WEBVTT 00:00.566 --> 00:02.166 align:left position:10% line:89% size:80% [Scott] Next on "Energy Switch," 00:02.166 --> 00:04.766 align:left position:20% line:83% size:70% we'll look at policies to reduce carbon emissions, 00:04.766 --> 00:05.833 align:left position:30% line:89% size:60% including taxes, 00:05.833 --> 00:06.766 align:left position:37.5% line:89% size:52.5% incentives, 00:06.766 --> 00:08.033 align:left position:32.5% line:89% size:57.5% and standards. 00:08.033 --> 00:10.366 align:left position:30% line:83% size:60% - A carbon tax is the only policy 00:10.366 --> 00:14.166 align:left position:12.5% line:83% size:77.5% that simultaneously encourages every single activity 00:14.166 --> 00:17.866 align:left position:27.5% line:83% size:62.5% to reduce emissions wherever it is efficiently. 00:17.866 --> 00:19.666 align:left position:25% line:83% size:65% - So what we've been doing up to now, 00:19.666 --> 00:21.966 align:left position:22.5% line:83% size:67.5% which has had actually a great deal of success 00:21.966 --> 00:24.766 align:left position:27.5% line:83% size:62.5% is we've been using incentives and subsidies. 00:24.766 --> 00:27.366 align:left position:25% line:83% size:65% So why don't we take those proven tools 00:27.366 --> 00:29.333 align:left position:25% line:83% size:65% and scale them up at the federal level? 00:29.666 --> 00:31.533 align:left position:30% line:83% size:60% [Scott] Coming up on "Energy Switch," 00:31.533 --> 00:34.466 align:left position:27.5% line:83% size:62.5% policies to reduce CO2 emissions. 00:35.766 --> 00:37.266 align:left position:22.5% line:83% size:67.5% [Announcer] Funding for "Energy Switch" 00:37.266 --> 00:39.133 align:left position:22.5% line:89% size:67.5% was provided in part by 00:39.133 --> 00:40.433 align:left position:40% line:89% size:50% Microsoft 00:40.433 --> 00:44.200 align:left position:27.5% line:83% size:62.5% and The University of Texas at Austin. 00:46.800 --> 00:47.900 align:left position:27.5% line:89% size:62.5% - I'm Scott Tinker 00:47.900 --> 00:50.000 align:left position:15% line:89% size:75% and I'm an energy scientist. 00:50.000 --> 00:51.666 align:left position:25% line:89% size:65% I work in the field, 00:51.666 --> 00:52.800 align:left position:32.5% line:89% size:57.5% lead research, 00:52.800 --> 00:54.233 align:left position:22.5% line:89% size:67.5% speak around the world, 00:54.233 --> 00:55.533 align:left position:32.5% line:89% size:57.5% write articles 00:55.533 --> 00:57.833 align:left position:15% line:89% size:75% and make films about energy. 00:58.533 --> 01:01.200 align:left position:30% line:83% size:60% This show brings together leading experts 01:01.200 --> 01:04.366 align:left position:27.5% line:83% size:62.5% on vital topics in energy and climate. 01:04.366 --> 01:06.200 align:left position:35% line:83% size:55% They may have different perspectives, 01:06.200 --> 01:09.066 align:left position:30% line:83% size:60% but my goal is to learn and illuminate 01:09.066 --> 01:12.566 align:left position:20% line:83% size:70% and bring diverging views together towards solutions. 01:13.366 --> 01:15.633 align:left position:12.5% line:89% size:77.5% Welcome to the "Energy Switch." 01:16.800 --> 01:18.533 align:left position:25% line:83% size:65% There have been many policies proposed 01:18.533 --> 01:20.500 align:left position:20% line:89% size:70% to reduce CO2 emissions, 01:20.500 --> 01:22.400 align:left position:22.5% line:89% size:67.5% a tax on carbon emitted 01:22.400 --> 01:24.266 align:left position:20% line:89% size:70% or embodied in products, 01:24.266 --> 01:25.766 align:left position:27.5% line:89% size:62.5% a cap on emissions 01:25.766 --> 01:28.966 align:left position:22.5% line:83% size:67.5% with emissions permits that could be traded, 01:28.966 --> 01:31.466 align:left position:27.5% line:83% size:62.5% subsidies for lower emission energies, 01:31.466 --> 01:34.600 align:left position:22.5% line:83% size:67.5% and carbon emission and efficiency standards. 01:34.933 --> 01:36.766 align:left position:12.5% line:89% size:77.5% Each have their pros and cons. 01:36.766 --> 01:40.066 align:left position:15% line:83% size:75% And we'll talk about them all with my expert guests. 01:40.533 --> 01:43.266 align:left position:22.5% line:83% size:67.5% Dr. William Pizer is a Harvard trained economist 01:43.266 --> 01:46.066 align:left position:17.5% line:83% size:72.5% and the vice president for Research and Policy Engagement 01:46.066 --> 01:48.266 align:left position:15% line:89% size:75% at Resources for the Future. 01:48.266 --> 01:51.266 align:left position:15% line:83% size:75% Sasha Mackler is the director of the Energy Project 01:51.266 --> 01:53.333 align:left position:10% line:89% size:80% at the Bipartisan Policy Center, 01:53.333 --> 01:55.866 align:left position:32.5% line:83% size:57.5% a Washington DC based think tank. 01:55.866 --> 01:58.700 align:left position:30% line:83% size:60% He studies energy policy and markets. 01:59.600 --> 02:01.966 align:left position:32.5% line:83% size:57.5% On this episode of "Energy Switch," 02:01.966 --> 02:04.600 align:left position:27.5% line:83% size:62.5% policies to reduce CO2 emissions. 02:04.600 --> 02:06.100 align:left position:25% line:89% size:65% Let's jump right in. 02:06.100 --> 02:08.133 align:left position:15% line:89% size:75% Let's start with carbon tax. 02:08.133 --> 02:10.433 align:left position:25% line:83% size:65% What are the benefits of that approach? 02:10.433 --> 02:12.466 align:left position:10% line:89% size:80% - The arguments for a carbon tax 02:12.466 --> 02:14.933 align:left position:20% line:83% size:70% are that you have all of these different places 02:14.933 --> 02:16.266 align:left position:22.5% line:89% size:67.5% throughout the economy 02:16.266 --> 02:18.566 align:left position:25% line:83% size:65% where you can reduce emissions, right? 02:18.566 --> 02:19.866 align:left position:15% line:89% size:75% You can drive your car less, 02:19.866 --> 02:21.466 align:left position:17.5% line:89% size:72.5% you can use cleaner fuels, 02:21.466 --> 02:24.800 align:left position:20% line:83% size:70% you can install an energy efficient air conditioner. 02:24.800 --> 02:27.266 align:left position:12.5% line:89% size:77.5% A carbon tax is the only policy 02:27.266 --> 02:31.600 align:left position:12.5% line:83% size:77.5% that simultaneously encourages every single activity 02:31.600 --> 02:35.066 align:left position:25% line:83% size:65% to reduce emissions, wherever it is, efficiently. 02:35.066 --> 02:36.266 align:left position:17.5% line:89% size:72.5% And that has the advantage 02:36.266 --> 02:39.866 align:left position:22.5% line:83% size:67.5% of getting the cheapest reductions wherever they occur. 02:39.866 --> 02:41.000 align:left position:15% line:89% size:75% It does have the disadvantage 02:41.000 --> 02:43.800 align:left position:15% line:83% size:75% of potentially being horribly inequitable, [laughs] 02:43.800 --> 02:46.600 align:left position:32.5% line:83% size:57.5% but in terms of economic efficiency, 02:46.600 --> 02:48.200 align:left position:27.5% line:83% size:62.5% it's the thing that does it the best. 02:48.200 --> 02:49.233 align:left position:40% line:89% size:50% - Right. 02:49.233 --> 02:53.033 align:left position:17.5% line:83% size:72.5% So pricing CO2 is obviously a pretty big deal. 02:53.033 --> 02:54.033 align:left position:30% line:89% size:60% How do we do it? 02:54.033 --> 02:56.100 align:left position:27.5% line:83% size:62.5% How do we calculate a price on CO2? 02:56.100 --> 02:57.766 align:left position:32.5% line:83% size:57.5% - It basically comes down to this. 02:57.766 --> 03:00.533 align:left position:27.5% line:83% size:62.5% You figure out what the temperature change 03:00.533 --> 03:01.833 align:left position:17.5% line:89% size:72.5% or what the weather change 03:01.833 --> 03:03.566 align:left position:22.5% line:83% size:67.5% and the climate change is gonna happen 03:03.566 --> 03:07.033 align:left position:17.5% line:83% size:72.5% from climate models, based on increasing emissions. 03:07.033 --> 03:10.700 align:left position:32.5% line:83% size:57.5% You turn those things into impacts, 03:10.700 --> 03:15.233 align:left position:17.5% line:83% size:72.5% the storms, the wildfires, all that sort of stuff, 03:15.233 --> 03:16.466 align:left position:22.5% line:89% size:67.5% and then you value it. 03:16.466 --> 03:18.666 align:left position:25% line:83% size:65% - This isn't just an academic exercise, right? 03:18.666 --> 03:20.600 align:left position:25% line:83% size:65% I mean, this is how, for example, 03:20.600 --> 03:21.900 align:left position:30% line:83% size:60% the Environmental Protection Agency 03:21.900 --> 03:26.366 align:left position:22.5% line:83% size:67.5% looks at ways in which to design regulations 03:26.366 --> 03:27.833 align:left position:20% line:89% size:70% and how far to go, right? 