In this episode, Gil Jenkins speaks with Justin Gillis and Hal Harvey, authors of the recently published book “The Big Fix: 7 Practical Steps to Save Our Planet.” The book offers an everyday citizen's guide to the seven essential changes our communities must enact to bring our greenhouse gas emissions down to zero. Justin Gillis spent a decade as an award-winning reporter for The New York Times covering climate change, where he is a contributing opinion writer for the newspaper now and currently a fellow at the Harvard University Center for the Environment. Hal Harvey is an acclaimed energy policy advisor and the CEO of San Francisco-based Energy Innovation, a nonpartisan energy and climate policy firm delivering research and analysis to help policymakers make informed choices. Gil, Hal, and Justin discuss the themes, industries, policies, and issues from The Big Fix and highlight the stories of people who are making those changes a reality.
In this episode, Gil Jenkins speaks with Justin Gillis and Hal Harvey, authors of the recently published book “The Big Fix: 7 Practical Steps to Save Our Planet.” The book offers an everyday citizen's guide to the seven essential changes our communities must enact to bring our greenhouse gas emissions down to zero. Justin Gillis spent a decade as an award-winning reporter for The New York Times covering climate change, where he is a contributing opinion writer for the newspaper now and currently a fellow at the Harvard University Center for the Environment. Hal Harvey is an acclaimed energy policy advisor and the CEO of San Francisco-based Energy Innovation, a nonpartisan energy and climate policy firm delivering research and analysis to help policymakers make informed choices.
Gil, Hal, and Justin discuss the themes, industries, policies, and issues from The Big Fix and highlight the stories of people who are making those changes a reality.
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Episode recorded: October 12, 2022
Email your feedback to Chad, Gil, and Hilary at climatepositive@hannonarmstrong.com or tweet them to @ClimatePosiPod.
Chad Reed: This is Climate Positive – a show featuring candid conversations with the leaders, innovators, and changemakers driving our climate positive future. I’m Chad Reed
Hilary Langer: I’m Hilary Langer.
Gil Jenkins: And I’m Gil Jenkins.
Justin Gillis: What we're saying in the book is we have to get out of the mindset of thinking that we're solving this problem just by being green consumers even though that is important.
We're only going to solve it by acting in a political sense, to get in the faces of all the people making these decisions by inertia and shaking their lapels and saying, "We need to start making different decisions and we need to be in a hurry about it."
Gil: Our guests this week are Justin Gillis and Hal Harvey, co-authors of the new book "The Big Fix: 7 Practical Steps to Save Our Planet." In their book, Justin and Hal offer an everyday citizens' guide to essential changes our communities must enact to bring our GHG emissions down to zero. Justin Gillis is a former award-winning reporter for The New York Times, where he covered climate change for over a decade. Hal Harvey is an acclaimed energy policy advisor and the CEO of the San Francisco-based NGO Energy Innovation -- a nonpartisan energy and climate policy shop that delivers research and analysis to help policymakers make informed choices. So, without further ado, here is my conversation with Justin and Hal.
Gil: Hal and Justin, thank you for joining us on Climate Positive.
Justin: Absolutely.
Hal Harvey: We're delighted to be here.
Gil: The theme of your new book, The Big Fix, I think is really about this idea that those of us who are climate-conscious need to move from just being green consumers, a smart thermostat, LED bulbs, maybe buying an electric car, putting solar on our roof, but really shifting and waking people up to this mindset of being green citizens, which really resonated with me in terms of practical things we can do to engage in this climate fight. Could you expand a bit on the theme as I understand it for our listeners?
Hal: We have to transform some really big systems. Our transportation system, the buildings we live in, the industry to the power of the country, and so forth. That requires great technology, lots of blue-collar and white-collar skills. It requires capital. Fundamentally, it requires a political decision to make the transformation happen. We have the technologies that are affordable, they're in fact cheaper now than the fossil age needs to be, but that doesn't mean it happens automatically. There are deeply embedded incumbent interests who fight for market share, and against that we have to have a political force that meets and then exceeds the resistance.
The second part of this, and I won't go on too long, is that you have to choose very carefully how to influence each of these sectors because the strategy for accelerating the transformation to electric vehicles is quite different from the one that insists that new buildings be built with the latest and best insulation and heat control technologies. You need to dig into the particulars of each sector to understand where the change can happen. When you do that, it's incredibly empowering and it's incredibly effective.
Gil: Justin?
Justin: We are up here against what I would call the power of human inertia, as Hal mentioned, the incumbent interest, which are powerful and have been lying really to the American public about the risk we face. On top of that, there's this just human inertia. All over the country, people are making decisions on a daily basis to perpetuate the fossil fuel economy without really thinking about it because that's what they've always done. School boards every year are making decisions to keep buying diesel buses even though electric buses have become available.
