Volts

In this episode, Priya Donti, executive director of nonprofit Climate Change AI, speaks to how artificial intelligence and machine learning are affecting the fight against climate change. (PDF transcript)(Active transcript)Text transcript:David RobertsAs you might have noticed, the world is in the midst of a massive wave of hype about artificial intelligence (AI) and machine learning (ML) — hype tinged with no small amount of terror. Here at Volts, though, we’re less worried about theoretical machines that gain sentience and decide to wipe out humanity than we are with the actually existing apocalypse of climate change. Are AI and ML helping in the climate fight, or hurting? Are they generating substantial greenhouse gas emissions on their own? Are they helping to discover and exploit more fossil fuels? Are they unlocking fantastic capabilities that might one day revolutionize climate models or the electricity grid?Yes! They are doing all those things. To try to wrap my head around the extent of their current carbon emissions, the ways they are hurting and helping the climate fight, and how policy might channel them in a positive direction, I contact Priya Donti, an assistant professor at MIT and executive director of Climate Change AI, a nonprofit that investigates these very questions.All right, then, with no further ado, Priya Donti, welcome to Volts. Thank you so much for coming.Priya DontiThanks for having me on.David RobertsWe are going to discuss the effects of artificial intelligence and machine learning on the climate fight. And I think we're going to, for reasons that will become clear as we talk, kind of like taking on an impossible task here. As we'll see, it's going to be very difficult to sort of wrap our heads around the whole thing. But I think we can make a lot of progress and maybe get clear about sort of some of the directions and some of the applications and get a better sense of how things are going, because this is something I've been sort of meaning to think about and talk about for a while.I'm excited. But to start, can we just get some definitions out of the way? Because I think people hear a lot of these terms flying around. There's artificial intelligence, AI. There's machine learning, ML, in the business, and then there's just sort of the digitization of everything, and then there's just sort of more powerful computers. Like, if I'm running a climate model and I want to put more variables in there, but I'm constrained by the amount of computing power it would take, computers that have more power and more processing cores or whatever, then I can do that.So help us understand the distinction between these things, between just sort of more and better and faster computing and something called machine learning and something called artificial intelligence. What do all these things mean?Priya DontiYeah, so I'm going to start with AI: Artificial intelligence. So AI refers to any computational algorithm that can perform a task that we think of as complex so this is things like speech or reasoning or forecasting or something like that. And AI has two kind of main branches. One of them is based on rule-based approaches where you basically write down a set of rules and ask an algorithm to reason over them. So when, for example, Deep Blue beat Gary Kasparov in the game of chess, this was a kind of rule-based scenario where you were able to write down the rules of chess and get an algorithm to understand and reason over what to do given that set of rules. Of course, there are lots of scenarios in the world where it's really difficult to write down a set of rules to capture a task, even though we kind of know how the task goes.David RobertsMost you could say are difficult.Priya DontiExactly. And so, one of these things is, like, if I have an image, what does it mean for that image to contain a picture of a cat? I can probably tell you, okay, there's got to be a thing with ears, a head, a tail, but it doesn't capture that always because you can't always see the tail. Like, how does this work? And so, machine learning is a type of AI that basically tries to automatically learn an underlying set of rules based on examples. So, for example, it takes large amounts of data, like, that it can analyze and use to help kind of figure out what the patterns are in that underlying data, and then apply those patterns to other similar scenarios, like classifying other images that the algorithm hasn't yet seen but are similar to what it saw when actually being created.And yeah, I would say that in terms of what's the distinction between these things and computing, I would say computing is a workhorse behind many of these algorithms. So in order for these algorithms to work, you need fast computers that are able to kind of execute the computations behind the creation of these algorithms. Behind the learning. You also need good data. And with those things together, you can basically create a lot of these more powerful AI and machine learning algorithms that you've seen today.David RobertsI see. So in AI, you're kind of telling the computer the rules and then hoping that the computer can use the rules to respond effectively to new data. With machine learning, you're just feeding it an enormous amount of data and it is deriving the rules or patterns from the data.Priya DontiRight. And those rules might be derived in a way that either is or is not interpretable. So I may or may not be able to go into the model and actually pull out what the set of rules are. But implicitly, at least in there, there's some set of rules that's being learned based on the data.David RobertsSo there are so many side paths that I'm going to try not to go down all of them as we go. But I'm sort of curious because one of the fears people are always bringing up is you feed it this enormous amount of data, it derives some rules from it and applies that to new data, but you don't really know what it's doing. And this is something we hear about AI a lot, is sort of relatively quickly the sort of complexity of what's going on and the kind of foreignness of what's going on to our way of thinking, to sort of human reasoning just puts these things out of touch. And pretty quickly we're in a kind of like, well, it seems to be working, so let's keep using it even though we don't know what it's doing.So I guess my question is, is that a limitation of our knowledge? In other words, is it theoretically possible if we had sort of the time and willpower to dig in and figure out what it's doing? Or is there some reason that in principle it's sort of impossible to know what it's doing? Does that make sense?Priya DontiIt does, yeah. And I'd say that one thing to kind of step back and note also is that there's a diversity of machine learning methods, some of which are inherently a bit more interpretable than others. So, linear regression, even though people don't think of it as a form of machine learning, it actually is, right? Because you're taking in some data and you're learning parameters that allow you to make some kind of prediction. And linear regression is, abundantly, interpretable. And similarly, you have things like decision trees. There are more complicated methods, like physics-informed machine learning or other methods, that try to just constrain the model in a way such that the goal is you can pull out certain kinds of rules.So, there is that axis of methods, but then there are these other methods, like some of the more complicated deep learning methods you see today, where, agreed, we basically view it. It is a bit of a black box. You don't know exactly why a prediction is being made, and there is some work going on to try to get at this issue and see if there are ways we can understand what the model is doing post hoc. But it's an area of research, I think, one that undergoes a lot of debate. Also, in terms of can you post hoc explain what a deep learning model did?For example, if I, as a person, make a decision and take some kind of action and you, David, ask me, "Hey, why did you do that?" I could probably come up with any number of explanations for you, all of which seem plausible, but those may or may not actually describe how I actually made the decision. So there's a bit of a debate about kind of even if you can try to somehow understand what the deep learning model did, what are the limits of that analysis and interpreting what it actually did and why?David RobertsYeah, there's a lot of things about this whole subject matter that sort of unnerve people. But this is kind of what I think is at the root of it is just that as these things get more complex, you pretty quickly get into an area of kind of trust or faith, almost like our machine masters. They seem to be doing well by us, even though we don't know exactly why. There's just something a little weird about that.Priya DontiYeah. And maybe just one thing I'll add. There are levers here, though, right? In any kind of machine learning pipeline, you have the data, the model, and then the outputs are how you evaluate the outputs. And you do have the ability to kind of quality control or constrain any of those things. So you should know exactly what's going into the data that's going into a model. In order to understand if your model is actually seeing quality things that it's trying to learn from. You can, as I mentioned, constrain your model to be an interpretable model.And then, what some of my work looks at is, you can actually often constrain the output in certain settings. So, if I create a controller for a power grid based on machine learning and it outputs some kind of action, but I know something about the control theoretic constraints that that action should satisfy, there are ways I can actually constrain the output so that it still satisfies various performance criteria that we recognize. So, it isn't sort of a foregone conclusion that AI and machine learning must be this sort of black box, scary thing. But I would say that there is work to be done and kind of intention that goes into making sure that we really understand and are constraining and quality controlling how the whole pipeline goes forward.David RobertsRight. And one other general question. So when people talk about AI these days, I think mostly in the popular imagination, I think mostly what they're talking about is what's called general intelligence. This idea that you could create a program that could find its own data and apply rules and figure things out, basically that has some autonomy, that would be the AI, right, the rules based. Like you give it the rules and then it goes and applies this to the world. Or is there a dispute about how you get to general intelligence? Which of these routes leads you to general intelligence?Priya DontiYeah, so I would say that the distinction between sort of general intelligent AI versus task-specific AI, it's not quite the same as this AI machine learning distinction of rules versus data. It's something different. And it kind of comes down to, when you create an algorithm, there is some objective that you're creating it with in mind. And so, for example, if I am creating a forecasting model of solar power, that's a very specific task. I'm kind of giving very specific data. I'm making a very specific ask when I look at the output of the model. But others are saying, can we somehow imbue a lot of data or a lot of rules and learn some kind of foundational representation that really is capturing a ton of general knowledge that can be kind of tuned or specified in various ways.These are kind of the kinds of works that really are trying to lead towards something more general. And so, yeah, I would say that there's kind of these different threads of work within the machine learning community at the moment.David RobertsRight. And just to be clear, we have not reached general intelligence and no one knows how to do that. And there's a lot of theoretical work going on, a lot of work going on in that. But practically speaking, almost all of the AI or machine learning that is happening today is task based. Right? I mean that's to a first approximation, when we talk about AI and machine learning, that's what we're talking about today.Priya DontiYes, that's right. So, I think that there is some kind of research going on in specific labs that is trying to work on artificial general intelligence. But when we think about the implementation of AI and machine learning across society and what it's really used for in practice, I think it is safe to say that a lot of it is task-based. And even some of the stuff that looks very clever and artificial general intelligence-like, there is genuine debate as to whether that is actually the case. For example, large language models and models like GPT have been called stochastic parrots, which is to say, they're not actually thinking; they are mirroring, parroting in a kind of stochastic way, what they're seeing in their data.And we potentially as people who then read text outputs that seem realistic, we maybe ascribe intelligence to that. But that doesn't necessarily mean there's any thinking actually going on under the hood.David RobertsYes. And then, of course, there's this whole, like, back in the "dark ages", I was in grad school in philosophy and I used to study cognitive science and consciousness and all these sort of theoretical debates around this stuff. There is a sort of debate. There is this sort of idea that all we're doing is what the language models are doing, just on a vast scale. So, there is no sharp line. They're just like, eventually you do that well enough that you are, de facto, deploying intelligence, and the models will eventually, eventually there will be no point in drawing a distinction between what they're doing and true intelligence.But that is well far afield of our subject here today anyway. So we're going to try to wrap our heads around how this all applies to the climate change fight, the clean energy fight. But just as a caveat up front, in one of your papers you write "those impacts that are easiest to measure are likely not those with the largest effects." So just by way of framing the discussion. What do you mean by that?Priya DontiYeah. So when we think about the impacts of AI and machine learning on climate, we need to think about a combination of AI and machine learning's direct carbon footprint through its hardware and computational impacts. The ways in which AI is being used for applications that have quote, unquote immediate impacts on climate change, be those sort of good or bad. But then we also have to think about the broader systemic shifts that AI and machine learning create across society that then may have implications for our ability to move forward on climate goals. And I'm sure we'll get into the specifics of all of those things.But I guess, briefly speaking, these sort of broader systemic shifts that AI and machine learning is going to potentially bring about are extremely hard to quantify, but they'll be large. And so it's important to make sure that as we think holistically about the impact of AI on climate, we do the quantifications in order to guide ourselves. But we also make sure to look at this holistic picture, even for things that we're not able to put so concretely into numbers.David RobertsYeah, I think about going back to, whatever, the beginning of the 19th century and just saying, like, well, what are the systemic impacts of automation going to be? Who knows? But they were in fact enormous, right? And they did, in fact, sort of swamp the kind of tangible, measurable immediate impacts. So this just to keep in mind that we are to a large extent, I think, stumbling around in the dark here, kind of guessing, like, we know something big is going to happen. Big things are coming, but good big things? Bad big things. What kind of big things?To some extent, we're guessing from behind a veil of very little information. So let's start then with the immediate impacts. And this is something, when I threw this out on Twitter, this is something I got a lot of questions about. I think it's in some ways the easiest question to ask, which is, just as you say, all these algorithms require a bunch of computing, a bunch of calculations, which requires a bunch of chips and a bunch of data centers and a bunch of hardware, basically. And so the first thing to ask is just, do we know this shift into AI and machine learning, do we have a good sense of just how much it is increasing the world's computing load and just sort of exactly how big the greenhouse gas impacts of that computing load are? This is a conversation I think people are very familiar with, vis-a-vis, Bitcoin, right? Like lots of people are asking about Bitcoin. Is whatever we're getting out of Bitcoin worth the immense resources we're putting into it, computing wise? Sort of same question with machine learning and AI. So do we know how to wrap our head around that do we know how to measure the total amount of computing devoted to this?Priya DontiYeah, and there are some macro level estimates here but they are kind of evolving quite a bit over time. So in the kind of latest numbers at least that I am on top of at a macro level is that in 2020 the total information and communication technology sector was something like 2% of global greenhouse gas emissions and machine learning is an unknown fraction of that. And one thing that was happening is that we were starting to see kind of an increase and I think exponential increase in the amount of computational cycles that were being demanded from just various types of compute that we're doing across society. But hardware was also getting efficient at a similar rate which kind of kept these greenhouse gas emissions and energy impacts relatively constant over a decade or so.But we're seeing a couple of these trends change. For example, we're starting to see larger and more energy intensive AI and machine learning models being developed and we're also potentially reaching the end of, quote, unquote Moore's Law improvements that were leading to these hardware efficiencies. And so it's really important that we get honestly better and more transparent data on machine learning workloads and sort of the dynamics and trends of that in order to really understand what we're dealing with. And this is one of those things where it's, from a technical perspective, not the hardest in the world to measure the computational impacts of AI and machine learning. You sort of know where they're happening or you know what entities are doing them. And it's a matter of instrumenting some computational hardware. But for political and organizational reasons we don't tend to have transparency on that data. It's also worth noting that hardware is an important part of this conversation because, of course, data storage and machine learning algorithms, they all kind of rely on having computational and storage hardware. And the kind of creation and disposal and transportation of that hardware has not only kind of energy impacts but materials impacts and water impacts and all other sorts of impacts that we really need to be thinking about.David RobertsSo is it true that Moore's Law is slowing down? I don't know that I had tuned into this issue, but is it measurably slowing down or is it a fear it's going to can we see it? I imagine it's not super clear.Priya DontiYeah. So I'm not a computer systems researcher myself, but I will say that there has at least been discussion within the community about are we reaching the end of Moore's Law as we've potentially run against just physical limits on how small you can make something.David RobertsRight, interesting. Yeah, we're getting down to nano, whatevers. Now, is it fair to say that the majority of these direct impacts are about the electricity that is running these things or are the embedded emissions in the hardware itself that you were just referring to are they comparably sized? Do we know how those two compare to one another?Priya DontiYeah. And I will say again, it's a bit of a shifting landscape. But as of now, I would say that the computational emissions are higher than the embodied emissions. But this is also shaped by organizational choices in certain ways. For example, what we see is that when you have data centers, they are often replacing their computational infrastructure very quickly in order to make it so that your computations are more efficient. So you kind of reduce your computational emissions footprint.David RobertsRight.Priya DontiBut by doing that, by replacing your hardware so quickly, especially when your hardware is not actually spent, you're increasing your embodied emissions. And so I think we're seeing kind of adds a picture of what the computational emissions are versus how quickly are we replacing hardware. The kind of proportion of embodied emissions sort of is increasing if we kind of believe this fact that the hardware is getting more efficient.David RobertsAnd just in terms of how much to worry about this, about these impacts in particular, I mean, I guess I'm inclined to just say most of that comes down to the power sources. A) the power sources that are running the data centers, or b), the power sources that are running the factories that are producing the things. Those power sources are getting cleaner over time. Right. They're being replaced by renewables over time. And so you can imagine a not too distant future where this particular family of impacts, the direct impacts, are fairly low to negligible. So I guess I'm just inclined to just not worry about that piece of it much. Is that off? Do you worry more than that about this piece of it?Priya DontiI do worry about it. And this is because if we think about decarbonization strategies across any energy related sector, the first order of business is to reduce waste and improve efficiency. And if every sector feels entitled to its unbounded growth in energy use, we start to run into various constraints on the actual "can the grid handle this?" on the decarbonization-of-the-grid side. So I would say that here this translates to kind of reduce waste is; if it's not worth running a particular machine learning algorithm, if the benefit on the other side isn't worth it, then we shouldn't be doing it.And then improve efficiency is; for use cases where we've decided it is worth it, let's make sure to do that in a way that is reducing energy use as much as possible. And I think this sector, like every other energy based sector, needs to be thinking about those primarily in addition to, of course, decarbonizing the grid.David RobertsRight. And there's a lot of runway left to make these things more efficient, like the computations themselves. Is that mostly a software thing, a programming thing to make them more efficient? Or do you mean physical improvements in chips and data centers and whatnot?Priya DontiSo there's both stuff that can be done in software and in hardware. There are kind of physical improvements that are doable and are being worked on to make hardware more efficient. But also in terms of the software, there's work that's looking at if you have a big model, can you somehow actually do something called pruning or architecture search? Things that allow you to figure out are there smaller versions of the model that would make sense. You can also, when actually training your model so getting it to a state where it's making good predictions. There are various procedures like hyperparameter tuning that go on, where you're trying to figure out kind of meta design choices around how the model is designed.And there's more and less wasteful ways to do hyperparameter tuning. We can again pick to not always use the most complex model if it's not worth the value. So if a kind of much less energy intensive model gives you 99.9% accuracy and it takes you 1000 times more energy to get to 99.99, that may not be worth it in every use case. And so really, I think there's a lot that can be done in there as well.David RobertsAnd it seems like we could also although I don't think we will, it seems like we could also say as a society that some things are not worth putting all this effort into. Like maybe if you're creating a bunch of greenhouse gases and burning a bunch of data center cycles to sort of improve the performance of a button position on a particular Amazon page or whatever, maybe we should just say deal with the current button position. There are frivolous things that we're throwing enormous resources at already.Priya DontiIt's totally true. And I think all of these are driven by the fact of money speaks. And I think it's unquestionable sort of where money flows in society.David RobertsOkay, well, so those are the computing related sort of direct physical impacts. The next tier up is what you call immediate application impacts, which is just what are the things that are running on machine learning doing now for climate? And I guess you might say against climate, it's like, oil companies have access to this stuff too and I imagine are throwing tons of resources at it. One of the papers you sent me was sort of this catalog of things that are using machine learning and it's just already it's so vast that you can't really wrap your head around it.It's spread so fast that it's hard to say anything general about how they're being used. But is there some way of sort of wrapping our heads around or categorizing what machine learning is being used for now in this world? In this sort of clean energy climate world?Priya DontiYeah. So I can give a couple of themes that I think cut across a lot of the applications that I've seen and these aren't exhaustive, but hopefully are at least illustrative. So one of them is machine learning is maybe unsurprisingly being used to improve predictions and by analyzing past data in order to provide some kind of foresight. So an example there is the nonprofit Open Climate Fix in the UK is working with National Grid ESO to basically create demand and solar power forecasts by ingesting a combination of historical data, the outputs of numerical weather prediction models and in the case of solar, things like videos or images of cloud cover overhead.And by basically cleverly combining different data sources and then using machine learning models to learn correlations between these, they were able to cut the error of the electricity demand forecasts in, I believe half —Oh wow!by doing that. And there are also applications in the climate change, adaptation space. So for example, there's a Kenya based company called Selina Wamucii which is using AI to predict locust outbreaks which are exacerbated by climate, by basically combining agricultural data, weather data, satellite data. So the idea is basically if you have a bunch of different data sources that are telling you something a bit different about the problem, machine learning is really good at combining and learning correlations among these heterogeneous data sources and then kind of using that to make some kind of forecast in the future. So that's one theme.David RobertsAnd does that theme also apply to the climate models themselves? Like, I'm assuming climate modeling in general is going to benefit from all this stuff.Priya DontiYes. And so there is a lot of work that's looking at not machine learning as a direct predictor of climate because ultimately climate involves a shift in what's going to happen. And what machine learning is good at is you have a data set, you identify existing patterns and then to the algorithm, those patterns are the world. So it's going to continue trying to apply the same patterns. But where machine learning has been used in climate forecasting is to do things like take these existing physical models that are really complicated to run and try to approximate portions of them so that the overall model runs more quickly.Or take the outputs which are often coarse grained and try to downscale them or fine grain them based on on the ground data. Kind of post hoc.David RobertsInteresting.Priya DontiYeah.David RobertsSo just prediction.Priya DontiYes so prediction is one.David RobertsSeems like an obvious enough one.Priya DontiYes. The second one I'll talk about is taking large and unstructured data sources and distilling them into actionable insights. So this often comes up when thinking about the large amount of satellite and aerial imagery that's becoming available as well as the large amount of text documents we have available on public policies or patents or things like that. So for example, there's a project called the MAAP Project which is using satellite imagery to try to give like a real time picture of deforestation in the Amazon in order to then enable interventions to actually stop it. And in the public sector, the UN Satellite Center UNOSAT they use AI and machine learning to analyze satellite imagery to get high