03:27.833 --> 03:28.900 align:left position:22.5% line:89% size:67.5% - That's totally true. 03:28.900 --> 03:31.400 align:left position:27.5% line:83% size:62.5% Every regulation in the United States, 03:31.400 --> 03:34.100 align:left position:22.5% line:83% size:67.5% at least at the federal level of a certain size, 03:34.100 --> 03:36.066 align:left position:15% line:89% size:75% has to go through an analysis 03:36.066 --> 03:38.600 align:left position:22.5% line:83% size:67.5% to say do the benefits outweigh the costs. 03:38.600 --> 03:40.600 align:left position:27.5% line:83% size:62.5% And so this number becomes really important 03:40.600 --> 03:42.166 align:left position:17.5% line:89% size:72.5% how we value the benefits. 03:42.166 --> 03:44.133 align:left position:30% line:83% size:60% And so we have to figure out ways 03:44.133 --> 03:47.333 align:left position:25% line:83% size:65% that we can encourage the emission reductions 03:47.333 --> 03:49.500 align:left position:20% line:89% size:70% that may cost $100 a ton, 03:49.500 --> 03:53.033 align:left position:12.5% line:83% size:77.5% but without charging consumers $100 a ton in the process. 03:53.033 --> 03:56.500 align:left position:22.5% line:83% size:67.5% - Yeah, before we start talking about mechanisms, 03:56.500 --> 03:58.066 align:left position:17.5% line:89% size:72.5% what's a reasonable price? 03:58.066 --> 03:59.000 align:left position:25% line:89% size:65% - You mean a price-- 03:59.000 --> 04:00.766 align:left position:35% line:83% size:55% - On carbon. - to charge a tax 04:00.766 --> 04:02.866 align:left position:30% line:83% size:60% or do you mean a price to use to value 04:02.866 --> 04:04.200 align:left position:27.5% line:83% size:62.5% and make decisions? - Whichever. 04:04.200 --> 04:07.133 align:left position:20% line:83% size:70% - Well, I think the right number to use to make decisions 04:07.133 --> 04:09.166 align:left position:27.5% line:83% size:62.5% is probably on the order of $100 a ton. 04:09.166 --> 04:10.733 align:left position:20% line:89% size:70% I mean, that's, I think, 04:10.733 --> 04:12.466 align:left position:27.5% line:83% size:62.5% where the evidence is gonna lead us. 04:12.466 --> 04:13.466 align:left position:25% line:89% size:65% - And that's global? 04:13.466 --> 04:16.233 align:left position:27.5% line:83% size:62.5% - That is based on global benefits. 04:16.233 --> 04:17.933 align:left position:42.5% line:83% size:47.5% - Okay. - So that you, 04:17.933 --> 04:21.400 align:left position:20% line:83% size:70% you have put your finger on a very sensitive issue, 04:21.400 --> 04:24.900 align:left position:25% line:83% size:65% which is when we talk about our efforts 04:24.900 --> 04:27.600 align:left position:20% line:83% size:70% to reduce emissions here in the United States, 04:27.600 --> 04:28.766 align:left position:12.5% line:89% size:77.5% how do we think about the fact 04:28.766 --> 04:31.566 align:left position:17.5% line:83% size:72.5% that everybody in the world shares in those benefits? 04:31.566 --> 04:33.866 align:left position:27.5% line:83% size:62.5% And you think about the US economy 04:33.866 --> 04:36.300 align:left position:17.5% line:89% size:72.5% as what, 25% of the world? 04:36.300 --> 04:39.033 align:left position:27.5% line:83% size:62.5% So maybe we get 20, 25% of those benefits. 04:39.033 --> 04:41.433 align:left position:27.5% line:83% size:62.5% Should we really be counting those benefits 04:41.433 --> 04:44.433 align:left position:15% line:83% size:75% if most of them are occurring outside the country? 04:44.433 --> 04:46.700 align:left position:20% line:89% size:70% - How do we get to this? 04:46.700 --> 04:50.266 align:left position:25% line:83% size:65% How does a carbon tax capture that price, 04:50.266 --> 04:51.500 align:left position:22.5% line:89% size:67.5% whatever that price is? 04:51.500 --> 04:52.900 align:left position:12.5% line:89% size:77.5% Let's just say it's 100 bucks, 04:52.900 --> 04:55.133 align:left position:30% line:83% size:60% how does the tax capture that price? 04:55.133 --> 04:58.933 align:left position:22.5% line:83% size:67.5% - Well, so it would be reflected in the product 04:58.933 --> 05:00.066 align:left position:30% line:83% size:60% in some way that whatever you're buying, 05:00.066 --> 05:01.300 align:left position:32.5% line:83% size:57.5% whether it's a gallon of gasoline, 05:01.300 --> 05:03.900 align:left position:20% line:83% size:70% $1 a ton of CO2 would be about a penny a gallon, 05:03.900 --> 05:06.033 align:left position:20% line:83% size:70% and so it would just flow through to the consumer. 05:06.033 --> 05:08.766 align:left position:25% line:83% size:65% It could be embedded in the energy 05:08.766 --> 05:11.066 align:left position:27.5% line:83% size:62.5% that has gone into making a ton of steel. 05:11.066 --> 05:14.433 align:left position:15% line:83% size:75% And so that steel price will, so it'll be in the products. 05:14.433 --> 05:16.833 align:left position:20% line:83% size:70% - But it's not $1 a ton, it's $100 a ton, 05:16.833 --> 05:19.466 align:left position:20% line:83% size:70% so that's a buck a gallon on top of three bucks 05:19.466 --> 05:21.800 align:left position:22.5% line:83% size:67.5% or whatever it is today or something like that. 05:21.800 --> 05:24.400 align:left position:15% line:83% size:75% So is that kind of the range, 20, 25% on things 05:24.400 --> 05:27.533 align:left position:17.5% line:83% size:72.5% if we go to that $100 range and see things go up? 05:27.533 --> 05:30.500 align:left position:20% line:83% size:70% - I think it's the right range for gasoline, 05:30.500 --> 05:31.933 align:left position:30% line:83% size:60% but there aren't that many things 05:31.933 --> 05:33.933 align:left position:30% line:83% size:60% that are quite as carbon intensive 05:33.933 --> 05:36.666 align:left position:25% line:83% size:65% or emission intensive as gasoline. 05:36.666 --> 05:39.700 align:left position:30% line:83% size:60% So the effect on electricity would be less. 05:39.700 --> 05:44.133 align:left position:22.5% line:83% size:67.5% - The political reality that waiting for a policy 05:44.133 --> 05:48.233 align:left position:12.5% line:83% size:77.5% that brings us to $100 per ton in some explicit form 05:48.233 --> 05:51.133 align:left position:20% line:89% size:70% from a policy perspective 05:51.133 --> 05:54.300 align:left position:30% line:83% size:60% is really not the smartest thing to be doing 05:54.300 --> 05:57.600 align:left position:22.5% line:83% size:67.5% because carbon pricing is politically hard 05:57.600 --> 06:01.666 align:left position:25% line:83% size:65% and we need political buy-in to get started 06:01.666 --> 06:03.500 align:left position:15% line:89% size:75% so we have enduring policies 06:03.500 --> 06:06.600 align:left position:22.5% line:83% size:67.5% that are durable across changes in administration. 06:06.600 --> 06:09.633 align:left position:20% line:83% size:70% So instead of focusing on what's the right price, 06:09.633 --> 06:12.800 align:left position:17.5% line:83% size:72.5% I think really we should be focusing on what's our goal 06:12.800 --> 06:15.100 align:left position:32.5% line:83% size:57.5% from either an emissions perspective 06:15.100 --> 06:17.000 align:left position:15% line:89% size:75% or an energy mix perspective, 06:17.000 --> 06:19.433 align:left position:27.5% line:83% size:62.5% and then be kind of walking back from that. 06:19.433 --> 06:20.600 align:left position:25% line:83% size:65% - But again, I would just caution, 06:20.600 --> 06:21.766 align:left position:25% line:89% size:65% I don't think we're, 06:21.766 --> 06:24.600 align:left position:12.5% line:83% size:77.5% Sasha or I think we're going to $100 a ton anytime soon. 06:24.600 --> 06:27.733 align:left position:22.5% line:83% size:67.5% - Yeah, no, that's sort of the analytical number, 06:27.733 --> 06:30.166 align:left position:15% line:83% size:75% but when you think about sort of how that filters through 06:30.166 --> 06:32.366 align:left position:22.5% line:83% size:67.5% to what's possible, or probably what's the right place 06:32.366 --> 06:34.066 align:left position:32.5% line:83% size:57.5% to start, it's probably much lower. 06:34.066 --> 06:35.666 align:left position:22.5% line:83% size:67.5% - Let's talk about cap and trade a little bit. 06:35.666 --> 06:37.300 align:left position:27.5% line:89% size:62.5% Different approach. 06:37.300 --> 06:40.733 align:left position:27.5% line:83% size:62.5% How does that look instead of a carbon tax? 06:40.733 --> 06:43.866 align:left position:25% line:83% size:65% - The big difference between a cap and a tax 06:43.866 --> 06:45.600 align:left position:25% line:89% size:65% is really with a tax, 06:45.600 --> 06:47.900 align:left position:22.5% line:83% size:67.5% you set the price that you're willing to pay 06:47.900 --> 06:50.500 align:left position:20% line:89% size:70% on what you wanna reduce, 06:50.500 --> 06:52.100 align:left position:30% line:83% size:60% like for example, carbon emissions. 