adding on, I could go to 10. But let's just stick with these three right now. One is: the original premise behind my thinking around Vote Solar is, once you made it cheap, it would just continue under the gravitational pull of economics. Solar PPAs right now in sunny spots are like 2 cents per kilowatt hour. They're just crazy, it's awesome. Yet you still see places where they are trying to build ginormous new fossil fuel. Duke Energy, for example, largest utility in this country, knows very well how cheap solar is. It's made these public commitments to net zero by 2050. Their press announcements are wonderful; their plans that they file with regulators tell a very different story. They're trying to build massive amounts of new gas plants. It is still necessary for advocacy to have a seat at the table and drive deployments. We just saw the DOE come out with their solar roadmap for 40 percent by 2035. That will require, according to their numbers, 30 gigawatts a year of solar deployment through 2025 and then 60 gigawatts a year through the next decade after that.David Roberts:   For reference, it's about 15 GW a year now. So we have to double that for the next five years, and then double that for the next 15 years to get to that target. It's pretty big.Adam Browning:  It's all totally doable, but it won't just happen because it's cheaper and cleaner. There are still entrenched interests that want to continue to profit from the fossil-fuel infrastructure and legacy that we have.David Roberts:   When I say to people that it’s cleaner and cheaper, their natural first question is, well then why isn’t everybody already doing it? In a market, it's capitalism, economics ought to be dictating things; at least that's people's intuitive sense of it. So what are those forces now causing utilities or states to still push for fossil fuels, even if it is true that they could get cheaper, renewable energy?Adam Browning:  I think there are two things here. One is, in much of this country we have vertically integrated utilities. That is to say that you have a monopoly: they own the wires, they own the generation, and they in essence get paid based upon how much capital they deploy. There are regulators that are there to approve their investments as prudent and in the customers’ best interest, but there is a real capital bias towards getting a return on equity for how much money they spend. So that's a big part of it. The other part of it also leans into ease, or laziness. When we go into an integrated resource plan, this is when a utility says, “We want to build X,” and if it's gas we'll say, “Well, renewables are cheaper.” First they say they want to do it for economic concerns; then, when we show them renewables are cheaper, they next say, well, we need it to keep the lights on, we need it for reliability. So the moat we have to cross here is cost, but that's the real castle keep: reliability. Because for policymakers, this is a career-ending thing to get wrong. It's a big trump card they play. I was going to lay out the three things that we need to work on: We can run a system nationally with majority renewables in terms of variable generation, and we need to make some changes to make that work. We need to introduce a lot more flexibility into the system. Partly that's batteries; partly that is a focus on demand flexibility, essentially paying people to change when they charge or give them incentives to be good grid citizens. We can talk more about that if you’d like. It is also to some degree some transmission that helps expand balancing areas, interconnects the load centers with the best generating profile. So the reasons why we don't see this happen just because it's cheaper and cleaner and better for everybody have to do mostly with economics, in terms of perverse incentives inside of utilities. It is a lot easier to have a gas plant; you just flip a switch on rather than transforming the system to be more flexible and resilient.David Roberts:   OK, so you said three areas for solar advocacy these days.Adam Browning:  The last — I should have led with it as the number one — is inclusivity. As we make this transition from fossils to renewables, we absolutely have to make sure that it benefits and includes everybody. We cannot continue to replicate some of the inequities of our fossil fuel system. Over the past five-plus years at Vote Solar, we've completely changed how we go about planning our campaigns, how we go about the policies that we work on, and it has really benefited everybody by making this transformation. When we look at some of these largest, most comprehensive climate bills, none of these would have happened if it weren't for the leadership of the environmental justice community. This goes from California’s SB100 to the New York Climate Leadership and Community Protection Act, to, as of this week, the Climate and Equitable Jobs Act in Illinois. Across the board, beginning with developing partnerships with the communities that we wish to serve, co-creating the policies to make sure that they include benefits for everybody that everybody can participate in, just builds these much stronger, much more powerful coalitions that can get big things done. I firmly believe that this is the path we need to double down on as we continue to move forward in getting that further deployment of solar. Broadly speaking, the more beneficiaries, the more power building you have in order to make big changes happen.David Roberts:   Solar is everybody's favorite success story. It's one of the few things that give me any hope at all. The tech and the economics and the advocacy all worked together really well for solar, in such a way as to really turbocharge it, and it's been amazing these last 20 years. But of course, solar is not the only thing we need for climate mitigation. So how much of solar’s success is unique to solar? This adaptability to different values, this image of wholesomeness that is seemingly undentable: how much of what has made solar advocacy work can be transferred to other pieces of the puzzle that we need for clean energy, like home power management and storage? Is solar's mojo transferable?Adam Browning:  Yes — and, that's a two-part question. One of the things that's been awesome about solar is these monumental cost declines, from something that was 10 times more expensive than the alternative to something that is quite a bit cheaper than the fossil alternative. Can you see similar cost declines in other climate-necessary technologies? I would argue, absolutely. I would also argue that longtime readers of Dave Roberts will know that the path forward for success is to electrify everything and run it all on renewables. So having this cheap renewable energy is a foundation for our hopes in other sectors as well. But if you're looking at mobility, batteries have come down 87 percent in the last decade, and they are far from done yet, both with the battery technologies that are currently extant and the new ones that are all being worked on. I think you could make a similar argument for the electrification of buildings, for heat pumps, which are nascent.David Roberts:   Make heat pumps as sexy as solar, Adam. That's your next goal.Adam Browning:  Sexy is one thing, but the first question is, can the technology get cheaper through scale? Absolutely. Both the hardware as well as all the soft costs associated with the workforce knowing what the heck it is and then being able to efficiently install it, removing all the bugs and the permitting and etc. So there's a ton of work that can be done to reduce those costs. The other part of this — and I think the key to sexiness — is, does it make your life better? Tell me, what's Tesla's advertising budget?David Roberts:   Right. Zero.Adam Browning:  They shoot a car into space and they go on Twitter, and that's it. It has zero advertising budget because it is absolutely compelling. All the reservation lines for the Rivian trucks; the F150, when they went electric and you could charge your house with it, their reservation lines were absolutely huge. I went to the launch of the Tesla Model 3, and nobody had ever seen a picture of it, no one knew how many wheels it had, and Elon got over a billion dollars worth of free money in terms of $1,000 down payments on reservations. Before anyone had even seen a picture of it! So yes, at least in vehicles, it's definitely sexy. When it comes to home automation: I'm a customer of OhmConnect, which is this company that's trying to help reduce grid costs when the grid needs it most. First it was just by changing behavior, sending people a text and asking them to turn off lights. But now, all my major loads are on wifi-enabled plugs, and when the grid needs it, it automatically turns off my freezer, turns off my fridge. Now, when my kindergartener daughter opens the fridge door and the lights don't go on, she's like, “hey, Daddy, it's an Ohm hour.” We all know every time that happens, for every 15-minute increment, we're making a quarter. Every time they touch our Nest, we're making 75 cents. So you can expect to make somewhere around $300-$400 a year. You don't lift a finger, it's all automated. So, is getting paid to do nothing sexy? For some people, it is. David Roberts:   Yeah, that's my dream. Have you changed your mind at all about the state focus? If anything, it seems even more apt now than it was when you settled on it. Is that still your primary hope for climate progress?Adam Browning:  We do have a generational opportunity right now to get something done with this Congress, especially if we were to get rid of the filibuster, as longtime listeners and readers of your insight well know. I do think there is a way to get to what would effectively be an iteration of what has worked so well in the states: a federal standard for clean energy. You could make that happen. The entire Biden administration has surprised me with their ambition, and it is just rife with superstar leaders. I'm a committed west coaster, but I definitely have some FOMO; working with those people would be awesome. So this is the best scenario that we're going to see on the federal level that we could possibly imagine for quite some time. We've had a longstanding rule of thumb that if your plan involves the federal government, or if your plan involves Congress, you're gonna need another plan. That has always stood us in good stead. But with Jigar Shah over at the Loan Program Office, they're doing some really cool and innovative financing that will create some durable models that will exist beyond his tenure there. The federal government has a lot of money and a lot of power and can do a lot of good; getting stuff through Congress is just another matter entirely. So let's hope we can get something through, but then double down on the states. We're going to continue to have to have state-level advocacy going forward, and we have proven time and time again that you can make big things happen that will have additional impacts elsewhere: by bringing down costs; by bringing the jobs that will, again, impact places where you're not doing it directly; by advocacy; with solar, solar is cheap. There are utilities in Indiana right now that are going ahead and doing their own math and really digging deep on solar, and you just love to see it.David Roberts:   I want to ask about your experience founding an organization and then running it for 20 years as it grows from two people to 40. Navigating that shift, from “we're a tiny band of people who all know each other and are good friends” to an actual organization that’s something like a bureaucracy with levels and managers, is a very difficult transition no matter what you're doing, but especially in the nonprofit world, which is difficult to survive in the best of circumstances. What do you feel like you've learned about how to build an organization? What have you taken away in terms of managerial wisdom?Adam Browning:  That is a great question, and we could do another hour podcast on just that. I don't think that this is something unique to the nonprofit side; there's a literature replete with founders that are good at starting things and less good at scale. For me, I didn't have many models of what a good boss looked like, what successful management structures look like. That was exactly it: we began as a couple of passion-driven, like-minded people, and then grew. There were three, maybe four, big step changes of complexity, where what worked before broke and I had to either learn something new or get out. I tried to take that seriously, to continuously ask myself, am I the best person to run this organization right now? I had to grow a lot. I had to learn a lot of new skills. I had to learn a theory and practice of management that I was not born with. It has been far from a smooth road, but it's been a lovely road full of a lot of those learnings that we've all grown from.But you’ve got to fundraise all the time, and you have to show success in order to be a successful fundraiser all the time. It’s part of what it means to run a nonprofit. Some of the historical regrets I've had were, frankly, being so far attuned to looking at all the external opportunities and wanting to have impact and knowing that I could make change if I hired another campaigner here, or regulatory person there. I wish throughout I had invested a lot more on infrastructure, on the human resources side. We had so many lovely, idealistic, mission-driven people that were constantly overextended and overachieving under budget. There's just a lot more foundational work to a larger organization that I wished I'd invested in earlier. As I step down from Vote Solar, I want to put in this plug: as we look back over this history of success and achievement, this is not my success and achievement. There is such a legacy of awesome alumni and current team members that have made all of this happen. So the extent that I was able to do this was my ability to provide the resources and then to get out of the way of wonderful people doing wonderful things. Trust your people, give them the resources they need, figure out what is blocking them and what their problems are, and then focus your effort on fixing those. That would be my best lessons learned.David Roberts:   What is it from all this experience that you would like to jump back into and do again? Or, what is it that you are looking to do differently now that this 20-year chapter is over?Adam Browning:  That's a great question. For me, the time is ripe right now for me to step aside for a couple of reasons. One is, I do want some new adventures, some new experiences. I am so grateful for this experience, it has been a labor of love every step of the way. Yet I also have a feeling that I want to take on some new challenges. The flip side of this is, it is time for some new perspectives, some new voices, someone with radically different life experiences that looks at the world in a different way to have a chance at running what I think is an incredibly impactful organization. I am encouraged by that type of change. I think it's healthy. As I've shared my decision internally, it's been like a jolt of adrenaline running through the entire org as we've seen everybody step up, step in, and step forward with their individual ways of leadership. It's just lovely to see. I think this is going to be healthy for this organization that I will continue to support for the rest of my life, and I encourage everybody else to do so, because it is a necessary organization going forward; I'm just not necessary to it, is what I came to the conclusion. For me, I’d like a little rest for a bit. This fall isn't in the end turning out to be like I thought it would be, travel isn't in the cards for me right now. But that's OK. I also find I am invigorated by the challenges of climate, I am going to stay in the climate space. I am definitely mission-driven on this front. Look at what we did collectively around solar: there was something that needed to exist but didn't yet, and with a global campaign, we made that happen. There are a lot of other similar blank spaces in the climate sphere, things that we know need to exist, but don't yet. That's where I'd like to focus my efforts. I feel like I'm an entrepreneur at heart. I am kicking around some private sector ideas that I’m going to look to pursue. My entire life has been on the public service side, and I think I would like to try the private side. But in my heart of hearts, I'm a campaigner, I'm an advocate, I love the rush of going out against all odds with the plucky band of joyful solo warriors and winning.David Roberts:   If listeners are looking to get into this the same way you did 20 years ago, where are those blank spaces where they could make a real impact?Adam Browning:  There's a lot of people that will have their own list of these, depending on how far you pull back the lens. I'm on the board of this awesome organization called Power for All, which is in many ways Vote Solar but for the billion people on this planet that don't have any access to electricity at all. There is the ability and the potential to bring decentralized renewables to provide electricity and electrified services in many different business models. It's just an incredibly dynamic space. That is a passion project of mine. When I look closer to home here, the challenge of introducing flexibility into the grid, whether it be through storage or demand response, it does feel nascent compared to where it needs to be. If you read the RMI reports on clean energy portfolios, I'm absolutely convinced that demand response is a gas killer. We need to have it. The policy models for it feel like solar 2007: there's competing different business models, we do not have good transactional space for the value that it can bring. That's a policy problem that needs to be solved. The opportunity for huge scale is there, but there's a lot of roadblocks in the way. I look at electrification of transportation. I'm not a super car guy, but I do think that this premise of interconnecting tons of really large batteries onto the grid provides an opportunity for solving so many other problems, through managed charging as well as potentially, in the future, vehicle-to-grid charging, and a couple of other things besides. That is an enormous opportunity for bringing in efficiencies and bringing down costs for participants and nonparticipants alike that needs a lot further exploration. I could go on and on. But those are some of the ones that are top of mind for me right now.David Roberts:   Well, thanks for that perspective, that's really interesting. Maybe in 20 years, there'll be another Adam at the end of another 20-year career and we'll find that demand response is sexy and ubiquitous.Adam Browning:  You know, here's hoping.David Roberts:   Thanks so much, Adam, for taking the time, and thanks for your 20 years of work.Adam Browning:  Both this hour and the past 20 years have definitely been my pleasure. David, thank you for being such an incisive and insightful reporter in this space. No one does it better than you. I've enjoyed reading your stuff for the last 20 years as well.David Roberts:   Well, I'll get you that check later. Thank you for that. Thanks a lot, Adam. Goodbye.Adam Browning:Take care. Bye. Get full access to Volts at www.volts.wtf/subscribe

After months of anticipation, Democrats have begun to reveal pieces of their upcoming Build Back Better Act (aka the budget reconciliation bill), including the key clean energy provisions. On Monday, the House Energy and Commerce Committee began markup of its full set of recommendations for the bill. Meanwhile, the House Ways and Means Committee released its draft tax package for the bill, including the clean energy tax credits.As negotiations around the reconciliation bill move forward, I’ll have more to say about the politics, economics, and larger implications of all this Democratic energy policy. For now, I just want to get the specifics on the record. For one thing, there’s a lot of policy here, and it will take some time to think it through. For another, it will be important to track what gets added and (more likely) cut when the bill goes to the Senate, so this post can serve as our baseline for comparison.Let’s start with Energy and Commerce and its Clean Electricity Performance Program (CEPP), arguably the most important single piece of energy policy on offer.E&C: the CEPP and some other good spending (For a quick introduction to the CEPP, see highlights from my interview with Sen. Tina Smith.)The $150 billion CEPP would offer grants to utilities that increase their year-on-year share of clean energy by at least 4 percentage points; it would charge fines to utilities that fall short of that goal. (“Utilities” here includes any and all end-use electricity providers: vertically integrated utilities, investor-owned utilities, co-ops and munis, etc.)For the purposes of the bill, “clean energy” is energy that emits no more than 0.1 tons of CO2-equivalent per megawatt-hour of electricity generated. This 0.1t/MWh threshold is notably stringent — it would exclude all fossil fuels and biomass unless they are equipped with carbon capture and storage.The grants are based on a somewhat complicated formula: $150/MWh x (YoY percentage point increase in clean share - 1.5 percentage point) x total retail sales.Say a utility boosted its year-on-year clean share by 5 percentage points. Five percentage points minus 1.5 percentage points is 3.5 percentage points. So the utility would get a one-time grant of $150/MWh for 3.5 percent of it retail sales that year.The formula for the fines is: $40/MWh x (4 percentage points - YoY percentage point increase in clean share) x total retail sales.Say a utility grew its share 3 percentage points. Four percentage points minus 3 percentage points is 1 percentage point, so it would pay a one-time fine of $40/MWh for 1 percent of its retail sales. (The exception here is utilities with a clean share at 85 percent or above; they are exempt from fines, but still eligible for grants.)A utility is not allowed to fall steadily behind; any shortfall is added to the following year’s target. If it only hits 3 percentage points growth one year, the next year a utility must hit 5 percentage points growth. Utilities can choose to tally up their performance over a two- or three-year period, to smooth over year-to-year spikes or valleys; for instance, if a utility hits 3 percentage points in year one and 3 percentage points in year two but 6 percentage points in year three, it averages out to 4 percentage points a year and it receives the grants.This is all a bit convoluted; it would definitely keep accountants and lawyers busy. There are five things worth noting about the CEPP at this point.First, $150/MWh is real money. Spread out over a 10-year power purchase agreement (PPA), it’s about $15/MWh/year, not that different from (but additive to) the clean-energy tax credits. That, coupled with the tight definition of clean energy, makes this a relatively strong offering, design-wise. Second, a lot of details would be left up to the Department of Energy, which would administer the program, such as how distributed and behind-the-meter resources will be counted, how much compliance can be done through renewable energy credits (RECs), and so forth. There are lots of devils in those details.Third, it is not accurate to say that the CEPP targets, much less guarantees, 80 percent emission reductions in the electricity sector by 2030. That is Biden’s goal, and the aspiration for the full suite of policies Dems are trying to pass, but the CEPP, by design, does not guarantee any particular outcome. How would utilities respond to this level of incentives and fines? We hope to find out! It’s a new program; it’s never been tried before. (It would kick off in 2023.)Fourth, a study by the independent firm Analysis Group found that, through 2031, the CEPP would expand the US workforce by 7.7 million new jobs, add $907 billion to the national economy, raise $154 billion in tax revenue, and lead to over 600 gigawatts of new clean energy. It’s not a cost, it’s an investment.Fifth, there’s no guarantee Sen. Joe Manchin (D-WV) will let this pass unmolested, or let it pass at all. He chairs the Senate Energy and Natural Resources Committee, which will be marking up the energy parts of the bill. He could kill the CEPP. He could weaken the carbon-intensity requirements to allow for dirtier energy; he could lower the required rate of clean energy growth; he could reduce the incentives or the fines. Nobody knows what Manchin will do, or why, so we’ll just have to wait and see.Also! Other items worth noting in the E&C package. * There is $9 billion for home energy retrofits — $2,000 rebates for projects that save 20 percent relative to average energy use, or $4,000 for 35 percent. (Both numbers are doubled for low-income projects.)* There’s another $9 billion for home electrification — $3,000 per heat pump with greater than 27,500 BTU-per-hour capacity and $4,000 if it's cold-climate rated; $6,000/$7,000 for low-income projects. For heat pumps under 27,500 BTU/hour, it’s $1,500/$2,000; $3,000/$3,500 for low-income projects. In that same section are rebates of $1,250 per heat-pump water heater, $3,000 per smart electric panel, and other, smaller grants for electric stoves and dryers.* $13.5 billion for electric vehicle infrastructure, focused on underserved areas.* $5 billion to replace heavy-duty vehicles like fire trucks and school buses with zero-emission vehicles.* $9 billion for electricity transmission, including funds for DOE’s transmission planning and modeling capabilities and for state transmission planning processes.* $17.5 billion for decarbonizing federal buildings and fleets (including, one hopes, the Postal Service fleet).* $27.5 billion for a green bank, which we’re not supposed to call a green bank, but rather “nonprofit, state, and local climate finance institutions that support the rapid deployment of low- and zero-emission technologies.” (40 percent goes to vulnerable communities.)* $2.5 billion for low-income solar.* $5 billion for community-led environmental and climate justice programs.* An unspecified methane fee on leaked methane (which the industry is furiously lobbying against).All these numbers are, based on the need, too small — especially the retrofit and electrification numbers. The heat pump money, for instance, is likely to be used up after a year or two.Nonetheless, with a limited pot of money, E&C Dems have managed to cover quite a few bases. Let’s move on to the Ways and Means tax package.W&M: a bonanza of clean-energy tax creditsThe tax package, which itself only covers a limited subset of policy areas, is a monster; even the section-by-section summary is 41 pages long. The green energy part (subtitle G) starts on page 9. It is basically a long list of technologies and practices that will receive tax credits.Before getting to individual items, it’s worth noting three intriguing provisions that apply to all the credits.First, there are now strong prevailing wage standards built in. To receive the full value of the credit, a project must show that it is paying prevailing wages and using qualified apprentices; without doing so, it can receive only a fifth of the credit value (called the “base rate”). Second, projects that use domestic content — defined as 55 percent of total project cost from made-in-USA components and services — can get another 10 percent on top of the value of the credit.These are important policies for the domestic workforce, drawn from successful states (like Washington), and will increase the amount of credit value that goes to good US jobs and supply chains. Third, the energy tax credits are now “direct pay,” which means projects can get the full value without having to offset it against taxes owed. This opens up the credits to many more projects and eliminates a lot of wasteful lawyerly games around tax equity financing. (Note: the percentage available for direct pay declines over time for projects not using domestic content.)On to some of the individual credits:* The production tax credit (PTC) would be extended through the decade. It would go to qualifying clean electricity sources — wind, solar, geothermal, landfill gas, methane gas with CCS — based on MWhs produced: $25/MWh ($5/MWh base rate). * The investment tax credit (ITC) would also be extended; it would be available to solar and geothermal, and now, as of this bill, energy storage, biogas, microgrid controllers, and, uh, “dynamic glass.” It would cover 30 percent (6 percent base rate) of the cost of a project. (A solar project could choose the PTC or ITC, but couldn’t get both.)* A bonus ITC would be available to projects that locate in a low-income area (additional 10 percent) or are themselves low-income benefit or housing projects (additional 20 percent). This is an excellent way of building environmental justice into the tax system.Note: both the PTC and ITC would be restored to their full original value, higher than any current credit, and extended through the decade. This is a very big deal.* The electric vehicle (EV) tax credit has been revived and expanded. It would now be fully refundable and no longer limited by manufacturer. It starts at $4,000 per vehicle; for vehicles that go into service before 2027, there’s an additional $3,500 (that’s $7,500); for vehicles built at a US assembly plant with a union-negotiated collective bargaining agreement, there’s an additional $4,500 (that’s $12,000); for vehicles assembled at plants that use at least 50 percent domestic content, there’s an additional $500. So, for a domestically manufactured, domestically sourced EV purchased next year, the total available credit is $12,500 (limited to half the vehicle purchase price). That’s huge!Note: The EV tax credit would be available only for vehicles under specific price limits: $55,000 for sedans, $64,000 for vans, $69,000 for SUVs, and $74,000 for pickup trucks. Also, the amount of available credit phases out quickly for joint households above $800,000 income, or single households above $600,000. In short, the credit is meant to be available primarily to middle-class voters buying mid-range EVs.Note 2: Automakers that use non-unionized workforces, like Toyota, Honda, and Tesla, are furious about the union provisions. The awkward truth is that some of the best automakers on EVs have been non-union, while union shops like Ford and GM have been among the worst. It’s a bit of a dilemma for progressives. * There is also a credit for commercial EVs, worth up to 30 percent of vehicle cost.* Happily, there’s a credit for used EVs, ranging from $1,250 to $2,500, depending on battery capacity; the credit would be capped at 30 percent of the sale price, for vehicles costing no more than $25,000 and at least two years old.* Even more happily, there’s a new electric bicycle credit, worth 15 percent of the purchase price. The max available credit is $1,500 (joint filers can use it toward two bikes). The credit starts phasing out at incomes above $75,000; the maximum total price of a qualifying bike is $8,000. Note: Folks are grousing on Twitter about how much more generous the EV credit is than the bicycle credit, and how the bicycle credit should be bigger, and how absurd it is to means-test a friggin’ bicycle credit, and they’re right about all of it. Still, it’s nice e-bikes at least got a nod.* The 45Q tax credit for carbon capture, utilization, and storage has been extended through the decade: $50 per ton for sequestered carbon dioxide; $35 per ton for use of CO2 in products or enhanced oil recovery. * Added to 45Q is a new $180-per-ton credit for direct air capture of CO2.* Hooray, a new investment tax credit for transmission lines! Lines of at least 275 kilovolts, capable of carrying at least 500 megawatts, placed in service before 2032, receive a credit worth 30 percent of project costs. (Read my transmission series to understand why this is a good thing.)* Also worth cheering, though more controversial: a production tax credit for existing nuclear power plants, calculated via a formula I do not pretend to understand.* A new sustainable aviation fuel credit would offer $1.25 per gallon for aviation fuels that cut lifetime GHG emissions (vs. jet fuel) at least 50 percent, with another penny per gallon available for each percentage point above 50. * A new clean hydrogen production tax credit would offer $3 per kilogram to hydrogen with 95 percent fewer lifecycle GHG emissions than hydrogen made through the currently dominant method, steam reforming. That could include hydrogen made through electrolysis driven by renewable energy or through biomass gasification with CCS. Credits of $0.60 to $1.02 would be available to hydrogen with between 40 and 95 percent fewer GHGs, which could include “blue hydrogen” made by steam reforming with CCS. * There are credits for energy-efficient homes, up to $2,500, with a bonus tier of $5,000 for certified zero-energy homes.* The clean manufacturing tax credit (48C) has been extended. It would offer up to 30 percent of the value of investments in clean manufacturing facilities, i.e., facilities manufacturing solar panels, wind turbines, EVs, batteries, etc. $400 million a year of the credit money would be reserved for projects in “automotive communities.”* A credit for environmental justice programs would distribute $1 billion a year, on a competitive basis, to institutions of higher learning that gather data to help improve environmental justice outcomes. Notably missing from this list is any reduction in fossil fuel subsidies. This is frustrating, since less than 24 hours before the package was released, Senate Majority Leader Chuck Schumer was saying, “we need to take away all the subsidies for oil, gas, and coal. We will have that in our bill.” (It’s at minute 26 of this video.) Where did the subsidy cuts go? Who took them out? Anyway, all told, the Joint Committee on Taxation estimates that the Ways and Means tax package would cost $1.2 trillion over 10 years; the “green energy” subtitle would account for $235 billion. Of course, that’s just an estimate — it could be lower or higher in practice, depending on the uptake of the credits and the growth they spur. Now let’s see how much survives the SenateLike I said, there will be more to talk about as the bill is negotiated. For now, I’ll leave you with three observations.First, is this enough? Ha ha, no. No climate policy is ever enough. This is far short of the $10 trillion that would be needed for a true Green New Deal. It’s far short of the $6 trillion bill Sen. Bernie Sanders first proposed, back in June. It is, from a climate perspective, a ludicrously low level of investment and mobilization. Nonetheless, this is what the lamentably small group of climate-focused legislators were able to squeeze from a chaotic process. This is a reflection of the relative weight climate carries in the House. Second, this is the high-water mark, so enjoy it while it lasts. Sens. Manchin and Kyrsten Sinema (D-AZ) are going to try to hack down the overall level of spending, and Manchin has already signaled his intention to go after some of the energy provisions, including the CEPP. I have no idea what will happen in the Senate — my brain is tired from trying to predict — but given that Manchin is involved, it’s likely to be unpleasant.Third, I know this isn’t helpful right now, but damn is it stupid for a wealthy democracy to make policy the way we do. Because every policy of any size has to be crammed through the budget reconciliation process, it all ends up in the tax code, a complicated skein of credits and loopholes that encourages rent-seeking and keep armies of lawyers employed. This is not how any energy wonk, including the energy wonks on Democratic congressional staffs, would write policy if offered a blank sheet of paper. It is kludge upon kludge, a Rube Goldberg mechanism reverse-engineered to conform to anachronistic budget rules administered by a parliamentarian-cum-shaman. But it is what’s possible now. American democracy is staggering, barely upright, and people of good will are scrambling to do the best they can under the circumstances. There’s no time left for infighting. Let’s just get this thing over the finish line. Get full access to Volts at www.volts.wtf/subscribe

As a dog walker and kitchen cleaner, I listen to a lot of podcasts. One that I’ve been enjoying quite a bit lately is Know Your Enemy, which bills itself as “a leftist's guide to the conservative movement.” Sponsored by Dissent Magazine and hosted by Matthew Sitman and Sam Adler-Bell, it typically interviews experts, analysts, and activists about the current (lamentable) state of the US conservative movement. It is unusually smart and thoughtful, offering more illumination than rage bait.Recently it had a different kind of episode: a pod on climate change. The guests were Daniel Sherrell, an activist and organizer who just released a book called Warmth: Coming of Age at the End of the World, and Dorothy Fortenberry, a playwright and television writer currently working on Extrapolations, an upcoming limited series for Apple TV+ that focuses on climate change.I’ll be honest: I don’t typically enjoy climate change content. It’s mostly a bunch stuff I already know, arguments I already agree with, and exhortations I don’t need. But this one was different. Rather than focusing on politics, policy, or science, it’s about, well, living with climate change. How to think about it. How to acknowledge its horror and weight without being crushed and immobilized. How to make fiction about it. How to imagine a future in its shadow. Lots of philosophical and even spiritual stuff that I haven’t focused on much here at Volts.Anyway, I asked Matthew and Sam if I could share it with Volts listeners and they were kind enough to say yes. It is long, but rich and full of interesting ideas. I hope you enjoy it. Don’t forget to support Know Your Enemy on Patreon! Get full access to Volts at www.volts.wtf/subscribe

In this episode, Sen. Tina Smith (D-MN) discusses a policy that she has proposed in the Senate and is working to get included in the upcoming reconciliation bill: a Clean Electricity Payment Program (CEPP), which would aim to reduce carbon emissions in the US electricity sector 80 percent by 2030. She also shares some excellent thoughts on the filibuster!Full transcript of Volts podcast featuring Sen. Tina Smith (D-MN), September 1, 2021(PDF version)David Roberts:There are lots and lots of policies being discussed for inclusion in the Democrats’ upcoming budget reconciliation bill, from a childcare tax credit to universal pre-K to a wide range of climate and clean-energy measures.According to the office of Senate Majority Leader Chuck Schumer (D-NY), the climate provisions in the bill would collectively reduce total US greenhouse gas emissions 45 percent below 2005 levels by 2030 — getting us close to America’s Paris agreement pledge. Schumer’s numbers have not yet been backed up by outside analysts, so they should be taken with a grain of salt for now. But what’s clear, and unlikely to change, is that the bulk of the emission reductions will come from the electricity sector — specifically, from the clean-energy tax credits and the Clean Electricity Payment Program. As regular Volts readers know, the Clean Electricity Payment Program is a version of the more familiar Clean Energy Standard that has been modified to fit within the rules of budget reconciliation. It would set up a federal program that would offer utilities financial incentives to increase their proportion of clean energy and levy fines on those that failed to do so. Its goal would be to reduce emissions from the US electricity sector 80 percent by 2030.As Schumer’s graph shows, the Clean Electricity Payment Program, in combination with the extension and expansion of the clean-energy tax credits, would be responsible for almost 42 percent of the bill’s total reductions. To hear more about the program and how it will work, I talked with Minnesota Senator Tina Smith (D), the policy’s sponsor and its greatest champion in the Senate. Smith is one of the handful of senators with in-depth knowledge of the dynamics in the US electricity sector, and she’s deeply involved in budget negotiations, so I was excited to ask her about how the program would work, what kinds of jobs and projects it might produce, how it might affect coal states, and of course, because I am me, what she thinks about the filibuster. Senator Tina Smith, thank you so much for coming on Volts. Sen. Tina Smith:Well, thank you, David. It is terrific to be with you. David Roberts:We're going to talk today about clean electricity policy and the politics of getting it passed, which are two of my very favorite subjects in the world, so let's just dive right in. Senator Smith, I’m pretty confident that Volts listeners are familiar with state-level policies, renewable portfolio standards or clean energy standards at the state level, that mandate that utilities in the state increase their proportion of clean energy. It’s a regulatory mandate passed by the state government; these are familiar, there are dozens of them across the country. The Clean Electricity Payment Program that you have proposed is not quite that. So why don't you start by telling us what it is and how it is similar and different to these more familiar state policies? Sen. Tina Smith: Well, the basic goal is the same. We want to move the power generating sector so that it is adding clean energy. One way of doing that is to have a regulatory framework that says, you will add clean energy, and if you don't, you'll pay a penalty. But another way of achieving that goal of adding clean power is to do what we're doing with the Clean Electricity Payment Program. This is a plan that says: We will provide financial incentives to utilities to add clean power; there'll be a fee if you fail to add clean power; and our goal is to get, on a national average, 80 percent of our power generation from clean energy sources by 2030. So the goal is the same: adding clean power. The mechanism is a little bit different. I think this mechanism has some real advantages, because under a regulatory framework, adding that clean power costs money in the short term (though it saves money in the long term) and often those costs are passed on to ratepayers. With the clean electricity plan that we're proposing, this federal incentive would defray the costs that utility ratepayers would normally pay. That's the real advantage of this approach.David Roberts: It’s worth pointing out something I've heard from a couple of the architects: costs on ratepayers tend to be regressive, whereas federal money comes from more progressive income taxes. So you get a progressivity advantage by drawing the money from the federal pot.Sen. Tina Smith: Absolutely. That's exactly right. We need to be on this path to a clean energy transition, but what you don't want to have happen is for the cost of that transition to be disproportionately borne by people who can least afford it. This is especially important to me, because the costs of the fossil fuel economy have been disproportionately borne — in bad health outcomes and in all sorts of other external costs — by poor people, Black and brown people, people who are sited right next to freeways or right next to that coal-burning power plant.David Roberts:The details of this thing obviously matter. I'm curious, to what extent are the details of the program fixed and in place vs. being negotiated right now? Do we know the size of the payments? Are we sure that the target is going to stay the same through negotiations? What's in place and what's still up in the air?Sen. Tina Smith: Well, of course, everything is in the midst of being negotiated all the time, as you well know. Negotiations will be finalized when the budget reconciliation bill is completed. But for me, there are a couple of key aspects of this. One, the goal of achieving 80 percent clean power in the power sector nationally, on average, is set in stone. That was described in the Democratic budget resolutions that we passed at the end of the last session. That is described as the goal of the president. So to me, that's the starting point. Then there are a couple of other things that are crucial to this. One is that this clean electricity plan is technology neutral, which means we don't say this kind of clean energy is better than that kind of clean energy, or it must be renewables vs. carbon capture, for example. That technology neutrality is clear. Also clear is the core idea that each utility starts from where they are, and they improve from there. This is a big deal, because some utilities and regions are already well along the path of adding clean power, and others are just starting. You don't want to unfairly penalize that utility that maybe is only at 10 percent clean power. David Roberts:Can you expand on that a little bit? Utilities are at very different places — financially, in terms of power mix, etc. How is the plan customized on a per-utility basis? If I'm a coal-heavy utility, what does it look like to me?Sen. Tina Smith:If you are a coal-heavy utility, this is very much in your favor, because you need to figure out how to add clean while you have a lot of assets in coal power. Rather than having your utility ratepayers end up having higher rates in the short term because you're adding new, clean power capital infrastructure, this would help you to add clean. You may be a utility that's only 10 to 20 percent clean; so under our plan, we would still ask you to add clean power every year at a percentage level yet to be negotiated, at a pace that is moving you strongly and speedily in the right direction. But there's no expectation that a utility that starts at, say, a 10 percent clean power percentage must catch up with a utility in the Pacific Northwest that relies heavily on hydropower and may easily get to 85 or 90 percent clean within a 10-year period. At the end of that 10-year period, you're going to have some utilities that are over 80 percent, and some that are below 80 percent. The utilities I speak to that are farther along will probably argue that it's harder for them to add that incremental 20 percent of clean, whereas the utility that’s starting with ample, untapped renewable resources, you could argue that they could add quicker.David Roberts: So there's a national average target, but it's not that each utility has to hit that same target.Sen. Tina Smith:That is exactly right. That's the flexibility. It makes it much more appealing to utilities that are not as far along the curve. David Roberts:This brings up another question. You're trying to figure out from our present vantage point what level of payments and what pace of change would yield 80 percent by 2030. It seems like it's hard to know right now exactly what those numbers are. So if the program is put in place, and payments are at a certain level, and the pace of change is set at a certain level, and it turns out in 2024 we find out we're not on track to hit the national target, are there provisions in place to adjust those numbers as we go?Sen. Tina Smith: That is a great and interesting question. I'm now going to get really wonky into the details about Senate process, because what we're using here is a process called budget reconciliation, which is a budget-driven process. What that means in practical terms is that much of the implementation and the rules around how this plan gets implemented will be left to the Department of Energy. They are writing the rules, because this is a budget process, it's not a regular process. But let me see if I can answer your question a little bit at least. One thing I would point out is that historically, the cost curve of clean power has gone down more quickly than we anticipated. So it seems to me that, particularly for solar, for which we know the cost is going down really dramatically, we are just as likely to see power added more quickly than we originally anticipated as taking longer than we anticipated. The overall question about how the Department of Energy would write the rules to accomplish this would probably end up being addressed in rulemaking. It gets to the question of: what do you anticipate? What do you think is going to happen? The way that we've designed this is based on a ton of modeling from the Department of Energy, and also from outside groups who have expertise in modeling. That gives us a good framework for making some assumptions about how this is going to pan out in the real world.David Roberts:You've said before that you don't actually expect utilities to be fined very often, since they'd be dumb not to take incentives that are on the table. But are there protections written in about where the fines come from? And how the incentive payments are used? How closely is that specified in the bill?Sen. Tina Smith:This gets at a real strength of the policy. First of all, the answer is yes, we want to write into this what are allowable uses for the incentive payments. It could be building out clean resources. It could be deploying carbon capture technology. It could be adding energy efficiency resources to a system, because if you think about it, if you are reducing electricity demand at the same time that you're adding clean, the percentage of clean of your overall system goes up faster. So that would be an allowable use. I speak to utilities and power generators that have coal power plants or natural gas plants that they want to phase out, but they have a stranded asset; you could potentially use these resources to help to retire those resources more quickly. Then, similarly, we need to have rules around who bears the cost of the penalties, in order to protect ratepayers as much as possible. But as I said, this isn't like the old cap-and-trade mentality, where a utility is looking at this and saying, my cost of paying the fee is lower than making the investment — this just isn't set up that way. That's a strength.David Roberts:It's a little bit more transparent than cap-and-trade; the money is more in the headline and less something you have to deduce. How do you pitch this program to a person — say, for instance, a friend of yours named Joe — in a coal-heavy state, with a lot of coal-related jobs? Fossil fuel-heavy states have traditionally been resistant to things like this because they feel like they're starting on the back foot. In terms of both the power mix and the job mix, how do you pitch this program to a coal state?Sen. Tina Smith:It's interesting. I think about answering that question from the perspective of a place in Minnesota that is similar in many ways to parts of West Virginia, which is Minnesota’s Iron Range. This is a part of my state where the bread and butter of the economy, and historically the culture and the source of pride, has been mining iron, and then taconite, and producing the iron that has driven the economy of the United States. There is a real sense in that part of Minnesota, just as I think there is in West Virginia — though Joe Manchin knows way more about West Virginia than anybody — that this economy is getting passed by. There are new opportunities out there, but is it ever going to come to me, to my community, to my world? That is one of the real strengths of this idea. First of all, clean power, including renewable energy, is rural energy. That's where it is most likely developed. In fact, West Virginia has abundant renewable energy assets that are waiting to be developed. If you care about wanting to be a part of this clean-energy transition — which is, by the way, going to happen — the question is: Do you want to lead? Do you want to be in the forefront of that? Or do you want to be behind?The opportunities for West Virginia, and other states that are part of the traditional fossil fuel economy, to seize this moment, to move forward with the kinds of proposals that Joe Manchin has put forward, like the American Jobs in Energy Manufacturing Act, and deploying carbon capture and storage technology, and taking advantage of the skills and expertise of the working folks in West Virginia to drive those innovations — to me, that's all about being in the forefront.In fact, the West Virginia University Law School just put out a really excellent summary of what moving to this clean energy future could mean for West Virginia in terms of increase in employment, growth, and state GDP, opportunity for new investment that creates new jobs. It demonstrates where the opportunity is, in West Virginia and other places.David Roberts:As a matter of fact, I just posted a piece yesterday about West Virginia and that study. One of the interesting things about that study is it shows pretty substantial benefits for West Virginia, but the analysis was done before the Clean Electricity Payment Program was on the table. So the Clean Electricity Payment Program would more than double all those benefits; the amount of money that could flow into the state from federal coffers just through the Clean Electricity Payment Program is pretty enormous.Sen. Tina Smith:It is. It's such a perfect case study of how, the way that this is structured, along with the other clean and renewable energy tax credits, is actually a giant boost to employment and jobs, and not a gloom and doom, “we're going to all have to sacrifice because the climate is warming” mindset that has too often been the way that these issues have been approached.David Roberts:  Of course, the question for West Virginia is: compared to what? What is the alternative? Coal is on its way out, according to the markets, so it’s now or never. Sen. Tina Smith:That's exactly right. Coal demand has gone down substantially, and as I said, this transition is occurring. A lot of times people will point to, why should we make sacrifices in the United States when we see China increasingly being a source of carbon pollution? What I like to point out is that China added substantially more wind and solar resources than the United States over the last 10 years or so. They are making significant investments in wind and solar, not to mention electric vehicles and other new energy technologies. So, let's lead on this.David Roberts:How much of a sacrifice is it, really, to get more GDP and more jobs and less air pollution and better health outcomes? Pretty nice sacrifice as sacrifices go.Sen. Tina Smith:But I think we also can acknowledge that, as a very dear friend always loved to say, everybody loves change as long as it happens to somebody else. You could understand why Minnesotans who live on the Iron Range, or coal miners that live in Wyoming or West Virginia, are questioning whether at the end of the day these benefits are actually going to come to them and their communities. So it is incumbent upon us to make sure that we're putting in place the policies that make sure that happens. I've spoken with Secretary Granholm about this a lot. She gets this, not only from being head of the Department of Energy, but being a former governor. You have to have a real place-based strategy for making sure that these benefits don't just happen anywhere, but they happen specifically where they need to. It’s the same issue as the environmental justice needs we have as well.David Roberts: A couple of broader questions about the politics of this. One of the vexations about US policy these days is that it seems to swing back and forth wildly depending on who's in charge. We saw Obama pass a bunch of stuff, and then Trump take over and spend four years frantically undoing it all, and now it's being redone. Is there anything about the Clean Electricity Payment Program that will make it resilient, even if Republicans take back over Congress and/or the presidency?Sen. Tina Smith:What you just said makes the strong argument for why it is so important to make these kinds of policy and budgetary decisions legislatively, rather than through executive action. You're absolutely right. When Obama was so tired of being stymied by a recalcitrant Congress, he took steps through his executive power with the Clean Power Plan, for example; that and other steps that he took around renewable fuel standards and so forth are relatively easy to wind back. But I think there's another lesson here, which is when you legislatively pass budget bills that are not only smart policy but are broadly approved of by the public, it becomes very difficult to unwind them. I look at the case of the Affordable Care Act — the Republican Party opposed that, spent how many years, over and over and over again, tried to unwind it, with no policy to replace it, because they really didn't know what their other idea was — that became more and more popular. Ultimately, they failed in unwinding it because people liked it. The same can be said of this clean electricity plan, because polling data shows that this is the direction people want. Businesses know this too. This is why businesses like Walmart, and Kroger, and others, are saying, oh, our customers want more clean power. This is what they want. There's a lot of public pressure to move in this direction. David Roberts:Notably, both large employers in the state of West Virginia.Sen. Tina Smith:Yes. It's interesting, I was just looking at this: The percentage of people in West Virginia that are employed in coal is 2 percent. So again, similar to Minnesota's Iron Range, it looms large in the history and the economic foundation of the state, but it's a relatively small percentage.David Roberts:In some ways this is the energy analogue of Medicaid expansion, in that it is the federal government saying: you need to do this; let us pay for it. Some states have resisted Medicaid expansion, but none who have accepted it have reversed it. Once you're getting it, you don't want to stop getting it.Sen. Tina Smith:That's right. To further that analogy: We could conceivably have designed a plan that would have been state-based rather than power generator-based, and I think that your point is one of the reasons why it's good that this is power generator-based. They're going to be making investment decisions and economic decisions that will support advancing this. David Roberts:Right, and it’ll be hard to unwind those. On a broader level, some people in the Senate have raised worries about spending too much money and running up the deficit and exacerbating inflation. One, do you worry about that at all? What's your take on the worry about deficit spending? And two, if the overall spending number gets haggled down, how safe do you feel that the energy money is in those negotiations? Is it going to be on the chopping block if there are cuts to be made? Sen. Tina Smith:Well, not if I can help it. Broadly speaking, when we are looking at the overall size of the Build Back Better budget, I don't hear people in Minnesota saying, “Oh, Tina, this amount of money is too much, $3.5 trillion is too much, but $3.1 trillion would be OK.” I don't think that that's how people are thinking about it. They're thinking about, how is this going to affect me and my family? That's sort of the cliche of talking about legislative policy, but I actually think that it's real. Certainly, as we go through this negotiation, and we have to come up with a plan that is agreeable to all 50 Democratic senators, there's going to be some haggling and some back-and-forth. To me, the most important thing is that we don't give really strong policy and budget proposals like this a haircut so that they don't work anymore. We’ve got to make sure we don't do that. But the other question you asked is an interesting one too, about budgets and deficit spending and so forth. I would just point out that when we write this bill, at whatever size it is, it's going to be paid for. So that's a good thing. In fact, when you look at how Americans feel about the Democrats’ budget bill, one of the things that they like the most is that it is paid for by asking the wealthiest Americans and big corporations to pay their fair share. That seems fair to them, and it seems right. It generates resources in order to do these things that are going to build up our economy and lift up our communities in powerful ways.David Roberts:I have been somewhat confused that the deficit concern seems to come up again and again, even in the context of a bill that is explicitly paid for. It seems like something people say almost by instinct now in DC.Sen. Tina Smith: That's right. In Washington, David, maybe you've noticed, there is sometimes a disconnect between rhetoric and reality. David Roberts:What?! Yes, I'm skeptical that there is any human being that has genuine concern about the deficit as a primary motive in their heart. That always sounds like an excuse to get at something else.Sen. Tina Smith: Right. The bipartisan infrastructure bill that is moving through Congress, that passed the Senate with 69 votes, is about investing in infrastructure, including some important strategies for advancing this clean energy transition with electric vehicles and charging stations — that was bipartisan, and probably not completely paid for. I would say, shoot, you're investing in roads and bridges and broadband infrastructure that's going to be around for 60 or 70 years; that's what states do all the time, is borrow to pay for long-term assets. So to me, that's not a big deal.David Roberts: Right, and putting in place long-term assets drives economic growth, which is the best thing for wiping out a deficit. OK, we won’t get stuck ranting about deficits, I could do this all day. Also on the broader politics of this: energy and climate people are watching this unfold from the outside with white knuckles. There's this two-track strategy: you’ve got the bipartisan infrastructure bill, and then you’ve got the reconciliation bill, which together are supposed to be the full agenda, the full package. But there's been a lot of fights and strains lately about whether to keep those two bills linked; there was a fight in the House about it just last week. Do you think that linking those two bills is the right way to go, and do you think that you're going to be able to keep them linked?Sen. Tina Smith: It is absolutely right to link these two bills. To me, they're rafted together. My support for the infrastructure bill, which I think is a good bill, is contingent on understanding that we have all agreed that we're going to move forward the reconciliation bill together. The two-track process divided up a broad agenda into two chunks, but we still need to pass that broad agenda for the good of the American people and for the good of people in my state. One of the things that I've learned about legislating in the relatively short time that I've been in the Senate is that you have to have a clear idea of where you're heading. In this case, the Democrats are heading towards passing these two big bills. Then you have to be flexible and incremental about how that happens as you move through the process. And then there's just a pileup at the end, and then you get it done. I'm not looking forward to the pileup, but I expect that it’ll happen. That is the reality of working in a democratic process, where there's 100 people in the Senate and 435 people in the House that all have very clear ideas about how they want to get things done.David Roberts: In my political lifetime, I’ve never seen a situation quite like this, where there are 50 Democrats and every single one of them has to agree.Sen. Tina SmithI know. It's kind of terrifying.David Roberts:It gives every single one of them the ability to blow the whole thing up. People are focusing on Manchin and Sinema, but really, every senator could blow it up. But at the same time, if they blow it up, they all go down together. There's going to be a game theory study about this some day. Sen. Tina Smith:That’s right. But at the end of the day, this broad agenda is broadly popular. It is what Joe Biden ran on; it’s not like it got pulled out of thin air. It's what he talks about, and what so many of us talked about during our campaigns in 2020. So you're right: the price of taking this down because you didn't get absolutely everything you wanted, because it's a little bit more money than you wanted to spend, that seems to me to be a heavy price.David Roberts:There's no half failure here. It's all success or all failure.Sen. Tina Smith: One for all and all for one.David Roberts:Along the lines of unity, and the question of how to legislate in today's politically dysfunctional atmosphere: What is your take on the filibuster? This is not directly related to the reconciliation bill, but in a sense, Democrats are forced now to basically run the vast majority of their agenda through the reconciliation process because of the filibuster. That shapes what policies they're capable of doing and excludes some policies that people would like to see, like voting reform, potentially immigration reform, etc. So what's your take on the filibuster personally, and the attitude of the Democratic caucus about the filibuster? Do you see that changing at all or shifting?Sen. Tina Smith:Personally, I believe that the filibuster rule ought to be thrown out, and I didn't come to that easily. I believed for a long time that it was important that hard-won rights couldn't be taken away by a simple majority in the Senate. I cared about that one, because I spent a lot of my life working on women's reproductive rights, and I imagined a world where a majority of the Senate could strip away those incredibly precious rights. But my perspective on this has really changed. I came to understand how fundamentally undemocratic it is to require a supermajority to get anything done. I also came to see that the filibuster, which is the right, basically, to debate or to talk as long as you want to — that that isn't really happening in the Senate these days. It's not as if Mr. Smith is going to Washington and making impassioned speeches on the floor of the Senate. Mr. Smith is sending his staff member down to say, “I’m putting a hold on that piece of legislation.”David Roberts:  Right. It's a memo.Sen. Tina Smith:Exactly. Truth be told, the Senate already structurally leans towards giving strong power to less than a majority of the voices, because the 50 Republicans in the United States Senate represent only about 43 percent of the American public. So what do we do because of the unwillingness of some to change these rules that also have an ignominious history? We develop workarounds like the reconciliation package, that allows us to pass significant and important legislation with a simple majority at the end of the day. It doesn't make any sense.David Roberts:It's not what you would write out if you were sitting down to write out a coherent legislative process. How common do you think that opinion is in your caucus? It’s either got to be done in the next two years or not at all. Do you think there's any chance of opinion thawing or shifting within that timeframe? Or is this just something people should write off?Sen. Tina Smith:It’s hard for me to see a world where people just change their minds on the filibuster. However, I would look for other ways that Senate rules could be reformed so that they make more sense, so that the Senate can function better, and maybe, possibly, changing the rules around ending debate for particular pieces of policy — though that's maybe more my wishful thinking than anything else. We have to seize this moment that we have to take action on climate, a moment that I don't think will be replicated for many years. We don't have time to waste. There is an urgency of seizing this moment, and that's what a lot of us are working really hard to do.David Roberts: Well, on that note, thank you for your work. Thank you for pushing so hard for this, and thank you for taking the time today. Sen. Tina Smith:It's great to talk with you. Thanks a lot. Get full access to Volts at www.volts.wtf/subscribe

Electricity transmission has been having a moment lately, getting more attention from analysts and policymakers than it has in … well, at least in my lifetime. There's good reason for this: every single model of deep decarbonization shows that, to get there, the US will need lots, lots more long-distance high-voltage power lines, to carry renewable energy from the remote areas where it is concentrated to the urban load centers where it is needed. The problem is, the current system for planning and building those long-distance power lines is utterly dysfunctional, at every level, which means they aren't getting built. The US will not decarbonize on time or on budget unless it can figure this out.It's a thorny, complicated subject — not just understanding all the flaws in the current process, but figuring out how to move forward with solutions. Loyal Volts subscribers will recall that I wrote a five-part series on these issues earlier this year, but if you're looking for a more compact & polished version, I highly recommend a newly released report, jointly produced by the Niskanen Center & the Clean Air Task Force, called, "How are we going to build all that clean energy infrastructure?" The report emerged from a workshop held with a variety of professionals across the industry and serves as a plain-language summary of the problems facing transmission in the US today and the candidate solutions. It's remarkably readable, even for non-nerds — I recommend checking it out.To walk through those problems and possible solutions, I'm excited to have as my guest today Liza Reed, the Research Manager for Low Carbon Technology Policy at Niskanen. Reed completed and defended a dissertation on these issues just a few years ago and has been a crucial help to me in parsing through them, so I'm thrilled she's joining me today, so that Volts listeners can also benefit.  Get full access to Volts at www.volts.wtf/subscribe

As we speak, Democrats in Congress are hashing out the details of the budget reconciliation bill that will contain the vast bulk of President Joe Biden’s domestic agenda. It is meant to be passed alongside the recent bipartisan infrastructure package that came out of the Senate. One of the unique features of this political moment is that virtually every individual Democrat has the power to sink the whole enterprise — there are zero Dem votes to spare in the Senate and only a handful in the House — but if any of them sink it, it all goes down. If progressive Dems kill the bipartisan infrastructure bill, conservative Dems will kill the reconciliation bill, and vice versa. (House Speaker Nancy Pelosi recently agreed to hold a vote on the bipartisan bill on Sep. 27, but progressives have pledged not to vote for it unless reconciliation also gets a vote.)They either all succeed together or all fail together. And if they fail, the party will get crushed in 2022 and 2024. None of them will escape unscathed. They’ve got to make it work.For obvious reasons, there’s an enormous amount of speculation about how various Democrats will play their hands in these negotiations. I can’t claim to understand the motivations of everyone involved. The recalcitrant House “moderates” are some mix of irrational and malicious. Sen. Kyrsten Sinema is utterly opaque.But Sen. Joe Manchin makes sense to me, for the simple reason that I believe he has West Virginia’s best interests at heart. And that’s why I’m confident he’s going to find his way to supporting an ambitious reconciliation bill. He knows West Virginia needs it.The simple fact is, West Virginia’s energy economy is not on a sustainable course. US coal is on the way out.This is true across the country and it’s true in West Virginia. One of the state’s two big utilities, American Electric Power (AEP), will shut down 5,574 megawatts of WV coal generation by 2030, and the rest of it by 2040. The other, First Energy, has pledged carbon neutrality by 2050. The number of US coal mines continues to fall.Many of the states biggest private sector employers, like Walmart, Kroger, Lowe’s, and Proctor & Gamble, have set aggressive emission-reduction goals and are looking for clean electricity (which they must currently purchase out of state). The people of West Virginia largely understand that an inexorable energy transition is underway. They are scared it will leave them and their communities behind. West Virginia needs new investment and new jobs. They need leadership. Passing some version of Joe Biden’s American Jobs Plan (AJP) would be an enormous boon to the state and a political win for Joe Manchin.The American Jobs Plan would invest in West VirginiaLast week, the Center for Energy and Sustainable Development at the WVU law school released a new analysis showing what a few key provisions of AJP would do for West Virginia’s economy. (It builds on a previous analysis demonstrating the feasibility of rapid decarbonization in the state.) Specifically, it models a “Clean Innovation Pathway” that would reduce carbon emissions from the state’s electricity system roughly 80 percent by 2030, taking into account two key policies from the AJP: extension/expansion of the clean-energy tax credits and the 48C Advanced Manufacturing Tax Credit, which invests in clean-energy manufacturing projects. Through 2040, the Clean Innovation Pathway reduces the cost of electricity by $855 million and increases employment by the equivalent of 3,500 full-time jobs, while pulling in $20.9 billion in investment in new solar, wind, energy storage, and other clean-energy projects. If Manchin’s American Jobs in Energy Manufacturing Act (which would expand 48C) were passed as part of the AJP, it would draw an additional $1.7 billion in manufacturing investments and create an additional 3,250-4,350 manufacturing jobs (plus 9,300-12,400 jobs created indirectly). Importantly, these numbers capture only a fraction of the AJP’s benefits to West Virginia. There are other investments in Biden’s plan that would land in the state.Carbon capture, utilization, and storage (CCUS) would get money for demonstration projects; money for a series of “pioneer projects” applying CCUS to steel, cement, and other heavy industrial plants; and a tax credit for carbon capture and storage.There’s money for economic development in coal country, reclamation of mines and wells, weatherization of buildings, regional innovation hubs, and much else that would channel investment into the WV energy sector. Perhaps most importantly: the analysis, done back in April, does not take into account the effects of a Clean Energy Payment Program (CEPP), which would offer federal payments to utilities that increase their deployment of clean energy — whether it’s solar, wind, geothermal, hydrogen fuels, or natural gas with carbon capture — and levy fines on those that fell short. In effect, federal revenue would pay for West Virginia’s transition to clean energy, rather than the bill falling on state ratepayers. By doing so, it would generate vast in-state benefits — in air quality and other health improvements, in jobs, in innovation and entrepreneurship — that would dwarf those of the other policies, at little cost to the state. (Precisely quantifying the benefits will have to wait on analysis of the final proposal, which I’m told is forthcoming.) If you add it all up, the AJP offers West Virginia tens of billions of dollars in federal investment to help kickstart an energy transition in the state. It’s an opportunity that won’t come along again any time soon. Manchin knows an energy transition is necessary, and that it’s underway elsewhere. He doesn’t want his state to get left behind.That’s what his constituents fear: being left behind. If they’re going to embrace an energy transition, they need to hear from leaders they trust, like Manchin, that it’s possible.West Virginians are nervous about the energy transitionIn national political circles, West Virginia is thought of as a red fossil-fuel state, which everyone takes to mean that the WV public supports fossil fuels and will fight any policy that hurts them.Polling shows things are not that simple. Recently the Nature Conservancy and the West Virginia Chamber of Commerce sponsored some detailed polling of West Virginians’ views on their energy future. (The polling, conducted by Research America, deliberately oversampled voters in coal country.) The results are fascinating. WV voters know that the state currently depends on coal and that it is being hurt by a broader national shift to clean energy. Quoting from the local Weirton Daily Times:When asked if respondents agree with the statement that coal is the backbone of the state and that renewable energy is hurting mining jobs, 59% of statewide respondents and 59% of coal country respondents agreed. But when asked whether they agree that the economy is shifting away from coal and fossil fuels towards clean and renewable energy sources, 69% of statewide respondents and 73% of coal country respondents agreed.They know (67 percent) that coal is not clean. And they are not wedded to it: 90 percent see benefits in shifting the state’s energy system toward clean energy like renewables and carbon capture, 68 percent support federal investments in clean energy jobs, and 68 percent support federal investment in clean manufacturing. What WV voters are wedded to is jobs. The poll asked about the most important thing politicians could do to help WV communities. Only 12 percent urged support of clean energy and only 14 percent urged support of coal. The overwhelmingly favorite answer, with 70 percent, was to bring more jobs. It’s not difficult to pull a coherent narrative out of these results. The people of West Virginia know their state relies on coal, they know the nation in trending away from coal and toward clean energy, and they want to be a part of the transition, but they fear losing more jobs and economic development.They need a trusted leader — Joe Manchin, for instance — to show them that the energy transition can bring them those jobs.Data for Progress has also done polling in West Virginia which backs up these findings. While the answers reflect a predictable partisan split, clear majorities of WV voters support transitioning to a decarbonized energy grid, offering incentives for the purchase of low-pollution technologies, supporting displaced fossil fuel workers, and leading in a clean energy economy. The latter two of these even draw support from a majority of Republicans. And even where there’s more opposition from Republicans, they are fairly evenly split.The political term for this is “wedge issue” — Manchin has the support of virtually all of his party on an issue that splits the opposition party. The AJP is his chance to take advantage.Manchin’s overwhelming interest, and West Virginia’s, lies in bringing federal investment to the stateManchin has been using his position in the majority to do right by West Virginia. In the bipartisan infrastructure bill, he steered money toward big investments that will benefit his state, in clean manufacturing and industrial decarbonization, the Appalachian Regional Commission, broadband expansion, and more. He has focused federal attention on WV coal communities, drawing state visits from Energy Secretary Jennifer Granholm and Labor Secretary Marty Walsh. He was instrumental in Biden creating a new White House Interagency Working Group on Coal and Power Plant Communities and Economic Revitalization and appointing West Virginia native Brian Anderson, director of the National Energy Technology Laboratory, to run it (and direct an initial $109.5 million in new investments). But now, as I have written before, the national Democrats have reached what is likely their last chance to do anything big for a decade or more, and it is far and away the biggest thing they will do. Manchin has it within his reach to sign a bill that will draw tens of billion of dollars to his state, to help it kickstart an energy transition that both he and a majority of his voters recognize is necessary. The alternative is … nothing. Republicans will never pass a bill like this. A Republican president might do more of what Trump did — rig the rules to allow fossil fuel companies to pollute a little more and draw a few more subsidies before they go under — but no Republican Congress is going to spend billions of dollars on West Virginia’s energy transition. It’s now or never.Manchin can be a hero to his state or he can allow the work of his political career to flame out in a burst of recrimination and failure. I am confident he’ll make the right decision, for himself and for West Virginia. Get full access to Volts at www.volts.wtf/subscribe

A trickle of transcripts!First up, an administrative note: many, many people have requested written transcripts of the Volts podcasts. And I want to provide them. But it’s going to take a while.I could produce the transcripts in a few hours if I were willing to simply send the sound files through a robot transcriber like Otter and accept the somewhat choppy results (which are generally around 85 percent accurate).However, I’m way too anal retentive to do that. And Volts readers deserve better! I want to clean the transcripts up — remove all the “sort of’s” and “kind of’s,” delete aborted or repeated sentences, polish up the grammar — so that they are as pleasant to read as they are to hear. (I’m not that precious about preserving the exact original words; I’m more interested in clearly capturing meaning in readable form.)That means closely copyediting these files, some of which are more than 10,000 words. So far, with a little help, I’ve gotten through … one. And it took about 10 people-hours of work. Sigh.Here’s the full transcript of my podcast with Rep. Sean Casten on “Hot FERC Summer” (and here’s a PDF version). For those who’d like a more compact version, here’s a highlight reel running on Canary.Hopefully these will get somewhat faster and easier going forward. I will let you know as they come out. Now, on to the main event.Pulling tipping points into climate economicsJust about everyone familiar with climate change has heard about “tipping points.” Famed climate scientist Wallace Broecker first raised the possibility way back in 1987, and ever since then, they’ve loomed large in the climate discussion.The idea behind tipping points is fairly simple and familiar: as heat accumulates in the atmosphere, Earth’s geophysical systems may not simply adjust in linear fashion, alongside the incrementally rising temperature; in some cases, they may “tip over” some unpredictable threshold and enter a fundamentally new state, sometimes called a “phase shift.” Think of ice that has slowly cracked suddenly shattering, or “the straw that broke the camel’s back.” The commonly cited examples of potential tipping points are the Greenland and West Antarctic ice sheets. As warming has progressed, they have been shedding water and developing deep fissures. It is possible that at some (unpredictable) point, one or both will lose integrity and begin breaking apart altogether, irreversibly, raising global sea level dozens of feet in relatively short order.Because the consequences of some oft-discussed tipping points are rather apocalyptic, they have been used and misused for a long time in climate communications. It has somewhat annoyed climate scientists, because not only are these tipping points not a sure thing, each one is, in its own right, relatively unlikely.Civilization-ending changes are not likely, but they’re not zero probability either. Legendary Harvard economist Martin Weitzman called these low-probability, high-impact possibilities “tail risks” and was famous for warning that economists are not taking them into account — and are thus underestimating the need for rapid decarbonization. In his book Climate Shock, co-authored with his protégé, New York University’s Gernot Wagner, he argued that the right way to think about climate mitigation is not through a cost-benefit lens, as though particular levels of spending avoid specific levels of damages, but instead as a kind of insurance. We purchase insurance to cover against tail risks all the time, not because we think they’re likely to happen, but because the consequences would be so dire if they did. Weitzman has passed away, but Wagner and others have carried on this argument long enough that it has begun to break through in mainstream climate economics. However, it leaves a key question unanswered: yes, the risk of tipping points raises the value of mitigation, but how much? It has never been quantified.Into that breach comes a new paper in the Proceedings of the National Academy of Sciences (PNAS), from Wagner and a group of colleagues: Simon Dietz and Thomas Stoerk of the Grantham Research Institute on Climate Change, and James Rising of the University of Delaware. “Economic impacts of tipping points in the climate system” represents the first formal attempt to quantify the economic impacts of tipping point risks. The results are startling: the economic impact of carbon emissions is much higher than appreciated, as is the value of reducing emissions. Not that we needed much more evidence, but this study makes it clear that there is virtually no way we could overdo it on decarbonization. As Wagner told me when I called him to discuss the results, “I don't see a downside to doing too much too quickly.”The devilishly difficult task of quantifying risksThe PNAS authors adopt a common definition of tipping points: “subsystems of the Earth system that are at least subcontinental in scale and can be switched—under certain circumstances—into a qualitatively different state by small perturbations.” They included the eight that have been studied by the IPCC:Thawing of permafrost leading to carbon feedback resulting in additional carbon dioxide and methane emissions, which flow back into the carbon dioxide and methane cycles.Dissociation of ocean methane hydrates resulting in additional methane emissions, which flow back into the methane cycle.Arctic sea ice loss (also known as “the surface albedo feedback”) resulting in changes in radiative forcing, which directly affects warming.Dieback of the Amazon rainforest releasing carbon dioxide, which flows back into the carbon dioxide cycle.Disintegration of the Greenland Ice Sheet increasing sea-level rise.Disintegration of the West Antarctic Ice Sheet increasing sea-level rise.Slowdown of the Atlantic Meridional Overturning Circulation modulating the relationship between global mean surface temperature and national mean surface temperature.Variability of the Indian summer monsoon directly affecting GDP per capita in India.It’s important to note that these are not all possible tipping points, just the ones that have been studied, so the PNAS study’s results are, as the authors emphasize, a “probable underestimate, given the literature we synthesize has yet to cover some tipping points and misses possible impact channels and interactions even for those it does cover.”In their survey of existing literature, the authors found 52 papers that quantified the economic impacts of one or more tipping points, but over half of those were based, not on geophysical data or analysis, but on highly stylized adjustments to model parameters. The authors put those aside. In the end, they focused on 21 papers that actually linked the geophysical mechanisms of tipping points to economic damages.The whizbang procedural move of the paper is to pull these different studies — many using different models with different assumptions — into a single “meta-model,” with replicas of each studied tipping point combined in a single framework. (There is a great deal of discussion of this methodology in the paper, and more in an extended appendix, if you’re interested.)The result is an ability to directly compare, and to sum up, the possible economic damages of tipping points. From there, applying a few conventional assumptions about discount rates and risk aversion, a model can spit out a number for the present-day costs of those future risks.Obviously, any estimate like this going to be somewhat faux-precise, involving all kinds of assumptions and probability ranges piled atop one another, so it must be taken as provisional and tentative, subject to further research. But still, it’s better than having no estimate at all.We are underestimating climate risks and overestimating the costs of actionAs its principal metric, the study uses the “social cost of carbon” (SCC), meant to capture the total social and environmental damage done by the emission of a ton of carbon dioxide. For convenience, it uses the current US government SCC figure, which is about $51. There’s a history behind this: Obama originally convened the working group that put the figure at around $50 during his administration. Under Trump, it dropped to about $1. Biden has bumped it back up to $51.“They undid the Trump damage and went back to decade-old assumptions,” says Wagner. Now, there is work underway to update the US government SCC with better numbers. “If you go to the most modern estimates and turn on the stuff that we think ought to be turned on — we know that there are tipping points, we need risk aversion, we need reasonable discount rates, and so on — you don't get to $50,” he says, “you get $250.” (For the true climate modeling nerds: that’s true even in DICE, William Nordhaus’s model.) I don’t know if the new number will be $250, but I’d be shocked if it were under $150. Anyway, that’s a subject for another post, because the PNAS study quantifies the relative increase in SCC when tipping points are incorporated rather than ignored. The headline result: “When modelled separately and then summed together, the individual tipping points increase the expected SCC by 24.5%.”The details:As you can see, the most costly tipping points are the release of ocean methane hydrates and permafrost carbon. A couple, like the Atlantic Meridional Overturning Circulation, average out to reduce the SCC. (A change in the AMOC might shelter some parts of Europe from the worst effects of climate for a while — though this effect might be overwhelmed as the damages are better understood.)The main thing to note is that 25 percent is not a small number. If we’re systematically underestimating the cost of carbon emissions by a quarter, we’re probably giving bad policy advice — badly underplaying the urgency of action.But another important note is that 25 percent is the median estimate of the effect of tipping points on SCC. Just as with estimates of the physical damages of climate change, estimates of the economic costs of tipping points have a long right tail.These are the tail risks Weitzman warned about, translated into economic terms. SCC could be higher if climate sensitivity is higher than estimated, if people are more risk averse, if discount rates are lower, if tipping points arrive sooner, or any number of other variables go the wrong way. What it means is, there’s a small-but-not-negligible chance that we are currently underestimating the cost of carbon emissions by as much as 250 percent or more. (Look at that “More” blob!) If that is true, we’re really giving bad policy advice, as in, “market mechanisms” vs. “wartime footing.”The policy implications of tipping pointsLet’s take a step back and review what we can learn from this study. First, economists have more or less been ignoring tipping points, which means they have systematically been underestimating the SCC. Best estimates put the amount of that underestimation around 25 percent. But that 25 percent is almost certainly a lower bound. The authors have built a framework that can plug in new data and analysis of tipping points as it comes along. It is almost certain that as more tipping points are studied and the interactions among them are better modeled, the estimate of their potential damages will rise. And again, remember that long tail. 25 percent is the median estimate, but the average estimate is 43 percent, and there’s at least a 10 percent chance of 100 percent — in other words, “there's a one in 10 chance that doing the calculation doubles the SCC,” says Wagner. “Holy shit, right?”“So if you start with $150,” he says, “there's a 10 percent chance you'll end up with $300, just because of tipping points.”One in ten is not that small a chance. If the chances of a plane going down were one in ten, you probably wouldn’t board it. It probably wouldn’t be allowed to fly.This is the significance of tipping points: we are playing with fire, pushing Earth systems to the point that there is a small-but-real chance that some of them will break down entirely, entering phase shifts and becoming something permanently less stable and hospitable. If that happens, we will have consigned all future generations of human beings to inexorably and irreversibly deteriorating conditions. It is a crime worse than any genocide, worse than any atrocity conceived or conceivable, and even if there is only a small chance that we might stumble into committing it, we should be hyper-cautious. We should spend a lot of money to reduce that risk, to insure against it. You might notice that we are not, as a global community or within the US, expending $50/ton worth of effort to reduce emissions, much less $300/ton. In that sense, this study is just one more voice in the chorus urging policymakers to go bigger and faster on decarbonization. But it does put a fine point on the fact that there is effectively no way for policymakers anywhere to do too much, or to go too fast, on decarbonization. The risk of overdoing it is vanishingly small, all but impossible. We are currently underdoing it. We will be underdoing it even when we’re doing five times what we’re doing now. We will almost certainly be underdoing it for the rest of the lives of everyone reading this. That’s daunting, but it’s also clarifying. There’s only one direction to push: more and faster, forever and ever, amen. Get full access to Volts at www.volts.wtf/subscribe