frequency flood reports because basically you can have a human looking at satellite imagery and analyzing the extent of flooding, but it's a task that's hard to do at scale for a human.And so they use machine learning to actually try to analyze how is flooding changing and get real time reports that have helped them improve disaster response actions.David RobertsYeah, in a sense it's just pattern recognition even for data collections that are so vast and heterogeneous that maybe the human mind sort of is stymied. The human minds are just pattern recognition machines too, but we have our wetware limitations so it just can find patterns in much larger and more heterogeneous data sets.Priya DontiYeah, I mean, in some cases it's that the patterns are just really hard for people to grasp. Now, I have to emphasize the pattern needs to exist. You're not going to find patterns where they don't exist. But that's one case. But another case is one where we as humans can grasp them and readily apply them. It's just that scale is really hard. Kind of labeling a couple of satellite images to understand flood extent is fine. Labeling thousands and thousands that you're just going to run out of human time.David RobertsAll right, that's two.Priya DontiNumber three. So the third is machine learning can be used to optimize complex real world systems in order to improve their efficiency. So while the kind of last two themes I talked about with forecasting and distilling data into actionable insights, it's fundamentally about providing information that ultimately will go on to inform a decision. But there are places where machine learning is itself in some sense, making a decision is automatically optimizing some kind of system. This comes up, for example, in building automation. So there are companies that are using AI and machine learning to automatically control heating and cooling systems. For example, in commercial buildings, based on sensor data about weather, temperature, and occupancy, we are trying to leverage that to basically find efficiencies in how the heating and cooling infrastructure is managed —David RobertsYou can throw power prices in there.Priya DontiYou can throw power prices in there. Yes. And I think this is actually a really kind of underrated and underexplored area of work where there's work using machine learning for demand response and market trading and there's work using machine learning for building energy efficiency. But I think actually there's a lot to be done in kind of bridging those two views. And so I'm really glad you brought that up, actually.David RobertsWell, I can also think of another large complex system that desperately needs some optimization, which I think you also know something about one of our shared, shared obsessions, namely the electricity grid. I'm very curious what is currently being done with machine learning on the grid?Priya DontiYeah, it's a great question and I will say , so, machine learning is pretty widely deployed across power grids for forecasting and situational awareness kinds of tasks. When it comes to optimization and control, I would say largely a lot of those applications sit more on the research realm than in the deployment realm right now. And part of the reason for that is that I think there's just a big lack of appropriately realistic data and simulation environments and metrics that actually allow us to test out and validate research methods in an environment that is realistic and actually advance their readiness that way.Because by testing out a research method in an environment that looks realistic, you then understand how do I need to adjust my method to make it responsive to the realities of the grid. And you sort of have that feedback loop and kind of progression of readiness which I think we're lacking a lot of infrastructure for. But concretely, where machine learning can play a role there is when we think about centralized optimization problems. So things like optimal power flow problems and the stochastic and robust variance of that, these problems are computationally intensive to solve. And so sort of similarly to the theme of improving the runtime of climate models, we can similarly think about are there parts of the problem we can approximate, or can we learn quote unquote warm start points?Or can we even make direct and full approximations to these centralized optimization models, but in ways that preserve the physics and hard constraints that we care about? And that's actually what some of my work looks at. And then also on the kind of distributed and decentralized control side, we want to construct controllers that can make decisions based on local data, maybe plus a limited amount of communication to get some more centralized data. And this is a place where control theory is playing a role and AI and machine learning can potentially also play a role by basically learning complex patterns in the underlying data and using that to make nuanced control decisions.David RobertsWhen I first thought about AI, machine learning and climate, this was the very first place my brain went, I guess. No surprise to any listeners. But the rise of DERs, the rise of distributed energy resources is just, among other things, an enormous increase in complexity. You're going from, whatever, a dozen power plants in your region to potentially thousands, tens of thousands, hundreds of thousands. And I think I mentioned this when we talked earlier, but I'm not sure ordinary non-grid nerds really understand how much of grid operation today is still like people turning knobs and making phone calls to one another.It's bizarrely low tech, a lot of it. And so that just seems to me like an absolutely ripe area for this kind of thing.Priya DontiYeah, I definitely agree. I mean, there's the scale problem you talked about, there's the speed problem as we deal with increased variability, and there's actually the physical fidelity problem. So right now, because on power grids, we find that true physical representations are really hard to kind of solve computationally. So you often will use something like DC optimal power flow as an approximation to the grid physics, rather than something more realistic like AC optimal power flow. Then what we rely on is we make a kind of decision a bit ahead of time based on these approximate physics.We let that play out, and then we allow real time adjustments on the grid. Things like automatic generation control take place to compensate for mispredictions or mischaracterizations of the physics. And as we have fewer spinning devices on the grid, and we're starting to see things like faster frequency swings because we don't have that buffer provided by spinning devices attached to the grid in the same way, we also lose some of our kind of buffer in terms of being allowed to be slightly physically off in terms of our characterization.David RobertsSo we need to be more precise.Priya DontiWe need to be more precise.David RobertsYeah, this is the thing about solar power in particular, is just so digital. It just seems like it lends itself to digital control and not to this sort of old fashioned kind of inertia and spinning and all these sort of very physical, very physical things.Priya DontiAnd I think one way to think of it is I know there's a lot of folks who are very scared. I mean, we're fundamentally talking about a safety critical system where if it goes down, it's a real big issue. And so I think there's a combination of for those physical constraints that we can kind of write down and really be certain of, there are ways to start to construct AI and machine learning methods to fundamentally respect those. And then also, I mean, it's not unreasonable to think that at certain timescales that we would possibly have some amount of human in the loop control.Sort of in the same way, when you're driving a car, you as a human are steering it, but you're not dictating every lower level process that takes place to make the car go.David RobertsYeah, the car analogy getting slightly off course again. But the car analogy raises something that I've been thinking about, which is some of the dangers of automation coming from machine learning and AI. And I think the car example works really well. So it's generally pretty safe for a human being to be 100% in charge of the car. And I can imagine a level of AI and sensing and et cetera, and infrastructure sympathetic infrastructure makes it such that 100% automated control is safe. But what doesn't seem safe to me is the sort of quasi semi-automation where the car can drive itself most of the time, but then you need a human out of nowhere, possibly quite suddenly. And it's just we humans are not really made for that, to sit there not doing anything for hours on end and then be ready at any second to jump in. And I wonder if there's an analogy to other systems in that is there that gap between no automation and full automation where there's weird automation-human interactions that are kind of sketchy. Is that analogy broadly applicable or is it just a car thing?Priya DontiNo, I mean, I think it is broadly applicable and it's a combination of what is the correct level of sort of human automation-interaction both at the level of an individual component but also you're often thinking of multiple components interacting with each other that may have different trade offs. So in cars, that is, if you have a mixture of autonomous, semi-autonomous and fully human controlled cars on the road in grids, you can imagine, of course right, multiple grids. I mean, it's a physical system, but there are different sort of governance and jurisdiction related things such that we're doing different things on different parts of the system. And so how do those interact with each other becomes a super important question.David RobertsYeah, and it's one thing in a car, it's another thing if you're driving a grid. As you say, the cost of mistakes is much higher. But I interrupted your list, I think. Was there a fourth?Priya DontiYeah, I had a last theme that I wanted to talk about. Yeah, so the last one is machine learning for accelerating the discovery of next-generation clean technologies. We've talked so far about machine learning for operational systems, but of course, as we're trying to transition systems, how do we come up with that better battery for frequency regulation on the grid or for your electric vehicles or how do you come up with a better carbon dioxide sSorbent for sequestration related applications, things like that, or electrofuels. So what machine learning has been used to do is analyze the outcomes of past experiments in order to suggest which experiments to try next, with the goal of cutting down the number of design and experimental cycles that are needed to get to that next better material or clean technology.David RobertsRight. Yeah, I hear a lot about this, and this always seems enormously positive to me. And I thought, isn't it also in addition to just suggesting experiments, isn't it also a thing that they can sort of run the experiments virtually? Sort of do the materials science experiments virtually, so you don't have to do the physical experiment at all?Priya DontiYeah. So you can do some amount of physical virtual simulation rather in order to understand what the performance characteristics of a particular material are. But virtual simulations are not perfect. And so ultimately you do sort of need to synthesize at some point. Right? You need to synthesize or create the thing and test it out in the physical world.David RobertsAt least you could narrow down the number of physical experiments you need.Priya DontiThat's exactly right. That's exactly right. And so the goal is really to in this case, it's again, not that you're sort of letting a machine learning algorithm itself sort of dictate exactly what experiments you do at all times, right. There is sort of human scientific knowledge that's really coming into play. On the other side, to look at the output and say, that seems reasonable, that seems like something I'm going to try versus this might not be worth the millions of dollars it takes me to synthesize this thing. So it's sort of an interaction between the computational insight and sort of the human judgment on the other side.David RobertsThis is a big thing in pharmaceuticals too, right? Like drug development. Is there a clear sort of a success story in that particular application? Like, is there a materials advance where the company that did it was like, look what we did with AI. Can we point to something yet?Priya DontiYeah. So a group of us wrote this report for the Global Partnership on AI, which provides recommendations to policymakers on how they can align the use of AI with climate action. And as a part of that, we actually highlighted a couple of real-world use cases where we are seeing kind of on the ground successes. And so actually, some of the examples I've talked through today are from there. But in this category, one of the successful ones that we highlighted in that report, it's a startup called Aionics, which is a Stanford spin out. And what they do is they work with battery manufacturers across different sectors, so across energy and transport in order to help them kind of speed up their process of battery design, where of course, the properties of your ideal battery vary based on your use case.David RobertsRight.Priya DontiAnd they use a combination of machine learning and some physical knowledge to do this analysis. And per their reporting, they've been able to cut down design times by a factor of ten for some of their customers.David RobertsSuper interesting.Priya DontiI think there's a lot of potentially very impressive gains in that area.David RobertsYeah. I mean, to return to my theme, how do you even begin to predict where that's going to go? I mean, the mind boggles on some, on some level. So in terms of these immediate application impacts, you listed four sort of broad themes, all positive examples. I'm assuming carbon intensive industries are also —Priya DontiVery much seeing the power of AI.David RobertsYeah. Are there prominent sort of examples where AI is being used to find or burn more fossil fuels?Priya DontiDefinitely. So AI is being used in large amounts by the oil and gas industry to facilitate their operations. So things like advanced subsurface modeling to kind of facilitate exploration, the optimization of drilling and pipelines in ways that try to improve extraction and transportation and also, I mean, marketing, right. To increase sales. And so there's a lot of applications here. And there was a report called Oil in the Cloud by Greenpeace that came out a few years ago.David RobertsYes, I recall.Priya DontiYeah. And that one estimated that AI was going to generate hundreds of billions of dollars in value for the oil and gas sector by kind of the middle of this decade. And that is substantial.David RobertsYeah. And I believe their point was like Google is out there claiming to be a champion of clean energy and decarbonization and et cetera, et cetera, and it is providing these technologies that are turbocharging the fossil fuel industry. Seems odd.Priya DontiYeah. And there's genuine debate, which I do happen to fall on a particular side of, but there's genuine debate about sort of whose responsibility the resultant emissions are. But I guess what I will say is every entity is very — the tech sector, the oil and gas sector, they're very eager to claim that every set of emissions is scope three emissions that are not within their direct control. And given the urgency of hitting climate change related goals, if anything, we shouldn't be so worried about, well, we need to make sure that — this sector is responsible and this isn't — by all means, double count it. Make multiple entities responsible for any packet of emissions and just make sure something happens.David RobertsYeah. What's the danger of double counting? We might reduce emissions, accidentally reduce emissions too much.Priya DontiYeah.David RobertsSo here's an unanswerable question for you then. When you look out over the landscape of these immediate application impacts, sort of the way AI and machine learning is being used today, is there any way to sort of net things out and say, oh, it's good for climate or bad for climate, or is this just sort of like this is just making everybody who does everything slightly more powerful? You know what I mean?Priya DontiYeah. AI is an accelerator of the systems in which it's used. And this is not an original quote, it's a quote from many other people much smarter than I am. But what that means is that we need to look at what are the societal incentives around kind of who gets to leverage technologies like this and what kinds of processes does it mean it's likely accelerating as a result. For example, is there more money in oil and gas than in renewables? Right. That picture is shifting. But I mean, as long as that's the macro level case, you're going to see AI deployed where there is more money to spend for the use of AI.And so, yeah, I would say that in some sense, the kind of obvious answer would be net, like, the impact is not good for climate. I mean, and this is aligned with the fact that we as a society are needing to work pretty hard to hit our climate change related goals —David RobertsJust because society isn't good for climate right now.Priya DontiExactly. But I think importantly, as we think about both the broader climate fight and the role of AI within it, these are shapable. Right. So I think that in some sense, the macro level question of is AI good or bad for climate? Often leads to maybe the wrong implied downstream action of should we do or not do AI? Which I think unfortunately, or fortunately at this point is a bit of a foregone conclusion. And instead we need to really be thinking about how do we shape these developments on a macro level to be aligned with climate action.And that's not to say that certain applications shouldn't go forward. Like, I think that's a very valid thing to say. A particular application is one where we should not be applying AI, but on a macro level, it's really about kind of steering both thinking about where we should and shouldn't use it and then how we should use it where we should.David RobertsWhich is the same set of questions that face us on everything else too. Right. On any technology or doing anything, really. In a sense, the effects of these immediate effects are downstream of just sort of larger forces and will change as those larger forces change.Priya DontiYeah, and the reason to think about them in an AI specific context is the same reason we think about sector specific policies when we look at climate action. There are in principle macro level policies that should just address everything, right? Like if you deal with the emissions and the pricing, sure, technically all of the underlying incentives should follow. But in practice, we find that sector specific policies that are really cognizant of the bottlenecks and trends in a given sector are helpful. And so this is the same thing with AI understanding who the players are, what the levers are, and how we can come up with more targeted policy and organizational strategies. To actually address those is ideally additive to thinking about it on just a macro level.David RobertsRight, well, I want to talk about policy, but just real quick before we get there, this third level of impacts is system level impacts, which are just going to — I barely even know how to talk about them. There's going to be sort of emergent large systemic shifts that arise out of the changes that these things bring. Are there examples of systemic impacts that could help us wrap our mind around what we mean by them and is there anything general to say about them other than they're probably going to happen?Priya DontiYeah, I mean, I would say that there are some that are a little more in that, "Uh, they're probably going to happen" and others that are more shapeable. So things like machine learning is a key driver behind advertising and increased consumption, not just because of advertising, but because of on demand delivery and all of these things that AI and machine learning creates which often increase emissions, but not always in ways that make us happier. Right. Which again, like emissions increases. I think there's this thing about well, but if there's a benefit on the other side. But there isn't always, and largely, it's obviously a big question across society, is increased consumption making us happier?And AI is certainly driving that. In addition, AI is changing not just how we consume goods, but also information. So different people, when googling something will get a different answer. And on social media, also the targeting of posts, the generation of misinformation, but also the detection of misinformation. So I think there are some complex ways in which AI actually interacts with this, both in terms of having the capability to serve better information, but likewise be able to serve worse information as a result. And then there are things like the use of AI for autonomous vehicles where it's unclear what the impacts will look like, but they are potentially very shapeable.Where if AI and autonomous vehicles are developed in a way that facilitates private and fossil fueled transportation, that has very different implications for the transport sector than if you're facilitating kind of multimodal and public transportation, right. Making it easier for people to connect between different modes of transit. And that's not a foregone conclusion, the direction we go in. And so I think there's actually a lot we can do to kind of shape the directions these technologies take in these settings.David RobertsBefore we move on. There's just one other thought that occurred to me, is the use of these algorithms in trading in people day trading stocks, they're down to like one millisecond whatever trades. Now, I've read a lot of people a lot smarter than me write about this, and their conclusion is just like, no one needs this. No one is benefiting. The market is not benefiting from this. This does nothing but allow people skimming off the middle to skim more off the middle. So there's an application of algorithms and machine learning where we could just say, no, just don't. Just stop doing that.Priya DontiYeah, I think my tagline for people working on financial markets is; energy markets are way more interesting because you have both your financial system and your underlying physical system. I know there's a lot to be done there to facilitate renewables integration. Come join us.David RobertsYeah, there's a reality on the other side of all our numbers instead of just this weird sandbox that you're all just playing pretend in. Okay, by way of wrapping up, then let's talk about policies. So in your paper where you are making policy recommendations, some of the policies are just sort of obvious. You price carbon emissions, right? And then that produces a more or less universal force, pushing down carbon emissions and things like that. You offer tax incentives for greenhouse gas reductions. Just general good climate policy, you recommend a lot of that and all that stuff would be great, of course.But are there more sort of AI specific policy directions we should be thinking about?Priya DontiDefinitely. So when it comes to facilitating the use of AI for climate action, what we want to think about is creating the right enabling data digital infrastructure, kind of targeting research funding in particular ways, enabling deployment pipelines. So I talked about this kind of research to deployment infrastructure that's needed in power grids and also capacity building. I mean, I think that both in terms of people who have the skills to actually implement all or parts of AI and machine learning workflows, but also people who have the ability to run organizations or govern systems where AI and machine learning will play a role.I think having just that base level of literacy in terms of what you're dealing with becomes super important in sort of allowing there to be a lot of ground up innovation where people now are equipped with knowledge of their particular context and these tools and can make things happen as a result. So I think there's a lot that can be done and those all sound like very general levers, but of course there are specifics in there like how should research funding look? I mean, it should not be that climate funding is diverted to becoming AI plus climate funding only. It shouldn't be a narrowing of scope.It should be things like making sure you have AI expert evaluators in climate calls so that they can understand when something's being submitted that makes sense. And it's about shaping AI calls to have climate focuses. So there's some subtleties there, but basically a lot of things that are needed to enable the use of AI for climate action.David RobertsAnd it also occurs to me that there's tons of things you could think of where AI and machine learning would improve outcomes that won't necessarily make anybody money or might even by increasing public provision or reducing demand for some services, cost people money, like might reduce the net amount of money to be made. And that seems like a place where government policy could help nudge research funding and activity into those areas.Priya DontiAbsolutely trying to identify those quote unquote public interest technologies and channeling funding towards them. Exactly. And of course we talked about the kind of negative impacts of AI on climate and these should absolutely be accounted for as well. So when it comes to the computational and hardware footprint, we talked earlier about how it's just really hard to understand what's going on because you don't have transparency on what the computational energy impacts look like, even though you know in principle how to measure them because there aren't reporting incentives or requirements or things like that. And when it comes to hardware impacts, we can get a sense of embodied emissions.But I mean, measurements on water and materials are really hard, just kind of putting in place at minimum reporting frameworks and standards so that those who want to report voluntarily know what that means. But I think more importantly, putting in kind of more mandatory reporting frameworks for some of these things so we can figure out what the dynamics and trends are and what it makes sense to do next.David RobertsRight, final issue. But this is something that several people flagged to me that they wanted to hear about is we've recently, I think, seen some articles about the enormous amount of human labor that is behind these AI things. And of course, the world being the way it is, it's often poor people, it's often exploited people, a lot of people that aren't treated well, aren't paid well. So once again we find ourselves with this sort of shiny new thing in the west and you scratch down a few levels and you find blood and tears from poor people behind it.Is there any sort of like climate or energy specific way of thinking about that or is that just a general concern and do you have any thoughts about sort of like what to do about that?Priya DontiYeah, I mean it is a general concern and I would say that some of this also comes from machine learning being right now predominantly developed in contexts that have certain assumptions associated with them, like large scale internet data that is able to be scraped and maintained by entities in the west. Whereas in many settings in the climate realm, for example, you don't have data that's that large nor do you have the capability to maintain it. But then when you make the assumption that large data and larger models are sort of the way to progress AI and machine learning, which is an implicit it is an assumption that is created by virtue of who it is who's doing it. Now then you also create all these human costs, all these hidden costs that are really important to take into account.And so I think really what has to happen is that and this is sort of along this point of also what can we do at a policy level to sort of align the use of AI with broader climate goals: I think we really need to think about what it means to develop AI in a way that is actually serving the needs of people around the world, which doesn't always mean biggest data AI. There are other ways to do AI and where the applications are ones where we're also picking in ways that drive the development of AI in these directions. So if you think about the development of AI for power grids, you're going to think about robustness and safety critical aspects differently than if you're looking at other areas.And that's going to shape how AI itself moves forward and what other domains it immediately has benefits for. And so this just integration of climate and equity considerations more deeply into AI strategies in a way that should then inform funding programs and incentive schemes and the creation of infrastructure and all of that is going to be really important.David RobertsThank you so much for this. This is really helpful for me to wrap my head around all this. And it just highlights again the fact that I emphasize over and over on this pod, which is it really seems like we are on the cusp of a wild wild time to be alive, to put it as bluntly as possible. Like, we're going to see some crazy stuff in our lifetime. Thank you for helping get our heads around, at least, how that's shaping up so far, so Priya Donti, thank you so much for coming and sharing.Priya DontiThanks so much.David RobertsThank you for listening to the Volts podcast. It is ad-free, powered entirely by listeners like you. If you value conversations like this, please consider becoming a paid Volts subscriber at volts.wtf. Yes, that's Volts.wtf so that I can continue doing this work. Thank you so much and I'll see you next time. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.volts.wtf/subscribe