City governments and county governments are making decisions to top up their car fleets for their employees with gasoline-burning cars even though electric cars have become available. Builders are making decisions to put gas appliances and gas heat and such into buildings, even though they don't have to do that and the smart climate choice would be to not do that. The public at large people buy houses and they failed to ask this question, "Why is there gas in this house? There didn't need to be." What we're saying in the book is we have to get out of the mindset of thinking that we're solving this problem just by being green consumers even though that is important.
We're only going to solve it by acting in a political sense, to get in the faces of all the people making these decisions by default, by inertia and shaking their lapels and saying, "We need to start making different decisions and we need to be in a hurry about it."
Gil: Absolutely. You alluded, both of you, to some of the different sectors and practical, I want to emphasize the word practical ways people can involve in what may seem like a confusing and esoteric aspects of how we do climate energy policy in this country. Could you talk a little bit more about these three sectors or territories which are themselves levers for decarbonization? We talked about battery, electric buses, and parents getting involved at their school board.
Hal, I want you to talk about the importance of building codes and how that works. Also, I don't know that I've read anything so eloquent and direct on the importance in the practicality of engaging with public utility commissions, which are so influential. I want to talk to you about that as well.
Hal: Let me start with buildings. If you build a great building, it requires almost zero electricity or energy. My house, which is not a fantastic example, generates more energy than I use. I get negative bills from my utility. They pay me every month to be their customer. How does that happen? How did it happen? If you look at the history of buildings in the old days, they used to burn down. You remember the Chicago fire-- We don't actually remember it, but we know of the Chicago fire. Buildings used to collapse in earthquakes quite frequently. They still do in countries without strong building codes.
Modern sanitation systems, modern heat. There's a lot of decisions that go into a building. Some of those decisions can foreclose a green building and some of those decisions in effect insist on a green building. What kind of windows do you have? What kind of insulation do you have? Which was appointed? Do you have an overhang that shades your south-facing window in the summer months, but allow sunshine in in the winter months? All these choices are going to determine for a sensory or so, the amount of fossil fuel that gets burned from your building.
With new technologies, really fancy window coatings that are invisible, you don't know they're there, you can turn a window into a heater in Minneapolis, you can turn it into a cooler in Arizona with these specialized coatings, for example. Good insulation means that you're just spending a lot less on both heating and cooling. Some states and some countries have taken the building code question seriously and say, "How do we use it to make sure that every building belt is an outstanding energy performer?" The Nordic countries have done this. Germany has done this. California has done this. In California, the post-code buildings use 80% less energy than pre-code buildings. This was when Jerry Brown was--
Gil: Title 24, I think.
Hal: It was passed into law when Jerry Brown was the youngest governor in California's history. He signed it into law. It had a fantastic clause in it, and we need to learn from this clause where it says, "Every three years it gets tighter." How much tighter depends on technologies that pay for themselves and energy savings. We've gone through a bunch of Republican governors, a bunch of Democratic governors in the decades since then, and every three years the code got tighter. Now you're down to 80% in terms of your energy consumed. Since then, it said every single family home has to have solar PV on the roof.
We're going to make climate-positive buildings with that change. Who writes the building code? What considerations do they make? Why are most building codes in America lagging by a couple of decades compared to where they should be? Why do they fail to insist on the newest best technology? Those are questions any citizen can ask of their government, could go find out. It'll take you about three hours work to research building codes. You don't have to know the answer to every technical detail. You have to know, are you using an old code or a new code? Are you using a weak code or a strong code?
With that, you go into your local building code office or go to the mayor and say, "Do you have any idea how much money we're wasting by failing to properly insulate buildings in this state or this city?" It opens the door to large-scale change accessible by a handful of people.
Gil: Awesome. Justin, you were talking about buses. Could you share the story from the book about the kids in Montgomery County where I live. I just knew about the policy and seeing the headlines recently as that project on Electric School Bus comes out. Talk about that local action and how that could be a model. Montgomery County is interesting. It's one of the most wealthiest and most diverse counties in the country. Tell me about whether that's applicable across the social and economic spectrum and sharing lessons from what happened in Montgomery County.
Justin: Montgomery County is actually one of those places, and there are now thousands of towns across America and counties that declared a climate emergency a few years ago. A bunch of people declaring climate emergencies and then essentially doing nothing. They never had a plan for what to do to make those words real. Some citizens of Montgomery County, including kids, teenagers, picked up on that and got mad about it, and realized-- I sometimes say hypocrisy is the great American sin. They realized the hypocrisy of declaring a climate emergency and then doing nothing, and so there were marches in the streets. They were both kids and adults.
It was a coalition of people who stopped traffic, went and got in front of the school board and pleaded meeting after meeting, after meeting. Now, one of the big hurdles, and we should mention this, is the electric buses are still two to three times more expensive on first cost than the diesel buses. You can see why a school board would hesitate, and they're not crazy to hesitate. What you realize when you look closely at the economics is the operating costs are so much lower with the electrics that you can equalize that out over time. In fact, in this deal that Montgomery County eventually cut, they're probably going to wind up saving money ultimately, because they basically came up with the deal to lease the buses and capture that cost savings on the back end from the operating cost.