In this episode, Reed Hundt, the CEO of the Coalition for Green Capital, discusses the merits of green banks, quasi-public or nonprofit institutions that provide seed capital to accelerate the growth of clean energy. There are more than 20 active green banks at the state level. Now Biden has proposed a federal green bank. Hundt explains how it could help.Full transcript of Volts podcast featuring Reed Hundt, August 13, 2021(PDF version)As we speak, Democrats in Congress are at work putting together a budget reconciliation bill that will include enormous swathes of President Biden’s agenda, including his climate agenda.One of the policies being discussed for inclusion is the creation of a “Clean Energy & Sustainability Accelerator,” more commonly known as a green bank.The idea of a federal green bank has been floating around forever. There was one in the ill-fated Waxman-Markey climate bill of 2009 (which never made it through the Senate) and there’s been one introduced in Congress virtually every year since. But this time it might happen! So it’s time to brush up on what a green bank is and what it does.It would not, contrary to some popular misconceptions, be an agency of the federal government, nor would it finance projects purely with federal money. Rather, it would be an independent, nonprofit entity that uses an initial grant of federal money to pull private capital off the sidelines and into climate-related projects. After the initial grant, the bank would be self-sustaining.The model has been tested: there are green banks in more than a dozen states, which have generated $5.3 billion in clean energy investment since 2011, including $1.5 billion in 2019 alone. And there are more than 20 states where the process of establishing a green bank has begun.These state- and city-level green banks are popular and successful, but because states and cities tend to be short on funds, they too often lack the capital needed to fund worthy projects. Right now there are more than $20 billion worth of projects that are eligible for green bank funding and are now waiting. One of the roles of a federal green bank would be to capitalize all those local banks, to get all those projects rolling.To learn more about green banks, I was happy to talk to their greatest champion: Reed Hundt, the co-founder and CEO of the Coalition for Green Capital. Hundt has been advocating for green banks for over a decade — including seven years on the board of the Connecticut Green Bank — and it is largely through the coalition’s work that the network of state and local green banks has been established.I was eager to talk with Hundt about how a national green bank would work, the kinds of projects it would fund, how it would account for equity, and the potential if it’s done right, for a green bank to accelerate the clean energy transition. Reed Hundt, welcome to Volts, thank you for coming.Reed Hundt:Thank you very much. I was talking to a friend of mine in Tennessee and he told me that you're from Tennessee. He said that you were the best analyst and commentator about energy issues in the whole state of Tennessee.David Roberts:I don't know whether that's damning by faint praise?Reed Hundt:Well then I said to my friend, “No, no, the two of you are,” because the person I was talking to was my high school classmate Al Gore.David Roberts:Oh, funny! Yes, he and I have bonded over our Tennessee roots before. I want to talk about green banks with you, but real quick, by way of setting context before that, let’s talk history. Obama faced a similar situation [to the one Biden faces] — different in a lot of ways, similar in some ways. But you wrote a book about Obama's response to the crises he faced that was extremely critical of Obama. So as we contemplate what Biden should be doing in this similar situation, let's review real quickly, what did Obama do wrong and what does that tell us about how Biden should be approaching this mess?Reed Hundt:You're in a very small club, which is the club of people that know about the book called A Crisis Wasted, and as a founding member of the club, I’m very happy to have a new member. So the problem in 2008-09 was that, as Rahm Emanuel said at the time, a crisis is too good to waste. But all of the advice to the President-elect was small where it should have been big, constrained where it should have been bold, and was short range rather than long range. The people were not badly motivated, but in retrospect and at the time, their counsel was insufficient to meet the needs, not only of the moment, but of the next 10 years. The big difference for the Biden administration, and indeed for the entire Democratic Party in the current year, is the decision from the very beginning of this presidency and of this particular Congress to follow what Larry Summers himself said in 2008: the risks of doing too little are much much worse than the risks of doing too much. Larry didn't follow his own advice then, but the entire Democratic Party is taking it to heart now. The second learning that the Biden people took from the past was not to do just one thing at a time, in sequence, and then run out of time, but to do everything on every front as fast as possible, pressing on every single topic: the democracy agenda, childcare, the COVID relief, climate change, infrastructure. All topics are being pursued in parallel, simultaneously. The tactical decision of the Obama administration was to do one thing at a time, in sequence. The problem with that is that it played into the hands of opponents who correctly felt that, if they could delay action, ultimately inaction would triumph — entropy would take over. So the decision made by President-Elect Obama was to do climate change and energy legislation after healthcare, instead of simultaneously. The decision made by this President was to do them together, to do all things together. That's why the reconciliation package includes climate change measures as well as childcare. So there's two different things: one is go big, and the second is do everything in parallel.David Roberts:That strategy is coming to a head with the reconciliation bill, which, indeed, is gigantic and contains just about everything you could think of. It'll be a real interesting historical A-B test if this new strategy does in fact work better.Reed Hundt:And it's a test that has to be passed, right? In terms of the role of government in the United States to stop a climate catastrophe, this is the last chance.David Roberts:Among the things being proposed for inclusion in the reconciliation bill is a green bank. I've been following this area for a long time and I have heard about green banks, in the background or on the periphery, over and over again. It seems like an evergreen idea that never seems to get over the finish line. By way of framing this discussion, maybe you can just tell us in the simplest terms, what is a green bank?Reed Hundt:A green bank is a publicly funded institution that aims to combine public and private investment to build something. You have to believe that public-private investment is a good thing, or you won't like a green bank. Public-private investment is how we build all infrastructure, actually, so it shouldn't be too challenging to say, “Let's have public-private investment to build the clean-power platform.” Let me give you an example of the way that a road is built. A state government or a county government issues a bond; the bond is purchased by the private sector; the private sector then, through the mechanism of the bond, provides the money. And then, overwhelmingly, the state contracts out to the private sector to actually build the road. That's a public-private investment.The road might not be owned by the private sector, or it could be owned by the private sector, but the ownership is not the point — the point is that it was private money that was pushed through a municipal bond that created a form of financing that built the road. There are five major infrastructure platforms: sewage, water, transportation, communications, and power. For all five, there is some version of public-private investment. So point one is, we're talking about public-private investment. Point two is, to contribute the public side of it, let's have a national bank with a network of state and local banks. That's what the green bank idea is.David Roberts:One intuitive reaction to this is, if these projects are profitable for private funding and private financiers, what is the role of the public side of this public-private partnership? What is the state doing?Reed Hundt:The role is to cause the projects that wouldn’t otherwise happen to occur. They basically fall into three categories, which I call clean up, clear out, and catalyze. So here's clean up: invest public-private money in neighborhoods and communities where one, carbon energy is not affordable, and two, the byproducts of creating carbon energy are not breathable. That's investment in renovating homes so that they are using rooftop solar or community solar, so that they're insulated effectively. If you do that, in the low- to medium-income households in the United States, the cost of that investment per home will be greater than the income of the household. So somebody else has to provide the money; it has to be the contractor that says, “I'll put up the money and you'll pay me back over time.” That's the shared-savings model. Well, the private sector does not jump enthusiastically into that activity; it has made almost no headway into that particular market. That market’s potential size in West Virginia alone is more than $40 billion of investment.David Roberts:Let's pause here, because I think this confuses some people. There's a big pot of profit, there's a profitable market, there's money to be made. Why isn't private finance already flooding into these areas if there's so much money to be made? What’s the barrier?Reed Hundt:In the case of investing in low to medium households, our number one barrier is private sector investors don't know the space. Typically, even though the capital investment per household is twice the median income, that means it's only $80,000. So $80,000 - $90,000 financing, that's beneath the purview of major commercial financiers across the country. So that's the “too small” problem. Number two, there's the “don't understand” problem, meaning most private sector financiers don't know whether an individual household is a credit risk or not, and because they don't know they don't take the credit risk. Number three, they have more lucrative activities to engage in, many other more lucrative activities. So they say, “why put the money into an $80,000 upgrade of a household in Marshall County, West Virginia, where the return over time might be in the neighborhood of 4 percent or 5 percent a year. Why do that?” So it's not that it isn't profitable, it's that it isn't as profitable as investing in Microsoft or a data center or some other high growth activity. Therefore, the role of public investment is to catalyze the private investment to take a little more risk, to aggregate the small financing projects so that they can be sold as a package, to fund small businesses that will actually knock on doors and get people to agree to have the small business do the upgrade. Those are the primary roles the public part of the investment can play and then the private sector money is pulled in — the goal is to pull the private sector money in.David Roberts:Right. So the green bank is in a lot of ways taking on the transaction costs.Reed Hundt:Yeah, that's exactly right. That's probably the core point, you just made it. The “clear out” problem is to clear out the obstacles to massive private sector investment. As you know, a major obstacle in the electricity market is stranded costs, meaning the amount of money that a utility has invested in the old carbon power platform — they need to recover it somehow. The regulator of the utility says, “well, I have to recover what I invested in the old before I can invest in the new,” but we need them to invest in the new at an accelerated rate in order to stop climate calamity. So how do you get rid of the stranded cost problem? You have the green bank step in and say, “I'll help you out on the stranded cost,” and then the utility — which in 80-85 percent of the country is a private entity, not a public entity — goes, “oh, well fine, if the stranded cost problem is solved, I'll accelerate the move into the clean-power platform.” That's “clear out” obstacles.David Roberts:That sounds more like public grants, just giving them money so that they can clear their plate. Is there some way that that those kinds of things pay themselves back?Reed Hundt:Yeah, the technique is called securitization. You basically securitize the stranded cost, and the public entity gets paid back at a slow rate over a fairly long period of time.David Roberts:Right. So in this sense, the green bank is providing patience that private capital wouldn't.Reed Hundt:Yes, right. You clean up the hard-hit areas, you clear out the obstacles, and then that's how you catalyze the private sector investment. And the net result is that over a 10 year period the accelerator, which is the congressional name for a national climate bank, will pay for itself.David Roberts:Right. So this whole idea of a green bank is premised on the idea that markets are not, in fact, perfectly rational, and are, in fact, leaving all sorts of profitable opportunities on the table that they need to be nudged into.Reed Hundt:Or you can say that markets are not perfectly efficient. You would think the financial crisis of 2007-2009 proved that point for everybody, right? You’d think that the volatility of Robin Hood would be proving the point to anybody right now, but it's not really disputable that markets are not perfectly efficient at all times in all segments. The problem, when we talk about the transition from carbon power to clean power, is we can't wait for the markets to figure out how to achieve efficiency, because we've got to get rid of the emissions basically yesterday.David Roberts:So we would not be jumping into a national green bank without experience; you and the coalition that you lead have been helping to establish green banks in states and cities for years now. Tell us a little bit about what you've learned from that experience and how they are performing at that level. Are they doing better or worse than you expected?Reed Hundt:Better in all respects except one: we haven't been able to attract massive public sector capital.David Roberts:That’s because states don't have any right?Reed Hundt:That’s the why. Ben Franklin said, “experience keeps a dear school, but a fool will learn in no other,” so I'm the fool. We presented the idea of a green bank to Larry Summers, Tim Geithner, and Peter Orszag in the 2008-2009 transition, and they said they didn't want to do it, because they prioritized recapitalizing the big Wall Street banks. They didn't want to create a green bank. And also, the economists were suspicious of public-private investment.David Roberts:It seems like capitalizing a green bank, relative to the amount of money involved in recapitalizing the big banks, would have been kind of a rounding error. It's not really that much we're talking about, is it?Reed Hundt:As it ended up, the money for capitalizing Wall Street, which was appropriated by Congress, was $700 billion, and the Treasury Department did not even use $400 billion of that. They did not even use it.Davird Roberts:That would have been a nice green bank seed.Reed Hundt:They could have used, I don't know, a fourth of it, an eighth of it, to create a national bank. Or they could have said to one of the big commercial banks, “we'll give you extra capital for you to set up a national climate bank.” They didn't do these things, I think because there was a failure of imagination of disaster. That's a phrase from Henry James, the novelist. He said, “you need to make sure you have the imagination of disaster.” Not putting too fine a point on it, but disaster is what the IPCC said we are now experiencing with the climate. They just said it. But in 2008, the imagination that would enable anyone to know that by 2021 we would have irreversibly committed to a staggering increase in temperature by human causes … you know, it should have been knowable, but it wasn't knowable. Or if it was knowable, it wasn't acted upon. However, I would say the idea of the green bank was popular and bipartisan even then. It was passed in the House Energy and Commerce Committee by a 51 to 6 vote, and that means a lot of Republicans voted for it. It was passed out of the Senate Energy and Natural Resources Committee on a bipartisan vote. Senators Bingaman, a Democrat, and Murkowski of Alaska endorsed it. They also endorsed a clean electricity standard. Neither the green bank nor the clean electricity standard ever got to the floor of the Senate. Had they gotten to the floor of the Senate, they would have passed rather easily. There probably would have been 65 votes. The Democrats accounted for, depending on the week, either 58, 59, or 60 of those votes. Toth those things would have been law. They didn't become law because the Democrats made the perfect the enemy of the good and waited for the cap-and-trade bill that never emerged from committee.David Roberts:Oh, I remember. I remember. We couldn't get a federal one back in 2008, so then you dispersed your minions out to the states and cities. Where are the green banks now and what are they doing?Reed Hundt:Well, there are 21 of them in 15 states. David Roberts:Wait, how's that? Are there multiple ones in some states?Reed Hundt:Yeah, Maryland, for example, has three, because the governor vetoed the idea of creating one at the state level. So there's a nonprofit that operates across the state, and then a county-sponsored green bank, and a Baltimore green bank. That's all because Larry Hogan, the governor, wouldn't create a statewide green bank. In New York, there's two, and kind of on and on it goes through 15 different states. And then there's 22 more states where people are raising their hands saying, “help us create a green bank.” If the Senate budget resolution passes, and if the reconciliation language matches the resolution, then at last we will have the accelerator funded. The very first thing that the accelerator should and would do would be to capitalize green banks in every single state.David Roberts:That means establishing them even in states where there currently isn’t one. Is that correct?Reed Hundt:We’d go to the governor of Tennessee, we would say, “do you want to create one? Well here's the capital from the federal government, here's the mission that's defined in the statute.” And if the governor said no, we'd ask the legislature. And if the legislature said no, we'd find a nonprofit that would do it.David Roberts:So you don't need a government to be involved.Reed Hundt:We’d ask them, but if they refused, if they treated it like the vaccine, we then would move to a nonprofit, because look, at the risk of really being simple-minded here, we are all breathing the same air and the same emissions, not just nationally, but globally, and so we can't leave any state out of the conversion from carbon to clean.David Roberts:Would the primary function of the federal accelerator be to funnel money through these state entities?Reed Hundt:The primary function is to accelerate the transition from carbon to clean, and do it in a way that helps low-income households and creates a lot of jobs and lowers instead of increases prices to the consumer. That’s the mission, and the mission would be pursued primarily through the network of state and local green banks, because most of the solutions would have to be local. Not all, but most. Here's an example: it would be great to find the incentives that cause heavily driven vehicles to be driven by electric motors. In a national fleet of 200 million plus vehicles, at the most 20 million are truly heavily driven. The average mileage per year is 15,000 miles — a total of 3 trillion miles for the country. But the heavily driven vehicles are driven 70,000 miles a year, 100,000 miles a year, 150,000 miles a year. You'd want to have an incentive system that would cause them to go electric as soon as possible, because they're relatively small in number and they account for a huge fraction of the emissions. How would you implement that? You would do that locally. You'd look for the small business person in Memphis, or the fleet that’s operating in Nashville, or the delivery trucks in Knoxville, and you would say, “what does it take to convert you to electric?” You do it locally; you wouldn't say one size fits all. FedEx is a great example, because they're headquartered in Tennessee, so you would talk to FedEx locally.David Roberts:So the federal money would be funneled through the Tennessee-based green bank.Reed Hundt:But with a unified mission, not like everybody does whatever they like.David Roberts:Are there examples on the non-local side, things that only a federal bank could manage?Reed Hundt:We would call them “special strategic situations.” An example would be catalyzing transmission. First of all, almost by definition, transmission always crosses state borders. Consequently, it's not going to be productive to have multiple state green banks cooperate to solve a transmission problem.David Roberts:That process is already complicated enough.Reed Hundt:It’s complicated enough. A typical obstacle that you'd want to solve in transmission is to be the anchor tenant, the entity that says, “I'll take the product, and I'll pay for the product.” Then all these other people that connect to the transmission line, all the local distribution networks, they all say, “if there's somebody that's guaranteeing the first slice of payment, then I’ll join in and sign up too.” That's the anchor tenant problem that holds up transmission, and is a fundamental problem for every big infrastructure project of any kind at all. Who's the first user? That's the kind of thing where you'd want to see the national green bank step in and say, “I’ll guarantee that.” Another example would be a major sea-coast resiliency project that might cross state lines, like between South Carolina and North Carolina. A third example could be (going back to heavily driven vehicles) national fleets, like a rental-car fleet. Where you have a national or interstate problem, you want the centralized entity to act. And lastly, you want the central entity to be aggregating all of the loans, selling them into the commercial market, and raising new money to recycle the original government investment. This is important: the way to fund this green bank is one-time. Give it all the money and then never appropriate any money again. Let it recycle that money.David Roberts:Is it going to make money, enough to churn more out? How does it fund itself?Reed Hundt:If you were an investor, you'd be better off investing in Microsoft or JP Morgan, but the goal, in the aggregate, is to have all the investments be positive. And in fact, over the last 10 years, 99.38 percent of all green bank loans have been profitable.David Roberts:Oh, wow!Reed Hundt:Not very profitable, but profitable.David Roberts:No Solyndra? No failure that gets tied around their necks? Nothing to demagogue here?Reed Hundt:Except for 0.62 percent.David Roberts:I saw you mention in a different interview that these green banks are not technically banks — they're “mission-driven loan funds.”Reed Hundt:They're not deposit-taking banks. Why are they called green banks? I sat in Congressman Van Hollen’s office in January of 2009 and said, “this is what we what we want to do.” He said, “it's a great idea.” I said, “what do you want to call it?” He said, “I want to call it a green bank.” I said, “Congressman, ‘green’ and ‘bank’ are the two most unpopular words you can come up with.” He said, “people will get used to it.”David Roberts:Well, “mission-driven loan fund” doesn't exactly trip off the tongue either. One more technical point about the loans. You make a point of emphasizing that these are not guaranteed. This is not like the DOE loan program, where the loans are backed by the full faith and credit of the federal government. What's that distinction?Reed Hundt:Really, really important. This idea of a nonprofit institution is not new. It is the way the government has chosen to achieve goals. In the Corporation for Public Broadcasting, the government chose to have non-commercial broadcast by funding a corporation for public broadcasting. But it didn't want to control it, because it didn't want Sesame Street to become a propaganda agency, right? The government gives money to the World Bank to accomplish international purposes, but it doesn't guarantee the World Bank's obligations on the US government's balance sheet. There are many other examples of using nonprofits precisely to avoid government control and avoid the government guaranteeing the debt. A counterexample is Fannie Mae and Freddie Mac, where everybody always knew that in a crisis, the government would guarantee the debt. When the crisis occurred in the summer of 2008, George Bush signed a bill called HERA (wife of Job), saying the government would guarantee the debt of Fannie Mae and Freddie Mac. That's what this isn't.David Roberts:This avoids the moral hazard that comes along with that.  Reed Hundt:Precisely. By not having the federal government guarantee, it means that the form of financing can be very flexible. It can be convertible debentures, it can be equity, it can be a secondary debt, it can be primary obligations, it can be deferred payments — you can have all kinds of flexibility. Most importantly, you can have the deposit in the nonprofit be the basis for borrowing and lending, which is exactly what a commercial bank does with its deposits. That's how you get leverage and the reason the accelerator would pay for itself over a decade. It would borrow and re-lend on its on its deposit, which is the public funding. It would be able to do that enough times over ten years that it would generate enough profit for the private sector that in turn there would be enough tax revenue to pay for the initial deposit.David Roberts:A related question: if I'm a listener out there of a conservative bent and I hear about a giant, federally funded institution meant to shovel money out the door, obviously my first concern is, how do you prevent it from becoming a slush fund where politically favored projects get money? What sort of oversight and assurances can we have that this will be independent, and not end up captured?Reed Hundt:Well, the uses of the money are defined by the statute that conveys the money. It can't spend on what it isn't authorized to spend on. Secondly, to have suspenders as well as a belt, the charter of the nonprofit defines what it can do. Third, it would be more transparent than anything, meaning every quarter — for all the world to see, and everybody in Congress to see, and every reporter to see — all the uses of the money would be disclosed. Ultimately, as is the case whether you're talking about the Department of Defense or the University of Tennessee or the green bank, you have to trust the people. Nobody should ever think the people don't matter.David Roberts:I'm going to get back to that later, but one thing I want to hit before we go on too much longer: you mentioned a couple of times that this is about directing money to low-income projects. For this federal accelerator, would there be some sort of equity screen or equity set-aside? How will it address equity?Reed Hundt:The bill that’s been passed in the House of Representatives this year …David Roberts:Wait, can we pause there? The bill that was passed in the House — is that the one that’s on the table for reconciliation, as far as you know?Reed Hundt:Yes. The drafters of the reconciliation package in the Senate — and they're going to begin work momentarily — will look at the bill that was enacted in the House a few months ago and translate it into reconcilable language. That language requires that 40 percent of the money benefit low- to medium-income households.David Roberts:Got it.Reed Hundt:Similarly, any state or local green bank would be obliged to adhere to that requirement.David Roberts:Obliged in order to get federal money? Are equity screens built into state banks already? Is that a common thing?Reed Hundt:Not already, but if the accelerator is funded, then the accelerator would have a contract with the green bank in Tennessee that said, “this is what you’ve got to do.” So low- to medium-income households — which in Tennessee are all over the state — would necessarily benefit from a minimum of 40 percent of the money.David Roberts:Interesting. The obvious example there is upgrading low-income homes with insulation and solar panels. Are there other examples? Do you have favorites?Reed Hundt:That's a big example. Another would be: low- to medium-income households, in many cases, have people that use heavily driven vehicles for work. Maybe in a rural area they drive far to find gainful employment. Maybe they're a small business operating out of the house and driving the truck around to work on contracts. That's a good place to replace a heavily driven vehicle with an electric car. And the electric car is going to be cheaper. The third example is, if you're able to clean up a neighborhood, and the people aren't breathing emissions, the health benefits are real and immediate.David Roberts:This is a side topic, but it's one of my personal obsessions: what about the whole cluster of issues around transit and zoning and density? This is a climate topic a lot of people I know are infuriated doesn't get more attention. Is there any way of funneling some of this money to, say, a public transit system or something like that?Reed Hundt:I hope and believe the accelerator would complement all the other programs that are going to be in the reconciliation package, or in the bipartisan deal the Senate voted on today. The Department of Transportation, in both of these instruments, is going to have a lot of programs to put into effect that involve public transit. Where there's a missing piece, something the accelerator could pay for to liberate the Department of Transportation's money, that would be a complimentary role to play. But we have to wait for the legislative smoke to clear to know exactly what has been passed.David Roberts:We're all on the edge of our seats over here. When you’re advocating for green banks before legislatures, is there a favorite success story that couldn't have happened without green banks?Reed Hundt:There are many. I was on the board of the Connecticut green bank for six years. In the important and interesting category, we electrified a dam in Connecticut. There are thousands of dams that don't generate electricity that could generate electricity. But they're all relatively small-scale. The commercial financiers don't want to get involved; it's a great role for a state and local green bank.David Roberts:The coalition requested $100 billion from federal lawmakers as seed funding. As you've emphasized, this would be a one-time grant that gets the thing going. It would be self-sustaining from then on. I believe in Biden's jobs bill, he proposed $27 billion.Reed Hundt:Yeah, that's right.David Roberts:Is that enough? Could a bank leverage that up and make it bigger? What’s your take on the level?Reed Hundt:You know the story about, if you chained 1,000 lawyers together and threw them to the bottom of the sea, what you would call that?David Roberts:Ha, yes, I'm familiar.Reed Hundt:A good start. $27 billion would be a good start. $100 billion would be a better start. But we've got to start. We've got to catalyze public-private investment and prove that private sector money can flow into these activities at a far greater rate, quite safely and prudently. That's the goal. If it's $27 billion, or if it's $100 billion, it'll be enough. We've got to get these green banks going in every state; we can't leave anybody out. More is better, but $27 billion would be a good start.David Roberts:This might be a silly question, but is there any upper end? Do you have any sense of the limits of a bank, or limits of the economy to absorb it, or anything like that? How much money could you deal with?Reed Hundt:The way to look at this at the macro level is, what is private savings and what is private investment? Ever since the crisis of 2008-09, private savings in the United States have been much higher than private investment. Whether they are pension funds, commercial banks, or high-net-worth individuals, people are sitting on large amounts of cash that is not invested in productive and useful infrastructure.David Roberts:What's the reason for that? Are there just not enough investment opportunities?Reed Hundt:Yes. Economists sometimes call it “secular stagnation.” They sometimes call it a “savings glut.” Basically, it's fear of the future. Many investors are paid to be fearful, because fearful can be prudent. We simply have to clear away the obstacles, to mitigate the fear and unlock that private-sector investing. How much? Quite literally, if private investment had equaled private savings since 2009 — which is normally the case in a healthy economy — the economy would be about $5 to $7 trillion bigger.David Roberts:Whew.Reed Hundt:The carbon-to-clean transition could be and should be the biggest investment opportunity of the century. The increase of wind and solar power from the current market share to the necessary market share is about a 4 to 5X increase in market share. That alone is about a $3 trillion business opportunity. There's no way public investment should need to or ever would invest that much money. The goal is to catalyze it and to have almost all of it be private money.David Roberts:So theoretically, it would be easy to deploy $100 billion.Reed Hundt:Oh, very easy.David Roberts:A helpful way to think about a green bank is: you've got this giant pool of savings, sitting there with fearful investors, and the role of the green bank is to go before the investors and ease some of these transition costs, set up some of the structures, basically prepare things so that it's easier for private capital to flow into these projects.Reed Hundt:And it has to happen quickly, because we don't have a moment to lose in terms of reducing emissions. If we had all the patience in the world, if we had “world enough in time” as the poem says, then 30, 40, 50 years from now the whole world would be based on wind and solar and maybe a little bit of nuclear — because it's cheaper. But we don't have 30, 40, 50 years. I've been part of this before. When I was FCC Chairman for the Clinton administration in the ‘90s, the question was, how was private investment going to make it possible for you and me to talk via the internet and all these other communications devices that didn't exist then? How were we going to go from wire-line to wireless? How were we going to go from analog to digital? How were we going to go from a long distance phone call to what we're doing now? The answer is, the government needed to clear out regulatory obstacles, catalyze private sector investment, and encourage the transition, which is what we did. About the same amount of money was spent over 15 years to have the communications industry be completely transformed as we now need to completely transform the energy sector.David Roberts:Just a couple of additional political questions. You mentioned that there's transparency, there's oversight, but in the end, you have to trust the people involved in managing this. As Republicans and Democrats trade control, we've seen policy wildly swing back and forth. We've seen Trump roll back or degrade all kinds of Obama initiatives — green initiatives, regulatory initiatives. Is there anything you could do to make a green bank resistant to Republicans trying to screw it over or twist it in some way? In Australia, when the conservatives took over, they tried to appropriate green-bank money for fossil fuel projects. Is there any structural or regulatory way to prevent that, or is that just the nature of democratic government?Reed Hundt:You have to not put your trust in regulation. Political change changes regulations. You have to trust the integrity and viability of a nonprofit institution. You have to have a bipartisan or nonpartisan board. Let's have the charter and the conditions of funding clearly defined, but then let's trust the people. Let’s say, not that it's more important than politics, but that the vagaries of politics from election to election can't change the purpose. The purpose has to be executed on or we’re cooked. That's why you have to do this. The idea that there can and should be trustworthy institutions — that's a belief you have to hold to have any success. You have to believe in that, whether they are religious institutions, nonprofits, or other examples of civil society. You have to believe in that and you have to try this one.David Roberts:Republicans are all over the place on climate change right now. You think they could be brought around to affirmatively supporting?Reed Hundt:State and local green banks, where they exist, draw bipartisan support. As I said, the idea was bipartisan in 2009. The House bill that was passed had Republican co-sponsors. It should be the case that this mission is nonpartisan or bipartisan. It’s a big country and there's always somebody that doesn't want to do anything, but we don't really have a choice here. We’ve got to try every institutional technique, every technology, every method, because we can't lose the battle against climate catastrophe.David Roberts:The green bank is your baby; I assume that's what you’re making calls about and lobbying for. But if that's your number one, what's your number two and three for reconciliation?Reed Hundt:For me, this is number one, two, and three. The shoemaker should stick to his last. I've been doing this for 12 years. The main thing I need to do is summon all of my energy to focus on this one thing and not be distracted. But I'm not alone. This is a big movement now. We have hundreds of people employed in state green banks already. We run a consortium of green banks; we meet every two weeks and have been for years. We've raised more than $5 billion of private sector money into different projects. We have more than 100 environmental organizations supporting this, we have the president supporting it, the House of Representatives voted for it. I'm not trying to say I'm not involved, I’m trying to say, it ain’t just me.David Roberts:As a final question, we started with a little history of how Obama, in your estimation, went too small, thought too small, hedged his bets too much. By way of wrapping up, I'm curious, what is your assessment of Biden and Democrats so far? Does it seem to you like they've taken those lessons to heart? Are they doing what you want them to be doing so far?Reed Hundt:Absolutely. The bipartisan bill is an amazing accomplishment. Amazing.David Roberts:I don't know why it exists; I can’t explain it.Reed Hundt:It can't be gainsayed. What did they get, 19 Republicans or something like that to vote for it?David Roberts:Yeah.Reed Hundt:It is amazing. The president had the patience, the Democratic leadership had the patience, Republicans were helping and willing. The previous president said “don't vote for it” and 19 of them voted for it.David Roberts:And the COVID relief bill, they didn’t go small on that either.Reed Hundt:This is a great country. We try pretty much everything else and then we usually get it right. It's just that, right now, we don't have a moment to lose with respect to the climate. That's the reason this thing is called the accelerator.David Roberts:All right. Well, thank you for taking so much time.Reed Hundt:Thank you, I really admire your work and thanks for talking to me. Get full access to Volts at www.volts.wtf/subscribe

This is it, folks! The home stretch. It’s time to pay attention, call your members of Congress, and mobilize your networks. Congress is working on what is likely to be its last big shot at climate change policy for a decade or more. If things go well, the legislation will include a clean energy standard (CES) and clean energy tax credits, which together would revolutionize the US electricity system. If things don’t go well, there will be no substantial climate legislation for many years to come.That’s the only question being decided: Will we get a CES and tax credits, or will we get nothing that will tackle fossil fuels this decade? That’s the binary. It’s time to focus.Looking around, it doesn’t seem like clean energy supporters, climate hawks, or the left more broadly really get that. So let’s talk about why this is such an important moment and what’s at stake. The reconciliation bill is likely the last chance for big federal climate legislationThe Democratic approach for a while now has been to proceed along dual tracks. On one track, there’s the bipartisan infrastructure bill, hammered out by a group of just over 20 senators from both parties. On the other track, there’s the budget reconciliation bill, which is meant to contain … everything else in Biden’s agenda. The former needs 60 votes; the latter can pass with 50 Democratic votes.This has always been a fraught and delicate strategy. It could crash and burn in any number of ways. But so far, at least, it is hanging together.The bipartisan group unveiled its bill this week; it is slowly inching toward a vote, though Senate Minority Leader Mitch McConnell (R-Ky.) is doing everything he can to slow it down and gum it up. It contains decent chunks of money for things that will indirectly help clean energy — transmission, demonstration projects, R&D — but it lacks anything that will directly confront fossil fuels in the coming decade, the sine qua non of adequate climate policy. As Robinson Meyer argues in The Atlantic, it is not a climate bill, not really. There’s no guarantee the bipartisan bill will pass, and there’s no way to know how the Senate’s bipartisanship fetishists, Sens. Joe Manchin (D-W.V.) and Kyrsten Sinema (D-Ariz.), will react if it doesn’t.But whether it passes or not, when it comes to decent climate policy, it’s all about the reconciliation bill. There won’t be another bill this big while Democrats control Congress, and they won’t control Congress for long. What Democrats are able to get through in the reconciliation bill is likely to be the last big federal climate legislation for a decade at least. This is the key thing to understand, so I’m going to repeat it: What Democrats are able to get through in the reconciliation bill is likely to be the last big federal climate legislation for a decade at least.(You may be thinking: can’t Democrats do another reconciliation bill next year? Yes, they can, but the midterms will be in full swing, moderates will be feeling even more cowardly than usual, political appetite for big spending will have dried up in the face of a recovering economy, and focus will have turned, hopefully, to voting reform. This one is it.)Absent substantial federal voting reform — which is looking less and less likely, certainly nothing anyone should bet on — all signs point toward Republicans taking back the House in 2022. It’s unclear what will happen in the Senate, but regardless, if the GOP controls either house, no climate legislation will pass (and no voting reform). Republican presidential candidates can win despite larger and larger losses in the popular vote. And the chances of Democrats controlling both houses of Congress again are only getting dimmer. The structural advantages that favor the GOP in the US system are only tilting further in its favor, while the party is actively extending those advantages with a wave of voter-suppression laws at the state level and an accompanying wave of gerrymandering, which alone could win the GOP the House in 2022, even absent any Dem seats being lost. The GOP is protected in this endeavor by a hyper-conservative Supreme Court (which, by the way, could get even more conservative if the disastrously vain Stephen Breyer hangs on until there’s a Republican president again).The conservative movement in the US is attempting to engineer one-party control of US government (along the lines of their new hero, Hungarian autocrat Viktor Orban). There’s no way to know how successful the endeavor will ultimately be, but it’s a pretty good bet, given current trends, that Democrats won’t control the presidency and both houses of Congress at the same time again for a long while. Last time they lost full control (just before a wave of gerrymandering in 2010), it was a decade until they got it back.That all begins in January 2023 — which makes this year’s reconciliation bill the Democrats’ last big shot at climate and clean energy policy. There are two key clean-energy policies on the tableClimate folk are prone to endless policy arguments; everyone has their favorites. But most of those arguments are immaterial right now. Democrats have lined up behind a menu of clean energy policies in line with Biden’s climate plan. What’s on that menu is what might get in the bill. Might. If it’s not on that menu, it’s not going to get in. There’s no carbon tax. There’s no cap-and-dividend. There’s no prohibition on new fossil fuel infrastructure. You may support any and all of those policies, but they are not live options in the reconciliation bill. Right now, political pressure is best aligned behind options that actually are on the menu. Two in particular are immensely important — together, they would be transformative. The first is a Clean Energy Standard that would reduce electricity sector greenhouse gas emissions 80 percent by 2030. (Biden’s plan calls for 100 percent by 2035, but a reconciliation bill can only extend 10 years out.)It’s not actually going to be a standard, per se, because you can’t pass regulatory standards through reconciliation. Instead, it’s going to be a system of fines and payments that will incentivize utilities to increase their proportion of renewable energy to meet the targets. It’s called a clean electricity payment program (CEPP). A CEPP actually has some advantages over the traditional CES’s and renewable portfolio standard (RPSs) commonly seen in states. For one thing, it’s more progressive: the money to drive the transition comes from federal coffers (via taxes on corporations and the wealthy) rather than from electricity rates, which are regressive. If you’re interested in the details of how a reconciliation-friendly CEPP will be structured, see this piece from Ben Storrow and Scott Waldman of E&E, or this thread from Princeton professor Jesse Jenkins:The end result will be the same as a conventional CES: the US electricity grid will reach 80 percent decarbonization by 2030, which is an achievable but still incredibly ambitious target. As I’ve said so many times, nothing is more important to deep decarbonization than cleaning up the electricity grid. It’s the core of the “electrify everything” strategy. The second is boosted and expanded clean energy tax credits. The investment tax credit (ITC) and production tax credit (PTC), for wind and solar respectively, would be renewed, but various forms of tax credits would also be extended to energy storage, hydrogen, carbon capture, and other key clean energy technologies. (The details are in flux; for a blueprint, see the Senate Finance Committee’s Clean Energy for America Act or the House Ways and Means’ GREEN Act.)Tax credits will provide the supply push; the CEPP will provide the demand pull. The result will be an enormous surge of clean energy projects and jobs. This is the core of good climate policy: pushing fossil fuels off the grid over the next decade and replacing them with zero-carbon energy. There are other good climate provisions on the Democrats’ menu for reconciliation as well. I would love to see a Civilian Climate Corps. I’d love to see more money for public transportation and an electrified postal service fleet. Lots of smaller climate provisions might make it through just by virtue of not drawing much notice, which would be great.But the CEPP and the tax credits are the one-two punch needed to make a real short-term difference in the energy system. And they are on the menu.Manchin is likely to be skeptical of the CEPP. Although carbon capture counts as clean energy under the program, every analyst understands that the practical effect is going to be to ramp up renewables and ramp down fossil fuels on the grid. Manchin doesn’t actually want that.I have no idea if public pressure will have any effect at all on Manchin, but it couldn’t hurt. Might as well try it.The perilous path ahead for reconciliationEveryone on the left is aware that the reconciliation bill is the last big legislative train leaving the station, and every interest group wants a seat on it. Climate policy will be competing with other Democratic priorities. Especially as Sinema and Manchin arbitrarily reduce the total size of the bill, as they surely will, the factions of the party will be fighting it out over a shrinking pie.It is far from a sure thing that the CEPP and tax credits will survive negotiations. It’s all being decided right now. Everyone who cares about US climate progress should put aside their personal projects and preferences for a few weeks and speak in a unified voice. Call your representatives. Push the groups you’re involved to make noise about it. It’s going to be the CEPP and tax credits or nothing big for climate. If both those policies are put in place, it could set the US power system on a new course and strengthen American credibility at the upcoming COP26 international climate meeting. If they slip through the cracks, climate will have to settle for scraps and the US will surrender all hope of meeting its climate targets or influencing others to do the same.For the next few months, this is all matters. If you’ve ever considered getting involved, now is the time.Bonus dog Get full access to Volts at www.volts.wtf/subscribe

(If you prefer listening to reading, just click Play above.)I’ve spent a lot of time on Volts discussing energy storage. As those who read my battery series know, lithium-ion batteries (LIB) currently dominate short-duration storage — in devices, cars, and buildings — and the durations they are able to economically provide are creeping up, from two to four to eight hours and beyond. However, as I explained in a separate post, the grid of the future, run primarily on renewable energy, will also need long-duration energy storage (LDES), capable of discharging energy for days or weeks. As that post covered, there are two basic challenges facing LDES. The first is technological: what sort of materials and processes can hold large amounts of energy for cheap?The second is economic: how can an LDES company make money? Currently, the role they propose to play on the grid (“firming” renewable energy) is being played by natural gas power plants. In a theoretical future clean-energy grid, those plants will be gone, or at least they will be saddled with the additional costs of carbon capture, but for now, they exist, and they are quite cheap. Consequently, there just isn’t much of a market for LDES, as battery industry veteran Cody Hill points out:A hot new startup called Form Energy believes it can overcome both challenges.Form Energy has the technology; now it needs customersI mentioned Form Energy in a previous post. The company — a kind of battery dream team, with Mateo Jaramillo (who built Tesla’s energy storage business), MIT’s Yet-Ming Chiang, and other veterans of previous battery companies — has finally revealed the battery it has been working on lo these many years. It uses iron as a cathode and air as an anode, in a process called “reversible rusting.” The best place to catch up on the news is Julian Spector’s piece. (Canary is doing amazing coverage of energy storage.) See also Russell Gold’s piece in the Wall Street Journal for deeper background on the company and its technology. Neither piece, however, gets deeply into the subject that most interests me, which is the second challenge: where to find markets. So I called Jaramillo to find out more. Not surprisingly, he sees a clear pathway to profitability. “We see a very compelling business environment for us over the next 10, 20, 30 years,” he says. “It's as much as we can go after, frankly.”Early markets for clean firmingIn terms of its function on the grid, the best way to think of Form’s battery is not as storage, but as the equivalent of a carbon-free natural gas plant. Rather than methane, it runs on renewable energy as fuel, but from the grid’s perspective, it provides basically the same service, which is reliable, dispatchable generation that can run for 100 hours or more when needed. The problem, as I said, is that natural gas is quite cheap. According to conventional wisdom, natural gas plants will dominate the firming game until policy begins driving them out of the system (or forcing them to install carbon capture). That’s what the models show: when decarbonization of the electricity grid (using mostly renewables and LIBs) goes past about 80 percent, costs begin to spike and more expensive clean firm options like LDES and nuclear become competitive. That conventional wisdom may be correct at the 30,000 foot level, but closer to the ground, things are much more complicated and varied. As Jaramillo notes, “there's no time at which the country will uniformly be at 80 percent renewables.” In fact, some nodes on the grid are close to that already. More to the point, Jaramillo says, there are a variety of situations in which grid operators need the services a natural gas plant provides but are leery about (or prohibited from) investing in gas.“Every single US coal plant in the system today has a retirement date on it,” he says, “and all of those dates are sooner than they were five years ago, and they will probably be sooner in two years than they are today.” That means lots of utilities around the country need to replace large chunks of power capacity.To date, they’ve been doing so with natural gas, but that may be changing. Remember, Form is not talking about entering the market in earnest until 2025. Between now and then, Jaramillo expects two macro trends to continue: first, renewables will keep getting cheaper and cheaper, and second, utilities will grow more wary of natural gas. “It's not full steam ahead to replace coal with natural gas,” he says. “Indiana [utility regulators] recently rejected a 850-megawatt combined-cycle gas plant and they specifically cited the risk of stranded assets.” Similar rejections of natural gas have taken place recently in Minnesota and Virginia. Great River Energy, a Minnesota-based electricity co-op, is hosting Form’s first demonstration project, a one-megawatt system capable of discharging for 150 hours continuously. Great River needs to replace lost coal capacity, but while they are under no statutory mandate to phase out natural gas, they “know how to read what direction the wind is blowing,” Jaramillo says. They don’t want to build a natural gas plant with a 30-year rated lifespan only to face a carbon price or a clean electricity standard (CES) forcing its retirement in 10 or 20. In the long term, gas is on the way out, and every natural gas plant built from here on out is a gamble that could very well come up stranded. That will only be more true in 2025.There are other reasons utilities might be trending away from natural gas. In California, of course, they are forced by laws mandating rapid decarbonization — and more states, like Washington, Colorado, and Oregon, are joining it in rapidly decarbonizing electricity. In the New England grid, they’re having trouble importing enough natural gas through the pipelines in times of peak demand; LDES could be the easiest way to ease grid congestion. In grids like Texas’s, natural gas has proven an extremely unreliable hedge against extreme cold snaps; LDES could help improve reliability margins for ERCOT, Texas’s grid operator.To achieve clean energy targets, many jurisdictions will have to overbuild renewables, increasing curtailment, or wasting of renewable energy. LDES could reduce or eliminate curtailment, allowing renewables to produce at full capacity whenever the weather is aligned. That would have the effect of further boosting the value of existing renewables — something else natural gas plants can’t do.Finally, there are commercial and industrial (C&I) entities who want to race down the decarbonization curve faster than the jurisdictions they are located in. Both Google and Microsoft have committed not just to running on 100 percent clean energy, but to running on 100 percent clean energy 24/7, throughout the year. Accomplishing that feat will require them to procure their own clean firm generation. C&I customers are the fastest growing segment of market demand for renewables and could prove a key early market for LDES. There’s no mass market for LDES yet — nothing like the hundreds of gigawatts we may eventually need — but there are several localized markets, adding up to several gigawatts of needed capacity, which is more than enough to keep Form busy from 2025 forward. Natural gas is as weak as people believe it to beSo that’s Form’s case that it can find a market foothold. It sounds plausible to me, but then, I’ve heard lots of plausible-sounding stories from startups over the years … only to read about dead startups a few years later. Time will tell, etc.Two things give me some hope that Form might make it. The first is that the capacity price point it now claims ($20/kWh) is extremely low, already close to the price range it will need to start cutting into firm generation. And that’s just the beginning. If it can find a market and start scaling up, it should be able to bring down costs substantially. (It is basically building its demonstration project by hand; standardization and scale will bring enormous savings.)“We see, in a reasonable timeframe, being able to get to $10/kWh, all in, at the system level,” says Jaramillo. If it can pull that off, Form can start substantially cutting into gas markets. And “we are far from being done thinking about how we might displace ourselves,” he adds. “One characteristic of the team we built is that it's phenomenally creative.”So Form will be getting cheaper alongside renewables. The second thing is the sociology of the transition away from gas. Up until fairly recently, gas was seen as a “clean fuel,” reducing coal pollution. Elite opinion is currently lurching in the other direction. None other than Democratic Senate Majority Leader Chuck Schumer has publicly acknowledged that natural gas does not qualify as clean energy. Gas is the dominant fuel on US energy grids, and still growing, which has given it an aura of inevitability. Adding to that aura is a belief among many utilities that renewables and LIBs can not provide a reliable alternative to gas. They believe they need lots of dispatchable power. Those fears are likely overblown, especially at this early stage in the energy transition, but they are real. So the turn away from natural gas is tentative and scattered for now. If, in the latter half of the 2020s, alternatives like Form emerge, which allow utilities to build more of the cheapest generation available (renewables), the turn against gas could become more precipitous. Just as fear is contagious, so is FOMO. It’s one of the most important questions in clean energy right now: whether the shift in US electricity away from natural gas will be slow and steady or whether it will happen the way Hemingway’s character famously went bankrupt: gradually, then suddenly. It depends, in part, on psychology. The weaker gas looks, the more utilities will shy away from it. If Form — or other LDES — proves viable, it will represent the last piece of the puzzle, the key to a reliable, fully decarbonized grid. That could push US utilities closer to the point of a decisive break with gas. Get full access to Volts at www.volts.wtf/subscribe

Fossil fuel subsidies are a vexed and peculiar topic. On one hand, everyone seems to agree they’re bad and should be eliminated (it’s in Biden’s jobs bill, for instance). On the other hand, they never go anywhere. In part, it’s because we lack a clear understanding of what constitutes a subsidy and what impact they have. Analysts are forever arguing over exactly what counts, trying to tally up the total subsidies fossil fuels receive, but there are very few bottom-up attempts to document the concrete effects of subsidies on the economics of oil and gas projects.That’s why I was interested in this new paper in Environmental Research Letters, by Ploy Achakulwisut and Peter Erickson of the Stockholm Environment Institute and Doug Koplow of Earth Track. It breaks down the effect of 16 specific, direct US fossil fuel subsidies on the profitability and emissions of US oil and gas production. As for those subsidies, there are three basic categories: “forgone government revenues through tax exemptions and preferences; transfer of financial liability to the public; and below-market provision of government goods or services.” (Note that this study does not get into unpriced environmental externalities like air pollution and greenhouse gases, which are themselves a kind of subsidy.)Subsidies either enrich oil & gas investors or spur new oil & gas projectsOne reason there aren’t many bottom-up analyses like this is that it’s devilishly difficult to pin down the economic effect of a subsidy. Doing so always involves a counterfactual baseline — what would have happened absent the subsidy. Anytime counterfactuals are involved, there lots of assumptions to make and variables to account for.To take just a couple of examples, the effect a subsidy will have on the decision whether to invest in a new oil and gas project will depend on oil and gas prices and the hurdle rate. (The hurdle rate is the rate of return investors require to fully cover risks; more aggressive decarbonization efforts will presumably mean more risk and thus a higher hurdle rate.) The study actually runs several different scenarios based on different values for those variables, producing a cost curve for each region of the US. It gets complicated.For clarity, they chose to highlight two scenarios: 2019’s higher oil and gas prices with a 10 percent hurdle rate and 2020’s lower prices with a 20 percent hurdle rate. Here are the results:We find that, at 2019 average market prices of oil and gas, the 16 subsidies could increase the average rates of return of yet-to-be-developed oil and gas fields by 55% and 68% over unsubsidized levels, respectively, with over 96% of subsidy value flowing to excess profits under a 10% hurdle rate. At lower 2020 prices, the subsidies could increase the average rates of return of new oil and gas fields by 63% and 78% over unsubsidized levels, respectively, with more than 60% of oil and gas resources being dependent on subsidies to be profitable under a 20% hurdle rate. The way to think about this is, subsidies can have one of two negative effects, depending on market circumstances. With higher prices and a lower hurdle rate, “only 4 percent of new oil and 22 percent of new gas resources would be subsidy-dependent, pushed into making profits,” Achakulwisut told me. That means most of the projects didn’t really need subsidies and the extra money is all going to bigger profit margins for oil and gas investors.With lower prices and a higher hurdle rate, “subsidies would matter a lot,” she says, “and 61 percent of new oil and 74 percent of new gas would be subsidy-dependent.” The subsidies would directly lead to more production. Achakulwisut summarizes: “In one case, it's going to profit, amplifying the incumbent status of the oil and gas industry. In another, under more aggressive decarbonization policy and low oil and gas prices, it's actively working against the climate goal by spurring additional production.”Either of those effects is bad. In 2021, we don’t want bigger profit margins for oil and gas companies and we don’t want more oil and gas production.One subsidy to rule them allWhat’s interesting is that the benefits to oil and gas are not spread evenly over different subsidies. In fact, one in particular dwarfs the others: the expensing of intangible exploration and development costs (“intangible drilling costs,” or IDC), a policy that’s been around for over a century.The chart below shows the “average effect of each subsidy on the internal rate of return (IRR) of new, not-yet-producing oil and gas fields, at average 2019 prices of USD2019 64/barrel of oil and USD2019 2.6/mmbtu of gas.”As you can see, in every region, the IDC deduction is the dominant subsidy. It “increases US-wide average IRR by 11 and 8 percentage points for oil and gas fields respectively.”The IDC deduction has been the subject of controversy for ages. The Committee for a Responsible Federal Budget (CRFB) has a good breakdown here. A definition: Intangible drilling costs are defined as costs related to drilling and necessary for the preparation of wells for production, but that have no salvageable value. These include costs for wages, fuel, supplies, repairs, survey work, and ground clearing. They compose roughly 60 to 80 percent of total drilling costs. Since the dawn of the federal income tax code in 1912, US law has allowed oil and gas companies to deduct all these costs up front, rather than as they are incurred. The idea is to defray the risk that an exploration project will come up dry; in practice, it’s a fat financial reward at the front end of every project. The industry and its defenders offer an array of arguments in favor of the deduction, which CRFB adeptly summarizes:Supporters of the deduction argue that oil and gas and exploration and development is a high-cost industry, and allowing expenses to be recovered immediately encourages companies to invest. They explain that altering the deduction could result in job losses, since wages are included in the deduction.More broadly, supporters point out that the oil and gas industry receives the same treatment that other manufacturing or extractive industries receive, and are merely a target because of the now-controversial nature of reliance on fossil fuels. Finally, supporters of energy independence often support the IDC deduction, as it promotes further exploration and development of wells within the United States.The thing is, all those arguments are true. But the subsidy is still bad.Yes, deducting IDCs encourages investment in new oil and gas projects and creates new jobs. That’s what subsidies do! It just happens that we no longer want to encourage investment in oil and gas. Yes, other manufacturing and extractive industries get similar deductions. The difference is that we want to encourage investment in those other industries and we no longer want to encourage investment in oil and gas. That’s the whole point.The issue is not whether the subsidy does what it’s designed to do. It does. The question is whether we still want to do the thing it does. We do not. People have been calling for removal of this subsidy for decades. It’s still a good idea.Oil and gas also benefits from offloading its environmental regulatory costs onto the publicThe other subsidies that substantially boost oil and gas profit margins are “regulatory exemptions that lower [oil and gas] production costs at the expense of the health and safety of workers and the public.” Two such exemptions shift financial liability for well closure and reclamation from companies to state governments, which saddles places with lots of abandoned wells — Texas, Pennsylvania, and Oklahoma, for example — with an average of $10 billion a piece in remediation costs, which well exceeds what those states have set aside in cleanup funds.Another allows oil and gas to treat solid wastes from extraction as non-hazardous, despite the fact that they frequently contain toxic chemicals or radioactive materials. This reduces per-well operational costs an average of $60,000.Keep in mind, this study didn’t try to tally up the public health benefits of removing these subsidies. Others have done so, like a recent study from Yale’s Matthew Kotchen that tried to tally up the “implicit subsidies” to US fossil fuel producers represented by “externalized environmental damages, public health effects, and transportation-related costs.” His conclusion:The producer benefits of the existing policy regime in the United States are estimated at $62 billion annually during normal economic conditions. This translates into large amounts for individual companies due to the relatively small number of fossil fuel producers. Those implicit subsidies are far larger than any direct subsidies. In 2017, the International Monetary Fund tried to tally up implicit subsidies across the globe and came up with an eye-popping $5.2 trillion. Like much climate policy, removing fossil fuel subsidies requires directly confronting fossil fuelsI take three things from this research. One, fossil fuel subsidies really do strengthen the economics of US oil and gas companies and accelerate investment and exploration. That’s what they’re designed to do, and they do it. Two, the oil and gas industry really does materially benefit from being allowed to offload its environmental risks onto the public. And three, the deduction for intangible drilling costs is the main fight. It is the big subsidy, the one that’s actually pushing new oil and gas projects over the line into profitability, and it is a much more specific target than “fossil fuel subsidies.” It seems like something some clever group ought to be able to build a campaign around. It’s worth noting that Joe Biden’s proposed 2021 budget would eliminate the IDC deduction, along with a host of other fossil fuel subsidies. Then again, Obama included the same kinds of provisions in virtually every one of his budgets, and Congress never complied. Like I said, fossil fuel subsidies just hang around.In this way, they represent the sad reality of federal climate policy in the US, which involves a lot of heady talk and future targets, but very little that would confront fossil fuel industries head-on over the next decade. (I wrote about this the other day.)The problem is that the benefits of fossil fuel exploration and production are concentrated in a few regions and communities and the members of Congress who represent those communities are hyper-motivated to preserve existing advantages. In contrast, the benefits of ramping down fossil fuel production are spread out, geographically and temporally, so few members of Congress will champion it with the same vigor. That’s how climate policy runs aground in the US — in the translation from high-flown rhetoric to policies that will materially affect the bottom lines of fossil fuel companies.This study offers us a marker of serious commitment: repealing the deduction for IDCs. When Congress actually gets around to addressing that age-old subsidy, we’ll know we’re finally getting somewhere. Get full access to Volts at www.volts.wtf/subscribe