06:52.100 --> 06:55.433 align:left position:22.5% line:83% size:67.5% With a cap, you set the level of the emissions 06:55.433 --> 06:56.533 align:left position:10% line:89% size:80% that you're willing to tolerate, 06:56.533 --> 06:58.733 align:left position:25% line:83% size:65% and you let the price kind of fluctuate. 06:58.733 --> 07:00.266 align:left position:12.5% line:89% size:77.5% Those are the core differences. 07:00.266 --> 07:02.166 align:left position:25% line:83% size:65% We have a successful track record 07:02.166 --> 07:05.333 align:left position:35% line:83% size:55% of running an environmental market based 07:05.333 --> 07:07.133 align:left position:25% line:83% size:65% cap and trade systems in this country, 07:07.133 --> 07:08.433 align:left position:20% line:83% size:70% through the Environmental Protection Agency. 07:08.433 --> 07:10.166 align:left position:15% line:89% size:75% I actually used to work there 07:10.166 --> 07:12.600 align:left position:20% line:83% size:70% in the Clean Air Markets Division of the EPA, 07:12.600 --> 07:15.966 align:left position:12.5% line:83% size:77.5% where we were setting up sulfur dioxide trading programs, 07:15.966 --> 07:18.966 align:left position:32.5% line:83% size:57.5% nitrous dioxide trading programs. 07:18.966 --> 07:20.233 align:left position:15% line:89% size:75% And they've worked very well 07:20.233 --> 07:25.266 align:left position:15% line:83% size:75% in smaller sort of much more contained markets like utility, 07:25.266 --> 07:27.866 align:left position:20% line:83% size:70% power regulations, really coal plants, for example. 07:27.866 --> 07:29.266 align:left position:15% line:89% size:75% 'Cause there was a whole push 07:29.266 --> 07:31.666 align:left position:27.5% line:83% size:62.5% for an economy wide cap and trade program 07:31.666 --> 07:33.166 align:left position:27.5% line:89% size:62.5% about a decade ago, 07:33.166 --> 07:35.600 align:left position:17.5% line:89% size:72.5% which didn't gain traction. 07:35.600 --> 07:37.000 align:left position:10% line:89% size:80% And it really hasn't come back-- 07:37.000 --> 07:38.200 align:left position:17.5% line:89% size:72.5% - Is it a scale challenge? 07:38.200 --> 07:39.566 align:left position:32.5% line:83% size:57.5% I mean, why has it sort of faded? 07:39.566 --> 07:40.966 align:left position:40% line:83% size:50% What's-- - It is a scale challenge 07:40.966 --> 07:43.566 align:left position:17.5% line:83% size:72.5% in the sense that covering the whole economy, 07:43.566 --> 07:46.166 align:left position:17.5% line:83% size:72.5% it's just a lot of entities to regulate in some way. 07:46.166 --> 07:49.000 align:left position:20% line:83% size:70% - One of the great things about both of these programs, 07:49.000 --> 07:51.266 align:left position:27.5% line:83% size:62.5% whether it's a tax or a cap and trade, 07:51.266 --> 07:53.000 align:left position:32.5% line:83% size:57.5% as long as it's technology neutral 07:53.000 --> 07:55.000 align:left position:17.5% line:83% size:72.5% and it doesn't say you have to do a particular thing, 07:55.000 --> 07:56.400 align:left position:15% line:89% size:75% people will find cheaper ways 07:56.400 --> 07:57.733 align:left position:30% line:83% size:60% to do everything. - Yeah, yeah. 07:57.733 --> 07:59.300 align:left position:12.5% line:83% size:77.5% It's a really important point. - Let the markets compete. 07:59.300 --> 08:00.433 align:left position:17.5% line:89% size:72.5% - Let the markets compete. 08:00.433 --> 08:01.700 align:left position:30% line:83% size:60% - Economy scale. - And so I think 08:01.700 --> 08:03.066 align:left position:22.5% line:83% size:67.5% that's one of the most important messages. 08:03.066 --> 08:04.100 align:left position:42.5% line:89% size:47.5% - Yeah. 08:04.100 --> 08:05.500 align:left position:17.5% line:83% size:72.5% - It's flexible regulation. - And it gets back 08:05.500 --> 08:07.733 align:left position:15% line:83% size:75% in an entrepreneurial nature of finding the right solution. 08:07.733 --> 08:08.900 align:left position:35% line:83% size:55% - Absolutely. - And giving people 08:08.900 --> 08:10.033 align:left position:30% line:89% size:60% the right signals 08:10.033 --> 08:11.600 align:left position:22.5% line:83% size:67.5% and then letting really our entrepreneurs 08:11.600 --> 08:13.600 align:left position:30% line:83% size:60% and our business community pursue. 08:13.600 --> 08:15.200 align:left position:10% line:89% size:80% - So the unintended consequences 08:15.200 --> 08:19.500 align:left position:20% line:83% size:70% of perhaps going down the tax road or the cap and trade 08:19.500 --> 08:22.533 align:left position:35% line:83% size:55% or some other mechanism are what? 08:22.533 --> 08:24.266 align:left position:30% line:83% size:60% - I'd say they're intended consequences 08:24.266 --> 08:29.566 align:left position:20% line:83% size:70% that you raise the price of fuels and products 08:29.566 --> 08:32.000 align:left position:27.5% line:83% size:62.5% in a way that makes it more transparent 08:32.000 --> 08:33.433 align:left position:12.5% line:89% size:77.5% and politically more difficult 08:33.433 --> 08:36.366 align:left position:25% line:83% size:65% and creates a massive amount of redistribution. 08:36.366 --> 08:39.600 align:left position:27.5% line:83% size:62.5% I mean, if you were doing a $50 a ton tax 08:39.600 --> 08:42.566 align:left position:22.5% line:83% size:67.5% and you were creating a couple hundred billion dollars 08:42.566 --> 08:44.733 align:left position:17.5% line:89% size:72.5% in revenue in the process, 08:44.733 --> 08:47.533 align:left position:12.5% line:83% size:77.5% you've got hundreds of billions of dollars of transfers 08:47.533 --> 08:50.233 align:left position:12.5% line:83% size:77.5% from the people who are paying for the tax to the government 08:50.233 --> 08:51.333 align:left position:30% line:83% size:60% who will then do something with it, 08:51.333 --> 08:52.666 align:left position:17.5% line:89% size:72.5% maybe give it back to them, 08:52.666 --> 08:55.766 align:left position:17.5% line:83% size:72.5% but not back to exactly the people who had the higher costs. 08:55.766 --> 08:57.800 align:left position:20% line:83% size:70% And it's that additional redistribution 08:57.800 --> 08:58.933 align:left position:25% line:89% size:65% and very visible cost 08:58.933 --> 09:00.766 align:left position:25% line:83% size:65% that I think creates a political liability. 09:00.766 --> 09:04.633 align:left position:17.5% line:83% size:72.5% - Isn't it a consumer issue more than the producer issue? 09:04.633 --> 09:07.300 align:left position:12.5% line:89% size:77.5% I mean, we want all this stuff. 09:07.300 --> 09:09.700 align:left position:22.5% line:83% size:67.5% Shouldn't we pay if we consume more for the taxes? 09:09.700 --> 09:12.300 align:left position:25% line:83% size:65% Why should the people making the energy 09:12.300 --> 09:14.133 align:left position:20% line:89% size:70% that we're demanding pay? 09:14.133 --> 09:16.500 align:left position:25% line:83% size:65% Why shouldn't we pay on the consuming end? 09:16.500 --> 09:19.833 align:left position:17.5% line:83% size:72.5% - Certainly the economists would say, "Yeah, 09:19.833 --> 09:20.933 align:left position:22.5% line:89% size:67.5% you should make 'em pay 09:20.933 --> 09:23.233 align:left position:17.5% line:83% size:72.5% so they'll figure out ways to reduce their fuel use." 09:23.233 --> 09:26.200 align:left position:22.5% line:83% size:67.5% But I think politically it's just very unpopular. 09:26.200 --> 09:28.100 align:left position:27.5% line:83% size:62.5% The other dimension is the trade, right? 09:28.100 --> 09:31.333 align:left position:27.5% line:83% size:62.5% So if you do a very transparent carbon price, 09:31.333 --> 09:33.666 align:left position:27.5% line:83% size:62.5% you raise the price of all of our products 09:33.666 --> 09:35.366 align:left position:25% line:83% size:65% and that creates even more trade problems. 09:35.366 --> 09:37.533 align:left position:15% line:83% size:75% - What if it doesn't happen, Billy, globally then? 09:37.533 --> 09:39.066 align:left position:27.5% line:83% size:62.5% We put these prices on in Europe, 09:39.066 --> 09:41.433 align:left position:15% line:89% size:75% in the US, and it's 25 years 09:41.433 --> 09:44.766 align:left position:12.5% line:83% size:77.5% before those who are producing the most emissions today, 09:44.766 --> 09:46.433 align:left position:10% line:89% size:80% say, "Yeah, we might get there." 09:46.433 --> 09:48.200 align:left position:20% line:83% size:70% So what's the unintended consequence of that? 09:48.200 --> 09:51.433 align:left position:27.5% line:83% size:62.5% - Well, our carbon intensive industries 09:51.433 --> 09:53.966 align:left position:15% line:83% size:75% would relocate to these less regulated jurisdictions. 09:53.966 --> 09:58.833 align:left position:20% line:83% size:70% So the only way it really works at some point, 09:58.833 --> 10:00.400 align:left position:27.5% line:83% size:62.5% regardless of what policy you use, 10:00.400 --> 10:02.300 align:left position:25% line:83% size:65% is to have some sort of trade mechanism. 