In this episode, Anthony Wang, co-founder of ETFuels, describes his company’s business model of using renewable energy to make green hydrogen, then using the hydrogen to make carbon-neutral methanol.(PDF transcript)(Active transcript)Text transcript:David RobertsAnthony Wang, a mechanical engineer by training, spent years as a researcher on hydrogen technologies. He worked with governments to develop policy and infrastructure plans — he was project manager on the EU's big hydrogen backbone project — and with private companies like Total and Shell to develop hydrogen technology roadmaps. He has authored or co-authored several industry-defining reports on hydrogen and been cited in countless publications.A few years ago, he decided to throw his hat in the ring and try to actually build hydrogen projects in the real world. All his research and contacts in the energy world led him to a very specific — and, to me, extremely intriguing — business model.ETFuels, the company he co-founded, develops projects that couple giant off-grid renewable energy installations with hydrogen electrolyzers; it then uses the resulting green hydrogen to synthesize carbon-neutral liquid fuels. (First up is methanol for shipping, but the company plans to branch out into other e-fuels.)This model somehow manages to implicate half the stuff I’m interested in these days — green hydrogen, markets for hydrogen fuels, off-grid renewables, coupling renewables directly with industrial loads — so I was eager to talk with Wang about it. We dug into the limits of “electrify everything,” the difficulty of transporting hydrogen, and the economics of e-fuels, among other things.This one gets fairly deep in the weeds, but if you find the real-world challenges of developing clean-energy projects interesting, you don’t want to miss it. All right, then, with no further ado, Anthony Wang. Welcome to Volts. Thanks so much for coming.Anthony WangThank you so much for having me, David.David RobertsSo you were sort of recommended to me as somebody who knows a lot about hydrogen, about sort of green hydrogen, the markets. I know you've worked with public on policy roadmaps. I know you've worked with private companies on technology roadmaps. So I know you've given a lot of thought and sort of analysis to the green hydrogen phenomenon, the green hydrogen market. And you settled when you decided to start a company of your own, you co-founded this company, ETFuels. You settled on a very particular business model, which I just find sort of fascinating as it sort of implicates half the things I'm interested in these days in the energy world.So I wanted to just run through it with you and talk about why you made the choices you did and get into some of the bigger issues that way. So just for listeners' benefit, the idea here is you find a big piece of land somewhere out in the middle of nowhere. You build a bunch of renewable energy, mostly solar, maybe some wind. Instead of hooking the renewable energy up to a grid, you pipe it directly into electrolyzers and make green hydrogen out of it. And then instead of exporting the green hydrogen or selling the green hydrogen, you use the green hydrogen, combine it with CO2 to make methanol, basically, carbon-neutral methanol, which you are then going to sell to shipping companies. So that's a big puzzle. That's a big puzzle with lots of pieces put together. So I want to kind of start at the front end of it. My intuitive reaction to this is you're taking valuable renewable energy and then you're converting it to hydrogen, you lose a lot in that conversion, and then you convert it again to methanol and you lose a lot in that conversion as well. It sounds sort of inefficient.So the question comes up like, why not just sell the renewable energy? So why off-grid in the first place?Anthony WangFor us, obviously, it depends where you're talking in the world, right? So renewable energy, if you can get it connected to the grid, you're completely right, it's extremely valuable. I mean, you've seen what prices of power have done in the last couple of years in Europe and in the US. And if you can use it to electrify your vehicles or heat up a heat pump, that's a very good use of that renewable energy. That said, there are many places in the world where solar and wind, on a levelized cost of production basis, are the lowest cost sources of energy we have.And on top of that, most of these locations are not connected to grids. And so one question that always puzzled me a bit was everyone's talking about renewable energy getting cheaper and cheaper and being the lowest cost source there is. So why, why aren't we seeing that being reflected at all in, in the prices that we see a) on the wholesale market, and b) ultimately on our bills at the end of the month? And thought a lot about this, and I'm not an economist, but it does seem to me that while we've got very good at producing renewable energy in a very cheap way, I'd argue it's the cheapest that we've got.We seem to have made a lot less progress in transporting, storing and balancing that renewable energy in a way that meets the consumer when they need it, where they need it. We know also that the energy transition is going to put this massive strain on power grids. Today we transport about 20% of our final energy through the grid. And in a fully decarbonized system, I mean, depending who you talk to, that number should be going up to 60, 70, 80%. We should electrify as much as we can. But that also means that we need about three, four, five times the number of cables, transformers and substations.And right now the grid does not seem to be set up to deliver that. And so we wanted to marry that problem in a way with an opportunity that we saw in producing hydrogen. And obviously, when you lose 30% through energy, conversion losses. That's a huge deal if your power is super valuable. It's a lot less of a big deal when your power is virtually free, depending on where you are.David RobertsSo sort of to summarize that renewable energy itself at the point of production is super cheap, but all these balance of system costs, mainly transmission and distribution, end up boosting the cost anyway. So your idea is just to use the cheap renewable energy and avoid all those other costs. Basically just use the cheap energy directly and not have to pay those additional costs?Anthony WangYeah, exactly. And cost is quite a simple way of capturing it. But there's lots of other things right in projects it's also time. The biggest risk in developing renewable projects is often getting the grid connection permit. I think, not to bash too much on the grids, I've got lots of good friends there, but the numbers speak for this. So if you look at the US, I think the Berkeley National Lab found there's a two gigawatt backlog or 2000 gigawatts, sorry, of PV, wind and storage.David RobertsYeah. Terawatts.Anthony WangTerawatts, exactly. Which is like almost double of the installed capacity base today. And you see similar numbers in Europe. And the cost of interconnection, the deposits that developers are asked to put down are twice what they used to be. They can be almost as big as your CapEx of your solar project. So it's lots of things that have come together that are just making it very difficult to connect the phenomenal amounts of renewables that are available to the demand where it is.David RobertsSo, I'm curious how you see this playing out. Because the enthusiasm is for electrifying everything and as you say, that's going to mean like four or five times our grid capacity and nowhere that I know of is a shining example of how to build grid capacity that much, that fast. I don't know that anyone's doing it. So, do you think that is going to be a serious constraint at the macro level on electrifying everything? Do you think that's going to push a lot of activities to this sort of off-grid model?Anthony WangWe hope so. At ETFuels we're definitely pushing it. Look, I've got nothing against the electrify narrative. I think it makes total sense and where we can, we should. But the reality is that it's incredibly difficult. I mean, we're finding this ourselves. We're trying to develop projects which are in the middle of nowhere. And even there, permitting and consent can be a challenge. So, imagine building a transport cable that crosses the entire country. These transmission highways in Europe, we're talking about the European super grid. Governments are trying to kind of coordinate about who gets what space in the North Sea.We're talking about kind of hydrogen backbones that should cover the entire continent. And you can just see the political and practical implementation challenge of doing projects like that I think. I was working closely on a hydrogen pipeline project between Spain and France, these countries putting a pipe through the Pyrenees. I think now they've landed on kind of putting it through the Mediterranean Sea and said, you see presidents shaking hands about which pipelines should happen and then it still takes eight, ten, twelve years before they're actually implemented. So, I think it's a question of let's do everything as much as we can and whichever one gets to market first, you should have some merit to that.David RobertsRegular listeners will know that. I'm sort of fascinated by this question. We had John O'Donnell from Rondo, the heat battery company on and that's sort of his thesis of his company is kind of the same logic. The grid constraints are going to push a lot of renewables off-grid. Basically, they're going to be coupled directly with industrial applications and just skip all the grid stuff, which I find a fascinating trend. That's one of the reasons your kind of business model caught my eye. So then you're generating all this variable renewable energy which notoriously comes and goes, waxes and wanes, sort of out of your control and you're using it to make green hydrogen.So part of the conventional wisdom that I always hear is that's a bad match because electrolyzers need to be run a lot of the time to pay off. Basically to be worth the investment, they need what's called a high capacity factor. And if they're sort of tied to variable renewables, how do you think about that problem? Have you thought about putting anything in between them? This is the heat battery question again. Have you thought about putting anything in between them to smooth the supply of the energy to the electrolyzers? Or is a lower capacity factor just a cost you think is worth bearing?Anthony WangYeah, a really good question. Obviously when we started the business that was probably the first question that we looked into because obviously we're only doing this because we think that we have a commercially viable proposition and we can provide hydrogen at lower cost than what is currently available on the market. And fundamentally when you look at this equation, you're kind of balancing three variables, right? You've got on the one hand, your cost of power. Secondly, you've got the number of hours that you're able to run your kit on that power, which obviously is lower with renewables.And then the third is just the cost of the kit itself. So let's say the CapEx of the electrolyzer and the cost of balancing the power. And when we look at modeling this out across the year, there are places in Europe, in the world where your renewable energy wouldn't be producing often enough for this to be worth it, right? So if you only have a solar production model in the north of Europe, then it's probably not going to work. You can't run your electrolyzer for 1000 hours a year and hope it to make money but there are also places where it definitely can work.And you're seeing lots of projects these days which actually combine solar and wind together in these types of hybrid configurations. And that's useful, one because they're not entirely I mean, so wind is a bit more expensive, but it runs a bit more often. But then on top of that, depending on where you are and there are special deserts where this is particularly the case where the wind and solar production hours actually very anticorrelate very well, where you essentially have solar during the day and then wind which mainly blows at night, not exclusively, but mainly at night. And when you combine those two, you can get very, very steady profiles up to 5500 hours a year of essentially base load production.And when you spread that across an electrolyzer, and especially obviously today electrolyzers are still quite expensive, but going forward their cost will come down. You'll see that the numbers actually pan out very well. And when we've done the math, we come to conclusions where depending on the power that you're using but if you're comparing a hybrid solar wind project in, let's say, the deserts of Chile or in the Middle East or in Western Australia, you can easily get to production costs of hydrogen that are 40% lower than if you were using grid connected power, paying essentially wholesale prices in Northern Europe. So that's on the economic side.Then there's of course the question around can the electrolyzer even run flexibly?David RobertsRight.Anthony WangAnd this is a bit more of a technical question. Obviously, you've got different technologies. You've got PEM, so the Proton Exchange Membrane electrolysis, and you've got alkaline ones. PEM is more flexible. But even the latest kind of pressurized alkaline models are able to run flexibly depending on their ramp rate. The specific model, you may need to add a small battery in between. But in principle you don't need to run, especially if you got 6000 full load hours from your renewables. You're mainly looking at balancing on the kind of second to minute level and the technologies that are on the market today can handle that.So you don't need any additional storage. It's more of just a pure economic thing. If your power price is low enough and your hours are good enough, then you can make it work.David RobertsRight. So two things: You go to places where a hybrid renewable system can actually reach relatively steady production and then you go to places where the power is super, super cheap. So what about electrolyzers then? Let's talk about electrolyzers because you're saying you're going to produce green hydrogen that's cheaper than what's on the market. Is that purely because the power you're making it with is going to be cheaper? Or is there something about your electrolyzers that is special?Anthony WangYeah, and just to clarify, so when we say our green hydrogen is cheaper, I'm comparing to other green hydrogen projects, not the fossil hydrogen projects that are of course hydrogen that's on the market.David RobertsBrown or —Anthony WangYeah, exactly.David Robertsgray or whatever the hell.Anthony WangSo, that stuff's definitely cheaper at the moment. So for us, the innovation is not in the electrolyzer technology itself. We're not an equipment supplier or manufacturer with our own technology. Our development IP, I suppose, is in the integration of the different technologies. So we haven't really spoken about the methanol component, we'll get there. But what we essentially do is we find the optimal end-to-end project configuration that makes the economics work for the final offtaker. Because we start with what is the price that we need to hit for our final product, which is methanol, we'll talk about, it can be a bankable commercially viable product.And then we work backwards. So then we reverse engineer. Okay, what does that mean in terms of the electrolyzer size? What does that mean in terms of the hydrogen storage size? What does that mean in terms of the solar to wind ratio? What does that mean in terms of the battery if you need to add one? And so what we've done is we've optimized that end to end. And what you'll see is that you might have to do some slightly unintuitive sizing decisions from an engineering perspective. So that's kind of where our added value sits. And also just in terms of the development of those individual pieces of the project and pushing them forward at the same time.David RobertsYeah, I'm wondering how much now because even if you have a hybrid renewable system, I'm wondering how much sort of overbuilding you do to try to boost that capacity factor. Like are you overbuilding and throwing away a lot of power just because it's so cheap?Anthony WangYeah, we do a little bit of that. So maybe a couple of things. So a typical project for us, what that looks like we're actually developing in Europe and in the US. So in the US, a site will be very big, 8000 acres, which is 8000 football pitches. European ones, I think the American ones are half the size it's like 8000 ... Anyway, you get the point. It's huge. And most of that's earmarked for onshore wind. So about 6000 acres is onshore. Turbines are spaced far apart, so you need a lot of land. And the remaining 2000 acres is a mix of solar PV and the process plant itself.And that will give you about, I mean, these are rough numbers, but about 200 to 300 megawatt of onshore wind, one to 200 megawatt of solar PV. So you're looking at a combination of, let's say 400 renewables. And then we would probably put an electrolyzer that's around half the capacity next to that. So a 200 megawatt input electrolyzer. And that sounds like a very big delta. But actually, if you look at lots of the studies that have been done, they come to similar conclusions because you don't end up curtailing anywhere near half of the power you end up curtailing only a fraction of what you produce because there's only very few hours where both the solar and the wind are producing at peak.David RobertsRight.Anthony WangMaybe just to complete the picture of the project. So that produces about 20,000 tons of hydrogen a year, depending on your load factor, which is a lot of hydrogen. That's I think the equivalent of about 30'000 to 40,000 Tesla Model 3 batteries in a day that's getting produced.David RobertsSo the electrolyzer part to you is mostly just a commodity at this point. When you're looking at big cost centers like the big CapEx and OpEx costs, where are the big costs here? Like, are the electrolyzers themselves a big cost center or is it all down to kind of the cost of the power? Is that the biggest variable?Anthony WangIt's about 50/50. I mean, for us, we have kind of a renewables plant or part and then a process part, and it's about 50/50 between the two, the electrolyzer representing the main component of the process part. We've been doing a lot of, say, electrolyzer shopping in the last couple of months and you're probably wondering how that's going.David RobertsI am quite curious about what you're seeing out there in electrolyzer land.Anthony WangYeah, the reality is no one has actually built and constructed a 200 megawatt electrolyzer to date. It's not because electrolyzers are a risky technology, we've had them for hundreds of years. But at the scale that we're talking, we haven't really got that much experience. Even the biggest technology OEMs don't. And so as much as there is a big boom in the hydrogen space, I think for me personally, it's been quite a sobering experience being in the market, actually trying to procure these pieces of equipment because —David RobertsIs the hype getting a little out ahead of where the market is?Anthony WangObviously there's the hype and then there's the reality of getting things done on the ground. It's not that I'm disillusioned by what I've seen. It's more that you just realize that there are so many practical implementation considerations that you haven't thought of, right. Well, one is on pricing, obviously, because there's very little, very few of these projects have happened. There's not that much price liquidity and so no one really knows how much this stuff costs. Not even the EPCs who are meant to build this really know. So everyone's trying to figure it out. People are also aware that there are subsidies, so everyone's trying to make sure that they don't leave a penny on the table in terms of how they price their kit.And obviously you can imagine if everyone does that, then your economics go out the window. So that's on pricing and all the electrolyzer OEMs know the game and they're kind of looking to find a way to play into that. And then in terms of the actual technical and implementation challenges, ultimately this is going to be a process plant, right. This project is going to look a bit like a refinery. That means that every single valve needs to be lined up, every single power cable needs to be at the right voltage. And especially in our case, because we're off grid, for example, when you try to run your entire renewables to electrolyzer without — in the engineering terms, I think they call it like clock — you don't have a base frequency that you can follow, you end up having to create your own kind of grid stability. And that brings it with a bunch of challenges around frequency, voltages, harmonics.David RobertsRight? You're not getting any of those grid services. You kind of have to do all that yourselves.Anthony WangYeah, so turbines, usually they're connected to the grid, so they just follow the frequency of the grid. Whereas when you don't have that, you need to create it yourself and then your electrolyzer is there, kind of disturbing it a bit because it's not entirely efficient. And so there's lots of day-to-day engineering challenges that we need to overcome that, I at least, had not expected when we started this.David RobertsYeah, it does kind of seem like the mother of all optimization challenges you've taken on here. There's like so many variables moving at once. So you feed this cheap power into electrolyzers and just one last question about electrolyzers. Just from looking around in the market and your general sense of things, are you anticipating or do you feel like the sort of market is anticipating, substantial reduction in those costs or is that just kind of a fixed piece in the middle of this puzzle?Anthony WangYeah, good question. Obviously, when I speak with our suppliers, I always ask them because I hope that the prices that they give me today are not reflective of where they hope things will end up in the future. So today, they're obviously not pricing in that cost reduction. That said, all of them are very optimistic about the price reduction and usually, especially on the PEM side. I mean, when you talk to the PEM electrolyzer suppliers, they tell you that the reason they chose that technology is because it just has a lot more cost reduction potential.And you've got lots of levers there, right? You've got the raw materials themselves switching from the very precious ones to the slightly more common ones and that'll obviously reduce the cost. Then the second one is purely in terms of the design. So lots of the OEMs are trying to figure out ways to modularize not just the stacks and the core kind of arrays of the electrolyzer so the area where the hydrogen gets produced, but also the balance of system and the balance around that stack. So the purifiers, the transformers, rectifiers.David RobertsRight. All that stuff is still pretty bespoke at this point, right, for big electrolyzers?Anthony WangYeah, it is. And this is where the traditional OEM kind of equipment manufacturing model slightly overlaps with what traditionally an engineering company would have done. So the big EPCs would design stuff and engineer stuff to order rather than having prefabricated productized modules. But what you're seeing is that the intent is for electrolyzers to really follow what wind and solar have done, where in the future, if you need an electrolyzer project, you're not having to engineer for a year to find the right size of purifying tank. But you can just call up an OEM and they'll deliver you something that essentially comes out of a box.I mean, I'm simplifying, but that's the idea.David RobertsYeah, something containerized.Anthony WangYeah, exactly.David RobertsAnd if those cost drops manifest, will that be a substantial piece of making this kind of model viable in more places? In other words, is that a big lever or how big is that electrolyzer cost relative to say, the renewables on one side and the methanol on the other?Anthony WangYeah, we have our projections for this obviously. So we have our power part and our electrolyzer part. Obviously, we're more optimistic about the electrolyzer part coming down further. We don't expect renewable. I mean, there may be perovskite solar panels, you may have some thought on that, David, but on the renewable side, things will happen as they do. On the electrolyzer side, obviously, this is a huge part because when you think about that equation of cost of power, cost of the electrolyzer and then the number of hours as you reduce the fixed cost of your electrolyzer, the incremental impact of your cheap power just becomes even greater.So all the benefits that you get from going to the cheapest places in the world so your windy deserts just get magnified and you will get to a point where whereas today you use your power, let's say it's 50 kilowatt hours per kilogram of power that you need to make hydrogen. That efficiency conversion factor, when you reduce the cost of the electrolyzer, it'll make a huge difference to the economics for sure. We're very bullish on that and we're hoping that those costs come down but we're not relying on it. And our first project probably won't be benefiting from a lot of those cost reductions.David RobertsRight. And of course, there's also just scale and learning.Anthony WangYeah, of course.David RobertsJust the natural cost declines that come with more people buying more electrolyzers which I assume is going to be happening soon. So then you synthesize this green hydrogen and then the question is why not just sell the hydrogen? Why not sell the green hydrogen? It's pretty precious these days, a lot of people want it. Why not pipe or truck or however one carries hydrogen to customers? Why the third step?Anthony WangWhen we started this business we probably thought of two main challenges. One was excessive production costs and then the second was kind of the midstream transport challenges. And on the production costs, we've kind of covered that but to the midstream challenges. So maybe just as a bit of context. I spent my entire career in hydrogen and green molecules, working with power utilities, oil and gas companies. And at one point I actually led a project called the European Hydrogen Backbone, which was an initiative by the gas TSOs, the pipeline network operators in Europe to try to repurpose their pipelines from natural gas to hydrogen.I'm a mechanical engineer by training. I spent a lot of time doing hydraulic modeling of pipelines and compressors at the time, and I learned quite quickly that hydrogen is a relatively leaky gas. It's not the easiest to move around, and it's also the reason that we don't really transport or store it at large scale today. It's not that you can't do it. You can. But the economics and the practical details of implementing it become quite challenging.David RobertsYeah, just to pause there since you were just talking about having studied it, because I'm really interested in this question. When gas infrastructure companies talk about this, I've seen two things. One, I've seen mixing some hydrogen in, right, just sort of lower the carbon intensity. And then there's discussion of just turning the infrastructure over to hydrogen entirely. And my question is, just from an engineering standpoint, are those pipes ready for hydrogen? It seems like hydrogen is a lot harder to hold onto than natural gas. And there's thousands of miles of these pipes. Are they just going to work or