In this episode, Rep. Sean Casten (D-Il.), the House Democrats’ resident clean-energy expert, discusses the importance of the Federal Energy Regulatory Commission, the influence it has over US decarbonization, and the urgent need for Biden to appoint a new commissioner. We also get into our favorite FERC orders!Full transcript of Volts podcast featuring Rep. Sean Casten, July 28, 2021 (PDF version)David Roberts:Greetings. Welcome to the Volts Podcast. I am your host, David Roberts. As Volts subscribers are well aware, the fastest way to decarbonize the US economy is through clean electrification — decarbonizing the electricity sector and shifting energy use in other sectors like transportation and buildings over to electricity.How can the federal government help that process along? Most control over power utilities and markets lies at the state level. There's only one federal agency with real jurisdiction over electricity: the Federal Energy Regulatory Commission, or FERC.FERC is not an agency people many people follow, or even know about — in fact, in the Volts household, it has become a kind of jokey shorthand for "the boring stuff dad writes about."But it could play a key role in implementing Biden's climate agenda. And it has come to a crucial crossroads. FERC has five commissioners. Currently, three are Republicans, but one of them, Neil Chatterjee, came to the end of his term on June 30. He has agreed to stay on temporarily because Biden, somewhat inexplicably, has yet to formally nominate anyone to replace him. Until he does, and the Senate confirms, the commission will not have a Democratic majority and won’t be able to get anything big done. That’s unfortunate, because FERC has lots of big decisions to make — about transmission, electricity rates, and markets — with potentially transformative consequences. But the agency moves slowly, with rulemakings taking months or years, and it only has three and a half years to get everything done. Biden needs to get someone in that seat.Enter Rep. Sean Casten. The Democrat from Illinois' 6th District, which includes wide swaths of the western suburbs of Chicago, is trying to draw attention to FERC and the importance of a bold and climate-minded new commissioner. He’s leading a communications campaign called "Hot FERC Summer," a twist on Megan Thee Stallion's "Hot Girl Summer." (Hey, nobody said getting eyes on FERC was easy.) Casten, a member of the House Select Committee on the Climate Crisis, recently delivered a floor speech filled with Stallion-related puns of varying cheesiness, calling on Biden and Dems to nominate and approve a new commissioner quickly. He has also co-authored bills on transmission siting and ratemaking that clarify and reinforce FERC's obligation to take climate change into account in its decisions.I have known Sean since the 2010s, when he was the CEO of a waste heat recovery company called Recycled Energy Development. His long experience in the clean energy industry informed some sharp analysis, and he occasionally wrote guest posts for my blog at Grist, the environmental news site I worked for at the time. As you can imagine, it was a delight to see him win a seat in Congress in 2018, bringing his deep energy expertise to a body that has often lacked it. I was excited to geek out with him about FERC and the state of congressional energy politics.Rep. Sean Casten, welcome to Volts! Rep. Sean Casten: So happy to be here, David. David Roberts:Sean, I knew you back when you reached the pinnacle of your career: I'm talking, of course, about when you were writing guest blog posts for me at Grist. Rep. Sean Casten:Really, it's been downhill for both of us since we left Grist. David Roberts: Suffice to say, you know more about energy than the average bear; probably considerably more, I would say, than the average congressperson. So before we get to FERC: When you got to Congress, would you say that the average clean-energy literacy of your colleagues in Congress was higher or lower than you expected going in? Rep. Sean Casten:Oh, that's the kind of question that could get me in trouble for throwing people under the bus, but let me maybe offer one of the best pieces of wisdom I got on getting sworn in. Jamie Raskin, who of course everybody knows now because of his work on impeachment, is just a wonderfully kind and decent person. And he said to me, when I was just sworn in and trying to figure out the ropes of this place, he said, “This is a job that makes you very broad, but it's very hard to have the time to get deep. And if you want to know how to get things done, ask people why they first ran, because that's a really good shorthand way to find out where people are deep. If you really want to do something on healthcare policy or criminal justice, it'll help to know who those are.” So I've tried to follow that policy. I've asked around, and I will tell you that I have not met a lot of people who said, “I ran because I care about energy policy” — which is not a criticism, because they did run for other reasons, and they have depth in other areas. But historically, energy policy is not the kind of thing that pollsters say, “the voters demand somebody who really appreciates the nuances of obligation-to-serve and ratemaking proceedings,” right? So yes, it's lonely. It's just not a way that people typically get into Congress.David Roberts:Well, all of the sudden, these issues are on the front burner, and everybody in Congress is expected to know a bunch of stuff about them. Have you found that people are open to being educated? Is there a crash education process happening?Rep. Sean Casten:There is and there isn’t. It's interesting, I find that energy policy is a lot like foreign policy in the sense that most voters don't care, but we [Congressfolk] make decisions that are really impactful. So it becomes an area where members are very deferential to staff. I am as well; I don't claim to be an expert on, you know, the situation going on in Afghanistan right now. But I trust that there are staff on the Foreign Affairs Committee, and their job is to understand that.So yes, members are receptive. But what's hard on issues like energy policy is that the job of a congressional staff person is to figure out how to get done what is politically possible; the job of a staff person is not to move the Overton window. It’s hard to get members who are confident enough in their own skills to really try to push the envelope on energy policy.David Roberts:Let's talk about FERC, the Federal Energy Regulatory Commission. Whenever I tell people I'm writing about FERC, the eye glaze is almost instant. So maybe just tell us, why should ordinary people care about FERC?Rep. Sean Casten:The way you stop people's eyes from glazing over with FERC is you couple your conversation with a picture of Megan Thee Stallion and some hip-hop lyrics. I've found this week that is a very effective way to keep people engaged.We can get to that, but look, stipulate a couple things. Number one, we have to get to zero carbon way faster than anybody is even talking about in the most ambitious world right now. Number two, as you've so eloquently explained, it's really hard to see how we do that without “electrifying everything.” If that's going to happen … let's just talk about the transportation sector: the transportation sector uses about as much primary energy as the electric sector uses today. So if we were just going to electrify the entire transportation sector, we need to build about as much electricity generation as we already have, and then build a whole lot of wires to connect that new generation that's going to be in different places — because it's going to be where the sun and the wind and the renewable resources are, not where the coal seams are — up to loads in new places along highways and homes and apartment buildings. And that's just for the transportation sector. The Department of Energy has no meaningful jurisdiction over those questions of generator siting, generator installation, generator permitting, transmission siting, the markets that regulate and give people an incentive to deploy capital. The EPA doesn't really have a lot of jurisdiction over that; they have some on the environmental side. Department of Transportation doesn't really have much jurisdiction over that. FERC does. And so, if we are going to do what's necessary on climate, FERC is really the only agency that has the tools necessary to do what is environmentally necessary, even though it's not an environmental agency. That's why you should care.David Roberts:Yeah, it's the only piece of the federal government that gets directly at electrification. I'm not sure people really understand that. Before we jump into some of the substantive issues FERC is wrestling with, the big thing going on with FERC right now has to do with commissioners. There are five commissioners on FERC; by statute, two of them have to be from the minority party, and three can be from the majority party. It's been a long time since there were three Democrats, but it might happen soon. What's the state of play there?Rep. Sean Casten:Yeah, hugely important. McConnell largely stonewalled Obama's [FERC] appointments, so it's been not as effective as it could be for a long time (like most things McConnell touches). Chairman Chatterjee — well, I should say former Chairman Chatterjee, now Chairman Glick; he was the chairman before Glick was elevated — his term expired in June. So technically he's off; he is agreeing to stick around until the new nominee comes in. I actually get along pretty well with Chatterjee; he and I have spent a fair amount of time together, in spite of the fact that he started his career as an energy aide to Mr. McConnell and comes from the coal belt. I think he's been more forward-thinking than a lot of people thought he would. But he still is not, by his nature, going to lean in on some of the transformational issues in the power sector. So with him gone, the president has the opportunity to appoint someone; there are several names being thrown out that have been vetted. I'm very long on rumors of the status of that process. But what I can say factually is that the Biden administration, as we talk right now, has not affirmatively put one of those names forward. And therefore the Senate has not started confirmation hearings. That really needs to accelerate, because until they've got a 3-2 majority, they can't initiate the hearings; until they've initiated the hearings, they can't do the ANOPRs — the announcements of proposed rulemakings — for public comment; until they do those, they can't do the orders; and until they do the orders, the markets are not going to start responding to the ways that they might change these structures. We don't have a lot of time.David Roberts:Yes, those things take a lot of time.Rep. Sean Casten:Yeah. So it just needs to go right away. I'm quite certain that if the White House wanted to, they could twist arms and put some pressure to make that process move a little faster. I'm also quite aware that they have a lot of things on their plate, and they can't do all of them. So I'm hoping it'll come quick. But it's already not as quick as I'd like it to be.David Roberts:Well, speaking of rumors, do you have any theories about the lack of urgency here? Because presumably there are staffers up there who appreciate that FERC is the only route to a lot of President Biden’s goals. Do you think they're just not paying attention? Or do you think something else is going on? Rep. Sean Casten: I'd be purely speculating, but I think it’s probably not unreasonable to conclude that it's related to how this conversation started. It is not just your listeners whose eyes glaze over when we talk about the importance of the Federal Energy Regulatory Commission. So there's not been a tremendous amount of political pressure to expedite this, as much as there has with, say: we need to get new FTC staff appointed so that we can talk about what we're going to do with social media companies and antitrust; we need to get an attorney general to reconcile with the issues of the Trump administration and the horrible things going on with white supremacy in this country. Those are really important issues too. But those have tended to attract a bit more political attention than this particular agency.David Roberts:I have also heard rumors that there's some talk of the FERC nominee being used as a kind of bargaining chip to get centrist or moderate Senate votes for this reconciliation bill. Do you know anything about what's going on in the Senate behind the scenes on that?Rep. Sean Casten: I am not familiar with that specific rumor; that doesn't sound implausible. I think it is safe to say that anything meaningful we are going to do on climate is not going to be done in a bipartisan basis. I wish that wasn't true. It's tragic. But the way that our Democratic and Republican seats in Congress are distributed right now more or less tracks to the way that the energy-producing regions and energy-consuming regions of the country are distributed. And so anything that a functioning FERC would do to accelerate the deployment of lower-cost technologies — which also, by the way, is the deployment of cleaner technologies — implicitly is going to create a huge wealth transfer from energy producers to energy consumers, and therefore, from the empty, depopulated red parts of the country to the concentrated, populated blue parts of the country. I don't think it's intentional that the parties have aligned that way. But it means that it's very hard to … you know, I've said to some of my colleagues across the aisle that if your district loses $100, and mine gains $1,000, I can understand why we're both not going to yell, “Kumbaya, we've created $900 of value for the American people!” So yes, I think those who would prioritize bipartisanship in this moment — you can insert any name you would like into that box — do not overlap very well with those who prioritize the urgency of climate action.David Roberts:Well said. OK, speaking of the issues that FERC has its hands on, let's start with transmission. Transmission used to be a rather sleepy topic that not a lot of people cared about, but all of the sudden it's hot, it's in the news, everybody's talking about it. FERC has an open docket on transmission right now that they're getting ready to launch into, which everyone's very excited about … for some values of “everyone” …Rep: Sean Casten:Once a philosopher, always a philosopher. I can hear you describing those Venn diagrams. David Roberts:So what is wrong with transmission and what can FERC do to fix it? I know you have a bill specifically about FERC and transmission, but I'm also interested in what FERC can do on transmission without a clarifying bill, and what it really needs a bill from Congress for.Rep: Sean Casten:Let me take them in reverse order, because I think there's two problems with transmission. The first is that it is really, really hard to get a transmission project permitted in a timely fashion. And that is the result of the fact that there is no controlling agency for a transmission project. If you want to build a wire to connect the wind in Iowa to the electric loads in Chicago, every time that wire crosses a town line, a county line, a state line, you've got a different group of people who can object — as compared to natural gas, where you can have a single controlling agency, where everybody who might object can still weigh in, but they can only weigh in to one agency, and you adjudicate these all at once. That has made transmission virtually impossible to site in this country and is why for the last 20 years, the way that we've built power plants — pre the broad deployment of renewables — was to find where there was an existing interconnection and then run a gas pipe to that point to build a combined cycle plant at that node. Because it was easier to permit the gas. FERC can't really fix that; that needs to be fixed statutorily. The Biden White House and a number of us in Congress have been talking about creating a single Office of Transmission Planning that would have that authority. It’s really important, because then you would give certainty to people who want to build either generation projects that need transmission or the transmission to bring it to load. Like I said, FERC can’t solve that; we can and should, legislatively.David Roberts:Yeah, that's the Federal Power Act, I think it was? Back in the 20s, 1920 I think —Rep. Sean Casten:1935, I think, was the Federal Power Act.David Roberts:Specifically gave FERC that oversight of natural gas pipelines, and just through its silence, didn't give it control over transmission. So the idea here would just be an addition to the Federal Power Act saying FERC also has control over this, right? I mean, is it that simple?Rep. Sean Casten:I think so, although I'm just an engineer, so I'm not going to quote you on the legal ways to solve that. I'll defer to smart energy staff on that one. But yes, conceptually, you're exactly right. The second problem is one that I think FERC does have the authority to address. And it's the classic problem of regulatory capture. There's a huge governance problem at all the regional independent system operators [ISOs] and regional transmission organizations [RTOs], which is that their membership is a function of their market participants. So wherever you live, think of the big utilities in your state, the big transmission companies: they're the members of those organizations. And those entities, more often than not, make most of their money during a few hours of the year when there's a real congestion situation. Electric markets are actually extremely efficient most of the time, which means that it's really hard to make a profit most of the time. And when you get congestion on nodes, that's where the big money comes in. And so they have a very strong economic disinterest in market efficiency. So that has historically made it really hard to connect transmission that would have the practical effect of taking excess generation out of one part of the grid that's got too much load and moving it to a place that's congested on a little node down below. You look around the country, Maine has always had way too much generation, southeast Connecticut has always been way too constrained. No matter how long we try to fix that, it's like, why are we not getting that fixed? In California, you've got times … well, where you are David, up in the Northwest, BPA is dumping excess power, because they have more wind and hydro than they know what to do with, even while California is short, but you can't get a wire that's run down there. And those are solved by making sure that we bolster the interregional connections on the grid, which is what this bill — that's really Senator Heinrich, I should give all credit, has been really leading this, I'm carrying it in the House — but to make sure that we fix some of those interregional issues, and really direct FERC to do it, because the pressure from the RTOs and ISOs is going to be to resist that. I think they have that authority. I think there's some debate over whether they have enough authority to deal with some of the cost-allocation questions. If your utility was to build a transmission wire to bring power down to northern California, should you pay for that or should northern California pay for that or how should you divide that? Those are tricky issues. So some of the cost allocation comes in, but I think FERC has the ability to do that. But the problems derive from the governance issues, which is more an issue of, are you willing to flex the authority you have? If not, do you need authority that you haven't currently been provided?David Roberts:So what would that authority look like? If you have RTOs that are benefiting from congestion and you propose a line that's going to reduce congestion, the RTO is going to push back against you. What exactly does it mean for FERC to exercise authority there? Just to insist that someone build it? Rep. Sean Casten:Well, at the risk of having an overly naive view of politics, I don't see any problem with utilities advocating for their interests. And I don't see any problem with the regulator listening to those interests. The challenge is, what do you do when another set of interests is not in the room, or not as strong, and how do you make sure that their voice is heard? And that's just as true for, in our example, the beneficiaries in California vs. Seattle as it is for the beneficiaries who are not yet born and who are going to benefit in the future. I think a good, enlightened, public-prioritizing regulator is going to do that. And there are certainly plenty of examples of people who fit that description. I think of someone like Louis Brandeis on the Supreme Court. You can have the other kind of regulator as well. So I think some of what Congress can do is essentially mandate good behavior — which I wish, in some philosophical sense, we didn't have to do. But by mandating good behavior, we will ensure that good behavior happens. I do think, having said that, that if we get a good new commissioner to take this third spot, we will have a majority of well-behaving commissioners.David Roberts:One of the big problems is cost allocation. Right now, costs get allocated to the power generators who want to use the new line, despite benefits being spread out widely over the whole area that the transmission line covers. How do you see cutting that Gordian knot? Does your bill address cost allocation?Rep. Sean Casten:We do address some of it. Kathy Castor has a bill that more explicitly addresses cost allocation. Ours is more getting FERC to acknowledge that when they do those cost-allocation formulas, there's also a benefit allocation. There are benefits that go beyond things that are thought of in a very strict Milton Friedman “all that matters is the price of power in the next hour” kind of conversation. For example, we had a power plant in northern Indiana recently — it was a coal plant that was totally uneconomic, didn't make any sense to run as a source of energy, but was providing some really critical power-factor stabilization roles. That's one of these ancillary services that's not very well factored into retail markets, but the grid needs. So they came up with this really interesting approach of saying OK, we'll shut down the boiler, we'll turn the generator into a motor spinning backwards, and we'll use that motor just to do power-factor correction. And that will spread that benefit around the grid, so that we still get the benefit of this thing providing reactive power, even though it's not providing power. But that was a really interesting, creative solution that was done because the people involved were pretty smart and pretty innovative. But you wouldn't necessarily get there in a normal FERC proceeding, even if you had a transmission line that was providing some of those benefits.David Roberts:That's an extremely expensive way to provide spinning mass, isn’t it.Rep. Sean Casten:Well, actually, like in that particular case, the whole plant was already built. So it was actually kind of neat that you took this thing and said, instead of shutting down this coal plant and losing the jobs, we're still going to get the benefit from a pollution perspective of shutting down the coal plant, but we're gonna keep this existing asset running and keep some of the talent here. So it was probably a much cheaper way to provide that service than anybody else could. At any rate, I'm getting way down in the details now.David Roberts:FERC, by statute, is supposed to ensure just and reasonable electricity rates. So these big IOUs have to come to FERC and justify their rates. And one of the fights going back years now is whether climate damages should be taken into consideration when considering what counts as just and reasonable rates. You have a piece of legislation that explicitly tells FERC to do that. Can FERC do a little bit of that without legislation? And what exactly does your legislation specify that it do?Rep. Sean Casten:I would argue that FERC absolutely has this authority, and again, it's a question of, “let's make sure they also have an obligation to do it” stapled to it. There's two pieces of why this bill is necessary. The bill is the Energy PRICE Act. PRICE is an acronym that stands for something; I forget what it is [Prices Require Including Climate Externalities]. But what it does is remind FERC that, number one, the 1935 Federal Power Act said rates must be just and reasonable; number two, in FPC (the name of FERC at the time) vs. Sierra Pacific in 1956, the Supreme Court ruled that the commission must ensure the protection of public interests; and number three, in 2009, the EPA endangerment finding — that I know is one of your favorite rulings — said that rates must take into account current and future generations. So with those three decisions in tandem, you have an affirmative obligation on FERC to set rates that take into account the costs and consequences of climate change and effectively set up markets that for all practical purposes build in a carbon price in some fashion. Now, that's the negative reason, protecting from a cost. There is an even more urgent positive reason for this, which is that every clean electricity generator effectively eats its investment thesis. By that I mean, you build these generators — whether it's a nuclear plant, a solar plant, geothermal, whatever you want — because you think you are going to make money, because you operate at a lower cost than the grid currently sits. You then put a source of power into those markets that is lowering the cost in those markets, because you've knocked off whatever was the higher marginal cost generator that would have operated but for you being there. So over time, particularly in the markets that have really embraced deregulation, you've seen electric markets get cleaner and cheaper, to the point that you now have — and again, it's what I alluded to in the Pacific Northwest — a lot of hours where the power price is negative, because there's so much hydro and wind on the system, and they don't know how to turn it off. That then creates a circumstance where, as clean energy succeeds, you lose the incentive to build any generator, because the value of electricity gets to be too low. I mean, think about how awesome that is, right? The whole theory that it's too expensive to care about the environment is exactly wrong. It's too cheap. Now what happens with FERC, who is tasked with an obligation to maintain consistent, reliable power? What do you do in response to that? I think the legislative and judicial history is pretty clear. What you do is provide a differential incentive to bring on the generation that is cleaner. So you get there through the same means, but you get there because you have to prevent these technologies from eating their investment thesis. It’s a strange thing to talk about with the solar and wind industry that seems to be booming right now, but that's what the nuclear industry is already going through. Those plants were built, and now they're not making enough money to justify their five-year refueling cost. They're having to shut down because they can't make enough money.Now we're having a political conversation: Should the taxpayers provide a subsidy to these nuclear plants to keep running because FERC failed to fix a problem that, I would submit, you could see coming?David Roberts:There's been a lot written about this lately, the declining marginal value of new clean energy as it comes online. So your idea is, instead of taxpayers subsidizing clean generators, FERC should in some way penalize dirty generators with a price, by forcing them to pay for their carbon emissions?Rep. Sean Casten:Oh, I prefer to call it a carrot to the good guys than a stick to the bad guys. But yes, they should ensure that there are incentives to build new generation that are consistent with nondiscriminatory pricing that does not adversely affect current or future generations. Will that be bad for coal? You betcha.David Roberts:This might be getting slightly too much in the weeds, but this issue of declining marginal value: you're chasing a receding target, right? You can do differential rates, and that will punt the problem down the road a little bit, but doesn't it just come back unless you're constantly escalating?Rep. Sean Casten:I guess it's a question that's much bigger than the energy industry. We've regulated all of our markets in this country for 30, 40 years on the assumption that as long as consumer price is falling, everything else must be good. So we outsourced huge swaths of manufacturing, because if we could have a country that is cool with child labor manufacture our dishwasher, as long as the cost of the dishwasher is cheaper, we'll do it. We've hit the limits of that as an operating philosophy, I think. I don't mean to duck your question; I think it's a valid question. But there are a broader set of societal values that are not always encapsulated in consumer price, and it just so happens that in electricity markets, we're on the verge  of hitting the limit, where if we don't answer that right, we're gonna lose our access to power. But it's the same dynamic playing out in a lot of other sectors.David Roberts:So what you're delicately trying to say is that maybe pushing electricity rates lower and lower and lower and lower is not the north star here; there might even be good public reasons to raise rates to pay for those benefits.Rep. Sean Casten:I’d put it slightly differently: if I can build an asset that is going to clean the air and create wealth for society, let's make sure we have a regulatory structure that ensures that that wealth is equitably allocated between consumers, investors, and the public at large, and doesn't disproportionately accrue to one of those groups. We are making the pie bigger. We just have to make sure we divide the pie appropriately.David Roberts:A lot of people involved in clean energy have a lot of complaints about IOUs [investor owned utilities]: the way they make rates, the way they plan. Could FERC, under this “just and reasonable” banner, force IOUs to — instead of using planning models based on the last 10 years, which is standard practice — use forward-looking models, since things are changing very fast now? Or, second part of the question, could FERC force them to consider resilience — which is a big thing now, people are losing power because of wildfires, because of cold snaps — in rates? What's the limit of FERC being able to kind of kick IOUs in the butt and make them move into the 21st century?Rep. Sean Casten:I don't know that I have a precise answer, just because IOUs are so different in one part of the country than another. Some states have embraced deregulation, where the IOU is really just the last-mile distribution company; other states still have fully vertically integrated monopolies, that own everything from the power plant through the transmission to the wire. And in all cases, you have some very clear jurisdictional limits between what FERC can do and what the states can do. Generally speaking, the monopoly franchise is issued by the state. And so FERC can impact markets, can impact interstate transmission of power, which the courts have deemed a federally germane conversation. But a lot of the IOU regulation planning is really more at the state PUC level. My all-time favorite FERC order — I'm sure you have yours — is 888. 888 was the one that really started to deregulate the power sector back in the early 90s. The reason I like it so much is because for the first time in the history of our country, we told the electric sector that you could make money by building the lowest marginal cost asset, instead of saying you make money by building capital that will be built into rate base. Within 10 years, the nuclear fleet went from 60 percent to 90 percent capacity factor, because all of a sudden, every utility said, “I've got this asset that's really cheap to run, I should run that asset more often.” We built a ton of combined cycle generation, natural gas, that was almost twice as efficient as the generation it replaced, because utilities said, wait a minute, if I can make money by having an asset that burns less fuel per megawatt hour, let me build more of those. Within about 15 years, the grid went from emitting 1,300 pounds of CO2 per megawatt hour to 900. All while rates were falling. I tell that long story because that order was implemented very differently in different parts of the country, much like many issues of our day. If you live in the Southeast, you effectively operate under a very different set of federal rules than if you live in the Northeast. The question you're asking, about how they could enforce more holistic planning tools on the IOUs — wouldn't it be nice to have a FERC hearing that asks, what are the lessons learned now from this 25-year-old order? How can we take the best practices that were implemented in some parts of the country and accelerate their movement into other parts of the country that were resistant at the time because they feared something that didn't come to pass?David Roberts:This segues perfectly into one of my other questions. The Southeast famously did not deregulate its electricity markets, and is still very much run by vertically integrated monopoly utilities, which own the power plants and the power lines and deliver the power. Now there's what I would characterize as a half-assed movement proposing a regional quasi-market called SEEM. I forget what it stands for [Southeast Energy Exchange Market]. Do you think FERC can or should force the Southeast to deregulate, form a wholesale market, form a regional transmission organization, and follow the rest of the country in restructuring? Is that something it can do? And do you think it should do so?Rep. Sean Casten: As someone who cares deeply about climate change and thinks that a properly designed market is the single best tool to address it: absolutely, yes. I also think it's entirely possible and not uncommon to do an improperly designed market. So the details matter, but yes, directionally, I'd love to see them do it.David Roberts:Speaking of intransigent regions of the country, one hot topic of conversation lately is about Texas-based ERCOT: they famously have created an RTO, a regional transmission organization, that only applies to Texas, thereby escaping FERC jurisdiction, because they don't ship power over state lines. And they are not shy about saying that's why they did it. But they had this cold snap, a bunch of people died, a bunch of people lost power. And now we've just had a study a couple of days ago that said ERCOT could have, among other things, saved about a billion dollars during that cold snap if it had just been interconnected with surrounding states. Is there any way for the federal government to force ERCOT to interconnect? Or will Texas basically have to make that decision on its own?Rep. Sean Casten:It's worth pointing out: we use ERCOT and Texas as synonymous, but El Paso is a part of Texas, it just isn't a part of ERCOT. And El Paso had the same weather, they had the same utilities, they had the same generator maintenance — and they didn't lose power, because they were connected elsewhere. Oklahoma is also a lot like Texas: they had the same weather, they didn’t lose power. When I said to one of my colleagues, who shall remain nameless, from the allegedly great state of Texas, “will you be advocating to interconnect to the grid?” there was a pause and the response was, “Well, we still are Texas.” You've got the perennial discussion about state vs. federal rights, and as you and I have had many conversations about, how much of our frontier mythology is based on … I want you to build the railroad, build the electricity, build the broadband, and then get out of here, because I'm just an independent cowboy.David Roberts:“Thanks for all that, but don't try to tell me how to use it.” Rep. Sean Casten:Yes, exactly. David Roberts:Well, I try these days to think, what would Republicans do? And they don't seem to particularly care about these divisions of jurisdiction or whatever; they just care about their goals, and whatever tools they have to achieve their goals. So do you want FERC to try to browbeat Texas into this, or pass some rules that would penalize Texas for not doing it? Rep. Sean Casten:I guess I'm not smart enough to know exactly what those tools are and how sharp they are. I do think, and part of the reason why I'm so bullish on FERC, is that there's this huge tension between being pro-market and being pro-business. And FERC at its best, in setting up these markets, has been pro-market. In all that story I told you about FERC order 888, most of the companies that built those gas plants went bankrupt; the plants are still running, but they designed the market so efficiently that people actually didn't make the money they thought they were going to make because the benefit flowed to the consumers. That's a very pro-market approach. As long as FERC does that — subject to what I said before about, let's make sure that we allocate the wealth through the system so that people aren’t choosing between consumer prices and bankruptcy — we're going to have good outcomes. But your comment about where are the Republicans on this: the Republicans — this isn't every Republican, but by and large — are a pro-business but anti-market party.David Roberts:Yes. I love that way of putting it. I don't think that's widely appreciated, the distinction you're making.Rep. Sean Casten:And to be fair, a lot of Democrats are not really pro-market either, right?David Roberts:Not many entities or people in the world are pro-market when the rubber meets the roads. They are pro their own interests. And markets are devastating to business interests, quite often.Rep. Sean Casten:I've yet to meet the person who comes into my office and says, “Hey, Mr. Congressman, I've got this problem: it's too hard for my competitors to succeed.”David Roberts:“We need to open this playing field. I need more competitors.” Yes, exactly.Rep. Sean Casten:“What can I do to make more transparency of information and lower the barriers to entry and exit, consistent with the principles of Adam Smith?” You never hear that.David Roberts:Yeah, not a lot of lobbyists for that perspective. While we're still in the states-rights things — and this may also be slightly too nerdy for anyone to care about — this question of where FERC jurisdiction ends and where state jurisdiction begins has been a hot topic among FERC nerds lately. Because some of the things FERC did with its regional markets via the MOPR, which I'm not even going to attempt to explain here, basically had the effect of setting regional market prices such that they cancel out state climate policies. That obviously is outrageous to clean-energy advocates, and it also seems like a real imposition on states’ power of movement and jurisdiction. Do you have any general thoughts on where the right line is between FERC and the states? It seems a little arbitrary these days, with electricity markets being so regionalized and so national even.Rep. Sean Casten:At the risk of sounding like a cop-out: I think, at some level, the blessing and the curse of our form of government is that we're not very precise about that answer. And it moves around a bit from time to time. And there are times when we think to ourselves, boy, thank goodness we have these state laboratories of democracy to lean in where the federal government isn't: witness California emission standards. There are other times where it's hugely regrettable that we don't have the federal government with some authority to step in: witness voting rights. And, yes, there's a big issue. Because I've spoken to him, I know that Chairman Glick is thinking a lot about how to structure markets to not step on state renewable-energy standards and other incentives they may have had in place, and to factor those in. But those standards exist in no small part because the federal government failed to act and the states stepped up. This is moving into a totally different realm, but if we were by some magical event to come to agreement on a federal economy-wide carbon-pricing structure tomorrow, we'd have this huge problem that the states have already done it in a bunch of places. You've got AB32 in California, RGGI, and you have a bunch of private players that have entered into long-term contracts with an expectation that those contracts would be honored to the terms of those agreements. So for all practical purposes, it is impossible right now to write a federal carbon-pricing structure that doesn't have tons of carve outs around the country. Which means a disharmonious standard when you cross the border from, let's say, California into Nevada, where, by the way, trucks and cars and powerlines cross all the time. We’d have these inter-state border-adjustment agreements or something to figure out. It's a cop out on your answer, because I think, on balance, I like our federal system of government. But it's a very issue-by-issue answer.David Roberts:Much like you rarely meet people who advocate for markets as such, you rarely meet people with a strictly principled answer to this question. It very much depends on, well, what's the issue? I mostly care about my issue, not these abstract questions.Rep. Sean Casten:As an interesting aside, when we first put NAFTA together, Mexico was essentially forced to come into compliance with our electric regulatory structure. But Mexico doesn't have nearly as strong a culture of states rights. So in Mexico, you can do things that seem completely magical and dreamy, where you can build a power plant in one part of Mexico that's optimized to the local resource — maybe it's a waste heat recovery project, like I was doing in a prior life, or a solar plant — but if that power source exceeds the local load, you can just dump it onto the grid and then enter into a purely financial agreement with someone on the other side of the country, who would happily take your excess power, and just agree to financially settle with them as long as there's a transmission corridor that connects. That's actually fairly consistent with FERC-level rules, but inconsistent with the ways that different states and regions have interpreted those rules within the United States. So the degrees of freedom and flexibility you have to optimize the system — so that locally you're saying, how do I make the maximum amount of valuable energy from this resource at this location, and then just figure out how to deal with the financial matters separately — we have those tools, just our states’ rights get in the way. So we have a model to our south of what we might be with a stronger federal structure, but for the fact that they don't quite have as robust a legal system as we have.David Roberts:Here's another puzzler for you: Some recent studies have shown that in aggregate, distributed energy resources — generators or energy storage that's on the distribution system, not on the transmission system — have huge effects on the national economy and electricity system, but are sort of intrinsically local. So I wonder, is there anything FERC can do regarding distributed energy resources? It seems like an awkward interface.Rep. Sean Casten:Well, by recent studies, I assume you mean ones from 1992 or so, because this was true as long as I was … David Roberts:Right, you were in the business of distributed energy resources!Rep. Sean Casten:Yeah, and it drove me crazy. I've lost track of how many times we optimized a generator to a local load, knowing full well that that was not optimized to the region, but we couldn't get paid to optimize for the region. So we were leaving value on the table, and in some cases, working against value because of the way that the rules were wrong. As long as we're going with cool FERC orders, there’s FERC 2222. (FERC has this interesting thing where they always pick very memorable numbers for their most impactful rules.)David Roberts:Are they totally arbitrary? Are they just picking those numbers out of the air for funsies?Rep. Sean Casten:I actually don't know the process, but I have been told that they do reserve palindromic or interesting numbers for good orders. David Roberts:And people call them boring.Rep. Sean Casten:Bringin’ sexy back. But 2222 is a fairly recent order that says you can sell demand services [in wholesale energy markets]. In other words, if I'm a generator, I provide energy, which is the megawatt hours that you get out of your socket. And then I provide capacity, which is the ability to be there on a moment's notice if you need me, even if I'm not running. What 2222 said was, there's a whole lot of capacity value created by these local distributed resources. If you enter into an agreement that says, sure, I can tolerate an extra five degrees — if you pay me for it, I'll shut my air conditioner off; to, let me install more efficient light bulbs that will cut the load down; to, let me put a generator on my premises that will displace load. All those things in aggregate are not only as valuable as the generator that's sitting there, able to suddenly provide new load, but objectively more valuable, because the generator that's 100 miles out of town may lose 20-40 percent of its output on a hot peak day by the time it gets into your house. If you can curtail load at your house, a megawatt of load reduction might be worth 1.2, 1.4 megawatts of capacity on the system. So 2222 provides a way, not so much for you as a homeowner to participate, but for so-called “load aggregators” to say, let me put together a whole network of people, and I can now participate equally with the big generators in these markets, with these values that I can aggregate from this collection of distributed resources. It's really cool.I think we've barely scratched the potential of what we could do within those markets. It's not a complete set of all the values that distributed resources can create, but it's certainly a heck of a first step.David Roberts:I wonder, though: 2222 opened up demand-side aggregators to play in these wholesale markets. But I wonder, as DERs proliferate, if that's going to be computationally nightmarish. You're going to go from wholesale markets that have a dozen participants to wholesale markets that have thousands or tens of thousands. I wonder if that's the right level of administration, if we don't need something more like a distribution system operator [DSO], like they have in the UK, to manage that local complexity and simplify it before it moves up to the wholesale level. Rep. Sean Casten:You might be right. I haven't thought about that level. I mean, we do have distribution system managers in the sense that every region has a load-serving entity. When I ran a utility in Rochester, NY, I had load-serving entity responsibilities over that particular node, where I had to know all those things and manage it. And in your distribution utility, Seattle City Light, they are a load-serving entity that has those responsibilities. To some degree, the DERs are already there. The question is, do we know about them. There's so many people doing what I was doing a decade ago: building the systems out, but not optimizing them for the grid, optimizing them for the local load. Every factory that makes a decision to put in a more efficient motor is having a meaningful effect, in aggregate, on their grid, but the utility doesn't necessarily know they're there or know that they have the ability to dispatch in response to a variable price signal. They don't find that out until they institute a variable price signal.  I haven't looked at the latest database, but last time I looked, there was something like 83,000 megawatts of cogeneration installed on the [US] grid. The median generator is two megawatts, and almost none of them are speaking in any kind of a data or dispatchability to the grid managers. They just turn on and off in response to local loads. What that looks like from the perspective of FERC at the highest level, or the distribution companies at the lowest level, is just normal variability — not much different from a bunch of people turning their lights on and off. But because they don't have the data, they also aren't going out and saying, this would be really valuable, could I pay them to dispatch according to some larger value?David Roberts:I guess when I envision that kind of detailed local management, where you're trying to coordinate things so they work at the local and regional level … I’m just trying to imagine RTOs doing that, for five different regions they're overseeing, with thousands of DERs in each of the regions. I'm inclined to think we need more robust management closer to the distribution level to keep track. Rep. Sean Casten:The AI robots will take care of it. We’re just going to teach them.David Roberts:I used to have such faith in that. And then I was researching this article about that, and everybody I talked to said, no, the robots are not going to do this. There's not going to be the robots. I was so psyched about the robots. We've mostly been talking about electricity, because of course it is the most important thing in the world and everybody should know more about it. But FERC also has jurisdiction over [natural gas] pipelines, and has been quite profligate in the past in approving pipelines. There's been this heated battle between Glick, the Democratic commissioner, and Chatterjee, the Republican commissioner, about whether FERC should take climate change into account when approving or not approving pipelines. Are you involved in any legislation regarding that, or do you have any opinions about what to do about FERC and pipelines?Rep. Sean Casten:I'm not hugely involved. Obviously, I feel strongly that FERC does have the authority and obligation to take climate change into account in what they approve. What gets a little bit harder about pipelines vs. electricity, at least to my small brain, are conversations around, “Should we provide incentives for the market to meet people's energy needs as cheaply as possible?” Those easy, black and white, absolutely yes-every-time questions. Conversations around, “Should we limit people's ability to access energy in exchange for considerations about other moral issues?” are a lot grayer. That's not to say categorically yes or no, but it's harder when you're saying, if we don't build this pipeline, will you still be able to keep your house warm in the next cold snap? That’s different from, when did we get the incentives right to provide you resources? A lot of times this conversation about pipelines is those two arguments sailing past each other.David Roberts:But if you talk to activists, they'll say these pipeline companies are not making very plausible cases that they're necessary, that a lot of these are fly-by-night, debt-heavy fracking companies that are profiting and not being held to very tight account. Rep. Sean Casten:I'm not saying those arguments are not sometimes true, I'm just saying they’re not always true. At some level, energy’s like sex and drugs: if you want to curtail supply, you've got to curtail demand. You can't curtail demand by limiting supply, that just criminalizes supply. So let's invest in efficiency, let's invest in conservation, let's make homes tighter. But if you say you can't build a pipeline across the Canadian border, you better be happy with a lot more port traffic and rail traffic, because as long as people still want that energy, they're going to find a way to get it. David Roberts:Enough about FERC. I've kept you a long time, and we probably talked about FERC more than any two people have a right to.Rep. Sean Casten:A fraction of what the planet deserves.David Roberts:A fraction of what the planet deserves. Oh, actually, you had a third bill about FERC; let's mention real quick what that was.Rep. Sean Casten:The third one is probably the least interesting. This was a right to timely rehearings. Frankly, this is what we were saying before, about how it is appropriate for the IOUs to argue their case before FERC, but it is not appropriate for the other side not to be heard. In every utility regulator, state and federal level, one of the ways you control the process is by limiting the other side's access to the process. So this is basically just making sure that when people have disputes, they have some sort of a cost-effective, time-effective way to make sure that their case is heard.David Roberts:So, to summarize the foregoing: it sounds like you think FERC already has a lot of the statutory power it needs to implement a lot of these things, and a lot of it just comes down to kicking them in the butt to do it — a lot of which sounds like it could be solved with a sufficiently committed commissioner. In some sense, that might solve a lot of these problems, just getting three commissioners on the board who are aimed in the right direction.Rep. Sean Casten:Sing it from the rooftops. David Roberts:Passing bills in Congress has basically become impossible because of the filibuster, so what do you anticipate happening to these bills? Do you want to sneak them into the reconciliation bill? Do you think there is real prospect of getting 10 Republican senators to care about FERC and vote for a FERC bill? Where do you see this legislation going?Rep. Sean Casten:I wish I had a clear answer. I was chatting with Secretary Granholm earlier this week and I told her that I feel like us members of the House spend most of our time peeking out the door, looking at the other side of the Capitol, waiting to see if the parliamentarian is going to issue a white or black puff of smoke.David Roberts:Just doing your chanting, sacrificing a goat. Rep. Sean Casten:Exactly. Let's be really clear: get rid of the damn filibuster, it gums up everything and it stops us from doing our job. It's not what the founders intended. It's just something you do if you think the best way to resolve debates is to defer to the will of the minority, because that's what the filibuster does. Having said all that, as long as it exists, the way that you pass things that are supported by bipartisan majorities of the American people, but are not supported by bipartisan majorities of the United States Senate, is by jamming them into huge bills in corners where people aren't paying attention.David Roberts:Yes, like the energy bill that passed at the very end of the previous congressional session, which miraculously had all kinds of good energy stuff tucked away in it, which survived, as far as I can tell, entirely because no one was paying attention.Rep. Sean Casten:And because it was jammed in with a bunch of other things that people did like, and said, I'll take a little bit of this with that. I don't remember that speech by our founders ...David Roberts:“Thou shalt jam everything together and hope no one’s paying attention.”Rep. Sean Casten:Exactly. Climate is hard to predict, but let's start with the positive: we have a White House that is absolutely committed to doing what's necessary. We have House and Senate leadership that is committed to doing what's necessary, and therefore is committed to saying until we have everything we have nothing. So we will get whatever we can into the bipartisan package, and then we will look at what's left and try to find a procedural way to get that into the reconciliation package, so we can generate them together. That process, at least in theory, has the potential to do a whole lot of good things. What's hard in practice is that, because of the arcane rules of parliamentarian and the reconciliation process and the Byrd rule, the things we can do that are subject to reconciliation are by and large limited to things that require the expenditure of federal money. And almost everything we're talking about at FERC is a policy change to unleash private markets. So we're in this bizarre case, where if we insist that Republicans must be at the table, then we are insisting we do not embrace capitalist free market principles — that we have to prioritize spending federal dollars to fix these problems.David Roberts:That's why all policy these days gets crammed through the tax code. It’s not because that's the best way to do things, it’s just the only way to pass things anymore.Rep. Sean Casten:I don’t know that I’d be quite that explicit, but that is certainly part of it. Secretary Granholm has said that if we're going to electrify everything, as we must, we need to build 1,100 gigawatts of new generation. I think she might be a little low. For context, we currently have 1,000 gigawatts of generation total installed in the country. Jesse Jenkins over at Princeton has said that once we build that out, we'll need to spend at least $350 billion in transmission to connect it up to the grid. If you figure that the generation is going to cost $1,500-$2,000 a kilowatt, and Jesse's right on the transmission side, that means we need something like $2-3 trillion just for the electric sector. We haven't gotten to roads and bridges and ports and EV charging stations and all the other stuff in the infrastructure package. That's not to say that we can't do it, just that, if we are going to do what's necessary, we should be working with the private sector. They have a lot of cash too! They’ve got more than we do, in fact. So the more we lean on reconciliation, the less we have the ability to lever private markets and all of that entrepreneurial zeal that we love in our country, which means we're not going to do as much as we should.David Roberts:Okay, final question, speaking of the reconciliation bill. Clean-energy wise, climate-wise, what do you think are the top two or three things that should be prioritized in that bill?Rep. Sean Casten:How do I pick my favorites? At core, making the clean-energy transition we need depends on building assets, not operating assets, because the assets we will build will run all the time, because they’re so much more competitive. The coal industry is dying because it can't compete economically — and no one ever woke up in the morning and said, “Given the price of power today, I'm gonna turn off my solar panel,” right? You just have to get them built. So I'm focused on those things that will accelerate the construction of those assets: a well-designed CES. David Roberts:A clean electricity standard, requiring utilities to boost their percentage of clean energy.Rep. Sean Casten:Yeah. Senator Smith has a great CES. Designing that well provides a huge carrot to clean generators — when you're sitting down saying, “Can I justify this investment?” it goes from “No” to “Holy smokes, I sure can, because I'm getting paid for this societal value that I'm creating.” It's going to be key to watch how that evolves, because it’s being tweaked right now to fit into a reconciliation process.David Roberts:Designing well means, one, to achieve your goals, and two, to please the parliamentarian wizard — which are not necessarily the same design constraints.Rep. Sean Casten:I'm not even sure they're in the same room. But a well-designed CES is really important. I'd love to see a proper market for carbon. But if I have to choose between carrots and sticks, give me a carrot, and a CES is a carrot. Also, for obvious reasons, we’re focused on anything we can do to accelerate the deployment of transmission. We've got a pretty strong infrastructure bill from the House, the Invest Act, that has a whole lot of money in it to build out EV charging, to make sure that EV charging is done equitably, so it's not only available to people who own their homes and have a garage that they can put a charger in. But if you go through and build all that out, we need to make sure that we've got the wires and generation to meet that expanded electric load. So transmission and CES would be my big two.David Roberts:I've heard transmission’s having a rough time of it in the Senate, that there's pushback from Republican senators about some of the language around transmission in the bill. Do you know anything about that? Rep. Sean Casten:The subtext behind all of that is energy producers vs. energy consumers. If you build out transmission, you will make it easier for more cost-effective sources of power to find a home for their product.David Roberts:Right. Oh, what a system we've built.Anyway, thank you so much for taking all this time. Rep. Sean Casten:Always a pleasure, David.  Get full access to Volts at www.volts.wtf/subscribe

In this episode, career environmental regulator Cynthia Giles discusses the rampant rule-breaking common in environmental rule and regulations and how to solve the problem — not with greater enforcement, but with smarter rule design.Full transcript of Volts podcast featuring Cynthia Giles, July 14, 2021(PDF Version)David Roberts:The US has hundreds of environmental rules and regulations on the books, meant to achieve various environmental goals — clean up coal plants, reduce toxins in consumer products, limit agricultural waste, and so on.Once these rules and regulations are put in place, most people don’t give them a lot of thought. To the extent they do, they tend to believe two things: one, that environmental rules are generally followed (maybe, what, 3-5 percent break the rules?), and two, that the answer to noncompliance is increased enforcement.According to Cynthia Giles, both those assumptions are dead wrong. Giles was head of EPA’s Office of Enforcement and Compliance Assurance for all eight years of Obama’s presidency — and had a long career in environmental enforcement before that — so she knows something about rules and enforcing them. Through the Harvard Environmental & Energy Law Program, where she is a guest fellow, Giles has been writing a series of pieces (which will be issued as a book in 2022) on “Next Generation Compliance: Environmental Regulation for the Modern Era.” In those pieces, she reveals that environmental rule-breaking is absolutely rampant — and that there’s surprisingly little increased enforcement can do about it. Instead, the key is to design rules better, such that compliance is the default choice.I’m a sucker for policy design, so I was eager to talk to Giles about what she’s learned, how to design rules well (or poorly), and most of all, the best way to design climate rules. With no further ado, welcome to Volts, Cynthia.I really enjoyed your articles. As I was saying on Twitter earlier, I love it when I discover an expert who's making a well-argued, well-cited argument in favor of something I believe already but didn't have the chops to defend myself. I feel vindication. There's a number of mind-blowing things in here, but one of the initial mind-blowing things that people don't understand very well is just how common violations and rule-breaking are. You spent eight years as head of EPA enforcement for Obama. I'm curious: before going into that position, did you know this about environmental rules? Cynthia Giles: This is certainly something I had strongly suspected for a long time. I've worked in the environmental enforcement arena for a long time and I persistently saw a mismatch between what I was seeing in the field and what I was hearing so many people say — that compliance with environmental rules was good. After I started in my position in the Obama administration, I asked folks to pull together everything we know about how compliance is with environmental rules. And I discovered that the evidence supported what I had suspected all along, which is that the rate of violations is substantially higher than most people think.David Roberts: What do we mean by substantially higher? Give us a sense of the scale here.Cynthia Giles: I'll give you the contrast between what's popularly believed and what the facts are. As I mentioned, I have spent most of my professional career in environmental and compliance-related work. During that time, including during the Obama administration, I've asked a lot of people what they think the rate of non-compliance with environmental law is. The most common answer I get, including from people who have also spent their entire professional careers working in this area, is 5 to 10 percent. That's what people think.It's nowhere near that. Not close. The rate of serious violations, the ones we care about the most, is 25 percent in most programs. And there are plenty of programs, I'm sorry to tell you, with rates substantially worse than that. It's not rare to find serious violation rates in the 70 percent and higher range. I want to make sure I'm clear: when I'm saying someone has serious violations, I'm not saying they're violating every single thing, every day, 24/7 — but they are having a lot of violations we care about, in terms of protecting people's health. So the rate is substantially worse than most people think. And that's just the ones we know about. There's plenty where the data is thin — indications are bad, but the data is not there to say anything definitive about it.   David Roberts: There are all sorts of bad things about common violations, but the central bad thing is that we're not achieving the goals of these rules and regulations. If violations are 50 percent, you're getting 50 percent of what you think you're getting out of the rule, right?Cynthia Giles: There's a lot of areas where we know there are environmental problems — over 130 million people in the United States live in areas that don't meet the health standards for air quality, and almost half of the waters in the United States are designated as poor quality. There's a lot of evidence about serious issues that affect people's health that are widespread, and certainly this incredibly high rate of violations is a significant contributor to that.David Roberts: You come into EPA in this enforcement position and inherit a bunch of rules that you have to enforce, but you didn’t have a hand in designing. The other intuitive belief people have about this is, insofar as there are violations, insofar as people are breaking the rules, the solution to that is better enforcement. From your experience at EPA, how much can you do with additional enforcement? Can you substantially increase compliance? What's the range of effect you can have?Cynthia Giles: That very much depends on the problem. For some of the most serious and high-rate violations — coal-fired power plants are one example; for many, many years, they were by far the highest-polluting sector and the rates of violation were stunning — EPA decided, correctly in my view, that the health risk was so substantial, and the violation rate was so serious and egregious, that EPA would just sue all the coal fired power plants. One at a time, they’d go after them. It was essential for public health that they be made to comply and install modern pollution controls — which by the way, reduce pollution by 95 percent. I mean, we're not talking about minor differences. It was really, really big. Some of these problems — coal-fired power was one, cities that were discharging raw sewage into surface waters around the country was another — were so serious from a public health perspective that EPA decided to go after them individually. That is not a strategy that can work for the vast array of programs that EPA administers. Some sectors have a million or more regulated entities, or it's hard to tell who's violating. For those kinds of problems, enforcement as your first line of defense is obviously not going to be able to do it. You don't have the resources to do it. But you couldn't do it even if you did nothing else but that one thing. So for many problems, enforcement can never be the principal way of solving noncompliance.David Roberts: And even in cases where enforcement can force broad compliance, it is raising the cost of the regulation. Every one of those lawsuits costs money and time.Cynthia Giles: Coal-fired power is a terrific example. The work to address air pollution from coal-fired power plants has been going on now for more than 20 years, and every one of those years has consumed a lot of people, millions of dollars of money for investigators, enforcement staff, etc. So that kind of approach is really expensive. Sometimes it's worth it, like it was for that sector, and like it was for cities and raw sewage, but most of the time, it's not a feasible strategy.David Roberts: It's hard not to look back at our history with coal-fired power plants and think that some heavy-handed, super-simple mandate back in the ‘70s, however economically inefficient it was, was definitely not going to be so inefficient that it costs as much as as suing every coal plant for for 20 years.Cynthia Giles: Yeah, I don't think anyone would sit down and say, here's our plan, we're gonna just do them all individually. Beyond the expense, you don't get the benefits until the cases are over and the company installs. You have a 5, 10, 15 year delay in the public health benefits. For both of those reasons, it is not a sensible strategy. Plus, if you take another example that's top-of-mind today, oil and gas wells and pollution, there's over a million wells in the United States. That kind of strategy is hopeless for that. David Roberts: The key insight at the heart of all your work is that the difference between a rule that is generally complied with and a rule that is generally not complied with does not come down to enforcement — the degree of enforcement, or the strength of enforcement. It's much more to do with the design of the regulation. So let's start with an example of a rule that is poorly designed, such that it renders non-compliance inevitable and fails to meet its goals. What's a good example of doing it badly?Cynthia Giles: The perfect storm of a bad-compliance design was a program called New Source Review that Congress started and EPA was charged with implementing, that had a goal of cleaning up the largest sources of air pollution as they modernize. They exempted existing sources from the tougher controls, but said, you'll have to install them as you modernize your plant. That was Congress's theory, that over time, the largest sources of air pollution, including but not limited to coal-fired power, would gradually clean up their act.David Roberts: And the presumption was that of course they're all going to modernize at some point. Cynthia Giles: And they did modernize. But they took advantage of — and manipulated, frankly — the rule to modernize but avoid having to install the pollution controls. The New Source Review program was set up so that every determination of when are you modernizing enough such that you trigger the obligation to install pollution controls was a very fact-intensive site-specific decision. There was no general rule; every inch of ground was fiercely fought over. Then there was almost no reporting required, so the companies held the information that was necessary to determine if they had crossed that threshold, and they weren't going to give it to EPA without a fight. It was quite expensive to install these modern controls. It was totally worth it, because of the huge public health gains — well worth it from a regulatory perspective; the benefits far outweigh the costs. But it gave the companies a lot of incentive to fight. So what happened after that rule was put in place was exactly what somebody who's looking at rules through the next-generation compliance lens would predict, which is they look for ways around, they obfuscate, they withhold evidence, they fight, and they litigate. Every case takes years and years and years to get done. They lose in the end, in almost all cases, but they've gained some time. All the economic incentives lined up behind not complying. So that's an example of a disastrous design.David Roberts: That's a rule where, inadvertently, you've created a massive financial incentive for cheating. It is in the rational self-interests of some of these coal plants to fight and delay. It makes absolute sense for them. You could even argue, insofar as they're beholden to shareholders, that it's their obligation to fight. Cynthia Giles: Their obligation is to comply with the law, and they weren’t complying. They knew it. So I wouldn't take it that far, but I would agree that it was not only predictable that this would happen, it was inevitable.David Roberts: Was it predicted? Were there voices at the time saying, “this grandfathering idea is a disaster in the making”?Cynthia Giles: I wasn't there when this was set up, so I couldn't speak to what the conversations were internally. I would say that it occurred at a time when no one was really challenging this fundamental belief structure, which I think is demonstrably wrong, that most will comply and enforcement will take care of the rest. That was certainly the dominant view about how this structure should work. David Roberts: That's an example of where the design of the rule makes rule violations inevitable. You point out in your work that you can design a rule such that breaking the rule is more of a hassle than it's worth, or more expensive than it's worth. What's a good example of a rule that pulled that off?Cynthia Giles: The best example of a completed rule is in the acid rain program, which is particularly interesting for proving the thesis of next-gen, because it covers the same sector. Coal-fired power was the regulated entity, and unlike the compliance catastrophe that happened with New Source Review, the acid rain program had 99 percent compliance. How did they do it? A couple key interlocking features. No one of these does it by itself, but together they make for a robust compliance structure. One was continuous emission monitoring — don't estimate, know in real time how much pollution you have. This program was designed to reduce sulfur dioxide pollution from power plants that was causing acidic rain in big parts of the country and devastating ecosystems. Continuous, real-time measurement of sulfur dioxide was coupled with an incentive to use the monitoring by saying, “if your monitor is not working, or you don't pass quality control, we're going to assume you had a lot of pollution.” You'd think that seems like a no-brainer, but there are still programs that don't have that today — electronic reporting to a central system, which allows monitoring in real time and data analytics, which are important for spotting anomalies and fixing problems. And then simplicity is an under-appreciated value for getting compliance. Even though it's a complicated program, and monitoring is complicated, there's hundreds of pages of guidance on how to run these monitors and what to do, it all boiled down to a very simple thing: a ton of emissions and one allowance. Do you have enough allowances to cover your tons, yes or no? It’s impossible to miss a violation. The coup de grâs at the end is automatic penalties. If you don't have enough allowances to cover your emissions at the end of the year, you will be penalized automatically. You don't have to wait to be sued, you owe it right now. And by the way, your penalty is more than it would cost you to go out and buy an allowance. So this combination of strategies together made it hard to violate. There was really no way to manipulate the situation; everyone was going to know what was going on. There was only one pathway forward, and that was to comply. It was more hassle, more expensive, to violate.David Roberts: Trying to cheat on that, you'd have to rig your monitor, or lie on your electronic reports, at risk of much greater expense. So it just becomes easy to comply?Cynthia Giles: Yeah. The whole idea is to try to make compliance the path of least resistance. If you're not paying attention, or you have people that make mistakes — if you make it so that those kinds of things are addressed within your rule, you're not waiting to catch people afterward. It's brought to their attention through the design of the rule itself. David Roberts: Was the acid rain program notably cheaper for EPA? Is there a way of measuring how expensive it is in terms of enforcement and monitoring and compliance for the agency itself?Cynthia Giles: There is no perfect way of doing that, and I would say here's part of the rub. We're not measuring what a next-gen strategy would cost versus getting to the same result through enforcement. Because that's not going to happen, there isn't the resources to get to the same result through enforcement. So what you're measuring is a next-gen strategy that gets to your public health endpoint at reasonable cost against not getting there. Those are really the choices. The enforcement work that was done for coal-fired power is really the exception that proves the rule. This was a one-off that you could do it that way, normally you can't.David Roberts: Right, you'd have to have a galactic-sized enforcement agency with unlimited funds, which we definitely do not have in the EPA. Insofar as ordinary people do think about rule design, the in-vogue opinion these days is that market-based is great, flexible is great, performance-based is great; you want to specify the end-goal, not the means, and leave it open to entities how they comply. Ty doing that, you will get the cheapest possible outcome. This is something close to religion these days in environmental circles, maybe even beyond environmental circles, along with endless bashing of so-called command-and-control regulations, which dare to specify things and dare to impose mandates. You have a great discussion of this sort of fight. One of the points you make is that these terms have become almost meaningless, they're more identity-based now than referring to any particular features of programs. Could you explain to your average listener who has been generally convinced by the argument that markets are great, they're flexible, and they use the acid rain program as an example of this. Your point is not that market programs are bad, just that the features that make a rule good or bad are orthogonal to this distinction between markets and command-and-control. Cynthia Giles: I totally agree that performance-based and markets have become their own orthodoxy, comparable in power and breadth to the beliefs that drive the problem, that gave rise to next gen, which is, everyone complies — performance-based and markets are a similar type of orthodoxy. Both of those strategies have potential in the right circumstance. Markets are primarily about saving money for compliance, not about driving compliance; they're about more efficiency, and they have power to do that. Two things I would say is that, first, markets happen because of command-and-control. The market doesn't just spring from the earth fully-formed, a market is created, because a regulatory agency decides to create a market, that's what happened with acid rain. By imposing a regulation that says you can only have so much pollution, and you have to report in this way, and you need to have monitors, etc. those are traditional command-and-control type things. But the mechanism for efficiency was a market mechanism. At the end of the day, the market mechanism has nothing to do with the compliance result. It saved some money, but it did not drive compliance. The thing that drove compliance was this design structure that I described to you, all of which were standard command-and-control things, how you report, how you monitor, what your obligations are, penalties, that kind of thing. I get that economists love markets, and they really do, because they look great on paper — this idea that you can have individual flexibility and that everyone is so efficient seems great. Next gen is focused on the practical, what’s actually going to happen in the real world, not how it seems in theory. What I discovered in researching the book is that there’s actually very little data and evidence that supports the idea that markets are more effective than command-and-control in achieving environmental results. The record is just stunningly thin, and it's more an ideology that drives it. Here's an illustration of some evidence about the market and flexible performance, as opposed to the one-size-fits-all that most people are thinking when they think of command-and-control. So at the beginning of the Clean Water Act, way back when there was a huge problem of water pollution around the country and Congress was like, “okay, that's got to stop. States, you're in charge, go out there and do your monitoring and impose permanent limits and fix this problem; go get them.” And it didn't happen. It did not happen. The reason is that the states were, as it turned out, unable to surmount the technical and political challenges of imposing the necessary obligations on the sources in the flexible- and ambient-monitoring based way that everybody talks about as being so desirable. So Congress came back years later and said, “okay, guess what, you blew it. It's not working, states, forget it. Nevermind, we're not doing that. What we are going to do now is, every sewage treatment plant in America is going to meet the following standard. EPA, you write the standard, everyone's gonna meet it. No exceptions.” That's it, period, the end, the classic command-and-control thing. And guess what, the rivers got cleaned up. So when we look at what the record shows, yes, markets can work when they are accompanied by thoughtful design that looks at all these questions, and there's adequate monitoring, and there's good structure around it, but just saying we're going to get out there and be flexible is a recipe for disaster.David Roberts: One of the points you make in this respect — which was a little bit of a mind blower for me, too, because I never thought about it in quite this way — is that flexibility for the regulated entities is the mirror image of increased costs for the regulator. All that flexibility for the regulated means that more work for the regulator. People don't take that into account when they're thinking about these market-based rules.Cynthia Giles: There's all different types. Markets are one way, but there's also plenty of rules that say, “well, people should try to do A, but if you can't do A, then you could consider B, C or D.” And by the way, maybe some people have E, and maybe you're exempt. By the time you get to the end of this regulatory structure, nobody can figure out who has to do what, and it is very tough from a compliance-driving perspective, nevermind enforcement. If you can't be sure exactly who's supposed to do what, if every determination is very fact-specific, and you have to actually get all the records from the company to figure out why they chose C and not A, to figure out if they're doing anything wrong, you've created a situation where government can't know who's complying and who isn't. That degree of fog and gray and ambiguity provides lots of places to hide for companies. Some companies are legitimately operating in that zone that they're allowed, and some are hiding there. From the government's perspective, it's almost impossible to tell the difference without a huge investment of resources.David Roberts: This is another thing you point out. It's easy for lawmakers to say, “oh, we're gonna give all this flexibility to the regulated entities. Sure, that will require more from the regulators, more enforcement, more monitoring, more time and money. But that's fine. We'll just spend the time and money.” But they do not then boost the EPA budget to accommodate that; you don't get the additional resources. And the result is just violations, as you say — just a whole lot of cheating.Cynthia Giles: That leads to a lot of violations, and just as concerning, it leads to the government being unable to even know how it is going. They don't know whether the facilities are meeting what's required or not. So if there's a lot of monitoring violations, a lot of reporting violations, a lot of ambiguity about the pollution obligations, the government can't really say whether we're achieving the objectives or not. This is a really bad place to be for the government, when you have obligations that are important for protecting public health and you don't know whether you're getting there or not.David Roberts: Also, they're in statute, so you're supposed to know.  Are there generalizations you can make about when markets and flexibility are promising solutions, when they're a good fit, and when they're not? Cynthia Giles: I would say the most important and essential thing for a market to work is a good measurement strategy. If you cannot measure reliably and have a lot of confidence in the thing being traded being actually worth what it claims to be worth, then your market program will not work. There's going to be a lot of mess and confusion, and you will have zero idea whether you're actually getting there. I would say that’s essential, and all the experts say this too. Deep in the papers of economists favoring markets, they have throwaway lines saying, “of course this only works if you have good monitoring.” Well, okay, yeah. But that's a pretty big point, because there isn't good monitoring.David Roberts: I just want to emphasize this, because this is a point you made that has also stuck in my head: insofar as you’re specifically mandating facility-level reductions, and measuring performance at the end, that really raises the importance of being able to measure. If you’re not doing these facility-specific measurements, you really need to be able to measure the end-goal precisely, because that’s all you’re doing. Cynthia Giles: Imagine the acid rain program with no monitoring. “Okay, just get out there and trade your sulfur dioxide emissions. How much did you have? Well, you tell us how much you had and we'll see how it goes.” We would not have achieved the actual reduction to sulfur dioxide and acid rain with a system like that; it’s impossible.David Roberts: You'd still have all the market features and all the flexibility, but without the measurement, the whole thing falls apart.Cynthia Giles: You'd have no compliance, and you wouldn't really know how you're doing. You could measure the rain and see, well, we're not getting there. But you wouldn't know why. So yes, you absolutely have to have measurement. The other thing you need is a group of fairly sophisticated participants. they need to be able to report electronically with a high degree of precision and consistency, and you can't have a huge amount of variability across source types. Certain types of problems will be good for that, and some problems are impossible for that. It's important that the people who are designing policy recognize that. I would prefer if the ideologues who push markets for every problem would live by what their own colleagues say: you can't do it without monitoring. So don't even talk to me about your market until you show me your monitoring strategy.David Roberts: Measuring sulfur dioxide is fairly straightforward and possible. There's a limited number of coal plants there, they tend to be owned by big businesses that are relatively sophisticated and have this relationship with EPA already with reporting and monitoring of stuff. So it's a perfect area. What's an example of a problem where you look at it and say, “a market will never work there?” Where do you need a heavier hand? Cynthia Giles: We have an example in front of us in the Renewable Fuel Standard, also sometimes known as Low-Carbon Fuel Standard. It's a program designed to reduce greenhouse gas emissions and reduce dependence on foreign oil — from plants, essentially, is the part we're concerned about here. Carbon is recycled by plants. You create carbon when you burn the fuel in your tank in your car, but in theory, carbon is taken up by the plants when they grow. So the great theoretical construct here is that you would have recycling of carbon, so you would reduce the climate impact.David Roberts: This was about ethanol back in the day; it came about a long time ago and it predated a lot of other climate programs.Cynthia Giles: So the market-like situation in the Renewable Fuel Standard — the renewable energy credit that’s created was separated from the actual fuel itself. So companies were buying these credits, but they weren't necessarily buying the actual fuel that was made. It’s a market-like system, because it's trading pieces of paper, essentially, that people are trusting, hoping, believing, actually reflect a gallon of actual fuel. What we've discovered is that they don’t. There was a huge amount of fraud in that program. I shouldn't use the past tense: there is a huge amount of fraud in that program. So substantial that you can't know when you buy one of these credits on paper if it actually reflects either renewable fuel gallon. It is impossible to know. RFS has a ton of other big problems, which I could talk about, but this market-based element was doomed to failure, because there was no mechanism to be sure that a credit was actually worth what it claimed to be worth. That's why the market can't achieve the endpoint.David Roberts: And there are ambiguities in the chain here. You have to have the land, and if you plant biofuel crops in the land, maybe you're displacing the farming crops, which will then use fresh land. Maybe the fresh land use gets attributed to the biofuels, maybe not.Cynthia Giles: You're pointing out the reason why conventional biofuels are not climate enhancers, which is itself an interesting topic, and also has a significant compliance dimension. The narrower point I was raising was just about fraud in the market, because no one could be sure that there was actually a gallon of fuel produced; it was possible for companies to go in and just manipulate a bunch of paperwork and computer stuff, and voilà, they produced credits without fuel. There wasn't really a mechanism to prevent that from happening. One thing we've observed and learned from real-life experiences is that, if you create a market where people can make a lot of money and you have no controls, there's going to be a lot of fraud. That's just the reality of life. Rather than bemoan that reality and say, “oh no, there's fraud” — yeah, there's fraudsters, of course — you need to design a program that prevents that. Don’t complain about it and whine about it afterwards. Don't allow it to happen!David Roberts: Let's use our remaining time to think about how these principles of good regulatory design might apply to climate rules, which are very much in the news now. A lot of the discussion takes the form of, “let's use markets and flexibility, let's not be heavy handed, let's not use command-and-control.” That argument is replicating itself all over the place, to my frustration, and I assume yours. Let’s look at some specific examples. Your example from electricity was very gratifying to me, as a huge fan of renewable portfolio standards — state-based rules on utilities that say you have to increase the percentage of your total power provided by renewables over time. You say that these things can work, with one big caveat, so tell us about that. Cynthia Giles: It is not simple, but you can design something that looks like a renewable portfolio standard, where utilities have to buy some percentage of their power from solar, wind, and other forms of renewable energy. That's easy to measure, we know how to do that, we're already measuring that now. That system can be designed to function very well — you know you're getting the carbon reductions you're expecting to get. That's very possible to do. One that is talked about a lot, that doesn't fit into that structure, is energy efficiency. That goes directly back to the point we were talking about earlier, about measurement. Energy efficiency is how much energy you use to do something versus what you would have used for the counterfactual. You can already see it's not measurable; there's no way to go out in the world and take a sample that measures what would have happened if you did not do your energy efficiency program. That's one of the first weaknesses. Another significant weakness is that, because it's not possible to do a big giant modeling that figures out what the impacts of your energy efficiency project are, people have to have a shortcut. Administratively, you can't expect people to do this gigantic measuring thing every time you do a project, so people have developed this shorthand for what energy efficiency usually saves. If I have insulation in my ceiling, I can assume I save X amount of energy, and you can take that to the bank and have it considered as a credit.The robust research that's been done about those says that they greatly overstate the savings. What we've all been assuming we get in energy savings is not really what we get. One of my favorite illustrations of how the real world interjects into your theoretical construct is that the least effective energy efficiency is energy efficiency installed on a Friday. Somebody did a study showing that if your energy efficiency is installed on a Friday, it probably doesn't work as well as if it's installed on a Thursday. David Roberts: I'm just gonna pause for a minute and contemplate why. Everybody should take a moment to guess why that might be, before we get the answer.Cynthia Giles: On Fridays, people are incentivized to cut corners. You got to get that job done today, because you're not coming back tomorrow, and you don't want to come back on Monday. This is just one of many studies that have been done saying that the assumptions that we've all been making about what energy savings, and thus carbon reductions, we get from energy efficiency are not right. The last thing, which is common to every time, every rule, every structure, is: how did the incentives line up? All the incentives [in existing energy-efficiency programs] line up for people to overstate savings — the people who install it, the regulators, the public. Everyone wants to believe this is working well. Whenever you have a system where everybody benefits if you overstate something, then guess what? They're going to overstate it. And that's what the studies show. There have been some robust studies — including in California, which is one of the most rigorous programs anywhere — showing that because of these incentive structures, people overstate savings. This is relevant to carbon, and whether a clean electricity standard can achieve carbon reductions. If you include energy efficiency, you have the inherent uncertainty, the inaccuracy of the deemed savings, the incentive structure, all those things aligned to say, when you are trying to sell your energy efficiency credit, you don't know what you have there.Why is that a big problem? First, we can't solve that through enforcement — that should probably be self-evident. The reason it's a big problem is that if the utility buys energy efficiency credits instead of solar or wind credits, they are going to be emitting more carbon. If you include this hard-to-measure element in your market, you're going to reduce the chances that you achieve your carbon reduction goal. Which is not to say that energy efficiency isn't good. We gotta have it as much as you can, as fast as you can, everywhere. That's absolutely essential. What I argue is that you need to do that through something like an energy efficiency research standard. You have to mandate energy efficiency as fast as you can. What you shouldn't do is combine it with the utility’s obligation to achieve a clean electricity standard, because that will undercut your carbon reduction goals.David Roberts: You keep those separate, basically.Cynthia Giles: Yes, don't put it into the market, put it into a command-and-control program mandating that people do energy efficiency.David Roberts: On the energy efficiency side, rather than trying to measure and make the rewards based on reduction in energy use — which is difficult, if not impossible to closely track — you just tell people to insulate buildings. You just require it. Cynthia Giles: There's ways to design programs of that type that provide incentives and efficiency. The whole idea of an energy efficiency resource standard is not as simple-minded as just telling everybody exactly what to do. But it decouples it from the market. What you can't do is put something that's not measurable, essentially, into a market setting, because you're going to distort that whole market. You will undercut the ability of the market to do what it's supposed to be doing. You need to do it a different way. And there are other ways to get energy efficiency.David Roberts: As I was reading this section of your paper, it occurred to me that there's an analogous situation in terms of cap-and-trade systems and offsets, which are legendarily entirely based on counterfactuals — what would have happened if X had not happened. You're taking those counterfactual-based credits and sticking them directly into a market where they are doing just what your theory would predict. Cynthia Giles: Totally. Carbon offset programs have all the same problems we just talked about with energy efficiency, plus some more. All the studies that I've seen have said that offset programs are not delivering anywhere close, not in the same solar system, as what's being claimed. You've got all these incentives for people to over-claim, and of course that's what they're going to do. It's impossible to check up on that. There's been a huge amount of fraud and other significant problems with carbon offsets.David Roberts: What about cap-and-trade generally? Say you could take offsets off the table, what are your thoughts on trying to marketize carbon dioxide emissions?Cynthia Giles: From a compliance lens it is totally doable if you have a measurement strategy for every participant. But you have to have something that you can take to the bank, and say, “yep, that's a ton of carbon, I'm sure about it.” If you have that, then a market strategy is a feasible way to drive innovation and reduce costs. It has potential, but where it runs aground is by allowing in things that are not measurable. The more unmeasurable they are, the more the market will seek those out, because those are going to be cheaper, because they're not real! That's where you invite disaster, is by allowing the unmeasurable things into your market. David Roberts: On transportation, one of your other three climate-related examples, we talked about the RFS, the biofuels program, and what a disaster it is. You're a little bit kinder to low-carbon fuel standards of the kind that are now in place all along the West Coast, California and Oregon and Washington, and you're also pretty friendly toward fuel economy standards, i.e., old school CAFE standards. Explain why those work, in contrast to the RFS.Cynthia Giles: Fuel economy standards, or emission standards for vehicles, are possible to design for strong compliance, Volkswagen notwithstanding. And by the way, Volkswagen’s not the only one. I think the EPA’s eyes were opened to the possibility of cheating and fraud at scale. I felt like saying, “see, see this what I've been telling you.” People's eyes were opened to that and the adjustments have been made in the vehicles program at EPA to address that. That has now become very, very tough to get away with — and you know, eventually, passenger vehicles are going to shift to electric. That's just a whole different animal in terms of compliance strategy; that seems very doable.David Roberts: Let me ask you about that, because, from a regulatory point of view, this has always struck me as a little bit of a dilemma. It's one thing to regulate internal combustion engine vehicles, such that they become more efficient and emit less over time. But when you're trying to engineer a mode-switch to a different kind of engine, it seems like just ratcheting up fuel economy standards is a bank-shot approach. Cynthia Giles: The near-term thing, of course, is to make the vehicles as efficient as they can be and reduce pollution as much as possible — carbon is not the only thing we care about from the roads, there's a lot of health problems associated with vehicles, and huge environmental justice issues, too. So yes, you can do better than where we are now on efficiency and pollution from vehicles. But on the shift to electric vehicles, that's very manageable, to ensure that people are doing what they claim to be doing — that's a manageable thing in terms of the manufacture of those vehicles.I just want to be clear, I am not saying that low-carbon fuel programs don't have the same problems that the Renewable Fuel Standard has, in terms of climate impacts. It's a little bit better of a design, because it doesn't have a cliff-like drop off in the obligations like the RFS has. It's a more gradual and market-type system, so it has those benefits. They both depend on trying to figure out how much carbon comes from land use changes. They have the identical problem for that.David Roberts: Anything that involves biofuels is gonna run into that problem.Cynthia Giles: If I could throw in another topic on climate: a late breaker that I think is particularly encouraging and interesting is EPA’s proposed rule for hydrofluorocarbons, HFCs, which are massively intensive climate-forcing, I mean, hundreds to 1000s of times more climate-forcing than carbon.David Roberts: Typically in refrigerants.Cynthia Giles: Usually, yes. This is a next-gen type story in Europe, where they first started regulating HFCs, as they are called. There's been a huge amount of fraud and illegal activity and illegal smuggling, and they got problems out the wazoo over there — they’re more than 30 percent over the standard, already, and that's before they've even gotten into where it's tight. They're in a bad way over there. And the same thing could have happened in the US. Congress passed the law, in December 2020, telling EPA to regulate HFCs and telling them in general how to do that. In May, EPA put out a proposed rule which is the most forward-thinking next-gen type proposal since acid rain.David Roberts: Oh, really? Can we pause and ask why? Is it just good people at the EPA or what?Cynthia Giles: I think it is good people who are open to innovation and who looked at the situation in Europe and thought, “oh, my God.” It's a situation where non-compliance will sink you. It's not around the edges, it could be better — no, you will never get there. You're gonna have mostly illegal activity.David Roberts: So necessity is the mother of invention.Cynthia Giles: And they're a great bunch of people over there in the air office at EPA, innovators and thoughtful and very open to trying new things. The rule they proposed in May has a whole bunch of terrific ideas to try to prevent that kind of disastrous thing from happening in the United States. Let me just give you a couple examples of things that they've included, that Europe doesn't have. In Europe, the products just come in and the countries hope to track them down if they were unlawful later. Good luck with that, okay; that that's not gonna happen. So what they're proposing is that there'll be a real-time check at the border. You cannot bring a product, customs will not allow it in, unless they connect to the data system and show that A), you’re legitimate, and B), you have enough credits to cover this import. If you don't, then sorry, you can’t come in. David Roberts: Isn't that expensive? Cynthia Giles: No, it's not hugely expensive. Customs has, over the years, developed electronic programs to enable it to take advantage of today's IT. EPA can develop its side of that and plug it into the Customs system. Real-time monitoring at the border is a very doable thing in today's IT environment, and it makes total sense that you would try to stop things at the border. Another thing they included in here is a QR code, like the barcode that you have on just about every product you buy now, on every container, which also links to EPA’s data system. It is possible for anyone with a phone to determine, is this company that's trying to sell me this product legitimate? It is possible to do that today. There's lots of other things, but those two things illustrate that EPA has designed a very tight system to block things at the border and then to reduce the demand for those unlawful products by making it possible to know in real time if every single container is legal or not.David Roberts: And thereby make it a huge pain in the ass to try to smuggle stuff in — to try to cheat.Cynthia Giles: A huge, huge pain. Your chances of getting caught are very high, the consequences are severe, and your market is substantially reduced, because EPA is working on the demand side too. It's a structure that is thoughtfully designed to prevent illegal activity. This is one of the toughest kinds of compliance problems: how to keep illegal products from coming in across the border. Very hard. But this is a thoughtful and quite groundbreaking proposal from the EPA.David Roberts: This raises a side question. When people talk about carbon taxes, there's a lot of discussion of border adjustments, which would amount to trying to do roughly the same thing — make public the amount of carbon embedded in every product that comes in over the border. That strikes me intuitively as much trickier than measuring HFC content. Have you given some thought to that?Cynthia Giles: That gets to the heart of the measurement issue we've been talking about: what is the embedded carbon in your product? There's a jillion judgments that go into that question. The Renewable Fuel Standard is one illustration of that, where the recent science is showing that actually, when you produce the conventional renewable fuel, you end up disturbing a lot of land, and you're arguably making the climate situation worse, not better. Every product that you attempt to put a carbon stamp on is a gigantic measurement question, and very, very challenging. Imposing a tax once you have a carbon measurement is comparatively quite simple. The tax is not the point. The point is, who puts the carbon label on there, and how confident are you that that reflects real life?David Roberts: I'm just imagining that every link in the supply chain has the incentive to downplay the amount of carbon involved — literally every entity involved in all of this wants to cheat. And there you are, the regulator with thousands and thousands of these products in front of you.Cynthia Giles: Whenever you have an incentive system that's lined up to push in one direction — where it's obvious what the regulated parties would prefer the outcome to be, and you have essentially no real way to check — that's where you get these kinds of compliance disasters.David Roberts: As a final subject, let's talk about oil and gas production. That's your third example — specifically, you're talking about methane. Notoriously, the oil and gas production process leaks methane at more or less every stage, and methane is a very active short-term greenhouse gas, which is a problem. There's been arguments going on for years now about measuring and enforcing this. Industry has been claiming they're doing it on their own, and asking to report their own measurements of what they do. How do you tackle methane, which is manifestly difficult from a monitoring perspective?Cynthia Giles: On the one hand, the methane problem, at least from a technical perspective, is fairly straightforward. People know what to do, how to reduce the methane that comes from the wells. People know how to do that. They're not doing it, but they know how to do it. The technical answers are well understood. The compliance problem is more complicated, because of this point that you've put your finger on, measuring what's going on is so difficult. It's even more difficult than it may appear, because the amount of methane released is intermittent. It could be a huge amount and then it drops off. It's intermittent and unpredictable as to which wells are going to be the so-called super emitters. Some of them are quite stunningly high numbers for at least some period of time. Until a monitoring solution is figured out — and a lot of people are working on that. Satellites might be part of the answer, there's aerial monitoring strategies, there's some ground-based ones, there's a lot of people applying themselves to this problem. Having a monitoring strategy would be a game-changer for this industry, figuring this problem out and getting it fixed. But in the meantime, there are things that can be done. I can give you two small examples, but it shows the mind shift that's needed in thinking about these problems. One is automating what you can. One of the problems is, people leave the hatches open on the tanks at the well pad. Sometimes that happens accidentally, but you got a million well pads, those numbers add up. If you had an automatic closing … that's just an illustration of thinking about your problem differently. See if there's a technical fix. The other one is a more conceptual fix, which is shifting the burden of proof. There's no way the government can bind your wells; that's not gonna happen. Maybe someday, through satellite imagery, it is possible to get closer, but we're nowhere near that right now. Shifting the burden of proof says, if there's credible evidence that you have a pollution problem, it's on you, the company, to prove it isn't, and to fix it. The data shows that if you're doing everything right, you shouldn't have that kind of a problem at your site. If you're seeing a huge amount of emissions, something is up — you own it, you control it, you have access to it, it should be on you to go figure that out. You shouldn't be counting on a handful of government inspectors to get out to these million sites around the country to try to figure that out. You own the equipment, you have the inspection records, you have access to the people, you are in the best position to solve this problem. And you should, because not only does methane have climate change impacts, but along with that are VOCs and other pollutants that neighbors are being exposed to. You have to take care of that problem. David Roberts: If we know what steps reduce that problem, if the technical problem is solved, why not just go full command-and-control say: all operators of all wells have to take steps one, two, and three, and prove to us that you did it.Cynthia Giles: That's certainly a sensible way of going. What I'm talking about is, how do you handle the compliance problem of, did you do it? Let's say you were required to do it, but you didn't do it. EPA finds in the field lots of companies that are at oil and gas wells that are not doing what's required today. It's a big compliance problem, because there's more than a million wells, and methane is intermittent, it's not visible to the naked eye, you gotta have specialized equipment to see the leaks, it's unpredictable. If you got a lot of companies out there that are, accidentally or on purpose, not doing what they're supposed to be doing, how are you going to find them and get that fixed? Shifting the burden of proof is one illustration of how you could change the framework under which everybody's operating. You might even be able to, by doing that, bring in the possibility of citizen science. If there are citizens who can meet the threshold for credible evidence, that provides some additional incentive and pressure for companies to do what they're supposed to be doing.David Roberts: Oh, interesting. Well, I've kept you too long, but you have now anticipated my final question a couple of times, so clearly you've been thinking about it. One of the trends I've been following is new ways of measuring these things, specifically, satellites that claim to track real-time methane emissions down to the square mile. They're saying the same thing about CO2, with satellites that pinpoint real-time CO2 emissions down to the square mile, all over the Earth. Then there are these other programs where you measure pollutants at the ground level, on a block-by-block basis. You can now get sensors that you can plug into your phone. Anybody can do this. My point being, insofar as the difficulty of measurement is a huge impediment to good regulation, this trend towards more and more different ways of measuring, which don't rely on regulated entities, do you see that opening up new avenues for regulation? Do you think regulation could get better on the back of monitoring getting better?Cynthia Giles:I absolutely do. The technological innovation that's going on in monitoring is a huge, huge potential gamechanger for many pollution problems. There's no silver bullet, though. For example, satellite imagery is great for some types of pollutants, but the resolution isn't that terrific, and it's not so good when it's cloudy. Every type of monitoring system has its own issues. But also, lots of important environmental problems are not just straight ahead pollution-monitoring type problems. Lead paint is an example. Industrial agriculture. Renewable Fuels Standard. Energy efficiency. There's a lot of important things that are not subject to just being monitored. Having said that, I do think that the revolution in monitoring, where it's getting cheaper, smaller, more mobile, better, provides a huge amount of opportunity, and is terrific news. If I could just add one thing. Sometimes, when I talk about next gen, people misunderstand me, and I just want to make sure that I'm leaving no ambiguity. Sometimes people think I'm saying we don't need enforcement. No, no, no, no, I am not saying that. Enforcement is essential, required, and must-have. You cannot have an effective compliance program without it. My point is that enforcement alone cannot fix the big compliance holes created by bad regulatory compliance design. I just want to make sure no one's confused. Enforcement is essential, but stronger regulations are going to get much farther down the road than relying on enforcement alone.David Roberts: You're pushing back against trends in thinking around environmental regulation that have been building for decades now — this obsession with markets and flexibility, this ignoring of enforcement, or this assumption that if you throw more enforcement at it, you can get any rule enforced. How lonely are you in this fight? In terms of the people running EPA now, how are your ideas catching on? What's the state of thinking in the field?Cynthia Giles: The assumption that compliance is pretty good and enforcement will take care of the rest is still the entrenched thinking. But there is some traction for these ideas, maybe in part because I've been such a giant pain in the neck. Compliance is not usually talked about as part of the policy discussion, but it should be, because compliance is about what's going to happen in the real world. That's the place that matters; that's what counts. The people involved in policy discussions do care about what happens in the real world. I'm out there raising a ruckus, and I'm hoping that we will get compliance at the table at these policy discussions, so that people do not continue blindly along, adopting rules that will not achieve what they're intended to achieve. And nowhere is that more important than climate. There's no time. We cannot make mistakes and hope to fix them later. It's got to be right. It's got to happen the first time out of the gate. It's essential these ideas get baked in.David Roberts: Awesome. Well thank you for fighting the good fight, and for taking all this time to talk.  Get full access to Volts at www.volts.wtf/subscribe