In addition to that, the batteries in these buses will actually be selling power back into the electric grid a few times a year when prices are really high. We sometimes get these stressed moments on the grid and prices are really high. That's part of what people call the value stack here, the value proposition. When you do the deal right, it becomes possible to do it. To your question about getting this done in poor communities, and let's be honest, richer communities should lead the way. They are the people right now who can afford electric buses. If they go first, that will help to scale them up and lower the cost and buy them down the learning curve as we say, and make them cheaper. It's also true that a huge amount of federal money for electric buses, grants for electric buses was--
Gil: Billions.
Justin: Yes, billions was put into these climate bills that the Biden administration recently got passed. There's down opportunity for even poorer school districts to get awarded grants and to go after electric buses. They may need to start small, start with 20 of them, not 200 as Montgomery County did. The opportunity is there, and our real point is school boards need to be making a plan here. Even if you can't do it right away, what is your plan? What is your timeline for converting? Parents need to go get in the faces of the school board. If you have a kid with asthma, or you know of kids with asthma, the diesel buses are a culprit, right?
They are directly responsible for exposing-- We have research that shows that kids riding diesel buses to school are more likely to have asthma attacks. Anyway, there's just a huge opportunity. People don't think of their school board as a venue for climate action, but it is. School boards are responsive to parents. Parents need to go down and make this case and the kids too, and say, "What are we doing here? We need a plan."
Gil: Yes, and it's not just new shiny buses and challenges of getting the constraints. This retrofit market for electric buses is fascinating. Something we're looking at as an investment firm, and it's like a third of the cost to change a diesel bus versus a new electric bus. The financing models are there because of that value stacks, and certainly the narrative and the storytelling around what electric school buses mean as a symbolic nature. I love the focus on that.
Let's talk about public utility commissions and PUCs. I think our audience have pretty good sense, but can you demystify that a bit and the stories that you share in your book about successful green citizen engagement efforts to drive clean power generation decisions at the public utility commission model?
Justin: Sure thing. We should pick up the thread on buses a little bit because it goes much further than school buses [crosstalk].
Gil: Corporate fleets and the alike, absolutely.
Justin: Can I riff on that for one minute?
Gil: Yes, please.
Justin: I've spent a fair bit of time in a city called Shenzhen in China. It's a newish city. It's about 10 or 12 million people. Every single bus in Shenzhen is electric. That's 18,000 buses. Every single taxi in Shenzhen is electric. Every single delivery truck in Shenzhen is electric. Every single one of their car sharing or their answer to Uber, which is called Didi, is electric. Now, Shenzhen is a rich city by Chinese standards, but it would be a partially by American standards, and they figured out they could do this. When you walk around Shenzhen, in contrast to many cities in China, the air's clean and it's quiet. There's humming noises.
Maintenance on the buses goes down dramatically because maintenance is driven by moving parts. An electric motor has four wheels and one motor and vibration kills vehicles. If everyone knows that buses vibrate like crazy, but electric buses don't because they don't have that internal combustion engine rattling away. If Shenzhen can do it, why on earth would any American city fail to do it?
Gil: We're going to do it.
Justin: We're going to do it. We have to do it. We need to think in terms of that kind of scale, tens of thousands rather than [crosstalk].
Gil: Can I just point out also, the last time I tried to count, we had more than 50 factories under construction in the United States to build batteries for electric cars and buses and other vehicles. In my home state of Georgia, people are already talking about 20,000 30,000, 40,000 jobs doing this work just in one state, and we are way behind China. The Chinese are just very far ahead of us on the electrification so is Europe. Norway is at 80 plus percent market share on electric cars. It's essentially gone entirely over. The United States is lagging here as we so often do in these recent decades on important technological trends and we just have to get on the stick and go faster.
Gil: I'm going to come back to IRA later in the conversation what those manufacturing incentives and batteries specific incentives will do to catch up on that great race. Quickly on the PUCs, Hal or Justin, do you want to take that?
Hal: 40% of the carbon in the US economy goes through monopoly pipes and wires. Pipes for natural gas and wires for electricity, of course. Because they're monopolies, they have to fall under public regulation. Otherwise, they could be subject to abusive pricing. That means they're guided by and they're actually controlled by public utilities commissions in each of the 50 states. Now if you ever want to put somebody to sleep, mention those three words in a row. Public utilities commissions.
Gil: I know but so important. There's several 100 people that are essential for driving real energy policy in this country.