is this going to be a thing where you have to go through the whole system and sort of fortify it?Anthony WangYeah, it's a good question. And I mean, just on blending and repurposing. So in Europe, the discussion is mainly on repurposing. So fully converting, not blending hydrogen into gas pipelines. I think it's a bit depending on the political environment where you are in Europe, blending is not really seen as a viable solution. The energy impact is tiny because hydrogen is less dense than natural gas. So when you blend like 10%, I mean, there's only a fraction of that on an energy basis.David RobertsYes, I mean, I think it's just a political fig leaf here. I'm sure it'll go away once the practical challenges become more clear here too, I think. But at least right now, natural gas companies are kind of waving it around as one of their "Please don't kill us" ideas.Anthony WangYeah, that's on blending. Just to clarify on the technical viability of repurposing, I mean, in Europe, they've actually done a lot of work on this and a lot of good work. I mean, the German TSOs have just had DNV GL, a very reputable engineering company, look at this and they essentially conclude that just on this, you do need to actually go through each single pipe and look at whether it's ready or not. So it does take a lot of work to do. But in Europe, the pipelines are in a very good state and you can repurpose them, but it will come at a cost. Mainly, at least currently, with the way that the codes are set up, is that you need to derate them. Which means that whatever pressure you are operating the natural gas pipeline at, if you want to operate it for purely hydrogen under the current safety standards, you have to lower the pressure. And when you look at the hydraulics of hydrogen, you really don't want to be piping it at low pressure because it just becomes very expensive. And so on the per kilometer or mile transported per megawatt hour, it becomes quite expensive.David RobertsIt's just more manageable at high pressure.Anthony WangWell, you want to store it at high p... So because hydrogen is a lot less energy dense than natural gas, to get the same energy content throughput, you need to compress it more and transport it at much higher velocities. So when you don't do that, you end up, kind of like, transporting hydrogen, but very slowly. It's a bit like a congested motorway. And so in terms of value for money, obviously you get a lot less throughput and capacity of transport. That's the main reason.David RobertsDo you think, I mean, in Europe, I suppose, is probably the most promising place of anywhere, that this is actually going to happen on a timeline that is meaningful? Or alternatively, are a lot of green hydrogen projects going to end up doing what you're doing, which is basically being off the hydrogen grid, converting hydrogen before you ship it out? I'm sure there'll be some of both. But how bullish are you on hydrogen infrastructure generally? Pipeline infrastructure?Anthony WangWell, we've not bet our company on it. That said, look, I mean, I wish them the best, right? Obviously it's a hugely ambitious project and I think that they're making progress. But ultimately I wouldn't want to for our projects and the ones that we're trying to raise financing for. The argument that you've got a business case because 5-10 years down the line there may be a hydrogen pipeline that comes in and it's the same for CO2 infrastructure, really. I mean, it's just not going to fly when it comes to raising debt financing for a project of this size.David RobertsAnd there's no practical way for you to build a pipeline even if you wanted to. So are there even alternative ways of transporting green hydrogen that are practical at all? Or is it pipelines or nothing?Anthony WangAt the scale that we're talking now — hydrogen is already transported in trucks and you can put it in tanks and stuff and that's usually compressed, you could liquefy it as well, but that's even more energy lossy. You end up having to compress it. So you pay for the compressors, which are expensive, or the liquefaction, and then it's again not very dense, so you end up having to pay a lot for the transport itself — and at the scale that we're talking, 20,000 tons a year, that's not something that you would want to be trucking around. Also from a safety perspective, I'm sure that's not ideal and lots of local authorities would not be very happy with that.David RobertsYeah, that's a lot of trucks.Anthony WangYeah.David RobertsSo it's just not practical, basically, at this point to build green hydrogen out in the middle of nowhere where the renewables are good.Anthony WangRight, yeah, exactly. And that's also why I think today most of the hydrogen projects that are actually getting somewhere and having traction are the ones that are near industrial clusters and by ports and next to an existing refinery, which makes total sense. Right. Decarbonize the existing hydrogen that you have. But that's not going to cut it when you're trying to integrate renewables from the best regions into where the demand sinks are.David RobertsRight. Yeah. Are there even exclusively hydrogen pipelines now? Is there much of that infrastructure now?Anthony WangSo it does exist. So there is what's already available and there are industrial clusters and there are pure hydrogen pipelines. They're mainly operated by the industrial gas company. So the Air Liquides, the Air Products of the world, but these tend to be quite small. So these are 10-20 inch pipelines that aren't meant to transport across long distances. These are mainly pipes to bring it from one side of the industrial site to the other or as a backup. I mean, they work, they're totally safe and people have experience building them. But at the scale that the natural gas pipeline companies are thinking, which is like 48-inch huge cross country type pipelines, we don't have anything at scale or that's commercially kind of running.But the TSOs, especially in Europe, are running pilots and trials. And I think there's one connecting Germany and France. There's a bunch of projects in the Netherlands. I know that the Dutch TSO is very active on this, so there's definitely stuff coming. But as to when and where exactly it'll be up and running, I don't know.David RobertsRight. And I'm thinking of the US. We have this huge hydrogen hub program. I'm sure you're familiar with it. It's a similar idea, building these huge industrial clusters. And I guess we're just going to have to build pipelines for all those in the US. Because there's not sort of curious about site selection for those too.Anthony WangYeah. As a principle, it's very difficult as an individual project developer to make a pipeline like this work. I mean, it really requires everyone to come together and the stars to align. And then you often need — this is why these companies are typically regulated, usually is, because that's the only way to finance it. And so I know we've looked at, for example, using pipeline transport, and as an individual company, there's no business case for building a pipe just for your own uses. It would have to be because you pool into it with other producers and off takers.David RobertsA little coordinated industrial policy to build that infrastructure. So you make the green hydrogen and then you combine the green hydrogen with CO2, basically to make methanol. So my first question about that is, where do you get the CO2? Because you've dodged the importing and exporting electricity problem, you've dodged the importing and exporting green hydrogen problem, but now you've got an importing CO2 problem. I guess my question is, how big of a problem is that? How available is CO2? How easy is it to get it where you need it?Anthony WangYeah, when we looked at this, it was like we kind of put the main energy carriers and commodities, we stack rank them electricity, hydrogen, CO2, methanol. Which one would you rather transport and which one would you rather store?David RobertsRight.Anthony WangAnd kind of where you end up is you really don't want to transport electricity if you've not got an existing cable network, you don't really want to transport hydrogen. CO2 is a bit easier. I mean, it's still not ideal. It's an industrial gas. You need to liquefy it. But it's better than hydrogen. Much better. But the best thing to transport in store is methanol because it's liquid at room temperature. So what we try to do is you try to bring everything into our sites and then make methanol there, and then ultimately transport the methanol out to a port and on the CO2.So we have two options, really. One is to work with industrial point sources and we try to work with companies who have either unavoidable process emissions so cement companies, or biogenic sources of industrial CO2. So pulp and paper.David RobertsSo this is carbon capture you're talking about CCS.Anthony WangYeah. So this is carbon captured.David RobertsIs there enough of that to supply you?Anthony WangSo, obviously, we've got quite a big carbon CO2 supply problem. So from an availability in the flu gases, for sure, obviously, I think you're asking about the carbon capture itself.David RobertsRight. Is enough being captured to supply a substantial market?Anthony WangInterestingly for us, when we started this, we looked at the market and said, okay, very few are actually capturing the carbon. But when we spoke to a lot of these potential CO2 capture companies and suppliers, to our surprise, lots of them already had been doing lots of engineering study and were very keen to implement this technology. The problem for them is they had nothing to do with the CO2. Interestingly, for a cement company, especially the ones that we spoke to in Europe, they're under such immense pressure with the EUTS, the European Carbon Cap and Trade system, where they're essentially, once that's in full swing, their product price doubles because it's one ton of CO2 per ton of cement.Cement sells for 50 euro per ton. So you can do the math. Right. So for them, they had to do something. So they've been studying this and looking to pull the trigger on some investment decisions.David RobertsI thought there were industrial uses of CO2. I thought there was a market there.Anthony WangYeah, CO2 is already used today for greenhouses, but at a very small scale. And usually, the CO2 is not coming from big industrial point sources, although there are some. So there's some ammonia plants that already capture CO2. So that's one is on the industrial point source. The other source that we think is a very good option and where we have lots of discussions, is with biomass, often anaerobic digestion. So if you look at RNG, what you have actually is a very pure source of CO2, because in the process of making RNG, what you do is you essentially purify RNG from biogas.And biogas is about 50% RNG and 50% CO2. So in the process of purifying RNG, you actually inadvertently purify CO2. But because there is no offtake for it, the CO2 is currently vented. People don't make a big deal out of it because it's biogenic CO2, right, because it comes from dairy manure or agricultural residue. But it's still right. It's CO2 that's vented into the atmosphere, which we could at that point, you're not really talking about carbon capture, right? It's just connecting it to a pipe because it's already pure. You don't need to scrub it or clean it.And that CO2 is a very good source for us because, a), it's very, very pure, so it's cheap, and b), it's obviously biogenic.David RobertsWell, if they were going to throw it away, if you hadn't come along, I would imagine they're willing to sell it to you quite cheaply.Anthony WangYeah, exactly.David RobertsSo in terms of just sort of absolute numbers, you're not worried about supply of CO2, you think you have enough CO2 to go on for a while or what's your outlook on that?Anthony WangYeah, so, I mean, just to give you an example, right, we have an agreement with Cemex, a major cement company, and their cement plant produces 450,000 tons of CO2. And one of our projects takes 150,000. So three of our projects are needed to decarbonize one cement plant, just to give you a sense of the scale. And then these guys have tens of these around the world, and that's just one company. So in terms of scale, we're not too worried about the CO2.David RobertsRight. So in terms of its availability in general, clearly there's a lot of it. But in terms of the mechanics of getting it to you, that's not a bottleneck at all. How does it come to you, by the way? Does it come to you in a truck?Anthony WangSo we use a combination of rail and trucks. So both CO2 and methanol, we rail and truck. Typically, what we find is that actually the CO2 producers or industrial facilities are again close to ports where traditional industries are. And so what we end up doing is we use the same infrastructure, so the same rails and same train rail, cars and trucks to import the CO2 and then export the methanol. And it's a similar principle where we use tankers. So you liquefy the CO2, put it on a train and then the methanol is already liquid and you export it out.And so that infrastructure all exists and it's just a matter of connecting to the right infrastructure.David RobertsAnd to be clear, you intend to only use captured CO2, not like natural CO2 from underground, because your sort of process is only carbon neutral if you're using the carbon that's been captured somewhere else.Anthony WangYeah, exactly. And I mean, there's lots of debate and discussion about what exactly is good CO2. Maybe that's a rabbit hole that we don't have time to dive into.David RobertsHave they made up a bunch of colors for that yet?Anthony WangWouldn't be surprised if they're getting to that stage. So in Europe they call it biogenic CO2, which ultimately means that it has to be CO2 with a short cycle. So it can't be CO2 that's from the ground basically. Right, but obviously, even with things like processed CO2, you can argue how green is that compared to if it was from agricultural residue? But then you can argue that some of the biomass that's being used today for power and heat production from wood in the Amazon forest isn't great either, so it's a pretty big topic.David RobertsOr direct air capture. Is direct air capture even enough of a thing for you to have thought about it? Or is that still just a gleam in somebody's eye, more or less market wise?Anthony WangYeah, it's not competitive at the moment, so obviously for us it'll be an option in the future. Today there is not nearly enough scale and it's not competitive enough for us to consider it. But I mean, I'm definitely keeping a close eye on it, but for now, we stick to the industrial point sources. Obviously, it would take out a lot of the transport considerations because we could power the direct air capture with our own renewables. So we could just put everything in the same location.David RobertsYeah, you could make your own CO2.Anthony WangExactly.David RobertsThat would add another piece to the optimization puzzle. You're going to have to bring AI in to deal with all this. So I think my knowledge of e-fuels is pretty sketchy, as I think most people's are. My understanding is that if you have hydrogen and CO2, there's a number of different fuels you can make. So of all the sort of possible fuel choices, why methanol? Is it easier, process-wise, to make it, or is it something about the market for it is better, or what are the sort of considerations?Anthony WangYeah, for sure. Obviously we had to pick one. We looked at the hydrogen market and if you look at where most experts think hydrogen will be used today and likely in the future, it's mainly as a feedstock. So it's for ammonia, methanol, steel and sustainable aviation fuel (SAF). And so those are the main kind of derivatives that we considered. Obviously we looked at the technical side, so we've talked a bit about the transport options and methanol kind of comes out on top. There ammonia, better than hydrogen, but still quite a toxic gas as well. We had to pick one to start with for our first project.But I would like to add we're called ETFuels, not ET Green Methanol for a reason, not only because the latter is not very catchy, but also because we see our off-grid production model as a way to scale into a multi-fuel future. But for our first one, we chose methanol. Again, partially for technical reasons, but also part of it was just timing, because this was around the time that the big Danish shipping company called Mersk made a huge announcement that they essentially committed to methanol as their decarbonization fuel of choice. And they had put in an order for eight methanol-fueled vessels at the time.This was a couple of years ago. Obviously, that number of methanol ship orders has grown exponentially since then. Last I checked, in the first half of 2023, methanol vessel orders represented 62% of the order book, outstripping all other fuel types. And so for us, the message from the shipping sector was clear. If we're going to decarbonize and do anything in the next ten years, it has to be methanol, because the ammonia engines just aren't ready yet. So that was quite an obvious one for us. And then on top of that, methanol is already an existing market of 100 million tons a year, used as a chemical feedstock for various plastics and chemical products.So that's kind of the main reason that we went with that fuel.David RobertsSo you chose methanol because it's easy to transport at room temperature and there's a relatively guaranteed market for it, but you think the model, there's nothing about the model that's going to prevent you from moving into other kinds of e-fuels.Anthony WangYeah, exactly. I think one of the reasons the model is attractive, the off-grid model, is because so much of the cost and learnings are applicable to other fuels as well. So obviously the renewables is the same, the hydrogen production is the same, and this is the notion of hydrogen as this platform chemical. And then the final part is, depending on which fuel you go with, is 15-20% of the total CapEx. But you could have a train for ammonia, you could have one for methanol, you could even have one for e-methane, which some people are doing, which is kind of e-RNG.And so for us, it's — obviously we bet on methanol as our first. We think the market is ready there, but ultimately, ammonia might have a big future in shipping as well. And ammonia doesn't have the CO2 problem. So for us, it's a really good way to kind of keep our options open.David RobertsIs making methanol out of hydrogen substantially more or less expensive than making ammonia out of it, or methane? Or are there substantial cost differences in that last piece of the puzzle?Anthony WangSo the main difference is — they're all a bit different. So obviously, ammonia, the big benefit is you don't need CO2. So whatever you were paying for the CO2, you're now no longer paying for.David RobertsBetraying some rank ignorance here, but how on earth do you make hydrogen into ammonia?Anthony WangYou combine it with nitrogen, so you take nitrogen out of the air, so you purify nitrogen and then you run it through a reactor. It's a similar type of synthesis reactor where you basically run your gases at a certain temperature over a catalyst. So for ammonia, it's called the Haber Bosch reaction. For e-methane, it's called the Sabatier reaction. I think the methanol reaction doesn't have a name, but they all have similar principles, which is you put it into a chemical reactor, hydrogen plus some other compound.David RobertsRight, so it's not no, it's very similar.Anthony WangI mean, there are obviously some technical, detailed process differences. So ammonia in terms of reaction, temperature in terms of how well it operates under fluctuating load. So all of these processes, whereas the electrolyzer is very flexible, most of these chemical reaction kind of chemical plants are a lot less flexible because you need to maintain the temperature and the pressure. And it's much more like a refinery than an electrical kind of process. And then for methane, when you're obviously methanol, the last step is distillation, where you have to separate the methanol from the water, whereas with methane, you're separating a gas from water.So there are some kind of nuanced differences. But in terms of the big picture, I mean, your renewables is the same, your hydrogen is the same, and the last 20% you can kind of flex that if you need to.David RobertsSo in terms of carbon-neutral methanol, for which there is this sort of nascent market just emerging, these shipping companies just sort of getting into this. Are there lots of competitors? Do we know? I mean, is there a good sense yet, like, what it ought to cost? I guess it's far from commoditized at this point. But how mature is that final market? Or is this sort of like everybody's figuring this out as they go?Anthony WangProbably more the latter. I mean, there are definitely competitors. I'd say most e-fuel announcements you see are probably around ammonia because it's just slightly easier because you don't have to source CO2, which is a challenge. So for us, it's a competitive advantage, I think, that we know how to source CO2 and we know our way around that market. On your question around pricing, so of course people are figuring it out. There are a couple of pilot plants. There's a few that have just started, kind of just taken an FID. Orsted has just bought one in Sweden where they've started construction, but they aren't producing yet, so no one really knows how much it's going to cost until it's operational.Obviously, we know, today we would be producing at a price premium to fossil methanol. But that'll be the benchmark is — how many times more expensive are you compared to either fossil methanol or the fuel that you're replacing. So in our case it'll be fuel oil for shipping.David RobertsYeah. I'm guessing you're a lot more expensive than fuel oil at this point.Anthony WangYeah. So at this point we're significantly more expensive. Obviously what gives us comfort is that we're well one is the cost reduction trajectory of the technologies and the learning that we think we will gain and two is our relative cost differential against our direct competitors which we see as green methanol. Right. So we don't think we will be directly competing with fuel oil because one obviously from a regulatory perspective those get treated very differently and all the incentives that a shipping company, especially in Europe, in the US you've got the IRA in Europe there's lots of incentives for fuel switching demand side kind of quotas and ways to benefit.So you only get those if you're to decarbonize fuel. And for us, what gives us comfort is not so much the comparison to fuel oil but the comparison to other green methanol projects. And for us the off-grid nature gives us this competitive pricing advantage because of our cheaper power and that's what allows me to sleep at night.David RobertsWell, one question I have is, what counts exactly as carbon-neutral methanol? Because, as Volts listeners know, because they listen to the hydrogen tax credit episode, the question of what is the carbon intensity of your hydrogen is far from straightforward. And there's a lot of debate now about whether to require it to be off-grid or exactly how to measure the cleanliness of the electricity going into it, et cetera, et cetera. It's a very complicated debate here in the US. I'm sure you're very familiar with it over in Europe too, you are very clearly making carbon-free hydrogen because nothing's more additional than renewables that you are building yourself to attach to your electrolyzers, right.So you clearly pass the bar. But is that same debate live in Europe? Because if people can use cheaper grid renewables I don't know, maybe that actually wouldn't give them a cost advantage. I don't know. But is there debate right now over what counts as e-methanol?Anthony WangYeah, for sure and really good point on the additionality I hadn't mentioned. Thanks, David. It's a big part of why we've chosen this model as well. It's the cost, it's a scale and it's the additionality on the debate around what is green methanol. So for sure, I think in the US it's a bit of a different discussion. There's not really so much a definition of what is green methanol because you make it compete with fossil methanol through the IRA, through the tax credit. In Europe, we've just had a big legislation passed called the Delegated Act for Renewable Fuels of Non-Biological Origin.Anyway, lots of rules kind of were described in that one is for green hydrogen, which is the one that you talked about, which I think is the similar discussion in the States around additionality temporal correlation, geographical correlation, which we comply with. And the second one is around CO2 essentially how you carbon account for the CO2 in a fuel like green methanol. And the European policymakers agreed on that. So the commissioned parliament and so what we have is up until 2040 any CO2 is okay. So that's kind of what they agreed on. And then beyond that, you would need to be either unavoidable process or you need to be biogenic.But for now, their argument is because there is so much CO2 that's kind of going into the atmosphere that we're not decarbonizing — all of those sectors, for those sectors, you can capture the CO2 and use it and it'll qualify as a "renewable fuel of non-biological origin." That's what they call it.David RobertsInteresting. So as I'm thinking about a project like yours in the US in a post-Inflation Reduction Act world, I'm sort of slightly boggled at the number of tax credits or subsidies that you could rack up with this. You could get tax credits for building the renewables, tax credits for green hydrogen which are substantial. I think there's tax credits for using the CO2. I think there's tax credits for the e-fuels. Like every piece of this is going to get money showered on it from the IRA. I'm wondering whether that makes these projects more attractive.I mean it must. And whether you've been thinking about that. And two, just on a more general basis, how you think about subsidies and whether you need them and to what extent this business model relies on them.Anthony WangYeah, we founded the company before the IRA, before all these policy and incentive mechanisms came out. And we founded it because we believe there to be a commercially viable proposition without it. So we didn't create a business that relies on or is reliant on subsidies. I don't think that would make for a very good business.David RobertsWell, there are plenty of them.Anthony WangYeah, I guess so. But I mean, obviously now for us what this means is kind of accelerated our trajectory so we can do things much faster and basically just get going. And obviously we can't not go for them because it'll make us less competitive because our competitors are. In terms of which ones exactly, I mean, we take quite an opportunistic approach. Obviously in the US we'll try to play into the tax credits the extent to which you can, I don't know, what I would call "double dip" in the sense that get benefits from the US credits and then export your fuel to Europe and then get more benefits there from avoiding the EU ETS.I don't think that's entirely clear. I mean, I'd be quite personally, as a taxpayer—if I were a US taxpayer—I'd be a bit skeptical of that. And even as a European one, I'm not sure how comfortable I feel with importing US-made fuel subsidized with US tax credits and then getting another whammy on top of that in Europe. Yeah, but I think that's all to be identified in Europe. Obviously, you've got the innovation funding there's all the onsite measures, which I think are much better. Like for example, the renewable fuel quota. That's a very clean quota for ships where they just have to switch a certain share of their fuel to be green.And then you've got various other kind of incentive schemes, carbon contract for differences, which are meant to be a support mechanism for hydrogen production. And so we'll see for us, basically what it means is that our projects are even more viable than they were a year and a half ago.David RobertsHave you done the math yet on a project with all the IRA subsidies? Because the green hydrogen tax credit is ginormous.Anthony WangYeah, obviously we've done the math just to give you maybe cut some numbers. So the $3 per kilogram hydrogen tax credit translates to about $600 per ton of methanol. And just to give you a sense of fossil methanol, so methanol made from natural gas today, I mean, I haven't checked the latest numbers, but historically it's kind of traded at around $500 per ton. So that's only for your hydrogen. And then on top of that, there is potentially a CO2 credit, which again, the extent to