Last week, I wrote that there is no “moderate” position on climate change. Either we act rapidly and at massive scale to avoid the worst consequences … or we suffer the worst consequences. Either outcome involves radical change. There’s no avoiding radicalism. Lots of activists, politicians, and ordinary citizens understand this need for ambitious action — they are convinced by the scale and severity of the problem — but there is less clarity about what qualifies as ambitious. In an atmosphere of legislative scarcity, when tough decisions are being made and policies are being prioritized, what exactly should climate advocates be pushing for? What’s a simple way to distinguish between climate policy and good climate policy? In the great climate policy feast, what is the entrée and what are the side dishes?We lack a common framework for judging climate policy, which creates a fog in which dedicated advocates can lose focus and malefactors can get up to shenanigans. Within the fog, people tend to pick their favorite markers of climate commitment based on instinct and affective affiliation (shut down pipelines! ramp up nuclear power! impose a carbon tax!). What counts as good policy becomes a matter of identity rather than what would most effectively ratchet down carbon emissions. The fog allows weak and marginal policies to be branded as moderate, or, other times, to masquerade as radical. It leads activists to diffuse their energy, while core policies often don’t receive the coordinated support they need.We need to clear away the fog, fast. Policy decisions are being made over the next few weeks that will reverberate for decades. This is crunch time on climate policy and everyone who wants serious action needs to be (at least roughly) aligned.So I want to spend a few minutes laying out a simple framework to help people think about how to prioritize climate policies. It doesn’t cover everything, but it’s a pretty good rough-and-ready guide.Clean electrification is the entrée. Everything else is a side.How can the US hit net-zero emissions by or before 2050, a goal shared by almost every Democrat and, at least rhetorically, by some Republicans?The key is to immediately begin reducing emissions and maintain a rapid pace of reduction for the coming three decades. That is the only way we have a shot. If we wait another decade to start rapid reductions, the curve will simply be too steep. It has to start now. So we can think of the work in two parts. Job One is to rapidly push fossil fuels out of the system using technologies and strategies that we have on hand, such that we reduce carbon emissions by around 50 percent by 2030. Job Two is to research and develop the technologies and strategies we will need to continue rapidly reducing emissions from 2030 onward, such that we hit net-zero on or before 2050. Job Two is important. But Job One is the main thing. Job One is the entrée. Without it, you don’t have a meal. What does Job One consist of? This is important: while different climate models disagree about which policies and technologies will be needed to clean up remaining emissions after 2030, virtually all of them agree on what’s needed over the next decade. It’s clean electrification: * clean up the electricity grid by replacing fossil fuel power plants with renewable energy, batteries, and other zero-carbon resources;* clean up transportation by replacing gasoline and diesel vehicles — passenger vehicles, delivery trucks and vans, semi-trucks, small planes, agricultural and mining equipment, etc. — with electric vehicles; and* clean up buildings by replacing furnaces and other appliances that run on fossil fuels with electric equivalents.Or as I summarize it: electrify everything!Clean electrification is the entrée. If you decarbonize electricity, transportation, and buildings, you’ve taken out the three biggest sources of emissions in virtually every country. The technologies and policies we need to do it exist today, ready to deploy. Exactly how much of the US economy can be decarbonized through clean electrification is an open question. Saul Griffith of Rewiring America is an optimist. He thinks electrification can reduce between 70 and 80 percent of US emissions by 2035, and probably in the 90s eventually. (Listen to my podcast with Griffith.)We’ll see. Today, there are all sorts of edge cases that are difficult to electrify — bigger trucks, airplanes, trains, ships, steel, concrete, a variety of high-heat industrial applications — that might be easier with cheaper zero-carbon electricity and a decade of innovation. There’s no way to know in advance how far electrification can get, though it’s worth noting that critics have underestimated it at every stage thus far. Regardless, whether it can ultimately get at 60 or 90 percent, clean electrification will do the bulk of the work reducing emissions over the next decade. It is the entrée.None of this is to diminish the scale and difficulty of Job Two — all the side dishes. We need those too. We’ll need lots of zero-carbon liquid fuels for industry, ships, and airplanes, so we need to work on developing clean hydrogen. We’ll need to figure out some sustainable biomass options, along with a variety of ways to capture and store carbon dioxide. We’ll need focused innovation in geothermal energy, long-term energy storage, energy management software, and all sorts of other things. Much work remains to be done.Nonetheless, clean electrification — done in a way that honors and protects frontline and vulnerable communities — needs to be the top item on every list of climate demands. It would be fatal for climate activists to take it for granted or assume it’s taking care of itself. It is not.Climate policy that’s all side dishes is not “moderate”As I wrote last week, the danger is that weak and insufficient climate policy gains a reputation as moderate. But the danger is more specific than that: it’s that moderate policy will be all side dishes and no entrée. It will be all policies that prepare to phase out fossil fuels a decade hence … and none of the policies that phase them out today. This type of approach is on particularly clear display these days from Republicans and their nascent “climate caucus.” Republicans in the House recently introduced a package of climate policies centered around carbon capture (helpful to fossil fuels), nuclear power (no threat to fossil fuels in the coming decade), and tree planting (irrelevant to fossil fuels). But it’s also what’s passing for “bipartisan” climate policy. A particularly on-the-nose example is the Clean Energy Future through Innovation Act of 2020, introduced in the House by Reps. David McKinley (R-WV) and Kurt Schrader (D-OR). It would establish a clean energy standard to decarbonize the electricity sector … in 2030. Until then, we’ll have a “decade of innovation,” whee!Needless to say, “start reducing emissions in 2030” is the very definition of a climate policy meal with no entrée.Our beloved West Virginia Sen. Joe Manchin (D) recently produced an even more elaborate version of an all-side-dishes climate package, in the form of a 423-page bill he released, somewhat out of the blue, earlier this month. It was unclear if the bill was meant to be part of the bipartisan infrastructure package or something else. Mainly it reads like a Manchin wish list.It’s a fascinating document. It’s got a lot of policies in it. Here’s one page of the bill’s 3.5-page table of contents:And not just policies, but good policies. There’s virtually nothing in it I would disagree with on the merits. Clean electricity will need new grid infrastructure and more robust supply chains and better cybersecurity. Energy efficiency is great; so is keeping existing nuclear power plants open. I’m even down with carbon capture and utilization research. But it’s all side dishes and no entrée. It’s all preparation for pushing fossil fuels out with none of the actual pushing. It’s all kinds of stuff that will supplement clean electrification without the clean electrification itself.This is the kind of climate policy that is in danger of being branded “moderate” — the kind that does everything but rapidly push fossil fuels out of the energy system in the coming decade. Progressives need to demand an entréeClean electrification is the core of any ambitious climate policy. Without it, we’re still spinning our wheels, innovating without deploying what we’ve already innovated.There is very little for clean electrification in the bipartisan infrastructure package recently unveiled by Manchin’s gang of ten in the Senate, save some money for transmission lines and electric buses.So far, progressive Democrats aren’t making a fuss about the bipartisan package because they have assurances from both Senate Majority Leader Chuck Schumer (D-NY) and House Speaker Nancy Pelosi (D-CA) that alongside the bipartisan bill there will be a reconciliation bill, which can get through the Senate with only Democratic votes. Pelosi is under no illusions that anything that directly challenges fossil fuels will get any Republican votes. "I don't think there's any question that the more bipartisan a bill is, the less green it is," she said last month, because Republicans "are in the pocket of the fossil fuel industry."So progressives are looking to reconciliation to pass the rest of President Biden’s climate agenda. The climate plan Biden campaigned on, the infrastructure plan he released as president, and the plans released by Democrats in Congress all contain extensive clean-electrification measures, including a clean energy standard to decarbonize the grid by 2035, tax and point-of-purchase incentives for electric vehicles, and programs to electrify buildings. Those — implemented with a strong focus on environmental justice — are the key climate pieces that need to be included in the reconciliation bill. They are the entrée.The question around reconciliation will not be Republican support, but support from Manchin and his crew of self-styled moderates. They will push for compromises that go easy on fossil fuels. Progressives need to hold the line: only by pushing fossil fuels out the system, beginning immediately, can Democrats meet the challenge of the moment.That means clean electrification: the policy that makes climate legislation a meal. Get full access to Volts at www.volts.wtf/subscribe

In this episode, longtime activist Tzeporah Berman discusses the need to track and reduce fossil fuel production (not just consumption) and the Fossil Fuel Non-Proliferation Treaty that she and other activists created to help coordinate those efforts. Full transcript of Volts podcast featuring Tzeporah Berman, July 7, 2021(PDF version)David Roberts:For as long as I've been covering climate change, it's been conventional wisdom among economists — and the kind of people who aspire to please economists — that the proper focus of climate policy is on demand. We must reduce demand for fossil fuels, the argument goes, otherwise any supply we shut down will just pop up somewhere else.Activists have always disagreed with this logic. For many of them, the fight against climate change is a fight for places — specific places, with histories, peoples, and ecosystems — and every fossil fuel project is, in some way or another, an assault on a place. Over the last decade, more economists and policy wonks have come around to their way of thinking, questioning both the economics and the sociology of the demand-focused conventional wisdom. As things stand now, wealthy fossil fuel–producing countries are making grand emission reduction commitments while continuing to ramp up production. All that fossil fuel has to go somewhere. It creates its own set of commitments and investments, its own momentum.My guest today, Canadian activist Tzeporah Berman, has been fighting for places since grunge and flannel were big. There is no way to do her resume justice in a short intro, or else I would never get to the podcast, but here are some highlights.In the 1990s, she fought clear-cutting projects with blockades and civil disobedience. In 2000, she co-founded ForestEthics, which uses clever communications campaigns to shame companies into using less old-growth wood. In 2004, she turned to climate change, founding her own nonprofit advocacy group, PowerUp, to defend BC’s carbon tax; in 2010 she became co-director of Greenpeace International's 40-country climate and energy program, where she led its storied Arctic and Volkswagen campaigns; in 2015, she was appointed to the BC government’s Climate Leadership Team to advise on climate policy; in 2016, she was appointed as co-chair of the Alberta government’s Oil Sands Advisory Group. She also led the effort to secure the Great Bear Rainforest agreement, which protects more than 40 million hectares of old growth forest. Her activism continues today — she was just arrested in May defending old growth forests on unceded Pacheedaht and Ditidaht Territories on Vancouver Island, BC.Anyway! In 2019, Berman received the Climate Breakthrough Project Award from a coalition of foundations, which came with $2 million to create “breakthrough global strategies” on climate change. She used the money on a project she’s been thinking about for a while: the Fossil Fuel Non-Proliferation Treaty. The IPCC is clear: there are already enough fossil fuels in known reserves to blow the world past its 1.5°C temperature limit. Yet fossil fuel production continues to increase.Fossil fuels have become a threat to all of humanity, as nuclear weapons are, and just as with nuclear weapons, Berman believes we need a global agreement to cap their growth and ramp them down. The Fossil Fuel Non-Proliferation Treaty is meant to be a template for such an agreement.Though the treaty is relatively new, it has already been signed by nine cities and subnational governments, more than 480 organizations, and over 12,000 individuals, including a wide array of academics, researchers, and scientists.I called Berman to hear more about the need to address fossil fuel supply, the motivations behind the treaty, and where it might go in the future. Tzeporah, welcome to Volts.Tzeporah Berman:Thank you. David Roberts:I'm so happy to have you here. It seems like the last time we talked was either a few years ago or 100 years ago.Tzeporah Berman:  It definitely feels like a very long time ago, but so does last week. Time is fungible right now.David Roberts:Time is meaningless. OK, so I want to talk to you about many things, including the Fossil Fuel Non-Proliferation Treaty. But before that, I'd like to just hear a little bit about what pulled you into all of this. You were born into a middle class Jewish family in London, Ontario, and went to school originally for fashion design, yes? Tzeporah Berman:  You’ve been digging far back!David Roberts:And you were even lauded, even won some fashion-y awards -- then took a sharp left turn. So what in your youth pulled you toward environmental activism?Tzeporah Berman:  Like a lot of my privileged generation, I took a trip to Europe, with a Let’s Go Europe in my hand and a train ticket, in my first year of university, in the summer, and at the time my dream was to go to the Acropolis. I was studying Art and Art History and Fashion Arts Design because I had to have a career and all I wanted to do was art. That year, in the late ‘80s, pollution was so bad — in a lot of cities in Europe, but in Athens in particular — that the Acropolis was melting. I can remember hiking up to the top, and this is before all the restoration, and you could just see the pollution on it. It was all crumbling. I looked down on the city, and it was just covered in this yellow haze. I got back to my youth hostel and I remember rubbing my face and leaving a white streak across it and coughing up black goo. And I was like, I have got to get out of here. I mean, I'm Canadian, I'm used to a lot of space, a lot of air. And my sister and I, who I was traveling with, we were like, we’ve got to go to nature. We just picked a spot on the map and went to Germany: we're going to hike in the Harz Mountains and drink beer! And we went to the Harz Mountains. I didn't know that most of the Harz Mountains is dead, left standing as a testimony to acid rain. So we get off this train and start hiking through a standing dead forest, not a bird sound, not anything. Those two days rocked my world. I remember coming back to Canada and thinking, we are so lucky. And being really scared. I think environmental consciousness is one of those things where there's a new lens and then you can't see anything else. I, at least, went through that phase, and I seem to have never gotten out of it. So I started working on environmental issues, I dropped out of Fashion Arts Design, and I enrolled in Political Science and Environmental Theory and Environmental Studies at university. That was the beginning for me.David Roberts: And it's been a long road since. You spend a lot of your time organizing and fighting against forest exploitation, clear cutting, and fossil fuel exploitation. In the climate wonk community, it’s conventional wisdom that the only way to really solve the fossil fuel problem is to go after demand.If people want fossil fuels, they're going to find them and burn them; if you shut down demand, it doesn't matter if people are supplying fossil fuels, they won't get bought. But if you shut down a supply project, and there still is demand, supply will just pop up elsewhere. I'm sure you've heard variations on this a kajillion times. Why do you think that's wrong?Tzeporah Berman: I think the theory for a long time, now almost 30 years, has been that we're going to constrain demand -- which is happening, obviously: more electric cars, zero emission buildings, zero emission vehicles, etc. -- demand is going to go down, price is going to go up, a higher price on carbon, and the markets are going to constrain supply. That's what I often get from the Canadian government: “We're not responsible for who produces or how much fossil fuels are produced, we're just responsible for emissions.” And the thing about that market theory around demand is that it's not working. I mean, it's not working fast enough to keep us safe, that much is clear. I still actually kind of like it as a theory, but the fact is that there are two big problems with it. One is that the markets are completely distorted by fossil fuel subsidies and now by governments out-and-out buying projects that the industry runs away from. So renewables are cheap, cheaper than fossil fuels in a lot of places now; oil and gas companies are operating at the bottom of the SMP, more bankruptcies in that sector than any other; but these projects are still surviving. Like the Trans Mountain Pipeline in Canada: it's surviving because investors ran away from it and the government bought it for $12 billion. That's because of the political influence of the fossil fuel industry, and because governments are only just starting to really grapple with the fact that they're going to actually need to deal with supply as well as demand. The fact is, there are very few issues, if any — intransigent issues, where governments have had to step in — that we haven't had to deal with both the supply and the demand side of the equation.David Roberts:  Another thing that I think is germane, especially to your case, is: “demand” is abstract. But fossil fuel supply fights take place on the ground, in particular places, and pull people in for a wider variety of reasons. So tell me about a supply fight that you won. What brings people into it?Tzeporah Berman: I will, but I want to say one thing about places and policies. As a forest activist, when I first started working in the climate movement and on climate issues, the thing that I really noticed is: in the forest and conservation movement, we fight for places. We campaign about places. The climate movement — especially 15, 20 years ago, when I really started engaging — talks about not places, but policies.I'll never forget, at a briefing with this great, brilliant pollster, Angus McAllister, he said to me, “Why is it that the climate movement is always trying to sell the airplane ride to the vacation? Sell the beach! Sell where you're trying to get to! Not the complicated, annoying journey to get to it.” I think that's relevant here. I have three university degrees, and I spent years trying to figure out, what am I for on climate change? It's like, “no cap-and-trade, no cap-and-trade and auction, and then is it carbon tax, but from this benchmark date, and not this.” And we wonder why millions of people are not getting involved. Then when the pipeline, and the coal plant, or even the Heathrow Airport — when these tangible fights start arising, people can see them in their backyard, they can see that they're bad. The problem with climate change for years has been that carbon emissions are invisible. Oil spills are not. This pipeline, right now, they're starting to drill under Burnaby Mountain and under the Fraser River to put this pipeline in. Well, that's very tangible to people. I've been working on pipelines and oil sands issues for a little more than 10 years, and in that time, I would say we've won almost every fight. We've either stopped or delayed every single pipeline that the industry has proposed, other than the existing pipeline fights, which are Trans Mountain and Line 3. Enbridge Northern Gateway: dead. Keystone: dead. Energy East: dead. These pipelines have been stopped because of citizen action, which delays the project, raises the concerns, and draws both investor action and government policy action.David Roberts:People’s involvement and passion for a particular place, protecting a particular landscape, is hard to generate for “the atmosphere,” which is everywhere and nowhere. Do people build momentum from these fights to go on to bigger things?Tzeporah Berman:Oh, entirely. Yes. The momentum builds. But also, what I've noticed and witnessed is, people go through a personal journey. The climate movement is growing and diversifying because of these fights. David Roberts:You think they pull in young people, specifically?Tzeporah Berman: They definitely pull in young people. But what I was thinking of in the back of my head was indigenous leaders that I have worked with in Canada, on Northern Gateway for example, who started these fights because this is a human rights issue. It's issues to do with their trap lines, their concern for water. As we work together, as we're having discussions, as they're learning, it's a journey. Now many of those same leaders are giving some of the most passionate climate speeches I've ever heard. Nebraska farmers that I worked with on Keystone, they started this because of eminent-domain issues. I watched some of those individuals become passionate about working on climate change. Because it's a journey — they start to be introduced to the other aspects of the issues. It's a mistake that we make in all of our communications work: we keep talking about the message box and the narratives. Well, we need a narrative that brings people with us, and that's what's happened through the site fights.David Roberts: This might sound like a weird parallel, but when people talk about music, lyrics that are very specific — ”Jane broke my heart at the high school dance” — can resonate in a universal way, even more universal than if you try to write something more generic and broad. The specificity of it is a gateway to the universal. I think of land fights and exploitation fights the same way. Like the Nebraska farmers: “Oh, this fight is happening all over the place.” Tzeporah Berman: Right, and they motivate people, because they're not about information and data and statistics. Of course there has to be a foundation of knowledge, but what resonates with people are the values: this isn't fair, this isn't right that this is happening to this local community, that they face the dangers or the cleanup from the oil development, or the toxins. Then there's a journey around to, “Well, wait a minute, why do these oil and gas companies get to profit off this when we know that it's killing us?” — not just at the local site level, but because of the contribution to climate change. What we know from decades of social movement theory and psychological research is that what motivates people is triggering values, but also an opportunity to do something. Education doesn't motivate; opportunity motivates.David Roberts:Agency. Having some sense of control. So what happens when the indigenous people of northern Canada meet the Nebraska farmers, meet people in the Congo fighting oil projects — unlike demand fights, which tend to be fought by wonks and wonky NGOs, these supply fights bring in a really wide diversity of people. What does it look like when those people hook up with one another? What’s it like to watch them try to work things out?Tzeporah Berman:It's fascinating. It's joyful. It is also painful. One of the things I did when I was working predominantly on tar sands and pipelines is start to bring people together. I realized, whether you're in Nebraska or northern British Columbia, you're often fighting the same oil companies, the same pipeline companies — same strategy, same messaging, struggling with the same or similar regulatory issues. But they weren’t talking to each other; the movement wasn't learning from each other. It was very disparate. So I started convening these gatherings, 100 people at a time; first domestically in the US and Canada, and then eventually internationally through a network I helped create called the Global Gas and Oil Network. I have memories of sitting at a retreat center, watching an indigenous chief from a remote community engage with a Nebraska farmer, and a union leader, and then a climate policy wonk from NRDC, and then we've just finished dinner and they're all getting into the hot tub. I'm like, “Oh my god, what's gonna happen?”David Roberts: You’re over there chewing your fingernails.Tzeporah Berman:Some great and fascinating collaborations happened because of that. We all learned from each other. And there were huge blowouts!David Roberts:The Nebraska farmer is about private property rights; that's their lens. The indigenous leader is coming at it from a completely different viewpoint. What is the Venn diagram overlap where they can work together? It’s so fraught.Tzeporah Berman: Oh yeah. In some ways it was a microcosm of all the debates. We were fiercely debating which issues are most important, how do you talk about this issue, who talks about the issue, what are we asking for, what if the government says yes to this but says no to this indigenous rights issue? As a movement, we are grappling with all those questions.It's almost like we were testing it out before we went public. We were learning from each other and, quite frankly, unlearning our own biases, doing the deep work of decolonization and understanding our own privilege and trying to figure that out. In the process of doing all of that, we reached some pretty important agreements, which you see in the campaigns over the last many years: a commitment to step back for a lot of white folks and help raise indigenous voices and indigenous perspectives. A commitment to try and find resources for grassroots groups on the ground, instead of it just being “the big group” saying what the issues were. All of those things.I think the movement has strengthened and diversified as a result of the site fights.David Roberts:Do you think there is something like a global movement against fossil fuel exploitation forming, or possible? As you say, every site fight is different, every place is different, in many senses the values that people bring to these things are very different. What is the connecting thread that might make a global movement? What would it look like?Tzeporah Berman: It’s, what does it look like? Because we are creating it. A whole bunch of us have been, for the past five or six years, consciously trying to connect the threads and figure out how to have global conversations that bring people together; to bring indigenous groups in the heart of the Amazon into a strategy conversation around what should we be doing at the United Nations relative to fossil fuels? What about the subsidies campaigns? How do we do finance strategies? It used to be there were just some environmental groups, maybe grassroots groups, having these conversations. Now you see more and more voices coming in, people from different countries connecting to it through the Global Gas and Oil Network, but also now through the Fossil Fuel Non-Proliferation Treaty initiative and campaign that we've been developing. We realized we had to stop playing whack-a-mole — this pipeline, this project in Argentina, this offshore drilling in Norway — and we had to say, “No.” We had to say, “the science is really clear, we have to stop fossil fuel expansion.” This was hard. This was a fight inside the climate movement, especially with climate policy wonks and philanthropic foundations. During the Keystone campaign, we had philanthropic foundations and other NGOs coming to us and saying, you have to stop this campaign, because it's not a climate campaign. It's diverting attention from the important climate issues.David Roberts:I heard many, many wonks make similar arguments.Tzeporah Berman: That was happening all over the world. What we did is, we found our peers. A number of us — Steve Kretzmann and Hannah McKinnon from Oil Change International, myself, a bunch of others — made a list of the 100 people we knew who are at the forefront of oil and gas fights around the world, then added to that list a bunch of academics that we knew were thinking about supply-side policy, and indigenous leaders. At the time, there was a huge battle going on around the Lofoten offshore drilling in Norway. So we cast about and said, who wants to host this big strategy retreat? And the groups in Norway did. So we facilitated a five-day retreat for 100 people in Lofoten, Norway. That was the beginning of this international network. That's where we released the Lofoten Declaration, which is the first global declaration calling for an end to fossil fuel expansion everywhere, and a global just transition. In my mind, that's the moment when things changed — when we started really looking at supply-side pathways and the need for international cooperation and more work on constraining fossil fuels.David Roberts:That's a great segue into the treaty. It blew my mind a little bit, when you were first thinking about this and putting it together — I assumed people were keeping track of fossil fuels in the world, where they're being dug up, how much, and who's doing it. But it turns out, not! Can you tell us about the registry idea, and the state of knowledge about global fossil fuel production?Tzeporah Berman:  We started thinking, OK, so if the scientists and even Mark Carney [Governor of the Bank of England] is out there saying we have to keep two-thirds of fossil fuels in the ground, how much are we currently planning on producing? I also thought it would be an easy question to answer. What we now know is, countries are responsible for submitting emissions data into the UN, and domestically. That's all easy to find. But if you want to count up today who's producing what [fossil fuels] and how much, you have to buy the data from Rystad and Wood Mackenzie. That’s exactly what Oil Change International has been doing for years, producing its Sky's Limit reports. That's what Stockholm Environment Institute is doing in producing the Production Gap report. Most governments themselves don't even know, or don't have anywhere that they count up, what's being produced and how much.David Roberts: So these private databases are the only places where that information exists.Tzeporah Berman: If you dig deep at a national government level, you can find it. There are great experts out there, like Pete Erickson from Stockholm Environment Institute and others, who can do this. If you're an average person — or even, as I've discussed in several countries, a minister — you can't find it and you don't know what's being produced. Intransigent global issues like this — nuclear weapons, landmines, etc. — the first piece in a global reckoning is accountability and transparency. In fact, that would be the first piece at a national level as well. And we don't have transparency or accountability. We don't even have a comprehensive database of how much coal, oil, and gas reserves, resources, and production is happening globally at any given time. It's not even accessible to decision-makers, let alone publicly accessible. That’s the basis of this idea which we're now producing a prototype for, called the Global Registry of Fossil Fuel Production: that we can't count up the carbon budget, we can't assess the potential lock-in of fossil fuel infrastructure and fossil fuels, if we don't know how much is being produced or who's producing it. We can't hold anyone accountable on that side of the ledger.So the first critical piece in this puzzle was the Production Gap report that the Stockholm Environment Institute produced with the United Nation Environment Program, ISD, and others. It's that report that started crunching the global numbers and said for the first time that we're currently on track to produce 120 percent more fossil fuels than the world can ever safely burn under a 1.5 degrees scenario. In fact, we already have enough oil, gas, and coal, either above ground or under production, to take us past 2 degrees. So the majority of the world's financial, political, and intellectual capital at this moment in history is going to produce three products — oil, gas, and coal — which are responsible for 80 percent of the emissions trapped in our atmosphere. Three products which we can't use if we want to have a stable climate.David Roberts: So you put out this request for proposals on the registry, because I imagine there's quite a few logistical and technical issues to work out. What's the state of the registry now? Did somebody win that? Is somebody out there working on it?Tzeporah Berman:  Yeah, they did. What was really exciting is, we had a lot of submissions from some of the biggest energy agencies and analysts from around the world. None of them alone could really do it properly, because it's really hard to do. So what we ended up doing is starting negotiations between Global Energy Monitor and Carbon Tracker Initiative, because they both harvest data in totally different ways. This needs to be tested: what you need to do is to scrape data from industry, scrape data from governments. Originally we thought, oh, it's OK, Rystad and Wood McKenzie already do this. But we can't use their data — you have to be very careful, because they’re a company. I actually think they're probably not very happy with us, because we're really having a go at their business model here.David Roberts:If you succeed in this, it's gonna take a whack off some big revenue streams for some big companies.Tzeporah Berman:Yes. When we launch it, which will be the prototype at COP 26, it will be the first open-source, comprehensive, detailed database of coal, oil, and gas reserves, resources, and production globally, that is both publicly accessible and is starting to have some buy-in from governments and other major institutions. It will be quite a sophisticated, but interactive and publicly accessible, database. And it's on its way, currently being produced.David Roberts: With some of the poorer fossil fuel producing countries that maybe don't have governments interested in transparency, is there any way to enforce this? Is there any data that are off limits, that you have to fight to get, or is all the data out there somewhere and this is mostly about gathering it? Like if Congo, for instance, wanted to hide how much fossil fuel it's producing or obscure it in some way, could they? Tzeporah Berman:  Considering the majority of oil, for example, is from national companies: maybe. Honestly, I would have to talk to Carbon Tracker and Global Energy Monitor and see how they're doing on that front. But they were pretty confident that with what industry releases, combined with the data scrapes they're doing from government, they could provide a pretty significant picture. And we'll know, with the prototype. It's the first time that anyone has ever tried to build it and to make it available to the public. What we're finding with both the registry and the fossil fuel treaty is that governments in the global south are pretty interested in this type of transparency, once we show them the data that shows that the majority, well over 70 percent, of the expansion planned for fossil fuels in the next five years is in the global north. It's in wealthy countries. David Roberts: The very countries that are most vocal about climate change, right? Tzeporah Berman:  That’s right. In fact, the majority of what is planned globally on oil and gas is in the US and Canada.David Roberts: Let's talk then about the Fossil Fuel Non-Proliferation Treaty. Conceptually, where did this idea come from and what's it based on? What's the necessity for it? What do you want it to do or say?Tzeporah Berman:  The idea emerged from some of those conversations we were having in Norway and other places. What we realized is that every country was responding in the same way to this question of, how do we keep two-thirds of fossil fuels in the ground? Pretty much every nation-state, whether it was Norway, the UK, Canada, or Argentina, they were all saying: It’s not our problem. We don't deal with production, and obviously we couldn't, because then we wouldn't be competitive, and there would be leakage. If we don't produce it, someone else will. So these are all the answers of why they couldn't. Yet everyone's saying: we know we have to. Meanwhile, we are locking in all of this production. And all of this money and time is going to either fighting these projects or producing these projects that we can't use. The clock is ticking on electrification and the infrastructure that we actually need to be spending money on. So we started looking at what we could learn from other big, intransigent problems like this: the Montreal Protocol, the landmine treaty, the nuclear non-proliferation treaty, nuclear weapons agreements. The idea started emerging, well, if one country can't do it alone, if it really is this kind of dilemma that no one will do it without the other countries, then that's the point where you need international agreements. That's what treaties are for. It’s a great analogy, the nuclear weapons treaty. Some academics started studying it. I think the first peer-reviewed paper to come out proposing a Fossil Fuel Non-Proliferation Treaty was from Peter Newell and Andrew Simms out of the UK. They are now on the steering committee of our initiative. I read their paper and I thought, yes, this is what we've been talking about for ages. So I just called them up. I didn't know them yet. We’d been to some of the same conferences. And I said, Look, let's create an initiative and a working group and start talking about whether this is really real, and what we need to learn? What do we need to study? And we pulled together a group of former diplomats and academics and activists from around the world and started talking about it. Then that summer, out of the blue pretty much, I won the Climate Breakthrough award, where they give you $2 million to form global climate solutions that no one has ever tried before.David Roberts:Well that was helpful.Tzeporah Berman:  Yeah, good timing — and, you know, no pressure, just solve climate change. This is the first time in well over a decade that I've worked on anything which is commensurate with the scale of the problem. Sure, it's bold, audacious; and you know what, we need bold, audacious right now. We're racing against the clock and we keep not meeting our targets. Every COP, every UN negotiation I've ever been to or heard about, at the end of every one, there's a press release that comes out that says, well, we've done this, but we've failed to address climate change and the world is still burning. I just thought, let's try this. And then it took off. I mean, it's been a little bit over two years since that. It's just taken off. It's grown so fast. Now with the IEA coming out last month with the 1.5 net zero scenario, acknowledging that if we are trying to meet net zero we have to stop fossil fuel expansion, we're actually the kid on the block that for years has been studying how to stop fossil fuel expansion. We all know that we need to do it now. There's evidence showing that we need to do it, but I think everyone is now going to start looking for a pathway to how. Part of it is finance, the divestment campaigns; a huge part of it is finance. But again, we can't leave it up to the markets, not just because the markets are distorted, but because the markets aren't going to address equity and justice.The basis of the Fossil Fuel Non-Proliferation Treaty initiative is that we are going to need international cooperation in order to stop fossil fuel expansion everywhere. And that if we're going to do it in a way that is equitable, that addresses injustice, we have to have the hard conversations like debt forgiveness. I do a lot of work with Ecuadorian indigenous nations in the Amazon. They're facing new oil drilling entirely to feed Ecuador's debt. A lot of it is debt-for-oil swaps with China. There's a number of countries like that: Argentina, Ecuador, many countries that are starting new fossil fuel expansion not because they're going to use the products; they're just doing it to feed their debt. So equity and justice is a huge part of this. I think one of the reasons we need a Fossil Fuel Non-Proliferation Treaty is that some countries, especially wealthy countries, can put in place policies at a national or subnational level to constrain fossil fuel expansion. But if we are going to constrain fossil fuel expansion fast enough, in the time that we have to support actually moving to zero and beyond, we're going to need international cooperation. Right now, the Paris agreement does not provide the mechanisms for the conversations that we need.David Roberts: There are estimates that for some, for example, African countries, a successful green energy transition would devastate their oil and gas revenues and hurt their economies. That's a large chunk of their national income in some cases. So we can be conscious of equity, and conscious of the disparate effects, but what would an international treaty or organization do about that, exactly? It's the same dilemma Canada or the US has internally: there are some parts of the US where the economy is extremely dependent on fossil fuels and would demonstrably be hurt if they went away. Internationally, it seems like that's even trickier. So what do you do? What's the solution to that?Tzeporah Berman:  Part of what we're doing right now is starting to pull apart, what are the barriers in the global south, and really starting to do deep dives and understand the situations in particular countries. The treaty initiative is made up of organizations from around the world and we have core partners in each region. So Power Shift Africa, Third World Network, Asian People Movement on Debt and Development: these are groups that are now doing deep analysis and case studies of, for example, in Malaysia, PETRONAS and its influence. We're also working with Sivan Kartha and Greg Muttitt, who have written a seminal paper on equity and fossil fuel production. They basically look at a whole bunch of countries: What is their GDP? What are their jobs? What is their dependency right now, and so what are their barriers going to be? So we're doing the analysis, pulling apart the barriers. But what a treaty would do is, first of all, if countries agreed to the end of expansion, it provides a roadmap. So right now — it's really strange and in fact, when I first started looking at this stuff, I thought I was kind of crazy, because we're all talking about phasing out fossil fuels and everyone's talking about 100 percent renewable, and so I started doing the research to find out, what is my country's own plan for production? We don't have one. We don't actually plan for the production of fossil fuels to go down.David Roberts: Canada you mean, specifically, or anyone?Tzeporah Berman: Canada specifically, but pretty much any country other than Denmark, who has now announced no new expansion and planning for managed ramp-down and phaseout of production. So if you go and look at the NDCs of what countries file in the Paris agreement and look at any major producing country — US, UK, Canada — they are saying we're going to go 100 percent renewable, and they're saying, we commit to these emissions targets. But they're not actually saying that their fossil fuel production will go down. And that's because the fossil fuel industry has been working for decades to try and convince governments that they're going to separate production from emissions, that we are going to eventually have the technology competitive at scale (CCS, CCUS etc.) so that we can keep producing and reduce emissions. I mean, the evidence doesn't show that, and we've run out of time for that in a lot of ways. But we don't actually plan right now to end expansion. So the Fossil Fuel Non-Proliferation Treaty is designed on the pillars of the nuclear non-proliferation treaty. First of all, end the expansion. Second of all, manage a global phaseout of fossil fuel production. The third pillar is, ensure peaceful and just and equitable transition. Right now we have research, diplomatic efforts, and discussions going on under each of those three pillars, and our vision is for a world where vulnerable communities are offered an alternative pathway. That we actually planned for this, instead of just leaving it up to the markets. Poor countries will have to be supported by wealthier countries to transition away from fossil fuels. And right now, in all of those countries, they're under heavy pressure with capital coming in still from fossil fuel companies to do more fossil fuel expansion. And they're under heavy pressure, many of them, to continue feeding their debt. So it's this really strange disconnect we have right now in the climate debate, with energy and infrastructure and fossil fuel discussions are over here, and climate targets over here.David Roberts: I wanted to ask about that last point. Even if you take supply out of the picture and just look at the traditional discussion around climate change and traditional treaties, Paris and everything else: even through that lens, it's clear that if we don't want them to emit so much that we shoot past our targets, wealthy countries are going to have to send money to poorer countries. It's been part of the COP talks forever, always super contentious. We allegedly set up this Green Climate Fund, but if you've been following the reporting on that, we're not doing it. The rich countries are not putting money into that fund. That’s the part where I look around in vain for signs of optimism. Because if we're trying to pay them to emit less and to produce less fossil fuels, that's just a lot of money. It would be a huge wealth transfer to get that going. Tzeporah Berman: It is a lot of money. But there's a cascading series of impacts at the point that a country acknowledges that it's going to stop fossil fuel expansion. If you are going to stop the production of fossil fuels, then that also means that the tax breaks and the subsidies that are going to the fossil fuel industry don't make sense. The reason they need them right now is their margins are so small; it costs so much to produce those fossil fuels and to expand those productions. But for Canada, for example, a fracking project that has a declining field, it doesn't need a lot of money in support. It's the infrastructure that is the issue. So that's billions, if not over a trillion dollars. In Canada alone, it's at least $2.7 billion a year just in direct and indirect subsidies, and that doesn't even include doing things like buying a $12 billion pipeline that will likely become a stranded asset. So there is money. There is quite a lot of money. And that's just on subsidies, let alone what we're spending in cleanup — cleanup of both spills, billions of dollars, and cleanup of liability and dead wells and leaking wells and methane, and billions of dollars that governments are spending right now into CCS research and pilot projects around the world. And we haven't even started talking about health costs. We know from the data that's coming out that fossil fuel development, especially in the global south, is costing millions, if not billions in health costs. Because it's toxic. We've always known that. Sure, we've benefited from this industry, lots of nice people work in this industry. Now we know, like nuclear weapons, that the expansion of it is killing us. That's the parallel, and that's the beauty of the treaty that we haven't really talked about, is that the climate movement hasn't had a global demand to government since well before Paris — except for increased ambition and complicated things that actually don't mean anything to the average person. David Roberts:  Higher targets! It's always targets.Tzeporah Berman: What does that even mean? And what the Fossil Fuel Non-Proliferation Treaty does is start to shift the norm around fossil fuels, because we've all grown up with the idea that fossil fuels are prosperity. They were keeping the lights on. And in places like Texas or Alberta, where we see production, it's also what keeps your hospitals open and your roads paved. In fact, that's not true anymore, because in both jurisdictions — and this is a trend in most wealthy countries — they’re spending more money for fossil fuel production than fossil fuel production provides to a subnational or to a nation state. Because of the liability costs, because of the royalties going down, subsidies going up, etc. We're paying them to extract and pollute now, that's what's happening. David Roberts:So are people and NGOs and academic organizations endorsing this or signing on to it? I guess the idea, eventually, is that countries sign, right?Tzeporah Berman: We decided to start at cities. And the reason we decided to start at cities is because cities are not as influenced politically by the fossil fuel industry. Also, historically, that's where treaties start. Look at nuclear. I'm old enough to remember driving into a city, there'd be a sign: nuclear-free city. That was part of the campaign for a nuclear weapons ban.David Roberts:And cities are where the left is, where progressive-minded people live.Tzeporah Berman: It’s taken off like wildfire. We launched the idea of the fossil fuel treaty at Climate Week, last year in September, and by October, November, Vancouver became the first city in the world to unanimously pass a motion to endorse the Fossil Fuel Non-Proliferation Treaty. And the council and the mayor sent a letter to Prime Minister Trudeau, asking him to start to work on the treaty and international cooperation on stopping all fossil fuel expansion. Vancouver was followed, less than a month later I think, by Barcelona. It just goes on and on. There were three cities in Australia this week, there were two cities in the UK last week, now LA and Hayward, California; there's a motion already tabled in New York. So the cities work is really taking off, and I keep hearing about new campaigns that have started. We created a campaign hub that has all the information that we could produce around what the treaty is, and now groups around the world are starting to make it theirs. So I know that Friends of the Earth Sweden is campaigning in Swedish on the fossil fuel treaty in 17 cities. Youth groups around the world are taking it up. We now have COICA, the association of all indigenous nations in the Amazon, who have endorsed and who are starting to work on the fossil fuel treaty. It's really starting to become a movement — 400+ organizations now endorsing and starting to campaign on the fossil fuel treaty. It brings together those issues we were talking about at the beginning; it's tangible. People can say, yeah, I don't want Line 3, but I also don't want drilling in the heart of the Amazon, so enough already. Let's start focusing on the good stuff, instead of always focusing on the bad stuff.David Roberts:  So who will be the first country? And when?Tzeporah Berman:  It's hard to know. I do think it will likely be more vulnerable nations, because the meetings that I've been in, when you talk to countries in the global south and show them the data —that the majority of the new expansion of oil, gas, and coal is in wealthy countries, and the science of the Production Gap report, and how we're producing 120 percent more than we can burn — they're angry. Some people say it could take 10 years to get a treaty; we may never get a treaty. I think the journey matters here. If you look at other treaties — nuclear waste, nuclear weapons, etc. — the journey mattered. We're creating a new conversation. Imagine the point when some vulnerable country stands up on the UN floor and says, “What do you mean, Norway? I saw it here in this global registry that you’re about to produce this.” I think what we're going to start to see is bilateral negotiations on fossil fuel production, some multilateral agreements on pieces of it, debt forgiveness, etc., working its way up towards a treaty. It's already started.David Roberts:It's slightly disheartening that so much of the production is in the US. The US has traditionally not been super jazzed about international treaties, especially lately.Tzeporah Berman:  But that's OK. The TPNW was a nuclear weapons treaty that was led by non-nuclear-armed states, and it stigmatized and banned nuclear weapons. It changed the narrative about nuclear weapons, and every country started being held accountable to what they were stockpiling and how they were going to reduce it. It's likely that's how the treaty will emerge here as well, by marking out a legal pathway, by identifying the barriers, starting to create political will. Let's not forget that it was Kamala Harris on the campaign trail that talked about an inverse OPEC; that's essentially what a Fossil Fuel Non-Proliferation Treaty would be. It was Biden that talked publicly during the debates about needing to phase out oil. There are tipping point moments in history when the technology, the finance, the political ideas come together, being pushed by social movements, and I think on fossil fuels, we're living that tipping point now.David Roberts:The future is so opaque to me these days, but it's not hard to envision the US becoming a pariah on this, if enough momentum builds and enough countries sign on. I can't envision the US signing on, but I can envision it becoming isolated. I'm trying to imagine, how would we here in the US respond to that? With grace and generosity? Hmm.Tzeporah Berman: California just became the first subnational in the world with major fossil fuel development to announce an end date to fracking and new oil development. That's huge. That's the beginning of recognizing that constraining and managing how much fossil fuels we produce, and for how long, is part of the climate debate. We have to start creating policy roadmaps for both supply and demand. That's the seed for the conversation in the US. Given the immense opposition in Texas and New Mexico to what's happening in the Permian Basin, and how bad the financial outlook is in the long term … I don't know.David Roberts:  These unpaid-for cleanups are popping up more and more often. It’s brutal out there on those Texas natural gas fields. That's going to be billions of dollars. And of course it's not fracking companies who are going to pay that.Tzeporah Berman:  No, it's taxpayers. People are also waking up to the fact that there are alternatives. I'm starting to see them right here. Look, there's an electric car, I can see it now. Maybe we don't have to be using all these fossil fuels. It'd be cheaper if my house was using better efficiency, and then I didn't need to buy so much.David Roberts:  Maybe I wouldn't have to burn my back fence to stay warm during a cold snap if we had more renewables.Tzeporah Berman:  The solutions clearly are more reliable, even at the moment when we need them to be more reliable, because they're distributed and safer and healthier. Again, new data came out this year from the Harvard study that fossil fuels are killing millions of people every year because they're toxic. There's a lot of good reasons to start thinking about fossil fuels in a different way, and to address that anxiety that we have: are we going to freeze in the dark? We're not going to freeze in the dark. We have enough fossil fuels already above ground or under production to meet the world's needs while we transition to a cleaner future. That’s the part we're just starting to understand. That’s the point where people start getting excited about what that beach looks like.David Roberts: Let's talk briefly about the beach. You've said before: the fossil fuel model, in terms of social and economic organization, is very centralized. It lends itself to concentrations of power, which of course then lend themselves to graft and bribery and all the rest, and the little people getting screwed, getting the ass end of all these cleanups, and not benefiting. I can't tell you how many stories I've read now about, this North Dakota town thought they were going to be rich forever … and then fracking left and now they’re all super poor.Tzeporah Berman: Turns out now their water is poisoned, they have higher cancer rates, and, yeah, they don't have any more money. David Roberts:  None of the wealth stayed behind. So what's your vision of what comes next after that, and why is it better? Obviously there’s not dying of inhaling poison — that's a bonus. But how else do you see clean energy reshaping some of those social and economic structures? Tzeporah Berman:  Reducing our dependence on fossil fuels, not just the use of them, but the production of them, changes everything. It changes the daily lives of millions of people. We're no longer fighting asthma. We're no longer fighting what should be rare cancers, which are now massive in downstream communities, especially communities of color, near refineries, and indigenous communities who are in the heart of the production in remote areas, from the Amazon to Canada. Having spent a bunch of time in some of those incredibly visionary communities in the heart of Amazon, and in northern Alberta, in Canada, where they are saying no to the oil extraction that is killing their communities — they show me the fish with lesions, I get introduced to people in their communities who are dying of cancer. And then they show me the renewable energy facilities that they're building, and they're so excited about them. The whole community is working on them, and they're plugging in their cell phones to their solar panels. They're doing traditional dances, circling the solar panels in the Beaver Lake Cree community. In the heart of the Amazon, I watched a shaman fire up his laptop after he plugged it into his new solar panel, and the beaming look on his face.People get to control the power that fuels their daily lives. They know that it's not going to have the direct health impacts on them. It's safer, it's cleaner. That’s the thing about a solar spill: it’s just a sunny day. That's the best image I can leave you with about what the future looks like. The work we're doing now on the fossil fuel treaty is, we're not going to get there just by the local efforts. We're not going to get there in time to have a planet stable enough where we're not just dealing with constant disasters. If we're going to do that, we need international cooperation. That's why we have to call on our governments to do this.David Roberts:Thanks so much for taking the time. Tzeporah Berman: This has been really fun. Thanks, Dave. Get full access to Volts at www.volts.wtf/subscribe

Perhaps the most politically difficult aspect of climate change is that, after decades of denial and delay, there is no longer any coherent “moderate” position to be had. To allow temperatures to rise past 1.5° or 2°C this century is to accept unthinkable disruption to agriculture, trade, immigration, public health, and basic social cohesion. To hold temperature rise to less than 1.5° or 2°C this century will require enormous, heroic decarbonization efforts on the part of every wealthy country. Either of those outcomes is, in its own way, radical. There is no non-radical future available for the US in decades to come. Our only choice is the proportions of the mix: action vs. impacts. The less action we and other countries take to address the threat, the more impacts we will all suffer. Politicians who hamper the effort to decarbonize and increase resilience are not moderates. They are effectively choosing a mix of low action and high impacts — ever-worsening heat waves, droughts, floods, and hurricanes. There is nothing moderate about that, certainly nothing conservative. For years, climate scientists, advocates, and activists have been trying to get politicians to understand this about climate change: that indifference and inaction are not neutral. Every day that goes by, more damages are baked in and getting the problem under control is more difficult. The cost of preventing future impacts is tiny relative to the cost, in lives and money, of adapting to them. The only way to conserve what Americans love in this country is to act aggressively to limit carbon emissions, commercialize clean-energy technologies, and wind down fossil fuel production — and help other countries to do the same. To do less means to conserve less, to accept more loss. Has the Democratic Party taken this message to heart? We’re going to find out in coming weeks. I’m going to describe some political forces that threaten to limit or constrain Democrats’ climate ambitions in favor of “moderation” and then take a closer look at the political drama going on in DC these days around infrastructure. We’re about to get an unusually clear test case of Democrats’ commitment to climate policy.The right is creating a new “other side” in the climate debatePretty much every demographic outside of hard-core conservatives is concerned about climate change and wants to address it — most notably young people, who aren’t exactly flocking to the GOP these days. A few people on the right are belatedly and begrudgingly recognizing this fact and its electoral implications.Lisa Friedman of The New York Times brings news of a budding Republican climate caucus. The story is hilarious and sad and worth reading, but here is the nut of it:“There is a recognition within the G.O.P. that if the party is going to be competitive in national elections, in purple states and purple districts, there needs to be some type of credible position on climate change,” said George David Banks, a former adviser to President Trump …So, at least some Republicans think science denialism is no longer working and the party needs “some type of credible position on climate change.” The question is, what is the minimum viable position? What’s the least they can do while appearing to do something?Here is the party’s opening gambit:A package of bills [House Minority Leader Kevin] McCarthy [R-CA] introduced on Earth Day championed carbon capture, a nascent and expensive technology that catches carbon emissions generated by power plants or factories and stores them before they escape into the atmosphere. It also promoted tree planting and expansion of nuclear energy, a carbon-free power source that many Republicans prefer over wind or solar energy.Friedman rightly notes that these policies would do very little to reduce emissions. But she also calls them “limited government, free-market policies,” which is a bit of right-wing spin we ought to reject. Carbon capture is entirely dependent on government subsidies and regulatory support. So is nuclear power. So is large-scale reforestation. These are all the very opposite of limited government.What unites these proposals is that they can plausibly be said to address climate change in some way or another, but they do nothing to limit or otherwise inconvenience GOP donors, especially fossil fuel companies. In fact, carbon capture can be viewed — and likely is viewed by Republicans — explicitly as a bid to protect fossil fuels from climate policy.Remember, the problem for which Republicans are solving is not climate change but the need to be seen as having “some type of credible position” on climate change, enough for suburban voters to reassure themselves that the GOP is not unreasonable on the issue — that there are once again two legitimate sides. Science denial looks ugly and extreme. But rhetoric about “small-government solutions” that are more sensible than the “tax and spend” Democratic alternatives? Well, that’s as soothing and familiar as warm milk. It might be possible for Democrats, if they were united in their message, to properly expose this Republican climate PR as the fraud it is … but they are not united in their message. Manchin is helping position fossil-friendly policy as “the center”The majority of the Democratic Party, both voters and legislators, is on board with an ambitious (if still insufficient) climate plan. But on this issue, as on all others, Democrats need total unanimity — it’s all 50 senators voting together, or nothing passes. So attention tends to focus on the most conservative Dems, the swing votes, and their words carry added weight. Republicans want to pretend that climate change is just another pollution problem and the solution is for fossil fuels to clean up a little bit. They want to pretend that “innovation” can keep fossil fuels going forever.Democrats need to expose that as nonsense, but they can’t, because Sen. Joe Manchin (D-WV) is out there saying, “You cannot eliminate your way to a cleaner environment. You can innovate your way.”Republicans want to pretend that coal can be saved, that it can somehow find a way to compete in a decarbonizing world. Democrats need to expose that as nonsense, but they’ve got Manchin out there whining that his fellow Democrats are “unfairly targeting” coal.Republicans want to pretend that decarbonizing the electricity sector by 2035 (Biden’s timeline) is impossible. Democrats need to expose that as nonsense, but they’ve got Manchin out there “concerned” about Biden’s “aggressive” timeline. Republicans want to pretend that climate isn’t a threat to the financial system. Democrats need to expose that as nonsense, but they’ve got Manchin out there scolding big banks for adopting zero-carbon goals. Democratic leadership has to tiptoe around all this stuff, because everyone needs to keep Prince Manchin happy. The result, though, is that in the eyes of the media, the majority Democratic Party consensus on climate change (as reflected in Biden’s climate plan!) becomes “the left” in a debate with Manchin in “the center.” Are Democrats going to allow that to happen? The dynamic is going to come to a head around the infrastructure bill. Let’s take a look at the maneuvering taking place right now.The bipartisan infrastructure plan is not a climate strategyFor weeks, Senate Majority Leader Chuck Schumer (D-NY) has been open about the fact that Democrats are pursuing a two-track strategy on infrastructure legislation. A bipartisan Senate “gang of ten,” including Manchin, is working on a bipartisan bill; whatever doesn’t make it into that bill will go into a bill meant to pass through budget reconciliation (which only requires 50 votes). This has always been a tenuous strategy, but it was apparently unavoidable, because Manchin and his crew of centrists refused to proceed straight to reconciliation. They were determined to do the bipartisan dance that has eaten up the past few weeks. Last week, the bipartisan group presented an outline of a plan. It would involve $1.2 trillion total spending — about half of the $2.25 trillion in Biden’s infrastructure plan — and just $579 billion in new spending. Democrats fought off Republican efforts to impose a special fee on electric vehicles and raise the gas tax to pay for the bill. Republicans fought off Democratic efforts to pay for it by rolling back Trump tax cuts. They’re still not sure how they’re going to pay for it. As for climate, the plan has … some stuff. There’s $73 billion for power system infrastructure (HVDC lines!), which is, the White House claims, “the single largest investment in clean energy transmission in American history.” There’s $49 billion for public transit, $66 billion for rail, $7.5 billion for electric vehicle chargers, and another $7.5 billion for electric buses. It’s better than nothing, and more than a Republican Congress would offer. It’s a small down payment on the investments in clean energy infrastructure that will be needed in the future. But it’s not a climate plan. Not even in the ballpark. A real climate plan will include a reconciliation-friendly clean energy standard (CES), clean energy tax credits, a civilian climate corps, investments in frontline communities, and the rest of the climate commitments in Biden’s jobs plan. That’s where the reconciliation bill comes in. Of course, climate isn’t the only issue competing for inclusion in that bill. At this point, every Democratic interest group is lining up to have its priorities included. Sen. Bernie Sanders (I-VT) has put together a $6 trillion bill as an opening gambit. Politico captures the conventional wisdom: “The dollar amount … is likely to shrink as moderates weigh in. At the moment, it appears impossible that all 50 Democrats would get on board with such a large figure.”Manchin and Sen. Kyrsten Sinema (D-AZ) are typically seen as the ones with leverage, since their votes will be needed for any reconciliation bill. And they are already making noise that the Democratic plan is too big. Something blah blah deficit something. But there’s a twist. Progressives throw their weight aroundProgressives have been trying to exercise a little leverage of their own. They are insisting that the bipartisan bill not be passed on its own, without being linked to the reconciliation bill. Sen. Elizabeth Warren (D-MA) said, “It has to be one deal and not two deals.” Sanders said, “It's going to be either both or nothing.”They want an “ironclad” pledge from Schumer that both bills will get a vote before they commit to the first. And so far, Schumer has said he is committed to doing both. "One can't be done without the other,” he said.House Speaker Nancy Pelosi (D-CA) has been similarly categorical:No, really.This message extended all the way to the top. Even as he introduced the bipartisan package, Biden said:I expect that in the coming months this summer, before the fiscal year is over, that we will have voted on this bill, the infrastructure bill, as well as voted on the budget resolution. But if only one comes to me, [if] this is the only one that comes to me, I’m not signing it. It’s in tandem.Republicans immediately pretended to be surprised and outraged by Biden’s commitment to pass both bills. Some of them threatened to bail on the bipartisan package. In response to the faux outrage, Biden clarified that he was not threatening a veto or linking the bills. It is entirely possible — some might even say thuddingly predictable — that Republicans were never negotiating in good faith and that the whole point of the exercise was to waste time and foster division among Democrats. Senate Minority Leader Mitch McConnell (R-KY) wants to prevent a reconciliation bill. The bipartisan process was a way to blunt Democrats’ momentum and slow things down. I expect he will be perfectly willing to blow up the deal if it no longer serves that purpose. The question is what Manchin and Sinema will do if their bipartisan deal falls apart. At that point, both they and the progressives on the other side of the coalition will face the same stark choice: find a reconciliation bill that can get 50 votes … or get nothing, and be known forever as the people who tanked Biden’s presidency and denied Democrats their only chance for structural change in a decade. The stakes are incredibly high. Schumer is promising a “unity budget” that will bring Democrats together, but strains are showing already. Exactly what and how much climate policy will be in the reconciliation bill will be hashed out in coming weeks. A campaign (from the Sunrise Movement and Evergreen Action) called “No Climate, No Deal” has been endorsed by a dozen Democratic senators and 38 reps. But it’s not clear what minimum threshold counts as enough climate to get their vote. This is where the battle between climate “moderation” and climate realism is going to be fought. Manchin will be angling to blunt the parts of Biden’s climate plan that directly displace fossil fuels. But those are the most important parts.It will be up to progressives to walk a tightrope, rejecting false moderation and insisting on an appropriately ambitious climate plan without tanking the deal entirely. Finding unity and holding it together against what is certain to be a full-on right-wing assault is a fraught undertaking, to say the least.The pressure in DC to do less, to compromise and scale back, is insidious and inexorable. But this is the moment of truth for climate change in US politics. If big stuff doesn’t happen now, it’s not going to happen for a long, long time. No climate, no deal. Get full access to Volts at www.volts.wtf/subscribe