10:02.300 --> 10:03.233 align:left position:30% line:89% size:60% - At that border? 10:03.233 --> 10:04.133 align:left position:30% line:89% size:60% - At that border. 10:04.133 --> 10:05.633 align:left position:27.5% line:83% size:62.5% And it can actually be an incentive 10:05.633 --> 10:07.900 align:left position:15% line:89% size:75% to get people to take action 10:07.900 --> 10:09.800 align:left position:20% line:83% size:70% where the people who are taking action have agreed 10:09.800 --> 10:11.900 align:left position:22.5% line:83% size:67.5% that we're gonna price stuff at the border 10:11.900 --> 10:13.300 align:left position:22.5% line:83% size:67.5% from all the countries that are not. 10:13.300 --> 10:18.533 align:left position:20% line:83% size:70% - My question is if some of us put border taxes on 10:18.533 --> 10:20.066 align:left position:32.5% line:83% size:57.5% and the country producing this stuff 10:20.066 --> 10:22.533 align:left position:32.5% line:83% size:57.5% has to pay the border tax, right? 10:22.533 --> 10:25.133 align:left position:20% line:83% size:70% But they have a different market to sell their stuff 10:25.133 --> 10:27.533 align:left position:22.5% line:83% size:67.5% and they send it to the emerging and developing markets. 10:27.533 --> 10:28.933 align:left position:30% line:83% size:60% - I think a point that you're making, 10:28.933 --> 10:32.633 align:left position:15% line:83% size:75% which I really agree with is that this is gonna be messy. 10:32.633 --> 10:34.000 align:left position:20% line:89% size:70% It's gonna be very messy. 10:34.000 --> 10:35.333 align:left position:20% line:89% size:70% It's going to take time. 10:35.333 --> 10:39.333 align:left position:22.5% line:83% size:67.5% And we shouldn't judge success or failure, 10:39.333 --> 10:42.933 align:left position:17.5% line:83% size:72.5% and really by the metric of are we able to get everybody 10:42.933 --> 10:44.933 align:left position:10% line:89% size:80% to do the same thing on day one? 10:44.933 --> 10:46.200 align:left position:27.5% line:89% size:62.5% This is gonna be-- 10:46.200 --> 10:47.833 align:left position:15% line:89% size:75% - So in a transparency sense, 10:47.833 --> 10:50.700 align:left position:32.5% line:83% size:57.5% we need to say what you just said. 10:50.700 --> 10:51.900 align:left position:25% line:89% size:65% It's gonna take time. 10:51.900 --> 10:52.833 align:left position:25% line:89% size:65% It's gonna be messy. 10:52.833 --> 10:53.800 align:left position:15% line:89% size:75% There are going to be costs. 10:53.800 --> 10:54.900 align:left position:30% line:89% size:60% We have to adapt. 10:54.900 --> 10:57.233 align:left position:27.5% line:83% size:62.5% - People, I think, tried out carbon tax 10:57.233 --> 10:59.933 align:left position:22.5% line:83% size:67.5% as kind of a boogeyman to scare people, 10:59.933 --> 11:00.966 align:left position:15% line:89% size:75% that we're gonna go out there 11:00.966 --> 11:02.933 align:left position:22.5% line:89% size:67.5% and suggest $100 a ton 11:02.933 --> 11:04.300 align:left position:40% line:83% size:50% as a tax. - Right, that scared me. 11:04.300 --> 11:05.600 align:left position:20% line:83% size:70% - Exactly, it scared you, it scared me. 11:05.600 --> 11:06.800 align:left position:15% line:89% size:75% It'd scare anybody listening. 11:06.800 --> 11:08.000 align:left position:15% line:89% size:75% I don't think anybody thinks 11:08.000 --> 11:10.866 align:left position:22.5% line:83% size:67.5% that we ought to have a carbon tax as the main policy. 11:10.866 --> 11:13.300 align:left position:17.5% line:83% size:72.5% Anybody who's serious about solving climate change 11:13.300 --> 11:16.133 align:left position:20% line:83% size:70% is proposing a carbon tax to be the main policy. 11:16.133 --> 11:19.600 align:left position:12.5% line:83% size:77.5% - Also, I think if we put this into some historical context, 11:19.600 --> 11:21.733 align:left position:25% line:89% size:65% a decade ago or more, 11:21.733 --> 11:24.533 align:left position:22.5% line:83% size:67.5% there were a number of proposals on the table 11:24.533 --> 11:27.266 align:left position:30% line:83% size:60% to price carbon, either through a tax 11:27.266 --> 11:28.666 align:left position:30% line:83% size:60% or through a cap and trade program 11:28.666 --> 11:30.133 align:left position:17.5% line:89% size:72.5% which would've had a price. 11:30.133 --> 11:33.400 align:left position:17.5% line:83% size:72.5% And then we've been working on those ideas since then, 11:33.400 --> 11:35.500 align:left position:32.5% line:83% size:57.5% and nothing has been implemented. 11:35.500 --> 11:38.366 align:left position:20% line:83% size:70% We haven't made the sale on that policy mechanism. 11:38.366 --> 11:39.366 align:left position:27.5% line:89% size:62.5% - It's a tough one. 11:39.366 --> 11:40.833 align:left position:27.5% line:83% size:62.5% - It's a tough one. - Politically tough. 11:40.833 --> 11:42.166 align:left position:20% line:89% size:70% - Politically difficult. 11:42.166 --> 11:43.666 align:left position:35% line:83% size:55% It's really- - Public doesn't like it. 11:43.666 --> 11:45.200 align:left position:30% line:89% size:60% - It's unpopular. 11:45.200 --> 11:49.533 align:left position:17.5% line:83% size:72.5% And so I think as we think about carbon pricing, 11:49.533 --> 11:51.100 align:left position:32.5% line:83% size:57.5% we should think about it as something 11:51.100 --> 11:52.866 align:left position:25% line:83% size:65% that we will probably eventually need, 11:52.866 --> 11:54.833 align:left position:17.5% line:83% size:72.5% but maybe we don't need to start with carbon pricing. 11:54.833 --> 11:56.533 align:left position:15% line:83% size:75% We just start with the things that we know have worked 11:56.533 --> 11:58.033 align:left position:25% line:83% size:65% and that we can use. - What are those? 11:58.033 --> 11:58.900 align:left position:30% line:89% size:60% So what do we do? 11:58.900 --> 12:00.300 align:left position:25% line:83% size:65% - So what we've been doing up to now, 12:00.300 --> 12:02.700 align:left position:22.5% line:83% size:67.5% which has had actually a great deal of success 12:02.700 --> 12:06.433 align:left position:15% line:83% size:75% on certain things like solar and wind bringing down the cost 12:06.433 --> 12:08.666 align:left position:27.5% line:83% size:62.5% is we've been using incentives and subsidies. 12:08.666 --> 12:12.033 align:left position:27.5% line:83% size:62.5% And we've also been creating policy mechanisms 12:12.033 --> 12:14.366 align:left position:22.5% line:83% size:67.5% at the state level that require certain amounts 12:14.366 --> 12:16.766 align:left position:22.5% line:83% size:67.5% of renewable energy to come into the system. 12:16.766 --> 12:20.733 align:left position:22.5% line:83% size:67.5% That is actually proven both popular and effective. 12:20.733 --> 12:23.433 align:left position:25% line:83% size:65% So why don't we take those proven tools 12:23.433 --> 12:25.100 align:left position:25% line:83% size:65% and scale them up at the federal level? 12:25.100 --> 12:27.500 align:left position:17.5% line:83% size:72.5% - Okay, so like a renewable portfolio standard 12:27.500 --> 12:28.600 align:left position:32.5% line:89% size:57.5% at the states? 12:28.600 --> 12:29.966 align:left position:30% line:83% size:60% - Yeah, I think-- - That kind of structures-- 12:29.966 --> 12:31.866 align:left position:17.5% line:83% size:72.5% - Something like that, but maybe we should broaden it 12:31.866 --> 12:33.266 align:left position:27.5% line:83% size:62.5% to be a little bit more than renewable 12:33.266 --> 12:35.333 align:left position:22.5% line:89% size:67.5% and to focus on clean, 12:35.333 --> 12:37.566 align:left position:25% line:83% size:65% on carbon free energy that would include-- 12:37.566 --> 12:38.933 align:left position:30% line:83% size:60% - Love that idea. - carbon capture, 12:38.933 --> 12:41.233 align:left position:20% line:83% size:70% would include nuclear as well as wind and solar. 12:41.233 --> 12:42.233 align:left position:22.5% line:89% size:67.5% - Geothermal hydrogen. 12:42.233 --> 12:43.866 align:left position:20% line:83% size:70% - If you're not emitting- - All of the above. 12:43.866 --> 12:45.600 align:left position:17.5% line:89% size:72.5% - and you can be on price, 12:45.600 --> 12:47.033 align:left position:27.5% line:83% size:62.5% you're in, you get some incentives. 12:47.033 --> 12:48.066 align:left position:30% line:89% size:60% - Then you're in. 12:48.066 --> 12:49.733 align:left position:25% line:83% size:65% That would be a very productive place to start. 12:49.733 --> 12:51.066 align:left position:25% line:83% size:65% And that's something we're really working on 12:51.066 --> 12:52.100 align:left position:20% line:89% size:70% with bipartisan policies. 