Hal: It's staggering. There's typically five commissioners per state and they decide where your money goes when you write your utility bill check every month. They decide whether it goes to coal or to solar. They decide whether the utility can be a leader in putting in charging stations or not. They decide whether you get a hookup for free or subsidized for natural gas into your home or whether you go electric and so forth. What's interesting about public utilities commissions is that word, "public". They're supposed to serve you and other members of the public and "serve" means to make sure you have reliable and affordable supplies of energy.
It also means that they don't poison the rivers or foul the air or cook the atmosphere. If you want to do something about climate change, it's a fantastic opportunity, great target for your efforts. How does it work? They operate in a quasi-judicial form. It's almost like a court hearing where they take evidence and they consider their statutory duties and they make decisions about billions and billions of dollars per year where the money lands. They are required by statute to listen to the public. You can make a statement, you can enter a letter into the record and they have to react to these statements or letters.
If you're a utility regulatory expert this is your bread and butter. If you're not it can seem daunting. Here's the thing, you don't have to argue in the legal [inaudible 00:17:32] of the lawyers and the regulatory experts. You can speak in stark simple terms about what has to happen. You can bring in your kid that has asthma where you can organize 50 moms and dads bringing their kids who have asthma. You can put them in front of the Public Utilities Commission and you can say, "Why are you forcing these kids to breathe foul air?" You can say, "Why don't you accelerate the transition," especially as it's now brand new solar is cheaper than paying just the existing costs, operating costs of coal fired power plants.
You can save money and save kids at the same time. What's up? That's a powerful sentence. That's a headline grabber in the newspaper that uttered by a parent or anybody who cares about children is a political statement. First, what we have to do we have to start insisting that these representative bodies, these regulatory bodies put the entire public interest first including the environmental aspects.
Gil: It's a fight because of the political ingrained monopolies. We don't have to go into the scandals of some recently unless you want to. It's an uphill battle but they should know.
Justin: People should know that in a lot of states, the local utilities are the biggest contributors to state politics. They're buying your politicians with campaign contributions. By the way, those utilities are heavily invested in fossil. Even though, as Hal says, clean energy is now cheaper, they've got sunk costs and fossil and they want to keep making money on their fossil investments. They're dragging their feet on the transition pretty much all over the country. Unless the public speaks up louder, that's going to continue to happen. We have to get in there and shake these commissioners and say, "We want you to move."
Gil: Justin, you're a storyteller first. By your background, I think a true newspaper man. I think it's fair to say you're a bit of a policy wonk and aren't you an engineer by training?
Justin: I am.
Gil: What's it like teaming up on a book and not to be overly stereotypical and harmonizing your styles and interests? Hal, that's not to say you're not a good communicator either just because you're an engineer and a policy wonk. I think you are, but I have to just frame it that way and react to bringing those styles together because that's what I think is so interesting about your book is that it has the practical way, but the compelling journalism that only comes with a true journalist of your experience, Justin.
Justin: To some extent I resist this question because the real truth is this was a complete collaboration.
Gil: Hal was a source, right? You met Hal as a source?
Justin: He was originally a source. For 10 years, I was listening to all the people I met talk who were talking about this problem. This one guy kept making more sense than anybody else. I'd meet economists, and I'd get this line about carbon tax being the one true policy and nothing else will ever work. You'd meet technology evangelists, whether solar or wind or geothermal or lots of other things. The worst are the nuclear nuts who think they have gotten the only conceivable solution to this. Here was Hal talking about how the economy actually works--
Gil: How politics actually works.
Justin: Yes, all these systems that determine like the building codes are an example. I knew about the importance of building codes from having lived through Hurricane Andrew in Florida and we put this in the book actually. The night Hurricane Andrew hit in 1992, people lived or died depending on how well their builder had followed the local building code and a lot of builders had not. We had neighborhoods in Miami where on one side of the street, everything collapsed, and on the other side of the street, every building stood up. That told me something is really going on here with ethics and economics.
It's all a long way of saying that how is the guy who was talking about these systems as they exist in the real world and how we might tweak them? What I brought into it was a bit of the political frame. If we're going to tweak them, how do we get more citizens wind up behind us to push for that? It isn't like how like typed out the bullet points and I turned it into copy. It didn't work that way. This book is a true blend and brainstorm of our mutual ideas. I would say.
Hal: Justin also has a couple habits that are quite important in this. He doesn't take anybody's word for anything.
Gil: That's why I said Newspaperman Justin, a true muck racker.
Hal: He digs in and whenever I make an assertion, he says, "Okay, Harvey, back it up." The other thing he does, which I do not do well is tell stories. I don't mean that in a fantastical sense. He digs into what happened at the PUC hearing? Who is motivated? Why were they motivated? What were the results? He goes to the source every time. That gives the book a measure of honesty and depth.
Gil: On the stories, Justin, if you had to pick one darling narrative that moved you about citizen engagement, is there one story in the book or one person that really blew you away?