In this episode, Saul Griffith (co-founder of Rewiring America) and Arch Rao (founder and CEO of Span, which makes smart electrical panels) discuss the need to electrify US homes, the challenges standing in the way, the kinds of solutions that will ease the process, and much more.Full transcript of Volts podcast featuring Saul Griffith and Arch Rao, June 28, 2021 (PDF version)David Roberts:Those of you who have been reading or listening to Volts for a while know that I am fairly obsessed with clean electrification, which involves shifting all the things we do now with fossil fuels over to electric equivalents (while cleaning up electricity supply).One important nexus of electrification is the residential sector. US homeowners are in a position to electrify their power supply (with solar panels), their heating and cooling (with heat pumps), and their transportation (with electric vehicles). How can we induce millions of them to make the decision to electrify, starting today? How can we make it cheaper and easier for them? To discuss that and related issues, I was excited to connect with two of the smartest people working in this space. The first is analyst, inventor, tinkerer, and entrepreneur Saul Griffith, who will be familiar to longtime readers — I've cited his work numerous times, especially his most recent work with Rewiring America, which advocates for rapid electrification. There is probably no one on earth with a better understanding of the US energy system. (He’s got a book on electrification coming out in October.)Griffith is a backer of and investor in a startup called Span, which makes smart electrical panels that offer homeowners fine-grained control over all their individual appliances, lights, and devices (via an app on their phones, of course). The founder and CEO of Span, my other guest, is Arch Rao. Rao was the project lead for Tesla's Powerwall home battery before leaving to start Span, so it goes without saying that he is intimately familiar with the technical and economic challenges of home electrification.Welcome to Volts, Saul and Arch! Saul, I want to start with you. We're going to talk about home electrification today, and just by way of setting context — it's pretty easy to make the case that home electrification is fun, it's cool. But what is the case that it is necessary, and not only necessary, but necessary quickly? Set the bigger picture for us.Saul Griffith: There's a few components to that. Let's start with the climate component: the urgency. There's a concept called committed emissions — that is the emissions that a machine that exists today will emit while it lives out its lifetime. So if you bought a petrol or gasoline car last year, it'll keep burning gasoline for another 20 years; if you bought a natural gas furnace last year, it'll keep burning natural gas for 25 years; a hot water heater, 15 years; an oven burning natural gas, another 12 years. So those are committed emissions, the same as a new coal plant opening last year would go on operating for another 50 years. We now know that if all of the machines that exist on the planet today live out their natural life, the committed emissions of those machines take us to about 1.8 degrees Celsius, over three degrees Fahrenheit of warming. So the practical reality is every time any of our machines fails or needs to be replaced, we need to upgrade it with a zero-carbon option. And the only real zero-carbon option that has emerged is electrification, and that's electrification of our heat with heat pumps, of our vehicles with electric vehicles, and then tying that all together and balancing the grid.David Roberts: Right. And what chunk of emissions comes from residential? Saul Griffith: Historically, we put emissions into sectors: residential, commercial, industrial, and transportation. The residential sector is responsible for 10 or 15 percent of total emissions, by that measure, but it's actually much higher than that because in reality, you make the decision about your car and your home. And when we electrify our cars, they're going to be charged at home. And then today, as it stands, a huge amount of our economy in the U.S. — close to 10% — is used to find, mine and refine fossil fuels, so that's the pipelines and the trains moving coal. And that's all filed under industrial emissions. So if you wrap up your pro rata share of that in your household, you wrap up the electrification of your vehicles, the decisions you make around your kitchen table are actually about 40 or 42 percent of our total emissions. In our small businesses and offices, what's traditionally known as the commercial sector, it's about another 20 percent. As I like to say now, there's two types of emissions. There's a small number of big machines, and there's a large number of small machines. The small number of big machines is a few hundred coal plants and a few hundred LNG terminals and a few hundred oil tankers, but the real game in town is the 200 million vehicles, the 128 million households, the 70 million natural gas furnaces, etc. That's the large number of small machines, which is what we need to electrify when we electrify the household.David Roberts: And it’s individuals in charge of those decisions. One objection I hear to home electrification is that, from an household point of view, the boring stuff like insulation and weather-sealing is a better value. What's your general response to that? Saul Griffith: I don't think that's true. It’s empirically wrong. Retrofits like the envelope and ceiling can be very, very expensive, because you have to remove walls, you have to stuff new insulation in those walls. I just got a quote on doing that for my house, which is in a mild climate but is nevertheless freezing. It was about $28,000. That would give me a small efficiency win in this house, of maybe 20 percent less energy use, whereas buying the heat pumps to heat the house is about a $2,500 project. They will lower my energy for heating the house by two-thirds compared to how it's currently heated. So the big efficiency win in this house is the heat pump.  Arch Rao: Just to expand on that, we have to be looking at technologies that change the outlook for us, not just looking back, but looking ahead. Things like fundamentally changing how we heat our homes or how we think about cooking and heating our water supply are the big game changer here.David Roberts: Following up on that: Span makes these smart electrical panels. What's the pitch that intelligence is important, or a necessary component of this, versus just dumb-appliance replacement?Arch Rao: That's a very good question. Often people have to be walked through the second-order effects that a solution like the Span panel can have for your home and your carbon footprint. A very useful analog, perhaps, is: in order to enable faster adoption of electric vehicles, we have to think about building charging networks, where we are working to deploy a large number of charges around the country and around the world. It's kind of similar. The electrical panel has a critical place in the electrical grid infrastructure, especially for your home. Without thinking about data controls and intelligence flowing in and out of it, it is very hard to envision a future state where switching over to electric appliances is practical or inexpensive. Anecdotally, when you think about replacing your water heater or your home heating system, it doesn't happen outside of an event. You have equipment failing, then you think about upgrading it, and when that decision point arrives, the cost and the timeline for upgrading your electrical system is often not compelling. It’s too much for any homeowner to take on, so they end up adopting the easiest solution, which is often calling somebody on Yelp and saying, “Hey, please replace the water heater with another natural gas water heater.” They're then locked into those committed emissions, like Saul said, for the next decade or more. So that's one part of the problem. The other part of the problem is, when you think about the continued adoption of electric appliances — be it electric vehicles, electric induction cooktops, or self-generation storage solutions like solar and batteries — the electrical panel, which is what everything connects into, is insufficient from a capacity standpoint. What we're allowing for is a smarter electrical panel that gives you controls and visibility down to every appliance and makes it easier to lock in these electric appliances and also potentially avoid the cost of upgrading your incoming service.David Roberts: The idea is that Span will juggle the loads and the timing, to smooth out the demand curve so you don't have these spikes where you might need bigger hardware.Saul Griffith: So the average US household today has two cars in the garage that burn petrol or gasoline or diesel, and it has natural gas heating, and it uses about 25 kilowatt-hours per day of electrical energy. If you electrify both of the vehicles in that household, you'll add about another 25 kilowatt-hours per day to the load of that house. And if you electrify the heat, you'll add about another 20 kilowatt-hours. For the majority of U.S. homes — and this is true around the world, when we electrify for purposes of decarbonizing, or for purposes of having a quieter, cleaner car, or because you're trying to improve the respiratory health of your children, because you don't want to burn fossil fuels inside your house — you're going to double or triple the loads in that house. The other phenomenon that is happening — and where I'm dialing in from today, in Australia, is an incredible example of this — rooftop solar is now providing 5 cent per kilowatt-hour electricity in Australia. Australia got the right mix of regulatory environment, politics, financing, that there is no way the grid will ever provide electricity to you as cheaply as solar. That will be true in the US — it is starting to be true, but it's going to be very, very true by 2022 or 2023. And then you're going to want to run your hot tub when the sun is shining, and you're going to want to charge your car battery when the sun is shining. That needs coordination, and it needs a computer, and a brain. What we're trying to avoid is having both cars on a type-two charger running at the same time as your oven, at the same time as your stove, at the same time as your hot tub. And with a small amount of intelligence coordinating those loads, there's actually quite a big economic win — it means that the total retrofit that we need to do is much smaller.Arch Rao: Thinking about it from the bottom up as well, the home electrical grid is built very much like traditional electrical infrastructure. You think about the worst case scenario, you try to build out capacity to support a very low likelihood scenario of these EV chargers, the heat pumps, your induction cooktop, and all of the different appliances in your home being powered on at the same time. That rarely ever happens, or in fact never happens, right? To be able to manage these, you need a solution that sits at the nerve center of your electrical system. That's really what Span does.David Roberts: It’s quite analogous on the household level to the larger grid: you're just peak shaving. You're installing some intelligence to avoid big peaks and valleys, right?Arch Rao: There’s an elegant comparison to be made here with fractals. We're moving into systems where your edge of grid looks more and more like the grid — you have generation, storage, you have different types of loads. So all these things we talked about, in terms of energy efficiency — reducing your consumption, which is a concept that's existed for decades now — is just not going to buck the curve quickly enough. If people want to continue to have the conveniences they have today, the solution is to electrify, to power it with known, available, increasingly lower-cost renewables.David Roberts: A lot of the promise of intelligence or software in buildings is that grid managers will be able to interface with the grid edge and coordinate and co-optimize it with central generation, so that everything works well together. A lot of what Span offers is: here's what you the owner can do; you can set this, or if this happens, you can turn this down, and turn this up. Over the years, I have picked up a real skepticism about how much we can expect people to do. Even if it's directly in their self-interest and super easy, people generally, as a behavioral matter, will not do things. In thinking about Span, what's the balance of user control versus what’s automated? Do you think about that a lot? Arch Rao: We do think about that a lot, actually. At the homeowner level, what we've zeroed in on is, monitoring without controls is not valuable. We're not just offering customers information and hoping that they'll change. Alongside that, controls without intelligence is not scalable. Ao we have to work toward solutions that take the human out of the loop, which means doing nuanced but subtle things within a home that don't impact your everyday life, but at the same time, are the right thing to do in terms of power flow management. So the solution is at the home level, but you want to take the homeowner out of the everyday decision-making process. The second part of it is, as we deploy more and more of our systems, we are seeing the benefit of the fleet level. In fact, we've already signed on a few utility partners that are looking to give this away to their customers or significantly rebate it, because the panel, given where it sits, is the natural intersection point between the grid operator and the home. Everything that you source power from, sink power into and store power in, all naturally connects, which means you can have a single gateway, so to speak, that can monitor and control everything at a fleet level as well. Whether it's an EV charger, from any brand, make, model, or company, or whether it's a smart thermostat, all of these can be monitored and controlled to a single gateway.David Roberts: To what extent are grid managers controlling things through Span now? Or does that need some sort of extra signoff from the homeowner?Arch Rao: Te're thinking about this as an opt-out model. We recently announced a program with Green Mountain Power, and another one with Silicon Valley Clean Energy here in California, where the customers are by design enrolled into some form of load monitoring and demand management. This doesn't preclude them from overriding those requests, but now the utility is given access to a piece of technology that allows them to control water heaters and EV chargers and space heaters, etc.David Roberts: Is Green Mountain giving them away? Arch Rao: That's right, the first part of their program is, they're offering 100 systems to customers in their territory — some that have batteries, some that have EV chargers, some that are just getting a panel up because they're getting an electric appliance — to understand what the benefit will be. The plan is, as we demonstrate successfully that this has value to both the homeowner and the grid operator, to scale this up. They have around 200,000 homeowners. There's another interesting benefit to this, which is that there are still a number of utilities in the US that are filing for rate cases to adopt smart meters — but frankly, smart meters are not really that smart. They’re communication radios. Our panel gives the energy company or the utility a lot more visibility at the whole home level and at the circuit level. So imagine by design being able to monitor the consumption of EVs, the production of solar, the major appliances, etc. and the controls. There's a very strong case for how this can be offered nationally through existing utility companies and potentially even being rebated by the government to enable electrification. David Roberts: So just slotting these in where smart meters are now? It sounds like a better technology, but for the same general purposes.Arch Rao: That's right, this takes the place of an existing smart meter. Our product is revenue-grade metering at the home level and at the circuit level.David Roberts: There’s another complaint I often hear about home electrification, and I'm curious what both of you have to say about this. Whenever I bring it up online, one thing I hear is that electrification would raise homeowners’ costs quite a bit. And it's true, probably, in places where electricity is more expensive than natural gas per therm — which is, I think, a lot of places. So I'm curious what percentage of homeowners can save money by doing this now, by virtue of existing economics, versus those who need some sort of incentive?Saul Griffith: I’ve spent my whole year answering this question, with Rewiring America, which is an organization founded not only to answer that question, but to make the economics better and better and better. One thing we looked at was, at what point in the future the household economics will be positive for everyone. That point is when the US achieves Australia's cost of solar installation, at $1 per watt on the roof, when we've electrified our heat, when we get batteries installed for under $200 per kilowatt-hour at the household, and when we get EVs to cost parity with gasoline. That moment is about 2024. At that point, every American household saves more than $2,000 per year on their energy bills. We're actually getting closer and closer on EVs — a lot of the savings are driven by EVs. Just for perspective: 10 cent per kilowatt-hour electric vehicle versus $3 gallon gasoline; three or four cents a mile for the electric versus 20-plus cents per mile for the gasoline. Carrier, an American heating and cooling company, just created a variable-speed heat pump that's got a COP of 4. So the technology is there. If you can install these things in the household without too much headache, then households will realize savings. I admit we're not quite there today. One of the reasons is that we haven't trained enough HVAC technicians, we don't have enough electricians, there's a lot of excess permitting that needs to be done, there's just challenges to the practical reality on the ground. But they're falling day by day, and there's more and more contractors that will do a heat pump and not recommend a natural gas heater. The economics are flipping right now. But I do agree that the challenge is, we've got to design and build for the future that's going to happen in 2024, and have to sell it in 2021. That means there are ZIP codes where it works. We just did a study trying to help the White House on how many low- and middle-income households would already save by flipping off natural gas, and it's tens of millions of homes. You can pick the ZIP codes in the country where it's most favorable, where it's a reality already.David Roberts: What's the differentiating feature of those areas?Saul Griffith: For heating specifically, it's either because there's high natural gas prices or because there's low retail electricity prices in that location, or because the climate is mild. So across the South and Southeast, there's a lot of homes in the money, across the Southwest and the West Coast there's a lot of homes in the money. It gets a little bit harder in the middle and up at the top of the country, but honestly, every year we're gaining 5 degrees of latitude in heat pump performance. David Roberts: Arch, you must have to deal with the question of upfront costs.Arch Rao: Saul provides a really useful macro perspective, through the longer-term horizon, for us to enable this for every home. Expanding on one of the points he made: how do you get to that dollar-per-watt solar? How do you get to the sub-$200-a-kilowatt-hour storage? I think we're coming at it from an inside-out perspective of affordability. That's what's driving our product design and innovation. When you think about the cost of delivered, behind-the-meter solar today, to homeowners here in the US, a lot of the cost is operational costs, installation cost that stem from design complexity and customization on site. That's part of what we're trying to solve here: there is too much design complexity, and there's too much design customization, for this to get to a low enough cost to become affordable for every household. If you don't have to worry about relocating nodes, if you don't have to worry about changing the ideal size of the solar that goes on your roof, because you're not as constrained by how much capacity the service has, it makes it that much easier for us to reach more customers at a lower dollar per watt. That's what we're solving. When we think about storage — and this is actually a very debated topic for us internally — resiliency is arguably more of a need for low- and medium-income households than it is for larger, more affluent households. But in order to get your whole home backed up, or your essential loads backed up, most folks cannot afford to have two or three batteries. Part of what we can offer is to combine a single small battery with the Span panel, and effectively you can manage everything in your home.Again, it goes back to the same point of affordability: lower capex, lower opex. That's how we're going to move closer to a smaller carbon footprint, but also closer to enabling these customers to take that next step towards electrifying their appliances. David Roberts: Spell that out a little bit, why a Span panel plus a small battery can do the same work as two or three big batteries. What exactly is the magic there?Arch Rao: There's two pieces to it. One is, when you think about backing up an entire home, you're having to place a large bank of batteries to meet what your maximum load could be. And you have to wire it up such that you're placing this bank of batteries upstream of all of your circuits, or all of your loads. In some places, like California, that requires quite a bit of installation labor, because you're having to disconnect the meter, move all your circuits and loads into a separate critical-loads panel, etc. With the Span panel, we are a one-for-one replacement for your panel — or it can also serve as a sub-panel or critical-loads panel. And it takes in all the circuits that you already have in your home, with all of the existing breakers, so there is no on-site customization required. Once installed, we are able to see and manage your load such that you can get more outage protection with a single battery than you can with two batteries, because you're aware of what's consuming power during an outage. One surprisingly common piece of feedback we got from customers when installing home batteries for Tesla was that they inadvertently discharged their home battery into their car during an outage, because they didn't know any better. They didn't know they were experiencing an outage. We can solve the problem for some people by giving them more batteries, but I think we can solve the problem for all people by giving them a more controllable and dynamically managed load-control panel. David Roberts: So in the event of a brownout or a blackout, your Span panel can turn off or turn down inessential loads. It can prioritize.Arch Rao: Yeah. Today, the interface is very simple. It is designed for anybody to use, where it says, here are my must-have loads, here are my nice-to-have loads, and here my non-essential loads. It all goes to the Span app. Depending on the state of charge of your battery, or more importantly, how many hours and minutes of backup you have left, based on your load profile, we will shed those non-essential loads first. When you approach, let's say, half of the capacity of the battery, it will shed those low-priority or nice-to-have loads and send you a notification saying, “Hey, David, so you know you have another five hours of battery remaining, would you like to share anything else?” That's what we can do today. Where we are headed, because of the massive amount of compute and communication we have built into our panel, is the ability to talk to your appliances. We will change the set-point of your thermostat; we will change the frequency of your compressor turning on or off inside your refrigerator. We can get a lot more out of the same number of kilowatt-hours than you would if you were just blindly discharging it into your home.David Roberts: Explain that a little bit. Today, it can basically turn up or down the amount of power going to the appliance. You're saying it'll have more fine-grained control over appliances in the future?Arch Rao: That's right. Today we turn off circuits — which is a harsh sort of customer experience. Very soon, we will have the ability to interfere, to change, let's say, the rate of charge of your EV, or change the set-point of your thermostat. And in the future, we're working towards capabilities where we can control most if not all the devices in your home. David Roberts: Is that going to require any change in the devices, or is it more intelligence on the Span side?Arch Rao: It’s just more over-the-air software updates that we can release. And as long as your device is “smart,” meaning it has WiFi, we should be able to talk to it. David Roberts: Is this also true of fossil fuel appliances, like if my Span is connected to my natural gas furnace? Or is this an all-electric type of thing?Arch Rao: It works with any appliance that has a digital interface. So if you had a fossil-based heating system for your home, but if it was controlled through a Nest thermostat, then we will soon be able to talk to the Nest thermostat and ask it to turn off or go to a higher setpoint. So that's possible today, but directionally, where we of course want to get to is a place where the heating device itself is electric, and we're talking directly to it.  David Roberts: Let's turn to another big topic, which I know Saul has burned a lot of brain cycles on. We need to do all of this home electrification quickly, and the main thing we need to do to make that happen is to fund it. That's always the choke point — funding and financing by the customer. There are the appliances, there's the smart management software, there's the rewiring of the home electrical system to be ready for 220-volt appliances, and all of that costs money. With customers, we know it's legendarily true that even if the lifetime cost of ownership of something is much lower, the upfront costs scare people off. Basically, people don't like upfront costs. So what are the right new mechanisms or tools to fund these things such that we can get them going, quickly, at scale?Saul Griffith: It's a great question. It matters a lot which part of the market you're in. The good news is, we have historically low global interest rates. So the set of goodies that we're describing are things that people buy every decade, and there's a lot of evidence to show that most likely, you're doing any one of these things either because you just moved house, or you're refinancing your house, or you've just bought a car, or, the new entrant in this game is, you've just put solar on your roof. At any one of these interventions in your life, most households typically will do a couple of things at the same time, and at those points we need mechanisms that tie the financing of these things to the refinancing of your mortgage, and do it at the lowest possible interest rate. Certainly if you could apply mortgage-level interest rates to all of these items, that helps enormously with the financing of it. There are about eight things we're talking about — the heat-pump water heater, the heat-pump space heater, the two electric vehicles in the garage, the two vehicle chargers in your garage, the Span load center that connects all of them and has the brain, and the induction stove and induction oven in your kitchen. There is a good argument that we should declare this national infrastructure, because there will be a date in the future where my solar panel is running your cooktop, because I'm out of the house, and there'll be a time where your home battery is supplying my car with some electrons, because that's the nature of electricity — how this is all going to get connected together and balanced. There's actually precedent for financing the suburbs and homes as infrastructure. FDR created Fannie Mae in 1936 under the Federal Housing Authority, and the government stepped in and provided guaranteed infrastructure-quality financing to build out the American suburbs. We will make this project collectively cheaper for the nation if we do something similar for this bag of goodies. And if we recognize that if you install any two of these things at the same time, it's cheaper than installing two of them individually. So there's a discount if we're smart about how we do it. That's a pretty good story for people who are homeowners, in the top 50 percent of homes. The other thing we really need to recognize is that half of American homes are struggling to find $800 and have credit rating problems. This was before COVID, in the economic disaster that was 2020. So I think we've got to be more honest with ourselves, providing tax write-offs for building these things is not enough — we need point-of-purchase rebates. We know that when people buy hot water heaters or air conditioners, more than half of the time it's under financial duress — your wife is pregnant, your partner is ill, if the water heater fails, you need a hot shower tomorrow, right? You go to the store and they say, well, the natural gas one will cost you $100 less, and I've got a contractor ready to go. That's why people make that decision. So we need to think about this, not as tax incentives for the top households, but point-of-purchase rebates for all households to do it? How do we do clever on-bill financing? How does the utility play a role in building out this infrastructure? Quite frankly, given the time frame required, every single possible mechanism that lowers the cost and lowers the brain damage of doing it at that point of purchase is what we have to do.Arch Rao: Mechanisms like the investment tax credit already exist and products like Span already qualify for it, because when you install a solar system or a battery system, the new measure allows for standalone storage to also take incentives with the 26 percent tax credit. They are good and they are in place now. But I agree with Saul 100 percent that moving toward a model where we think about products like Span, home-electrification products, EV charging, as part of your home infrastructure and potentially part of the grid infrastructure, allows us to go a lot farther in terms of what types of financing we offer. Even before we brought Saul on board as an advisor to Span, he and I were independently thinking about the idea of mortgage-based financing for improvements to your home. We see a path towards offering solutions like this to every home through mortgage lenders and insurance providers.David Roberts: And is there anything interesting to say about renters and landlords? This is another thing I hear whenever I talk about this online: “I'm a renter, I have such limited control.” What kind of problems does that raise?Saul Griffith: I don't think any of us, if we're honest, have a satisfying answer to that question yet. Somebody will figure out the business model innovation or the piece of policy that will help. I think what we can do is describe the world we'd like to get to. That $2,000 or $3,000 per household in savings is $300 billion a year in the US, and there's a lot of options of where that money could go. Those savings could go to the bank that wants to finance you and make it in the interest rate, it could go to a company like Tesla or Sunrun who'd like to somehow benefit from selling the grid services, it could go to the utility. I think we should go with a guiding principle that we should always choose regulations where we return as much of that money as possible to the household, then try to figure out how to make that happen. In this case, you'd like to figure out the mechanisms and the regulatory environment that would motivate the renter or the landlord to both do these things and to pass some portion of those savings along to the household.Arch Rao: There's a combination of thinking about this problem from a technology standpoint, which is primarily what we're doing, and thinking about the regulatory policy standpoint, which is a big part of what Saul and his team are doing. The alignment with the economic incentives, be it the landlord, the homeowner, the bank, the solar installer, etc. — I think there isn't one form that fits all here. Going back to your original question, David, about funding, there's one piece I think deserves just as much attention as the rest, which is building out the workforce that can scale this up, by offering vocational training to a larger number of Americans so that we can actually get these deployed at a scale and pace that will have an impact. There's about 60,000 licensed electricians in the US now, and that's woefully inadequate if you want to electrify every home in the next decade.David Roberts: Right. I was gonna return to that in just a sec. One more thing about the barriers for homeowners: it's pretty well known at this point that, the closer you get to home and hearth, the less you're talking about economics, the less rational interest maximizing you have, and the more time constraints and psychological constraints come in — which is to say that electrifying a whole home today is, aside from the cost, a huge pain in the ass. So even in places like California, which you’d think would be cutting edge on this, I hear, “I had to talk to six different contractors and their permitting boards, and there's different vendors, trying to coordinate, trying to figure out which piece to do first, and how to finance one piece with another piece…” So the transaction costs seem enormous right now. And I can say from my own point of view, I would pay a lot of money to have to think about this shit less. So how do you reduce those transaction costs? Is there a future where I can just call somebody and say, here's my check, please do all my stuff, and then that's the last I have to think about it? Saul Griffith: I think you've led yourself to the correct answer here. That's already emerging, and it is one business model innovation away from being able to do it. There's a company in Australia called Brighte that has similarities to a company in the US called Mosaic. They offer the financing; they have contractor networks. There's a whole lot of companies starting to do that. They’ll be able to afford to pay full-time lobbyists to help change the laws and the regulations. Rewiring America is focused on this, because we've got to fix the rooftop-solar regulations in America. In Australia, there’s suburbs with greater than 50 percent solar on their roof, all enjoying electricity that's a third the price that the grid can offer. Yet in America, we still have less than 2 percent of homes with solar on their roof, because it's still too expensive. And we have a prevailing wage of $35 an hour in Australia, so it's not because of minimum wage. This is red tape. We've red-taped the future out of existence. There's been 120 years for fossil fuels to build regulations and nurture workforces that work for it. So I think it will need some combination of regulatory change and organizations lobbying for those changes, with some business-model innovation. This is going to be true not just in one affluent ZIP code, but every ZIP code. We're really at the inflection point. There's a famous photograph of New York City with 200 horse-drawn carriages in the foreground and one car, in like 1908, and then they show you a photograph taken from the same point 10 years later and there's 199 cars and one horse. We’re at that 1908 moment, with one electric house and 200 non-electric houses, and it's all going to change this decade. It will take a lot of contributions, like what Span is doing, to enable that. No one exactly knows the answer, we're all feeling our way forward here, but we're doing that with a fair amount of intelligence about what needs to happen. Arch Rao: I recently wrote a blog about this being our decade to decarbonize. If you think about the growth in the adoption of solar over the last decade and a half, if you look at just the rate at which EV adoption has grown in the last half a decade, I'm strongly a believer and a proponent of the fact that this decade is going to be about electrifying many things in your home. To your question about home electrification companies, I don't think there's going to be one — there's going to be many companies offering a combination of products that allow you to choose electric over gas, to the point where it truly does become as easy to adopt these as it is to get a home appliance. If you compare the shopping experience between getting a washer/dryer installed in your home versus getting an EV charger or a battery system installed, the latter is an order of magnitude more complex, because of all the red tape we just talked about. The path to simplifying that is from the top down — improving regulation, simplifying standards, moving toward policies like we have in California, where we have solar mandates and EV mandates and soon hopefully an electrification mandate — but also from the bottom up, which is how do you build pieces of technology that become the new standard for every home, that truly make it as easy to adopt a home battery or an electric appliance as it is to get a refrigerator delivered to your home from Home Depot. Saul Griffith: Just think about the events of the last month: Joe Biden driving an electric F-150, which in and of itself is amazing. The F-150 is the most produced car in the history of mankind — 42 million F-150s have been built so far, double second place, which was the ubiquitous Volkswagen Beetle. So this really matters. What was not nearly as much in the headline, but I thought was fascinating and really interesting, is that Sunrun is partnering with Ford. So they might say, “You can make the installation easier, while you're financing your car, let us just suggest that it might be a great time to finance the solar installation and this battery and this upgrade as well.” These things are happening and they are about to happen at lightning speed and enormous scale.David Roberts:I did a podcast with Lynn Jurich, the CEO of Sunrun, a couple of weeks ago in which she discussed that, among other things. Arch Rao: Sunrun is a good example of a company that grows up to become a home electrification company — much like I think many other companies will. Tthey have to, because just being a solar installer or a solar financier is not going to cut it.David Roberts: Are you thinking a lot about, not just the technology of the Span box and how to make it better, but business models and partnerships? How to package things and ease the transaction costs?Arch Rao: Absolutely. We're thinking about three pieces. We're thinking about how we generate demand through channels that haven't been the primary focus. So today, I think most green energy solutions start with a conversation around the coffee table about solar. That's a missed opportunity, because you can be thinking about a panel upgrade along with adopting an electric heater or an EV charger, or even just a battery without a solar system for your home. That's what we're seeing happen more and more often. These are all technologies that can be installed with any electrical contractor, so we're seeing electrical contractors as a key channel. We're working with mortgage lenders and financiers to make it as easy as giving away a Span solution as part of your refi, because that now makes your home that much closer to being a clean energy home, and an entry point to offering better products or more products in the future.The second pillar for us is the fulfillment side, how do we build a network of qualified service providers like electricians that can install the system for us, but at the same time, provide ongoing service to the customers. The third is technology partners — thinking about any product that we're going to build ourselves or we're going to partner with OEMs. That's where we're headed.David Roberts: On the regulatory front, Lynn said this as well, about Sunrun, that her mantra now is soft costs, dumb regulations, red tape. It's close to being conventional wisdom now in the US, at least in energy circles, that this is the big barrier at this point. So is Span getting involved at all in lobbying for specific regulatory changes or laws? What's your top priority there?Arch Rao: Well, there are a couple of things. There are big-picture opportunities, like the work that we're doing around Rewiring [America], asking for or setting up programs that can rebate the adoption of upgraded electrical panels. Then there are more nuanced but specific things like helping define standards with NFC or UL, that really help us rethink our arcane model of distributed electricity grids. We think about building electric conductors and circuit panels with oversized capacity for that larger load to come on. So it's across that whole gamut, but I think the biggest levers for us are going to be better financing and, like Saul talked about, upfront rebates. David Roberts: Saul, do you have any particular regulatory targets that are top of your list?Saul Griffith: This is how extraordinary the soft-cost problem is for solar: your cost of solar modules now is 25 cents per watt, yet the cost of installed solar on an American rooftop is $3 a watt. So let's just dispense with the belief that this has anything to do with the cost of the solar [panels]. Of that $3 in the US, about 75 cents is the cost of the sale. Because American rooftop solar is slightly more expensive than the grid, you gotta spend a lot of money to sell it — it's as much for the cost of the sale as the cost of the hardware. It’s crazy. There's another 50 cents to $1 in the costs of permitting inspection and those regulatory soft costs. So we’ve just got to get to the binary flip where you get over that, getting rid of that sale cost because you lower the cost of electricity. That's huge. Pretty much in every ZIP code, when it gets to $2 a watt installed, it's cheaper than the grid. That's the rule of thumb. Just making bigger systems, so that the people that are putting it on your roof can install eight kilowatts instead of four kilowatts, is enough to pretty much get you to $2. We're really on the cusp of a very exciting moment. A wonderful guy called Andrew Birch has done a lot of work to do a solar app, which is an online portal that's going to make the application for the permits much more streamlined and easy. That's important. Every utility in every state has a slightly dysfunctional relationship with time-of-use billing and reverse metering. We need a future of what I would call grid neutrality, meaning any generation resource is treated equally, any storage resource is treated equally, any opportunity for demand response is treated equally — so that homeowners are motivated to put the maximum amount of solar and the maximum amount of [electric] vehicles in their garage, and benefit from participating in all of these transactions to balance the grid. The utilities traditionally resist this because they also sell natural gas, but the reality is, we're going to double or triple the load in every household and rooftops aren't big enough to meet all of that so the electric utilities are going to see load growth. They win no matter how they play here, and we just have to kill off the protection of the natural gas part of the business component and move towards grid neutrality, which will be hard-fought regulatory changes.  The Federal Energy Regulatory Commission is debating a bunch of issues right now that are super important, that will determine the future. We know where the North Star is, it is grid neutrality, where everyone gets to play and benefit from the resources that they install, and that is also going to bring down the cost and maximize the savings.David Roberts: What country is farthest along the pathway toward grid neutrality?Arch Rao:The countries that I've seen as the most forward-leaning when it comes to understanding the need for and supporting the adoption of distributed energy and grid neutrality are Germany, the Netherlands, and Australia. Now, this is a blanket statement, they each have their own deficiencies in terms of how these programs are implemented, but I think they're certainly farther along than the U.S. right now, where red tape is really delivering a crushing blow to the rate at which we can and should be adopting rooftop solar, batteries, electric vehicles, etc.Saul Griffith: I’m going to give you two different answers, both of which might be funny. I think the unregulated markets in Africa and Malaysia and smaller countries in Southeast Asia are being very innovative precisely because they have so little infrastructure, they can write new rules as they go. I wouldn't look to any Western nation to be perfect here.Australia is having to face up to this reality first, and that is because they got to very cheap rooftop solar first, they go to very high penetrations — 50-plus percent — first, but Australia is dysfunctional in its own unique way. What you really want is a country that has Australian rooftop solar policy, Californian or Norwegian electric vehicle policy, and South Korean or German heat-pump adoption. That's the country where the economics are very positive for the household. So we know how to do this, we just don't know how to do it in one place.David Roberts: Are there, in the US or in the world, places that are too hot or too cold to fully electrify a home?Saul Griffith: Very cold places are difficult, although heat pumps are getting better and better. But places that are cold enough generally are also quite wooded so there is a good opportunity for wood pellets or just traditional wood stoves. So there are places in the world where a wood stove is still going to be the cheapest way to heat your house, and it can be renewable. In Australia, there are states like Tasmania, where that wood-fired heat supplements the electrification of the rest of the house. They're already a 100 percent renewable grid with hydro. There are other places in the world, such as Arizona, or Queensland in Australia, where the biggest mismatch between electricity generation and load is the peak summertime air-conditioning hours. So the solar peak is at two o'clock in the afternoon and the afternoon peak is at 6 pm, and we've got to match that. The ones where that is the case for heat, you know, small amounts of storage, whether it's thermal storage or electrical storage, can bridge that four-hour gap and you're in good stead. There are technologies that we're working on, thermal storage technology that can bridge the 16-hour gap between the solid generation periods and when you want heat at 4 am. So that's the heating problem. There will always be a few small ZIP codes where there are exceptions, but I think now everyone can squint and see that we have answers for nearly all of these cases.David Roberts: Arch, you're selling all over the country?Arch Rao: We are selling nationally,, across the US. We've now deployed, I want to say, in over 18 states across the country, and the efficiency of heating or cooling hasn't been a barrier to adoption of Span panels or adjacent technologies for an electric home.David Roberts: And are Span customers saving money now? Are you tracking usage or trying to get data on usage and finding out what actual results on the ground are?Arch Rao: We certainly are. The metrics we are most closely tracking are, are they getting empirically this benefit of going with fewer batteries? We're seeing that with a Span panel you get roughly 1.65 to 1.7x value per kilowatt-hour available, because of how we can manage the loads. That's quantifiable value. The other metric that we often look for is, what is the reduced time to install and cost of installation labor? That then directly translates into a lower dollar per watt or dollar per kilowatt-hour to customer, and we're seeing that play out more and more significantly, especially right now, for a couple of reasons. The electric panel as we have it designed is a Ul 67 box. What that means is, it's an over-the-counter permit, so the permitting for a product like Span is, by design, a lot shorter than the permitting for a rooftop solar system or battery system. We're able to help our installation partners get projects going very quickly. Right now, because of global supply-chain constraints, we're seeing that there's a significant supply shortage of lithium-ion batteries. especially in those cases, as we approach summer here in the Northern Hemisphere, we have installers that are able to go back to their customers and offer them a Span panel plus, say, one battery, as opposed to the previously designed two- or three-battery solution, and help them move to a more self-sustainable lifestyle.David Roberts: Air-source heat pumps versus ground-source — how far do you think ground-source is going to get? Or do you think air-source heat pumps are going to get good enough to do everything?  Saul Griffith: So ground-source heat pumps, for everyone's benefit, are where you use the temperature of the ground as the input to your heat pump. The ground about four feet down, around the country, is about 55 degrees Fahrenheit all year round. An air-source heat pump just takes the outside air. Ground-source heat pumps require something like an enema for your front yard or your back yard. It's a lot of drilling equipment; it's a very high capital item. If you're doing a new-build home in New England, or you have large acreage in New England, it's a no-brainer to go with ground-source. For any milder climate, the ease of installation of air-source looks like it will be the answer. As with nearly everything on climate, electrification, and energy, these are giant markets where there's room for both players, and the details will be around local regulations, local geography, local climate, so the answer is yes and/or both. If I was picking the market share in 2036, I'd say 80 percent air-source, 20 percent ground-source is ambitious for ground-source. Unless we get robots that can drill holes really well and take all the headache out. But you still need the physical space to drill the hole, and most people don't have enough land under their house to sink the heat.David Roberts: Especially if you're building new developments — if you're doing a common ground-source heat pump for multiple buildings, that's probably the most efficient way.Saul Griffith: This is the decade for change, so don't rule out unexpected solutions. We've got to do something with the 4.4 million miles of natural gas pipelines in the country. Why don't we use that as a collective ground source? It's not impossible to think there might be a solution in lane three that helps solve this, but I think ease of installation and low cost of capital certainly favors air.David Roberts: I recently found out that the battery in the new Ford pickup is bigger than a Powerwall, bigger than a home battery. So in terms of home power backup, what percentage, in 10 years, will come from home batteries versus connected EV batteries?Saul Griffith: Overwhelmingly electric vehicles. Any electric vehicle is going to do 250-plus miles, which is basically where real range anxiety just goes away. The battery in a sedan that does that is going to be 60-plus kilowatt-hours and for a truck it's going to be 100-plus kilowatt-hours. So that's four days of your current electrical load in your house. There's 1.88 cars in every driveway in America, so that's like a week's backup. The Powerwalls and LG batteries that people bring in the side of the house, they're like five to ten kilowatt hours. That's a very, very small fraction. I'm working on thermal storage technology, as are other people — being able to turn your space heating, your water heat, and your vehicles into storage is a big opportunity. Those two batteries dwarf any other battery that will be on the grid 10 years from now.  David Roberts: So what's the case for home batteries then? Saul Griffith: Well occasionally, both cars are out of the house and you still want to play your Xbox.David Roberts: So, backup for the backup.Arch Rao: Actually, I quite disagree. I think that the vehicle-to-home concept is a powerful one. The size of the battery in your car is roughly 10x or at least 5x the size of a home stationary storage battery, but the emotional choice for a homeowner to say, I'm going to take the energy available in my car's battery to power my home, I think it's a difficult one. It's kind of analogous to saying I have a large power generator in my car with my petrol engine, and I'm going to use that as a genset for my home, right? David Roberts: But if you're in the middle of a blackout?Saul Griffith: Honestly, we're not even disagreeing. It's just that this is a huge battery. There are so few time periods in the year where you're gonna want these things. This is not even an argument. There's a huge number of reasons to have a small battery in the home. But you really just need to understand that our car batteries are enormous. Even if we put those batteries in 200 million cars, the whole grid for the whole U.S. can run off our cars for days at a time. But that never happens, because you still have solar, you still have wind, you still have all of these things happening. But the anxiety we have about storage goes away as we deploy batteries in vehicles, batteries in homes and batteries in our thermal systems.Arch Rao: And the cost of stationary batteries comes down as we continue to adopt more electric vehicles and batteries in your home as well, which makes room for not just thinking about storage as being a backup to a backup type of solution, but instead a device that can provide you with energy management — being able to charge when you have excess solar, etc., benefits to it that aren't provided by vehicles, where the primary use is actually to get around. The second part of it that I think has spun up a lot of conversation since the F-150 announcement is, how does it actually power your loads, because it's a giant battery, but you still need a whole host of electronics and grid-connect and grid-disconnect devices.David Roberts: That's what Sunrun is trying to sell alongside the pickup truck; that’s the piece they're trying to provide.Arch Rao: Yes, they're going to be installing those solutions. But to generalize the problem statement, there are going to be millions of electric vehicles, not just F-150s, so what is the ideal solution for being able to “island” your home and power it off of your vehicle battery? I think those are the kinds of products and solutions that we're thinking about here at Span — within our panel, we already have a grid-disconnect built in. David Roberts: So you can island if you have a Span panel?Arch Rao: That's right. Our main breaker has its own control system built into it, where it's monitoring the health of the grid, and if it determines the grid is sagging, or it's out of spec from a frequency or voltage standpoint, we automatically, safely disconnect and bring up your battery as the main power source for the home. It can then orchestrate your solar and your loads as needed, to then manage that “off-grid” home. And then when it's safe, it rejoins the grid, making sure it doesn't cause issues on the grid — you want to be careful about frequency when you rejoin the grid, you want to be careful about how much power you push back into the grid, etc. That's all built into our current generation product. But as we think about future products, the types of things we spend a lot of time thinking about are exactly the question that you're asking, David, which is: can cars provide power, not just when off-grid, but even when your on power from the grid? Does it make sense for us to use vehicles as a day-to-day thing? And what are the types of technologies you need built into the nerve center of your home, i.e., a load panel or an EV charger, that allow you to do this in a seamless way, without having to go through a complex design process and having a smorgasbord of stuff on your garage wall just to be able to use that expensive battery in your car?  David Roberts: If you could create this theoretical country with all the best distributed energy policies together, do you guys seriously think that we can decarbonize 100 percent of US homes by 2035, which is the 100 percent clean grid target year? I think people get daunted because it's so distributed, the work itself is so distributed, the use cases are so distributed and so various, and there are so many different kinds of homes and owners. It just seems so daunting. Arch Rao: Yes. The alternative scenario is a bleak one. We have to align products and policies and people to move toward at least decarbonized homes (decarbonizing industry is a whole other can of worms). I would say, yes, it's possible, and we need to be working toward doing that. Saul Griffith: We need to make it possible. It is physically and technically possible, and the more things you electrify, the easier you make it to electrify everything. We will electrify steel making, we will electrify the manufacturing of aluminum, we will electrify a huge amount of industry. Then you dial industry up and down, there’s huge inertia in those machines, and so they will be a great asset, just like your car batteries and just like our home heating systems, they will be critical to balancing the grid. People really don't appreciate that. It'll be about the same amount of wire that's distributing electricity to the grid, but three times as much electricity will go over it. More than half of your utility bill cost is the cost of that distribution network. So if we're putting two or three times as much electricity over it, the price of that distribution cost is going to come down. The more we electrify, the cheaper it gets to electrify everything, the easier it gets to electrify everything. So this is possible. Yes, it is heroic. Yes, the timeline is now. A good climate outcome is, we do this in 15 to 20 years, a terrible climate outcome is, we drag our feet and we take 40 or 50. David Roberts: Well, there's an appropriate call to arms to end with. Thanks, guys, for taking all this time. Appreciate it.  Get full access to Volts at www.volts.wtf/subscribe

Washington, DC, is a slow-motion nightmare right now, but out in the states — at least the states that Democrats control — climate and clean energy policy is still happening. A few weeks ago, I covered the fantastic policies recently passed in my home state of Washington (see also my podcast with Washington legislator Joe Fitzgibbon). Today, we turn our gaze to Colorado.In 2018, Democrats gained a trifecta in the state — the governorship and both houses of the legislature — for the first time since 2013. They promptly got busy passing a vast array of clean energy policies: reform of electric utilities, support for electric vehicles and charging infrastructure, new restrictions on oil and gas production. During this year’s legislative session, Gov. Jared Polis released a comprehensive roadmap to 90 percent statewide reductions in greenhouse gas emissions by 2050 and the state legislature tackled clean buildings, industry, environmental justice, reform of state transportation agencies, reform of natural gas utilities, and on and on. To discuss this flurry of activity, I turned to a man who has been involved in Colorado politics since the previous century: Will Toor.Toor was mayor of Boulder from 1998 to 2004. From 2005 to 2012, he was Boulder County Commissioner. During all that time he was also board chair at the Denver Regional Council of Governments, where he led efforts on climate policy. He then became director of the transportation program at the Southwest Energy Efficiency Project, until 2019, when the newly elected Polis appointed him to run the Colorado Energy Office.Toor has had a hand in shaping Polis’s energy agenda from the beginning, and he has been closely involved in negotiating bills through the legislature. He helped walk me through Colorado's sector-by-sector approach to emissions, what the state has accomplished so far, and what might be next for it.Listen, enjoy, and if you appreciate work like this, please consider becoming a paid subscriber to Volts.As a bonus, here’s a picture of Toor in 2003, as mayor of Boulder, hosting visiting scholar Noam Chomsky. Get full access to Volts at www.volts.wtf/subscribe

Here at Volts, I recently spent a week … OK, a month writing about batteries, which store energy for electronic devices, electric vehicles, and, at least for short periods of time (four to six hours), the power grid.Lithium-ion batteries are extremely good at those tasks — and they’re getting better, and cheaper, all the time.But here’s the thing: a net-zero-carbon grid is going to need storage that lasts a lot longer than six hours. It’s going to need durations of up to 100, 300, 500 hours or more, and it’s going to need them cheap. Lithium-ion batteries just aren’t going to work for that. What will work? Good question! No one really knows yet. Whatever it is will require substantial research, development, and scaling, and possibly some good geographical luck. We can’t know yet what technology or technologies might win that race, but we do have a good sense of what they need to accomplish, thanks to some new research in Nature Energy from a team at MIT (along with Jesse Jenkins, who used to be at MIT but is now at Princeton). Their findings on long-duration energy storage (LDES) are daunting and somewhat deflationary. In a nutshell: LDES needs to get extremely cheap before it will play a substantial role in a clean grid — cheaper than almost any candidate technology today, and cheaper than any geographically unconstrained technology is likely to get any time soon. Let’s start with some background on the need for LDES.Renewables on the grid need firmingThe cheapest large-scale renewable energy sources are wind and solar, but wind and solar are variable. They come and go with the sun and the wind, and as you may have heard, the sun is not always shining and the wind is not always blowing. We cannot turn them on or off, up or down.The supply of wind and solar energy will not always match the “demand curve,” i.e., the level of electricity demand throughout the day. As more and more wind and solar are added to the grid, there’s more and more need for flexible resources that can fill the gaps when supply doesn’t match demand.Today, those gaps are overwhelmingly filled by natural gas power plants, which are 100 percent “firm” in that they can be turned on at will and run as long as necessary. As the grid is decarbonized, however, fossil fuel plants (at least those without carbon capture) will be phased out of the electricity system and wind and solar penetration will increase. As that happens, other resources will be needed to firm the system. There are four basic options.* Transmission: connecting larger geographical areas raises the chances that sun or wind will be available somewhere within them.* Low-carbon (“clean”) firm generation: the MIT team’s paper lists “nuclear, fossil fuels with carbon capture and storage (CCS), bioenergy, geothermal, or hydrogen and other fuels produced from low-carbon processes.” (The first three items are anathema to some climate activists, but they may end up being necessary.)* Negative emissions technologies (NETs): technologies that permanently bury carbon dioxide can offset emissions from firm fossil fuel plants. * Long-duration energy storage (LDES): technologies that can store enough energy, for long enough, to displace firm generation. (Note: natural gas power plants are much cheaper than any of these options, save perhaps some transmission. There will be no market or pressure for any of them unless there are policies that require reduced greenhouse gases.)NETs are likely to stay expensive and transmission can only do so much, so the real fight is likely to be between clean firm generation and LDES. The new research is an extremely detailed modeling look at the role LDES might play in a decarbonized energy grid — how much clean firm generation it might displace and how much it might reduce energy system costs.The LDES “design space”The researchers took an interesting and (to me at least) somewhat novel approach. The problem with trying to study LDES is that a bunch of incredibly heterogenous technologies are claiming that mantle, with different mechanisms and different performance characteristics, at different levels of development and commercialization, competing for different market niches. It can be difficult to compare them or to say anything meaningful about them as a class. So instead of focusing on particular technologies, the researchers modeled different combinations of performance characteristics. Specifically, they used a high-resolution model to represent five separate LDES technology parameters:1) energy storage capacity cost (using a bathtub as an analogy, think of the cost of increasing the size of the tub); 2) charge power capacity cost (cost of enlarging the faucet); 3) discharge power capacity cost (cost of enlarging the drain); 4) charge efficiency (how much water is lost when filling the tub), and 5) discharge efficiency (how much water is lost when draining the tub).Here’s how they went about it:We modelled a total of 1,280 discrete combinations of these cost and efficiency parameters encompassing performance levels that are consistent with projections for existing LDES technologies found in academic peer-reviewed studies as well as domains that are currently infeasible but that could be the focus of technology development efforts in the future. Furthermore, we evaluated the technology design space for LDES in multiple power system contexts encompassing different wind, solar and demand characteristics and different assumptions regarding the availability of firm low-carbon technologies.They present the results in two basic contexts: a Northern Grid representing average New England conditions and a Southern Grid representing Texas. The methodology was complex but the goal was simple: to determine which LDES performance characteristics would do the most to displace clean firm generation and reduce system costs for a net-zero-carbon grid. First we’ll look at which parameters made the biggest difference and the aggregate impact they could have. Then we’ll take a quick tour through current LDES techs to see which might make the cut.What LDES needs to be able to doThe basic question is how much clean firm generation LDES can displace in a model optimizing for total system costs. Here are a few basic findings:1. Of the five modeled technology parameters, the two that enable LDES to have the biggest impact are energy storage capacity costs (the cost of increasing the size of the tub) and discharge efficiency (how much water is lost draining the tub). The other three parameters don’t matter nearly as much. A good benchmark for energy storage capacity costs are lithium-ion batteries (LIBs). Last year, BNEF’s annual battery price report had the average capacity costs of LIB battery packs at $137 per kilowatt-hour (down 89 percent from 2010), projected to hit $100 by 2023. Dan Steingart, a materials scientist and co-director of Columbia University’s Electrochemical Energy Center, told me he thinks LIBs are eventually going to get down “somewhere between $45 and $60 per kilowatt-hour.” (To be clear: that’s extremely aggressive and optimistic.)2. That gives some context to the next finding: not until it hits $50/kWh will LDES even begin to see meaningful deployment or declining costs. Not until $20/kWh will they reduce system costs by 10 percent. And “to deliver more significant savings in electricity costs (>10%), storage technologies must exhibit costs in the $1-10/kWh range and discharge efficiencies greater than 60%.”That pretty much rules out LIBs. It also, as we’ll see later, rules out quite a few of the technologies currently claiming the mantle of LDES.3. What’s more, across the full design space modeled, the very best LDES could hope for is to reduce system costs 50 percent; the best existing LDES techs could do is 40 percent. And in a system with more clean firm options available, the max is 20 to 30 percent.4. What’s even more, not until LDES capacity costs get down to $10/kWh could it displace all firm generation — if firm generation includes only nuclear. If it includes other clean firm generation with lower capital costs and higher operating costs (like natural gas with CCS or hydrogen combustion turbines), then LDES would have to get down to $1/kWh to displace it all. 5. What’s even more more, the modeled cases where LDES displaces the most clean firm generation involve storage durations of 100 hours or more, up as high as 650 hours (concentrated in 100 to 400 hours). 6. As No. 4 suggests, aside from energy capacity costs, the single factor that most influences LDES’ ultimate deployment has nothing to do with LDES tech at all — it’s the cost and availability of other clean firm options. If only or mainly nuclear is available, LDES has a much better shot. If other forms mature and get cheaper and more widely available, LDES will have a harder time. 7. LDES has a harder time on the Northern Grid, and an even harder time on the Northern Grid under scenarios of high electrification. (Electrification in the cold northern winters means a huge winter demand peak, which renewables struggle to meet.)So, what have we learned? LDES needs to store huge amounts of energy for cheap. Though it will run only intermittently, it needs to discharge energy efficiently. And it needs to be capable of durations of well over 100 hours. Even if it meets those requirements, it will likely displace less than half the clean firm generation required to run a clean grid. That said, reducing systems costs by even 10 percent represents billions of dollars in savings, so it’s nothing to sniff at.Let’s take a quick tour through the technologies competing in the LDES space.The varieties of LDES and their chances of successEnergy wonks are aware of the need for more and better options in the LDES space. ARPA-E has a DAYS (Duration Addition to electricitY Storage) program intended to spur development of energy storage technologies capable of anywhere from 10 to approximately 100 hours duration. But this new research reveals that LDES will need to run much longer than that, and for dirt cheap. Can any of today’s technologies measure up? Let’s run through the four broad categories of competitors. Electrochemical storageThere are two big electrochemical contenders. The first is flow batteries, which I wrote about in a previous post. They have the advantage of being able to scale energy storage and power capacity separately, which theoretically opens the door to very high energy capacity for fairly cheap. Unfortunately, the most common varieties of flow batteries (vanadium redox and zinc bromine) have energy storage capacity costs in the hundreds of dollars per kWh, which means they probably won’t cut it as LDES. (As I wrote, flow batteries are aiming for that awkward mid-duration storage space and getting squeezed on both sides.)Another electrochemical option (an alternative flow battery tech) is liquid metal batteries, which I also wrote about previously. A company called Ambri is building a 250 MWh demonstration project with liquid metal batteries in Reno, Nevada. In this paper, researchers demonstrated an “air-breathing aqueous sulfur flow battery” with $10-$20/kWh energy capacity costs at 100+ hours duration. That wouldn’t entirely displace firm generation, but it could theoretically get to 10 or 20 percent system cost reductions, which is no small thing. Chemical storageChemical candidates mainly include hydrogen and hydrogen-derived fuels like ammonia and syngas (e.g., synthetic methane). This is something of an odd category, since the result of all these processes is a fuel, which operates just like natural gas, as firm generation. You can see chemical storage as a direct substitute for, or a form of, clean firm generation.The cheapest forms of chemical storage rely on specific geological features for storage, like compressed hydrogen in caverns and porous rock formations. Energy capacity costs range from $1 to $5/kWh for hard rock caverns all the way down to around $0.5/kWh for some depleted gas or oil fields. The problem with chemical storage is that, while energy capacity costs are low, there’s lots of infrastructure and conversion processes involved in making hydrogen, storing it, capturing CO2, combining hydrogen and CO2, and then burning the resulting fuel in combustion turbines. This gives chemical storage high power capacity costs and low round-trip efficiency. Lots of work needs to be done to bring down costs, particularly of electrolysis and fuel cells, for making and burning hydrogen respectively. Mechanical storageThe oldest and still most common form of large-scale energy storage is pumped hydroelectric energy storage (PHES), whereby water is pumped from a lower reservoir to a higher one and then run back down through turbines to recapture the energy. (PHES accounts for about 99 percent of the US grid energy storage market.)Most PHES installations today are built for diurnal cycling (every six to 24 hours) and have energy capacity costs in the hundreds of dollars per kWh, which makes them unsuitable for LDES.Some PHES projects with particularly large reservoirs can get over 100 hours of duration at energy capacity costs in the $20 to $30/kWh range, which combined with their relatively high round-trip efficiency means they can probably eat into some clean firm generation at the margins. But those sites are even more geographically limited than PHES generally.The other viable mechanical LDES technology is compressed air energy storage (CAES), which is just what it sounds like — use energy to compress air, then use the pressure of the compressed air to run a turbine and generate electricity. In the best locations, with access to large saline aquifers, CAES can get down in the $1/kWh range with hundreds of hours of capacity; costs rise in less ideal sites (e.g. salt caverns). Like PHES, CAES is geographically limited (and might compete in some sites with compressed hydrogen storage).There are many other forms of mechanical energy storage out there, everything from pushing rocks uphill on a train to lifting rocks with a crane to spinning a flywheel, but none of them yet have energy capacity costs low enough to make them eligible as true LDES.Thermal storageThere are numerous ways to store electricity as heat. The most familiar is concentrated solar power using molten salt, but capacity costs for that technology remain prohibitively high and round-trip efficiency prohibitively low for it to serve as LDES.There are also (less developed) proposals to store heat in ceramic “firebricks” for electricity or heat applications, with energy capacity costs potentially as low as $5 to $10/kWh and round-trip efficiency over 50 percent. A process called pumped thermal energy storage using reciprocating heat pumps also shows great promise. Thermal storage remains an intriguing area of study, in part due to its usefulness as both direct heat and electricity.Here’s a roundup from the MIT team’s paper of all the LDES technologies and their projected future costs:The ultimate potential of LDESAs I said, the research is not explicitly framed this way, but the results strike me as fairly deflationary toward LDES. The low costs and long durations required rule out several existing technologies and set incredibly ambitious targets for others. And even if LDES meets those targets, it won’t erase the need for clean firm generation — at best it will take a good chunk out of it and reduce overall system costs a few dozen percent. That’s not nothing, but it’s not a silver bullet either. Here’s a visual from a seminar Jenkins gave at Stanford:Just a few things to note about this graph. The colored boxes are different LDES technologies — the solid lines indicate geographically unconstrained options and dotted lines indicate those that are geographically constrained. You’ll notice that all the options in the $1/kWh box have dotted lines, and aside from CAES, they’re all chemical. There are currently no geographically unconstrained LDES technologies that have even the potential to knock out clean firm generation.Labels identify a few of the technologies. CAES and hydrogen have huge potential; some thermal technologies and metal-air batteries are intriguing; PHES and reciprocating heat pumps can trim a little off the top. In reality, there will likely be a mix of LDES technologies in the market, targeting various performance or geographical niches. If I were a betting man — which I emphatically am not — my money would be on hydrogen over the mid- to long-term. It has an advantage similar to LIBs’ advantage in the short-duration market: it can draft off of other, bigger markets. LIBs for energy storage can draft off of the much larger electric-vehicle market, which is driving their costs down. Similarly, hydrogen and hydrogen-derived fuels for energy storage can draft off of much larger hydrogen markets: industrial applications, possibly airplane or shipping fuel, possibly mixing with natural gas in existing pipelines. Relative to those markets, the market for hydrogen as LDES is likely to be marginal, but it will benefit from the cost reductions driven by scale in those other markets. Thermal storage might also benefit from being of use in both heat or electricity applications. As I’ve written before, there’s a huge potential market for clean heat. The practical implication of this modeling is that research and development in LDES needs to focus primarily on driving energy capacity costs as low as possible, while targeting durations of 100 hours or more (beyond the 10 to 100 hours the DAYS program targets) and discharge efficiencies of at least 60 percent. It’s a tough set of aspirations and there’s no guarantee any technology will get there any time soon, so another practical implication of the research is that we need to start thinking hard about where to find lots of clean firm generation. We probably can’t store enough energy to get around it. Get full access to Volts at www.volts.wtf/subscribe

Long-time readers know that I am a veteran hater of the US Senate, the graveyard of good ideas and progressive policies. America’s upper chamber is one of the world’s least productive and most ridiculous legislative bodies, its dysfunctions matched only by its boundless self-regard. Don’t get me started.Instead, get Adam Jentleson started! Now there’s a guy who has earned his ire at the Senate. As a senior aide to Democratic leader Harry Reid from 2011 to 2016, Jentleson saw up close and personal how the institution’s antiquated rules (especially the filibuster) can be weaponized against reformers. He shared what he learned in a book that came out earlier this year: Kill Switch: The Rise of the Modern Senate and the Crippling of American Democracy. I didn’t want to have Jentleson rehash the book — it has been favorably reviewed and he has been on every podcast under the sun to discuss it — but I was quite interested in his thoughts on the current Senate standoff. Are Democrats going to let the filibuster prevent them from keeping their promises, improving people’s lives, and getting reelected … again? Are they going to allow a small handful of conservative Democratic senators to squelch a once-in-a-decade chance at legislating … again? Can that still be prevented, and if so, how?Basically, I asked him to explain Joe Manchin to me. Enjoy. Get full access to Volts at www.volts.wtf/subscribe

(If you’d rather listen than read, just click Play above.)Energy nerds love arguing over the value of distributed energy resources (DERs), the rooftop solar panels and customer-owned batteries that are growing more popular by the day. There’s a fight in California right now over the value of energy from rooftop solar, just the latest skirmish in a long war that has ranged over numerous states. The conventional wisdom in wonk circles is that the value provided by DERs is not sufficient to overcome the fact that the energy they produce is, on a per-kWh basis, much more expensive than that produced by utility-scale solar, wind, and batteries (residential solar is roughly 2.5 times as expensive as utility-scale solar, according to NREL).For that reason, many wonks view DERs as a kind of boutique energy and argue that public funds are better spent on utility-scale energy. Turns out: no, that’s wrong. Some groundbreaking new modeling demonstrates that the value of DERs to the overall electricity system is far greater than has typically been appreciated. The work didn’t get the attention it deserved when it came out in late December, so I want to spend some time with it. First, though, let’s get clear on what we’re talking about.The misguided battle between centralized and distributed energyTo understand the difference between centralized and distributed energy, it’s important to understand the distinction between transmission grids, the high-voltage power lines that carry electricity over longer distances, and distribution grids, the nests of low-voltage power lines (strung from the familiar brown poles) that carry electricity to local consumers. If the transmission grid is the interstate highway system of electricity, distribution grids are the local road systems that branch off those main trunks. Centralized energy generally refers to utility-scale power generators (or energy storage) hooked up directly to the transmission grid: coal or natural gas plants, wind farms, solar fields, grid-scale battery stacks, what have you. The big stuff.Distributed energy consists of anything that generates, stores, or manages electricity on distribution grids: rooftop solar panels, ground-mounted “community solar” arrays, consumer batteries, electric vehicles, building energy management software, and the like. (And then there’s truly distributed energy, in the form of off-grid installations that don’t connect to any larger grid. We won’t be getting into that today.)To paint in broad and somewhat crude strokes, advocates for centralized renewable energy tend to view advocates for distributed energy as crunchy pastoral proto-hippies who can’t handle modernity. They note that utility-scale energy is cheaper and capable of powering highly energy-dense modern economies, whereas distributed energy is expensive and diffuse. Advocates for distributed energy tend to view advocates for centralized energy as corporate capitalists in thrall to perpetual growth. They note that distributed energy brings a range of benefits, from resilience and independence to savings on avoided infrastructure, whereas utility-scale energy tends to do greater damage to landscapes and concentrate economic power.Like many disputes in the energy world, this one has hardened into an identity battle, which is annoying and unproductive, since the answer, like with so many other disputes, is both-and.Nonetheless, it’s worth noting that advocates for distributed energy have been at something of a disadvantage to date. It can be devilishly difficult to quantify the benefits of DERs, so a lot of the discussion gets into hand-wavey intangibles.It can be especially difficult to quantify the benefits of DERs to larger grid systems, because energy modeling to date has effectively ignored distribution grids (which represent about a third of US spending on electricity). It has treated them purely as load, as demand to be satisfied, rather than as active, flexible participants in grid management. Until now! Or, until a few months ago anyway. In December, energy modeler Christopher Clack (a familiar name to Volts readers) and his team at Vibrant Clean Energy (VCE) debuted a new way to model the energy system that takes into account DERs and the services they provide. They used it to study the effect of DERs on the electricity system and the results are summarized in “A New Roadmap for the Lowest Cost Grid.” (Full technical report here; slideshow presentation here.)Spoiler: the cheapest possible carbon-free US grid involves vastly more centralized renewable energy, but it also involves vastly more distributed energy. What’s more, far from being alternatives, they are complements: the more DERs you put in place, the more centralized renewables you can put on the system. DERs are a utility-scale renewable accelerant. The practical implication is that going all out on DERs is to everyone’s benefit, up and down the electricity supply chain, from utilities to consumers. It is difficult to exaggerate just what a revolutionary change this represents in energy modeling and how much it turns conventional wisdom on its head. By making distribution grids visible to their model and co-optimizing those grids with the transmission system, the team at VCE uncovered a source of grid flexibility that could save a decarbonizing electricity system some half a trillion dollars through 2050. That’s real money. (If you want to take a deep dive into the material, check out this interview with Clack on Chris Nelder’s Energy Transition Show. It is gleefully nerdy; I cannot recommend it highly enough.)The cheapest energy scenario is clean and distributedAt the heart of VCE’s work is Clack’s state-of-the-art modeling tool: Weather-Informed energy Systems: for design, operations and markets planning (WIS:dom). It allows resolution down to two-mile square areas and makes dispatch decisions every five minutes. It takes into account granular weather data stretching over decades, climate impacts, policy, all forms of generation, storage, transmission, and on and on. VCE boasts that it “leverages 10,000 times more data points than traditional models.”For this study, WIS:dom was augmented to better understand and represent distribution grids, so that it could bring transmission and distribution systems together in one system and co-optimize them. It was given better information about the costs and capabilities of DERs and more options; for example, instead of spinning up a new generator to meet peak demand, it could draw on distributed solar and batteries. No one to Clack’s knowledge has done this before, so there was a lot of experimenting to get it right. “I had to spend a lot of money and time and resources upgrading the model to include this, with a lot of failures along the way,” says Clack. “That's why I'm confident that we did it first, because I spent a lot of time trying to find someone else that had done it, so I didn’t have to do the hard work.”The modeling question was: if a high-resolution optimization tool is given DERs as an option, will it choose to deploy them? If so, how much?The broader social question was: can DERs help lower the overall costs of a clean electricity system? If so, by how much?The paper presents four core scenarios (which were run across a range of geographies):* BAU (business as usual), which includes existing policies and mandates but otherwise lets economics drive dispatch decisions; it deploys WIS:dom in a way that mimics traditional models;* BAU-DER, which does the same but uses the augmented form of WIS:dom, with greater visibility into distribution systems;* CE (clean energy), which models a system that reduces power sector carbon emissions 95 percent from 1990 levels by 2050; WIS:dom mimics traditional models;* CE-DER, which models a 95 percent reduction but uses the augmented form of WIS:dom.To skip straight to the results: if you make DERs an option for the model, it deploys an absolute boatload of them (spending about $10 billion extra over the first 10 years), and by doing so substantially reduces overall system costs. BAU-DER is $301 billion cheaper than BAU (the blue line above), which means we would save money from day one by deploying more DERs even if we didn’t care about climate change. CE-DER is $473 billion cheaper than CE (the green line), which means DERs will make the decarbonization of electricity much less expensive than doing it all with centralized renewables and storage. And here’s the kicker: CE-DER is $88 billion cheaper than BAU (the red line), which means, economically speaking, we’d be better off reducing electricity emissions by 95 percent using DERs than continuing with the status quo. (And this is all just the pure economics — it leaves out the enormous health savings and environmental justice benefits of reduced point-source pollution.)Whether you’re concerned about climate change or not, whether you want to reduce emissions or not, whether you care about the health and resilience of local communities or not, deploying DERs brings down system costs. It’s the fiscally responsible thing to do.Now, note the shape of the red line above (and to a lesser extent, the green line). Scenarios that decarbonize using DERs are a smidgen more expensive for the first 10 years or so because they use those early years to deploy an enormous quantity of DERs. The US currently has about 98 gigawatts of rooftop solar and less than a gigawatt of distributed energy storage installed. Through 2025, CE-DER deploys an additional 75 gigawatts of distributed solar and 27 gigawatts of distributed storage; by 2035, it is 200 and 90, respectively. (By 2050, it is 247 and 160.) That is an absolute DER building binge, starting now.After that early period of heightened investment, though, savings begin to skyrocket as DERs pay off in system benefits. DERs make everything else on the grid work betterFor the entire history of electricity up until about five minutes ago, grid operators viewed electricity demand as an exogenous variable, a set figure they had to meet with supply, not something they had much control over.The key to the value of DERs is that they make electricity demand more controllable. With energy generation and storage scattered throughout distribution grids, grid operators have a way to move energy around, both geographically and temporally, without firing up more power plants. They can absorb extra energy if there’s a dip in demand or produce extra energy if there’s a spike. The overall effect is to smooth out the “demand curve.” Look at the thick black line on the top right graph below — that’s the distribution demand curve throughout a representative year:Now note the same black line on the bottom right graph. By satisfying the little demand peaks with distributed solar and storage, the demand for utility-scale energy is leveled off. Here’s a graph that shows a “load duration curve,” which reveals how high demand is, for how often in the year, and how DERs affect it:As you can see by the sharp spike on the left, there are relatively rare periods of extremely high demand (peaks). The problem is that the current electricity system has to be sized to meet those peaks, even if that means many power plants end up idle most of the time. Clack says that today, roughly 20 to 25 percent of generation capacity on the grid — some 300-350 gigawatts — covers around 3 percent of the energy load each year. (This, in a nutshell, is why electricity systems everywhere are so overbuilt.) The light blue-shaded area on the curve shows the reduction in demand that DERs can provide (the dark blue on the right is the increase in demand). Not only can DERs “shave the peak” by an average of 17 percent nationwide, they can reduce the demand for utility-scale energy for 80 percent of the hours of the year. They make the load duration curve more level as well. These demand-leveling effects bring four big benefits:* First, if you don’t have those big peaks in demand for utility-scale energy, then you don’t need that 20 to 25 percent of capacity that only runs during peaks. Not building those plants, or shutting them down early, saves lots of money.* Second, a more level demand curve means that all generators on the system will run more consistently, with fewer ramps up and down, at closer to their full capacity, helping to maximize their value. * Third, a more level demand curve means that transmission congestion will be reduced and transmission assets will be more efficiently utilized. (In one of my Transmission Month posts, I discussed “energy storage as a transmission asset.” This is the same idea, on a broader scale.)* Fourth, DERs offer the system the option to shift demand to meet variable supply, rather than always forcing it to shift supply to meet demand. Shifting demand is often much cheaper. These benefits explain why CE-DER is so much cheaper than CE, and even than BAU. They explain why, even though rooftop solar may cost more than centralized solar on a per-kWh basis, its value is greater.Infusing distribution systems with DERs allows grid operators more stability and more options — including more renewables. DERs enable more utility-scale renewablesWind and solar are cheap, but they are variable. They come and go on their own schedule, outside of our control. There will be times — seconds, minutes, hours, sometimes weeks and months — when wind and solar dip and something else is needed to fill the gaps. Conventionally, this role is played by dispatchable generators that can be turned up and down at will — these days, mostly natural gas plants. Given that most natural gas plants, at least those without carbon capture, will have to be phased out in a decarbonized system, there’s a hunt on for “firm” zero-carbon alternatives — think nuclear, hydro, natural gas or biomass with carbon capture, or geothermal. But VCE’s modeling shows that a big chunk of that role can be played by DERs, which Clack calls a “firming agent on the load.” By bringing demand more under grid operators’ control, DERs virtually eliminate curtailment, or discarding of renewable energy due to temporary oversupply, through 2045. Just as they allow transmission to be used more effectively, they allow us to consume more of the energy generated by existing utility-scale renewables.They also prevent the familiar problem of “value deflation” — more wind and solar energy at particular times and places competes with existing wind and solar energy from the same times and places — by giving grid operators a whole series of time- and location-specific demand knobs that they can turn up or down at will to better accommodate renewables. By preventing value deflation, DERs will allow for more new renewables on the system (and the retirement of more thermal and fossil generation). That’s why the CE-DER scenario builds more utility-scale wind and solar than the CE scenario. CE-DER builds 800 gigawatts of utility wind, 800 of utility solar, and 200 of utility storage, whereas CE builds 60 gigawatts less wind and 50 less solar (though slightly more batteries). By enabling renewable energy to be moved around, DERs unlock more of it — with, again, enormous public health benefits that are not captured in the model. Put technically, as Clack told Nelder, “the model says that distributed [solar] and storage in some combination ends up being higher value than the differential in the [levelized] cost of utility-scale solar and distributed solar.”Put more colloquially, though it will require enormous upfront investment in the coming decade, laying a quilt of DERs over the nation’s distribution systems is the best thing we can possibly do to enable the rapid emission reductions we will need in the decade after. DERs are not a boutique version of, or a distraction from, utility-scale renewables; they are a necessary complement, an enabler and accelerator. DERs will mean more jobsVCE did some analysis estimating that the DER-enhanced scenarios would add an additional million jobs per year relative to conventional scenarios. It stands to reason that a huge deployment of DERs would create lots of jobs. These are very hands-on, labor-intensive projects. And since distribution systems are ubiquitous in the US, it would create jobs in every part of the country (though not uniformly). I’m generally suspicious of employment projections, so I don’t know how much stake to put in the particular figure, but we can be confident that more DERs = more jobs. DERs could hasten the collapse of existing power marketsVCE’s modeling shows that current electricity markets, if they are not reformed, basically collapse in the next 10 to 20 years. DERs will hasten that collapse in two ways. First, they will reduce demand peaks, which produce a great deal of value in current markets. Lots of peaker plants will get cancelled or shut down and peaker money will dry up. Second, DERs will enable more utility-scale wind and solar, which have zero marginal costs. They are all upfront capital costs; once a solar panel is in place, it doesn’t cost it anything more to produce the next kW. It can bid into markets at $0. Pretty soon, so much of the market’s power will come from zero-marginal-cost sources that prices will be $0 most of the year, and $0 means zero profit for participating generators. Electricity markets were built for fossil fuel generators. They need reform — but that’s a topic for a different post. (This is a good start.)Clean electrification boosts the value of DERsAn intriguing note: Clack says that if WIS:dom is told not just to decarbonize electricity but to decarbonize the whole economy (i.e., electrify everything), the value of DERs to the grid effectively doubles. An economy-wide decarbonization scenario that makes use of DERs saves a trillion dollars relative to one that doesn’t. VCE will have a new report on economy-wide decarbonization coming out soon.DERs also provide a range of co-benefitsVCE’s modeling only captures DERs’ contribution to overall grid performance and cost. It does not capture many of the benefits that have long attracted customers to them: resilience against brownouts and blackouts, the capacity to go off-grid temporarily (or permanently), independence from the whims of utilities and state regulators, reduced personal greenhouse gas emissions, and most of all, lower electricity bills. All of those benefits will help drive early adoption of DERs as their value to the grid ramps up (though they should be boosted by utility, state, and federal incentives). The value of DERs should be visible in all models and statesClack says that it’s just four paragraphs of code that open WIS:dom up to distribution grids — other models, including the models that utilities use in planning, could easily replicate this. “One of the reasons I was so keen on having it be relatively simplistic is, it should be able to be adopted by other models,” he says. “Maybe they wouldn't show as much savings as we do, because of different model logic, but I'm pretty confident they will show similar trajectories.”This is just one more area where outdated utility models and practices are keeping costs too high and the clean-energy transition too slow. Utilities have traditionally been hostile to DERs, viewing them as competitors or net costs, but VCE’s modeling demonstrates what should have been obvious: having flexible generation and storage infused throughout distribution grids offers a fantastic tool to help stabilize a grid with growing renewables and increasing electric loads and bring costs down for all ratepayers. VCE’s work is obviously germane to the many fights going on across the country over net metering. (See California in particular.) Utilities want to pay solar homeowners less for the energy they produce, but VCE’s modeling shows that, if anything, they should be paid more. They can help reduce rates for all ratepayers. It makes fiscal sense for utilities and states to incentivize as much DER growth as humanly possible. Utilities need to stop viewing DERs as an intrusion, a disruption, or a distraction. They are not simply smaller, more expensive versions of utility-scale energy. They are a firming foundation that will help utilities build stable, reliable decarbonized electricity systems.DERs are good for everyoneIt’s not often you come across an energy solution that’s truly win-win, but DERs, if they are properly understood and deployed, are good for just about everyone.They save building owners money, increase individual and community resilience, create local jobs, reduce peak demand, level the demand curve, get more out of existing power generators and transmission lines, unlock more utility-scale wind and solar, boost reliability, and reduce system costs. We should build lots of them, everywhere, starting now. Get full access to Volts at www.volts.wtf/subscribe

I have been reading Will Wilkinson’s writing since I was a baby blogger, way back in the early 2000s. By then, I had already left behind the libertarianism that gripped me in college, but Will was still a professional libertarian at the Cato Institute. I disagreed with him about many things, but I always found him rigorous and engaging.Over the years, I’ve followed as he’s moved from Cato to the center-right Niskanen Center (where he got canceled) to, now, the Progressive Policy Institute, where he is a senior fellow. In the process he left behind libertarianism for “liberaltarianism” and now some some kind of synthesis that doesn’t quite have a name but lands in the vicinity of social democrat, with an emphasis on small-d democracy.And of course, like everyone who’s anyone, he has his own newsletter: Model Citizen.There’s something nice about following a mind you admire as it tries to work its way toward higher and better understanding — it is so rare these days to witness anyone change their minds about anything — and there’s something especially nice when it ends up converging with your own thinking. I feel much more confident about things I believe when Will articulates them.Both Will and I have come to spend less time thinking about what might be the correct or optimal political philosophy and more time thinking about the workaday challenges of pluralism and democracy: how people of different cultures, ethnicities, genders, beliefs, and personalities, whose disagreements and conflicts are unlikely ever to be entirely resolved, can live together in relative peace.All of which is to say, I’ve wanted to talk politics with Will forever. We got around to it a few weeks ago and now I’ve finally got the thing produced. If you're in the mood for almost two hours of nerdy talk about Ayn Rand, rationalism, freedom, social insurance, the relationship between markets and government, and the perils of pluralism, strap on those headphones and travel along. (Note: several times in the pod I say “non-zero” when I mean “non–zero sum,” which bugs me now, but what can you do.) Get full access to Volts at www.volts.wtf/subscribe

It is now widely agreed among energy wonks that the fastest, cheapest way to reduce greenhouse gas emissions is to, as I like to put it, electrify everything. That means cleaning up the electricity system while shifting other energy uses — especially transportation and buildings — off of fossil fuels, onto electricity.When it comes to electrification, one technology in particular sits at the nexus, helping to decarbonize the electricity system, vehicles, and buildings all at once. I'm speaking, of course, of the humble solar photovoltaic panel, a technology that has defied predictions for decades, getting cheaper and cheaper, spreading faster and faster.But the spread of solar panels is just the leading edge of a much larger, more important shift to electrified homes and communities. As I've followed electrification and all its implications, one of the people I've learned the most from, in conversation and through her writing, is Lynn Jurich. In addition to being an insightful observer of the US energy system, Jurich also happens to be the co-founder and CEO of America's largest residential solar company. Sunrun has been around since 2007 and seen some ups and downs, but lately it has been all ups. The company adapted relatively quickly to the pandemic shutdown, invested heavily, and had a banner year in 2020. Then, to top it off, it bought Vivint, its leading competitor, for $3.2 billion. It is now sitting at the top of a burgeoning residential solar market, with a valuation of some $22 billion.I talked with Jurich about her new deal with Ford, the reason US residential solar costs twice what it costs in Germany, the ways distributed energy can help the grid, and the next steps for electrification. Thanks to her for coming on and to you for listening. If you value this kind of work, please consider becoming a paid Volts subscriber. Get full access to Volts at www.volts.wtf/subscribe

As you might have gathered from the name, when Battery Week began … a month ago, I did not anticipate it going on quite so long. Since it has dragged out a bit, I thought it might be helpful to pull everything together in one place.If you click play above, you will find a lithium-ion battery megapod: all the battery pieces read aloud, plus the podcast with Chloe Holzinger, strung together into one three-hour-long beast.Links to all the pieces:* Why lithium-ion batteries are so important* A primer on lithium-ion batteries: how they work and how they are changing* The many varieties of lithium-ion batteries battling for market share* Competitors to lithium-ion batteries in the grid storage market* Volts podcast: battery analyst Chloe Holzinger on possible futures for lithium-ionAs always, thank you for reading and listening. If you value this kind of work, please consider becoming a paid subscriber to Volts. Forest says Happy Spring! Get full access to Volts at www.volts.wtf/subscribe

Welcome back, my Volts friends, to the Battery Week that never ends. (Just kidding — this is the last of it.) For several weeks now, I have had my head buried in batteries, specifically, lithium-ion batteries: how they work, why they have taken over so fast, what different varieties are competing for which markets, and where innovation will take them in the future.Even with as many PDFs as I’ve read, I'm still learning every day just how much I don't know. I'm not going to lie: I still have the Wikipedia page for lithium-ion batteries open in a tab.So I thought it would be nice to round out battery week with someone who actually knows what they're talking about. To that end, I was happy to chat with Chloe Holzinger, a battery analyst at IHS Markit. (At least, that’s what she was when I spoke with her, and how I introduce her on the pod; since then, she’s become an Investment Associate with The Engine, a venture capital firm spun out of MIT.)Chloe keeps up with lithium ion batteries for a living, so I was eager to talk with her about the growing market, the raw materials that make up batteries and their possible supply problems, the coolest new innovations in batteries, from solid state to liquid metal, and much more. She was generous with her time and I learned a ton. Enjoy. Get full access to Volts at www.volts.wtf/subscribe

(If you don’t want to read, you can listen! Just click play above.)Hello! Welcome back to Battery Week here at Volts … where we use the term “week” somewhat loosely.Up to now, we’ve been focusing on lithium-on batteries (LIBs) — why they are so important, how they work, and the varieties of LIBs that are battling it out for the biggest battery market, electric vehicles (EVs). It’s fairly clear from that discussion that LIBs, in some incarnation, are going to dominate EVs for a long while to come. There is no other commercial battery that can pack as much power into as small a space and lightweight a package. Plus, LIBs have built up a large manufacturing base, driving down prices with scale and learning. Their lock on the EV market is likely unbreakable, at least for the foreseeable future. But there’s another battery market where some competitors hope to get a foothold: grid storage. They think there’s space in that market waiting to be claimed.Currently, there’s a robust and growing short-duration grid storage market, offering storage of anywhere from seconds (to provide grid services like voltage and frequency regulation) to four hours. LIBs have about 99 percent of that market locked up; in some areas, projects with solar power coupled with four hours of storage are bidding in competitively with natural gas. Most energy wonks believe that, to fully shift the grid to zero-carbon energy, we will eventually need long-duration storage as well, to the tune of weeks, months, or even seasons. LIBs are almost certainly not going to cut it for that purpose, so it will be some combination of other technologies. (I’ll write about long-duration storage some other time.)In between short and long, there’s something that might be called mid-duration storage, covering the range between four and 24 hours. What technologies will cover that range? LIBs can do it, of course — theoretically they can cover any duration; you just stack more and more batteries — but the economics get extremely difficult. Mid-duration projects will require lots of capacity but might run comparatively rarely. As duration gets to four hours and above, the cost of LIBs, at least today’s LIBs, starts to get prohibitive.This is where other batteries come in, challengers to LIBs that hope to beat them at longer durations — though they aren’t quite there yet. “There really aren't competitive technologies in the battery electric vehicle space aside from all these different lithium ion batteries,” says Chloe Holzinger, an energy storage analyst at IHS Markit, but “there's a ton of different battery technologies for grid storage. They just tend to be significantly more expensive than lithium ion batteries.”These challengers believe they are better suited to the needs of the mid-duration grid storage market, where energy density matters less than capacity, calendar and cycle life, and safety. They think they can bring costs down to competitive levels at those durations. (Some of them think they can find other niches as well, but it’s grid storage that offers the most realistic shot.)Flow batteriesFlow batteries operate on a fundamentally different principle than the batteries we’ve looked at so far. Rather than storing energy in metals on the electrodes, energy is stored as a dissolved metal in an aqueous electrolyte. The anolyte is stored in one tank; the catholyte is stored in another; pumps circulate the fluids past electrodes (sometimes in a fuel cell), where they don’t quite mix, thanks to a thin separator, but they exchange ions and electrons, generating electricity.The key conceptual difference is that flow batteries separate energy (the amount stored) from power (the rate at which it can be released). If you want more power, you make the electrodes bigger. If you want to store more energy, you make the tanks of electrolytes bigger. And electrolytes are fairly cheap, so it’s cheap to increase capacity. This is in contrast to LIBs, which double in cost with each doubling of energy capacity. In theory, flow batteries can scale up to almost any size, relatively cheaply. So as the demands for storage get bigger — six hours, eight hours, 12 hours — the economics of flow batteries look better and better relative to LIBs. A variety of different metals can be used in the electrolyte. For a long while, vanadium was expected to be the breakout candidate, but materials costs remain stubbornly high. Companies have tried with zinc (like the late ViZn, and also see below) and iron (like ESS, which is still going strong). Recent history is littered with failed flow battery companies.“Flow batteries have been the next big thing for a really long time,” says Purdue University assistant professor and battery expert Rebecca Ciez, “but they've never quite gotten there.”The problem, as ever, is the steady march of LIBs down the cost curve. “For a three-or four-hour system, a lithium ion battery outperforms any flow battery now,” says Dan Steingart, a materials scientist and co-director of Columbia University’s Electrochemical Energy Center. “Fifteen years ago, that was not predicted.”Flow batteries can theoretically expand their energy capacity indefinitely, for little more than the cost of the electrolyte goop to fill the tanks (though pumps and other accoutrement add to the cost a bit). But “when we're below $100 per kilowatt-hour on the cost of [LIBs],” says Steingart, “you're really close to the cost of the goop.”And flow batteries, like all challengers, face the fact that LIBs are well-established and well-understood. “It's easier to finance a lithium-ion battery,” says Steingart, “because of all the existence proofs and their inherent reliability. I can predict the fate and the failure.” That makes the operating and maintenance costs of LIBs incredibly low, on the order of 1 percent of the cost of capital, whereas for flow batteries it is 2.5 percent at best.There are still flow battery challengers in the field, like Largo Clean Energy (which bought VionX), which is commercializing vanadium flow batteries; Primus Power, which has a zinc bromide battery; ESS, which is selling an iron flow battery; and the mysterious Form Energy, which counts an aqueous-sulfur flow battery among its offerings. But there is a growing sense in the field that flow batteries aren’t going to be able to catch up to LIBs, at least not any time soon, without government help.Zinc batteriesSeveral companies are working on batteries that exchange zinc ions instead of lithium ions — it’s the second-most-popular metal for batteries.Zinc has the particular advantage of being light and energy dense like lithium, so with relatively modest adjustments, it can slipstream into the lithium-ion manufacturing process. Zinc is plentiful, cheaper than lithium, largely benign, and makes batteries that are easier to recycle. Like other lithium alternatives, zinc sacrifices energy density, but makes some of it back up in savings on safety systems at the battery-pack level, thanks to the lack of any need for fire suppression. This puts it in the same markets as LFP: smaller commuter/city vehicles, robo-taxies, scooters, e-bikes — and energy storage.Some in the zinc crew have larger designs: “We think we can coexist with lithium-ion and replace lead acid,” says Michael Burz, president and CEO of EnZinc, which has developed a new zinc anode it says can come close to LIBs on energy density. Remember, lead-acid batteries are still ubiquitous. “Forklifts use them. Airplanes. Snowmobiles.“ says Burz. “Data centers have huge banks of lead-acid batteries they use for switchover power.” It’s still a $45 billion global market.EnZinc thinks it can hit a sweet spot: close to the energy density of LIBs, close to the low cost of lead-acid, safer than either, and good enough to substitute for a big chunk of both. Zinc anodes are “cathode agnostic,” so Burz envisions, rather than becoming a battery manufacturer, becoming an anode supplier — “Zinc Inside,” modeled on “Intel Inside” processors. Research is underway on a number of cathodes, from manganese and nickel to, just as with lithium, air. A zinc-air battery “has a system-level specific energy of anywhere between 250 to 350 watt-hours per kilogram,” says Burz, well above most LIBs. The trick is making it controllable and rechargeable. There are zinc-air battery companies offering commercial products that believe they’ve solved those problems, like NantEnergy (formerly Fluidic), which is targeting its zinc-air batteries at off-grid markets in developing countries. There are other zinc-based technologies as well. A company called EOS is making a “zinc-hybrid cathode” that it says is safe and long-lasting. The much-hyped Zinc8 has developed a zinc-air hybrid flow battery that it claims can beat LIB costs at higher storage durations. Most of these batteries make the same basic claims: they are less energy dense than LIBs, but they are safer (no fires), they are made with benign and plentiful materials (no supply problems), and they are cheaper at high capacities/durations. It’s just that last part that’s tricky, since the price and capabilities of LIBs are a moving target. Zinc backers are confident that as the 100-percent-clean-energy pledges being made by cities and companies start to bite and the market for grid storage expands, demand for longer duration storage will expand with it. (California, for instance, is putting lots of money toward zinc battery demonstration projects, with an eye toward diversifying its storage options.)Sodium-ion batteriesLithium, nickel, and cobalt all have their issues. You know what material doesn’t? Salt. Sodium compounds can be substituted for lithium compounds to create sodium-ion batteries (NIBs), which have been the source of considerable hype for at least five years now. The basic idea and manufacturing process is the same for NIBs as LIBs — “you could use existing gigafactory structures to produce a sodium-ion battery,” says Steingart — but unlike the latter, the former can’t use graphite for the anode, because it can’t capture enough of the relatively bigger sodium ions, so something called “hard carbon” is typically used instead. Research is underway to find more energy-dense sodium compounds for the cathode and cheaper materials for the anode. “Sodium-ion has a lower energy density than lithium-ion,” says Tim Gretjak, an innovation analyst with Con Edison, “so all the materials that go into it have to be correspondingly that much cheaper.”There have also been some high-profile NIB failures. A promising startup called Aquion, backed by Bill Gates and showered with awards, declared bankruptcy in 2017. But here, too, there are surviving challengers. A company called Natron Energy is currently selling a NIB that uses Prussian Blue (a dark blue synthetic pigment) as the anode and a sodium-ion electrolyte. It has received “a total of more than $50 million in venture funding and more than $5 million in ARPA-E and DOE funding,” reports Eric Wesoff, and has a product currently on the market. Like enZinc, it is going after some lead-acid applications (data centers and forklifts) and some LIB applications (stationary storage), hoping its long life and safety can carve out a niche.To my eye, NIBs appear to be stuck in the same spot as the previous two batteries: better than LIBs on some metrics, for some applications, but so far behind on manufacturing and bankability that scaling them up is a Sisyphean task.Liquid metal batteriesA company called Ambri was spun out of MIT back in 2010 and has been threatening ever since to commercialize a battery for low-cost, long-lifetime grid storage. It too has received money from Bill Gates. It ran into problems with its initial battery in 2015, laid off a quarter of its workforce, started over, and now produces a calcium-antimony battery with (according to Ambri’s website) “a liquid calcium alloy anode, a molten salt electrolyte, and a cathode comprised of solid particles of antimony.”The liquids and suspended particles are contained in a positively charged stainless steel box with a negatively charged electrode plug on top. The battery will pass no current at room temperature, but on site, the contents of the boxes are super-heated (to 500°C), which activates the materials; the metals alloy and de-alloy, with the cathode being entirely consumed and then reformed, as the batteries charge and discharge. Because the contents are liquids, the battery has no “memory” — it is not affected or degraded by absorbing or releasing ions. This means it suffers virtually no loss of capacity over its lifetime; in fact, it works better if completely charged and discharged every few days. From the time they are first activated, liquid metal batteries require no outside heating or cooling for the lifetime of the system, eliminating a ton of system costs, and they can operate in a wide range of temperatures and conditions. Ambri claims the batteries contain materials less than half the cost of LIB materials, can be manufactured for less than half the cost of LIBs, and will run for 20 years at a “fraction of the cost” of LIBs. After a decade of hype, promises, and false starts, Ambri is currently building a 250 MWh project on the 3,700-acre Energos Reno project in Reno, Nevada. It will be, finally, a field test of the technology. If it pans out, it could establish a foothold in grid storage. Should we worry about lithium-ion’s headlock on grid storage?LIBs worked their way up from consumer electronics to appliances to cars to trucks to stationary storage, building momentum and scale. At this point, they have locked up the EV market and the short-duration grid storage market. At this point, there isn’t much demand for mid-duration storage. The question is, as the grid integrates more renewables and that mid-duration market develops, whether LIBs will simply continue their march to dominance. Right now, a few LIB competitors can claim lower kWh costs over longer (20+ hour) durations, but Steingart thinks that some variant of the basic LIB architecture is “going to get to somewhere between $45 and $60 per kilowatt hour” eventually. That’s just an incredibly difficult trajectory to keep pace with. Is it going to make LIBs uncatchable, even in the grid storage space? “I co-wrote a paper last year that basically says, up to eight to 10 hours, the answer is probably yes,” Steingart says, “at least for the foreseeable future.”Even if they weren’t still sprinting ahead on costs, simply by virtue of their ubiquity and familiarity, LIBs have gained an enormous institutional advantage. When it comes to grid storage projects, says Lou Schick, director of investments at Clean Energy Ventures, “the installed cost is so high that the chemistry of the battery doesn't really affect the cost.” He explains: “The soft costs of applications engineering, designing the contract, getting permission to do it, satisfying all the building codes, and so forth — by the time I'm done with all that crap, the battery itself is 20 to 30 percent of the installed cost, at most.”In that context, the differences in performance among different chemistries are less important than simpler criteria, Schick says: “Is it bankable? Can I get insurance for it? Is it standard consumer product?”This, even more than total long-term costs, is the biggest barrier to LIB competitors: LIBs are bankable. They are familiar. Their performance and failure modes are well-understood. Any competitor has to solve the chicken-and-egg problem of convincing the first several investors to take on greater risks. This gets us back to an argument I raised in my introductory post: if it is true that a) we will soon need more and longer-duration storage than LIBs can provide, and b) LIBs currently have an unbreakable hold on the market, then perhaps the federal government should proactively take steps to encourage competitors to LIBs.Recently, the research outfit ITIF released an excellent paper by Anna Goldstein making just this argument, in the context of flow batteries: “in the absence of ‘first markets’ that can rapidly pull flow battery innovation, the U.S. Department of Energy (DOE) should push it forward with investments in research, development, testing, and demonstration.”The same argument could be made on behalf of any of the battery chemistries discussed above. The market probably isn’t going to mature them fast enough; the feds should help.After all the time I’ve spent thinking about batteries, I am of two minds about this argument. On one hand, Goldstein makes a good case that the storage needs of the electricity system will soon push past what LIBs can provide. If that’s true, it does seem like it would be better to innovate alternatives now, to be prepared. On the other hand, analysts have been wrong about the ultimate capabilities of LIBs again and again. LIBs weren’t going to be able to handle cars, then they weren’t going to be able to handle short-duration storage, then they weren’t going to be able to hit $100/kWh, but they’re doing all those things. If LIBs follow a steadily declining cost curve down to $40-60/kWh, it’s difficult to imagine any competitor that could catch up. The only markets where competitors might have a shot is 20+ hours of storage, and it’s not even clear how much of that will ultimately be needed.Nonetheless, I think I come down in the “better safe than sorry” camp — there’s no harm in making multiple bets when the stakes are so high. Researching and innovating medium- and long-duration storage technologies will bring all sorts of learning and networking benefits that we can’t predict now. And if LIBs continue to defy all predictions and get so cheap nothing can compete, well, that will be a nice problem to have.Guest pup! My darling niece and her family got a darling new puppy. His name is Oscar. Get full access to Volts at www.volts.wtf/subscribe