12:52.100 --> 12:53.666 align:left position:32.5% line:83% size:57.5% - Yeah, just to put a point on it, 12:53.666 --> 12:56.033 align:left position:17.5% line:83% size:72.5% what you want to do is you want take every sector, 12:56.033 --> 12:58.033 align:left position:35% line:83% size:55% electricity, transportation, whatever, 12:58.033 --> 13:00.566 align:left position:27.5% line:83% size:62.5% and you want to say what do you produce? 13:00.566 --> 13:01.666 align:left position:20% line:89% size:70% You produce electricity. 13:01.666 --> 13:04.400 align:left position:17.5% line:83% size:72.5% Okay, we need to lower the carbon per megawatt hour. 13:04.400 --> 13:05.633 align:left position:32.5% line:83% size:57.5% And we're gonna give you a standard. 13:05.633 --> 13:08.266 align:left position:27.5% line:83% size:62.5% You figure out, you industry as a whole, 13:08.266 --> 13:10.500 align:left position:10% line:89% size:80% how you're gonna do it cheapest. 13:10.500 --> 13:11.500 align:left position:15% line:89% size:75% You give them that standard, 13:11.500 --> 13:12.633 align:left position:17.5% line:89% size:72.5% you give them flexibility, 13:12.633 --> 13:14.533 align:left position:17.5% line:83% size:72.5% they figure it out and they do it at the lowest cost. 13:14.533 --> 13:15.966 align:left position:27.5% line:83% size:62.5% And you don't have to pick the winner. 13:15.966 --> 13:16.933 align:left position:20% line:89% size:70% You don't have to pick-- 13:16.933 --> 13:18.200 align:left position:20% line:83% size:70% - You don't have to pick the price. 13:18.200 --> 13:19.466 align:left position:20% line:83% size:70% - You don't have to pick the price. 13:19.466 --> 13:20.500 align:left position:10% line:89% size:80% You just give them the standard. 13:20.500 --> 13:23.766 align:left position:12.5% line:89% size:77.5% So you're basically setting up 13:23.766 --> 13:26.566 align:left position:22.5% line:83% size:67.5% what would be called a carbon performance standard. 13:26.566 --> 13:27.800 align:left position:20% line:89% size:70% - Then do it and compete. 13:27.800 --> 13:29.566 align:left position:27.5% line:83% size:62.5% Because that moves us down the road 13:29.566 --> 13:32.600 align:left position:27.5% line:83% size:62.5% before we get stuck and mired in attacks 13:32.600 --> 13:36.900 align:left position:20% line:83% size:70% or a cap and trade, which goes down like a poison pill. 13:36.900 --> 13:39.166 align:left position:25% line:83% size:65% - Like a poison pill or a lead balloon. 13:39.166 --> 13:43.266 align:left position:17.5% line:83% size:72.5% But these flexible policies can put a price on carbon, 13:43.266 --> 13:45.466 align:left position:25% line:83% size:65% but they're not being passed on to the consumers 13:45.466 --> 13:46.933 align:left position:20% line:89% size:70% like the way a tax would. 13:46.933 --> 13:49.433 align:left position:30% line:83% size:60% So you have a low carbon fuel standard 13:49.433 --> 13:52.133 align:left position:22.5% line:83% size:67.5% for fuels that may have a fairly high price, 13:52.133 --> 13:54.466 align:left position:25% line:83% size:65% but it's not raising the price of gasoline 13:54.466 --> 13:56.466 align:left position:32.5% line:83% size:57.5% by a dollar or anything like that. 13:56.466 --> 13:57.833 align:left position:25% line:83% size:65% And so I think those are the kinds of 13:57.833 --> 14:01.200 align:left position:17.5% line:89% size:72.5% flexible sectoral policies 14:01.200 --> 14:02.466 align:left position:12.5% line:89% size:77.5% that could be really effective. 14:02.466 --> 14:04.000 align:left position:25% line:83% size:65% - Number one of them being more popular 14:04.000 --> 14:05.566 align:left position:12.5% line:89% size:77.5% so we can actually get moving. 14:05.566 --> 14:09.033 align:left position:30% line:83% size:60% Number two, they bring down the costs 14:09.033 --> 14:11.666 align:left position:32.5% line:83% size:57.5% of dealing with climate over time. 14:11.666 --> 14:13.933 align:left position:35% line:83% size:55% So that if we eventually realize, 14:13.933 --> 14:15.200 align:left position:15% line:89% size:75% which I expect that we will, 14:15.200 --> 14:18.000 align:left position:25% line:83% size:65% that we will need to have a more economy wide 14:18.000 --> 14:21.400 align:left position:20% line:83% size:70% or even global system to manage CO2 at some point. 14:21.400 --> 14:23.333 align:left position:12.5% line:89% size:77.5% We've already been on our way. 14:23.333 --> 14:26.533 align:left position:17.5% line:83% size:72.5% And it reduces the cost of that policy when we turn to it. 14:26.533 --> 14:28.133 align:left position:25% line:83% size:65% - And we've developed technologies. 14:28.133 --> 14:29.200 align:left position:30% line:83% size:60% - We've developed the technology. 14:29.200 --> 14:30.466 align:left position:15% line:89% size:75% - Had the economies of scale. 14:30.466 --> 14:33.333 align:left position:22.5% line:83% size:67.5% - Exactly, because one of the shortcomings 14:33.333 --> 14:35.700 align:left position:27.5% line:83% size:62.5% of something like a carbon price or tax 14:35.700 --> 14:37.866 align:left position:27.5% line:83% size:62.5% is that it doesn't really help so much 14:37.866 --> 14:39.833 align:left position:27.5% line:83% size:62.5% with the technology development side of things. 14:39.833 --> 14:42.233 align:left position:12.5% line:83% size:77.5% We need complimentary policies there to bring those forward. 14:42.233 --> 14:46.766 align:left position:12.5% line:89% size:77.5% - So instead of a tax or a cap, 14:46.766 --> 14:48.133 align:left position:25% line:83% size:65% is it more affordable or effective, 14:48.133 --> 14:52.566 align:left position:17.5% line:83% size:72.5% to like directly encourage the CO2 reductions? 14:52.566 --> 14:53.633 align:left position:27.5% line:89% size:62.5% - Yeah, I think so 14:53.633 --> 14:57.166 align:left position:22.5% line:83% size:67.5% because you're starting with trying to encourage 14:57.166 --> 15:01.066 align:left position:15% line:83% size:75% cleaner technologies or lower carbon emitting technologies 15:01.066 --> 15:05.100 align:left position:25% line:83% size:65% without discouraging the product itself. 15:05.100 --> 15:09.300 align:left position:17.5% line:83% size:72.5% So you're not getting into whether steel is good or bad 15:09.300 --> 15:10.533 align:left position:32.5% line:83% size:57.5% because of the carbon that's in it, 15:10.533 --> 15:12.733 align:left position:17.5% line:83% size:72.5% you're trying to encourage the steel manufacturers 15:12.733 --> 15:14.400 align:left position:15% line:89% size:75% to produce with less carbon. 15:14.400 --> 15:17.633 align:left position:12.5% line:83% size:77.5% - You might even add some jobs as you bolt something else on 15:17.633 --> 15:19.400 align:left position:27.5% line:83% size:62.5% and the steel jobs don't go away. 15:19.400 --> 15:20.433 align:left position:15% line:89% size:75% - That's right, that's right. 15:20.433 --> 15:22.366 align:left position:12.5% line:89% size:77.5% So I think all of these sectors 15:22.366 --> 15:24.933 align:left position:22.5% line:83% size:67.5% where you're trying to encourage new technologies, 15:24.933 --> 15:27.966 align:left position:20% line:83% size:70% potentially you're gonna take more jobs to do it. 15:27.966 --> 15:29.533 align:left position:30% line:89% size:60% - Mm-hmm, mm-hmm. 15:29.533 --> 15:31.266 align:left position:32.5% line:89% size:57.5% Oh, subsidies. 15:31.266 --> 15:33.666 align:left position:20% line:89% size:70% We mentioned them before 15:33.666 --> 15:35.000 align:left position:27.5% line:83% size:62.5% for solar and wind and other things. 15:35.000 --> 15:36.433 align:left position:27.5% line:89% size:62.5% Who pays for that, 15:36.433 --> 15:37.633 align:left position:17.5% line:89% size:72.5% how does it get translated? 15:37.633 --> 15:40.900 align:left position:25% line:83% size:65% - Well, so it really depends on the subsidy. 15:40.900 --> 15:42.466 align:left position:20% line:89% size:70% If it's in the tax code, 15:42.466 --> 15:46.400 align:left position:15% line:83% size:75% which is how we've done a lot of our incentive structuring 15:46.400 --> 15:48.800 align:left position:15% line:83% size:75% up to now for wind and solar and other technologies, 15:48.800 --> 15:51.066 align:left position:27.5% line:83% size:62.5% that's the federal taxpayer that pays. 15:51.066 --> 15:52.500 align:left position:32.5% line:83% size:57.5% It's all of us. - Everybody pays. 15:52.500 --> 15:53.666 align:left position:30% line:89% size:60% - Everybody pays. 15:53.666 --> 15:58.466 align:left position:17.5% line:83% size:72.5% - And there's downsides to that, if I make less money-- 15:58.466 --> 16:02.266 align:left position:20% line:83% size:70% - So there are downsides but there are also upsides. 16:02.266 --> 16:04.233 align:left position:25% line:89% size:65% It's less regressive. 