Justin: I really like the tale we have at the end from a town in West Virginia where the local church put solar panels on their roof and the people that were involved in setting that up, Dan [inaudible 00:23:23] and his wife Maryanne [inaudible 00:23:24] put solar panels on their roofs. He actually walked me out behind his house and up and down the alley and you could see where seven or eight neighbors had copied him. He was the first person to put up solar panels and then a bunch of other people did it. One of the things about this whole issue is there's real potential here for engagement with your neighbors.
People are still a little reluctant to do this, but when you buy an electric car, give your neighbor a ride in it. People ride in them and they quickly become converted because it's a superior experience. When you put solar panels on the roof, have a little party and tell your neighbors how you did it and how the economics worked out and so forth. I love the West Virginia thing because of the the way it just went a little bit viral and it's West Virginia, not a place you would think of as a hotbed of clean energy. Actually, there's a company there called Solar Holler that is putting up solar panels all over the state of West Virginia.
It can be done. There's not that much mystery about what we need to do here. People do need to understand where these levers are and they need to understand how they can exercise their democratic voice to pull those levers. It's straightforward politics. It's make a demand, get in their faces and stop them from operating on inertia.
Hilary: Climate Positive is produced by Hannon Armstrong, a leading investor in climate solutions for over 30 years. To learn more about our climate positive journey, please visit HannonArmstrong.com.
Gil: This book is also full of great charts and data points. A lot from your terrific team at Energy Innovation. Do you have a favorite chart in the book that really tells the story?
Hal: I would've littered the book with stats since we've had just a few if it was my druthers. Cost curves, how fast the price of things drop as you build more of them. This is the magic that runs all the way through the book. In the old days solar was expensive. It's dropped 90% in price in the last decade. It's cheaper than the alternative. You can say that about electric vehicles, batteries, led lights solar systems on your roof, wind turbines, offshore wind is happening now. The magic of driving prices down through specific policy is something that most policy makers, even when they do it, they don't necessarily know they're doing it right. They think we're just subsidizing solar. You're not subsidizing solar. You're creating a cost effective option.
Justin: I think a lot of people even who are pretty deep into the subject didn't really know that whole history on learning curves and how rights law came about, which is chapter one of our books. I think that chapter has been revelatory for a lot of people just to know the deeper history of the principle they're relying on to make these technologies cost competitive.
Hal: As the book came out, this amazing study from Oxford also came out showing 50 different learning curves for 50 different energy technologies and doing really statistically sound predictions of where they might go. We got this major substantive boost that's in parallel with the release of the book.
Gil: What I like about this book too is it's not just for the everyday citizen, although that's important. I think I've heard you talk about this being a message for the ENGO community that has done a good job inspiring people to be against stuff; you know shut down pipelines and so forth. I would submit and maybe you agree or want to push back that a lot of these well-resourced ENGOs haven't necessarily gotten into the minutiae of pushing an organized on our grassroots server for these practical and impactful solutions on the things we're for.
Hal: It's true that environmental groups are born into a resistance mode. They're trying to save some land for the critters for nature. They're trying to save some air and save some clean water. I sympathize completely with them, would call myself environmentalist, somebody who wants my kids to see and enjoy what I got to see and enjoy. It's hard constitutionally then to come out and say we're in favor of building this big power line or we need to mine some lithium in order to make the electric car batteries. Yet that's exactly what we need to do. Now, the approach I prefer is not to relax environmental standards one iota but to process them much more quickly and to pre zone where possible.
If you want to zone along an interstate highway corridor to put up wind towers or transmission line, great. You're going to get your permit in 90 days. If you want to put it in your a wilderness study area, forget it. That's red zone. We need to start thinking in advance of how to do some large -scale infrastructure without harming the environment. It has to be done by men and women of goodwill that understand both sides of this issue or at least are represented by both sides of this issue. If you just say no to every construction project, you're just saying yes to massive global climate change.
Justin: It's interesting, Europe is having this exact same discussion right now in response to their energy crisis precipitated, of course, by the war in Ukraine. They are trying to greatly speed up their rollout of clean energy. In Europe, as in the United States, these projects are taking 8, 9, 10 years to get approved and it's just too long. United States needs to build four times as much renewable energy as we have by 2030, in the next seven years.
Gil: Annually.
Justin: We're just not going to be able to do that if projects are taking 10 years to get approved. What I would say to the environmental community is you have got to be for something here not just against something. We've got to also make our peace-- Yes, we want to keep environmental standards but we've got to figure out how to speed this up and make things go faster or we're simply not going to get it done.
Gil: Justin, I want to turn a little bit back to your bio. I was a great fan of-- I think I must have become familiar with your writing in the tens at the times but could you tell us how you got involved in environmental reporting? I think you've talked about this profound moment you had on a beach in Florida, which really hit you on what was happening with the climate. Maybe start there.