Greetings! Last week, I wrote about the ambitious slate of climate and energy policies that the state of Washington has put in place over the last two years — culminating, a few weeks ago, with the passage of the Climate Commitment Act, which would cap the state’s emissions and reduce them 95 percent by 2050. It’s a dizzying amount of progress in a short period of time. As I talked to those involved about how it happened, one name came up again and again: Rep. Joe Fitzgibbon (D) of the 34th District, which encompasses West Seattle and areas southwest of the city. Fawn Sharp, president of the National Congress of American Indians, had this to say: “Representative Joe Fitzgibbon is now a living legend for his miraculous legislative diplomacy and pure, selfless heart; he deserves to win every legislator of the year award in existence.” This is not the kind of thing one typically hears about legislators after years of difficult negotiations, but in this case, it was a fairly typical sentiment. So I knew I needed to talk to Fitzgibbon — about his entry into politics, his approach, and what enabled this burst of progress. Please enjoy our conversation. And please consider becoming a paid Volts subscriber, so that I can continue to do this work. Get full access to Volts at www.volts.wtf/subscribe

In May 2019, I wrote in Vox that “one weird trick can help any state or city pass clean energy policy.” Spoiler: the one weird trick is electing Democrats. My home state of Washington elected a whole mess of Democrats over the last several cycles and it is paying off handsomely. Without much national attention, the last few years have seen Washington quietly put into place the most comprehensive and ambitious slate of climate and energy policies of any US state. Yes, I’m talking to you, California.The legislature just passed a carbon cap that will reduce economy-wide greenhouse gas emissions 95 percent by 2050 (it awaits Gov. Jay Inslee’s signature). I want to talk about that bill, but first, to understand its significance, we need to quickly review all the other stuff the Washington legislature has been up to lately. Let’s run through the last three years. It’s a lot. (And this is only the climate stuff; there’s much more: police reform, a capital gains tax, reduction in penalties for drug possession, etc.)In 2019, the legislature passed:* the Clean Energy Transformation Act (CETA), the most significant energy bill in state history, which will require state utilities to reach carbon neutrality by 2030 and 100 percent self-generated carbon-free electricity by 2045; it also contains a bunch of sexy utility business-model reforms;* the Clean Buildings bill, a first-in-the-nation program that requires large commercial building owners to address the energy efficiency of their existing buildings;* a bill on hydrofluorocarbons (HFCs), which will phase out dangerous ozone-depleting (and climate-warming) aerosols, foams, and refrigerants (making Washington the second state, after California, to do so); and* HB 2042, which puts about $170 million toward transportation electrification, through tax incentives for mid-market EVs, money for charging stations, and money to transit agencies to electrify buses. In 2020, it passed:* SB 5811, which adopts California’s Zero-Emissions Vehicle (ZEV) program and California’s Advanced Clean Truck Rule, requiring rising sales of ZEV passenger vehicles and heavy- and medium-duty trucks, respectively; and* an update of the state’s greenhouse gas emission goals: 45 percent reduction from 1990 levels by 2030, 70 percent by 2040, and 95 percent/net-zero by 2050. In 2021 so far, it has passed:* HB 1050, another HFC bill that goes beyond recently adopted federal standards;* HB 1084, the Healthy Homes and Clean Buildings Act, which would take a number of steps to gradually phase out natural gas utility service and boost building electrification [Correction: 1084 did not actually pass; it died in the Appropriations Committee, but several of its provisions passed via the state budget]; and* HB 1091, which would establish a clean fuels standard (CFS) that gradually reduces the carbon content of liquid fuels in the state, similar to laws already in place in California, Oregon, and British Columbia (making a declining carbon standard for fuels the law of the land from the Mexican border to the Yukon). This has been a long fight in Washington — the CFS is one of Big Oil’s least-favorite policies — and this is the third attempt to pass it, so victory is sweet.So, the legislature has already passed laws specific to electricity, transportation, buildings, and fuels. All of this activity sets the context for last week’s finale: SB 5126, the Climate Commitment Act (CCA — here’s the bill text). I wrote last year that carbon pricing has been dethroned in left-leaning carbon policy circles, in favor of industrial policy — sector-specific standards, investments, and justice (SIJ). But the dream of carbon pricing never died in the hearts of Jay Inslee and Washington legislators. The CCA is a “cap-and-invest” program that would impose a declining cap on emissions and distribute allowances under the cap, thereby placing an escalating price on carbon. There’s lots to say about this, but the first thing to note is that this is not carbon pricing instead of SIJ — note all the sector-specific policies passed before and alongside it. It is carbon pricing as a complement, part of a comprehensive suite of carbon policies.Note also that this bill comes at the tail end of a long record of failure on carbon pricing in Washington, including two citizen-led ballot initiatives, one based on economists’ recommendations and one based on the environmental left’s recommendations, both of which were defeated. There’s a lot of history here. Politically, there are two salient facts bounding the bill. On the downside, implementation of both the CFS and the CCA is contingent on the passage of a transportation package containing a boost in the gas tax of at least five cents per gallon. Many state climate activists are angry about this, because in its current condition, the transportation package is highway-heavy. (I’ll get into this more later.)On the upside, once it is in effect, the CCA is authorized to stay in effect until its emission goals are reached. This is a really big deal: there won’t be a big legislative fight over re-authorization like there was in California in 2017, which weakened that state’s program. There is no sunset or time limit on the CCA. It stays in place until the state is net-zero. A declining cap is now the status quo, and it’s always more difficult to pass a new bill to change the status quo than it is to keep it in place.Before we get too deep in the politics, though, let’s look at what the CCA does. It adopts the same broad outlines as California’s cap-and-trade system, but with this guiding principle, as articulated to the Seattle Times by state Sen. Reuven Carlyle (D-Seattle), the bill’s key Senate architect: “I had a check list, and I made sure in my own head that we addressed these criticisms and weaknesses of the California bill, and not just danced around them.” Cap-and-invest will issue a declining number of allowancesThe CCA is a program to achieve the state’s carbon targets, as updated last year: 45 percent reduction from 1990 levels by 2030, 70 percent by 2040, and 95 percent/net-zero by 2050. Keep in mind: this is not just the electricity sector. It’s electricity and transportation and oil and gas and more — somewhere between 75 and 80 percent of the state’s total greenhouse gas emissions. Only California has comparable economy-wide aspirations, but Washington’s rate of reductions will need to be much more rapid than California’s to reach its targets. In terms of the sheer pace of change to which a state has committed, Washington has taken the lead.With a few exceptions, the cap will cover all entities that emit at least 25,000 tons of energy, process, or landfill emissions a year — around 100 entities total. Each year, a declining number of allowances will be issued. Most of them will be distributed via auction (sold to raise revenue for the state), with a few exceptions. Electric utilities are already covered by CETA, so they get their allowances free. They can use their allowances for compliance and, if they reduce emissions ahead of schedule, auction off the remainder. Any benefits from those auctions are to be used “for the benefit of ratepayers, with the first priority the mitigation of any rate impacts to low-income customers.” Natural gas utilities get free allowances equal to their emissions the first year, with that number declining by about 6.5 percent a year through 2030, commensurate with the cap. Starting in 2023, natgas utilities must auction 65 percent of those free allowances, with the number by rising by 5 percent a year up to 100 percent. The auction proceeds must be returned to customers “by providing nonvolumetric [equal for each customer] credits on ratepayer utility bills, prioritizing low-income customers, or used to minimize cost impacts on low-income, residential, and small business customers through actions that include, but are not limited to, weatherization, decarbonization, conservation and efficiency services, and bill assistance.” But there’s a twist: excepting low-income households, only households that are already connected to the natural gas system when the bill goes into effect can receive these rebates. Subsequent hookups do not, a significant disincentive California doesn’t have. Finally, so-called energy-intensive trade-exposed (EITE) entities — industries where marginal increases in energy costs could prove a competitive disadvantage and potentially push them out of state — are not exempt from the cap. They will receive a steadily declining share of free allowances through 2035, based on their output. Note: some environmental-justice activists have criticized this provision, but a) the carbon-tax bill the EJ community supported earlier this session, Washington STRONG, would exempt all EITE entities from its cap, forever, b) EITE entities can have their access to offsets cut off if they are harming local air quality, and c) the air-quality regulations in the CCA serve as a backstop for local air quality. This is about as good as you’ll find any state doing on EITE businesses.The price of allowances will have a floor and a ceilingThe price of allowances, as established by auctions, will have a “collar,” meaning it will have a rising floor (to ensure the program produces reliable revenue) and a rising ceiling (to make sure it doesn’t get too expensive). The ceiling will take the form of an allowance price containment reserve, which basically means that if the price hits the ceiling, unlimited allowances at that price can be released from the reserve until prices go back down.The price collar will effectively cause the system to behave a little more like a carbon tax, with price fluctuations confined to a predictable range. There will also be an “emissions containment reserve,” set to a trigger price, that will allow the department to withdraw subsets of allowances from the system if the targets are not being met. (For more on emissions containment reserves, see this post from Resources for the Future.)The state Department of Ecology will set the floor, ceiling, and trigger prices through rulemakings involving public and stakeholder input. In 2027, 2035, 2040, and 2050 — and whenever else it elects to — the department will review whether the program is on track to meet its targets and take any corrective action necessary. For instance, in the event of oversupply of allowances, a problem that bedevils the California system, the department can withdraw allowances from the system to push the price as high as necessary to get on the right trajectory.Offsets will come in under the capRegulated entities may meet 8 percent of their compliance obligations through carbon offsets in the first compliance period (2023-2026); from then on, it is 6 percent. Of those offsets, 3 and then 2 percent respectively must go to projects on tribal lands; 50 and then 75 percent of the benefits, respectively, must be within Washington state. Offsets are a huge source of controversy, in this system as in all systems where they play a role. A recent blockbuster investigation by ProPublica revealed that California’s biggest forestry offset programs are basically bogus — failing to reduce emissions and blowing the state’s carbon budget.The dangers of offsets — explained in more detail in my interview with energy analysts Danny Cullenward and David Victor — are very real, but the bill contains a few key provisions that reduce those risks.First and most importantly, unlike in California, offsets in Washington’s system are beneath the cap. This is a tricky concept to get your head around, so let me walk through some idealized examples.Say, in a California-style system, the state’s emissions limit for the year is 1,000 tons. It allows 8 percent of compliance via offsets, so in addition to issuing 1,000 allowances, it allows 80 offset credits. Note: there are now 1,080 tons worth of compliance instruments on the market (allowances + offsets). However, California believes that each offset represents a ton of carbon reduced elsewhere, outside the covered sectors. So 1,080 tons of compliance instruments - 80 tons of carbon reduced elsewhere = 1,000 tons, the state emissions limit. So far so good.However! If the 80 offsets turn out to be bogus — if they don’t represent real carbon reductions elsewhere in the economy — then the system will net out at 1,080 tons of emissions, blowing past the state’s purported limit.That, basically, is what critics say has been happening in California: because so many of the millions and millions of tons of offsets in the system are bogus, the state is actually permitting emissions well above its stated limits.Washington legislators learned from California’s example and designed their system differently. Say Washington’s emissions limit for the year is 1,000 tons. It also allows 8 percent compliance via offsets. However, its offsets are beneath the cap, meaning the state will issue 920 allowances and allow 80 offsets — a total of 1,000 tons worth of compliance instruments.If all 80 offsets are bogus, then the state comes in at its limit: 1,000 tons. If the 80 offsets are valid, if they represent actual emission reductions outside the covered sectors, then they push emissions below the statutory cap. The system will actually have netted out at 920 tons of emissions, well under the state limit. This is worth repeating: in the Washington system, insofar as offsets represent valid emission reductions, they are effectively a bonus, over and above the reductions required by statute. (This could help push the system to net-zero eventually.) Because the Washington system doesn’t rely on the validity of offsets to hit its caps, some of the political pressure is taken off of them.That’s the first thing. The second thing is that the CCA directly addresses the long-standing concern over “hot spots.” The concern is that some heavily polluting facilities, often located in low-income or minority neighborhoods, will buy tons of cheap offsets and continue to pollute. The CCA — in addition to setting up a whole apparatus to measure local air quality and screen for vulnerable communities — says that if the state determines a particular facility is harming an “overburdened community,” it can restrict the facility’s access to offsets (a provision also absent in California).Third, the Department of Ecology will be charged with determining which of California’s offset protocols to accept; it is not required to accept them all. Critics of offsets have long said that the incentives are inevitably skewed in these systems: offset providers want lax standards so they can sell in bulk, regulated entities want lax standards because cheap offsets bring down the overall cost of compliance; politicians want lax standards because they also benefit from the optics of cheap compliance. Regulators, the only participants with an interest in maintaining standards, are under constant pressure. It’s definitely true that the success of Washington’s program, on offsets and elsewhere, will depend on judicious action from future regulators. But that’s true of any system.The revenue will go to climate mitigation and adaptationAuctioning allowances every year will bring in billions of dollars in state revenue, the exact level depending on the price they bring. The state estimates that, if allowances sell at the California floor price, they will raise around $500 million a year, rising up to the high 600s over time — about $8 billion total through 2037. In reality, the Department of Ecology will set its own floor and in practice the price is likely to exceed it, given Washington’s ambitions.Here’s how the revenue is allocated.First, between the start of the cap-and-invest program and 2037, $5.2 billion of CCA revenue will go to transportation projects that reduce carbon emissions, mostly transit but also electrification, including electrification of Washington ferries (a huge win for local air quality). We will get into the controversy over Washington’s transportation package later — remember, implementation of the CCA is contingent on its passage — but it is worth emphasizing that the CCA itself will spend roughly five times what the last transportation package allocated for transportation decarbonization projects. From 2037 on, 50 percent of CCA revenue will go to such projects. None of these funds can go to roads. Second, every two years, $20 million will go to the Air Quality and Health Disparities Improvement Account (see below).Third, the remaining funds — around $3 billion, assuming California’s floor price — will go to the Climate Investment Account, which will divide it as follows:* 75 percent to the Climate Commitment Account, which will fund climate mitigation and some adaptation projects; it will also set aside $250 million to help relocate tribal communities threatened by sea-level rise; and* 25 percent to the Natural Climate Solutions Account, which is dedicated to natural resources management and resilience.All of the Climate Investment Account spending is subject to high labor standards, like the money spent in CETA (more on that here). The intent is to use the investments to create high-quality in-state union jobs. Air-quality standards and targeted investments will address environmental justiceThere are provisions throughout the CCA related to environmental justice. First, one of the objections EJ communities often have to cap-and-trade is that it doesn’t guarantee improvement in local air quality, especially in overburdened communities. The CCA addresses this in Section 3, which sets up a system for local air-quality monitoring and regulation. The state will identify overburdened communities using a tool like the Washington Environmental Health Disparities Map (which grades communities on over a dozen metrics) and deploy air-monitoring systems in the identified communities — something Washington, like many states, now lacks. It will direct state and local air agencies to adopt new standards and regulations such that the overburdened communities either meet federal National Ambient Air Quality Standards (NAAQS) or have air quality equal to nearby communities, whichever is more protective. Since all of Washington complies with NAAQS, these standards will go beyond federal air quality standards to specifically identify and eliminate wide disparities often based on class and race. Every two years, the Department of Ecology will review the state’s progress to ensure that criteria pollutants in overburdened communities are declining on schedule.Second, all the investments made with CCA revenue must target:* at least 35 percent to overburdened communities, with a target of 40 percent, and* and additional 10 percent to projects sponsored by tribal nations.In California, a similar provision has meant roughly $3 billion invested in that state’s overburdened communities since 2014. Now Washington’s overburdened communities will receive a steady stream of investment as well. Third, Washington’s Environmental Justice Council — created by the Healthy Environment for All (HEAL) Act, also passed this year — will provide oversight on the design of the program, the revenue, and any plans to link the system to California’s. (The council is a 12-member group, appointed by the governor and approved by the Senate, drawn from affected communities and state agencies.) The state is also instructed to create a tribal consultation framework and ensure that tribes are involved in all Climate Investment Account spending decisions that affect tribal lands. (Tribes can halt projects if such consultation hasn’t taken place.)So, the bill contains a combination of specific air-quality standards for overburdened communities, revenue for overburdened communities, and formal environmental-justice oversight of design and revenue decisions. We’ll touch more on the politics around this below. Linking to California could be sketchyWashington may eventually want to link its system to California’s, which is a politically dicey prospect, given familiar criticisms of that state’s system. To do so, the two states would have to agree on mutual exchange of allowances, align their price floors and ceilings, and integrate their auction systems, among other things.Section 24 of the CCA instructs the Department of Ecology to analyze whether a link would do any harm to Washington’s system. Any linkage must not only integrate the systems properly, it must ensure that:* the jurisdiction being linked to has environmental-justice provisions in place to get revenue to overburdened communities, * the linkage will not harm overburdened communities in either jurisdiction,* the linkage will not harm Washington’s ability to hit its targets, and* Washington retains “all legal and policymaking authority over its program design and enforcement.”That’s a pretty stiff set of requirements, and it’s an open question whether a linkage with California can meet them any time soon, given that state’s problems with oversupply and local air-quality concentrations. (More on that below.)The politics around the CCA are pretty good, but there are objectionsThe nature of the news cycle these days is that stories come and go and are forgotten in a matter of hours. The passage of these landmark climate and energy bills is probably going to see the same fate — it will be gone from the headlines long before you read this, insofar as it got any headlines at all. (This should teach Democratic lawmakers something: they can pass big ambitious policies and people will barely register that it happened. Might as well let loose and pass more!)Most people, if they noticed the bill passing at all, felt happy that something was getting done. Climate action is, after all, extremely popular. Among those engaged with the process, however, there has been some pushback, falling into three buckets.1. Some urbanists hate the transportation linkage.As I said in the intro, the CFS and the CCA have both passed, but their implementation is contingent on the passage of a transportation package (containing a gas tax of at least five cents a gallon). Some Seattle urbanists are upset about the state of that transportation package; they believe it spends too much on highways, undercutting the CCA’s goals. They are therefore opposed to the linkage, and want Gov. Jay Inslee — who has a line-item veto — to strike it from the bill and allow the CCA to be implemented without restrictions. (That would severely piss off several moderate Democrats in the Senate.) One thing to note on this is that all highway spending is not equal. Big chunks of the Washington highway budget will be taken up by court-mandated repair of culverts (to help fish). And there are lots of projects — like the new Columbia River Crossing bridge, which will include light rail — that most everyone agrees are necessary. More importantly, through a twist of Washington law, the CFS and CCA will likely prevent billions of dollars in road spending. The use of bonding to borrow money for road spending requires a 60 percent majority in the Washington legislature, which means it will require several Republican votes. And Republicans are absolutely not going to vote for a transportation package that triggers the CFS and the CCA, two policies they passionately hate. That means no Republican votes and no bonding, which will sharply curtail, by several billion, the amount of money the transportation package can devote to roads. And finally, remember, the CCA will put $5.2 billion toward transportation decarbonization, five times what the last transportation package spent on that, none of which can go to roads. It seems to me that the benefits of the bill, in transportation alone, vastly outweigh the harms of a few highway-widening projects, irksome as they are. 2. Some environmental justice groups oppose cap-and-trade.The state environmental justice community is divided on the CCA. Groups like Puget Sound Sage and Front and Centered have spoken out against it, but it has received support from 20 state tribes, El Centro de la Raza, the Washington Black Lives Matter Alliance, and Washington Build Back Black Alliance.The opposition arises mainly from opposition to cap-and-trade itself, which some EJ activists believe is inherently inferior to a carbon tax like the 2018 state ballot initiative (1631) or Washington STRONG. To my mind, most of their critiques — especially around local air quality and participation — are directly answered by provisions in the bill. And some, like the idea that cap-and-invest allows companies to “pay to pollute,” are more true of the carbon taxes they support (which contain no mandatory emission reductions). But make up your own mind: the Sage and F&C essays make the case against; Vlad Gutman-Britten of Climate Solutions addresses the objections at length here.3. Some wonks worry about hooking up with California.There’s long been a strain of thought in Washington that hitching up to the much larger California carbon market will effectively put California in charge of Washington policy. That critique used to come from the right, but lately there have been versions of it on the left as well.There are two basic worries. The first is that California’s offset protocols are garbage and if Washington adopts them it will flood its system with bogus carbon reductions. The second is that California’s system suffers from chronic oversupply of allowances. The oversupply suppresses prices, and a governor facing a recall election and needing the support of the building trades is not going to support reform that raises prices any time soon. That could drag down Washington’s prices.To some extent, these objections are answered in the bill. Offsets are below the cap, so the risks are lower; the Department of Ecology is not required to adopt all of California’s offset protocols, it can independently assess them; and the criteria for linkage specifically include that it not suppress prices.Nonetheless, there is some tension here. There will be pressure to link the systems, to hold prices down in Washington. (Unlinked systems are, by some analyses, three times the cost of linked systems.) But it’s not totally clear how, once linked, Washington can enforce its own standards. Since linkage won’t happen until the middle of the decade at the soonest, the best-case scenario is that California wrings some of the oversupply out of its system by then. And Washington linking could actually help lift prices in California — Washington will represent a lot of demand, given the steepness of its proposed emissions trajectory. Washington is kicking assAll of these objections are worth taking seriously, but in my judgment, on balance, Washington’s new bill — or more broadly, the comprehensive suite of policies the state has constructed — is overwhelmingly worth celebrating. Among other things, the CCA will bring billions in investment and new economic growth to the state, along with hundreds of thousands of new jobs. Given all the scorn heaped on Washington legislators over the last decade, especially by climate advocates (including me), it is worth noting that credit for the CCA goes largely to legislators, negotiating directly with one another. They finally got sick of Washington fucking around on climate pricing, pulled together the lessons of previous attempts (and California’s example), hashed out a bill enough Democrats could agree to, and passed it. And they did a good job: the wonky i’s are dotted and t’s crossed.Every success has many parents, and this one is no different, but special credit goes to Representative Joe Fitzgibbon in the House and Senator Reuven Carlyle in the Senate, who by all accounts (and I mean all accounts — one or both were praised by everyone I contacted, even some bill opponents) were central to coalition-building around these bills and improving them as they moved through the process. Once Inslee signs the CFS and the CCA and a transportation package passes, both of which most observers expect in relatively short order, Washington will have the full suite: legally enforceable programs and standards in place to decarbonize electricity, transportation, and buildings, and in addition to that — as a complement, not an alternative — a declining cap that ensures the rapid emission reductions the state needs to meet its targets. The Washington legislature is showing Democrats across the country that climate politics are good politics, that voters respond to big climate ambition. Now it’s up to Washington to show other states that reducing carbon emissions is good for the economy and good for the health and welfare of state residents. The fight goes on for effective implementation and enforcement, but for now, Washington residents are justified in popping some champagne corks. The state has finally charted a clear path to a healthier climate future. Get full access to Volts at www.volts.wtf/subscribe

(Hey Volties! The following was going to be a column on Vox, but they decided they wanted something newsier, so I’ll be doing something about Biden’s pledge over there, soon. In the meantime, enjoy this writeup of a fun new paper, or listen by clicking play above. We’ll get back to Battery Week next week.)Climate change can sometimes seem like an intractable problem, so it is useful to remember periodically that progress is possible — indeed, that we are making progress, and know how to make more.This is especially true of the electricity sector.Electricity is the focus of some of our biggest ambitions. Climate policy analysts (and Joe Biden) agree that we need to decarbonize the electricity sector entirely by 2035 — that’s what Biden’s Energy Efficiency and Clean Energy Standard aims for, if he’s able to pass it. That’s an incredibly ambitious target for the next 15 years, but a look at the last 15 years shows that rapid change is possible.The US electricity sector is decarbonizing faster than expectedTo illustrate the point, Lawrence Berkeley National Laboratory senior researcher Ryan Wiser undertook a simple project. He went back 15 years and looked at the US Energy Information Administration’s 2005 projections for the electricity sector, to compare them with what actually happened. Specifically, he looked at the EIA’s business-as-usual (BAU) scenario, its projection of what would happen if 2005 policy were frozen in place. (He also looked at other projections, to make sure EIA wasn’t an outlier.) Here’s the top-line conclusion:Fifteen years ago, many business-as-usual projections anticipated that annual carbon dioxide (CO2) emissions from power supply in the United States would reach 3,000 million metric tons (MMT) in 2020. In fact, direct power-sector CO2 emissions in 2020 were 1,450 MMT — roughly 50% below the earlier projections. By this metric, in only 15 years the country’s power sector has gone halfway to zero emissions. [my emphasis]Not bad!Of course, as Wiser acknowledges, this is about the rosiest possible lens through which to look at this data.2020 was an unusual year; the pandemic drove demand (and emissions) down. Using 2019 numbers instead, the decline from BAU is 46 percent.If you measure how much power sector emissions fell from 2005 to 2020 in absolute terms — rather than relative to expectations — the decline is 40 percent. Measuring absolute decline with 2019 numbers gets you 33 percent. If you look at total energy-related emissions — not just electricity but all energy — they are down 39 percent relative to BAU. It’s evident that electricity is making the fastest progress.Nonetheless, no matter how you look at it, in terms of emissions, we’re doing much better than BAU in the electricity sector. Here’s a breakdown of emission declines in the electricity sector (and its component subsectors), relative to BAU projections and absolute levels, for both 2020 and 2019.(Look how much difference 2020 made in transportation — that’s the pandemic talking.)That’s how electricity GHG emissions did. Let’s look at a few other metrics.Coal died while natural gas and renewables grewFour big trends in the sources that power the electricity sector helped push emissions below BAU. First, coal died — just absolutely plunged relative to expectations. Second, natural gas boomed, thanks to the shale revolution, and stayed much cheaper than expected. Third, renewables boomed, thanks to policy support that drove rapid cost declines. And fourth, demand stagnated, thanks to declining manufacturing and energy efficiency.Here’s a graph that shows, on top, how supply and demand sources came in relative to EIA’s 2005 BAU, and on bottom, how they performed in absolute terms.You can see the four stories plain as day: coal plunged, natural gas and renewables boomed, and demand stagnated. Here’s another way of looking at the data:Electricity bills have not increased …The dynamic in electricity prices is interesting. EIA’s 2005 BAU projection had electricity retail prices falling slightly by 2020, but average consumer electricity bills rising substantially, thanks to increased demand. What happened instead: retail prices stayed about the same, and so did average bills.With all the cheap natural gas and renewables flooding the system, why didn’t prices go down? Wiser cites research uncovering the primary culprit: “declining power production costs due to decreasing prices for natural gas, wind, and solar have been offset by increases in sector-wide transmission and distribution costs.”Curses, transmission again! (Time to spend some infrastructure money.)… but pollution has plungedCoal is the dirtiest electricity source, so the unexpected plunge in coal means a commensurate plunge in local air pollutants and greenhouse gases. Wiser calculates both the climate damages (by using the government’s social cost of carbon) and the air pollution damages avoided by sectoral changes over the last 15 years. They are stunning.Even these numbers probably understate the benefits, since every new round of science reveals that the impact of air pollution is greater than previously understood. Employment grew thanks to renewables“The renewable energy sector is job-intensive, requiring more jobs per unit output than natural gas and coal,” Wiser writes. “As a result, though jobs in the coal sector are considerably lower than might have been the case, natural gas and especially renewable energy jobs boost the overall total to 920,000.”Measuring employment impacts is a little trickier — Wiser only measures a limited set of job categories, and calls these “rough first-order approximations” — but it’s clear enough that domestic renewable energy also involves lots of new domestic jobs. What to learn from our unanticipated success in electricityWhat’s happened over the past 15 years in US electricity is remarkable: for no added cost to consumers, we have radically reduced the social cost of power. Hundreds of thousands of people, maybe millions, will be healthier in the future for it.In part that came through a few strokes of luck. The fracking boom was responsible for somewhere around half the reductions. But a great deal came through organized activist and public-policy effort, to push coal out of the system, expand renewables, and hold demand down through energy efficiency. (Given how much research and public policy was devoted to expanding natural gas, even that could be seen as largely intentional.)When I asked Wiser how much credit he would give to deliberate policy, here’s what he told me:Policy has driven growth in wind, solar, and energy efficiency. For wind and solar, state RPSs, federal tax incentives, net metering, R&D. For efficiency, efficiency standards for equipment and buildings and utility energy-efficiency incentives. As it relates to renewables and efficiency, the glory goes to policymakers, and also to innovators in many cases directly or indirectly supported by policy. For coal to gas switching, the story is more nuanced. Surely fracking was developed in part with federal government assistance. Aswell, pressure campaigns by many advocates have supported the retirement of coal assets. But one also has to accept that this story line is not one that solely relates to policy intervention. So, I can't give you a precise percentage (I'd love to have one), but the role of policy has surely been decisive.“In the end,” he says, “I strongly believe that our fate is in our hands.”Given the mix of purposeful policy and happy fate in the outcome of the last 15 years, the paper itself draws two lessons:First, policy and technology advancement are imperative to achieving significant emissions reductions. Second, our ability to predict the future is limited, and so it will be crucial to adapt as we gain policy experience and as technologies advance in unexpected ways.Push on policy and technology and be open to experimentation and revision: not bad guidelines in any area of politics.One thing the last 15 years in the electricity sector does not teach us is that getting the rest of the way to net-zero by 2035 will be easy. For one thing, there will be a rebound in demand as the economy recovers from Covid-19. For another, many of the easiest low-hanging fruit have been picked; subsequent reductions are likely to be more difficult. And finally, the pace of reduction will need to substantially increase.We will have to beat the EIA’s BAU case again. Here’s what the agency projected this year, relative to a net-zero pathway.Getting the rest of the way to net-zero“Past success does not trivialize the challenges that remain for further decarbonization in the power sector and beyond,” Wiser writes. “Nor does it offer a specific roadmap for how best to achieve those additional reductions.”The final section of the paper is a brief review of the scientific literature on net-zero power. Obviously, coal-to-gas switching, a major engine of past reductions, can not be a long-term strategy, unless carbon capture and sequestration (CCS) scales up. So the next 15 years will primarily be about scaling up solar, wind, and battery storage, which are rapidly falling in cost. They can build on “existing low-carbon resources (nuclear, hydropower, geothermal, and other renewables) and energy efficiency,” Wiser writes, and research shows that “collectively, these low-carbon resources could reliably meet as much as 70% to 90% of power supply needs at low incremental cost.”Getting there means overcoming numerous challenges: preparing the grid for it, in part by adding more transmission; scaling up batteries and other sources of flexibility; improving the operation of wholesale markets; aggressively pursuing energy efficiency and demand response; and more. It won’t be easy, but the path to 90 percent electricity sector reductions is relatively clear. After that — wringing out that last 10 to 20 percent of emissions — things get a little trickier. Doing it only with today’s clean resources, especially relying on batteries to provide all the flexibility, gets rapidly more expensive as zero approaches. We will need more backup from “clean firm resources” — Wiser cites “longer-duration storage, hydrogen or synthetic fuels, biofuels, fossil or biomass with CO2 capture and sequestration or use, nuclear, geothermal, and concentrating solar-thermal power with storage.”The cheapest option for that additional flexibility, at least from what we can perceive today, is just keeping open a bunch of natural gas plants, but running them only rarely. That won’t get us to net-zero, but it will get us close. When I pressed Wiser on which clean-firm resources he would bet on eventually replacing those plants, he cited “using hydrogen in existing retrofitted gas plants, and new longer duration storage techs.”It will be important, over the coming years, to research and innovate on those clean-firm sources, even as we rapidly scale up the clean tech we already have.It’s a daunting task. But recent history shows we can make rapid progress, even with a patchwork of uncoordinated state policy efforts. Imagine what we could do with a concerted, well-funded federal effort. We could beat expectations again. A Mabel blep for your weekend: Get full access to Volts at www.volts.wtf/subscribe

(If you would rather listen than read, just click play above.)Hello, everyone, and welcome back to Battery Week! We’ve talked about why lithium-ion batteries (LIBs) are so important and we went through a basic primer on how they work. Today, we’re going to get into the competition within the broad lithium battery family, among all the different kinds of batteries that use lithium and exchange charged lithium ions. (See the previous post for a full list.)There are a few clear leaders — lithium nickel manganese cobalt oxide (NMC), lithium nickel cobalt aluminum (NCA), and lithium ferro phosphate (LFP) — that have achieved mass market scale and several others looking to get in on the action. The market prize is likely to exceed a trillion dollars within the next decade, so if any of these competitors can even carve out a substantial niche, it could be worth billions. Let’s look at the players. Better NMC and NCAThe bulk of LIB research these days is going to improve the dominant batteries on the market, mainly by reducing the amount of cobalt (the most toxic and expensive ingredient). Most EV makers use NMC batteries; Tesla uses NCA. In the past, it’s been difficult to push down the amount of cobalt in these batteries (it plays an important balancing role), but manufacturer LG recently introduced an NMC 811 battery: 80 percent nickel, 10 percent manganese, 10 percent cobalt. GM will use them in its new line, including in the Hummer, and Tesla will put them in some of its Model 3s in China.Most big battery manufacturers, including Panasonic (which supplies many of Tesla's batteries), have vowed to gradually reduce and eventually eliminate cobalt. Nickel is the key to energy density. Tesla, VW, and others are working on special high-nickel battery varieties that will be used for specialty vehicles that require extra-high energy density, like larger SUVs and trucks.But not every vehicle needs that, and nickel supply constraints are looming, so work is also being done to further boost manganese — a much more stable, abundant material — and reduce cobalt.Silicon anodesMany LIB developers are experimenting with silicon as an anode coating, partially or completely replacing graphite. Tesla has been working to increase the proportion of silicon in its anode since at least 2015.Silicon holds on to nine times more lithium ions than graphite, so energy density improves (range expands by 20 percent), and a silicon battery can charge and discharge much more quickly than graphite batteries, so power density improves as well. But silicon expands when it absorbs ions, so it breaks down quickly; cycle life is still much lower than graphite. If engineers can overcome that problem (and Tesla has vowed it can), LIBs could take a leap forward soon. SILA Nanotechnologies, in its brief on the future of LIBs, considers silicon anodes the biggest potential near-term market-shifting breakthrough in the space. It summarizes:[T]here are no high-volume commercial Li-ion batteries (yet!) in which a silicon anode entirely replaces the graphite one. When it does arrive, the reward will have been worth the wait. We expect automotive cells with NCA or NCM cathodes paired with Si-dominant anodes will increase energy density by up to 50%, thereby dropping the $/kWh cost by 30-40% in less than a decade. That is a mind-boggling prize, if any manufacturer can unlock it. (Read Canary’s Julian Spector on Sionic, a battery company that has recently debuted a silicon anode that it says can fit into existing LIB manufacturing.) Silicon anodes are technically “cathode agnostic,” though most testing so far has used NMC cathodes. If engineers can crack the code and make silicon anodes with high cycle life, it could benefit any and all cathodes (e.g., see LFP below).Fluorides as cathodesOne thing I didn’t mention about silicon-as-anode: it doesn’t operate via intercalation. Instead of nestling into the anode, ions react with the silicon and bond with it, a process called “conversion.” That makes it more difficult to peel the ions off without damage, but it can hold way more ions.With anodes (which are the limiting factor on most batteries now) improving, there’s more room for cathode improvement. SILA is big on research into fluorides — it cites metal fluoride-based cathodes (like iron fluoride or copper fluoride) and sulfur-based cathodes — which also operate via conversion rather than intercalation and can also store more ions. It writes:It’s plausible that with a conversion cathode and an engineered low-swell silicon anode, the cycle life of Li-ion can be extended all the way to 10,000 full cycles while also having the highest energy density in the market — thus breaking the [power vs. energy] compromise.SILA believes it’s only that combination — a conversion-based anode and a conversion-based cathode — that can bring LIB prices down to “~$50/kWh by 2030 and ~$30/kWh by 2040.” If it happened, that would be absolutely wild and almost certainly crush all competitors.Lithium ferro phosphate (LFP)LFPs, which use a lithium-iron compound as cathode, were among the first LIBs to commercialize. They are already standard in China, used in its ubiquitous scooters and small EVs. “The big Chinese battery makers — BYD and CATL and Lishen — each one of those is larger by itself than any other battery company that's not in China,” says Lou Schick, director of investments at Clean Energy Ventures, “and they have been making lithium iron phosphate cells for 10 years.”A few years ago, it looked like LFPs were going to be displaced by NMCs and NCAs, but lately they’ve made a comeback and now have a decent case that they could take the lead in the EV and stationary storage markets. They have already captured almost half of the Chinese EV market.LFPs use lithium ferrophosphate (LiFePO4) as the cathode, replacing nickel, manganese, and/or aluminum. The advantages relative to nickel-based competitors:* cheaper on a materials basis (though not yet on $/kWh);* higher cycle life (Matt Roberts, previously executive director of the Energy Storage Association, now working at battery company Simpliphi, says his company’s LFP batteries are warrantied for 10,000 cycles, compared to 2,500 to 5,000 for cobalt batteries.);* higher power density;* high safety and low toxicity (“They're almost literally bulletproof, in that they can't catch fire,” says Schick.);* replaces problematic and/or rare metals with iron, which is safe and abundant.In exchange for these advantages, LFPs offer lower energy density (there are fewer spaces for ions to intercalate). However, because they are so safe, LFPs do not require the same protective packaging as NMCs and NCAs, so they can gain some of that efficiency back at the pack level. Tesla says that, while LFPs have 50 percent of the energy density of their high-nickel competitors, an LFP-based vehicle can still get 75 percent of the range. VW announced last month that, starting in 2023, it would be “employing lithium iron phosphate, or LFP, in entry models; nickel-manganese in volume models; and nickel-rich NCM in high-end models.” Tesla said more or less the same thing at its Battery Day event in 2020. It plans to use LFPs for an upcoming cheap (under $25,000) vehicle, the Model 3, and commercial energy storage.Current LFPs are not going to feature in high-performance vehicles, but most vehicles aren’t that. They are “good enough, essentially, for any kind of commuter car,” Schick says. “I think you're going to see a whole bunch of economy cars that are LFP.” LFP will be used in taxis, ride-share vehicles, and fleet vehicles, along with scooters and rickshaws and motorcycles. It will be the cheap, reliable, everyday option.And if LFPs can make use of silicon anodes, they could potentially nudge up into the over-300-mile range category. LFP in energy storage marketsEnergy density is also less important in the energy-storage market, where price, capacity, and safety rule. LFP’s high cycle life and low costs make them attractive in the grid-storage market. As Julian Spector wrote in February at GTM:In 2015, LFP batteries only served 10 percent of the grid storage market, according to research from Wood Mackenzie. NMC dominated, with more than 70 percent market share. But since then, NMC's market share has trended down while LFP's rose. Analysts predict LFP will become the leading chemistry for grid batteries by 2030, capturing 30 percent of an increasingly diversified market.As for distributed, behind-the-meter storage, in some markets like California and New York City, Tesla home batteries (still NMC) are not allowed inside garages, thanks to the risk of thermal runaway, which can lead to fires. LFPs have passed an extensive regimen of safety tests and will be available everywhere; that gives them a tangible market advantage.Roberts is convinced the safety issue is going to rise in salience, thanks to the repeated recalls from manufacturers like LG Chem. (The latest is going to cost Hyundai a cool $900 million.) “What's your levelized cost of energy?” Roberts asks. “You're out there quoting, ‘I can do $100 a kilowatt-hour for a battery pack.’ If in two years, though, you have to do a billion-dollar recall, when does that get factored into the LCOE?” With sufficient manufacturing scale, the price of any battery approaches the price of its materials, and LFP uses incredibly cheap materials. If it scales sufficiently, it could potentially get cheap enough to dominate the storage market, fighting off other LIBs in the home-storage market and other chemistries and form factors (which we’ll look at in the next post) in the bulk-storage market. “Of all the lithium-ion chemistries, LFP may play the largest role in accelerating the world’s transition to sustainable energy,” says Jordan Giesige, who makes battery explanatory videos under the moniker The Limiting Factor. (They are superb; I cannot recommend them highly enough.)Lithium manganese oxide (LMO) and lithium manganese nickel oxide (LMNO)Manganese is abundant, safe, and stable at a wide variety of temperatures, though its energy density is lower than cobalt or nickel. Because LMOs don’t contain cobalt and avoid the threat of thermal runaway, they are used in medical equipment, as well as power tools, electric bikes, and EVs.“The original Nissan LEAF was a lithium manganese oxide cathode,” says Dan Steingart, a materials scientist and co-director of Columbia University’s Electrochemical Energy Center, “and the Nissan LEAF has never had a battery that that initiated a fire.” The LEAF also didn’t go very far on a charge, though — LMO may have trouble escaping its niche.LMNO (“high-voltage spinel”) batteries try to retain some of the energy density of nickel while replacing cobalt. According to a 2020 study in the Journal of Power Sources, in the search for “novel cathode materials with high energy density, low cost, and improved safety,” LMNO is “one of the most promising candidates yet to be commercialized.” LMNO batteries will need to boost their still-struggling cycle life before they can compete with more-established chemistries.The next three batteries use lithium or lithium compounds as the anode rather than the cathode.Lithium sulfur (Li-S)Li-S burst on the scene to some excitement in the late ‘00s, demonstrating that a cell with lithium as the anode and sulfur as the cathode — two elements with extremely low atomic weight — could double the specific energy of conventional LIBs. Plus sulfur is incredibly cheap.One problem is that sulfur has very low conductivity, so something (usually carbon) has to be added to pull in the ions. More importantly, Li-S batteries degrade quite quickly and have low cycle life. To date, they remain commercially unavailable. (This paper reviews the remaining challenges.)Lithium metal anodesSimple, solid lithium metal makes for a great anode, in that it is highly prone to releasing electrons and ions. Use of lithium metal as an anode actually dates back to the 1970s, preceding LIB development. In a lithium-metal battery, charged lithium ions “plate” on (attach themselves directly to) the metal anode. The problem is that lithium is highly reactive and ions tend to form “dendrites,” or tree-like formations, that reduce energy density and cycle life and increase the chances of a short or fire. It was problems with lithium’s reactivity that originally led to the addition of graphite to the anode, so the ions could intercalate rather than plating. That was the birth of LIBs. But researchers and developers have recently returned to lithium-metal, figuring out new ways to prevent dendrite formation. Losing the graphite on the anode drops weight and up to doubles energy density. To date, lithium metal has typically been paired with a standard NMC cathode. US startup Lavle is building a gigafactory to produce just such batteries, expected to open in 2023. It is aiming first at markets where energy density is prized, like shipping and aviation.Technically, though, lithium-metal is cathode agnostic. It could potentially work to enable rechargeability and better performance from cheaper cathode materials like zinc, aluminum, and sulfur. Based on pure materials costs, “the true least-cost system for a lithium-based, rechargeable battery is lithium metal and a sulfur cathode,” says Purdue University’s Rebecca Ciez.Much of the R&D action, though, is around electrolytes. Lithium-metal batteries with liquid electrolytes are around (and still being researched), but it’s the solid electrolytes generating the most excitement.Solid electrolytes (solid-state)The liquid electrolytes used in most LIBs limit the kinds of electrodes that can be used and the shape of the battery cell; plus, they are often flammable, a safety hazard. Tons of research is underway on solid electrolytes that enable much higher energy density and can’t catch fire. Many researchers expect solid-state batteries to set off a whole new round of innovation. RMI writes, “several solid-state companies are targeting 2024–2025 for initial EV commercial lines, but demonstrations would likely happen before then.” Companies with lithium-metal, solid-state batteries — like Solid Power and QuantumScape — have received huge investments from automakers and investors like Bill Gates. Nonetheless, for all the hype, there is a considerable strain of skepticism about solid-state. The EV company Fisker, after years of big promises, abandoned solid-state entirely earlier this year. “It’s the kind of technology where, when you feel like you’re 90 percent there, you’re almost there,” founder Henrik Fisker told the Verge, “until you realize the last 10 percent is much more difficult than the first 90.”“The cost and safety of current lithium-ion tech is improving so rapidly that a technology that's 10 years away, in [Fisker’s] estimation, is just not worthy of pursuit,” says Roberts. “At the end of the day, energy density is just not critical in a lot of applications.”Schick is blunt: “None of the solid-state lithium batteries are on track to do anything that anybody cares about.”“While there are technical reasons why this technology appears to be the holy grail of batteries,” writes SILA Nanotechnologies, “the reality is that even if the technology works (and that is a big ‘if’ after 40 years of development) it is unlikely to find more than niche opportunities in the market.” (Read Jason Deign on the current solid-state market.)Let’s call this one an important Maybe.Lithium titanium oxide (LTO) LTO batteries have lithium-titanate nanocrystals coating the anode, which increases surface area and allows for many more electrons to be released much faster than graphite. Consequently, they have incredibly high power density (they can release energy quickly) and can recharge faster than any other LIB. They also have high cycle life and high recharging efficiency.They are lower voltage than conventional LIBs and thus have lower energy density, but because of this they are also extremely safe to operate. “The performance characteristics are amazing,” says Roberts, “but it's just crazy expensive.”For now, LTOs are used in some EVs and smaller applications like e-bikes. If they come down in price, they could find other niches where power density is important, like industrial machinery.Lithium-air (Li-air)Out toward the research frontier is Li-air, which uses lithium metal as the anode, a variety of materials as the electrolyte (that’s where research is most intensive), and as the cathode … air. Yes, air. Lithium exchanges electrons and ions with the air, through the electrolyte. Wacky.Because it jettisons the entire weight of the cathode — air is quite light — Li-air has incredibly high specific energy (energy per unit of weight), theoretically as high as the specific energy of gasoline. In practice, only a fraction of that potential has been demonstrated, but even that fraction is about five times the specific energy of conventional LIBs.All sorts of improvements in electrolytes, cycle life, and scalability will be needed before Li-air will become practical, but in terms of 2030 dark horses, this is one to watch.So that’s a review of the lithium-based battery chemistries jockeying for position in a trillion-plus-dollar market. In my next post, I’ll look at a few non-lithium-based chemistries that are hoping to capture some of these niches — zinc and flow and liquid metal, oh my. Get full access to Volts at www.volts.wtf/subscribe

(If you don’t want to read, you can listen. Just click play above.)Greetings! Welcome back to Battery Week here at Volts. In my last post, I went over why lithium-ion batteries (LIBs) are so important to decarbonizing both transportation and the electricity sector. Next week, we’re going to get into the nuts and bolts of different kinds of LIBs, to see how different chemistries offer different kinds of performance and are competing for different market niches.Before that, though, it’s worth the time to do a little review of battery basics. If you’re like me-a-month-ago, you probably have a hazy understanding at best of the structure of batteries and the processes involved in running them.I’m not going to get into any complicated chemistry — believe me, no one wants that — but I thought it would be helpful later, when we get into the competition within battery markets, to have some rudimentary terms and concepts clear in our heads.Batteries 101F’ing batteries, how do they work?As the name suggests, electrochemical batteries store energy via chemical reaction. Discharging the battery involves a chemical reaction that produces electrons; recharging the battery involves a chemical reaction that stores electrons.The basic unit of the electrochemical battery is the cell. In the cell, two electrodes — negative (anode) and positive (cathode) — are separated by an electrolyte. When the anode and cathode are connected in a circuit, two things happen.1. Negatively charged electrons flow from the former to the latter, generating power. The amount of power is determined by two factors: * current, the number of electrons traveling in a given circuit, and* voltage, the force with which the electrons are traveling.Power = current X voltage. It’s like a river: the force exerted by the water will depend on how much there is and how fast it’s moving. You can get the same force with less water if it moves faster, or with slower water if there’s more of it. Similarly, you can get the same power with less current if you have more voltage, and vice versa.2. The anode releases positively charged ions into the electrolyte, to balance the reaction, and the cathode absorbs a commensurate amount. (Some batteries have a thin semi-permeable barrier within the electrolyte to regulate the flow of ions.) Recharging a battery basically involves reversing the reaction, returning the electrons and the ions to the anode.The anode will be a material that gives up electrons easily in chemical reaction with the electrolyte. The cathode will be a material eager to absorb them. The propensity to shed/absorb electrons is known as standard potential, and the difference in standard potential between the anode and cathode will determine the battery’s total electrical potential. The bigger the difference, the more potential.The whole game of battery design and development is to find a combination of anode, cathode, and electrolyte that performs well along a broad set of criteria — holds a lot of energy, releases energy quickly, operates safely, lasts a long time, is cheap, etc. The tragedy of battery development is that there are always trade-offs. High performance on one criterion generally means lower performance on another. Optimize for holding more energy and you limit how quickly energy can be released; optimize for safety and you limit energy density; and so on. Battery development has seen dozens of chemistries come and go, but four have stuck and scaled to mass-market size: lead acid, nickel cadmium (Ni-Cd), nickel metal hydride (NiMH), and lithium-ion (Li-ion).LIBs have hit on a combination of anode, cathode, and electrolyte that performs well enough along several criteria (especially cost) to work for most short-duration applications today. They dominate consumer electronics, electric passenger vehicles, and short-duration grid-scale storage, and are expanding in other markets as well (though lead-acid batteries remain a $45 billion global market). They have gotten very cheap and a large-scale manufacturing capacity has grown up around them.Let’s take a closer look at LIBs.Lithium-ion batteries 101LIBs have been around in commercial form since the early 1990s, though obviously they’ve improved quite a bit since then. Today’s most common and popular LIBs use graphite (carbon) as the anode, a lithium compound as the cathode, and some organic goo as an electrolyte. They boast two key advantages over prior battery chemistries.First, they need very little electrolyte. LIBs are what’s known as “intercalation” batteries, which means the same lithium ions nestled (intercalated) in the structure of the anode transfer to be intercalated in the cathode during discharge. The electrolyte only has to serve as a conduit; it doesn’t have to store many ions. Consequently, the cell doesn’t need much of it. Saving on electrolyte saves space and weight. (Bonus: the process is almost perfectly reversible, which gives LIBs their high cycle life.) Second, LIBs squeeze lots of energy into a small space. Lithium is the lightest metal (at the upper left corner of the periodic table) and extremely energy-dense, so LIB cells can work with electrodes 0.1 millimeters thick. (Compare lead-acid electrodes, which are several millimeters thick.) This also makes LIBs smaller and lighter. Because they are lightweight and high energy density, LIBs got their initial foothold in small electronic devices, phones and laptops and the like. They scaled up quickly to run handheld power tools and lawnmowers and then completely took over electric vehicles. Recently they’ve scaled up further to create home storage batteries and giant stationary battery arrays for grid storage. It’s worth noting that even the biggest LIB installation is just stacks upon stacks of cells, like Legos. LIBs are extremely modular — they can be scaled precisely to need.LIB manufacturingThere are a number of ways of manufacturing LIB cells — button cells, pouch cells, prismatic cells — but the most common for portable and EV applications is the cylindrical cell. Think of it like a jelly roll. A super-thin metal anode is coated with a film (usually graphite). Then a super-thin separator is laid on top. Then a super-thin metal cathode coated with a film (usually some lithium compound) is laid on top of that. Several layers are stacked this way, and then the whole thing is rolled up and packed into a cylinder. Before the cylinder is capped, electrolyte goop is injected to infuse between the layers.Cells are then clustered together into modules, which are in turn clustered together into packs.There’s a whole active area of LIB innovation around cell design. Tesla recently debuted a new, bigger cylindrical cell, the 4680 (46 millimeters wide, 80 mm tall), with improved … everything — energy, range, and power. Tesla is also putting these cells together into packs that form part of the structure of their vehicles, which will reduce overall weight and complexity. I’m not going to get into LIB manufacturing innovation too much, other than to note there’s a lot going on there. The manufacturing techniques that produce LIBs are being continuously refined, a process that is accelerated by scale. According to RMI, “lithium-ion battery suppliers are poised to reach at least 1,330 GWh of combined annual manufacturing capacity by 2023.” According to S&P Global, “global LIB capacity is set to increase 218% between 2020 and 2025.” That’s a lot of scale. The main thing to take from the boom in LIB manufacturing is that any competitor to LIBs will need to take advantage of existing manufacturing processes. “The way these battery factories are building up now,” says Dan Steingart, a materials scientist and co-director of Columbia University’s Electrochemical Energy Center, “they’re so capital-intensive that whatever chemistries come next will be produced and manufactured in such a way that they leverage existing infrastructure if at all possible.”This will be important later; some LIB competitors can slipstream into existing manufacturing and some can’t.For Battery Week, I’m going to focus less on manufacturing (and disposal) and more on the battery chemistries themselves — which ones are dominating and which have a chance of catching on.Li-ion is a family of battery chemistriesLIBs are not a singular thing, but a family. They have in common that they use lithium in either the cathode or anode and exchange charged lithium ions.This leaves quite a bit of room for different chemistries. There are many types of lithium compounds, many choices of anode or cathode materials to pair with them, and many choices of electrolytes. That yields a very large matrix of possible combinations and chemistries, each with its different performance characteristics (and, sigh, acronym). We’re not going to cover all of them, though — even I have my limits. We’ll just hit some of the most-discussed alternatives. The most common LIB chemistries used today are lithium nickel manganese cobalt oxide (NMC) and lithium nickel cobalt aluminum (NCA), which use compounds of those metals as the cathode. Lithium and nickel turn out to be a knockout combo — incredibly light and energy-dense. Nonetheless, there are others. Here’s a list of the LIB chemistries we will at least touch on starting in my next post:* lithium nickel manganese cobalt oxide (NMC cathode)* lithium nickel cobalt aluminum (NCA cathode)* lithium ferro phosphate (LFP cathode)* lithium manganese oxide (LMO cathode) and lithium manganese nickel oxide (LMNO cathode)* lithium sulfur (Li-S, sulfur cathode)* lithium metal (anode) and solid state* lithium titanate (LTO anode)* lithium air (Li-air, lithium anode)Why bother with any of these alternatives? Why not just stick to NMC and NCA? There are two sources of pressure on the industry to diversify. LIBs face pressure to diversify performance The first is performance. Most LIB innovation to date has focused on energy density, for passenger EVs. In some applications, though, like home energy storage or fleet vehicles, energy density matters less than safety and cost. As use cases diversify, so do performance demands. With that in mind, let’s take a quick look at the various metrics used to judge battery performance. RMI uses eight:* energy density (Wh/L): energy per unit of volume, or more prosaically, energy relative to space occupied, sometimes called “volumetric energy density”;* specific energy (Wh/kg): energy per unit of weight, sometimes called “gravimetric energy density”;* power cost ($/kW): cost per unit of power output (to return to our river analogy: cost per unit of force the river is capable of exerting at its peak);* energy cost ($/kWh): cost per unit of energy output (the amount of force exerted by the river over an hour);* cycle life: the number of times a battery can discharge and recharge before it falls below some threshold of capacity (usually set at 80 percent) due to degradation;* fast charge: how fast the battery can charge, i.e., how fast it can accept power;* safety: some batteries, particularly those with cobalt, suffer from “thermal runaway,” which means if one cell goes haywire and heats up, it heats up the next one, and so on in a self-reinforcing cycle that results in fires and battery recalls;* temperature range: the range of temperatures in which a battery can effectively operate. As I said, it’s possible to optimize for one or a small set of these, but doing so inevitably involves trade-offs in others. This graphic from RMI compares some LIB chemistries along all these axes. The dark green lines are current performance and the light green is highest theoretically achievable level:As you can see, different chemistries excel on different metrics and will target different applications.LIBs face pressure to diversify materialsCobalt, used in standard NMC and NCA chemistries, is highly toxic, comes almost entirely from the Democratic Republic of the Congo, and is mined amidst terrible human rights abuses. Lithium and nickel are fairly nasty too, and may run into supply constraints as the market grows (nickel, in particular, is a source of current stress). There’s lots of innovation underway to reduce the social and environmental impacts of materials mining, and increase supply, but, as we will see next week, there are also competing battery chemistries that eschew these problematic materials entirely.Smart manufacturers like Tesla are diversifying their battery lines in anticipation of supply issues, trying to evolve away from cobalt and secure a steady domestic supply of lithium and nickel. (Biden’s infrastructure plan, which aims to kickstart a domestic EV supply chain, could help.)Some battery diversity will happen, the question is how muchYou can find people in the battery field who stress that conventional LIBs have too great a head start for anything else to catch up. In its white paper on the future of LIBs, SILA Nanotechnologies writes:Technologies that claim they will replace Li-ion often grab headlines, but scale limitations make that impractical within a generation. It is for this reason that by 2050, while Li-ion will not constitute all of energy storage, it will be the most dominant chemistry by far, with most everything else relegated to niche applications. Lou Schick, director of investments at Clean Energy Ventures, a venture capital firm that invests in clean technology projects, stressed to me the importance of scale and familiarity:The only selection criteria for any project is, is it bankable? Can I get insurance for it? Is it consumer product? Any insurgent that wants to get to that state and is in a lab right now is 10 years away from being bankable, if they are very successful. So you're never catching up. And it has nothing to do with chemistry or physics.You can find others who believe diversity is inevitable. “It's not like the Lord of the Rings, one ring to rule them all,” says Michael Burz, an engineer who founded and runs battery company EnZinc. “There will be different chemistries for different applications.”Among the analysts more bullish on diversity are those at RMI, who wrote a report in 2019 called “Breakthrough Batteries” that surveyed possible competitors to conventional LIBs. They write:Unlike the market development pathway for solar photovoltaic (PV) technology, battery R&D and manufacturing investment continue to pursue a wide range of chemistries, configurations, and battery types with performance attributes that are better suited to specific use cases.RMI is convinced that other battery chemistries with other performance attributes will begin to find markets and scale up by the mid-2020s. Chloe Holzinger, an energy storage analyst at the research firm IHS Markit, told me that diversity will be a market asset:What we're going to see in the future is increasing diversity in all three of those areas [anode, cathode, and electrolyte]. Automakers will be able to take advantage of this diversity to make their portfolios robust against commodity price spikes and distinguish themselves from other automakers — “we're the only ones that provide this kind of battery.”It’s possible that this disagreement amounts to less than it appears. Even skeptics agree that some competitors might find niches; the main disagreement seems to be over how fast that might happen and how big the niches will be. After all, says Schick, in trillion-dollar markets, “if the market fragments by use case, the individual use cases can be quite enormous.”Conventional LIBs have a huge head start, but the pressure to diversify may offer some hope to innovators both within the LIB family and outside it. In my next post, I’ll get into some of that intra-family competition within LIBs, a space rife with ongoing innovation. Mabel wishes everyone a Happy Spring. Get full access to Volts at www.volts.wtf/subscribe

People of Volts! At long last, Battery Week is here. It is time to get into batteries. Waaay into batteries.Over the next few posts, I’m going to cover how lithium-ion batteries (LIBs) work and the different chemistries that are competing for market share, but I thought I would start off with a post about why I’m doing this — why batteries are important and why it’s worth understanding the variety and competition within the space.Lithium-ion batteries are crucial to decarbonization in two important sectorsWe know that the fastest, cheapest way to decarbonize, especially over the next 10 years, is clean electrification: shifting the grid to carbon-free sources and shifting other sectors and energy services onto the grid. LIBs are accelerating clean electrification in the two biggest-emitting sectors of the US economy, transportation and electricity. (Each is between a quarter and a third of emissions.)First, they are colonizing the EV market and enabling ever-higher performance and range. The global EV market is on the front end of explosive growth:Researchers at Deloitte expect growth to accelerate through 2030:As BloombergNEF analysts show in their “Electric Vehicle Outlook 2030,” it’s not just passenger EVs, either. The fastest growing EV segment will be buses, followed by scooters. The global market for EV batteries alone is expected to hit almost a trillion dollars by 2030. Sustaining that growth is going to require lots and lots of new batteries. The more energy-dense, cheap, and safe LIBs can get, the faster the electrification of transportation will happen.Second, LIBs are being used both for distributed, building-level energy storage and for large, grid-scale storage installations. As the grid shifts from firm, dispatchable sources of energy like coal and gas to variable, weather-dependent sources like sun and wind, it will need more storage to balance things out and stay stable. Batteries can help at the grid level (they can even serve as transmission assets) and they can serve local resilience at the building and community level. Overall, the research firm Wood Mackenzie expects the global storage market to grow at an average of 31 percent a year over the coming decade, reaching 741 gigawatt-hours of cumulative capacity by 2030.The more energy-dense, cheap, and safe LIBs can get, the faster storage will be infused throughout the grid and the more renewable energy the grid will be able to integrate. All together, here’s what the Department of Energy projects for the global energy storage market through 2030:As this graph shows, the vast bulk of the demand for batteries is going to come from transportation, meaning EVs of various kinds. Whatever is used for EVs is probably going to end up getting so cheap, just from scale, that it dominates energy storage as well.There’s one other cool aspect of batteries that gets too little attention. Storing substantial amounts of electricity for cheap is a relatively new thing in human affairs. We are only just now beginning to explore what can be done with it. What’s happened in the relatively short history of lithium-ion batteries is that, as they get cheaper and more powerful, we find new uses for them. Way back in 2015, energy analyst Ramez Naam called this the “energy storage virtuous cycle.” Lithium-ion batteries can do more and more stuffThere’s a reason why, in 2019, the three chemists behind the initial development of lithium-ion technology won the Nobel Prize in chemistry. LIBs boast incredibly high energy density and specific energy, which is to say, they cram lots of oomph into a small, lightweight package, and they are capable of cycling many more times than their predecessors. The first LIBs, commercially introduced in the early 1990s, were expensive, but found a market foothold in small electronic devices — phones, laptops, camcorders — where energy density is at a premium. They have since all but completely taken over the consumer electronics market. As manufacturing scale grew, prices fell and more uses opened up: power tools, lawnmowers, scooters. Scale grew more, prices fell more, and LIBs displaced other chemistries as the top choice for EVs. Especially in recent years, the growth (and anticipated growth) in the EV market has driven an enormous surge of public and private investment to LIBs, with dramatic effects on prices. According to recent research by BNEF, “lithium-ion battery pack prices, which were above $1,100 per kilowatt-hour in 2010, have fallen 89% in real terms to $137/kWh in 2020. By 2023, average prices will be close to $100/kWh.” (It wasn’t that long ago that most experts agreed $100/kWh was an impossible target.)And so the cycle continues. Prices fall and more new uses open up: big trucks, buses, airplanes, data centers, distributed energy storage, and large-scale grid-storage installations. From BNEF:BNEF’s analysis suggests that cheaper batteries can be used in more and more applications. These include energy shifting (moving in time the dispatch of electricity to the grid, often from times of excess solar and wind generation), peaking in the bulk power system (to deal with demand spikes), as well as for customers looking to save on their energy bills by buying electricity at cheap hours and using it later.Experts generally agree that LIBs are going to hit limits, even if it’s just the base price of raw materials, before they become economical for long-duration grid storage. They are being installed for 4-6 hour storage, sometimes 8-hour, and may some day even aspire to 12-hour, but beyond that — the weekly or even seasonal storage a renewables-based grid will need — some other technology or technologies will have to step in. (I’ll likely do a separate post on long-duration storage.)Nonetheless, continued scaling will ensure that LIBs get even cheaper. Some analysts believe that, with foreseeable improvements in LIB chemistry, prices could hit $40 or even $30/kWh in coming decades. We simply don’t know yet what can be done with storage that cheap. To take one example, if energy storage gets cheap enough to become an economically trivial addition to building construction/renovations, it will eventually be ubiquitous at the local level, and the benefits of ubiquitous, networked local energy are … well, hard to predict. We know that it would protect vulnerable populations through blackouts like those in Texas or California over the last year. But it could do much more.Cheap batteries could open up uses we haven’t even envisioned yet. What sorts of urban mobility vehicles, drones, planes, or research outposts could we power? What kinds of ships or trains could we electrify? How could increasingly cheap, ubiquitous storage be coupled with increasingly cheap, ubiquitous solar energy? We don’t know yet. But we’re going to see some cool shit over the next few years. Batteries have the potential to change our ordinary lived experience in myriad ways. It’s worth the time to understand what’s driving their development and where they might go.So here’s the question that is driving Battery Week: are LIBs going to be to energy storage what solar PV panels are to solar electricity?By way of concluding, let me briefly explain what I mean by that.Solar panels got so cheap, so fast, they swamped all competitorsBy “solar panels,” I’m referring to the standard kind — boring old crystalline silicon photovoltaic panels, the kind you see on roofs these days, which I will henceforth just call “PV.” Thanks to key early US research and development, German feed-in tariffs (which subsidized homeowners to put panels on their roofs), and a massive Chinese manufacturing boom, PV has received an enormous, extended push in the last several decades. As the scale has grown, the price has dropped — a whopping 99 percent in the last 40 years.PV got so cheap that it has simply steamrolled all competitors. Back in the ‘00s, even after Obama won and was putting together his stimulus bill, multiple solar technologies were in vigorous development: thin-film solar, concentrated solar power (CSP), building-integrated solar, multi-junction solar, all sorts of exotic stuff … there was even this one cool company called Solyndra that made cylindrical solar PV tubes.There were boosters of all these technologies who could tell you chapter and verse about their advantages over plain old PV. They pulled in a lot of venture capital (and some government loan guarantees) making those pitches. But in the end, they and their funders underestimated PV’s one great advantage: it is dirt cheap and getting cheaper all the time. It’s virtually impossible for anything else to catch up. PV’s domination of the solar market has some energy analysts concerned, thinking that government ought to step in and encourage innovation and tech diversity in this area, in preparation for the day that PV reaches its limits and plateaus. (Varun Sivaram — a researcher at Columbia University’s Center on Global Energy Policy who was recently made senior adviser to presidential climate envoy John Kerry — has a whole book on this subject.) Some researchers disagree and think super-cheap PV will be good enough to get us where we need to go. Either way, it’s clear that without concerted government intervention, PV is going to dominate for the foreseeable future.Is the same true of LIBs? Are they going to dominate in storage markets the way PV has dominated in solar electricity? They already largely own both the EV and storage markets and have a substantial head start in manufacturing capacity and know-how. That head start is only going to get more daunting over the next decade. This is from a brief on the future of LIBs by a company called SILA Nanotechnologies:Before Tesla was founded, Li-ion batteries were almost exclusively used in consumer electronics — mainly laptops and cell phones. At the time of the launch of the Tesla Roadster in 2008, the total global Li-ion manufacturing capacity was approximately 20 GWh per year. By 2030, we expect over 2,000 GWh of annual production capacity based on already announced plans by cell manufacturers.That would be 100X growth in 22 years and a hell of a head of steam for any competitor to take on. “It would be unwise to assume ‘conventional’ LIBs are approaching the end of their era,” concluded a recent comprehensive review in Nature Communications. “[M]any engineering and chemistry approaches are still available to improve their performance.”Nonetheless, LIBs do face restraining pressures, especially materials and safety concerns, which we’ll get into later. They could hit speed bumps. And when you’re talking about trillion-plus-dollar markets, even a niche could be worth billions. Will competitors be able to get a foothold? It’s an enormous prize with more researchers and entrepreneurs chasing it every day. That’s what we’ll be exploring during Battery Week. Next up: a primer on how lithium-ion batteries work! Get full access to Volts at www.volts.wtf/subscribe