16:04.233 --> 16:06.800 align:left position:20% line:83% size:70% It has less of an impact on the poorer populations 16:06.800 --> 16:09.100 align:left position:27.5% line:83% size:62.5% because it's spread more broadly. 16:09.100 --> 16:12.000 align:left position:22.5% line:83% size:67.5% The other, I think, big challenge with subsidies 16:12.000 --> 16:16.766 align:left position:17.5% line:83% size:72.5% is that we can't subsidize our way to a net zero future. 16:16.766 --> 16:19.566 align:left position:20% line:83% size:70% It really, because of the amount of infrastructure 16:19.566 --> 16:20.766 align:left position:20% line:89% size:70% that's needed to be built 16:20.766 --> 16:23.700 align:left position:30% line:83% size:60% and the scale of the energy system, 16:23.700 --> 16:26.633 align:left position:22.5% line:83% size:67.5% we really need to have the private sector 16:26.633 --> 16:29.466 align:left position:17.5% line:83% size:72.5% and the business community and the markets themselves 16:29.466 --> 16:32.500 align:left position:25% line:83% size:65% see this as their way of doing business. 16:32.500 --> 16:33.700 align:left position:12.5% line:89% size:77.5% - You don't want the government 16:33.700 --> 16:34.866 align:left position:15% line:89% size:75% to be subsidizing everything, 16:34.866 --> 16:38.366 align:left position:15% line:83% size:75% you want to set the rules of the road for the industries 16:38.366 --> 16:41.366 align:left position:27.5% line:83% size:62.5% and kind of unlock their efforts. 16:41.366 --> 16:42.600 align:left position:30% line:89% size:60% - And it's true, 16:42.600 --> 16:48.000 align:left position:15% line:83% size:75% if I strap an eight kilowatt solar panel system on my house 16:48.000 --> 16:50.133 align:left position:32.5% line:83% size:57.5% and charge the Tesla in my garage 16:50.133 --> 16:52.133 align:left position:22.5% line:83% size:67.5% and put the power wall in my house, 16:52.133 --> 16:53.833 align:left position:27.5% line:89% size:62.5% I can afford that. 16:53.833 --> 16:55.200 align:left position:25% line:89% size:65% And it's subsidized. 16:55.200 --> 16:56.833 align:left position:25% line:83% size:65% A lot of people that can't afford that. 16:56.833 --> 16:59.800 align:left position:10% line:89% size:80% Aren't they paying for my Tesla? 16:59.800 --> 17:01.666 align:left position:12.5% line:89% size:77.5% Isn't that a little regressive? 17:01.666 --> 17:03.000 align:left position:10% line:89% size:80% - There's an equity part of that 17:03.000 --> 17:08.333 align:left position:20% line:83% size:70% that I think really does need more scrutiny, but-- 17:08.333 --> 17:10.700 align:left position:22.5% line:83% size:67.5% - Because as you start taking the subsidies away, 17:10.700 --> 17:11.800 align:left position:20% line:89% size:70% then it gets to the point 17:11.800 --> 17:14.666 align:left position:30% line:83% size:60% where the people who need it the most 17:14.666 --> 17:15.666 align:left position:17.5% line:89% size:72.5% don't get a subsidy, right? 17:15.666 --> 17:16.833 align:left position:27.5% line:83% size:62.5% - Well, they don't get the subsidy, 17:16.833 --> 17:17.766 align:left position:22.5% line:89% size:67.5% but they're also paying 17:17.766 --> 17:20.300 align:left position:22.5% line:83% size:67.5% for you to enhance the quality of your life 17:20.300 --> 17:21.933 align:left position:17.5% line:89% size:72.5% or the value of your home. 17:21.933 --> 17:25.833 align:left position:20% line:83% size:70% So that's a dimension of energy and climate policy 17:25.833 --> 17:29.066 align:left position:20% line:83% size:70% that in the environmental justice component 17:29.066 --> 17:32.600 align:left position:17.5% line:83% size:72.5% of how we design policy has really been under thought. 17:32.600 --> 17:34.066 align:left position:22.5% line:89% size:67.5% - We get wealthy people 17:34.066 --> 17:36.833 align:left position:22.5% line:83% size:67.5% who are contributing to technology development. 17:36.833 --> 17:38.600 align:left position:17.5% line:83% size:72.5% But I think what's happened is we've gotten to this point 17:38.600 --> 17:40.366 align:left position:25% line:83% size:65% where it is actually a net benefit 17:40.366 --> 17:42.566 align:left position:32.5% line:83% size:57.5% and it's really benefiting the wealthy. 17:42.566 --> 17:45.000 align:left position:20% line:83% size:70% And so we have to rethink some of those dimensions. 17:45.000 --> 17:46.566 align:left position:30% line:89% size:60% - Policy has to-- 17:46.566 --> 17:47.766 align:left position:22.5% line:89% size:67.5% - Policy has to evolve. 17:47.766 --> 17:48.933 align:left position:30% line:89% size:60% It has to evolve. 17:48.933 --> 17:50.700 align:left position:30% line:83% size:60% I think that's a real thing in here. 17:50.700 --> 17:54.033 align:left position:17.5% line:83% size:72.5% We need to be able to learn and adapt as we move ahead. 17:54.033 --> 17:57.500 align:left position:22.5% line:83% size:67.5% And there's also, it's very important, I think, 17:57.500 --> 18:01.166 align:left position:25% line:83% size:65% to recognize that if we're gonna innovate 18:01.166 --> 18:02.466 align:left position:25% line:89% size:65% and innovate quickly, 18:02.466 --> 18:05.166 align:left position:27.5% line:83% size:62.5% we need to actually accept some failures. 18:05.166 --> 18:06.566 align:left position:20% line:89% size:70% Failures technologically, 18:06.566 --> 18:08.233 align:left position:27.5% line:83% size:62.5% and failures from a policy perspective. 18:08.233 --> 18:09.333 align:left position:17.5% line:89% size:72.5% And then we need to learn. 18:09.333 --> 18:11.500 align:left position:27.5% line:89% size:62.5% - Yep, absolutely. 18:11.500 --> 18:14.166 align:left position:17.5% line:83% size:72.5% So now renewable standards or power purchase plants 18:14.166 --> 18:15.800 align:left position:17.5% line:83% size:72.5% and other things like that, those tools, 18:15.800 --> 18:18.466 align:left position:27.5% line:83% size:62.5% who pays for those and how do they work? 18:18.466 --> 18:20.200 align:left position:20% line:89% size:70% - The renewable standards 18:20.200 --> 18:22.633 align:left position:27.5% line:83% size:62.5% basically are being paid for by rate payers, 18:22.633 --> 18:25.166 align:left position:27.5% line:83% size:62.5% ultimately who have to pay slightly more 18:25.166 --> 18:27.866 align:left position:20% line:83% size:70% for their electricity in order for the local utility 18:27.866 --> 18:30.133 align:left position:25% line:83% size:65% to buy the renewable energy credits 18:30.133 --> 18:33.000 align:left position:17.5% line:83% size:72.5% that then become a subsidy to the renewable sources. 18:33.000 --> 18:34.966 align:left position:27.5% line:83% size:62.5% It's a way of kind of internalizing the 18:34.966 --> 18:37.633 align:left position:25% line:83% size:65% cost of that subsidy within the rate payer base. 18:37.633 --> 18:39.500 align:left position:15% line:83% size:75% But the thing to think about with renewable subsidies, 18:39.500 --> 18:41.166 align:left position:27.5% line:83% size:62.5% as we talked about a couple times 18:41.166 --> 18:44.300 align:left position:20% line:83% size:70% is they're targeted on a couple of technologies, 18:44.300 --> 18:47.133 align:left position:22.5% line:83% size:67.5% not necessarily all the carbon reducing technologies, 18:47.133 --> 18:48.400 align:left position:17.5% line:89% size:72.5% and they don't do anything 18:48.400 --> 18:50.833 align:left position:27.5% line:83% size:62.5% to try to encourage cleaner fossil technology 18:50.833 --> 18:52.766 align:left position:30% line:83% size:60% or cleaner carbon emitting technologies. 18:52.766 --> 18:55.700 align:left position:25% line:83% size:65% So I think rethinking those sorts of policies 18:55.700 --> 18:59.333 align:left position:12.5% line:83% size:77.5% with an eye on carbon emissions could be quite powerful. 18:59.333 --> 19:00.333 align:left position:27.5% line:89% size:62.5% - Is it happening? 19:00.333 --> 19:01.566 align:left position:30% line:83% size:60% Are we seeing it start to happen? 19:01.566 --> 19:04.000 align:left position:12.5% line:83% size:77.5% Or is there still just a giant push away from the fuels? 19:04.000 --> 19:05.033 align:left position:17.5% line:89% size:72.5% - There's always been talk 19:05.033 --> 19:07.866 align:left position:27.5% line:83% size:62.5% about some sort of national clean electricity 19:07.866 --> 19:10.066 align:left position:12.5% line:89% size:77.5% or carbon performance standard, 19:10.066 --> 19:12.666 align:left position:15% line:83% size:75% but I don't think it's caught on too much or it hasn't-- 19:12.666 --> 19:13.500 align:left position:20% line:89% size:70% - Well, this is something 19:13.500 --> 19:14.966 align:left position:27.5% line:83% size:62.5% that I spent a lot of time working on 19:14.966 --> 19:16.400 align:left position:10% line:89% size:80% at the Bipartisan Policy Center. 