Justin: That goes back to the '80s. I could probably take you to the spot on Fort Lauderdale beach where, a scientist first told me that the ocean was rising. That's why the beach was eroding so rapidly, and that's why the government was spending many millions, tens of millions to pump sand up onto the beach, and that set me off on a quest. I was, I guess, an aspiring science reporter even then, although my job was covering local governments. I've been trying to understand it ever since, essentially. It's true that for the longest time I was not doing climate professionally. That really happened in the early odds.
I was sitting in a class at Harvard, I did a fellowship up at MIT and was auditing a class at Harvard taught by a fellow named Dan [inaudible 00:30:48]. I remember the moment where a kid in the class from Orlando said-- the class was called The History of the Earth, but toward the end of it, Dan talked about the future of the Earth. This kid from Orlando said, "So what happens to where I'm from?" Dan looks up and says, "I think you're going to be waving at the fishes eventually in the long run." Basically, I wound up getting involved in climate reporting out of sheer frustration.
Back then, as you'll remember, it was being done very badly by most publications. My newspaper at the time, The Washington Post wasn't really doing it at all. The Times was doing it, but with only one or two people. There's this old saying in the newspaper business that if you complain about coverage, long enough they make you do it. That's more or less what happened to me as I complain long and hard enough about the lack of coverage of climate and it was a great opportunity. I was actually editing at The Times when the old Andy [inaudible 00:31:48] job opened up, and somebody recruited me into that job.
I took a pay cut to go into climate reporting. I did that because I thought it was so important. I'm glad to say here we are 15 years later and the coverage has just improved enormously both at The Times and many other publications. We don't have climate deniers all over the airwaves anymore, telling lies the way we used to. It's just not perfect, but it's not as bad as it used to be. I hope I contributed in some tiny way to that shift.
Gil: You sure did. Hal, take us back a bit to-- you've had such an interesting career. Did you have a Eureka moment or a formative period that where you got hooked in and then eventually obsessed with climate policy and contributing?
Hal: I had two that were conjoined. The first was, if you remember when Jimmy Carter was president, he reinstituted selective service registration, the predecessor to the draft. This was after the Vietnam War where ending the draft, it was one of the principle goals of every young man. I had to go, like everybody else, down to the post office and register and the reason was the military conflicts in the Persian Gulf. Jimmy Carter also allocated $50 billion, back then was a fair sum of money for military aimed at the Persian Gulf, so it was vivid.
The other side of it though, is I was really into home construction, solar home construction. I had the opportunity with my brother to build a few solar buildings, including a rather nice solar home, and it wasn't hard. You pay attention to the orientation, to overhangs, to thermal mass, to insulation, to window placement and so forth. For roughly zero incremental costs, you get a building that uses almost no energy in a cold climate high up in the mountains in the Rockies. If on the one hand, it's that dangerous and stupid to be dependent on fossil fuels, and on the other hand, pretty damn easy to get off of them.
Now, this is not for all topics in all quarters, of course. What the hell were we doing? It came down to policy. When I got my graduate degree, I focused more on energy policy than energy technology.
Gil: Let's talk a little bit about energy innovation. A group you founded and lead, it's a climate and energy policy research nonprofit. I have to say, I've been so impressed with the great research you've all done since I really became familiar with the work about 5 years ago through my friend and your incredible communications guy, Silvio, I just have to give Silvio a shout out.
I was saying before we started recording that the last time I saw you was on a book tour and we were doing a press conference and we were pushing back on the administration and [inaudible 00:34:40] attempts at the time to prop up coal plants under the guise of resilience.
Glad those days are over for now. Tell us how you've grown the organization, the incredible research you're doing. I've played around with the policy simulator, which strikes me as from what I've learned and sensed that you were using that to work with legislators on the Hill to calculate the relative impact of policies that were being debated on the fly up until the very end and that miracle and shimmer mansion breakthrough so kudos to you, first of all, and your great team. Tell me about energy innovation and how you see the future there with great research?
Hal: Well, thanks for those kind words, Gil. Energy Innovations principle idea was to give policy design support for policy makers. There are literally hundreds of different policies that affect energy decisions and affect your carbon emissions. It turns out to be rather complicated to figure out which ones are the best or the most important or the most effective. I've done a lot of work in China, I've made something like 70 trips to China to work on energy policy issues with them. The first one was refrigerator efficiency standards right up there in the [inaudible 00:35:56].
Gil: Yes, boy, that's good late bedtime reading.
Hal: Exactly. Turns out that if you have very strong refrigerator efficiency standards that reduces your electricity appetite more than three-- Three Gorges Dam is the biggest hydroelectric facility in the world. It also turns out that if you do this analysis and present it properly with technical grounding, engineer to engineer to the right people in China, they adopt those refrigerator standards. At the near top level, China's dominated by technocrats, and they want solutions. They see energy policy as a technical question rather than a strategic one, at least for many, many decisions.