(If you’d rather listen than read, just click play above.)President Joe Biden has released the tax plan that is meant to pay for his $2+ trillion infrastructure plan. You can read the New York Times for a full breakdown. The bulk of the revenue will come from a set of changes to corporate tax law, raising the corporate tax rate from 21 to 28 percent, imposing a minimum tax on global profits, and discouraging offshore tax havens.All that stuff is great. I just want to say a few quick things about one of the provisions, which would roll back various fossil fuel subsidies in the tax code. In one sense, this is cool, and a big deal insofar as Democrats can actually do it — they’ve been trying for years, to no end. But in another sense, it reveals that the hue and cry over fossil fuel subsidies in the US is somewhat of a tempest in a teapot, more a political symbol than a real source of revenue or decarbonization.Direct US fossil fuel subsidies aren’t that big in the grand scheme of thingsThe administration projects that closing oil and gas tax loopholes will raise $35 billion over the coming decade.That’s 1.4 percent of Biden’s $2.5 trillion in tax-plan revenue. A Treasury Department report from the administration says: “The main impact would be on oil and gas company profits. Research suggests little impact on gasoline or energy prices for U.S. consumers and little impact on our energy security.” (It cites this study.)There are two reasons the changes would have “little impact on gasoline or energy prices.” The first is that oil is a globally traded commodity, with prices set globally — a US company can’t raise its prices without losing out on the global market. So it eats any extra cost as slightly lower profits.But the second is that $35 billion over 10 years just isn’t that much money. Even in 2020, a truly shitty year for US oil companies, Exxon made revenues of $181 billion. That was down 31.5 percent from $265 billion in 2019. For companies with revenues in the hundreds of billions, experiencing market swings of $85 billion a year, an extra $3.5 billion a year spread out over the whole sector just isn’t going to register much.Last year, Rep. Ilhan Omar (D-Minn.) and Sen. Bernie Sanders (I-Vt.) introduced the “End Polluter Welfare Act,” which takes a much more expansive view of what counts as a fossil fuel subsidy and pulls together $15 billion a year in tax changes. That would be $150 billion over the next 10 years — 6 percent of the revenue Biden’s plan will raise. (This even-more-aggressive study from Oil Change International found $20 billion a year in subsidies, though the oil and gas industry hotly contests some of the choices it made.)The point is, to get to real revenue, you have to bring in indirect fossil fuel subsidies.The big fossil fuel subsidies are the externalitiesWhen Greenpeace says that US fossil fuel companies get $62 billion a year in subsidies, it refers to this study, which examines what it would take to “correct market failures brought about by climate change, adverse health effects from local pollution, and inefficient transportation.”In other words, the study tallies up the oil and gas industry’s externalities, the costs it imposes on society that are not reflected in market prices. (And it doesn’t even include the costs of defending global oil supply, which are substantial.)Whether it is fair or accurate to call these unpaid costs “subsidies” is largely a matter of semantics, or, worse, metaphysics, but it doesn’t really matter. Fossil fuel companies don’t pay the costs; other people do. A 2017 International Monetary Fund study pegged the global value of direct and indirect fossil fuel subsidies at $5.2 trillion — that’s 6.4 percent of global GDP.Of course, making fossil fuel companies pay those costs would involve more than modest tax code tweaks. It would involve a new carbon tax. How much could that raise? A 2017 study by the Treasury Department modeled a carbon tax that starts at $49 per metric ton in 2019 and rises to $70 per metric ton in 2028 (not far out of line with some popular carbon tax proposals). Over the course of that 10 years, the tax would raise $2.2 trillion in revenue — just about enough to fund Biden’s infrastructure plan!It’s a perfect match. It’s notable, then, that no one on either side of the aisle has proposed it, despite an ongoing hunt for revenue. Carbon tax people are always saying it has bipartisan appeal, but in practice, it seems bipartisan in that both parties want nothing to do with it.Anyway, Biden’s run at fossil fuel subsidies (the latest in a long line from Dems) isn’t really about revenue.This story is mostly about political power and social licenseIn every article you read about the portion of Biden’s plan that goes after fossil fuel subsidies, you will see some version of this: “Previous attempts to eliminate subsidies on oil and gas met with stiff industry and congressional opposition.”Despite the fact that $35 billion over 10 years is relative chump change to the oil and gas industry, it fights any attempt to roll back these subsidies like a cornered polecat. It wants to protect its profits, but it also wants to establish that it still has clout in Congress. It has enjoyed these tax benefits for a long, long time, and giving them up would be a signal of its declining influence.It’s good for Democratic presidents to keep thrusting this issue into the debate, if only to put Congress on record. It will probably fall out of this bill too, if the bill passes at all, but it will serve as something of a barometer on the pressure fossil fuel companies can mount, even in their battered state.In the meantime, on this question as on all others, we await the judgment of our emperor and benefactor Joe Manchin, long may He reign. How it started:How it’s going: Get full access to Volts at www.volts.wtf/subscribe

Hey, everybody! President Joe Biden has unveiled his first infrastructure proposal and … hot damn. The eight-year "American Jobs Plan" would spend $2.25 trillion on a huge range of initiatives, from highways to the energy grid, water systems, airports, transit systems, broadband, energy R&D, and — paging a Sen. Joe Manchin — abandoned coal mine clean-up. This is an amazing document. Yes, there’s stuff in it that I would take out (some highway spending) and stuff I would add (more transit spending). Yes, a serious transition to sustainability would probably take closer to $10 trillion. Yes, there’s a very good chance the plan gets cut or compromised on the way to passage, if it passes at all, which is far from certain. Still. As presented by the Biden team, it represents not only an enormous total investment, but some really smart investments, in areas where the positive knock-on effects for the clean energy transition could be enormous. There were some true-blue energy wonks involved in writing this thing.I’ll just quickly go over the parts that are most exciting to me and then mention a couple of benefits that are getting underplayed.TransportationThe plan would put $174 billion toward a plan to “win the EV market,” which is on the verge of enormous growth. Biden wants to create a domestic supply chain for batteries and EVs (something that is virtually nonexistent today) and domestic manufacturing capacity to make the EVs, all of which will create domestic jobs. It would offer point-of-sale rebates to purchasers of domestic-made EVs, “while ensuring that these vehicles are affordable for all families and manufactured by workers with good jobs.” It would offer grants and incentives to state and local governments and private businesses to install EV charging stations, with the goal of 500,000 up and running by 2030.And I love this, though I wish it were much bigger: “Replace 50,000 diesel transit vehicles and electrify at least 20 percent of our yellow school bus fleet through a new Clean Buses for Kids Program at the Environmental Protection Agency, with support from the Department of Energy.” This will put us on “a path to 100 percent clean buses.”I have sung the praises of electric city buses; see Vox’s Kelsey Piper on electric school buses. Not only do they save money over time, but they generate immediate air quality benefits for some of the most vulnerable populations — kids and low-income and POC communities, who bear the brunt of diesel pollution. The benefits wildly outweigh the costs. (On the campaign trail, Bernie Sanders proposed $407 billion just for electric buses, which is more like it.)Finally, oh, by the way: the plan “will utilize the vast tools of federal procurement to electrify the federal fleet, including the United States Postal Service.” Whaaat? As Sarah Kaplan reported in The Washington Post in January:There are some 645,000 vehicles in the federal fleet. They include roughly 200,000 passenger vehicles, 78,517 heavy-duty trucks, 47,369 vans, 847 ambulances and three limousines.That’s a lot of vehicles.As for electrifying the 225,000 Postal Service vehicles, I have written at great length about what a fantastic idea that is. This part of the plan is honestly like a present to me. Thank you, Joe Biden.It’s not all about cars and trucks, though. The plan also has $85 billion for public transit (“to modernize existing transit and help agencies expand their systems to meet rider demand”), which would double existing federal investment in transit, and at least $80 billion for rail (“to address Amtrak’s repair backlog; modernize the high traffic Northeast Corridor; improve existing corridors and connect new city pairs; and enhance grant and loan programs that support passenger and freight rail safety, efficiency, and electrification.”)As for transportation infrastructure, there’s $20 billion for “a new program that will reconnect neighborhoods cut off by historic investments and ensure new projects increase opportunity, advance racial equity and environmental justice, and promote affordable access” and $25 billion “for a dedicated fund to support ambitious projects that have tangible benefits to the regional or national economy but are too large or complex for existing funding programs.”In my dream world I would spend much more on transit and rail, but this is a huge improvement over previous infrastructure bills, even from Democrats. TransmissionReaders of Transmission Month know that long-distance transmission is very much needed for national decarbonization and currently very difficult to build. The big news in the plan is that Sen. Martin Heinrich’s federal transmission investment tax credit (ITC) made it in. The fact sheet doesn’t specify the size of the ITC, but Heinrich’s proposal is 30 percent. The idea is to spur “the buildout of at least 20 gigawatts of high-voltage capacity power lines and mobilize tens of billions in private capital off the sidelines.”And remember my post on using existing rail and road rights-of-way to site long-distance transmission? Get this: “President Biden’s plan will establish a new Grid Deployment Authority at the Department of Energy that allows for better leverage of existing rights-of-way – along roads and railways – and supports creative financing tools to spur additional high priority, high-voltage transmission lines.”Hell yes. InnovationI have also written a great deal about the importance of concerted, well-funded clean-energy innovation policy. The US currently spends about $150 billion a year on R&D, of which about half goes to the Department of Defense and a paltry $8 billion goes to energy research. Biden’s plan calls for $180 billion of research money for the “technologies of the future.”It would spend $50 billion on the National Science Foundation (NSF) to create a technology directorate that would coordinate advanced-tech research across agencies, $30 billion on R&D to spur job creation in rural areas, and $40 billion on upgrading research labs across the country. Half of that lab money would go to “Historically Black Colleges and Universities (HBCUs) and other Minority Serving Institutions, including the creation of a new national lab focused on climate that will be affiliated with an HBCU.”A climate lab in an HBCU is a nice touch. Good stuff.Speaking of climate change, the plan would put $35 billion specifically toward tech research and innovation focused on the climate crisis, in part by creating an ARPA-C (modeled on ARPA-E and, before it, DARPA) “to develop new methods for reducing emissions and building climate resilience.”And the plan contains something for which every innovation scholar and expert has been advocating for years: funding for demonstration projects.In addition to a $5 billion increase in funding for other climate-focused research, his plan will invest $15 billion in demonstration projects for climate R&D priorities, including utility-scale energy storage, carbon capture and storage, hydrogen, advanced nuclear, rare earth element separations, floating offshore wind, biofuel/bioproducts, quantum computing, and electric vehicles, as well as strengthening U.S. technological leadership in these areas in global markets.And there are some other bits scattered throughout, like “ten pioneer facilities that demonstrate carbon capture retrofits for large steel, cement, and chemical production facilities, all while ensuring that overburdened communities are protected from increases in cumulative pollution.”This investment in clean-energy innovation is long, long overdue, and something that every Democrat, including Manchin, at least claims to support. Clean energy standardMidway through one of the bullet points, almost as an aside, we get this:President Biden will establish an Energy Efficiency and Clean Electricity Standard (EECES) aimed at cutting electricity bills and electricity pollution, increasing competition in the market, incentivizing more efficient use of existing infrastructure, and continuing to leverage the carbon pollution-free energy provided by existing sources like nuclear and hydropower.This is rather cryptic given that a CES is a central part of Biden’s climate plan. I’ve heard of clean electricity standards and efficiency standards, but I’ve never heard of an EECES and there’s not much here on how it would work or its targets. (The mention of nuclear and hydropower seems like a signal to lawmakers in, say, the Upper Midwest that they don’t need to be nervous.)It’s good that this made it into the plan, but the lack of detail does cause one to wonder how much faith the administration has that it will survive the coming Manchin Bath. (Listen to my podcast with Dr. Leah Stokes and Sam Ricketts on how to get a CES through reconciliation.)Buildings and distributed energyI have also written on the importance of decarbonizing buildings. (I am old and have written about everything.) Biden’s plan would drop a whopping $213 billion on upgrading buildings.The plan would “produce, preserve, and retrofit more than a million affordable, resilient, accessible, energy efficient, and electrified housing units” and “build and rehabilitate more than 500,000 homes for low- and middle-income homebuyers.”It would also — my heart sings — create a competitive grant program to reward local jurisdictions that take steps to eliminate exclusionary zoning. (Read Sightline’s Dan Bertolet for more on the evils of exclusionary zoning.)The plan has $27 billion for a Clean Energy and Sustainability Accelerator “to mobilize private investment into distributed energy resources; retrofits of residential, commercial and municipal buildings; and clean transportation.”There’s $40 billion to improve public-housing infrastructure. There’s money to upgrade, modernize, and reduce the greenhouse gas emissions of schools ($100 billion), community colleges ($12 billion), child-care facilities ($25 billion), VA hospitals ($18 billion), and federal buildings ($10 billion). All of that work on buildings creates lots and lots of high-skill domestic jobs that can’t be outsourced, while reducing energy bills for consumers.So much moreI’ve only highlighted a handful of the dozens and dozens of provisions in the proposal. It extends the federal clean-energy tax credits by 10 years, aims for 100 percent broadband access, invests in resilience for vulnerable communities and ecosystems, creates hundreds of thousands of union jobs plugging orphan oil and gas wells, and on and on. Much like the Covid recovery bill passed last month, the plan contains dozens of provisions and programs that, were they passed on their own, would count as major milestones. If even a substantial number of them make it through, this will be a historic achievement.Biden’s job plan would have seismic direct effects on the US economy and people, but a couple of its less-discussed second-order effects are worth highlighting.Reducing air pollution produces enormous progressive benefitsFirst, if Biden can kick-start a domestic EV industry the way Obama’s stimulus bill kick-started solar — if he can electrify the federal fleet, get hundreds of thousands of charging stations built, and put the electricity sector on a path to net-zero — he will have indirectly set in motion the greatest and most rapid reduction of US air pollution in generations.As I wrote last year on Vox, all the recent science points in the same direction: air pollution, particularly smog, does much worse damage to health, at much lower exposure, than previously appreciated. The upshot of this new research is that a transition away from fossil fuels to clean energy will pay for itself in proximate health benefits alone, even setting aside reductions in future warming. Similarly, though it will take some professional modeling to determine the exact level of pollution reductions Biden’s plan would produce, there’s a very good chance that it too would more than pay for itself in health benefits. And, again, the impacts of air pollution are not equitably distributed. Low-income and minority communities are more likely to be located along highways or near polluting facilities. Children, the elderly, and those with disabilities are hardest hit. Reducing air pollution, especially from vehicles, is progressive, in both the economic and political senses of the term.Cheap batteries will have spillover effectsSecond, by pushing the shift to EVs and scaling up a domestic supply chain and manufacturing base, Biden’s plan will further accelerate the already vertiginous plunge in battery prices. A recent comprehensive study found that lithium-ion batteries have fallen in price by 97 percent since their commercial introduction in 1991. As co-author Jessika Trancik of MIT put it: “lithium-ion battery technologies have improved in terms of their costs at rates that are comparable to solar energy technology, and specifically photovoltaic modules, which are often held up as the gold standard in clean energy innovation.”Batteries’ movement down the cost curve can be accelerated by public policy, just as happened so many times for solar PV. Biden’s plan would put Americans to work making batteries cheaper. The cheaper batteries get, the more uses they find for themselves: as home energy storage, reliable backup power for data centers, or large-scale grid storage. The more storage is distributed throughout the grid, the more stable the grid is. Cheap storage is good for everyone. It’s difficult to predict all the knock-on effects, but I think it’s going to generate some cool surprises. Biden’s plan faces a long, uncertain roadWhat Biden and the Democrats pulled off with the Covid recovery bill was something of a miracle. They held together and got a huge bill through Congress with remarkably little fuss, which never happens any more. That moment, with its particular sense of urgency and necessity, has passed. Congress will inevitably spend a lot more time on this infrastructure bill. Generally speaking, time is Democrats’ enemy. Every day that passes is a chance for right-wing media to fully polarize the issue and make the negotiations look ugly and contentious to the public. Dems have to go through the motions of negotiating with Republicans, not because there’s any prospect of Republican cooperation (there isn’t), but because Joe Manchin’s political brand-building requires it, and nothing can pass without Manchin. At some point (one hopes) it will become clear to everyone that Republicans are a lost cause and Dems must pass the bill through reconciliation, for which they only need 50 votes. Then the only problem will be getting every single Democratic senator on board. Who knows what that will look like.Pelosi says she wants to pass the bill by July 4, but who knows how firm that deadline will prove. There are many twists and turns and setbacks ahead. The very best-case scenario is that Manchin (perhaps with some group of “moderates”) picks a fight over a particular item — the exact structure of the taxes that will pay for the bill, or one of the spending areas — and theatrically wins it, getting some changes made. Meanwhile … the rest of the enormous bill passes largely unremarked. That’s basically what happened with the Covid recovery bill.If the bill passes at all, it won’t be exactly what Biden has proposed. Nonetheless, no matter what happens, it’s worth celebrating what Biden has done here. Within this expansive infrastructure package is a mini-Green New Deal, with large-scale spending targeted at just the areas energy wonks say could accelerate the transition to clean energy — all with a focus on equity and justice for vulnerable communities on the front lines of that transition.If it passes in anything like its current form, it will be the most significant climate and energy legislation of my lifetime, by a wide margin. I’m going to allow myself a moment of excitement and hope. Don’t worry, I’m sure it will pass. Get full access to Volts at www.volts.wtf/subscribe

(If you don’t want to read the post, click play above and I’ll read it to you.)Hello, beloved readers and listeners! Today I’m going to make an argument that is very important to me: Democrats must pass substantial democracy reform before the 2022 elections. If Dems don’t get this done, the US is in for a long period of political darkness. Democracy in America could very well perish. Climate change will become unsolvable. Every goal progressives seek — taxing the rich, funding infrastructure, fixing immigration, boosting unions, you name it — will move out of reach. It is, I say with some risk of understatement, the most important thing in the world.Let me try to explain why.Biden’s 2020 victory temporarily arrested, but did not stop, the US slide toward minority ruleWhen Biden was elected in November, I felt a conflicting mass of emotions. Most of all, of course, was relief. It is no exaggeration to say that a second Trump term would have meant the end of the American experiment with democracy. But alongside that relief was a persistent sense of dread. The larger context of the 2020 election is an ongoing process whereby America’s mostly white, rural, and suburban conservative minority — which hasn’t won the popular vote in a presidential election since 2004 — is gaining greater and greater structural political advantages each passing year. Republicans are overrepresented in the Senate, overrepresented by the Electoral College, gerrymandered into safe House seats, and busy passing voter suppression bills at the state level. What Dems needed in 2020 was commanding majorities in both houses and a few key state legislatures, enough to stop the next round of GOP gerrymandering and pass substantial democracy reform through Congress.They got majorities, but, far from commanding, they are whisker thin, smaller in the House than in 2018. And Republicans maintained control of all the state governments key to redistricting. That makes Democrats’ job much, much more difficult.Nonetheless, it remains the job. Getting Trump out of office was the first step, but it won’t mean anything in the mid- to long-term if Dems don’t repair democracy. Absent substantial structural reform, the most likely outcome remains the one that Matt Yglesias predicted in 2015: “America’s constitutional democracy is going to collapse.”I would put it this way: Democrats either pass substantial democracy reform (including statehood for DC) through Congress in the next 18 months or they will lose one or both houses in 2022 and remain locked out of congressional majorities for a decade if not longer. Without voting system reform, Dems are screwed in 2022The most likely outcome of the 2022 elections is that Democrats lose their House majority. To keep it, they would have to defy both history and Republican gerrymandering.Historically, midterm elections are a “shellacking” for the president’s party, as Obama (whose party lost 63 House seats in 2010) put it. With only two exceptions — Clinton Democrats in 1998 and Bush Republicans in 2002 — this has held true all the way back to 1934. Even if they defy that historical trend, Democrats won’t be fighting on a level playing field. Because they retained control of the key state legislatures involved in redistricting, Republicans could win a House majority in 2022 purely with new seats created by redistricting, even if they don’t flip a single blue seat red. To buck these trends and keep the House in 2022, Democrats will need not just the historic turnout that elected Biden, but more. It would take something of a miracle. “If we replicate the GOP’s post-9/11, 2002 midterm performance, we have a chance,” political analyst David Shor told New York magazine’s Eric Levitz. “If we replicate the second-best presidential-party midterm from the past 40 years, we lose.”The Senate will be more competitive in 2022: out of 34 races, Republicans are defending 20 seats and Democrats 14. Nine of those races are considered competitive, roughly evenly divided between parties. But it almost doesn’t matter: if Democrats lose the House, legislation of any substance will become impossible. And odds are getting increasingly stacked against Democrats in both houses, so it could be a long-ass time before they have Congress again. Perhaps there’s some path to bipartisan democracy reform? Ha ha, no.Republicans will fight democracy reform to the deathIf either house of Congress goes to Republicans, any kind of positive voting reform becomes impossible. If they get unified control again, they are much more likely to pass national versions of the kind of targeted voter restrictions they are passing at the state level. Democrats will never get a scrap of help from Republicans on democracy reform, only implacable, relentless opposition. Conservatives will fight it with everything they’ve got, for the same reason they fought it during Reconstruction or the Civil Rights era: to the extent voting in the US becomes easier, fairer, and more representative, they lose power. The right has a congenial and enduring Supreme Court majority and a growing network of militias willing to use intimidation and the threat of violence against legislative activity they dislike, as they have in Oregon and Michigan (oh, and the US Capitol). They have shown no hesitation in using either.Dems need to understand that Republicans will escalate the war over voting reform as far as they are able, full stop. It’s existential for them. Passing democracy reform means doing the Manchin danceWith the current dysfunctional and distorted electoral system in place, this could be the last time Democrats hold the presidency and both houses of Congress for a decade or longer. That’s why it’s now or never on democracy reform.Getting there will require a delicate dance. A lot of things have to line up.My hopes for Democrats were dim going into 2021, but thus far Biden has been astonishingly effective. He led with a blitz of executive actions, may get everyone vaccinated by May (!), got most of his cabinet nominations approved, turbo-charged a unionization drive in Alabama, and just got a stimulus bill almost exactly the size he wanted — $1.9 trillion — through Congress. That bill contains state and local aid, extended (tax-free) unemployment benefits, a child allowance that could halve US child poverty, and loads more.It’s a lot of concrete aid to a lot of people in a short period of time (exactly what I advised/hoped). Biden has done all this while maintaining a low personal profile, giving Americans the peace from politics they needed. He remains resolutely boring as a public figure — no provocative tweets, no inserting himself in passing culture-war battles, no unnecessary theatrics. A democracy-reform bill, though, can’t pass through reconciliation with a bare majority the way the Covid relief bill did. To pass it, Democrats will need to either scrap, reform, or otherwise bypass the filibuster. The major figure in that drama is West Virginia Sen. Joe Manchin, who has also, I must begrudgingly admit, outperformed my expectations thus far. He kicked up a fuss around the stimulus bill — a fuss that sounds like it was almost entirely about personal pique — but ultimately he signed on without fundamental changes. More importantly, after saying nothing but harshly negative things about filibuster reform for months, Manchin threw a curveball last Sunday, when he expressed openness, not to killing the filibuster, but reforming it. “If you want to make [filibustering] a little bit more painful — make them stand there and talk — I’m willing to look at any way we can,” he told Meet the Press host Chuck Todd.That’s only one small step toward filibuster reform — many problems and challenges remain — but it’s an important one. Let’s say you wanted to interpret Manchin’s actions charitably. Perhaps he’s doing a dance, making loud noises about moderation and blocking Democrats and working across the aisle in order to play to his conservative constituents in West Virginia, while ultimately running cover for Biden’s extraordinarily ambitious agenda. Voters, especially Democratic voters, love the optics of negotiation and compromise. Republicans have been incredibly effective at denying them those optics by refusing to compromise — it’s a way to ensure the Democratic agenda fails even as Democrats take the blame for not trying hard enough to be bipartisan.In a sense, fighting and negotiating with conservative Dems like Manchin and Arizona Sen. Kyrsten Sinema provides voters (and political journalists) some of those optics, making it look like Biden has to shepherd his priorities past the watchful eye of skeptical moderates. It gives the public more confidence in the resulting legislation. (The Covid relief bill is enormously popular.)Perhaps Manchin knows all that and is supplying those optics on purpose. Perhaps he’s accumulating “moderate” credibility that he plans to spend on filibuster reform when the time is right. I still don’t quite believe that — I’m suspicious of 12-dimensional-chess explanations in politics — but let’s just say there’s been no disconfirming evidence yet. The theory still fits the facts.Manchin is now saying that he doesn’t want to use reconciliation for the big upcoming infrastructure bill. Over on Axios:Asked if he believes it's possible to get 10 Republicans on the infrastructure package, which could yield the 60 votes needed under normal Senate rules, Manchin said: "I sure do."Again, there’s no way to know if he actually believes this or if he’s just setting himself up to look like he tried, but … it’s definitely wrong. There is no world in which 10 Republican senators vote for a major Democratic bill, infrastructure or otherwise. The question is what Manchin will do when Republican support for Biden’s “Build Back Better” agenda doesn’t materialize. Is there some demonstration of Republican obstinance that will drive Manchin to filibuster reform? If so, which bill might prompt it?Every Democratic constituency, if it gets wind of the possibility of filibuster reform — or even one-time exemptions from the filibuster — will want its issue to be the test case. Key unions are even now calling for filibuster reform in order for the Senate to pass the Protecting the Right to Organize (PRO) Act that the House just passed. The filibuster must fall for a democracy reform billBut if the filibuster is to fall — or waver, or reform — it must do so in service of the bill passed by the House earlier this month: HR1, which would implement nationwide automatic voter registration, mandate that nonpartisan commissions handle all redistricting, mandate early voting and no-excuses absentee ballots, institute campaign finance and ethics reforms, and restore felon voting rights, among other things. Yes, it would help Democrats electorally. According to Shor, comprehensive election reform would raise Dems’ chances of keeping the House in 2022 threefold.But it would help Democrats because it would allow more people to vote, in a fairer and more equitable way. No Democrat should be apologetic about backing it. I hope that wiser heads in the Democratic congressional caucus will be able to convince their colleagues, most notably Manchin and other Senate nostalgists, that democracy reform must get a vote. Even if Republicans want to filibuster it, the filibuster has to end at some point; debate must come to a close and there must be a real, old-fashioned, majority-wins vote. Democracy is too important to let arcane Senate procedure stand in the way. There are other things Democrats should do on democracy reform as well, including statehood for DC and Puerto Rico (if the people of PR want it) and expanding the Supreme Court, but HR1 is the core.“Basically, we have this small window right now to pass redistricting reform and create states,” Shor told Levitz. “And if we don’t use this window, we will almost certainly lose control of the federal government and not be in a position to pass laws again potentially for a decade.”Let’s not forget that Republicans, led by the president, tried to overturn the results of the 2020 presidential election. They were prevented from doing so by a few key state Republican officials and judges with integrity. Democrats should think about what will happen in the next presidential election, with the House in Republican hands and state parties having purged all their non-Trump loyalists. There’s no reason to think they won’t try to cheat again and their odds are likely to be improved. As they say over on Vote Save America: “HR1 or We’re Fucked.” It’s a narrow path, with dangers on all sides, and it will take a great deal of trust, cooperation, and coordination among Democrats to stay on it. But if democracy reform doesn’t happen, the US will be gridlocked, unable to address any of its problems with legislation, trapped in a self-reinforcing anti-democratic cycle through which an increasingly nationalistic minority exercises control over a growing, younger, more diverse majority. That can not end well. I am not particularly hopeful that Dems can, after passing this giant relief bill, hold on to their unity to a) pass a second giant reconciliation bill devoted to “building back better,” then b) push HR1 to the Senate floor and respond to the inevitable filibuster by c) convincing Manchin and other Senate holdouts to support filibuster reform, d) actually passing filibuster reform, and then e) passing HR1 into law. Oh, and then f) making DC a state.But I wasn’t particularly hopeful about Biden from the very beginning of his presidential campaign, and at every juncture, he’s done better than I expected. It’s the same since he took office. The aura of low-drama competence he and his team have maintained so far is pretty close to my best-case scenario for a Biden administration.So perhaps they know what they’re doing and will go to the mat for democracy reform when the time comes. Perhaps they can pull recalcitrant senators along with them. I suppose they’ve earned a little hope. Get full access to Volts at www.volts.wtf/subscribe

Hello, People of Volts! Today I’ve got a special treat for you: a podcast with Jesse Jenkins, energy modeler and assistant professor at Princeton.Those of you on #EnergyTwitter already know Jesse. He’s been doing this as long as I have, working his way up from take-haver to think tanker to graduate researcher at MIT to Princeton prof. Along the way he’s developed a reputation not only as one of the sharpest, most empirically informed energy analysts in the country, but as a scrupulously nice guy, always willing to share what he knows and engage in good faith with questions and arguments. As a journalist, I’ve found him indispensable.So it was a real treat to sit with Jesse for an in-depth conversation on energy system modeling. What exactly is it? How does it work? What does it tell us about the kinds of energy technologies we will need to decarbonize, and their relative scale? How do politicians use — and misuse — models?We get into all of it (as you will hear, I kept Jesse talking so long that I started worrying I might be violating the Geneva Conventions). I hope you enjoy it as much as I did. Here are a few links either mentioned in, or relevant to, the discussion:* A three-part series on the “rebound effect,” whereby energy efficiency reduces the price of a service, which then increases demand for the service, which then wipes out some of the energy and environmental gains of the efficiency. I wrote it in 2012 for Grist.* Jesse’s old blog Watthead, with posts going all the way back to 2005.* A 2015 post of mine about how the International Energy Agency (IEA) consistently overestimates the cost of renewable energy.* The Princeton University Net-Zero America project, an effort to model a variety of pathways to deep decarbonization in the US. * A presentation on the Net-Zero project with Jesse and Princeton’s Eric Larson.Question for the type of folks who read to the bottom: would you be interested in a written transcription of this episode? It would be some work, but if enough people want it I’d be up for doing it, perhaps as a bonus for community members. Let me know in comments or at [email protected] for reading. If you value work like this, please consider becoming a paid subscriber. Get full access to Volts at www.volts.wtf/subscribe

Hello there, Voltron! It’s been an interesting week, hasn’t it? A guy writes a tediously long and wonky series on energy transmission and, next thing you know, transmission grids are dominating the news. By now, the story of what happened in Texas last week is familiar: an extraordinary cold snap simultaneously a) raised demand on the grid to well higher than the grid operator’s worst-case winter projections, and b) knocked out more than 30 gigawatts worth of energy generators. Supply and demand must be kept in perfect balance on a self-contained grid like Texas’, so when demand spiked and supply plunged, something had to give — thus the not-so-rolling blackouts.Most of that lost generation was natural gas and coal. Freezing afflicted not only the water used in power plants but the mining, distribution, and storage of fossil fuels. And, yes, some wind turbines froze, though wind actually performed better than the modest expectations set by ERCOT, Texas’ grid operator.I’m not going to go through the story in detail. I just want to talk a bit about what it means and what we can learn from it. To learn more about what happened, those affected, and the role Texas’s grid and regulations played in events, I recommend reading the following:* The Houston Chronicle had a great story on the events as they unfolded and is, in general, all over it. * In The New Republic, Kate Aronoff has a great overview, with crucial historical context for why the Texas grid is isolated and why it has an energy-only power market.* In the Atlantic, Rob Meyer has great coverage of the Texas planning failures. * The team at ProPublica has a piece on how Texas regulators “have repeatedly ignored, dismissed or watered down efforts to address weaknesses in the state’s sprawling electric grid.”* In the Los Angeles Times, Sammy Roth has another great wrap-up, with a focus on grid vulnerability.* In the New York Times, a team of journalists pulls together a great backgrounder on Texas’s unique power market structure and grid independence. * In the New York Times, Princeton energy analyst Jesse Jenkins has a piece on the crucial failure of Texas utilities to future-proof their assets. * In the Wall Street Journal, Katherine Blunt and Russell Gold have a story on the implications of the disaster for the energy-only market.* In Utility Dive, Alex Gilbert and Morgan Bazilian write on what happened and what it means for Texas grid regulation.* The New York Times’ Brad Plumer explains what climate impacts will mean for the nation’s power grids.* At Gizmodo, Molly Taft reports on how much the oil and gas industry is paying Republicans to lie about what happened.* And here’s the Wall Street Journal editorial board lying about what happened.Any handful of those stories (save the last) will fill you in on what happened and why. Now let’s talk about what we can learn from it.It was going to be bad in Texas regardlessOne thing worth emphasizing up front is that Texas just faced an extremely unusual event. It got much colder, much faster, and dumped more snow and ice, for longer, and took out more energy infrastructure than even the grimmest forecasts predicted. Yes, the state has had cold snaps before — including in 2011 and 2014, producing a set of recommendations and guidelines that state regulators made voluntary and state utilities largely ignored — but this was extreme even in context. We’re going to touch on better planning, helpful technologies, and reformed regulatory structures, but the grim truth is that there is probably no alternative set of planners or regulations that would have adequately prepared for what took place last week. They certainly could have done better, but this event was fated to be rough.If we’re going to start seriously preparing the electricity system for long-tail, low-probability events — the kind climate change is making more likely — it will be a new thing, not something that’s been mastered by any current entity or regulatory body.Small picture: Texas electricity and natural gas systems need to be weatherized The Texas mess is being characterized as a grid crisis, but it was actually a generation crisis. Two-thirds of the state’s power comes from natural gas, and a) natural gas wells and pipelines froze (cutting normal production by about 20 percent), b) commercial and residential heating got priority access to natural gas, per state policy, and c) natural gas power plants froze. [Clarification: national natural gas production fell by 20 percent; Texas production fell by 50 percent.]Some coal plants and wind turbines also froze up, and one of the state’s nuclear plants went offline for unrelated reasons, but the bulk of the 30+ gigawatts of energy generation that went offline was natural gas power plants (many were also down for scheduled winter maintenance).Natural gas production and distribution falls under the purview of the Railroad Commission of Texas, so it is the RRC that will need to update regulations to make sure this doesn’t happen again on the production side. Given the RRC, that seems … unlikely.As for power plants, after the 2011 rolling blackouts, Texas should have required all generators to weatherize. It’s perfectly possible for natural gas plants and wind turbines to operate in the cold — there are wind farms in the Arctic. But the weatherization recommendations released in the wake of the blackouts were made voluntary and very few generators followed them.Some have argued that this failure to prepare can be laid at the feet of Texas’ energy-only market — the only such market in the US.In other restructured areas (like PJM in the Mid-Atlantic), alongside energy markets there are capacity markets, through which generators can get paid to maintain generation capacity in reserve, in the name of reliability. Texas has no capacity market. The incentive to maintain reserve capacity is supposed to come from the fact that the price of energy is allowed to swing with supply and demand. In times of high demand and/or constrained supply, prices rise, sometimes to many multiples of their normal level. Generating energy during those times can be incredibly lucrative. That’s supposed to induce generators to set aside (and weatherize) some capacity, to take advantage of those rare moments. It’s not a “free” market — no electricity market is — but it is more lightly regulated than its regional neighbors.For the past 10 years, the Texas grid has generally maintained lower reserves than, say, PJM, but it has performed quite well, despite persistent predictions to the contrary. During that time, Texas ratepayers saved quite a bit of money with their lean system. It’s not clear that if Texas had a capacity market, it would have avoided what happened last week. If a generator is set aside as reserve but it freezes, it doesn’t help. Capacity markets could impose regulations or mandates requiring generators to weatherize, but then again, so could regulators in an energy-only market. It is perfectly within the power of the Texas Public Utility Commission (PUC) to require weatherization. It just didn’t.Any regulatory system is going to need conscientious regulators and good planning. The larger lesson of the cold snap is that Texas, like the rest of the country, needs to plan its grid around resilience and redundancy rather than optimization, market or otherwise.Big picture: the Texas grid needs resilience in three directionsThe basic climate forecast for Texas is that it’s going to get warmer on average, but there’s a decent chance these freak cold snaps will get more frequent and nastier. (Like all climate science trying to pin down temporally and geographically narrow effects, this is provisional and there is disagreement within the science community.)That is a brutally wide range of conditions for which to plan and prepare. And the same basic problem will face grids in every region of the country. Climate change means a less predictable, less stable set of futures. Texas needs to work toward resilience at three levels.Improving the existing energy systemEven assuming it eventually wants to, or is forced to, it will take Texas a while to decarbonize its grid, working its way free of natural gas. In the meantime, it needs to take steps to ensure the security of supply, including weatherproofing major wells and pipelines and bulking up reserves.Clearly all power plants need to be weatherproofed, something that falls entirely within the jurisdiction of the Texas PUC. The Texas grid needs to be better and more finely segmented, so power outages can be more targeted, rather than akin to a lottery (homeowners who happened to be on a circuit with a hospital retained power). And ERCOT, like all transmission grid operators, could investigate the many ways of increasing the capacity and performance of existing transmission lines (see: transmission month). Improving local resilienceOne thing this crisis highlighted is the desperate need for demand-side resources on the Texas grid (measures the PUC and utilities have traditionally resisted). The state is way behind on “demand response,” whereby large groups of customers can be coordinated to reduce demand at times of grid stress. (FERC recently gave demand response access to capacity markets in areas under its jurisdiction, a decision the Supreme Court backed.)Perhaps the most basic step would be to better weatherize and insulate Texas’ homes and buildings, so they don’t require as much energy to heat and cool and they don’t lose heat as fast if the power goes out. Solar panels wouldn’t do much good in a snowstorm, but other distributed energy resources like batteries and electric vehicles can provide emergency power. At the community level, larger battery or other storage installations (perhaps fuel cells or flow batteries) located within distribution systems could help run community resilience centers, where at least people could congregate to stay warm.And microgrids that could island off from the larger grid and run on stored emergency power in the event of a blackout would have helped many Texans through the worst of the cold. I recommended the same set of local resilience and distributed energy solutions for California — which has had its own grid woes, despite not having an energy-only market — in a much more detailed piece, if you want to dig in.Improving interconnectionTexas, notoriously, runs its own grid, an island between the Western and Eastern Interconnections.There’s a long history behind why this is so (read Aronoff’s piece, and also this), but the gist is that, by not transporting electricity across state lines, the Texas electricity system escapes federal jurisdiction, in the form of the Federal Energy Regulatory Commission (FERC). Texas has long been, and remains, ornery about federal authority. Because its grid is an island, Texas could not import power from, say, nearby Southeast states, where conditions were somewhat better. It could only cut power to customers.(Notably, El Paso — which for quirky historical reasons isn’t on the ERCOT grid, but rather on the larger Western Interconnection — survived the storm just fine, because it could import power from neighboring states.)It’s difficult to envision Texas allowing this arrangement to change. A transmission developer would have to propose an interstate line and ERCOT would have to approve it, at which point FERC could reasonably assert authority. But Texas has fought off such attempts in the past and shows little appetite, even in the face of this crisis, for submitting to the feds. It might bring the dread Green New Deal to the state!A few years back, a project called Tres Amigas proposed to connect the three US interconnections with HVDC lines. Even though it argued that it wouldn’t trigger federal jurisdiction over Texas, the project ended up dying.Nonetheless, it’s at least worth noting that it would be to Texas’ benefit to build HVDC lines to the other interconnections. Among other things, it could import power when 30 GW of generation goes offline. Building a few HVDC connections would probably be cheaper in the long run than trying to up-armor the state’s entire natural gas infrastructure and all its wind turbines against once-a-decade cold conditions. That’s the beauty of a national transmission grid: no region has to prepare for every conceivable weather pattern. When extreme or unusual conditions strike, any region can draw power from elsewhere in the country. All things being equal, interconnection boosts resilience and reduces prices. Perhaps ERCOT and FERC could work out some sort of deal, whereby the feds promise not to impose a capacity market or other dramatic market changes on the state as long as it meets basic North American Electric Reliability Organization (NERC) reliability standards and takes steps to interconnect with the rest of the country. Everybody wins. Resilience costs moneyAll the recommendations for Texas above apply equally to every state and regional grid. They all need to quit planning based on past conditions and instead plan for a future of wider variation, less predictability, and more frequent extremes. That calls for resilience: improving the performance of existing infrastructure, improving local resilience through efficiency, weatherization, and distributed energy resources, and improving interconnection with neighbors through HVDC lines. All of that costs money. Texas has been demonstrating for a decade that it’s possible to operate with slimmer reserves, closer to a just-in-time delivery model, and save quite a bit of money for ratepayers. It works pretty well most of the time, except for once a decade or so, when it catastrophically fails.In the wake of such failures, with the human costs evident, it’s easy to blame regulators and demand more resilience. But imagine if, five years ago, Texas legislators and regulators had approached the Texas public and proposed to substantially raise its electricity rates in order to weatherproof its electricity system against once-a-decade (or in this case, maybe once-a-century) conditions. It would not have been popular.It’s just difficult to spend money wisely, with an eye on long-term resilience. The short-term incentives align against it — not just the market incentives, but the political incentives. It’s difficult for Texas, it’s difficult for California, it’s difficult everywhere.And it’s especially difficult in the US thanks to the fundamental misalignment between our current social and environmental goals — lower carbon, better performance and efficiency, increased resilience and security — and the regulatory incentive structure within which US power utilities operate. They make money by investing in capital projects. They don’t want to do more with less; they make money by doing more with more.The US utility regime is designed for expansion, for building out electricity infrastructure to a country without it. Now that the electricity system is built out, now that it needs to be ruggedized and fine-tuned, now that local distribution systems need more autonomy and intelligence, that regime is no longer serving us. We end up, again and again, working against utilities, trying to kludge together artificial incentive structures to persuade them to do stuff they simply aren’t designed to do.Getting to resilience and national interconnection by fighting through 50 public utility commissions is going to take forever. What’s needed are some federal performance standards and a large-scale program of public investment into electricity infrastructure. Congress needs to step up and act like climate change is a national emergency.Texas may lose some of its treasured autonomy in the process, but it will gain a more effective and resilient electricity system. Get full access to Volts at www.volts.wtf/subscribe

Greetings, People of Volts! We have come at last to the end of Transmission Month, née Week. It’s been quite a journey.Below are links to and summaries of all the transmission posts. Above is a mega-podcast — all the posts, read by me, strung together, for when you have a couple of hours free. * The subscriber-only discussion post that started everything. Thanks for all the ideas!* Why we need more big power linesAn explanation for why the US needs more big, long-distance power lines to decarbonize, relieve grid congestion, and reduce the cost of power. * How to start building more big power linesBuilding new power lines in the US is absurdly difficult, a kaleidoscope of dysfunction from planning to financing to permitting to siting. Local resistance ends up killing anything ambitious. The federal government needs to step in.* Burying power lines next to rail & roads to make a national transmission gridOne way to avoid siting hassles and local battles is to bury new transmission lines alongside existing rail and road infrastructure. One big line doing this, connecting Iowa wind to the Chicago area, is underway now. * How to make the existing grid work betterA set of “grid-enhancing technologies” stand ready to increase the capacity and improve the performance of the existing transmission grid, from “dynamic line ratings” to “topology optimization.” Utilities just need incentives to install them.* Two more ideas to quickly boost the transmission gridA couple of final proposals to improve existing transmission. One is using energy storage to supplement transmission; the other is replacing existing AC lines with HVDC lines.* Volts podcast: the challenges of building transmission in the US, and how to overcome them, with Liza ReedA discussion with clean-energy researcher about the obstacles facing long-distances transmission lines and some policies that might help clear them away. If you value this kind of deep-dive explanatory journalism, please consider becoming a paid Volts subscriber. I don’t have any advertisers or sponsors; the only way I can do this is with your support. Thanks for reading and listening. Get full access to Volts at www.volts.wtf/subscribe

Greetings, faithful Volts readers! Welcome back to the Transmission Week that never ends. The news these last few days has been filled with talk about electricity grids. Texas is suffering from an unprecedented cold snap that has left more than four million people without power for days. It’s a terrible situation. There’s a lot to say about it, what can and can’t be learned, and perhaps I’ll get to it next week.But you didn’t sign up for a breaking-news email, you signed up for Volts! So today brings what I believe what I believe will be my last big transmission post, though I may do a wrap-up after this. Thank you for traveling with me on this longer-than-expected journey.Today, we’re going to look at a couple of final ideas to make the transmission grid work better, short of building new lines — a remainder bin of grid-enhancing technologies, if you will. Idea #1: Using energy storage as a transmission assetAt least since the Energy Policy Act of 2005, the US government has acknowledged that energy storage technologies can be used to ease grid congestion and increase the reliability and flexibility of energy transmission. In recent years, there has been increasing interest in “storage as a transmission asset” (SATA), which refers to energy storage installations that are treated as transmission assets — meaning utilities can “rate base” them and receive a guaranteed rate of return plus any tariffs or incentives for transmission assets. Basically, it means allowing some storage to be treated — legally, financially, and operationally — like a piece of the transmission system.SATA projects — sometimes known as “virtual power lines” — offer a range of benefits to regional energy grids. When a line is congested, it can offload some power to storage. At times of lower congestion, stored power can be injected to maintain high line utilization. Storage can thus relieve congestion and make the grid more reliable. It is much cheaper and quicker to deploy than new transmission, its footprint is much smaller, and it faces a much less onerous regulatory process. It is extremely modular and scalable, which means it can start small and be scaled up precisely to need, and even relocated as grid needs change.Congestion on a power line often causes “inefficient dispatch,” meaning grid operators must ask generators on one side of the line to curtail their output and generators on the other side of the line to ramp theirs up, even if that isn’t the most cost-effective option. Storage on either side of the line can help reduce inefficient dispatch.Another key service storage can provide is to free up unused line capacity. A grid capacity standard called “N-1” holds that the grid must maintain safe operation if a “contingency event” takes out one of the lines. This means all lines must maintain some reserve capacity to absorb energy in the event of an N-1 situation. But storage can serve that purpose — rapidly injecting energy into, or absorbing energy from, the grid in the case of a contingency event — even better than power lines. Adding SATA projects can free up some of that reserve line capacity to carry more power. As with most things transmission, Europe is way ahead of the US on this. Most notably, Germany is developing 1,300 MW worth of SATA in a project known as Netzbooster (grid booster) to free up line capacity otherwise reserved for an N-1 contingency. (Germany has notorious congestion between the wind-heavy north and load centers in the south.) The US has nothing at the GW scale like that, but a few RTOs are moving forward. In August 2020, FERC approved MISO’s proposal for the rules and processes by which it would integrate storage into its planning and project selection.One twist: FERC has indicated that it is “permissible as a matter of policy” in the US for a storage project to be “dual use,” to serve as a transmission asset and receive fixed returns and simultaneously to participate in wholesale energy markets and receive market returns.This move has drawn some criticism, since it seems to blur the canonical separation between energy market participants and the “wires companies” that are supposed to offer them non-discriminatory access to the grid. If a wires company owns a storage asset that is drawing market returns, it has every reason to give that asset privileged grid access.FERC has said dual use is subject to the following four principles:* must be cost-competitive with transmission,* must avoid double recovery for providing the same service,* cannot suppress market bids, and* cannot jeopardize ISO/RTO independence.It’s not entirely clear how dual use storage could, in practice, avoid bumping up against those principles. So far as I know, none of the big RTOs/ISOs has yet hashed out exactly how to make the dual-use thing work. (Here’s an issue paper in which California ISO wrestles with the problem.)There are reasons to remain skeptical of SATA projects. Batteries are still relatively expensive compared to other types of assets. “Many areas of congestion are better served by a new power plant, fuel cell, or demand response asset than a big single-purpose battery,” says Cody Hill, who analyzes and deploys storage projects for LS Power. The California ISO has been skeptical too. It reported in 2018: “Over the past several years, the ISO has studied 27 battery storage proposals and one pumped hydro storage proposal as potential transmission assets. To date only two proposals have resulted in storage projects moving forward, both in the most recent 2017-2018 Transmission Plan.”But utilities are allowed to rate-base SATA projects — receive a guaranteed rate of return on them — and they love rate-basing stuff, whether it’s cost-effective or not. They make money by spending money. (See: Texas utility Oncor’s $5.2 billion SATA proposal, which was never approved. I wonder if grid regulators regret that in light of current news!)“A company that gets a SATA project approved gets a guaranteed profit on every dollar spent,” says Hill, “so utilities have an obvious incentive to get lots of these projects approved and put into the rate base, and not much of an incentive to keep the costs down.”Hill warns that utilities are working in regulatory proceedings “to guarantee that they will have a monopoly on new SATA projects going forward” — sheltering them from competition under FERC Order 1000, the same way they’ve been sheltering transmission lines from competition (see this post for more on that). “Now that storage is getting cheap enough to pencil in more locations,” Hill says, “this would be a terrible outcome for storage developers and utility customers alike.”Hopefully FERC will take steps to implement performance-based incentives for utilities and force true competitive bidding in both transmission and SATA, allowing merchant projects to compete on a level playing field. Here’s what the International Renewable Energy Agency (IRENA) says is needed (quoting its report):* Clear rules on the ownership and operation of the Virtual Power Line (VPL).* Compensation structures that reflect the costs of the VPL.* Regulations enabling a multi-service business case, so that the social welfare benefits provided by the ESS is maximised.* Regulations that enable network operators to consider battery storage systems in network planning, together with conventional investments in network infrastructure.The Energy Storage Association has laid out a set of positions and policy recommendations that get into more policy weeds, explaining how FERC could meet those conditions. In the meantime, a 2020 study found that, in a system with high renewable energy penetration, “storage value originates primarily from deferring investments in generation capacity (VRE, natural gas) and transmission.” SATA can do that — make the existing transmission system work better, thus cutting down the need for new lines.Anyway: storage as transmission! It’s all part of the process of making transmission grids more networked, dispatchable, and intelligent.Idea #2: Converting AC lines to HVDC linesFinally, here at the very end, let’s quickly look at a proposal that I probably should have put very first, since it may be the quickest and easiest way to boost transmission grid performance.Here’s the idea: existing AC (alternating current) lines have already fought all the siting battles. The land has already been claimed. In some cases, it is possible to convert AC lines to HVDC (high-voltage direct currect) lines. It turns out the actual wire used is the same — it just needs to be reconfigured. “If you are using an existing corridor, you can use the existing lines and just change the bundles,” says Dr. Liza Reed, research manager for low carbon technology policy at the Niskanen Center. “So if you have three phases of four lines each, you've got 12 lines, and you can turn that into six lines on either side of the DC bipole.”In some cases that will mean slightly extending the height of the tower.But the costliest part is replacing AC substations with converters to shift the AC power to DC and vice versa (and in some cases, boosting the capacity of nearby substations to handle the additional power). Ideally, the new converters will be Voltage Source Converters (VSCs) using solid-state electronics. (This this post for more on VSCs, which Reed thinks are close to being the default choice for HVDC developers.)Even with that cost, converting lines “is surprisingly cost-effective, even over relatively short distances, and, in some cases, may be the only way to achieve dramatic increases in the capacity of existing corridors.” That’s the conclusion of a 2019 study on which Reed — who did her PhD dissertation on converting lines at Carnegie Mellon — was the lead author. In another study, Reed and colleagues looked at five options for expanding transmission capacity: reconductoring (replacing conductors) to increase current, increasing voltage, installing a FACTS (see previous post), converting to HVDC, and building a new line.“In the normal course of operations, utilities have to replace lines as they age anyway,” Reed told me. “Replacing lines with high-temperature low-sag options can increase capacity quickly and at low cost compared to other solutions. The capacity increase is limited, but often still has substantial benefits to power flow.”Converting lines has been a subject of discussion among power engineers and scholars for decades (see this 1997 paper), but as with previous technologies we’ve discussed, things are finally now beginning to come together: costs are falling even as grid congestion and the need for relief rise. Reed says it’s difficult to pin down the total national potential of replacing lines, since projects are so dependent on specific line conditions, which in many cases have not been analyzed.The most promising lines for conversion are double-circuit 345kV lines. The map below shows the roughly 25 percent of US transmission circuit-miles that are over 300kV. About two-thirds of those, something like 16 percent of total US transmission, is suitable, at least in theory, for conversion. That’s not going to solve US grid woes, but it does represent a crucial opportunity to quickly expand the existing grid and relieve congestion while other solutions are being developed. And that’s it, folks! Transmission! I can’t guarantee I won’t return to the subject in the future, but I think I pretty much covered the waterfront. I hope it was helpful.Later this week, I’ll send a transmission wrap-up post, linking to all the previous posts in one place and summarizing what we’ve learned.As a reward for sticking with me this far, here’s Mabel with a bloop of snow on her nose: Get full access to Volts at www.volts.wtf/subscribe

(If you’d rather listen to this post than read it, just click play above.)Welcome back to Volts, where every week is Transmission Week!In my three transmission posts so far, I have focused mostly on the challenges of building new long-distance energy transmission lines in the US — the poor planning, the inefficient financing, the permitting and siting hassles. Today I’m going to turn to a different subject: the various ways that the performance of the existing transmission system could be upgraded and improved through so-called “grid-enhancing technologies” (GETs).To be honest, I probably should have tackled this subject first. Though new lines are going to be needed regardless, it is faster and cheaper to upgrade the existing system, with fewer regulatory barriers. GETs can achieve short-term relief from grid congestion while new lines are being developed.There are three techs that are typically classified as grid-enhancing technologies, and I will focus on them in this post. In my next post, I’ll cover a couple of extra options that I haven’t found any other way to fit in. Let’s jump in. (I should note here up top that I will be drawing heavily from a 2019 report on GETs from the Brattle Group and Grid Strategies.)Closer monitoring to improve line performanceWhen electricity passes through transmission lines, they heat up. As they heat up, they sag. If too much electricity is run through a line, it can exceed its maximum operating temperature or sag to the point that it brushes up against trees or other structures, potentially sparking fires.Grid operators want to avoid that, so they do not load lines to their full rated capacity. They set an operational limit well below theoretical capacity, to create a safety margin. But how far below capacity should the limit be set? That is the question.The heat and sag of a given line are changing in subtle ways all the time. They vary with the ambient temperature, humidity, barometric pressure, and wind speed. If it’s warmer, the line will heat up faster; if there’s a breeze, it will heat more slowly. Because the heat and sag are in constant flux, so too is the maximum safe capacity of the line.“The number we love to quote is, an increase in wind blowing across a power line of three feet per second results in a 44 percent increase in the capacity of that power line,” says Jonathan Marmillo, co-founder of LineVision, a company that makes equipment for monitoring lines. “That's the equivalent of a light breeze.” (Note: this means that the capacity of transmission lines increases as the production of wind energy increases. Handy!)But transmission system operators do not generally have that kind of real-time information about the heat and sag of their lines. They are forced to estimate, to use an average. In some cases, they assign a line a single “static rating,” well below full capacity. In some cases, they assign the lines seasonal ratings, adjusting for seasonal conditions. These estimates are, necessarily, conservative.As a result, “most transmission lines are loaded at 40 or even 30 percent of their rated capacity,” says Marmillo. That’s an enormous amount of usable capacity going unused, to hedge against the lack of information.That has changed with the development of “dynamic line ratings” (DLRs), whereby lines are continuously monitored and their capacity continuously updated.DLRs have been around for a couple of decades, but the first generations of devices were cumbersome. They were installed directly on the power lines (which involved taking the lines out of commission) and proved unreliable in operation.Technology marches on, though, and the latest generation of DLRs is vastly improved. LineVision’s DLR devices, for instance, have “no-contact” installation, which means no messing with the lines; they attach to the transmission tower. They are topped with LIDAR — the same technology used by autonomous vehicles — which gathers fine-grained data that is then crunched to determine the “net effective perpendicular windspeed,” the most important variable for determining line temperature. “We essentially use the conductor as a giant hot wire anemometer,” says Marmillo.Of course, if you abandon averages in favor of real-time measurement, sometimes capacity will be below what the static average would have indicated. But “we see capacity above static [ratings] about 97 percent of the time,” says Marmillo. It turns out those static ratings are extremely conservative. Allowing more power to travel through lines relieves grid congestion, which is valuable to grid operators. Marmillo says a recent installation of LineVision’s device on a PJM line paid itself back in three months.DLRs are particularly cheap if you compare them to more dramatic solutions to grid congestion. “The cost of deploying a DLR system on a transmission line,” says Marmillo, “is less than 5 percent the unit cost of reconstructing or rebuilding the line.”(Note: there’s an open FERC proposal on the subject of line ratings, in which the commission plans to require seasonal line ratings within two years, and for RTOs and ISOs to put in place systems that are prepared for DLRs within a year.)So that’s technology one: DLRs to better understand and exploit the real-time capacity of existing lines.Controlling the flow of electricity to ease congestionThe Brattle report says: “Power flow through an AC line is proportional to the sine of the difference in the phase angle of the voltage between the transmitting end and the receiving end of the line,” and I’ll just go ahead and trust them on that.Left uncontrolled, power will simply cascade through the system according to Kirchhoff's laws. But it is useful for grid operators to be able to route power away from congested areas and toward less congested areas. To do that, they need flow control devices.The first kind are special transformers called “Phase Angle Regulators” (PARs) that directly manipulate the phase angle to control the flow of power. They are well-known and accepted in the industry, but they are expensive, to the tune of millions of dollars a year, which has limited their deployment to a select few high-traffic lines. Plus, the accelerating pace of change in the electricity system has made their size and inflexibility more problematic. “These are 40-plus-year fixed assets,” says Jenny Erwin, marketing director for Smart Wires Inc., a company that makes flow control devices, and these days, “it's just much harder to plan out what you need 40 years from now.”The other family of flow control devices are Flexible Alternating Current Transmission Systems (FACTS), which are generally power-electronics devices that control the flow of power through a line or voltage on a system by, for example, increasing or decreasing reactance on a line. Older versions of FACTS were also quite large and expensive, but due to advances in electronics and control software, they have been made much smaller and more modular. “What used to be done with copper and steel,” Erwin says, “we are able to do with silicon and software.”Now, reports Brattle, FACTS “typically cost significantly less than PARs, can be manufactured and installed in a shorter time, are scalable, and in many cases, are available in mobile form that can be easily redeployed.” (Smart Wires, a California company that’s been around since 2010, is currently the only company making these modular FACTS.)Several studies have found that FACTS create value by easing grid congestion and deferring transmission system investments. For example, Brattle summarizes the results of a 2018 study from the Electric Power Research Institute (EPRI): “simulating the 2016 PJM system with 13 power flow control devices placed in optimal locations to reduce thermal overloads indicated annual production cost savings of $67 million. Considering the initial investment cost of $137 million, the payback period is roughly 2 years.”The possibilities opened up by modular FACTS have only just begun being explored. Most deployments and studies have focused on individual lines, but as more and more lines become dispatchable, it stands to reason that there will be emergent system effects. It’s one thing to have a dispatchable line; it’s another to have a dispatchable grid.Erwin acknowledges that this is, in fact, Smart Wires’ long-term vision. “We like to think about it as crawl, walk, and run,” she says, and implementing a fully dispatchable grid “would be running.” The company is taking small steps in that direction in the UK, installing FACTS on several lines across a wide swath of territory and linking them up so that they communicate with one another.But she stresses that the comprehensive vision “is not required to unlock value. You can extract meaningful value today, because every new FACTS adds a degree of control and efficiency.” For much more on this, see this technical report from EPRI and many other reports compiled by Smart Wires. So that’s technology two: power electronics to control the flow of power across the grid.Reconfiguring the grid to route around congestionThe flow of energy through an electricity system is determined by the level of output of the generators, the level of consumption of the loads, and the “topology” (physical configuration) of the transmission lines connecting them. There is already hardware deployed across the grid, in the form of circuit breakers and communications systems, that can, by switching open or closed, change that topology. Grid operators have long had switching procedures in place to reconfigure the grid as necessary to maintain reliability. But “finding good reconfigurations is computationally challenging,” says electrical engineer Pablo Ruiz, a consultant at Brattle, associate research professor at Boston University, and co-founder of NewGrid, Inc., a grid software company spun off from an ARPA-E project. Traditionally, reconfigurations have been implemented on a limited, ad hoc basis, guided by operator experience.Recently, however, engineers have learned to calculate reconfigurations more quickly using software. Thus the budding field of “topology optimization.” Ruiz draws an analogy with transportation. The old way of handling congestion was to raise tolls on the main roads, convincing drivers to stay home (or in the case of power, generators to curtail their output). Topology control software, Ruiz says, is like the navigation app Waze, showing drivers how they can route around congestion. That will mean less curtailment and less congestion.The software doesn’t do the reconfiguring itself — that’s still for the grid operator. “The analogy with Waze is actually pretty accurate,” Ruiz says. “It's a decision-support tool. This is not about self-driving cars; the operator is still the driver.”Naturally, though, it makes me wonder about the possibility of self-driving grids — grids that route power optimally and automatically. Ruiz thinks something like that will eventually happen, but expects a long road of incremental advances in automation before then.Anyway, in the meantime, recent deployments of topology control software in the UK have shown that “just by optimizing the configuration of the grid, you can increase grid capacity by, depending on system conditions, between 4 and 12 percent,” Ruiz says. “These are very large transfers, so if you can get 10 percent more with existing infrastructure, without any new capital investment, that's a big deal.”Studies by Brattle in the US and National Grid in the UK have confirmed that topology optimization can relieve transmission constraints and save power consumers tens of millions of dollars annually. “Broad application of the technology for real-time and day-ahead congestion management support would reduce the cost of congestion by about 50 percent,” he says.Even with the misaligned incentives of today’s utilities (software investments, unlike infrastructure investments, do not receive a guaranteed rate of return), Ruiz thinks topology control will pencil out for them. It might reduce the need for some smaller transmission-expansion projects, but it will relieve congestion on lower capacity lines by routing power to (currently underutilized) high-capacity lines — thus improving the economics of those larger, more expensive projects.Topology control will also improve the business case for a national macrogrid, since it can help ensure that every high-voltage trunk line is fully utilized.So that’s technology three: software to map out the best and most efficient configuration of the grid, from day to day and hour to hour.The extensive benefits of GETs The Brattle report I mentioned at the top of the post recounts several examples of successful deployments of GETs. It estimates that wide deployment would produce benefits that rival the value of creating regional transmission organizations (RTOs) and competitive power markets. The benefits of GETs include not only relieving grid congestion, deferring new capital investments, and saving ratepayers money, but also boosting reliability and resilience and generally improving system performance.The most interesting attempt to assess the full benefits of GETs comes in a forthcoming report prepared by Brattle for the WATT (Working for Advanced Transmission Technologies) Coalition, a group of companies developing GETs. The study won’t be released until February 24, and unfortunately, the folks at the WATT Coalition are too short-sighted to allow me to share the results in advance (grumble). I can say, though, that it is a detailed engineering analysis focused on a single (wind-rich, increasingly congested) transmission region. It examines the effects of a full deployment of GETs across the region.Long story short, GETs double the amount of new renewables the regional grid is able to accommodate through 2025. Building enough new power lines to do that would be wildly expensive and take decades; GETs do it almost immediately, with an investment that pays itself back in about six months. It also creates jobs, reduces carbon emissions, and saves the region money.In terms of the clean-energy transition, GETs are an easy win, a quick way to bring more renewables online and reduce emissions while also, helpfully, saving money. Utilities just need to do it.Making utilities want to get GETsThe core problem for GETs is the same problem I have been identifying for years: the incentive system in which US energy utilities operate. They do not make money by selling electricity or by providing superior service. They make money by receiving a guaranteed rate of return on capital investments. Naturally, they want to make more capital investments. If a technology comes along — energy efficiency, distributed energy resources (DERs), or GETs — that promises to defer or even head off the need to make new capital investments, the utility’s profits are directly threatened. All those technologies may serve the public’s social, economic, and environmental goals, but they do not serve the utilities’ financial interests. Even when utilities do not face a disincentive to improve their operational performance, they have no positive incentive, no reason to set aside money and resources. The costs of congestion and interconnection backups are simply passed along to ratepayers. Everyone in clean energy is aware of this basic incentives mismatch. “It's really an incentives issue,” says Erwin. “Clearly there is a misalignment in incentives,” says Ruiz. “There's no question about it.” Consequently, deployment of GETs remains confined to a few demonstration projects. Brattle summarizes:The slow pace of adoption of these new technology options may largely be driven by two factors. First, the technology options by themselves are not being recognized enough for their capabilities. … Second, there is insufficient incentive for either the transmission operators or owners—the two market players who are best suited to adopt these technologies—to innovate and change their operations, which requires a concerted effort.Reforming US utilities is a mountainous task, and nobody has time to wait around on it. In the meantime, the best that can be done is to create incentives where they are now lacking.FERC can do so by mandating that utilities and RTOs examine alternatives to new transmission — upgrades to the existing system — in transmission and operational planning processes. It can implement new rules that reward utilities for meeting performance metrics, so-called “performance-based regulation” (as is common in the UK and Australia). It can encourage benefit-sharing (and cost-sharing) among transmission owners and other market participants, both sharing congestion costs and spreading out the benefits of new GETs. And FERC could push utilities to subject new GETs projects to competitive bidding. A group of 13 senators recently wrote a letter to FERC asking that it take these steps to encourage GETs. Congress could help by offering tax credits or other financial incentives to utilities to improve existing transmission systems with GETs. Money is the best incentive of all.And maybe, some day, we could think about reforming utilities root and branch, to once and for all align their incentives with pro-social behavior. A fella can dream.GETs are part of the digitization of energyOne of my pet theories — which I first wrote about in 2016 — is that Vaclav Smil is wrong. Smil is a venerable energy analyst famous for throwing cold water on all the talk of a rapid transition to clean energy; he points out that previous energy transitions have taken more like a century than a decade.One reason I think the clean energy transition will move faster is that it is not merely a transition from one set of physical energy sources to another (though it is that too). It is also in part a transition from the physical to the digital. Where physical commodities generally get more expensive over time, computing power is consistently getting cheaper and cheaper. In area after area, engineers are figuring out how to substitute “intelligence for stuff” — i.e. computing power for commodities. Think, for instance, about solar trackers. Solar panel manufacturers used to experiment with a variety of shapes for panels, to try to catch more of the sun’s energy as it passes overhead; that manufacturing is expensive. Now panels can be mounted on trackers that automatically sense and follow the sun — so manufacturers mainly just make flat panels. The intelligence of the trackers has substituted for the stuff of the panels. (See also: digital circuit breakers that allow building owners to get more out of their existing electrical systems.)(I had to mention digital circuit breakers as an excuse to show this amazing video.)GETs are another great example. The same physical grid can virtually double its capacity through the combined application of GETs: better sensing, better calculating, and better control. Rather than make twice as much grid, we can make a grid twice as smart. Intelligence for stuff.Inevitably, as the costs of sensors, chips, and computing power continue to decline, we are going to infuse them into all our infrastructure: transportation, buildings, and power. We are going to get more performance out of our existing capital stock through the application of intelligence.Once progress is hitched to computing power, the clean energy transition will no longer be limited by the slow innovation and turnover cycles of physical commodities and machines. Things move much more quickly in the digital space. Consequently, the transmission grid we’ve already got may have much more potential than we’ve given it credit for. But fulfilling that potential will involve pushing utilities to value getting more out of the transmission assets they already own. It’s a fairly easy fix, for a large impact. Biden should get on it. Get full access to Volts at www.volts.wtf/subscribe