19:16.400 --> 19:18.833 align:left position:32.5% line:83% size:57.5% It really does need to now expand 19:18.833 --> 19:20.533 align:left position:30% line:83% size:60% to moving beyond just wind and solar, 19:20.533 --> 19:23.500 align:left position:17.5% line:83% size:72.5% to other clean sources that we know we're gonna need 19:23.500 --> 19:26.400 align:left position:15% line:83% size:75% if we're gonna have a deeply decarbonized power sector. 19:26.400 --> 19:29.866 align:left position:22.5% line:83% size:67.5% This is really a policy mechanism for electricity alone. 19:29.866 --> 19:33.966 align:left position:15% line:83% size:75% We should expand it so we can bring in more technologies. 19:33.966 --> 19:35.566 align:left position:12.5% line:89% size:77.5% And we should think about ways 19:35.566 --> 19:38.300 align:left position:32.5% line:83% size:57.5% in which we can expand the politics, 19:38.300 --> 19:43.333 align:left position:22.5% line:83% size:67.5% the supporters of those different technologies 19:43.333 --> 19:45.133 align:left position:22.5% line:83% size:67.5% and of those different regions of the country 19:45.133 --> 19:49.166 align:left position:22.5% line:83% size:67.5% so we can start to get moving on the federal level 19:49.166 --> 19:50.700 align:left position:10% line:89% size:80% and we are starting to see that. 19:50.700 --> 19:53.300 align:left position:20% line:83% size:70% There's a bipartisan bill in Congress right now 19:53.300 --> 19:55.166 align:left position:25% line:83% size:65% that has a Republican and a Democrat 19:55.166 --> 19:58.733 align:left position:17.5% line:83% size:72.5% that are putting together a clean electricity standard 19:58.733 --> 20:00.500 align:left position:17.5% line:89% size:72.5% for the federal government. 20:00.500 --> 20:02.233 align:left position:10% line:89% size:80% And there's increasing momentum, 20:02.233 --> 20:05.066 align:left position:22.5% line:83% size:67.5% although I wouldn't say we're there yet politically. 20:05.066 --> 20:06.833 align:left position:20% line:83% size:70% - So what would been the unintended consequences 20:06.833 --> 20:10.200 align:left position:10% line:89% size:80% of these kinds of purchase plans 20:10.200 --> 20:12.066 align:left position:25% line:83% size:65% and standards, mostly in the states? 20:12.066 --> 20:14.000 align:left position:12.5% line:83% size:77.5% Have there been anything you'd say, "Oops, I'd change that, 20:14.000 --> 20:15.566 align:left position:15% line:89% size:75% fix it when we go federally?" 20:16.233 --> 20:19.966 align:left position:20% line:83% size:70% - Well, I think focusing only on wind and solar, 20:19.966 --> 20:21.633 align:left position:30% line:83% size:60% I think that's an unintended consequence. 20:21.633 --> 20:23.033 align:left position:22.5% line:89% size:67.5% We haven't necessarily 20:23.033 --> 20:26.500 align:left position:25% line:83% size:65% cultivated the other technologies as much. 20:26.500 --> 20:27.833 align:left position:27.5% line:89% size:62.5% And in some cases, 20:27.833 --> 20:31.166 align:left position:27.5% line:83% size:62.5% we are letting some of our most important 20:31.166 --> 20:35.733 align:left position:22.5% line:83% size:67.5% clean energy generating resources fall out of the system 20:35.733 --> 20:38.000 align:left position:22.5% line:83% size:67.5% which is just digging a deeper hole for ourselves, 20:38.000 --> 20:40.300 align:left position:20% line:83% size:70% and I'm referring to our existing nuclear fleet 20:40.300 --> 20:41.933 align:left position:30% line:89% size:60% when I say that. 20:41.933 --> 20:42.966 align:left position:30% line:89% size:60% That's a lesson. 20:42.966 --> 20:46.666 align:left position:12.5% line:89% size:77.5% We can't let those clean, safe, 20:46.666 --> 20:50.800 align:left position:15% line:83% size:75% and very affordable actually, power stations go away 20:50.800 --> 20:53.700 align:left position:22.5% line:83% size:67.5% if we're actually gonna try to be successful 20:53.700 --> 20:57.300 align:left position:20% line:83% size:70% in taking all the carbon out of our system in time. 20:57.300 --> 21:00.400 align:left position:25% line:83% size:65% - One thing about the performance standards, 21:00.400 --> 21:02.266 align:left position:27.5% line:83% size:62.5% the fact that they don't differentiate 21:02.266 --> 21:04.533 align:left position:20% line:83% size:70% between technologies is a plus and a minus, right? 21:04.533 --> 21:07.300 align:left position:20% line:83% size:70% Because on the one hand, it's not limiting you, 21:07.300 --> 21:08.533 align:left position:22.5% line:89% size:67.5% but on the other hand, 21:08.533 --> 21:10.466 align:left position:15% line:83% size:75% it's not thinking about what are the incumbent technologies 21:10.466 --> 21:12.733 align:left position:25% line:83% size:65% and what are the new cutting edge technologies 21:12.733 --> 21:13.766 align:left position:20% line:89% size:70% that may need more time. 21:13.766 --> 21:15.466 align:left position:32.5% line:83% size:57.5% So I think it's important to realize 21:15.466 --> 21:17.566 align:left position:27.5% line:83% size:62.5% that there's not a silver bullet here. 21:17.566 --> 21:19.466 align:left position:12.5% line:89% size:77.5% You need a package of policies, 21:19.466 --> 21:20.766 align:left position:27.5% line:83% size:62.5% but you're going to need other policies 21:20.766 --> 21:23.766 align:left position:15% line:89% size:75% that kind of bring the newer 21:23.766 --> 21:25.766 align:left position:22.5% line:83% size:67.5% promising technologies to market. 21:25.766 --> 21:29.366 align:left position:20% line:83% size:70% - Yeah, there's no silver bullet from a policy perspective 21:29.366 --> 21:31.566 align:left position:15% line:83% size:75% and there's no silver bullet from a technology perspective. 21:31.566 --> 21:35.233 align:left position:30% line:83% size:60% We really do need to be really, really 21:35.233 --> 21:36.833 align:left position:12.5% line:89% size:77.5% working at multiple levels here 21:36.833 --> 21:39.800 align:left position:10% line:89% size:80% to get this transition underway. 21:39.800 --> 21:43.100 align:left position:20% line:83% size:70% - You mentioned nuclear, hydrogen, CCS. 21:43.100 --> 21:48.233 align:left position:20% line:83% size:70% We've talked about solar and wind as sources, 21:48.233 --> 21:49.933 align:left position:10% line:89% size:80% switching just from coal to gas. 21:49.933 --> 21:51.266 align:left position:27.5% line:83% size:62.5% It doesn't get you all the way there, 21:51.266 --> 21:52.733 align:left position:27.5% line:83% size:62.5% but you can make a pretty quick transition 21:52.733 --> 21:54.600 align:left position:25% line:83% size:65% to lower emissions if you're able to do that. 21:54.600 --> 21:56.066 align:left position:30% line:89% size:60% Some big levers, 21:56.066 --> 21:59.433 align:left position:22.5% line:83% size:67.5% and those should have a fairly reasonable path 21:59.433 --> 22:00.633 align:left position:17.5% line:89% size:72.5% because of the timeframes. 22:00.633 --> 22:03.966 align:left position:17.5% line:83% size:72.5% - There's almost like three things you could think about. 22:03.966 --> 22:06.833 align:left position:10% line:89% size:80% There's getting the technologies 22:06.833 --> 22:08.166 align:left position:15% line:89% size:75% that we have ready deployed, 22:08.166 --> 22:13.500 align:left position:17.5% line:83% size:72.5% so getting more renewables and nuclear and whatever, CCS, 22:13.500 --> 22:15.633 align:left position:15% line:89% size:75% is feasible in the near term. 22:15.633 --> 22:17.033 align:left position:15% line:89% size:75% There's the very short term, 22:17.033 --> 22:18.100 align:left position:32.5% line:83% size:57.5% the easy stuff that you mentioned, 22:18.100 --> 22:20.266 align:left position:27.5% line:83% size:62.5% like the switching from coal to gas, 22:20.266 --> 22:22.700 align:left position:17.5% line:83% size:72.5% which isn't really about a new technology deployment, 22:22.700 --> 22:25.666 align:left position:20% line:83% size:70% it's about redistributing what we have in some sense. 22:25.666 --> 22:28.800 align:left position:20% line:83% size:70% And then there's a longer term technology investment. 22:28.800 --> 22:34.366 align:left position:17.5% line:83% size:72.5% - And what you really need is bipartisan political will. 22:34.366 --> 22:36.766 align:left position:20% line:83% size:70% That's probably the most important thing of all, 22:36.766 --> 22:39.166 align:left position:12.5% line:89% size:77.5% to get this transition underway 22:39.166 --> 22:42.366 align:left position:17.5% line:83% size:72.5% and to take us through all the way to its success, 22:42.366 --> 22:45.533 align:left position:15% line:83% size:75% because the amount of capital that needs to be invested 22:45.533 --> 22:50.466 align:left position:22.5% line:83% size:67.5% into this transition is trillions of dollars, 22:50.466 --> 22:54.366 align:left position:22.5% line:83% size:67.5% and companies, I think, are reluctant 22:54.366 --> 22:57.833 align:left position:25% line:83% size:65% to bet their business on a one-party agenda 22:57.833 --> 22:59.933 align:left position:22.5% line:83% size:67.5% that could change every two to four years. 