This got us going doing more and more work across Europe and the US and China on what are the best policy choices? Then I was asked a question by Minister in China, tell me which policies can reduce carbon the fastest and at the lowest cost? I said, "That's the best question I've ever heard in my life, let me see what we can do." We have hired on our staff, this brilliant guy named Jeffrey Risman, he analyzed 50 different models to determine which one could answer that question and we discovered there were none of them in the world. They had to be open-source models and they had to have structural integrity.
Jeff, without any hubris, but with incredible determination set out to build that model, and building an energy model is a multi-million dollar multi-year process. Jeff worked it through. We ended up with a model that you can adjust up to 100 different policies and it tells you in real-time what happens to CO2, to 11 other pollutants, to cash flow into mortality. It turns out, policymakers really want this. They can adjust policies and get different outcomes and we encourage that. We made everything open source so people could post their results and see how they did compared to others.
It found its way into the hands of many members of the House Select Committee on climate change, more and more governors got into it. We started doing it for other nations, we've done it for about a dozen other nations as well. Again, we're not there to push a particular policy, we're there to enable rationality in choosing policies and that's something policymakers love, not all of them.
Gil: And credibility when the claims come out, right? Otherwise, it's back of the napkin and what's the point of this policy?
Hal: Will it achieve its goal?
Gil: Yes.
Hal: That's a simple question. We've then expanded on that work with them probably 100 different papers on specific policy questions, really complicated questions. How do you build a renewables-intensive grid that's more reliable than coal or oil or gas-intensive grid, for example? What's the role of hydrogen in the future economy? What about these learning curves? How far will they go? How fast will they go? What's the potential for offshore wind? These are all questions that need objective analysis and so we set out to do our best.
Gil: Quickly, let's talk about the big climate law that passed this summer, the Inflation Reduction Act and few months out how you're thinking about what we need to do to realize the promise of it. Your book obviously offers a key part of that prescription. There's a lot of work to be done on important but wonkery aspects of treasury guidance and implementation. Broad strokes, tell us how you're thinking about that potentially transformational law if we realize its potential.
Hal: Those are the two right words; potential and transformation. Most of the money is allocated through tax credits for solar panels, hydrogen and things like that, wind turbines, and that just changes their financial advantage, it improves their financial position vis-a-vis other competitors. They've put conditions on those tax credits though. For example, super expensive cars. Don't get them cars without-- mostly North American content, don't get them. There's a bunch of other goals that are embedded in those tax credits, the type of batteries that are in there and so on. Not every electric car is going to be eligible for a subsidy or a full subsidy.
I think that's a pretty clever way to do policy because you don't have to build a new bureaucracy. You have it, it's called the auto dealers. You're taking advantage of existing structures in the tax collector. That's the bulk of the money is tax credits, including for solar and wind and for electric vehicles. Then there are some specific investments for things like battery development, hydrogen development, advanced manufacturing and so forth.
Those are going to stress out the Department of Energy which has to implement most of them in record time. That's what I call a high quality problem.
I think the bill will be transformative. It will drive prices down it will create market certainty. It's got a 10 year horizon. You can build a business case around the 10-year horizon. You can't build around a 2-year horizon, but it is going to put pressure on the Federal Energy Regulatory Commission to act a lot more quickly in approving all these hookups.
Gil: Modernize our grid or to fit this massive build out absolutely.
Hal: It's also the process. Same with the process for construction permits, environmental permits and so forth and off deck agreements. I would say we have every opportunity now to make a huge debt in climate change but also many booby traps that we're going to have to avoid as we go that way.
Gil: Justin, you want to offer any thoughts? You were coming onto the beat, I think, right after the failure of the last time we tried to do a federal climate bill and Waxman-Markey 9. What's your take?
Justin: It is interesting. One lesson out of that is that the idea that the economists are really stuck on pollution pricing carbon is the only way. I think that's just been disproven in our politics. It's been a complete non-starter in American politics for 30 years now. When finally Congress comes along offering carrots instead of sticks, we get it passed. I think we're going to have do this with mostly carrots, not sticks in the American political context and political dynamic. The other thing I would say about this law is people need to realize this may need to be defended depending on what happens in the election this fall.
If the Republicans take the House and the Senate, they will go after this law. They'll try to defund it. Biden can use his veto in defense of the law. Just the assumption that it's absolutely there for 10 years and we don't have to do anything else, I think it's just wrong. I think people need to be gearing up for a potential battle just to keep it on the books or to keep it adequately funded. Not all the money that's nominally in the bill has been allocated yet. There's going to be budget fights down the road. This is not the time for people to declare victory and relax and say, "We can go home now because it's all done."
Hal alluded to Congress made the economics better but it didn't sweep away a lot of these other non-economic barriers. They're slowing us down, the slow pace of the environmental approvals, it didn't fix that problem. It didn't fix the routing new power lines problem. It didn't fix the build out of the grid problem. Although there is some stuff in the bill that should help but we need to respond to this bill by going back at this whole set of issues at the state and local level and working hard on those problems and trying to clear away some of the other barriers that are slowing us down.