Happy Monday! Welcome back to Transmission Fortnight here at Volts. Today’s a fun one.In my previous post, I described the many difficulties facing new high-voltage, long-distance transmission projects, from planning to financing to permitting and siting. It’s a bureaucratic slog.Today we’re going to look at a clever idea for bypassing many of those problems, namely, stitching together a national power grid by burying power lines along existing rail and road infrastructure, where rights-of-way are already established, thus eliminating the endless haggling with local governments and landowners. The idea has been gaining steam in the policy community for the last few years. FERC issued a report in June on challenges to transmission; siting along existing infrastructure was cited as a promising solution. In his Build Back Better plan, Biden promised to “take advantage of existing rights-of-way — along roads and railways — and cut red-tape to promote faster and easier [transmission] permitting.” This op-ed in The Hill sums up the benefits quite nicely, both of a national grid and of building it without siting battles. The vision is taking hold. And at least one small piece of that vision has gone beyond speculation into an actual permitting process. The SOO Green line will carry Iowa wind power to ChicagoA company called Direct Connect is currently in the development and permitting phase of a privately financed, $2.5 billion project called the SOO Green HVDC Link, a proposed 349-mile, 2.1-gigawatt (!), 525-kilovolt transmission line to run underground along existing railroad from Mason City, Iowa, to the Chicago, Illinois, area. It aims to go into operation in 2024.Going underground will allow the line to minimize environmental and visual impact. It will be much more resilient than an overhead line against weather, temperature shifts, sabotage, or squirrels. Two side-by-side cables will run through tubes of Cross-Linked Polyethylene (XLPE) and will be self-contained, lightweight, and easy to handle. They won’t get hot, interfere with signaling equipment (unlike AC lines), or affect rail operations. There are fiber-optic sensors along the lines to monitor sound and heat for any problems. (Nemo Link, the world’s first 400 kilovolt line using XLPE, runs undersea between the UK and Belgium; it began operation in January 2019.)Running alongside the railroad means SOO Green will have no need to claim land via eminent domain. Almost all of that railroad is owned by Canadian Pacific (one of seven large “class one” railroads in the US), so there are a tractable number of parties to deal with. A deal like this offers railroads a new passive revenue stream; royalty fees well exceed what they get from similarly buried fiber-optic lines, of which there are more than 100,000 miles along US railroads. And it’s also a chance for railroads to be part of a positive sustainability story. The project is privately funded, so there will be no need for any complicated cost-allocation formulas. The financiers (including Siemens, which very rarely puts direct capital in transmission projects) will make their money back from those who use the line — the suppliers that put power on it, the shippers that sell power across it, and the buyers that consume the power — through competitive bidding for capacity. SOO Green is holding an open solicitation right now to allocate its 2,100 megawatts among them. The aim is to create a more robust energy market by, for the first time, connecting the MISO and PJM territories. (MISO and PJM are regional transmission organizations; see previous post for details.) Wind power projects are backed up in MISO, waiting to connect, stymied by grid congestion. Meanwhile, nextdoor neighbor PJM is the largest liquid energy market in the world. The idea is that SOO Green will unlock renewable energy development in MISO; Direct Connect projects four to six new gigawatts. That energy will be transported to population centers in PJM, easing grid congestion, reducing the carbon intensity of the East Coast energy mix, and lowering power prices. The connection will also allow MISO and PJM to share reserves for the first time, which could reduce the need for reserve capacity, increase reliability, and save consumers money. Because the MISO side will be drawing from such a geographically broad region, it is likely to be in use almost continuously. “When the wind isn't blowing in North Dakota, it likely is in Minnesota,” Trey Ward, the CEO of Direct Connect, told me. “We anticipate upwards of 90 percent line utilization.”“It's as if we teleported a 2,100-megawatt wind turbine with a 90 percent capacity factor from Iowa into suburban Chicago,” he says. In fact, the converter station in PJM has applied to be treated as a capacity source in that market. (That will require some updating of regulations, just as power market regulations had to be updated to accommodate batteries.) The converter stations at each end of the line are worth looking at more closely. They will use the latest generation of Voltage Source Converters (VSCs) to exchange power between the HVDC line and the regional high-voltage alternating current (HVAC) systems already in place. VSC technology has been around since the late 1990s, but it has only recently gotten efficient, compact, and cheap enough to compete against the thyristors (solid-state valves) in common use today on HVDC lines. VSCs boast several important advantages. Thyristors need strong AC systems on both sides of the line, they require power filtering, and they have limited control over reactive power. (Do not ask me, or anyone else, what “reactive power” is. That way lies madness.)VSCs, on the other hand, are “self-commutated converters,” which means they can generate AC voltages (using IGBT capacitors) without relying on an AC system. They can control power independently, even with a weak AC system or no AC current at all; they can “black start” a grid from a blackout automatically, without any workers out throwing switches.VSCs allow precise and instantaneous, bi-directional control of both active and reactive power. They can provide services to the grid other than just energy — things like voltage and frequency regulation or “synthetic inertia” to support grid stability.“You can go from zero to 2,100 megawatts in 1/100 of a second, and back down again just as fast,” says Ward. “It will be the fastest, most dynamic resource on the North American grid.”Power electronics experts have been claiming for years that VSCs would eventually replace thyristors in HVDC projects. (“We’re in a race with Germany,” Ward says.) If built, SOO Green would be a big step toward making it finally happen — the first deployment of VSCs at this scale in the world. The main thing these VSC stations will do is serve as regional energy hubs, accepting gigawatts of energy from, or dispensing it to, existing HVAC grids.Energy users that require a large, reliable supply of high-quality electricity, like data centers or technology parks (perhaps ensconced in microgrids), can co-locate with the hubs to take advantage of their high-quality power control, thus spurring economic development. Direct Connect estimates that the SOO Green project will create 2,000 temporary construction jobs, unlock more than 4,000 jobs in renewable energy development, generate more than $2.7 billion in economic development in the two states, and yield more than $3.75 billion in ratepayer savings over 20 years. We shouldn’t exaggerate how easy things will be for SOO Green. It won’t be completely free of siting hassles, and there are costs outside its control. (The X factor is the cost of copper for the lines themselves — if it spikes for some reason, SOO Green will be in trouble.) But its costs will be much more predictable than a typical overhead line’s. It knows its exact route from the beginning and, because digging ditches is a pretty cheap and well-established technology, 80 percent of its construction costs will be for equipment. Things might be trickier for the next rail-transmission project. SOO Green is exploiting ideal conditions: a low-use railroad with well-characterized geology, connecting an energy-producing region with an energy-consuming one. Future projects could face more physical and economic challenges. At some point, there will be projects that don’t pencil out for private capital, but are needed to link the lines together into a national grid; then public money will have to step in.But private capital can do a lot. Ward mentions two federal policies that could help. One is a federal investment tax credit (ITC) like the one renewable energy receives, to defray the cost of investment, especially for early and pioneering projects. (More details on that in the previous post.)The other is some kind of manufacturing tax credit to spur more US companies to manufacture the XLPE line that Direct Connect is currently buying overseas. Even without those policies, though, things are more or less on track (har har) for SOO Green. If things go well for the project — no sure thing, given America’s history with transmission — it could serve as a template for new HVDC backbones along other sections of the elaborate US rail network. Ward estimates that as few as a half-dozen such lines would completely transform the US electricity system and spark billions of dollars of renewable energy development. (Direct Connect is in talks with all the class one railroads.) An aside: as long as we’re talking about electricity and railroads, you should check out Solutionary Rail, a plan to run (overhead catenary) electricity lines along the nation’s rail lines and electrify rail freight in the process.Anyway, to date there are no HVDC lines being planned along roads or highways, in part because state Departments of Transportation are always thinking about adding lanes, in which case the lines would have to be moved. But it’s also because developers still have an inflated sense of the cost of undergrounding lines. The news hasn’t widely spread that modern lines require less conducting metal, horizontal drilling has been perfected by natural gas frackers, and inverter stations are as little as 25 percent the size they used to be.Here’s what Dr. Christopher Clack, an energy modeler at Vibrant Clean Energy (VCE), told me:Data that I was provided from Tier 1 transmission vendors shows that the cost of underground HVDC transmission has a similar price point to the same overhead capacity of HVAC when the transmission line is over approximately 250 miles. This includes the cost to build inverter and rectifier stations at each end. And of course the sticker price of building overhead lines does not include the unpredictable expenses of regulatory hassles and intransigent landowners. A line can not be cheap if it never gets built. In terms of long-distance transmission, underground HVDC is now the smart choice. But there’s one other step planners and developers can take to bypass conventional transmission hassles.A national grid made of two-state piecesVCE is currently working on a detailed modeling exercise showing how the US can decarbonize by 2050. (You can see a preview here.)The modeling (like much other modeling before it) shows that a national HVDC network is desperately needed for decarbonization. But VCE is aware of the difficulty of siting lines that cross multiple states. So it came up with a way to create a national network that is comprised entirely of lines that only bridge two states — each one originates in one state and terminates in a neighboring state. And every one of the major HVDC trunk lines is underground, running along rail or road infrastructure.Here it is (a fancier map with more precise routes will be coming with the final release): The two-state pieces are like Legos from which a national grid can be built. “You can get [energy] from Colorado to Chicago,” Clack told me, “but you have to go through five rectifier stations. It is the same as having one line.”Building the system this way does come at some additional cost, since the VSC stations at the terminus of each line are expensive, and this would involve building more of them. And since each conversion of energy loses a little bit, all the additional conversions would add up to about 0.5 percent more “line loss.” But the advantage of this approach is that “each line is just a contract between two states,” Clack says. “You would never have a flyover state and you would never have a state that wouldn't get access to the market.” Each participating state would have one or more energy hubs and all the advantages — economic development, less grid congestion, lower power prices — they bring. The end result would be a functioning national energy grid. Clever! (When VCE’s modeling is officially released I’ll take a closer look at how the national grid operates and what it accomplishes.)Let’s do thisA national energy grid composed of underground HVDC lines running along existing rail and road infrastructure, with VSC stations in every state, is an absolute home run of an idea. It ticks every conceivable box: it’s economic development, jobs, clean energy, lower prices, and most of all, an ambitious national project that we can accomplish, red and blue states together, to regain some of America’s lost mojo.What’s more, transmission hasn’t yet fallen under the shadow of partisanship, unlike … everything else. There is bipartisan appetite for infrastructure spending and for unlocking the domestic renewable energy that is often concentrated in red states and needed in blue ones. An underground national HVDC network would create thousands of jobs and bring hundreds of millions or even billions of dollars of new economic development to every single US state. It would save every American money on their power bills. It would bring national decarbonization within reach. It would literally do what Biden promised: bring people together. We should build it! Get full access to Volts at www.volts.wtf/subscribe

Welcome back to Transmission Week here at Volts!In my previous post, I explained why the US needs lots of new high-voltage power lines. They will help stitch together America’s balkanized grids, connect remote renewable energy to urban load centers, prepare the country for the coming wave of electrification, and relieve grid congestion. And oh yeah — we won’t be able to decarbonize the country without them. Nonetheless, they are not getting built! It’s a problem.Today, we’re going to walk step by step through the process and show why they’re not getting built. At each stage, we’ll look at what Congress can do — and what Biden can do without Congress’ help — to get the process moving. This is some wonky stuff, but I’ve tried to keep it as simple as possible.Before we start …Transmission-related acronymsThis post will involve numerous acronyms, so to make things easier, I’ve put together a little acronym guide here at the beginning for you to check as needed. If you’re already an electricity system wonk, you can skip this.* DOE: The Department of Energy. The federal agency responsible for, among many other things, energy research.* FERC: The Federal Energy Regulatory Commission. The federal agency that regulates interstate transmission of, and bulk sale of, electricity and natural gas. * IOU: Investor-owned utility. Privately owned companies acting as public utilities. Excepting some federally owned and municipal utilities, most utilities in the US are IOUs. * ISO: Independent System Operator. For our purposes here, you can think of these as the same as RTOs (see below). This is why you constantly hear people in this field using the unwieldy phrase “RTOs and ISOs.” * NIETC: A National Interest Electric Transmission Corridor, designated by DOE as an area in particular need of new transmission to ease costs or congestion. * NREL: The National Renewable Energy Laboratory, a DOE-run research lab.* PMA: Power Marketing Administration. Federal agencies that operate electric systems and sell the electrical output of federally owned hydroelectric dams in 33 states. They are: Bonneville Power Administration (BPA), Western Area Power Administration (WAPA), Southeastern Power Administration (SEPA), and Southwestern Power Administration (SWPA).* RTO: Regional Transmission Organization. Non-governmental organizations (which nonetheless have government-like powers) that oversee transmission planning and wholesale energy markets in areas of the country that have been “restructured,” i.e., where generation, transmission, and distribution are owned by separate utilities. RTO membership is composed of the utilities in a particular region. Here are the US RTOs and ISOs: CAISO, ERCOT, SPP, MISO, PJM, NYISO, and ISO-NE.All right, let’s get to it! There’s still not much inter-regional (much less national) transmission planningFor most of the history of the US electricity system, up to the 1990s, almost all utilities were “vertically integrated,” meaning they owned the whole electricity value chain in a given territory, from generators to transmission and distribution. They built large central-station power plants close by to population centers and then ran transmission lines out to them. There was neither much need nor much appetite for building longer regional or inter-regional lines. Over all that time, states developed a persistently parochial lens and tight control over transmission planning. Two things have changed in recent decades. One, renewable energy expanded rapidly and got really cheap, which is why solar and wind are the fastest growing sources of new electricity capacity. However, as we saw in the previous post, the most intense sun and wind in the US are distant from population centers. This suggests the need for a wider scope of planning.Two, a wave of reforms in the 1990s and 2000s led to “restructuring” in regions containing around half the nation’s electricity ratepayers. Vertically integrated utilities were broken up: generation owners were separated from transmission owners and both were separated from distribution-system operators (i.e., the local utility that sends you a power bill). Transmission planning in these restructured regions was given over to RTOs and ISOs. This suggests there ought to be capacity for a wider scope of planning.Indeed, FERC has acknowledged the need for larger-scale, regional and inter-regional transmission planning for decades, and attempted to make it happen through orders 888 (1996), 2000 (1999), 890 (2007), and 1000 (2011). I won’t get into all those orders other than to note that order 2000 created RTOs (membership in which was voluntary for utilities) and was explicitly meant to encourage (though not mandate) broader regional transmission planning. Part of the idea was to create competitive regional markets for transmission, similar to wholesale markets for generation, in which merchant (non-utility) projects would compete on a level playing field with IOU projects. As Ari Peskoe of the Harvard Electricity Law Initiative writes in a recent paper, “FERC was optimistic that [the IOUs’] central-planning development model would be replaced by ‘well-defined transmission rights and efficient price signals’ that would facilitate market-driven expansion.” When it didn’t quite work out that way, once again, in order 1000, “FERC employed several mechanisms to pry control over regional transmission development from IOUs and break the IOU-by-IOU planning model,” Peskoe writes.The general consensus is that, despite its best efforts, FERC has failed to bring IOUs to heel and produce truly regional transmission planning and markets. Local IOU transmission plans still serve as the foundation of regional planning. There is still virtually no transmission built through competitive bidding. In practice, IOUs still build virtually all the lines in and between their territories and have deliberately made it difficult for merchant projects to get sited and financed. IOUs have engaged in a “shift away from regional projects, which must be developed competitively, to smaller or supposedly time-sensitive projects that IOUs build with little oversight and without competitive pressures,” Peskoe writes, and RTOs have implicitly or explicitly supported them in this shift.These local IOU processes are often opaque, closed to journalists and public interest groups, but the broad shift is clear. Utilities in PJM, for instance, tripled spending on local transmission projects since order 1000 was issued. In MISO, spending on regional projects shrank from nearly $6 billion to just $300 million from 2014 to 2019. Not a single transmission project in NYISO has been built on the basis of regional benefits since FERC established the process in 2008. A Brattle Group analysis found that between 2013 and 2017, 97 percent of the transmission approved by RTOs was not subject to a competitive process. Local transmission and reconstruction of aging facilities still receive the bulk of investment. One problem is, IOUs are not mandated to be part of RTOs, so they can threaten to withdraw their assets from RTOs at any point. That gives them undue leverage; RTOs are loathe to cross them.And so most transmission planning remains largely parochial. RTOs remain dominated by their members and predisposed to accept plans driven by local benefits. There are virtually no planning processes that take into account the changing energy mix or public purposes like integrating renewables and reducing greenhouse gases, and virtually no lines are being planned between regions.What Biden can doBiden’s FERC will start off with a 3-2 Republican majority. Current Democratic commissioner Richard Glick, a solid supporter of decarbonization, has been made head of the commission, and Democrat Allison Clements (who is also extraordinary) was sworn in in December. In June, an additional vacancy will open up, which Biden will be able to fill, giving Democrats a majority, which will be significant on a commission increasingly issuing partisan split rulings on things like oil and gas pipelines and, er, the MOPR (don’t ask). With a climate hawk majority, FERC could issue a stronger order mandating membership in RTOs and participation in regional planning. It could instruct RTOs and states to take into account the changing resource mix, the need for decarbonization, rising (and shifting) demand from electrification, and the benefits of inter-regional transmission. (MISO’s “multi-value project” process is often cited as a model here.)FERC could also mandate that transmission planning take a broader view of reliability, resilience, and cost-effectiveness, to replace the siloed way they are assessed today. It could also work with DOE and other agencies to develop a true national transmission plan, with an eye toward national policy goals, from which regional organizations could take their cue. And, as Peskoe advocates, FERC could more closely scrutinize the local transmission planning processes now run — parochially and with very little supervision — by IOUs. Specifically, it could “reverse its longstanding policy of presuming that all transmission expenses are prudent, and replace it with a presumption that only capital expenditures committed pursuant to an independently administered planning process are presumed prudent.” In other words, shift the burden of proof to IOUs. Doing so would push IOUs to put more transmission planning in independent hands. And FERC could take additional steps to force IOUs to regularly divulge key information necessary for independent planning. “In transmission operations, separating ownership from operational control allowed the industry to capture benefits of both coordination and competition,” Peskoe writes. “Separating ownership from control over planning could have similarly significant benefits by untethering planning from maintaining any IOU’s state-granted advantages.”One way or another, FERC has to wrestle control over transmission planning from IOUs and give it to independent organizations that can assess the full range of benefits.What Congress can doCongress could pass legislation clarifying that it intends for FERC to fully regionalize (and to some extent nationalize) transmission planning by taking the steps above. The Democrats’ Climate Leadership and Environmental Action for our Nation’s (CLEAN) Future Act, passed through the House last summer, contained language that would instruct FERC to issue a rulemaking to that effect. Congress could also allocate funding to DOE to ramp up its research on a macrogrid, including resuming NREL’s Interconnections Seam Study. It could also fund DOE to assist state and regional organizations in studying and implementing inter-regional planning, and work out a transmission plan for offshore wind in the Northeast (which is currently beset by NIMBYs). Basically, the federal government needs to study and develop best practices for inter-regional planning and then require that IOUs, RTOs, and states actually use them. Much of that legislative legwork has already been done in the Interregional Transmission Planning Improvement Act of 2019, introduced by Sen. Martin Heinrich (D-N.M.); it was included in the House-passed infrastructure bill, HR-2, but not in the year-end package that passed both houses.All right, that’s planning! Up next is financing, but first, we need a cuteness break. Here’s my cute niece:Financing transmission is unnecessarily difficultThe interconnection process — the process of connecting a new generator to the transmission network — is currently run by RTOs on a “participant funding” model, which means the project developer must pay for any grid upgrades or new lines required. This despite the fact that new lines create benefits (in reliability, efficiency, and regulatory compliance) that are spread state-wide, even regionally. A recent report from Americans for a Clean Energy Grid (ACEG) compared participant funding to “charging the next car to enter a congested highway for the cost of building a new lane.”The process is currently a disaster. First, there’s the free-rider problem: no developer particularly wants to shoulder the costs for broadly distributed benefits. Second, no renewable energy project developer knows in advance whether their interconnection will require grid upgrades; when it does, they often drop out, which means the whole interconnection study and approval process starts all over again for the next project in the queue. Third, it’s impossible to predict the location and size of power demand in five years, which is how long it takes to build transmission. And fourth, the one-at-a-time process foregoes opportunities to plan larger scale, multi-line regional projects. The financing barriers, coupled with the risk and uncertainty of a long, multi-stage regulatory process, serve to deter investment and keep costs unnecessarily high. What Biden can doWhat’s needed is for the costs of new transmission to be spread out more evenly among the beneficiaries, beyond the members of the particular RTO in which the line is proposed. That’s a highly technical undertaking in practice, so FERC could begin by soliciting solutions to this problem from RTOs and ISOs. But the process should result in a rule that forces cost-allocation reforms.To speed things up, a FERC rule could also permit portfolio-based cost allocation, which allows RTOs to group projects together instead of running individual cost-allocation studies for each.FERC could also apply more scrutiny and higher standards to local transmission investments, weighing them relative to regional projects that could provide the same benefits and more.What Congress can doCongress could pass legislation instructing FERC to prohibit the participant-funding model and spread costs out more equitably. It could also implement tax incentives for transmission investment, along the lines of the tax credits for solar and wind. They could be tailored to encourage long-distance, inter-regional lines. (There are Democratic bills in both the House and Senate that contain provisions to this effect; ACEG has its own proposal. There’s a whole wonky post to be written about how best to design these credits, but I will spare you.)And there are other ways Congress could pump money into transmission: investment grants, direct funding for inter-regional projects, support for states involved in regional and inter-regional planning, and money to compensate communities affected by new transmission projects.The Department of Transportation issues what are called Transportation Infrastructure Finance and Innovation Act (TIFIA) loans, targeted at surface transportation infrastructure projects that are of regional or national significance. A similar loan program could be set up for transmission projects.Finally, Congress could reinvigorate America’s Power Marketing Administrations (PMAs), which operate in 33 states (primarily to market and sell power from government-owned hydroelectric dams). As part of their operations, PMAs build and operate transmission. Congress could give them some money and a kick in the ass to get moving on more regional transmission. OK, that’s financing. Onward to permitting and siting!Permitting and siting are valleys of death for transmissionThe Center on Global Energy Policy (CGEP) at Columbia University and the Institute for Policy Integrity (IPI) recently put out a report (forthwith, the “CGEP report”) on what Biden can do to boost transmission without help from Congress. It serves as a good backgrounder on the barriers to siting transmission projects.The key background condition is that the 1935 Federal Power Act gave FERC authority over transmission rates and facilities, but not over transmission siting. That authority remained, and remains, with states. Consequently, a power line that runs through more than one state must be approved by each state’s public utility commission to act as a utility in that state. And it must secure a certificate of public convenience and necessity (CPCN) from each state siting authority. Notably, the report says, “state law often directs state commissions to consider only the interests of in-state residents and businesses” — in other words, the states that approve these projects are often prohibited from considering their broader benefits.It is a difficult and unpredictable process, fraught with veto points. CGEP elaborates:Several factors make long-distance transmission projects fragile to opposition—and there is always opposition. Their long length means that these projects inevitably encounter numerous stakeholders, potentially including federal, state, tribal, and local government agencies from which they must seek authorization, as well as private property owners from whom they must acquire property rights. And like all linear projects, they are subject to holdups, meaning that a single stakeholder can prevent assembly of a complete right-of-way. Each state (in some cases, each county or even each landowner) has veto power over the project. Each is thinking about the benefits to itself and has no incentive to consider broader regional or national benefits. Endless lawsuits and delays drive up the cost of capital and drive away even the most determined financiers. It’s a virtually impassable set of barriers to long-distance transmission.It is worth noting again that total state control over transmission permitting and siting stands in stark contrast to the way natural gas lines are permitted and sited in the US. The Natural Gas Act grants the federal government exclusive authority to permit and site interstate natural gas pipelines and the power to use eminent domain to acquire rights-of-way.That streamlined federal approval process — especially the profligate way in which FERC has applied it under a Republican majority — has been a boon to natural gas pipeline developers. “FERC coordinates the process as a whole, has seldom rejected a pipeline proposal, and has generally managed to overcome state efforts to prevent pipeline development,” CGEP writes.The situation is woefully inverted for interstate and inter-regional transmission projects, which can be blocked by any and every local interest and have no backstop federal authority. What Biden can doIn section 216 of the Energy Policy Act of 2005, Congress granted FERC limited authority to site transmission projects within “National Interest Electric Transmission Corridors” (NIETCs) designated by DOE. If (and only if) a state has unfairly refused to permit a project within one of these corridors, FERC can step in and provide backstop permitting and siting authority, including eminent domain. DOE’s initial effort to designate these corridors identified huge swathes of land, which freaked out local lawmakers and landowners. And the first attempts to exercise FERC’s siting authority were shot down by federal courts, leading many observers to speculate that the authority will never be used — and indeed, since then, it has remained notional. No new NIETCs have been designated or lines built on their basis. The CGEP report argues that the authority still exists and that the specific rulings in the two court cases are not an insuperable barrier to action. Trump’s DOE issued a preliminary ruling in September saying that no new NIETCs are needed, but it relied on the Trump administration’s characteristically shoddy reasoning. Above all, it ignored future electricity demand.The comment period on that ruling is still open; Biden’s DOE could revise the study to take in a broader interpretation of grid needs and constraints. It could quickly designate some NIETCs, to get the ball rolling, but it could be more deft about it by working with FERC to target designations narrowly, to support specific projects, reducing duplicative study and analysis and freaking out fewer landowners. It could even delegate to FERC the authority to designate NIETCs, as recommended by the House Select Committee on the Climate Crisis and others.And FERC could clarify its interpretation of its own backstop siting authority and when it plans to use it. Specifically, it could clarify that transmission projects that connect renewables to loads meet the criteria to receive a federal permit — and that it will take a dim view of other state-imposed obstacles.Separately, section 1222 of the Energy Policy Act authorizes federal-private partnerships on transmission projects. In theory, writes CGEP, federal involvement “both frees the transmission project from the requirements of state siting and public utility laws and provides a basis for the exercise of federal eminent domain authority.” This is another case where there have been very few attempts to use the authority. Biden’s DOE could deploy it by reinvigorating the PMAs, which could use section 1222 authority to build transmission anywhere it’s needed within their territories. What Congress can doAll of this would be easier if Congress would pass legislation specifying the measures above: that DOE can delegate its authority over NIETCs to FERC, that access to renewables and future electrification should be criteria for designating NIETCs, that DOE and FERC should work together to create a single, streamlined federal permitting process, and that FERC has real backstop authority to site transmission within NIETCs.Ideally, the federal exercise of eminent domain won’t be necessary. Congress could put money toward incentives for tribes, local governments, and states to revamp their permitting processes, perhaps accompanied by economic development grants, to ease the process. “You really don't want to have to use the backstop siting authority,” says Fatima Ahmad, senior counsel with the House Select Committee on the Climate Crisis. “You want to start by allowing the developer to develop good relationships with the community before they pitch the designation of the corridor, then you want to have some kind of economic incentives for the communities, and then the federal government can use its convening authority to bring the states together to work something out. So [eminent domain] really is a last resort.”In that same vein, Congress could put some money toward states and regional planners that are working to streamline siting. Money always helps move things along.Drawing some conclusionsAll right! This has been a long, wonky journey, friends, and I appreciate and respect those of you who made it this far. Let’s try to sum things up.The basic problem with transmission is that we need a lot more of it in the US if we want to electrify and decarbonize, but it remains prohibitively difficult and expensive to build. Mostly that’s because the process is dominated, at every stage, by narrow, parochial concerns. IOUs are looking inward, RTOs are looking inward, states are looking inward. The intense localism of the process produces dozens of opportunities for NIMBY opposition and few tools to overcome them. Politically speaking, it would be vastly easier to solve these problems with some clear legislation from Congress. As discussed here on Volts many times, a big climate bill is almost certainly not going to pass as long as the filibuster is in place. But that leaves open the possibility that some of this policy could sneak its way either into a budget reconciliation bill or one of the must-pass end-of-year funding bills. There’s some precedent for these kinds of reforms getting bipartisan support — a few were tucked away in the energy bill that was tucked away in the spending bill that just passed Congress a few weeks ago — so there’s some hope.But in the meantime, as I keep saying, Biden should use the powers of the executive branch aggressively. He should push the agencies to ease financing barriers, designate more corridors, permit more projects, and throw a little weight around on siting. These reforms are somewhat obscure and technical, but there is nothing obscure about the jobs new transmission would create or the enormous economic, social, and environmental benefits it would generate. It’s right in Biden’s wheelhouse — he should go for it.Coming up next in Transmission Week(s)Remember how I said there would be four posts in Transmission Week? Turns out that was a lie. There are going to be five, and there might be two Transmission Weeks. ¯\_(ツ)_/¯In my next post — shorter, easier, and more fun than this one, I promise! — I’ll have a look at two clever ideas for how to build a national transmission grid without the siting hassles. I don’t want to get all clickbaity on you, but … it will involve both trains and lasers. See you then! Get full access to Volts at www.volts.wtf/subscribe

[If you would rather listen to the post than read it, click play above.]Hello, Volties, and welcome to Transmission Week here at Volts! It’s been delayed almost as many times as Infrastructure Week, but it’s finally here. All week, we’re going to be digging into the US energy transmission system. For those of you new to the subject, “transmission system” refers to the big, high-voltage power lines that carry electricity over long distances, usually perched along tall metal towers. To use a road analogy, transmission lines are like the interstate system, whereas lower-voltage “distribution systems” are like the nests of highways and streets that serve local populations.I’ve always been fascinated by distribution systems, but I’ve never really taken a deep dive into the transmission side of things. Until now!And now that I have, I understand better than ever why I put it off for so long. It’s complicated, y’all. There are lots and lots of acronyms, agencies, and obscure policies involved. It’s not the sexiest stuff.But it’s important. Transmission is one of the key tools to help decarbonize the country and also one of the biggest, most dangerous bottlenecks standing in the way. We (probably) can’t decarbonize at the scale and speed we need without more of it, but laws, rules, and systems designed for a different century and a different electricity system are slowing it to a snail’s pace. The entire transmission process badly needs attention and reform. And there are signs it may finally be getting some. There’s bipartisan political support for it, along with support from big unions like the International Brotherhood of Electrical Workers. “I'm excited about transmission,” says Fatima Ahmad, senior counsel for the House Select Committee on the Climate Crisis. “I see jobs benefits, I see bipartisan interest, I see more and more climate policy advocates taking the time to get educated about these issues — all those things make me excited. This is just such a clear next step.”So here’s what we’re going to do. Today, I’m going to try to convince you that transmission matters: we need more of it, we’re not building it, our decarbonization goals are at risk, but we’re at a moment when real reform is possible.In the next post, we’ll get into the weeds. Getting a transmission line built requires planning, financing, permitting, and siting, and right now every single step of that process is dysfunctional and constipated. In each case, we’ll look at what Biden can do (through the agencies) and what Congress can do to expedite the process. Expect acronyms.In the post after that, we’ll look at a related issue: not how to build new transmission lines, but how to improve the existing transmission system with “grid-enhancing technologies.” (Get excited about topology optimization algorithms!)And finally, we’ll review what we’ve learned and contemplate the political landscape ahead.It’s gonna be so much fun!Why we need more transmissionI wrote about the need for more transmission here and here for Vox, if you want to really dig in, but here’s a quick review of the top reasons.We need more transmission to decarbonizeA group of researchers at Princeton recently did some comprehensive modeling of US decarbonization scenarios. Of the scenarios that achieved net-zero, the one with the least new transmission — the RE- scenario, which includes lots of nuclear power and natural gas with carbon capture and sequestration — doubles US transmission capacity by 2050. In the more renewables-heavy scenario, E+, transmission triples. Modeling from Dr. Christopher Clack at Vibrant Clean Energy has produced similar results, as have many other studies.If the US wants to decarbonize at all, it’s going to have to build the sh*t out of some new transmission.We need a national energy grid anywayDespite my road analogy above, the US transmission system is different from its interstate system in one important way: we have a true national interstate network. No matter where you are in the system, you can drive to anywhere else in the system. The US does not have a true national energy network. Instead, functionally speaking, it has three transmission grids: the Eastern Interconnection, the Western Interconnection, and ERCOT (a Texas grid, basically). Though there are a few small ties between them, very little energy is exchanged. They mostly operate in isolation.(As you can see from all the labels below, the Eastern Interconnection is divided up among several functional transmission regions, but they are all connected to a common physical grid.)This is goofy. Linking them together with high-voltage direct current (HVDC) lines — i.e., creating a true national energy network — would allow them to share, exporting energy when they have oversupply or importing it when supply is stretched. Early morning solar in Arizona could go to New York at the peak of its afternoon demand. Evening wind power in North Dakota could go to California when everyone is turning on their big screen TVs.Generally, with grids, the bigger and more interconnected they are, the more efficient, reliable, and cost-effective they are. To wit: a 2016 study by scientists at NOAA found that a national HVDC network would save US consumers $47 billion annually. The Interconnections Seam Study by the National Renewable Energy Laboratory (NREL) — a study the Trump administration tried to squash — found that every $1 invested in a national HVDC grid would return $2.50 in economic, environmental, and social benefits. A national grid (with the appropriate cybersecurity and resilience measures) would allow the US to make the best possible use of its domestic clean-energy resources. It’s a no-brainer.(By the by, China is in the midst of plowing $26 billion into a national network of ultra-high voltage lines — UHVDC — to carry renewable energy across the country.)We need to connect remote renewables to population centersThe areas in the US where sunlight and wind are most intense (the desert Southwest and the Midwest corridor, respectively) are distant from the metropolitan areas (mostly along the coasts) where there is most demand. To make use of that remote renewable energy, we need transmission lines much longer than most that were built in the age of fossil fuel electricity, when plants could be built close by. Those long HVDC lines will require sophisticated new technologies and unfamiliar planning processes. Right now, we’re stuck in a chicken-and-egg problem: renewable energy developers are hesitant to build, not knowing whether they’ll be forced to pay for expensive new lines; transmission developers are hesitant to build, not knowing whether there will be generators to fill their lines. Someone (spoiler: the federal government) needs to come in and break up the logjam to get things moving. There’s a huge pool of clean, domestic American energy waiting to be tapped.We need to prepare for clean electrificationAmong today’s US energy wonks, it is now fairly widely agreed that the fastest, cheapest, and possibly only route to large-scale, near-term decarbonization is through clean electrification. That means, first and foremost, transitioning to a net-zero-carbon electricity grid. But it also means shifting most transportation and heating/cooling off of liquid fossil fuels and onto electricity.Large-scale electrification will dramatically increase demand for electricity — close to 40% by 2050, by some estimates. It will also change the location and timing of energy demand, in ways that will change where and when the grid is stressed. A plan to decarbonize the US must involve looking forward, anticipating those changes, and planning the transmission system around them. We need to relieve grid congestionEven transmission wires of modest length can help relieve congestion in regional grids and make them more efficient and cost-effective. Currently, congestion is a major problem, and it’s creating a nightmare for new renewable energy projects in some regions. A recent report from Americans for a Clean Energy Grid (ACEG) found that, “at the end of 2019, 734 gigawatts of proposed generation — 90 percent of which are new wind, solar, and storage projects — were waiting in interconnection queues nationwide.” Not all that proposed generation would be built, even in the best of circumstances, but it’s still an enormous backlog of projects waiting to connect.Here’s a map of grid congestion in the territory covered by the Midcontinent Independent System Operator (MISO). The areas in orange and red are already overloaded (as of 2018).A recent analysis by the Natural Resources Defense Council’s Sustainable FERC Project — well-covered by Kari Lydersen for Midwest Energy News — found that “245 clean energy projects that had reached advanced stages of development were withdrawn between January 2016 and July 2020,” mainly due to grid congestion and the resulting high costs of grid upgrades. That’s an enormous amount of clean energy — and work on the part of renewable energy developers — down the drain.The graph below shows the amount of different kinds of energy waiting in interconnection queues from 2014 to 2019 — as you can see, both solar and wind are spiking. We’ve got more and more clean energy just waiting around to start sending electrons.Unclogging those queues requires, among other things, building more transmission. Remember that study by the NOAA scientists? It also found that a national energy grid would allow the integration of 523 gigawatts of new wind and 371 gigawatts of new solar. (US total electrical capacity is around 1,200 gigawatts, so those are not small amounts.)So: new transmission would help integrate renewable energy, reduce greenhouse gas emissions, reduce electricity costs, and relieve congestion. It’s national infrastructure that creates jobs and repays upfront investment many times over. We can’t hit our national decarbonization goals without it. It is good. We should build more of it.State and local resistance is constipating the national energy gridI’ll go into this in more detail in the next post, but the root of the problem for transmission in the US is local resistance. For natural gas, the federal government can step in, permit a pipeline, and seize land via eminent domain. It does not have that authority when it comes to transmission lines (except in some special cases). In the US, transmission siting is controlled by states. The process is a bureaucratic marathon subject to parochial objections and ridden with veto points at every stage. That’s why, even as the consensus around the need for new national transmission has been strengthening for decades, the US has continued … not building much. We have been under-investing in transmission for decades. Check out how electricity demand outran transmission expansion from 1988 to 2009:Texas broke the mold by building a bunch of transmission to connect renewables through its Competitive Renewable Energy Zones (CREZ) program in the 2010s, but the rest of the country hasn’t followed suit. Some shorter local lines are getting built, some lines that are underwater (and thus free of local landowners), but in terms of long-distance, high-voltage lines, there’s been basically bupkis. (In his book Superpower, journalist Russell Gold tells the story of Houston entrepreneur Michael Skelly and his company Clean Line Energy Partners, which had grand plans to build a national network of HVDC transmission lines — plans that were largely frustrated.)And so, overall, the US transmission system is as janky and outdated as the rest of its infrastructure.There are some positive signs, though. Biden is choosing smart people to lead the agencies that will have a hand in transmission, there’s broad public and political appetite for Green New Deal-style infrastructure spending, and advocates have begun a coordinated push to get the issue some attention — see, for example, the Macro Grid Initiative, a co-production of the American Council on Renewable Energy (ACORE) and ACEG. In its recent comprehensive report, the House Select Committee on the Climate Crisis included a whole detailed section on “moving toward a national Supergrid.”The top recommendation in all the reports I’ve read is simply that transmission be made a national priority. The president needs to affirm via executive order — and preferably Congress by legislation — that federal agencies will cooperate to develop and implement a comprehensive plan for a national transmission grid.That’s the big picture. On our next episode of Volts, we’ll dig into the specifics of what Congress can do, and what Biden can do without Congress, to get the process of building a national energy grid unconstipated. Get full access to Volts at www.volts.wtf/subscribe

[If you don’t feel like reading this post, just click Play above and I’ll read it to you.]Happy Inauguration Day, Voltsians! I know it’s getting somewhat tedious to keep saying this, but yes, I’m still working on that transmission post. I swore when I started my own publication that I was not going to rush anymore — that I would research and work on stuff until I was happy with it. But I never swore not to be neurotic and apologetic about it! Anyway, it’s in the works. Until then, let’s look at a few interesting news developments from this eventful past week. Biden administration pledges to come out of the gate swingingA few weeks ago, I shared some simple advice with the Biden administration: blitz. Do everything within your power, as fast as possible, and don’t get tripped up trying to finesse the media narrative or secure chimerical congressional cooperation.In what is clearly a direct response to my piece (I mean probably), the administration recently leaked plans for its first term, to be kicked off with a 10-day spree of executive actions — roughly a dozen on Day One alone. CTV News got the scoop from a memo by incoming Biden Chief of Staff Ron Klain, which Politico subsequently confirmed.I really encourage you to click over and read the list — it’s the best I’ve felt in ages. So many lives will be immediately improved through health, immigration, and Covid relief measures. Elections really do matter.But we’re here to talk about climate and energy, so I went through and picked out the relevant stuff:Wednesday, after inaugurationDeclaration that the U.S. is rejoining Paris climate accord.Start of a process to restore 100 public health and environmental rules that the Obama administration created and President Donald Trump eliminated or weakened.Not included in the memo but confirmed by CNN reporting: rescind the permit for the Keystone XL pipeline. By February 1Executive actions to address climate change.BeyondWin passage of a $2 trillion climate package to get the U.S. to net-zero carbon emissions by 2050.Win passage of a plan to spend $700 billion boosting manufacturing and research and development.The list suggests that the administration is going to move aggressively on multiple fronts, but it doesn’t reveal much about what direction it will go on climate. The last two items are going to be pure messaging efforts — as long as the filibuster remains in place, neither has a chance of passage in Congress.The first item, getting back in the Paris agreement, is low-hanging fruit, more symbolic than impactful. Ultimately, a Paris pledge is simply a pledge to pass domestic carbon policy, so it’s the domestic carbon policy that really matters. The second item, cleaning up Trump’s regulatory mess, is extremely important, but it’s a matter of restoration, not building. The third item, Keystone XL, is a genuinely nice-to-see nod to climate activists, but not that big a deal in carbon terms.So everything rides on that vague fourth item: “Executive actions to address climate change.” Will Biden’s EPA launch work on new rules to tackle fuel economy? A new plan to decarbonize the electricity sector? More stringent rules on air pollution? Rules that encourage building electrification? My fear is that the administration will put off that work, thinking that being gentle will make legislation easier. It won’t. Just do the rules!Court strikes down Trump’s plan to (not) regulate power plantsTuesday brought a bit of good fortune that will make Biden’s work easier: a federal court struck down one of Trump’s most important climate rollbacks, and not only that, repudiated the legal argument it was based on.Some background: The Obama administration’s plan to reduce greenhouse gas emissions from power plants — the Clean Power Plan — was stuck in legal limbo, waiting on a federal court ruling, when Trump came into power and squashed it for good. It never got the ruling or went into effect.The argument before the court was over whether the Clean Air Act grants EPA the authority to regulate air pollutants “beyond the fenceline.” The Clean Power Plan was extremely flexible, allowing states to meet their reduction targets through a portfolio of compliance strategies, many of which (like building new renewables or increasing energy efficiency) took place outside of the regulated power plants themselves — beyond the fenceline. Republican lawyers argued that EPA regulations can only mandate changes “within the fenceline,” which, when it comes to something like a coal plant, amounts to some modest efficiency improvements.When the rule and the lawsuit were scrapped, Trump’s EPA developed a replacement plan based on that legal interpretation: the Affordable Clean Energy (ACE) rule. Now, pretty much all the rules that came out of the Trump administration were shoddy and ridiculous, but ACE was something special. Studies found that the rule would lead to an increase in carbon emissions, because it would enable some coal plants to run more often. EPA’s own regulatory impact analysis found the rule would lead to as many as 1,400 additional deaths per year by 2030. Yes, you read that right: it was a pollution rule that would have led to more pollution and more deaths than passing no rule at all. It was super-dumb. Happily, a key federal court agrees: the DC Circuit Court of Appeals just struck ACE down. The ruling said that the administration “fundamentally has misconceived the law” in restricting changes to within the fenceline, effectively endorsing the Obama administration’s much more expansive interpretation. That means Biden’s EPA will not have to go through the laborious process of rolling back the ACE rule. Instead it can begin with a blank slate — “consider the question afresh,” as the court put it — and come up with a plan as flexible as Obama’s, but much more ambitious. It’s a fortuitous bit of news, fortuitously timed.And we begin our course in advanced Manchin studiesWest Virginia Sen. Joe Manchin (D-ish) — who incoming Senate Majority Leader Chuck Schumer has inexplicably made the chair of the Senate Energy and Natural Resources Committee — recently gave an interview to the conservative Washington Examiner in which he said a bunch of ridiculous stuff like, “you cannot eliminate your way to a cleaner environment. You can innovate your way.”Sigh. I was disheartened, and said so on Twitter.I was subsequently assured by several people I trust that this is just Manchin being Manchin, saying the kinds of things that will appeal to whatever audience he happens to be speaking to. In fact, I’m told, while Manchin is obliged by the Republican lean in his state to voice opposition to heavy-handed (read: any) regulation, he is in fact open to the kind of historic investments that would transform the energy landscape. He hasn’t ruled out DC statehood. He’s softer on the filibuster than it seems. He’ll be willing to bargain when it comes time for budget reconciliation. Congressional insiders seem weirdly optimistic about the possibilities under Manchin. So maybe I’m wrong! Maybe he is more flexible than he’s making out and will come through when circumstances demand it. I hope so.Either way, we’re all going to be studying this guy’s every word and expression for clues, for four years, so get used to it.Feline representation mattersMy dogs Forest and Mabel get most of the glory here at Volts, but I also have two cats, Anakin and Obi-Wan. They are old — my family got them when I was away attending Obama’s 2008 inauguration, ironically enough — and not particularly fond of sitting for pictures.They do like a good cuddle, though, and are willing to look at you exactly like this until you comply. Thanks for reading, everyone. Get full access to Volts at www.volts.wtf/subscribe

Greetings, peoples of the Volts! I’ve got a special treat for you today. It’s not my first podcast, exactly, but it’s my first Official Podcast, with music and fancy-pants guests and everything. My guests are:* Dr. Leah Stokes, an assistant professor of political science at the University of California, Santa Barbara, and author of the excellent recent book Short Circuiting Policy: Interest Groups and the Battle Over Clean Energy and Climate Policy in the American States; and* Sam Ricketts, former climate director for the Jay Inslee presidential campaign, cofounder of Evergreen Action, senior fellow at the Center for American Progress, and general climate-political man about town. Our subject? How to pass a national clean energy standard through budget reconciliation. If those words mean nothing to you, I recommend reading my previous post, about the Georgia Senate wins and what they mean for clean-energy policy. But I’ll run through some quick background.Biden may need to squeeze his signature climate plan through a budget billOne of the most important elements of Joe Biden’s climate plan — arguably the centerpiece — is a national clean energy standard (CES) that would require the electricity sector to steadily decarbonize until it reaches net-zero greenhouse gas emissions by 2035. This is important not just because the electricity sector is responsible for about a third of emissions, but because a lot of other emitting sectors like transportation and heating are going to shift to electricity in coming years, driving up demand. It’s important to have clean electricity for them to use.While Biden does have a Democratic Congress, his majority in the Senate remains slim and the filibuster is likely to remain in place, which means a big climate bill is unlikely. Any big bill at all is unlikely. Probably the only thing that will pass Congress is what’s called a budget reconciliation bill, which can not be filibustered and thus can get by with a simple majority.The only things allowed in a reconciliation bill are budget-relevant items, i.e., measures that raise or lower government revenue. Biden’s CES is a purely regulatory measure — it just changes the rules. It probably couldn’t get through reconciliation.However! Could a CES be tweaked or modified or redesigned in some way so that it is budget relevant and could pass through reconciliation? Could Biden pass his top climate priority after all?That is precisely what Leah and Sam have been working on, and that’s what we discuss, at some length, in today’s podcast. It’s way more interesting than it sounds! (That may be my new tag line.)Bonus MabelLife is a donut, y’all. Grab onto it with all your fearsome teeth. Get full access to Volts at www.volts.wtf/subscribe

[If you do not feel like reading today’s post, you can listen to it. Just hit play above.]Y’all, before we get started today I have to share the funniest thing that’s ever happened. You know how I went on MSNBC a few weeks ago to talk about how Joe Biden should do everything at once? And you know how former Saturday Night Live comedienne and all-around awesome person Leslie Jones frequently tapes herself watching MSNBC and commenting on people and their rooms? Well get a load of this:Lol. It’s even funnier to read the comment thread beneath the tweet. Apparently I look like all the white bearded guys rolled into one. Anyway. Good times. On to business!I’m working on a longer post about electricity transmission (join the preliminary discussion), but the news cycle has intervened. To wit: on Tuesday, Democrats officially won both the Senate runoffs in Georgia. Joe Biden will have a Democratic Senate!This news has Forest shaking with excitement.So before we get to transmission, let’s talk about what these Senate wins mean, in general and specifically for clean-energy policy. I’ll end with a little bit of advice for the Democratic Congress, which is the same advice I gave Biden: go for it. Control over the Senate mattersDemocrats have 50 senators (well, 48 plus Independents Bernie Sanders and Angus King) and Vice President Harris casts the tie-breaking vote, so technically they have a majority in the Senate — albeit the slimmest possible majority.But in the US Senate, the one-vote difference between being in the minority and being in the majority is a chasm. Just ask incoming Senate Minority Leader Mitch McConnell. Most importantly, the Senate majority leader controls which bills come to the floor. McConnell was forever refusing to bring bills to a vote unless he had the entire GOP caucus behind him — even bills with enough bipartisan support to pass. It was an incredibly effective weapon to suppress and obscure the Democratic agenda. New Senate Majority Leader Chuck Schumer will be able to control the tempo and focus now. Secondly, Senate committees will now be chaired by Dems, who can choose what to hold hearings on, and when. Thirdly, this is going to make it much easier for Biden to get his appointments confirmed by the Senate, which is a huge relief — those fights would have drained his attention and political capital. The day after the election, Biden announced that he would nominate Merrick Garland for attorney general. Ha ha, suck it, Mitch.Fourthly, if Dems can maintain their unity (which is never a given), they can begin populating the federal bench with competent progressive judges to offset the incompetent reactionaries McConnell has been cranking out. And if Justice Stephen Breyer should choose to retire [makes the sign of the cross] they will have an opportunity to get a solid progressive on the Supreme Court.Losing the Senate would have been a disaster for Dems. Congress would have passed nothing, leaving Biden virtually alone to accomplish everything his coalition needs to hang together in 2022 and 2024. Instead they have a narrow majority in the Senate to match their increasingly narrow majority in the House. So it is a non-disaster. That said, it’s not going to lead to progressive legislation.A 50-50 Senate will be owned & operated by Joe ManchinPre-November, Democrats were pretty high on election optimism — smoking some bad polls, as it turns out — and there was talk of a sweeping, New Deal-esque agenda, beginning with aggressive democracy reform and moving quickly into climate change. (Biden’s published plans constituted the most progressive agenda any Democratic presidential candidate has run on in decades.)That was all premised on the idea of Democrats winning 52 or 53 seats in the Senate. And if we’re being honest with ourselves, even that wouldn’t have been nearly enough of a margin for Dems to pass the kind of agenda Biden ran on.But with only 50 seats, Democrats will need unanimity for every move they make. Republicans will be united in obstructionism. It is what they know best; it is where they shine. There are only a few Republican senators who even pretend to be “moderate” any more — Susan Collins (ME), Lisa Murkowski (AK), and Mitt Romney (UT), basically — and even if one or two Republicans can be picked off for a given vote, that’s not enough to fully offset losing conservative Dems like Joe Manchin (WV, now chair of the Senate Energy and Natural Resources Committee), Kyrsten Sinema (AZ), and Jon Tester (MT), plus Independent Angus King (ME).Basically, the rightmost handful of Dems in the Senate will be the narrow aperture through which all legislation must pass, and as such, they will have almost total veto power over every part of the agenda. They will decide what gets through.Manchin does not want to pass Medicare for All or a Green New Deal. He doesn’t even want to pass Biden’s actual climate plan. He doesn’t want to do anything big at all, which he has made very clear:Senator Joe Manchin III of West Virginia, the most conservative member of his party in the Senate, has a message for fellow Democrats hoping to capture the majority and quickly begin muscling through legislation to bring about sweeping, liberal change: not on his watch.Most importantly, Manchin doesn’t want to get rid of the filibuster, and he’s not alone in that. Without 50 votes to scrap it, the filibuster stays, which means no major legislation will pass. No more Covid relief bills. No democracy reform bill. No climate bill. No health care bill. Nothing, period, full stop. (I cannot stress the point enough: there is no significant legislation in the universe for which 10 Republican senators will cross over to vote with Dems, save perhaps defense spending authorization. Keeping the filibuster means deliberately taking major legislation off the table.)That doesn’t mean there’s no hope for clean energy in the new Congress, though.Opportunities for climate progressI’ve already written about all the things Biden can do using executive authority alone. All of that is still on the table, though as we will see below, it is somewhat complicated by the Georgia development.But what about Congress? There is at least one place where Dems could get substantial clean energy legislation passed.Budget reconciliationI wrote a long piece on reconciliation last year, which I recommend. (Everyone needs to study up on this!) It’s a bit difficult to nail down, because the rules governing it are not statutory but adopted rules of the Senate, which can be changed — either at the beginning of the session or on a case-by-case basis. So reconciliation is, in many ways, whatever the Senate wants it to be.Budget reconciliation was originally conceived of in modest terms, as a way for the Senate to finalize and work out any discrepancies in the federal budget for the year. Unlike normal legislation, it cannot be filibustered, so it requires only a majority vote.As normal legislation has become more difficult, both parties have increasingly turned to reconciliation to pass their priorities. If I may quote my own story:In an age of partisan gridlock, the boundaries of [reconciliation’s] use have been pushed by both parties. “As polarization has made it harder to legislate under regular order,” says Molly Reynolds, a congressional scholar at the Brookings Institution, “the pot of gold at the end of the reconciliation rainbow has become more and more valuable as a way to pursue party-defining achievements.”But reconciliation is not a get-out-of-jail-free card. It can’t be used for just anything. Quoting myself again:The big and most obvious limitations are that a budget reconciliation bill is typically only passed once a year, cannot create or change regulations, and cannot create or direct any discretionary spending (things like research, defense, and environmental protection). It can only mess with mandatory spending or the tax code.Within that basic framework, the biggest limitations are imposed by the “Byrd Rule,” introduced by then-Senate Minority Leader Robert Byrd in 1985 (and subsequently incorporated into the [Congressional Budget Act] in 1990). He wanted to prohibit “extraneous” measures in reconciliation bills. He defined as extraneous any measures that [quoting Vox’s Dylan Matthews]: “change Social Security; don’t change the overall level of spending or revenue, or where such a change is merely ‘incidental’; increase deficits outside the 10-year budget window, and/or are outside the jurisdiction of the committee recommending them.” All reconciliation bills receive a special analysis to see if they abide by these restrictions, a process known semi-affectionately as a “Byrd bath.”This set of restrictions creates a kind of conceptual puzzle into which reconciliation policies must fit. They must materially affect spending or revenue, but they must balance out over the budget window (typically 10 years). Any new spending or tax expenditure must be paid for within that window.So what kind of clean energy policy can fit through this reconciliation process? The most obvious place to look is at measures that directly affect the budget: a refunded carbon fee, clean-energy tax credits and RD&D investments, infrastructure investments, and the like. Anything that spends money or charges fees.A variety of mandatory spending programs — think Medicare, Medicaid, food stamps, and unemployment benefits — could be tweaked to support a just transition away from fossil fuels. A Green Bank (or an infrastructure bank with a green focus) could be established to make ongoing clean-energy investments.There’s also some thinking underway about how to tweak regulatory programs so that they work via the budget and thus could pass reconciliation. For instance, there are several ways that a national clean-energy standard to decarbonize the electricity sector by 2035 could be adapted to reconciliation. (More on that in a post coming soon.) But it’s a lot of work, translating regulations to budget measures, and there are a lot of regulations needed.In theory, the Dem majority could vote to suspend or change reconciliation rules for particular measures like democracy reform. If challenged by the Senate parliamentarian who rules on these matters, they could simply vote to override. But it’s not clear why that bit of procedural radicalism would be any more congenial to Manchin than ditching the filibuster. Total Democratic unity is almost certainly going to be required to get any ambitious reconciliation bill passed (remember, other Dem interest groups also want their priorities included; Republicans are going to hate these bills), so once again, Manchin will be the gatekeeper. That will mean, among other things, that carbon capture, utilization, and storage (CCUS) gets lots of money, along with a bunch of other stuff greens don’t like.Nonetheless, budget reconciliation is likely the biggest bite Dems will get at the apple, and they’ll get at least two before the 2022 elections.The Congressional Review ActTrump did an enormous amount of regulatory damage in his four years and Biden’s administration could easily spend four years cleaning it all up. It could use some help.Helpfully, there’s a law called the Congressional Review Act. I wrote a piece about it in (good lord) 2011 that has some background. Quoting myself yet again:The CRA is a law Newt Gingrich got passed back in 1996. It says that within 60 days of a regulation being passed by the executive branch, a majority in both houses of Congress can vote to nullify it. (It can’t be filibustered, so you only need a majority in the Senate, not the usual 60.)At the time, the law was rarely used, because the circumstances in which it could possibly work are narrow. Any bill has to be signed into law by a president, and presidents don’t want to nullify their own administration’s regulations, so a president is only likely to sign a CRA that nullifies what the previous president did in the last 60 days of their term in office. And that new president needs both houses of Congress to be controlled their party as well. It doesn’t seem like it ought to happen much, and hadn’t until Hillary Clinton lost to Trump and Republicans took both houses in 2016. Republicans went on an immediate deregulatory bender, nixing 16 rules Obama passed in his last 60 days.Now it’s happened again: Trump lost to Biden and Democrats took both houses. So Dems can use the CRA to nullify everything Trump did in his last 60 days, with the stroke of a pen. And Trump has done a lot in his last 60 days. ProPublica has a special project devoted to tracking all the last-minute regulatory changes Trump’s administration has pushed (and is pushing) through. There’s a short article in The National Law Review about how best to use the CRA. Over at Morning Consult, Lisa Martine Jenkins has a nice chart covering the various ways that Dems might overturn Trump regulations, including by using the CRA.Among the CRA’s top targets: the EPA’s odious “secret science” rule, which would prohibit the agency from considering a huge and pivotal body of studies on public health; the EPA’s twisting of cost-benefit analysis to ignore most of the benefits of air pollution rules; DOI’s recent leasing of Alaskan Arctic land for oil and gas drilling; the recent assault on the Migratory Bird Treaty; and many more. Democratic wonks have been tracking the Trump administration closely and stand ready to write a comprehensive CRA bill. It should (and likely will) be a top priority for the new Congress.Uncertainties aboundRoughly 100% of my political prognostications in the last five years have proven laughably wrong, so I’m not even going to pretend to predict what course the next few years will take. As the last few days have demonstrated yet again, anything can happen.But there are a few particular strands I’ll be keeping my eye on.There’s at least some chance that Manchin is just positioning himself on the filibuster. Other filibuster supporters like Ron Wyden (OR) have recently said that, while they don’t want to get rid of it, they aren’t simply going to let Republicans block everything again. There’s some chance that, if Democrats lead with a democracy reform bill and Republicans block it, Wyden, Manchin, and other Dems could be persuaded to suspend the filibuster on a one-time basis, or reform it — say, so that senators once again have to conduct “talking filibusters,” appearing on the floor rather than simply vowing to filibuster through a press release.Another wrinkle is that having a Democratic Congress might weaken Biden’s drive to maximize executive action. He might think that if he acts too aggressively, he’ll lose the cooperation of key Democratic moderates. I think that would be a huge mistake — executive action is something he knows he can do, while congressional cooperation, as Biden should have learned under Obama, can be a maddening ephemera.There’s also the question of the 2022 elections. A president’s first midterms are typically a disaster in which their party loses Congressional seats. (Think, if you can stand it, about 2010.) And in 2020, Republicans won the key state houses that will allow them to gerrymander themselves more seats, so there’s a very real chance Dems could lose the House in 2022. The Senate landscape will be more congenial to Dems; Republicans are defending 20 seats, Dems only 13. But Senate races are devilishly difficult to handicap.So 2022 could see Dems keeping both houses, which would strengthen their mandate; losing the House and keeping the Senate, which would put a freeze on new legislation and open up the possibility of impeachment (Republicans will make up some reason); or losing both houses, which opens up the possibility of impeachment and removal from office. And then there’s the question of Biden’s health and the Democratic presidential candidate in 2024, which is even more opaque and unpredictable.We are cursed to live in interesting times. The Republican Party could implode. US democracy could crumble in the face of authoritarianism. A meteor could strike America. These are all open possibilities.So in the end, my advice to the Democratic Congress is the same as it is to Biden: blitz. Only two years are guaranteed. The only hope Democrats have of surviving the waves of white grievance and authoritarianism that are crashing against DC — strengthened by deep structural deficiencies in the US constitutional system — is to rapidly and visibly improve the lives of ordinary people. Get the pandemic under control. Give Americans money to get through the recession. Give them access to affordable health care. Make it easier for them to vote. And invest in the clean-energy growth that will employ them and clean their air. Do it proudly and loudly and make sure everyone hears about it.If you have to write a check to every citizen of West Virginia to get it done, well then, all hail our new overlord Joe Manchin, blessed be His beneficence. Get full access to Volts at www.volts.wtf/subscribe

Hey, Volts readers, guess what? Now you can be Volts listeners! If you would prefer to hear the post below read aloud, by me, just click play above. And if you like having the posts read like this, let me know. If enough people are into it, I might see about getting some better equipment and actually learning how to edit a sound file.Before we jump in, some housekeeping:* Remember, as of Jan. 1, free subscribers will receive one post a week. The other posts, and the ability to comment on posts and discussion threads, will be reserved for members (paid subscribers). I’m somewhat loath to do this — in my perfect world, it would all be free — but I need to, like, live. And buy dog food. So please join! We’re gonna have fun. * There are 20% subscription discounts for groups of four or more and students and educators. If you’re an educator who wants Volts access for your class or group, let me know and we’ll figure something out. * If you want to subscribe but can’t afford it right now, let me know and I’ll set you up. You can reply to this email and I’ll get it. * The Covid-relief/omnibus megabill, containing an enormous energy bill that I discussed last week? Trump signed it. It’s law! (I also discussed it with Matt Yglesias on the first Volts podcast.)Anyway, on to business.Today I’m going to do something a little different. It might seem like an odd digression into philosophy and ethics, but it comes back around to politics. In fact, it explains my core political orientation about as well as anything can.I’m going to explain why I hate the Trolley Problem.The Trolley Problem and its variantsThe Trolley Problem is a famous “thought experiment” in ethics. It traces back to philosopher Philippa Foot, who first wrote about it in 1967, but in the years since there have been dozens upon dozens of variations, in both the philosophical literature and the popular press.You’ve probably heard some version. The most basic goes like this: There’s an out-of-control railcar hurtling toward five people who are tied to the track. You’re next to a switch that could divert the car to another track, but on that track is a single worker who would be killed if you do. What do you do?Variations are endless. What if the person on track two is your son? What if the choice is between five people you know to be murderers and one good person? What if the choice were made from a switch house where you couldn’t see any of the people? The point of these thought experiments is to probe your intuitions and principles. Is it better to do nothing and allow five deaths or to take affirmative action that leads to one death? Does the difference between acting and refraining from acting matter? Does the number of lives matter? Etc. The recent development of autonomous vehicles has brought the Trolly Problem back into popular consciousness yet again. If robots are going to be driving, how will they make these decisions? Will they be utilitarians, maximizing the number of lives saved at every juncture, or Kantians, refusing to knowingly sacrifice one life for another? Presumably however we program them. So maybe we have to decide after all.The Trolley Problem served as the basis for a fan-favorite sequence on the show The Good Place:And of course, times being what they are, it has inspired all manner of memes.Despite its enduring appeal, the Trolley Problem is Bad. It is misleading about moral decision making and, more importantly, misleading about how to improve moral decision making.It’s not moral principles but moral agents that matter mostSome of you know that I spent several years in the late 1990s getting an MA in philosophy and then starting on (but not finishing) a PhD. Anyone who studied analytic philosophy — as I did, at least at first — has spent lots of time with thought experiments. I spent a semester reading the pinnacle of pure intellectual gymnastics, Derek Parfit’s Reasons and Persons, which is full of thought experiments moral, epistemic, metaphysical, and otherwise. The book is revered in the field, considered one of the great philosophical works of the 20th century, and it completely turned me off. It’s one of many things that led me away from philosophy entirely. As the Trolley Problem is structured, you, the moral agent, have an utter paucity of knowledge about the situation. You don’t know why you’re there, any of the people involved, any history, any detail. All you know is, one life or five lives. The problem is designed to make the agent (the decider) invisible, to isolate the decision itself away from embedded, embodied experience. Which is fine, if you’re just having a think. But discussing the ideal ranking of moral principles is like discussing Kant’s noumena, the thing-in-itself. No human can directly perceive it and wouldn’t know if they had, so there’s an angels-on-the-head-of-a-pin aspect to it. All we have are the perceptual and analytic tools available to us, so we should focus on improving them. If you want trolley-style decisions made better in the real world, in real societies, you’re much better off focusing on agents than on any set of final principles.How to be a good trolley deciderConsider if you ended up in the Trolley Problem in real life. How would you make a good decision in that situation? Ideally, you would be coming to it with a history; you’d know how you got there and something about how situation developed, who the other people are, why they hell they’re tied to the track, etc. You’d have a good sense of how fast the railcar is traveling and the force necessary to stop it. You’d have a good sense of the chances of success of various options: flagging down the car or the man working on the tracks, finding something to throw on the tracks, jumping on the track yourself. You’d know whether the people tied to the track are real or dummies, whether you’re being tricked.You’d also need the ability to make a quick decision in extremely difficult circumstances. You couldn’t let your fear or over-analysis paralyze you (as happens to Chidi in Good Place). You’d need the ability to keep your cool, to maintain some emotional distance from the situation, to rapidly consider the options from different perspectives, to notice if there are other non-obvious alternatives. You’d need to be alert, well-rested, well-fed, not distracted, attuned to circumstances — what the man on the tracks is doing, how securely the other people are attached to the tracks, whether the ground and tracks are wet and slippery, the speed of the railcar, the age of the equipment, etc. And finally, you would need to be motivated to do the right thing.To make the best possible decision, you would need to be perfectly informed, acting based on prosocial motivations and a perfect temperament, in control of yourself and thinking with perfect clarity. In other words, what we’d want operating in a real-world case of the Trolley Problem is not the perfect set of principles, but the perfect moral agent — the best possible decision-maker.That’s my answer to the Trolley Problem and all similar thought experiments: the right decision is whatever decision the best possible moral decision-maker would make in the situation. Of course, there is no such moral superagent. No one in this world, making real decisions in real circumstances, has a perfect temperament or is ever perfectly informed or thinking with perfect clarity. The default, in fact, is harried people making thoughtless decisions based on crude heuristics and mental models. But the crucial point is that we can be better or worse decision-makers, closer or farther away from the ideal described above, and we have a pretty good idea what it takes to help people get closer. (More on that below.) One thing that doesn’t seem to help is a well-developed set of ethical principles. A 2014 research paper surveyed the empirical evidence collected by studies of various moral behaviors and found “no statistically detectable difference between the behavior of ethicists and non-ethicists.” In any real-world situation, good decision-making is enabled less by abstract principles than by temperament and discernment, i.e., self-possession and wisdom. The person who takes in the most information, can see the situation through the appropriate lens, and can act on priorities amidst pressure and uncertainty will likely make the best decision. Whether we’re seeking better real-world outcomes (as I am) or seeking better answers to longstanding moral questions (as the Trolley Problem is), the right strategy is the same: get help. Try to make society fertile for the development of better moral agents. They will have better answers than we do.How to encourage the growth of better moral agentsIn his seminal 2011 book Thinking, Fast and Slow, Princeton psychologist Daniel Kahneman made a distinction between system 1 (S1) thinking and system 2 (S2) thinking.Kahneman describes S1 as “fast, automatic, frequent, emotional, stereotypic, and unconscious” — what are more colloquially known as “gut reactions.”S2 is “slow, effortful, infrequent, logical, calculating, and conscious,” closer to what we tend to conceive of as thinking — taking a step back, slowing down, consciously assessing and reasoning.Very crudely speaking, you can think of S1 engaging the amygdala, the brain’s basic pleasure/pain, attraction/revulsion centers, and S2 engaging the frontal cortex, the centers of symbol manipulation, self-reflection, and conscious calculation. The amygdala is prior to the frontal cortex, both evolutionarily speaking and in biological priority. Long-term thinking requires a basic level of safety, an S1 system quiet enough to let S2 work. The more threat looms, the more we, like all biological creatures, prioritize the immediate security of our bodies, our families, our tribes, our borders. We know that stress and privation make S2 thinking more difficult. For a superb introduction to this work, listen to Ezra Klein’s podcast interview with Robert Sapolsky, a Stanford neuroscientist and primatologist who has studied the intersection of stress and poverty. (Seriously, take an hour, it will change how you think.)Sapolsky’s work is varied and fascinating, but the recurring theme is that, in modern human societies, it’s expensive to be poor — cognitively, emotionally, and physically. Poverty, hunger, and social marginalization lead to stress, exhaustion, anxiety, and ill health. Stress is a biological emergency reaction, an elevated heart rate and flood of hormones designed for short-term anticipatory threat response. But it is now experienced as a constant background state in response to chronic threats that have no immediate solutions, to corrosive long-term effect. Sapolsky calls being on the lower end of America’s social and economic totem pole a “psychic sledgehammer.” Under those blows, it is difficult to undertake the “slow, effortful” cognitive processes necessary for long-term plans or Olympian moral decision-making.And our vulnerability to circumstance traces all the way back to before our birth. Stress hormones and nutrition in pregnant mothers shape the neural pathways of the fetus in the womb. The crucial weeks, months, and years after birth shape basic neural and hormonal response patterns that persist for life.(I once wrote a long article on the centrality of luck to human life. It’s a good one!)From the womb on, everywhere is the same basic pattern: insofar as a person feels safe and nurtured, they can more easily develop higher order and longer term thinking. Conversely, hunger, stress, and privation cause heightened threat response and a shrinking of horizons. That’s true whether it’s a fetus bathed in stress hormones or an adult marginalized in a society with low trust. Life is composed of dozens of small decisions every day, decisions in which conflicting interests and principles must be resolved, long-term benefits, personal and social, weighed against short-term desires. To maximize the net welfare of society, which ought to be our goal, we need to improve those decisions, incrementally, at the margins, bit by bit.We do that by creating better moral agents, which we know how to do. We make sure that everyone has their basic needs cared for; that every family expecting a baby receives prenatal care and basic childcare training; that every family with a new child receives time off from work and regular nurse visits; that every child has access to quality public education, from pre-school through college; and that every adult receives adequate health care and housing. We create a compassionate, law-bound society that incentivizes prosocial behaviors. These are the kinds of things that create the necessary foundation for widespread S2 thinking. Progressivism is about bringing more of humanity into serviceAnd this, at a fundamental level, is why I’m a progressive. It’s not that I think I’ve figured out the perfect society or the correct way to live. It’s that I believe we can get better at it — better at living, better at society, better at peace and equitable, sustainable prosperity. The best way to improve is to recruit as much help as possible, to get the maximum number of minds and hearts involved. The more we lift people up out of poverty, precarity, discrimination, and stress, the more we unleash their minds on longer term problems and non-zero-sum, cooperative solutions. The more minds we have applying themselves to our collective trolley problems, the more likely we are to get good answers. The Trolley Problem attempts to isolate moral intuitions from the messiness of human experience, but integrating those intuitions and principles into human practice is the whole ballgame. It’s what matters. Being good, acting for the greatest good of humanity and the biosphere, is a practical skill, not a fixed body of knowledge or set of rules. It’s something we do together, not as isolated moral agents next to rail switches. And it’s difficult. It involves building and defending a complex social and economic infrastructure. We accomplish it, if at all, by paying closer attention to human experience, not abstracting away from it.Thinking about philosophy led me out of philosophyOver the course of his career, one of my favorite philosophers, Richard Rorty, basically thought his way out of philosophy. He started in analytic philosophy, moved to American pragmatism, and ended up doing something like social and political commentary. I won’t try to summarize or speak for Rorty, who is a towering and complicated figure, but my intellectual arc was, in its own modest way, more or less the same.What philosophical pragmatism captures is that, whether it’s ethics, metaphysics, consciousness, or personal identity, Ultimate Truth doesn’t and can’t matter to us. We can’t experience it directly. We wouldn’t know for certain if we had. All we can experience is one another and our endlessly varying, conflicting ideas about the right perspectives and frames through which to view evidence and events. Our only real metric for comparison is which perspectives and frames work better to navigate the world (“work better” being the heart of pragmatism). No god or revelation is going to come along and settle those endless arguments. The real work is just figuring out how we can live together in something approximating peace and harmony, how we can improve our collective circumstances even in light of our inescapable differences. Abstract thought experiments can’t answer those questions; they are questions of practice, of incremental improvement, the strong and slow boring of hard boards. I like to think that what I’m doing today is, in some small way, engaging with those real-world problems, helping to bore the boards. It is immeasurably more satisfying than sitting in a room contemplating imaginary dilemmas. The only trolleys I care about these days are the ones that serve transit-oriented development.Thanks for reading this far, y’all! That was long and nerdy. You deserve some dogs.Here’s Forest, majestically/goofily surveying his grandfather’s back yard.And here is Mabel engaged in her new favorite activity: staring contemplatively into the fire. Get full access to Volts at www.volts.wtf/subscribe

Happy Christmas Eve, everyone. I hope you are somewhere safe and warm.Here’s a little holiday treat for you: I recorded my first Voltscast.Matt Yglesias runs a newsletter called Slow Boring. He is interested in the energy bill that Congress passed this week. I just wrote a long post about that energy bill.We wanted to chat about it. Starting a whole official podcast with professional editing and music and a name and all the rest sounded a bit daunting, so as an experiment, we decided, in the immortal words of Bill O’Reilly …We talked, we recorded it, and we’re sending it to you, unedited. Fast and loose. Let me know what you think and if you’d like to see (er, hear) more like this. I’d like to get into doing more audio in the future. Apparently some people don’t have time to read 3,000-word pieces, but they can listen to me read pieces while they wash the dishes or walk the dog, so I might try a bit of narration. And I’ve had a few early talks with people about doing something more professional and produced.I’ll be honest: I don’t really want to launch an Actual Podcast and get tied to a particular format and schedule. I’m terrible at satisficing and I know if I did it I would obsess over it and it would eat up all my time, and I’d rather spend my time writing. I’d like to do it on a less formal basis, though, at least if y’all are into it, so let me know.In the meantime, stay cozy like Mabel and Forest. Get full access to Volts at www.volts.wtf/subscribe