which we can play into that, I don't know. But the CCU tax credit is $60 per ton of CO2.And in terms of when you translate that to methanol, you would get to around $100. You multiply by 1.5. So again, it's a lot of you add it up, you get to like a $700 per ton of methanol tax credit compared to the fossil price of $500.David RobertsIs that enough to erase the delta with the fossil kind?Anthony WangYeah, we'd be in the money for sure.David RobertsI mean, it would be wild to be on the market selling carbon-free methanol that is cheaper than the carbon kind.Anthony WangSo that raises the question is what you're paying fo, right? That's where it's different in the US than in Europe. In the US, essentially that's the mentality, right? You're not trying to sell some different product, you're just trying to sell the same product cheaper. And that's why you need these support schemes to make that work. Whereas in Europe you're essentially saying, well, it's green, so it's okay that it's more expensive, but you have to do it because it's green. So it's kind of a different mentality.David RobertsYeah, there are more sticks in Europe and we're all carrots over here in the US.Anthony WangYeah, but I mean, from a developer and financiers perspective, it's not clear which one is better because obviously with the renewables, the drawback in the States was that one year you had them one year you didn't. Whereas in Europe the demand side signal meant that you had a very kind of fixed base load of demand.David RobertsRight. Yeah, that's interesting. So, the final question is just, it does seem like to some extent this business model is a reaction not to technological factors, but to socioeconomic factors. So, for instance, the limits of the grid and the slowness of getting on the grid, the slowness of interconnection, the lack of hydrogen pipelines, these are kind of bottlenecks or pressures that one can imagine easing over time. Right? One can imagine the grid getting built out more. One can imagine green hydrogen, I don't know, I actually have trouble imagining green hydrogen infrastructure being built. But who knows, it could happen.So, I wonder if those became easier and they were less of pressure points, would some of the rationale for this business model go away?Anthony WangYeah, I'm not sure if I fully agree with that statement. Just from the perspective of — yeah, okay, there are challenges with the incumbents and the pace that they're getting things done. But for us, it's also fundamentally what is a more efficient way to run the energy system. It's not just because it's not being done, we need to find some loophole that can make it work. Fundamentally, you can ask the question if you had a renewable energy system or an energy system that was driven mainly by renewables, is it more efficient to overbuild your grid, to run all that stuff intermittently —I mean, I've been part of grid planning sessions in Europe and when you've got capacity factors of solar of 15% to 20% and wind of 25% to 35%, you have to build an enormous grid to balance that. By the time that you've actually built out the grid to kind of run your power system base load, your balancing cost, sometimes they call it balance of system, basically the cost of all the extra stuff to keep it running becomes quite excessive. So, I think a study by Imperial estimated that that cost would be 50 to 60 pounds per megawatt hour of just pure balancing costs. That's in addition to the renewable costs, which by the way are a lot less cheap in Europe than they are in Chile.And so, you very quickly get to power prices which are much higher than what we are paying today. And then you can wonder, wouldn't it be more efficient if you could import some of that cheap power, put panels where it's sunny or put turbines where it's windy and import the power. And then also the other thing is, does it even make sense to try to aim for this type of base load, supply driven system or should we be running more flexible assets? And in many ways, what we've got is just a flexible asset, right? It's an electrolyzer that follows the renewables.And so, the system benefit of an asset like that is quite big. So, I don't think I fully agree with your framing of the business model. I think there's more to it than just it's a way to bypass all of the slow incumbent infrastructure. But it's definitely a good question and I don't think anyone really knows the answer until we've tried both paths.David RobertsSo, you think that the limits of electrify everything are more than just incidental or contingent? You think we're going to run into these balancing cost issues and it's going to make more sense to run more stuff on liquid e-fuels?Anthony WangNot for everything, obviously. I wouldn't ever buy a diesel car and then hope to ever be able to afford e-diesel rather than an electric car. So, obviously there are time and place for everything. For certain sectors, though, I definitely think, I mean, I'd rather fuel my ship or my airplane with an e-fuel made where renewables are cheap than to try to do that next to Heathrow Airport in London or something like that. So, I think, as always, it depends and we're very targeted in where we go. We're not looking to sell e-fuel to heat homes or do anything like that.It's very targeted to the sectors which are hard to abate and don't have other options.David RobertsThis has been super fascinating. I hope listeners agree. I hope we haven't gone too far down the technical rabbit hole and lost people. But I find this, this is where all the sort of interesting issues in the energy world are hitting the ground, right? Like you're trying to actually do these things. And as, as you said, when you start trying to actually do things, whole different challenges arise and whole different sort of questions arise about optimization and stuff like that. So, super fascinating to walk through this with you. Thanks so much for coming on, Anthony.Anthony WangThanks for having me, David. It was a pleasure.David RobertsThank you for listening to the Volts podcast. It is ad-free, powered entirely by listeners like you. If you value conversations like this, please consider becoming a paid Volts subscriber at volts.wtf. Yes, that's volts.wtf so that I can continue doing this work. Thank you so much and I'll see you next time. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.volts.wtf/subscribe

Unlike other parts of the country, the 11 western US states have not joined together in a regional transmission organization (RTO) to more efficiently and cost-effectively administer their respective electrical transmission systems. In this episode, Michael Wara, director of the Climate and Energy Policy Program at the Stanford Woods Institute for the Environment, discusses the current status of a potential western RTO and the political factors affecting the conversation.(PDF transcript)(Active transcript)Text transcript:David RobertsIn about half the country, power utilities have turned over administration of their electrical transmission systems to regional transmission organizations (RTOs), or what amounts to the same thing, independent system operators (ISOs). RTOs and ISOs oversee wholesale electricity markets and do regional transmission planning, which increases system efficiency and reduces costs for ratepayers.The power utilities in the 11 western US states are not joined together in an RTO. California has its own ISO, but it only covers that one state. In the rest of the region, utilities are islands — they each maintain their own reserves and do their own transmission planning within their own territories. It leads to enormous duplicated efforts and inefficiencies.For years, there has been discussion of creating a western RTO, to bring the western states together to share resources and coordinate transmission planning. Analysts have found that an RTO could save the region’s ratepayers billions of dollars a year.Recently the discussion has begun to heat up again. A regionalization bill in California was tabled this year but promises to return next session. Governor Gavin Newsom expressed his support for the idea. Nonetheless, numerous sticky technical and political issues remain to be hashed out.To explore the promise and risks of a western RTO, I contacted Michael Wara, director of the Climate and Energy Policy Program at the Stanford Woods Institute for the Environment. We discussed the political forces pushing for and against an RTO, the way the west's electrical system has changed since the last time this discussion came up, and incremental steps that can be taken in the direction of greater regional cooperation.All right then, with no further ado, Michael Wara, welcome to Volts. Thank you so much for coming.Michael WaraThanks for having me.David RobertsSo we're here to discuss something that is somewhat complex and rests on a set of concepts that might not be — that everybody might not come in understanding. But because I want to talk about the specifics and I don't just want this to be a 101 kind of thing, I'm going to assume Volts listeners have some basic background. So I think the main thing to know is the US electricity system is sort of divided in two. On the one hand, you have the traditional old school, vertically integrated utilities which own the generation and the transmission and the customer interaction, the whole deal.And then the other half is what's called "deregulated" or "liberalized" or whatever the term is. Basically have created markets, wholesale energy markets, where generators compete and sell into the markets. And then distribution utilities which interact with customers buy power from those markets and sell it to customers. And those areas with energy markets are overseen by organizations called Regional Transmission Operators or sometimes Independent System Operators. RTOs and ISOs, as everyone in our world is so familiar with saying over and over again I'll just use RTO, I think from now on as a shortcut for those. So in these liberalized areas RTOs sort of manage regional transmission planning.And the idea is if a bunch of different utilities can sort of share backup and share reserves and share generally they're going to lower costs for ratepayers. And so there are RTOs in the Midwest, there's one in the Northeast, et cetera. Listeners might be familiar with PJM and MISO. These are all regional transmission operators in various parts of the country. So as it happens, the western states, the eleven western states of the United States are almost all old school vertically integrated utilities which means they operate as islands. There's not a lot of sharing. So California has its own RTO or ISO, in this case California ISO or CAISO, but it only does planning for California.So what we are here to discuss is the long standing discussion about whether the western states should form an RTO of their own, join together into a regional organization so that they can do more of this sharing. That is the question before us. And there are all sorts of ins and outs and details about this but that is the basic background. So maybe the place to start is just at a very general level, sort of abstract level. You could explain what are the advantages of joining an RTO versus just operating as an island? What is the pot of gold at the end of this rainbow?Michael WaraI'd want to start by saying that there are advantages and disadvantages, right? And it's important to be straight about that. I think the key thing for listeners to remember and understand is that the primary mission of an RTO or an ISO is to operate. It's to operate the electricity system in a particular geographic footprint. And in general it is the case that it is more cost effective to operate across a larger footprint. And so a discussion around increasing the size of the California ISO or CAISO is about increasing the operational efficiency of the overall system. What I'd say also is that it's important to think both about the average conditions or kind of the expected conditions and then periods of extreme stress on the system.I guess my view is that the discussions around regionalization or growing the California ISO further outside of its California footprint have really become more important because of the challenges of the reliability that we've had in California and elsewhere. But especially in California over the last several years due to drought, the unavailability of hydro as a result, and the growth of intermittent renewables.David RobertsThe duck curve.Michael WaraThe duck curve.David RobertsThe dreaded duck curve. Yeah. So the idea here is just if you have more states or a wider area involved, you just have a larger pool to draw. And so if you're having a sort of like choke point or grid congestion here or a shortage of power here, there's maybe power over there that you can import just the larger geographic area you're covering, the larger sort of base of power and the larger variety of power sources you're drawing from. And that generally leads to resilience.Michael WaraYeah, I think an intuitive way for people to think about this is kind of national borders and trade, right? If you ship goods across an international border, they have to go through customs, and there are barriers to that. And we have rules about how those barriers are supposed to be under the WTO and other agreements we have with other countries. But it's just harder to ship things internationally than it is to ship something from California to Nevada, because we're all within a free trade zone. And what these ISOs or RTOs really create when they're done well is a free trade zone where electricity can be traded at very low cost.And what that means is that the optimal power plants turn on within a system footprint to meet the electricity demand that exists within that footprint. So that lowers costs because it means that you're not buying something expensive within your little market because it would cost money to get something cheaper that's just across the border.David RobertsRight. So it's just easier to share. And it's also worth saying, all these islanded utilities, the vertically integrated utilities, they're required by law to have a certain amount of backup available, basically resource backup in case of problems. And if you operate in an island, you have to have enough backup for your own island, which is and then the next island over also has to have enough backup for its island, et cetera, et cetera, et cetera. So you end up duplicating efforts over and over and over again. You have sort of like duplicated backups. And what this wider area allows you to do is sort of have a pool of backup, right?So not everybody has to have —Michael WaraThat's right.David Robertsenough to cover, and that also reduces costs. So these are the, I think, the sort of abstract benefits. Like a larger footprint means more sharing, better planning, lower costs. So back in 2016, 2017, there was a bill that came up in California, because at least one pathway to this, the first step would be right now, California's ISO is more or less controlled by California. The governor appoints the members and the California Senate approves them. So it's a very California-centric operation. So if you were going to expand that to incorporate other states, obviously you would have to restructure CAISO, so that it's not California-centric, because, like, other states are not going to join if California completely controls who's on it and how it works.So there was a bill back in 2016, 2017 to restructure CAISO this way, and that sort of prompted a whole round of this discussion back then. So what I thought I would do is sort of throw out at you some of the sort of worries and objections that were voiced back then and then maybe you could tell us, are those worries? Were they valid then and are they valid now? Have things changed, sort of catch us up on sort of stakeholder worries and issues. So I think probably the strongest opposition to the whole notion of regionalization, especially back then, came from unions because California's climate laws have a lot of domestic content requirements, so they require that the power be generated in California, which means a lot of jobs in California, a lot of union jobs in California.And I think the unions worried if we expand the footprint to include multiple states, California will be able to find cheaper power elsewhere and we'll just import it and that will mean fewer jobs here in California. So maybe you could say, was that a valid worry in 2017 and has anything changed now to address that worry?Michael WaraSo that, I think, is a primary worry about this proposal, and it does reflect the desire of the unions in California that have really benefited from the renewable portfolio standard here to make sure that those benefits don't evaporate. And I think it also in less maybe self-interested sense, the cooperation and support of labor unions in California has been critical to the political economy of getting hard bills through the legislature and signed by the governor that have been really important in terms of driving the climate policy situation forward in California. So we don't want to damage that. And the situation in 2017 was that you could build solar in California.If you do that, you have to pay prevailing wage and have an apprenticeship program, which basically means you're hiring unions to do the work. And that is not the case in many neighboring states. And so that was the situation circa 2017, I think there was a legitimate concern about that issue. There was some attempt to kind of massage the legal questions using clever language, which at the time made many of us, I think many of us were skeptical that that language would survive review if challenged. It's notable that the language in the California RPS, which you correctly point out, David, is I don't know if I'd call it protectionist, but it's certainly designed with particular outcomes in mind about where generation gets built, has never been challenged.So fast forward to today and the situation is different in a few respects that I think are worth talking about. The first respect, and this was actually true in 2017, but people didn't focus on it so much, is that we need to be real about who's going to want to join a sort of common electricity market with California. And probably it's not going to be states like Wyoming which are committed to subsidizing their coal-fired power plants as long as possible and in whatever way is legally tolerated by various courts and they also happen to have a really nice wind resource which if it were interconnected to California's grid would be extremely valuable. Rather than try to link up with Wyoming in a market sense what the CAISO is doing is actually building its own transmission line that it will control out to Wyoming to connect with Wyoming Wind.Right? So it's sort of decided that there's not a future where that happens. And I think many of the benefits that were envisioned for kind of out-of-state generation resources circa 16, 17 really depended on this vision where the entire west is in a single RTO. I personally think that's highly unrealistic. It's unrealistic today for two reasons. The first one is what I just mentioned that very conservative states do not want to share power with a very blue state like California. So I think it's unlikely those states are going to want to join whatever the economic benefits.It's a tribal issue. The second issue though is that there's a competing RTO under development in the west now that will be kind of the eastern side of the western interconnect and will involve a lot of these other states. SPP, which is an existing RTO based in Little Rock, is in the pretty advanced stages of getting ready to file with FERC to create an RTO across western states. So that's one set of issues. The big talk back in 16, 17 was "We'll get Wyoming Wind in the CAISO and that's going to really be great for various reasons" which it's still true it would be great to have more of that resource in the electricity mix in California.The other thing though that's changed is federal law: The Inflation Reduction Act passed. The Inflation Reduction Act says that if you want to get the full PTC, the production Tax credit then you need to pay prevailing wage and have an apprenticeship program. Period. Full stop. Starting on January 1 of next year. So any projects that would be a part of the California ISO and hope to receive federal tax credits which are material to the economics of these projects is going to have to pay wages and have unionized labor apprenticeship programs that are very similar to California's. Now the prevailing wage in Nevada or Arizona may be somewhat lower than in Kern County where a lot of the solar gets built in California or in the western part of the Central Valley and in the Westlands Water District.But at least a significant chunk of the kind of economic advantage to building out of state is eliminated by the changes to the Inflation Reduction Act the pro-union measures that the Biden administration has put in place. So I'd say we're actually doing some economic analysis right now to try to understand this with current data but none of the assessments that have been done of the ISO RTO concept and sort of regionalization really take account of this change and it's incredibly important. The unions are still opposed. And that may be the reason why we don't do this.They are very nervous. From the perspective of a California union, it might not matter whether nonunionized labor or a Nevada union construct.David RobertsI was going to say it's not necessarily quiet their worries to say "Oh, these jobs that will be taken from you will be given to a union somewhere else."Michael WaraThis is just anecdotal. But what I've heard is that there aren't actually unionized construction workers in a lot of these neighboring states to California because they're right-to-work states. And so some of what's happening is that in order to qualify for the Inflation Reduction Act tax credit structure, workers from California are being moved to Nevada or other states to construct these facilities. Kind of like man camp style. Because they need to make sure, right, they want to make sure that they check all the boxes to get the full tax credit.David RobertsRight.Michael WaraAnd that's a part of it. And so it's a somewhat fluid situation. I personally can't believe that that sort of approach will be sustained in the long run. But the general picture is that — I guess the other thing I'd say is that and maybe this is a third point I should have said there are three because it was better three. Is that California is running up against the challenges of really achieving the SB 100 objectives. We are sketching out construction rates, starting to procure, attempt to procure renewables at a rate that is really unprecedented in California. And we're going to need to build everything.And this is kind of a key message that I bring to this conversation. We need to make sure that we're building all the rooftop we possibly can. We need to make sure that we're building all of the in-state generation that we possibly can. And we are going to need to procure a lot of out-of-state generation.David RobertsYes. And even then, those goals are going to be very difficult to hit. This was, I thought, the strongest point you made. I was reading what you've written about this. It's just that California, its goals are so ambitious that this is not a scarcity situation. This is not an either-or situation. It has to go flat out to get all the power it can from everywhere it can. And even then, it might not be able to get enough.Michael WaraI really think that's the right way to view the situation in California right now. And we are working in our group on policies that will reduce barriers to in-state construction, reduce the barriers around interconnection, which are really the big delay right now.David RobertsOh, yeah, I want to pause and emphasize this point too, before you move past it, because I thought it was another great point you made in your writing, which is that the real — if you're worried that there's not enough in-state construction happening. The prospect of imports from other states is the least of your worries. Like that's not what's holding up construction of new power in California. It's all these things that Volts listeners are very familiar with permitting, NIMBYism, et cetera.Michael WaraThat's right. And I think the challenges there in California are quite acute. They also interact with just how much else the other jobs that our utilities have that are kind of even more pressing than achieving the SB 100 goals like not having wildfires ignited by their equipment. And many of the engineers and line workers that are needed to do the kind of renewables build-out in California are busy with that work as well. And so we have resource constraints in California that are real. We need to work on those, we need to train more line workers, we need to train.All of this needs to scale. But there are things we should be doing in California and we've been working on them. Many others are working on these issues as well. The PUC at the ISO, at the Energy Commission as well, of course, is to remove the barriers that exist to building things in California at the same time as we facilitate greater use of imported power that's actually clean and not just the old way. California has long imported large amounts of electric power. We built our coal-fired power plants in other western states and on the res and we have shut those down, mostly.A lot of it has been replaced by natural gas-fired power that we import and some renewables that we're importing as well.David RobertsLet me pause and emphasize that point too because another of the objections back in 2017 or whatever were from environmentalists who say "Here in California we've got laws mandating clean power. But once you open it up, you're going to get a bunch of these coal plants in other states, generate cheap power and sell it into the RTO. And we're going to end up in California getting coal power in our mix when we don't want it."Michael WaraIs that is just much less of a concern than it was in 2016 for a whole bunch of reasons. But the fundamental and most important one is that coal is a five cent product in a three cent market and it is just the economic loser pretty much no matter how you slice it. And the states that are trying to prop it up frankly can't afford to do that.David RobertsYeah. And the last thing they want is market competition. Right. I mean the more you expose it to market competition, the less well coal will do.Michael WaraThat's absolutely right. And so exposing coal, especially to markets that have a lot of renewables in them, so there's a big daily cycle in prices is really challenging for that type of resource. So I guess I look forward and I'll say I think about this also this proposal in terms of what the situation will be like, not right now, but in about five years, because it's going to take several years to get — eve if this law or a law like it were to pass this session, or frankly, it's not going to pass this session, it passed next session, then there would have to be preparation of a proposal that the ISO would share with the state government and then would submit to FERC, and FERC would review that proposal and approve it.And only after that approval would the ISO be able to implement it. And I think we're looking at the late two thousand and twentys at best. So really you need to ask how much coal is left in the western United States circa 2028? And I think the answer is not very much. And even if it's there, it's not running. So then the question is, what about the other resources? And certainly there's a lot of natural gas in the west, and we might import some of it if — we would import some of that power if we were more strongly tied to other western states.But California has its own issues with burning lots of natural gas to generate electric power. We generate enormous amounts of electric power using natural gas. And many of the gas plants we utilize are older, they have significant environmental impacts, they're located in EJ communities. And we are on the record of saying "We want to shut them down." So all of us in the west that have renewables goals and clean energy goals are going to be working on this question. But it's not like we're better, we're cleaner than other western states. And I guess the other point that you alluded to, David, that I want to come back to is the situation has changed fundamentally with respect to other states renewables goals as well.In 2016, 17, we were out way ahead with SB 100, proud of that fact, and looking at most states in the west that had either very timid RPSs from California's perspective