22:59.933 --> 23:01.200 align:left position:40% line:83% size:50% And so-- - It does. 23:01.200 --> 23:04.133 align:left position:22.5% line:83% size:67.5% - And so we really need bipartisan agreement 23:04.133 --> 23:05.966 align:left position:22.5% line:89% size:67.5% so we can get started. 23:05.966 --> 23:08.700 align:left position:17.5% line:83% size:72.5% - There's another big wedge we haven't talked about, 23:08.700 --> 23:12.066 align:left position:25% line:83% size:65% and that's just doing more with less, efficiency. 23:12.066 --> 23:15.566 align:left position:20% line:83% size:70% We consume so much energy in wealthy nations, 23:15.566 --> 23:17.166 align:left position:12.5% line:89% size:77.5% but it's hard to motivate that. 23:17.166 --> 23:21.666 align:left position:15% line:83% size:75% How do we get efficiency just translated into the economy? 23:21.666 --> 23:23.266 align:left position:15% line:89% size:75% What are the strategies here? 23:23.266 --> 23:25.600 align:left position:22.5% line:83% size:67.5% - I think you're really thinking about households 23:25.600 --> 23:27.900 align:left position:10% line:89% size:80% and consumers who may not really 23:27.900 --> 23:31.400 align:left position:22.5% line:83% size:67.5% be constantly trying to get everything they can 23:31.400 --> 23:32.666 align:left position:27.5% line:89% size:62.5% out of everything. 23:32.666 --> 23:36.200 align:left position:32.5% line:83% size:57.5% The evidence is pretty compelling 23:36.200 --> 23:39.933 align:left position:20% line:83% size:70% that it seems like people are not paying attention 23:39.933 --> 23:41.600 align:left position:27.5% line:83% size:62.5% and they're missing opportunities. 23:41.600 --> 23:45.733 align:left position:15% line:83% size:75% And a lot of the talk we had earlier about carbon taxes, 23:45.733 --> 23:47.666 align:left position:27.5% line:83% size:62.5% part of the reason you want a carbon tax 23:47.666 --> 23:50.433 align:left position:20% line:83% size:70% is to encourage consumers to do those sorts of things. 23:50.433 --> 23:51.566 align:left position:27.5% line:89% size:62.5% - Right, the stick. 23:51.566 --> 23:53.533 align:left position:17.5% line:83% size:72.5% - Yeah, the stick to raise the price of gasoline, 23:53.533 --> 23:54.900 align:left position:27.5% line:83% size:62.5% to raise the price of electricity, 23:54.900 --> 23:56.300 align:left position:25% line:89% size:65% get them to use less. 23:56.300 --> 23:57.500 align:left position:27.5% line:89% size:62.5% And in some sense, 23:57.500 --> 24:00.400 align:left position:15% line:83% size:75% the whole efficiency argument is based on them doing that, 24:00.400 --> 24:03.066 align:left position:17.5% line:83% size:72.5% and yet there's very little evidence that that's true. 24:03.066 --> 24:06.166 align:left position:15% line:83% size:75% So I think that's the reason we turn to other policies 24:06.166 --> 24:08.600 align:left position:35% line:83% size:55% where we set efficiency standards, 24:08.600 --> 24:11.200 align:left position:20% line:83% size:70% that's been the approach that we've had for buildings, 24:11.200 --> 24:13.433 align:left position:10% line:89% size:80% for appliances, for automobiles. 24:14.133 --> 24:18.800 align:left position:30% line:83% size:60% Most energy-using consumer devices 24:18.800 --> 24:23.000 align:left position:15% line:83% size:75% are regulated one way or the other because of this problem. 24:23.000 --> 24:24.700 align:left position:27.5% line:83% size:62.5% - But I think it's important to recognize 24:24.700 --> 24:27.233 align:left position:30% line:83% size:60% we're never gonna conserve our way 24:27.233 --> 24:28.733 align:left position:15% line:89% size:75% through the climate problem. 24:28.733 --> 24:31.133 align:left position:12.5% line:89% size:77.5% It really is too big for that. 24:31.133 --> 24:32.833 align:left position:32.5% line:89% size:57.5% - It's a wedge. 24:32.833 --> 24:34.900 align:left position:17.5% line:83% size:72.5% - It's really, if you look at the economics 24:34.900 --> 24:36.300 align:left position:12.5% line:89% size:77.5% of things that we can be doing, 24:36.300 --> 24:39.500 align:left position:17.5% line:83% size:72.5% it's usually the most cost effective thing to be doing. 24:39.500 --> 24:41.000 align:left position:12.5% line:89% size:77.5% So we should be doing it first 24:41.000 --> 24:44.033 align:left position:15% line:83% size:75% across all of these different applications and sectors. 24:44.033 --> 24:47.266 align:left position:27.5% line:83% size:62.5% - I would also just add that it is hard. 24:47.266 --> 24:49.233 align:left position:22.5% line:83% size:67.5% I mean, if you've ever tried to find somebody 24:49.233 --> 24:53.733 align:left position:15% line:83% size:75% to do the work on your house that's a quality person 24:53.733 --> 24:55.566 align:left position:15% line:89% size:75% who knows what they're doing, 24:55.566 --> 24:58.033 align:left position:25% line:83% size:65% knows your house well enough to know how to do it, 24:58.033 --> 24:59.000 align:left position:35% line:89% size:55% it gets hard. 24:59.000 --> 25:00.833 align:left position:25% line:83% size:65% So part of this is a little bit about scale, 25:00.833 --> 25:03.733 align:left position:15% line:89% size:75% that doing every house and-- 25:03.733 --> 25:06.666 align:left position:25% line:83% size:65% Even the transaction costs get higher or high. 25:06.666 --> 25:09.066 align:left position:25% line:83% size:65% So I think sometimes people look at these things 25:09.066 --> 25:10.500 align:left position:30% line:83% size:60% and they say it's low hanging fruit, 25:10.500 --> 25:12.666 align:left position:22.5% line:83% size:67.5% and they kind of forget these transaction costs 25:12.666 --> 25:15.333 align:left position:27.5% line:83% size:62.5% and frictions that happen for the homeowner. 25:15.333 --> 25:17.233 align:left position:30% line:83% size:60% And we've thought about it at RFF. 25:17.233 --> 25:21.066 align:left position:15% line:83% size:75% I mean, I'm not totally sure this is gonna be where we... 25:21.066 --> 25:22.866 align:left position:22.5% line:83% size:67.5% This may be one of the last places we actually go. 25:22.866 --> 25:23.900 align:left position:25% line:89% size:65% - At the home level. 25:23.900 --> 25:25.300 align:left position:15% line:89% size:75% - At the retrofitting homes. 25:25.300 --> 25:26.400 align:left position:32.5% line:89% size:57.5% - Interesting. 25:26.400 --> 25:28.066 align:left position:15% line:89% size:75% We talked about a carbon tax, 25:28.066 --> 25:31.633 align:left position:25% line:83% size:65% to put a price on CO2 emissions and cap and trade, 25:31.633 --> 25:33.900 align:left position:10% line:89% size:80% which sets a limit, not a price. 25:33.900 --> 25:37.166 align:left position:12.5% line:83% size:77.5% But both of these are unpopular and politically difficult. 25:37.166 --> 25:40.000 align:left position:27.5% line:83% size:62.5% Some countries have adopted one or the other. 25:40.000 --> 25:42.700 align:left position:27.5% line:83% size:62.5% The US most likely won't anytime soon. 25:42.700 --> 25:45.666 align:left position:20% line:83% size:70% Instead, we could broaden subsidies and incentives 25:45.666 --> 25:48.400 align:left position:25% line:83% size:65% at the federal level to include all energies 25:48.400 --> 25:50.333 align:left position:12.5% line:89% size:77.5% that can reduce CO2 emissions, 25:50.333 --> 25:53.166 align:left position:15% line:83% size:75% and we could try to adopt low carbon performance standards. 25:53.166 --> 25:56.100 align:left position:17.5% line:83% size:72.5% While these costs are less transparent to the consumer, 25:56.100 --> 25:57.233 align:left position:27.5% line:89% size:62.5% we still bear them. 25:57.233 --> 25:59.233 align:left position:12.5% line:89% size:77.5% So we need them to be equitable 25:59.233 --> 26:02.366 align:left position:22.5% line:83% size:67.5% and we need bipartisan support for these policies, 26:02.366 --> 26:04.033 align:left position:25% line:89% size:65% or they won't happen. 26:04.033 --> 26:14.400 align:left position:47.5% line:89% size:42.5% ♪ ♪ 26:14.400 --> 26:25.400 align:left position:47.5% line:89% size:42.5% ♪ ♪ 26:25.400 --> 26:35.400 align:left position:47.5% line:89% size:42.5% ♪ ♪ 26:36.766 --> 26:38.066 align:left position:27.5% line:83% size:62.5% [Announcer] Funding for "Energy Switch" 26:38.066 --> 26:39.900 align:left position:22.5% line:89% size:67.5% was provided in part by 26:39.900 --> 26:41.433 align:left position:40% line:89% size:50% Microsoft 26:41.433 --> 26:44.633 align:left position:27.5% line:83% size:62.5% and The University of Texas at Austin.