Gil: I think you're right. Also, in the making sure the implementation that these credits get used as fast as possible before '24 and that we can start to see that massive extra growth for clean energy above business as usual in a scenario where middle of the decade let's say, 2025, it's a trifecta of Republicans when I think the real threat most pronounced will come first. Maybe it's about making these industries bigger, stronger, more politically influential to fight back on the inevitable pushback.
Justin: A lot of these battery factory announcements that I talked about, this stuff is happening in red states. We know that wind power for example, is already huge in-- it's much bigger in red America than in blue America, essentially. There's a tremendous economic development and rural development opportunity here that once it gets going, I think will work to the benefit of a lot of these Republican-led states. I hope we get to a point where a few years down the road, they don't see political gain in trying to kill it. Basically, we have a head of steam on these changes and people are seeing the local benefits so that it becomes locked in and politically hard to cut.
We may be approaching that point already. The Republicans have been a lot less noisy about this law since it passed than I thought they would be. They may already be sensing that it works to the benefit of their constituents, which it does.
Gil: Just quickly one follow-up on the price on carbon, which is something our company has very graciously was pushing through the last couple years in the hopes we could get even a nominal carbon price with the exceptions rising over time. The politics of that are very difficult, hard to see. On some sense, and it strikes me in your book, you guys aren't against a carbon price, perhaps in industry, the hard-to-decarbonize sectors. If you believe in a carbon price, these carrots for a few more years potentially changes the politics when we have to reevaluate the other ways we're going to incentivize investment by the economy. Do you agree with that? You're not whole cloth against a carbon price but we got to do what we can continue locally and federally.
Justin: We are for a carbon price. We're just against making it the centerpiece and only policy you pursue.
Gil: Absolutely.
Hal: Tax credit for clean energy is a defacto price on carbon, works the same way.
Gil: Just not as efficiently though. It's a little more complicated with these big banks.
Hal: Well, this works a number of ways. The free market has a lot of its own structural problems as well. If you consider externalities to be part of an efficiency argument. Then renewable portfolio standard creates a shadow price on carbon, reducing subsidies for fossils is another way to handle it. We're doing it. We're just doing it in dribs and drabs rather than comprehensively. If you think a price is simple--
Gil: No, it's not.
Hal: Go see if you can lift up the US tax codes, I think comes in at 10,000 pages.
Gil: I know. At the end of your book, you include a terrific quote pulled from the ethical teachings and maxims in the rabbinic Jewish tradition, could you share the quote from Rabbi Tarfon and your thoughts on it?
Justin: Yes. This quote is getting a lot of mileage lately. I have to say people have been using it. There's a whole book out that's pegged on the quote. People have been using it in a bunch of different contexts. What we invoke at the end of the book is the Jewish ethical precept of Tikkun olam, which is the duty to repair the world which people interpret-- and much the same way that Christians interpret their duty of good works. You are obligated to go out and try to make things better. That's part of our moral obligation as human beings and as citizens. We cite the example in the book of the Jewish kids who went down to the south in the civil rights era and some of them never came home.
The quote is-- [unintelligible 00:48:04] on is quoted in the collection called the [unintelligible 00:48:07] and it's something like, you are not obligated to finish this work of repairing the world, but neither are you free to desist from it. We use that in the book as a way to say, "Look, we know this is a multi-generational change here. None of us talking about this right now is going to live to see the last pound of coal burned or the last gallon of gasoline burned. It's just not going to happen that fast but we need to be making headway and we do have an obligation to future generations."
The point was just to close the book on the idea that this is not all about economics. It's not all about cost and benefit. It's not even all about the asthma and medical problems and stuff like that. It's really about our moral duty to future generations. We don't have the right to wreck the planet for people who are going to come after us and that's what we're doing right now. We are saying to people, your obligation as a citizen, is to put some energy into this. We're not saying it has to take over your life or be the only thing you do, or even the only thing you care about in politics, but it needs to be part of your political dynamic and your political thinking, and your political agenda and that's our appeal.
Gil: I'm not sure if it's in the book but I've heard you interviewed and you alluded to this quote from Frederick Douglass as well that I loved, hadn't heard in a while. This quote is, "Power concedes nothing without a demand. It never did and never will." It's the harder edge of that.
Justin: That also distills what we're saying to people here. If you want to change, make a demand. The American public is still not loud enough on this subject. There is a climate movement now. There is a demand but it needs to get louder, it needs to involve more of us. It needs to be a 50-state struggle, not a 15-state struggle, which is what it is right now. That's where we're trying to go.
Gil: Excellent. Well, thank you both for the conversation today. Good luck with the book. You both are continuing to do to spread the word on practical and inspiring climate solutions.
Justin: Thank you.
Hal: Yes, Gil, thanks for the opportunity
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I'm Gil Jenkins.
And this is Climate Positive.