or no policy at all. Today, six of the states in the west have 100% clean energy goals, just like California. And there are several additional utilities that have taken on those goals and haven't just taken them on, but are proposing integrated resources plans that are consistent with them. So near term action to achieve those goals. And they're doing it because of the favorable economics of doing it right, that a mix of wind and solar combined with some batteries and natural gas is the cost-effective portfolio to have these days.Now, it may get harder, we'll see, right? It could be that all of us get to 80% clean and things get really hard, and then some of these folks that are saying they want to do that now change their minds, but that's in 10 to 15 years. We've have a lot to do in the meantime, and a lot of potential partners in achieving those goals that we didn't have five, six years ago.David RobertsYeah. And not only are a bunch of states now targeting 100% clean energy, but it's worth noting that Colorado and Nevada specifically passed laws saying we support the RTO idea, we like the idea of a wider area here. So there's some momentum out in those other states.Michael WaraAbsolutely. I think there are a set of partners, some of which have become public and some of which are less public, that are sort of looking to see what happens. Right. There's this proposal from SPP. There's a lot of discussion in California. My sense is that the partners want to see, like, if there were to be a California option, the economics of it are highly favorable to others because California is just such a big chunk of the population in the west, 40 million out of 100 million people. So there's a lot of potential buyers of electricity in California, and having access to that market for other players in the west could create a lot of benefits for them and also benefits for California because California would be able to purchase lower-cost power.I think where the other parties start to get worried is when we, and I say we, I'm a Californian, start to want to impose our values on others.David RobertsGreat segue because the third and sort of final objection I was going to raise to that law when it came up then was just the general worry that with a California-only ISO, California is very tightly in control of it and can ensure that the values of the ISO reflect Californians' values, the sustainability goals, et cetera, et cetera. The worry is if you dilute that, California will to some degree lose control over the running of the common ISO, or at least it will just be one voice among many. And I think some people in California, some lawmakers, some environmentalists, are worried that you're going to end up with an RTO that doesn't reflect what California wants. And at that point, California will be just up the creek.There's nothing you can really do once you, once you have committed to the RTO.Michael WaraYeah, so I guess I think this is a valid concern. If the governance structure of the ISO is not designed with some care.David RobertsBracket that because we're going to return to precisely that question.Michael WaraOkay, so let me just speak at a high level then. Certainly there are a bunch of states, one of whom I mentioned, Wyoming, that have really different priorities for their energy systems than California. California also is so kind of tribal in its blueness and its pro-climate policies, that can be a real turn off to more intermountain conservative states. Even with utilities that are a little bit out of step with their state. And I would note that Idaho Power has a 100% clean energy goal, but the state of Idaho does not, right?David RobertsTo say the least.Michael WaraAnd so Idaho Power needs to be careful and I think they're interested in participating in the regional sort of markets that the California ISO — We haven't talked about this —David RobertsBut that's our next topic. So you're setting it up perfectly.Michael WaraSo California has spent, since the last effort at full-blown regionalization creating a regional RTO, California has spent a lot of time developing kind of what I term like halfway houses to an RTO.David RobertsRight.Michael WaraThis thing called the energy imbalance market and then the enhanced day-ahead market proposal.David RobertsLet's talk about those. Right now, CAISO is operating what's called the Western Energy Imbalance Market, which involves multiple western states. And then it is developing what's called a day-ahead market, which will have a bunch of those same participants. Maybe you could just tell us, what does the energy imbalance market do? What would the day-ahead market do that the energy imbalance market doesn't do? And what would a full-fledged RTO do that the day-ahead market doesn't do? What are these halfway houses like? How big of a step is the energy imbalance market and what's the next step?Michael WaraSure. So the energy imbalance market has been something that's generated a fair amount of benefit for all the states that participate. And basically what it says is you optimize in your footprint. And that optimization typically happens mostly a day ahead. Right. So power plants are on, they're not on, whatever based on a forecast a day ahead. But those forecasts are never perfect. And so there's always some kind of leftovers that — maybe there's too much in one place or not enough in another. And what the EIM does is allow trading in that real-time or almost real-time space where the day-ahead forecast was wrong and somebody has a little extra, somebody has not enough, and they can exchange and create benefit from that exchange.And the real benefit is not having to turn on a power plant or call on a resource that would be expensive but can turn on quickly.David RobertsSo it's an incremental bit of sharing there.Michael WaraYeah, it's like the tip of the iceberg of benefits from lowering barriers to trade. And then there's this giant iceberg underneath, which is the day ahead.David RobertsAnd the day ahead is not yet running.Michael WaraNo.David RobertsIt is in development.Michael WaraYes. And the day-ahead is where you, say if you're a grid operator, look at the weather forecast and make an estimate of what electric demand is going to be, and then you decide which power plants you're going to utilize to cost-effectively meet that demand. So coordination across and I should say, even if there isn't a market right, like in these vertically integrated states, the utility is making that decision every day. So what the day-ahead market, The EDAM, as people call it around here, the Enhanced Day-Ahead Market Proposal will allow, is states if they want to, and if their utility commissions will allow them to, which is an important caveat, allow some utilities to kind of opt into participating in a single optimization across the footprint. Now, the challenge here, though, is it gets complicated to know what will really happen. And the reason is that many parties that say they're interested in the EDAM in this day-ahead market proposal say they are interested in it as a halfway step to an RTO and they are much less interested in participating in it if there is not an RTO proposal.David RobertsIf it's a terminal EDAM.Michael WaraIf it's the end, yeah. And the reason for that is, understandably, utilities don't want to — what an ISO RTO kind of construct is turning over your system to somebody else to operate. And if that somebody is in Folsom, California and you have no say over how the rules are written, no seat at the table in terms of designing future transmission expansion proposals, that strikes many people as unfair, let me just put it that way in simple terms. And certainly the players that do have a seat at that table are going to seek to maximize their benefits from whatever gets decided.And that's going to mean that the utilities in California, PG&E, Edison, and San Diego Gas and Electric principally get the most benefit.David RobertsRight. So EDAM is run out of CAISO, basically. And so the worry from other utilities is California utilities are going to get they're going to be at the head of the line here. They're going to get sort of favorable treatment.Michael WaraAnd California has bent over backward to create a governance mechanism for the EIM, the tip of the iceberg market that is really multistate and fair and is functioning well. And I think in many ways, many of the concerns that were raised in 16, 17 about what the governance would look like once California shared some power can be actually pretty well answered by just looking at how EIM governance functions today and has been functioning for several years. And it's a very successful model. It's widely perceived as fair.David RobertsAnd the participants are happy, the utilities —Michael WaraEverybody's happy.David RobertsYeah.Michael WaraEverybody loves it. That's why the EDAM project has moved forward, because the people that participate in the EIM, both California and non-California entities, have said, "Let's go further." But as this project has neared completion and it is getting close to that, two things are happening. One is this competition from SPP, which I think will thin out participation in the EIM, which is spread out quite far across the western grid and it will also limit participation in this new program, the enhanced day-ahead market. So the real story here is that to some degree, if California wants to have sort of day-ahead integration, it needs to maintain momentum toward power sharing.David RobertsAnd so what would the RTO do beyond the day-ahead market?Michael WaraWell, the other thing that it would do is actually plan transmission.David RobertsYes.Michael WaraRight.David RobertsYes. Praise be.Michael WaraYeah, right? Yes. And so today, in the footprint that a western RTO centered on California might contain, there's internal transmission planning each utility or within the California ISO, the ISO plans transmission build-out and then there are seams. And the seams are where different markets meet each other. They're kind of the border. And there are real limitations on planning across the border, planning transmission lines that cross these state lines and cross market barriers and just planning what people are today starting to call transfer capacity, which is the ability to move power for California, especially out of the Pacific Northwest and into California.And I just add to that another challenge that we've all confronted in the west in the last few years also is the effects that large wildfires can have on these transmission lines. Because there may be like four lines that connect California to the Pacific Northwest, but they're all in one right of way. And so if there's a big wildfire that's putting a lot of smoke into that right of way, it can shut down the whole thing.David RobertsRight.Michael WaraAnd so there's kind of an additional need for greater redundancy which will create resilience to wildfire.David RobertsSpeaking of that, I'm going to throw one more twist here at listeners who are now juggling whatever a half dozen acronyms we've thrown at them so far. But there's also something called the Western Resource Adequacy program.Michael WaraYeah, WRAP.David RobertsWRAP. Tell us what that is and how it fits in with that silent w.Michael WaraWell, so one thing to say, another big objection, way back when, was the fear of imposing a capacity market. As you mentioned earlier, David, resource adequacy is an important goal that all utilities or system operators plan for. They need to have enough power available on those hot, in California, it's the hot summer afternoon into evening to make sure that we don't have to do rolling blackouts like what happened in Texas.David RobertsRight. You need enough resources to meet the maximum conceivable demand.Michael WaraYes.David RobertsWhich, as we say, if you're doing it over and over again in each one of these utility islands, just leads to huge amounts of capacity that is idle almost all the time.Michael WaraThat's right. It's incredibly wasteful. So there's a developing program for utilities in the west to try to plan some of that resource adequacy together and sort of share resources more than they have in the past. How and whether this interacts with the burgeoning proposals both from CAISO and from the SPP group to have RTOs I think really depends on the rules in the markets. California has made it very clear that there's never going to be a capacity market in California and that the states that join any RTO created under — by governance change at the California ISO will maintain control over their RA.It doesn't mean that the amount of resources might change. Right. So it might be that you need a little bit less because you're in this larger footprint utility, and the ISO say "Well, we can get by with this much instead of this much plus a gigawatt or something" because we're operating the whole system as one. But what those resources actually are will be determined by the participants and ultimately then by the state commissions that regulate the participants in an ISO or an RTO. That's like kind of a non-negotiable item for California.David RobertsIs there a particular reason that it's so uptight about this particular point?Michael WaraWell, I think it relates back to our earlier point about kind of California wanting to have some real say over the power plants that it's using to meet load. Also, I think it has to do with the observations from the outside of experiences with capacity markets within PJM, especially where there's been litigation over the desire of states to build new capacity in their own state as opposed to having it be controlled by an auction mechanism. I think anybody who's participated in some of these auction mechanisms as a market participant will tell you that they're problematic, very hard to design well. Often in retrospect, designed poorly, and then the market operator is left trying to fix things after the auction, after money's changed hands, kind of change the rules retroactively, and so no one's super happy with them.It may be the least worst thing, but from California's perspective, they don't want anything to do with it. It's a non-starter, and that'll be written into the legislation. Any viable legislation that would allow for power sharing would say, power sharing fine, but there will be no capacity market. And if there ever were, California would withdraw.David RobertsGot it. We've got the energy imbalance market as a little step forward. Then they've got the day-ahead market, which is going to be a really substantial step forward. Beyond that, I mean, I think it's worth pausing just to say that sort of analyses of these things show benefits of the day-ahead market that just dwarf the benefits of the energy imbalance market.Michael WaraYeah, but let me just back up to these studies. Yes, they do. However, the studies that have been done to date typically assume full participation. So they ignore — they're like engineers sitting down to say "What would be the coolest electricity market we can imagine in the west?" Rather than people who are connected to the political process, which is very important in all of this, saying "Who are the most likely partners?" Or I would frame it somewhat differently who are the most valuable partners that California could have in an RTO, and what do we need to do to get those people?And who cares if all the western states join? It really doesn't matter. What matters is and I'll just call out one particular partner, like, what are the things that we can do to induce the participation of Bonneville Power Authority? If you want to think about really successful heavily reliant on renewables systems. Think about like northern Europe and Norway. That is a system that we should aspire to be like where Norwegian hydro balances German and other European wind. Right? And today a lot of that happens. Right. We trade power every day in large quantities with Bonneville. But if we could induce participation of Bonneville and a number of the northwestern utilities in a California ISO that would do an enormous amount to simplify having more renewables on the system.David RobertsRight. So there's the day-ahead market that's being hashed out there's, the resource adequacy program going alongside here and these are all sort of envisioned, I think by a lot of people at least, as steps towards an RTO. So let's pause for a minute and just think about if you're sitting down with a blank sheet of paper today and designing a western RTO what are the sort of main design issues that you want to make sure — because there's not like a set blueprint, right? There's not like a blueprint. You take off the shelf and say here's our RTO.These are all sort of designed in somewhat bespoke ways and would need to be designed in somewhat bespoke ways to fit the values of the participants. So what in your mind are sort of the top issues that anyone designing an RTO for the western states ought to keep in mind? I know that stakeholder input is a huge one, so maybe we could start there.Michael WaraYeah, well, as I look at it, I think we need to design a system that takes account of the real circumstances in the west and that isn't just a cookie-cutter approach. The EIM did an important first step toward that, but the reality is it doesn't go quite far enough. So I would say we should look at what's happened there, look at the successes and failures in the EIM, mostly successes. Honestly, I can't really think of real negatives and start there. But we'd also need to say there's not going to be a capacity market. We're going to give states sovereignty over their resource adequacy as long as they show that it meets the requirements for the system.And then we need to work out some kind of a body of state regulators that has voting rights that reflect the complexity of the west, where we have a few states with very large urban populations that are going to be, particularly in the early years of a California ISO, the vast majority of load and so be paying most of the transmission access charge. But we also need to make sure that states that have relatively small populations have a real voice, not some sort of nominal participation where they don't really have any power, so that they feel less concerned that California might just go on some spending spree and run up their transmission charges because Californians can afford it, and other states are much more price sensitive to the cost of electricity. So to me, this sounds a lot like the problem that the Founders solved with the Senate and the House. It's also a problem that's regularly tackled in international agreements.And the basic model is you say you need two majorities to move forward, you need a majority of states and you need a majority of load to make a recommendation and that's going to ensure that all the recommendations that come forward are really consensus-based and it gives everybody power to shape what happens. Another key kind of governance characteristic, that I think will be ultimately important is to make sure that the states that do participate in this market and in the body of state regulators that will be created have what's called Section 205 filing authority, at least for the really important issues that come up within an ISO and an RTO. And that basically just means that if the board of the RTO were to take some action that the body of state regulators really objected to, just basically the board kind of goes AWOL and starts taking their own independent actions without really consulting and considering what the states want. That the states can go to FERC with a relatively low burden of proof to get before FERC and have their issues considered on the merits.David RobertsOh, interesting. Just pause here and say back in 2016, 2017. Another one of the worries about an RTO is that at the time the Trump administration was in power, it was sort of bullying RTOs to allow more coal and just to be dirtier in general. And some of the RTOs were sort of seen as kind of bullying the states involved, disrespecting states, sort of clean energy goals, basically not giving states their independent due. So that was another of the worries about this is just when you give power to an RTO, you are giving up some power and I guess you just want some guarantees that you're not going to get that the RTO is not going to go bad and start steamrolling you over stuff.Michael WaraYeah. So this is an important reason why not having a capacity market is a good idea, right? That's an insurance policy. So what the Trump FERC was doing was really interfering in a material way in the issues around what kind of power plants exist in particular states within these RTOs. And if you just take that off the table by saying that that's not going to be a question that the RTO is really concerned with, then you can go a long way toward avoiding that problem. But we don't have any guarantees that a future administration will not wreak havoc with western electricity policy.That is possible. And that's why it's important that everybody vote who cares about the clean energy transition. Try to make sure that never happens. But there are lots of ways beyond FERC. I mean, you want to interfere, you could simply eliminate the tax credit provisions in the IRA if you had a cooperative Congress.David RobertsYeah.Michael WaraSo it's a problem that is just present in a country that is evenly divided politically on this issue, as the United States is. And given that FERC has jurisdiction over all the high voltage transmission, right, so it's not just these federally regulated electricity markets where there's a greater FERC role, for sure. But also FERC oversees all of the high voltage transmission in the United States because it's in interstate commerce. Even those vertically integrated utilities that kind of do things on their own. They still have to go to FERC and get approval for things. And if FERC wanted to, they could do things to make life difficult.David RobertsNotoriously in transmission planning, one of the difficulties is cost allocation. Who pays for what? Who gets the benefits of a transmission line and who pays for it? Do RTOs help with that? Would an RTO help smooth that issue?Michael WaraIt can remove some challenges, but it doesn't remove them all. And this is also getting to why having a good participation model for the body of state regulators, which would be kind of a subsidiary body to the board of directors but would provide a lot of input to the board, is important. Some RTOs have been very successful at building transmission to enable build out of renewables. Probably MISO is one that stands out.David RobertsI did a pod on that.Michael WaraYes, you did. And it was a good pod.David RobertsListeners want to go Google that.Michael WaraOther RTOs have been less successful. See PJM's long-standing cost allocation disputes. So I think it just really depends on the context and on creating a mechanism where there's mutual interest in seeing these new transmission lines get built. As I said at the beginning, I think we need to build them. And the ISO in California is building new transmission lines out to even distant other western states. We also need to build a lot of intrastate transmission. Right. And I think if that's the way to get things done, I'm sort of a person who's like "What can we get done?"What's going to push us further down the track toward where we need to be and also create a political and economic situation where there's strong support for continued transition? And I do think that those problems are solvable as long as you don't try to pit people against each other.David RobertsRight. Well, you sort of raised another issue which I wanted to ask about, which is there's a couple of really big utilities in the region whose disposition on this question will be very important. So I think like PacifiCorp and Xcel, for instance, and there's this idea, I think, like, if you listen to Southern Company, say a utility in the southeast, they are busy fighting off these efforts, fighting off efforts in the south to create a more unified market, to take steps towards an RTO, et cetera, et cetera. Even though all the same considerations apply. An RTO would be great for the southeast, for all the obvious reasons, but I think utilities like Southern Company view an RTO as kind of a direct threat to the vertically integrated utility model.What do you think? PacifiCorp and Xcel, where are they on this? And do you think that the vertically integrated utility model is under threat? Once you start this process, once you start going down this road toward more sharing and pooling of resources.Michael WaraWhat I'd say is, it is potentially under threat in some ways, but the question again is, what are the costs and benefits? And does your vertically integrated utility also have an independent subsidiary that builds merchant renewable generation? Right. And PacifiCorp is one vertically integrated utility within a basket of utilities and other companies that are owned by Berkshire Hathaway Energy. And I think BHE is able to take a higher level perspective on what's valuable for all of its assets and what the potential market opportunities might be. But I also think the situation is somewhat different because the west is so different than the southeast, where in the west market access to California is super valuable for some of these utilities.And so I think PacifiCorp looks at the situation and says "Yeah, well, there might be some more merchant generation that gets built in our footprint, but you know what? We could build it, A). And B) then we can sell all the energy to California and meet this, be a part of this really big market that we have trouble getting access to."David RobertsSo you think most of the big utilities in the west, generally speaking, are on board with the general movement in this direction?Michael WaraI think so. I think that the other thing is that it's challenging for a state as big as California with all the generation portfolio that we have to manage the transition to a solar heavy grid. But if you're smaller, that problem gets even more challenging. And so a lot of these utilities are also Portland General Electric or Seattle. Power and Light, I think is —David RobertsCity LightMichael Waraor City Light. Thank you. Yeah. Are looking at what they understand to be their future, right? And saying, "Wow, there's even additional benefit today to being integrated into a larger system."David RobertsYeah. If you're just building fossil fuel plants to satisfy your own load in your own footprint, it's all very simple. But once you start moving to variable renewables, the value, the need for these larger footprints and more sharing just rises and rises and rises.Michael WaraI think that's right. And also the ability to do things that are — to have pretty sophisticated demand response programs, to have the ability to integrate distributed resources and then bid them into the market becomes more valuable. Those are still kind of nascent technologies. But utilities are looking at this problem five years — like I said, they're not thinking about now, they're thinking about five years from now.David RobertsYeah, those things are going to get overwhelming for a single utility to manage, I feel like pretty quick. I've always felt that about distributed resources particularly. It's like —Michael WaraAbsolutely.David Robertsone thing when you have a dozen participants in your wholesale energy market, but what about when you have 1000 or 10,000 or 100,000 with DERs? Things get complicated quick.Michael WaraAnd particularly managing electric vehicle charging in a way that is grid supportive rather than grid destructive. I think it's going to be really important. There's a whole bunch of things that are coming at utilities relatively quickly and there's value in having scale. And a lot of the really innovative policies, like the innovative policies for integrating storage into wholesale electricity markets, those have come out of California.David RobertsRight.Michael WaraAnd ultimately become national FERC orders. But the early experiments happened here and I think there's a greater consensus, at least within the electric power industry, that that is the direction we are heading.And so then that makes participation in an RTO more valuable and particularly in one like California's.David RobertsSo let's return to something I've previewed a couple of times here, which is a little chaos agent in this mix, which is this other RTO, the Southwest Power Pool. SPP is at the, how did you put it, the eastern end of the western states. It has started to do a couple of things. One is it launched something called the Western Energy Imbalance Service, which sounds similar to and is similar to CAISO's Western Energy Imbalance Market. It's sort of a competitor to the EIM and it's sort of out there trying to lure states and utilities into that service rather than the EIM.And then it's also got designs on expanding its own footprint. So basically what you have now that I think is new in the equation is this other RTO out there talking to western states saying "Hey, never mind California, come join our thing, come join our Energy Imbalance Market and then eventually come join our RTO." So a couple of questions about this. Like why? Why does SPP all of a sudden have these sort of imperial ambitions? Why does it want to expand? Why is it doing it now? And then do you think that has a chance of succeeding?You can really see, you could imagine the western states, the western region kind of being split between two RTOs. So what's your take on all that?Michael WaraSo the first thing to say about the two RTO thing is like "okay, fine," there's lots of RTOs in the US.David RobertsRight.Michael WaraAnd the west is a big place. And while certain system planners have long kind of imagined that sort of the apple in their eye, like this one market —David RobertsYes!Michael Waraspanning across the entire interconnect, I don't think the sky falls if there are two. And it may actually be better for some of the parties to be I think there are real tensions that would come up in the body of state regulators, potentially, with having states that really just — it's not even that they don't care about climate. They view climate as a tribal issue, and they're on the other side, and California is on one side, and it's going to be hard to divorce some of those questions.So I'm sort of like, actually, this could be a positive. It might mean that some resources aren't available to California that otherwise would be very economic to have, and that's too bad.David RobertsBut at least everybody involved in the California ISO would be on the same page, right. Moving in the same direction.Michael WaraOr at least sort of roughly. I don't think we can go too far there, but I think that there's flavors of that. So why is SPP doing this? I do think part of it is kind of a desire to expand, just sort of like empire building. But there's also the fact that they're meeting a need. Right? There is a need for greater interstate coordination. The EIM was a market test of that need. It proved that this is really something people want. And the EDAM is another step in that direction to meet that need. And SPP is recognizing that there is a void created by the sort of idiosyncratic governance structure of the California ISO, which is a legacy of the California electricity crisis, remember?David RobertsRight.Michael WaraNone of the other ISOs work have governance that's like this. The reason California has it and the reason FERC tolerates it is what happened in California. And that also when you go to the legislature in California, not so much the legislators because of term limits, but the staff remember.David RobertsPTSD.Michael WaraAbsolutely. I don't know if it's active anymore, but surprisingly recently, last few years, there's been active litigation still over who pays the costs of that debacle. And so the California governance structure is unique because of that. It creates challenges to regionalization that would otherwise not be there if there were an independent board, which is what all the other RTOs have.And as a result, SPP sees an opportunity and they're stepping into it. And so the question really is, does California see wisdom in also stepping into that space?David RobertsKind of puts a clock on things, right? It was either nothing or a western RTO before, but now it's like, you need to move, or your competitor is going to suck up all your —Michael WaraYeah, we'll lose some opportunities. Although I think you see that some utilities do switch RTOs. That does happen. Little Rock, Arkansas, where SPP is headquartered, is not a part of SPP.David RobertsHilarious.Michael WaraBecause the utilities switched out because it didn't like the deal it was getting.David RobertsSo it's not permanent. Like these things are fluid even after the —Michael WaraThey can be there are significant costs, and I think especially, and this is important to emphasize, there would be very high cost for California to withdraw. Might be easier for another state that's a smaller part of it to switch out of California as RTO. But once you get rid of your control room, you're kind of committed, or you have to move to another person's, another entity that has a control room.David RobertsAnd I also hear worries about basically like, if SPP hoovers up all the states that California will be isolated in, this growing reliability problem that you alluded to earlier, this sort of serial crises, this growing duck curve, et cetera, et cetera. It's going to be that much harder to solve those problems if California remains isolated. Just if CAISO as an island amidst a larger SPP, do you give any credence to those worries?Michael WaraYeah, I mean, I think California as an island is not a situation that we want to be in. I'm a little bit skeptical that that's going to happen in the near term. And if it were to start to happen, I think that California, that would increase pressure on California to respond by creating a pathway toward shared governance. I guess that the other thing I would just sort of say about all of this is that people in California tend to be really afraid of this shared governance idea of sharing power. But I think we need to be confident about what we've accomplished, how that has changed where other utilities think the future lies, and in our ability to persuade other states and other utilities to come with us on this journey.And I think we can.David RobertsOn the politics of it, I forgot to ask this earlier, but I just throw it in now. There was a bill this session to restructure CAISO along these lines to take the first big step toward an RTO, and it ended up not advancing. And then, like the week after it died, Governor Newsom came out and endorsed it, which I think was puzzling to me as an outsider. What's going on there? Like, is Newsom on the side of the angels here? Are there internal political dynamics that are worth kind of calling out?Michael WaraWell, I think what happened with that bill was that it was essentially a reintroduction of the thing that did not pass in 2017 rather than an attempt to update it to the new circumstances. And so that was not perceived favorably. However, the issue is one that Newsom's team views as important. Remember, these are the people that have had to deal with the serial emergencies that have occurred on the California grid. The buck stops with Newsom. He understands that if there are rolling blackouts, à la Texas, he's politically accountable for that. And there's a sad history of what happens to governors in California that no one wants to go anywhere near.And so I think Newsom's team has long been supportive of this, but maybe not ready to step out and publicly say that. And the point at which this bill was going to fail was the point at which Newsom decided that this is something that he had to get involved in. And so without supporting the bill, what he is supportive of, and this is I think, where many of us are, is the process is developing a workable proposal that can pass, that addresses some of the legitimate concerns and that keeps us moving. And so it's my understanding that at the staff level within the administration and also at the agencies, at the CEC and the PUC, there's high level attention being paid to this issue that's going to hopefully produce something that can pass.David RobertsRight. So you think the politics are good, there's momentum going —Michael WaraWell.David Robertsthe big stakeholders are on board, more or less.Michael WaraLet me be clear. I think the politics are still challenging. Anything that unions are opposed to in California —David RobertsRight.Michael Warahas challenging politics.David RobertsAnd is there any prospect of bringing them on board, of persuading them? Like I'm sure the arguments have been made to them a million times. Are they immovable on this?Michael WaraIBEW is the shop union, is the union for the California ISO. All the California ISO employees are in IBEW 1245. But I think the bigger issue is the building trades and how the people that do all of the work that is not electrical when you build a big utility scale solar farm. And there the question is going to, I think, ultimately going to turn — and this is also actually where having the governor involved is really useful and important. The question is going to ultimately turn on what else do the building trades need?David RobertsRight.Michael WaraAnd is there a trade where the governor's team feels like giving something along some other dimension is worth it —David RobertsI see.Michael Warato get this value?David RobertsInteresting.Michael WaraBecause it's never just one dimensional, it's never just one thing that any organization as complex and powerful as the building trades needs.David RobertsI say. I've always found this comes up again and again, the sort of opposition of the building trades to clean energy bills in a bunch of different states. Somewhat mysterious to me because it just seems to me like of all the worries you might have about a clean energy transition, a shortage of building work should be at the bottom of your list. You're just going to build a crapload of stuff everywhere, everybody, all the time. It seems like an odd worry. Like, if anything, the building trades are going to be overwhelmed with the amount of work.Michael WaraWell, trades are generally supportive, like trades supported SB 100 trades are generally supportive of a lot of the clean energy legislation in California. They're worried about moving stuff out of state. And I guess the thing that I point to, and I think the issue that I feel California legislators and other stakeholders should be most focused on is the reliability question for the following reason: I'm old enough to remember the aftermath of the electricity crisis in California, where the basic political response was to roll back all the things that had led to that series of rolling blackouts. And what I worry about is a sustained heat wave in the context of a drought in California where we have significant rolling blackouts.And the political response to that is rollback of SB 100 goals. And I think that is not something we should rule out of hand.David RobertsWow, that's dystopian.Michael WaraI don't think it's dystopian. I mean, electric reliability is incredibly important, particularly in a heat wave. People will die. Like, there are real near term concerns with that kind of a reliability crisis like what happened in Texas in February of last year or two years ago. It's totally unacceptable.David RobertsWell, yeah, and you look at the response of the Texas legislature and it does not augur well for —Michael WaraWithout weighing in on their inadequate response, I would hope that California would have a more substantive and adequate response to a crisis like that were it to occur. I actually have confidence that we would, but I do think that it would raise real questions about particularly that last 20% of the SB 100 goal. And I don't want to see those. I want to see us succeed. And I want to see us do the things where we execute on that goal, ideally ahead of schedule. And so reducing risks is an important part of that. That's the reason why I think building trades should support this, because it's going to allow us to build more stuff.Like it avoids a situation where we have an emergency stop or at least an emergency pause.David RobertsRight, that's a good point. Final question here is and it gets to the schedule as you just brought up, whatever happens in this process of taking steps towards an RTO, it's going to take a while, as you said, late 2020, as earliest, probably more like 2030. There's a dire, immediate need for more transmission and better transmission planning in the western region. And I think everyone can agree that it would be really bad if all of that waited until 2030 to get started and if California didn't start regional transmission planning until 2030 when an RTO was in place.So are there ways to get more regional transmission planning going parallel to this RTO effort?Michael WaraThere are, and you see some of it in the current transmission planning process at the California ISO. So one alternative option is to begin to build transmission lines that are owned and operated by the California ISO, but which exist in other footprints. And that's something that has started to happen. It's happening with respect to connecting Wyoming Wind or a big slug of Wyoming Wind to California. I think we may want to think about that for sources of clean, firm power as they develop in the western interconnect. There are a lot of interesting geothermal proposals in Nevada and in Utah.And without weighing into the nuclear conversation, there's some news. A lot of the small modular reactors are going to get built in Utah first. And so how we leverage our existing transmission to these states, as the coal units that were the original rationale for it shut down, and whether we construct new transmission on the California dime where California recognizes paying for these lines, no one else's to interconnect new sources of especially valuable supply to California demand. I think it's something we need to look at in the near term. The good news is that the California ISO over the last couple of years has really pivoted from being pretty reluctant to build new lines to being maybe making some parties uncomfortable with the ambition of what they are proposing.And I think that's healthy. I think we need to be very ambitious in the near term because these lines take so many years to build and we need to be looking at where the puck is going to be, not where it is and thinking about systematic build out of the system to incorporate much larger renewable shares. And the ISO is moving aggressively in that direction. I think there's still room for them to move, but they are off the base and running, so that's good.David RobertsThank you so much for coming on and walking through this all. It's super fascinating. There's just so much going on in the electricity system. Everywhere you look. This is a really interesting little subdrama chapter here, so thanks for walking through it. Michael Wara of Stanford. Thanks for coming on, Volts.Michael WaraPleasure. Thanks for having me, David. Great to talk to you.David RobertsThank you for listening to the Volts podcast. It is ad-free, powered entirely by listeners like you. If you value conversations like this, please consider becoming a paid Volts subscriber at volts.wtf. Yes, that's volts.wtf so that I can continue doing this work. Thank you so much. And I'll see you next time. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.volts.wtf/subscribe

Will the US clean-energy transition be hampered by a shortage of electricians, plumbers, and skilled construction workers? In this episode, Betony Jones, director of the DOE’s Office of Energy Jobs, talks about the challenge of bringing a clean energy workforce to full capacity and the need for job opportunities in communities impacted by diminished reliance on fossil fuels.(PDF transcript)(Active transcript)Text transcript:David RobertsNow that the Inflation Reduction Act has lit a fire under the clean-energy transition, a new worry has begun to emerge: can the US create the workforce it needs to build all of this stuff? And can it care for the fossil fuel workers who are displaced in the process?Across the trades that will be necessary to build out clean energy — electricians, plumbers, construction — industries are reporting worker shortages. Meanwhile, entire communities are being disrupted and displaced by the closure of refineries and other fossil fuel facilities.What can the government do to help growing industries create the job pipelines they need? And what can it do to help cushion the blow to fossil fuel communities?To get to the bottom of these questions, I contacted Betony Jones, the director of the Office of Energy Jobs at the Department of Energy. She has spent years thinking about clean-energy workforce issues and working with industries to create shared job training and apprenticeship programs. We talked about the jobs that are coming, the jobs that are going away, and the need for an active hand in smoothing the transition.With no further ado, Betony Jones. Welcome to Volts. Thank you so much for coming.Betony JonesIt's great to be here. Thank you.David RobertsYou know, ever since the Inflation Reduction Act passed and the rest of the legislation sort of like kicking off a new era of clean energy acceleration, I've been thinking about what are the remaining kind of now the policy log jam has broken, what are the remaining impediments? What are the remaining dangers? And I've sort of narrowed it down to the four Horsemen. The four or four horsemen of the clean energy apocalypse political blowback, which is basically Republicans taking back over and undoing everything NIMBYism, which is the difficulty of building all the things we need to build interconnection queue and transmission i.e. making the grid big and robust enough. And then, fourth, workforce issues. I'm going to try to do a pod on all these eventually, but we're here to talk about workforce issues. So just by way of background, maybe start by telling us what your office is and what it's for and what it's intended to do.Betony JonesFirst, I just want to say when the Inflation Reduction Act passed, that was really game changing for someone like me who's been working at the nexus of climate change and labor issues for so long. And so to answer the question of what my office does, the Office of Energy Jobs at the U.S. Department of Energy is responsible for a few things, but one of them is making sure that the jobs that are being created from these historic investments are good, quality, family sustaining jobs that people want. And so writing the rules around the funding and how it goes out the door and how it's made accessible.David RobertsWas the office created by Biden, or has this been around a while?Betony JonesThis iteration was created by Biden, but it has also been around for a while. I think Obama had an Office of Energy Jobs, and so did President Trump. But our office is really focused on, first and foremost, making sure that the investments are getting out into communities, that the investments are creating broadly shared prosperity and good jobs for American workers, and that we're investing in new industries in the domestic supply chain to provide the materials and equipment for this clean energy transition. So that's really exciting. It's actually just an absolutely incredible opportunity to show that we can address the climate crisis while creating real material benefits for American workers.David RobertsYeah, you're really at the nexus there. That's a white hot area. So when I think about workforce issues and the clean energy transition, there's sort of two sides of it. There are the people in communities who are going to lose fossil fuel based jobs, and then there are the people in communities that are going to gain clean energy jobs. I want to start with the latter, although we will return to the former later. So there's all this work to be done electrifying and everything else. But I wonder, do we have a clear quantitative understanding or projection or good models or a sense of exactly what the job shift is going to be? I.e. Like how many jobs are going to be created in what industries, how many will be lost in what industries, or is there so much uncertainty that we're sort of adapting as we go?Betony JonesThere's always uncertainty because nobody can tell the future. I mean, my office puts out the U.S. Energy Employment Report every year, which is a backward look at energy jobs. And we can see some trends in that backward look. But in terms of forecasting, that's really challenging to do. For the bipartisan infrastructure law, it's difficult to determine where exactly some of these investments are going to take place because for the Department of Energy and most of the energy investments, they're competitive. And so different private sector companies compete for funding, and then they decide where it is that they want to build their hydrogen hub or their battery factory or what have you.And so it's hard to determine exactly where those jobs are going to be. But we do know that a lot of them, and I would say probably 75% of them are in the construction sector. And so this is traditional jobs. This is laborers and operating engineers, the folks who move heavy machinery, earth moving equipment to prepare the ground for these things or drill the geothermal wells. They're electricians, plumbers, pipe fitters, iron workers. These traditional construction occupations. And it's not that different building a battery factory from building a data center or building a hospital, for that matter.Construction is construction. The jobs that are created are mostly in traditional occupations sort of regardless of the technology that's being deployed. For the Inflation Reduction Act, this is the really game changing legislation because of the way that it's structured with tax incentives, so we expect to see those investments pretty much everywhere. Now, obviously for things like wind and solar geothermal, you're constrained by the location, by the availability of that resource geographically. But if you're building a factory to make solar panels or battery cells or EV charging stations, you're much less constrained geographically. So that's one thing.I mean, communities all across the U.S. are competing for those types of investments and then at the same time and this maybe gets to the first part of your question there's fossil assets that can be repurposed for some of the things that we're trying to develop now. And so there's a lot of attention on how do we repurpose those fossil assets, these facilities that have grid connections, that have water and other resources, that have a workforce and a community that supports that. So that's another area of focus.David RobertsYeah. The reason I ask is just because a theme I'm going to return to again and again is just the difficulty of guiding this stuff with policy on any sort of macro scale. That's kind of something I want to interrogate a little bit. But as you say, this legislation that Dems passed we expect ought to create a surge of new jobs in the trades, in pretty conventional trades. And yet all I hear or read in the news is the trades telling us that they face a huge shortage of workers, that they can't find new workers, that the pipeline is drying up, that there's like a million jobs for every applicant, et cetera, et cetera.So I guess I want to know why is that? Clean energy aside, why doesn't — you would think a market like this is what markets are supposed to do, right? Like when demand for something increases, the market produces new supply. So what is going wrong here that we have these shortages?Betony JonesWell, a little bit of it is who you're hearing from. So there are employers out there who can't find workers for sure, and then there are others where there's a line out the door for the opening. You have these established firms with some, you know, where a worker feels like there's some reliability. Siemens, for example, or GE, they can generally fill their positions. The other thing is registered apprenticeship and in particular the union apprenticeship programs. I am being told that even now with this historic low unemployment, they have ten times the applicants as they have openings for.So what that really shows is that people want jobs but they want good jobs. And so if employers are counting on paying yesterday's wages or counting on the labor market from pre-pandemic, then yeah, they're going to struggle to find workers. But the employers that have a good track record, unionized firms, union pathways into construction as opposed to just general construction, but the pathways that provide reliable access to the middle class, the ability to buy a home, to go camping on the weekends, have a garage full of toys, whatever, people want those jobs. And so the more that we can make sure that we're creating those kinds of jobs, jobs that people are excited about, that they want, it shouldn't be a problem to attract workers.Is there a bit of transitional pain? Sure. But I think that that's okay because we're in a ramp-up. We're at the bottom of a ramp-up phase. And so what's really exciting, I think, is that we have this big boom. This inflation reduction act is really significant, not just in terms of the greenhouse gas emission reductions, which is huge, 40% by 2030. I've been working in climate change for over 25 years, and I never thought that I would see that actually. So it's really significant in terms of the greenhouse gas emission reductions, but it also is significant in terms of its ability to transform our economy and rebuild a lot of these jobs that historically have provided pathways to the middle class for workers without a college degree.And so the fact that this is all happening so quickly, yeah, it's an abundance of riches and we have to do some work to realign the labor market. But it's also a great opportunity because there's a lot of buzz and it's a really exciting time to get into energy.David RobertsThat's what kind of breaks my brain, is that on the one hand, we have all this hype, all this talk, all this new legislation, et cetera, et cetera. And then on the other hand, over here you have electricians saying "Hey, we have a graying aging workforce. We don't have enough young electricians. We're falling short here." Trying to fit those two things together in my head is what kind of doesn't compute.Betony JonesWell, I think that's exactly where this is an opportunity because, yeah, there is sort of this silver tsunami in the trades, and it hasn't been an area of work that parents have pushed their kids into for a while. And that's also true with manufacturing. But now with these investments tied to actual labor standards that will make sure that these are good career track, family-sustaining jobs, that's going to shift. The promise of a college degree has changed. It's no longer the reliable path to the middle class that it has been. And so we're seeing even people with college degrees going into apprenticeship programs where not only do you not have to take time off work to go get trained because you're earning as you're learning, but there's also no tuition associated.So you're not going into any debt. You can tomorrow go sign up, get into a registered apprenticeship program. You start earning money immediately. You get to work with your hands. You get to see the fruits of your labor. There's a lot of people actually who want to do that. And so this wealth of investments that we're making really, I think, shows workers, young people or people looking to transition in their careers, that this is a pretty stable area of work to get into, that there's going to be investments for a while. This is a reliable career path, and I think that's really attractive to people.David RobertsYeah. One of the articles I read, it says the Bureau of Labor Statistics estimates that there will be 80,000 job openings for electricians every year until 2031 as we electrify everything. My own 17-year-old son is seriously considering going into the trades instead of college.Betony JonesAnd how do you feel about that?David RobertsBecause of all the stuff you mentioned, working with your hands, making decent money, not going into debt. And of course, he's like, I don't want Zoom meetings. I don't want cubicles. It's not just that blue-collar life maybe is looking a little better these days, but also that white-collar life is like "ugh". Young people aren't all that excited about it. Yeah, so we're thrilled. Of course, he's a teenager, so we're trying not to act thrilled. But the Bureau of Labor Statistics also says that the manufacturing sector is short 764,000 workers. So just catching up from that deficit plus all the new growth prompted by IRA to me just says that these labor markets, these particular labor markets in the trades, are going to be tight for a long time.Betony JonesThey're going to be competitive for a long time. They're going to be competitive. And I think they'll compete with other sectors for workers like warehousing or the service sector. These sectors that have traditionally relied on low-wage labor are probably going to feel a bit more of a pinch than they have for decades, because now there's manufacturing and construction work that have the ability to pay more, be more stable, be more rewarding.David RobertsBut I see you would think if you're a company in one of these areas and you're short on workers and you're competing for workers, one of the things you could do to compete for workers would be to make the jobs higher paying union jobs. And you would think that would attract people. And yet it just doesn't seem like that's spontaneously occurring to many companies. Instead, they're complaining to the press about entitled workers and asking the Fed to raise interest rates to weaken the labor market. What would it take? And now you're here basically saying it's got to be policy forcing, basically, or using incentives and tax credits to force these companies to make these decent jobs.Why is it just habit of having crappy jobs in these sectors in the US? Like, what is it with US employers and the resistance to the sort of obvious solution of just making the jobs better?Betony JonesYeah, I think there is some habit there. And to be honest, we don't have a lot of really strong policy levers. We have carrots and carrots and carrots and we're trying to use those. And I think this administration is really committed to helping companies to provide better jobs. I mean, certainly at the Department of Energy, we bake job quality into our funding guidelines because we know that these companies are really only going to be successful if they are able to attract and retain the skilled workers that they need. And so we want them thinking about that up front.And we're not the only agency doing that. But I think there is habit. There's decades of anti-union sentiment. Some startups say to me, I don't know why, but I've been made to believe that I should never talk to unions or that I should fear that at all costs.David RobertsYeah, it's just ambient now among that class, I think.Betony JonesI think for a long time in the clean energy realm, we've thought about the lowest cost as the solution to the climate crisis. And that lowest cost sometimes usually comes on the backs of workers and lower wages. And there's been even a concern among climate advocates that better jobs are going to slow down adoption or slow down deployment. And so I think that it's pretty entrenched and not just among employers. And I think this administration and certainly the passage of the Inflation Reduction Act puts that theory to the test because the Inflation Reduction Act passed in part because of the labor standards, the prevailing wage requirements, and apprentice utilization standards that are tied to so many of the infrastructure investments.David RobertsAnd I would be remiss if I didn't also insert here that states pioneered those kinds of policies, including my own home state of Washington were really early in doing that, in tying the sort of level of tax credits to the level of worker agreements and things like that.Betony JonesRight. I mean, it makes sense, right, because when people see a future for themselves in a low carbon economy, it's much harder to remain resistant to that transition. But for decades we didn't design our policies that way except at the state level where some states were innovative.David RobertsRight. Even that it's pretty recent at the state level. Yeah. So the traditional ding you hear when you talk about workforce issues, one of the things you often hear is we're asking the country, the workforce, to move away from jobs that are really well paying and unionized to jobs that pay less, basically to worse jobs. The idea is that solar and wind and retrofit jobs and solar installation jobs are just worse than the jobs that are being moved away from. And this is one of the things that creates immense resistance among unions because, you know, not unreasonably, they want to keep the good jobs and are not induced by the promise of less good jobs waiting over the horizon. So do you feel like that's changing or will change?Betony JonesIt does have to change. Again, employers that are paying well with some career stability for workers do not have the same challenges with recruitment. And we have data that shows there's a lot that shows that that's the case. And it's also true that solar jobs don't pay as well as fossil jobs, but they also don't pay as well as just general construction jobs. So this effort to drive down costs of renewable energy has been really important for increasing adoption, but it has not been helpful for fulfilling the workforce needs of that industry or building a nimble workforce that can transition from one technology to the next, which is really what we're going to need.We don't need a massive workforce of solar installers or wind technicians or EV charging infrastructure maintenance workers, we need people who are able to perform tasks associated with those technologies, but not only that, who can also pivot when the incentives for solar decline and something else picks up that they can pivot to another job. So I think the narrow focus on clean energy workers as if they can only do one thing has been detrimental to building the broader workforce that can do more of these things and also making clean energy jobs compelling. Because right now, if they're lower paying and less stable and you have to travel all over for work, that's just not very attractive for very long for workers. And so it has to change and it will change.But the other thing that is changing is that clean energy, while we might think of solar panels and wind turbines as these iconic symbols of clean energy, now clean energy means so much more than that. It means battery factories for electric vehicles and EV charging infrastructure all across the US. And geothermal.David RobertsGeothermal!Betony JonesYeah. I love Geothermal. I love Geothermal because it's such a direct —David RobertsEverybody loves geothermal.Betony JonesDo they? That's news.David RobertsWell, everybody in my tiny world.Betony JonesWell, we should be friends. The workers who maintain the fossil infrastructure, those skills are directly transferable to geothermal and so it's a really great opportunity for transitioning workers, whereas the workers from a natural gas power plant, that is a pretty different workforce from building a solar farm.David RobertsHydrogen hub.Betony JonesSo there's some technologies a lot we're investing in now. Yeah, hydrogen hubs are another example where you have much closer alignment between skills from the fossil industry and the clean energy. And not just the skills, but some of the employers are the same. Some of the fossil fuel companies are the ones who have the resources to invest in some of this new clean energy. So that could also help.David RobertsSo over time, as these labor markets are tight and employers are competing for workers, there's going to inevitably be a movement to make the jobs better, if only just to attract the workers. In some sense, that's just like the normal operation of market capitalism at work. So my question to you is to what extent can public policy speed that up? To what extent do you have levers that can induce employers to improve their jobs, that can create maybe like, programs to onboard people into these areas? How big of a lever is public policy relative to what are huge macroeconomic trends?Betony JonesYeah, so we have our funding, but I wouldn't say that's the strongest lever that we have.David RobertsThe carrot?Betony JonesYeah, we have the carrot. We have the 62 for DEO, the $62 billion for energy infrastructure through the bipartisan infrastructure law, then another $30 some billion through the Inflation Reduction Act. And there's the tax credits that are tied to, again, prevailing wage and apprenticeship standards. So we have our funding levers. And those are significant, I think especially the Inflation Reduction Act lever is significant. It will kind of move the needle for construction job quality, I think. But we have these other levers, too.Or maybe lever isn't the right word, but the federal government has real great convening power. And so one of the things we're doing to address manufacturing, and battery manufacturing in particular, is to bring together employers and unions and other experts in the field to identify what are the skills required to manufacture battery cells? And then we'll look up and down that supply chain and can we get to some industry consensus? And the argument that we make to employers is this there's no coherent system of workforce development for advanced manufacturing in this country. And so what that means is that every employer is responsible for training their own workers and there's nothing really to keep their trained workers working for them as opposed to going to work for a competitor.David RobertsRight. You invest in the worker and then the worker goes somewhere else. And that's inducement not to do it in the first place.Betony JonesRight? So there's this free rider problem. We can move away from that because workforce doesn't need you're competing on so many different areas. Workforce development, workforce doesn't need to be a point of competition. We're trying to rapidly grow this industry and facilitate the ability of American companies to compete with Asian companies in this space. So let's take workforce development out of the competitive arena for manufacturing and figure out what are the skills that everybody needs. So there's always going to be 15% or something that's proprietary, but what's the 85% that's not? And then how do we standardize that, communicate it to community colleges or support the development of new apprenticeship programs that will really support the rapid growth of that industry. And so that kind of thing where you're building industry consensus and trying to do that in a really rapid way to get these training guidelines to support the development of a whole new industry that's I think a really powerful tool that we have and that we're using.David RobertsIt seems like other countries, specifically European democracies, I guess specifically, I'm thinking of Germany. But I'm presumably not only Germany are sort of better at this than us. There's more sort of like bringing industries together and doing this sort of common work and setting up institutions for training people that go into these. Are there models from other countries that you think are really promising in terms of trying to not just shift a workforce so that it's ready for a booming industry, but to do so purposefully and quickly? Are there other models in other countries?Betony JonesThere are models, but I would say I more look at the success of other countries. So Germany has a really robust apprenticeship system. They have seven times the number of apprentices per capita as the US has. And it's a really valid training pathway in the eyes of parents and students and workers. And I think we need to build up our apprenticeship system to get there. But the challenge of looking at other countries is that the context is so different. Other countries, I was talking to a roundtable of embassy people recently and I was talking about our approach with the Inflation Reduction Act and the Bipartisan Infrastructure Law and they were just floored that all we have is incentives.They were like, can't you just require this? Like what?David RobertsYou just got to explain budget reconciliation to them. It all makes total sense.Betony JonesRight. I mean, the context is just so incredibly different that our solutions really do have to be American made. But there are examples in the US that work really well. So I will refer again to the construction industry and the system of registered apprenticeship. Let me just tell you for a second why this is such an incredible system of workforce development. One, it's privately funded.David RobertsThis is here in the US you're talking about?Betony JonesHere in the US union apprenticeship training for construction occupations. It is privately funded by both the employer and workers. Workers take money out of their paycheck to fund the next generation of training. And so the people enrolled in apprenticeship, they work out in the field, learning on the job while also taking classroom training. And they're paid from the get go, they're paid from day one and their pay increases as they acquire skills and training. And so they have this articulated trajectory of pay until they graduate three to five years later with their journey card.That is a transferable industry recognized credential that they can take anywhere in the country and get work. And so again, it's privately funded. Employers are putting in money and workers are putting in money. And that ensures that the system is accountable to the employers in terms of the skills that it's providing people and accountable to the workers in terms of realizing that they're going to get more money as they advance in their career development. And so that system works really well and it's collaborative. A bunch of employers contribute to that same system of training and then they can draw workers out of that system of training when they need them on the job.How do we translate that to new industries? How do we expand that model for manufacturing?David RobertsWas that born of some kind of public policy nudge, or is that just something the industry developed itself over time?Betony JonesOh, my gosh, that's a stumper. I don't actually know. But it has been around for a very, very long time and it serves everybody well. It's sort of one of these things. If it was developed today, it would be like the greatest social innovation. It would be all over the headlines. It's this incredible system. The unions put $2 billion a year into apprenticeship training.David RobertsOh, wow.Betony JonesThat's the contribution of workers and then there's an equal contribution from employers. It's not dependent on public policy. It's not dependent on the whims of philanthropy. It's not dependent on anybody. It's built into the system to make sure that the construction industry will be able to retain and grow a skilled workforce continuously.David RobertsBut on the other hand, the Bureau of Labor Statistics also says that the construction industry is short 413,000 workers.Betony JonesI like your stats, and BLS is a reliable source. But the thing is, the construction industry is not very heavily unionized. So on the one hand, we see ten people seeking apprenticeship openings as there are positions for. Ten people for one position. Why can't apprenticeship programs just accept more people? If they have ten people who want in, why don't they just bring ten people in?David RobertsRight.Betony JonesIt's constrained by their ability to put people to work. So if they don't have a project labor agreement to build the thing, then they can't guarantee a job for that person they're bringing into apprenticeship. As they get more agreements and as more construction activity gets built union, then that system of training can expand rapidly. And we've seen that in the past. It's very, very nimble. It can scale, but it is driven by demand. And not just demand for construction workers, but demand for union construction workers.David RobertsIt sounds like the slow pace or the anemic state of unionization in the US is a big part of what is creating this backlog or this appearance of backlog or this sort of choke point. Would you like to see and maybe you aren't allowed to say, but would you like to see other kinds of policy? I mean, are there other things that Congress could do to accelerate unionization or to support unions that you think would have the sort of side effect of accelerating the clean energy workforce?Betony JonesSure, Congress can do whatever they agree to.David RobertsOr can't, as the case may be.Betony JonesBut there was an early proposal, I think, to tie the electric vehicle tax credits to union made, or at least have some higher level tax credits and bonus credit if the vehicle was made in the US and made union that got stripped out, that would have helped. Right now we have Davis Bacon is the law that applies to federally funded construction work. So for construction, if you're using federal dollars, there are certain labor standards and wage standards and reporting standards that you have to meet.And then in the Inflation Reduction Act there's wage standards and apprentice utilization standards. But beyond construction there's nothing statutory to nudge more work or to make it easier to unionize. Ultimately, unionization is the choice of the workers. But there are a number of barriers, ever increasing barriers, to support unionization. So it has actually been the National Labor Relations Act was passed in 1935 and that act says quite clearly: It is the policy of the federal government to support worker organizing and collective bargaining because the quality of bargaining power is important to the free and fair conduct of commerce.Or some 1935 language that I'm not paraphrasing very well, but it says explicitly it is the policy of the US government to support worker organizing and collective bargaining and yet lawsuit after lawsuit and decision after decision have kind of cut away at that right of workers.David RobertsYeah, I wonder to sort of loop this back in. So there's this story in The Washington Post about how during the pandemic and post-pandemic, basically inflation kind of brought down the purchasing power of upper income people and labor market tightness raised the wages of lower income people. And as a consequence, the inequality gap in the US shrank by a crazy amount in a crazy short period of time, which you might think, woo! But in Rides, Powell and the Fed who say explicitly the rise in worker wages is a problem, we have to solve this problem by raising interest rates.So it seems like we have a macroeconomic institutional setup that is intrinsically hostile to raising the wages of blue collar workers. Even as with the other hand of the federal government, we're desperately trying to improve those jobs. What do you make of that? Is that resolvable?Betony JonesI mean, I can see how one would draw that conclusion. I don't know. I think there's a lot of barriers to trying to improve job quality, particularly for workers without a four-year degree. And all I'll say is that I don't think we can achieve our ambitious clean energy goals without doing that and that employers will, whether they do it because we're now asking them to or they do it because they eventually realize that they have to. The labor market is competitive. The balance of power has shifted more to workers after the pandemic or during the pandemic, and I think workers are asking for more from their employers.If you're an employer and you want to find and be able to retain a skilled workforce, you're going to have to make some investments in that workforce. And think about workers really as something that you're investing in and not this disposable commodity, because that's not a recipe for success, to be just churning through workers that employers aren't willing to invest in the skill, development, and advancement. I mean, you think about things like batteries or advanced manufacturing. This requires a really high level of skill. And right now, the way that that work is structured is to bring in low-wage workers to do very rote work and bring in foreign workers to do the skilled work.And there's no transfer, there's no knowledge transfer happening. That's not going to work. Once we have 100 battery cell factories across the country, we're going to need to invest in our own workforce if we're going to be successful here.David RobertsAnd also, I think, worth noting here is we can remember back to sort of globalization draining away these high-paying jobs and the federal government responding. I remember Bill Clinton sort of responding with this sort of hand-waving about worker retraining. This was kind of a mantra like, oh, retraining, retraining. We're going to help our workers adapt. And to my understanding, those federal worker training and retraining programs just have an abysmal record. And so, consequently, jobs were degraded, people got kicked out of jobs, and there was an immense and still ongoing political backlash. So you would hate to see like a decade of transition to clean energy followed by a backlash against the sort of low-wage labor it's involved.Betony JonesAnd sometimes, I mean, not just accounting for the track record of those programs in terms of job placement, but sometimes massive training programs can actually have the opposite effect, where even during the ARRA period, we invested tons of money in solar training and other clean energy workforce training. And what happened then is that we sort of flooded the labor market with basically qualified people who couldn't find work. And so that drove wages down, right? That people were competing with each other and trying to get a job. That drove wages down. That served the industry, or it served the employer part of the industry, but it maybe hurt the industry long term because now people think of clean energy jobs as unreliable or as volatile, and that might not have helped us long term.And so this time around, Congress passed these policies with very little money in the way of workforce education and training. There's very little. There's a few programs for a few things, but most of it is money that we're investing in the infrastructure itself, in the implementation, the deployment, the demonstrations. And so employers need to think about how they're building workforce development into their implementation plans because there's not just this massive pool of public funding to go train a bunch of people and hope that they find their way to jobs. This time it's much more demand-driven in order to ensure that there's good calibration.And even if Congress were to pass or put some money into workforce development, the timing of that is more likely to align with when real jobs are going to be created. Because right now, there's a lot of construction planning happening, engineering happening, but a lot of the construction is yet to materialize. And then the manufacturing jobs are even a little bit further away. First, you have to build the factory before you can staff the factory. So we do have a little bit of time to kind of reorient the labor market to meet the demand for these positions.David RobertsBut the overall message here is this is not going to be a thing where the federal government steps in and sort of spends a bunch of money taking charge of the workforce itself. You're basically convening private industry and trying to help them and train them and show them how to develop these programs themselves so that they become kind of self-sustaining?Betony JonesYeah, I think it's an all-hands-on-deck. I mean who knows what Congress will appropriate in the future? But right now we're not dealing with a lot of public money for workforce development and so we are looking at how do we engage strategically? There's a massive community college system out there, 8.5 million students. There's a massive apprenticeship program out there, there are states and there are workforce boards that are funded through the Department of Labor. How do we align all of this existing workforce infrastructure to meet some of the needs of the clean energy sector? That's where I'm thinking more.I don't think we have as much power when we have a million dollars to spend and we go train 26 people but if we have a million dollars to convene and corral the massive community college system out there then we're getting somewhere. So it's just what resources do we have available? And that's just an example by the way, we're not spending a million dollars —David RobertsIt seems like —Betony Jones— to community colleges.David Robertscommunity colleges for their own purposes have all the incentive in the world to try to get smart on this and to try to orient themselves toward the big burgeoning jobs of the future. I'm sure they're hungry for guidance or are they? It seems like they should want this.Betony JonesAbsolutely and it's hard. Guidance is hard to develop. Getting industry consensus for an emerging industry, that's challengin. And so yes, people want that because they want their curriculum to meet employer needs. They want the students that they train to be able to find work in their community. So yeah, people are hungry for the guidance and I think that's a really valuable thing that we can do.David RobertsOkay, my attempts to goad you into badmouthing the Fed having failed, let's move on into one other thing, which I didn't leave all that much time for. And it's really, really huge subject, but maybe we can just sort of say some broad things about it, which is the other side of the coin, which is fossil fuel jobs going away. If you count not only sort of direct fossil fuel jobs but all the kind of second-order peripheral jobs around fossil fuel jobs serving fossil fuel workers, et cetera, et cetera. There are a lot of those and there are communities that depend on those fossil fuel jobs almost completely.And there's been a lot of hand-wringing about this, about what to do with all these workers that are going to basically be pushed out of jobs if we do the clean energy transition successfully. I hear a lot of talk about this and I hear a lot of happy talk about how we're going to retrain them to work in geothermal or whatever. But the scale involved, I have not yet seen anything that seems of the scale of the problem. So are these sort of like fossil fuel worker retraining programs, are they just like nice brochures? Is there any prospect of having a humane response to that problem at scale?Betony JonesWell, there has to be the prospect of it, and I think that's the thinking around and talk around a just transition. We can't leave people behind. It's not the right thing to do, and it will slow us down in terms of building political will to do more of the kinds of things we need to address the climate crisis. So it's not just a moral imperative, it's just a pragmatic issue. It's not just jobs. It's the fossil fuel industry's hold on the economy, actually the tax revenue for communities that are dependent on those industries. There's a lot of issues beyond just the jobs that threaten or pose risks too.David RobertsYeah, I mean it's their schools, it's public services. It's all sustained by fossil fuel money in some of these places.Betony JonesSo our approach is really, like, looking at economic redevelopment and diversification. There is no one-for-one replacement for a fossil fuel facility in a community. Like, I live in a county that has five refineries.David RobertsOh my God.Betony JonesThey are at risk at some point due to transportation electrification. There's no single industry that can come in and replace that economic base or those jobs. So then the challenge is economic diversification. And how do you retain an industrial base for blue-collar workers? It's not all just transitioning to the creative class or something else. How do you retain an industrial base in these communities?And I think that advanced nuclear carbon capture and storage, direct air capture, hydrogen, some of these technologies that we're investing in provide those opportunities because they aren't necessarily dependent on a resource. They can be anywhere. So why not locate in a place that can use existing assets, including the infrastructure but also the workforce? There's a whole interagency working group that is really looking at how to serve energy communities, how to connect them with resources, how to make sure we get this transition right and create new opportunities for workers.David RobertsLet me ask about that because you wouldn't expect jobs in those new industries that you're talking about to sort of spontaneously align with lost jobs, right? You wouldn't expect them to sort of spontaneously line up with the places that need to replace fossil fuel jobs. So aligning them has got to be active, right? It's got to be done by someone and a) sort of like whose job is that and how does it work? And b) sort of like do we have a track record of success? Everybody's talking about this return to industrial policy, which is fantastic.But industrial policy involves a lot of really difficult questions that we have not necessarily done great on in the past. And one of them is like trying to match new jobs to the places that most need them. What are the kind of instruments you can use to push that alignment?Betony JonesWell, one, I will say the track record of success is really with military base closures.David RobertsRight.Betony JonesAnd there's a whole process that they follow so that they're not just leaving a community high and dry. And so again, there's domestic examples that we can think of. Aside from fossil fuels there's this massive transition underway in the automotive industry where the places where we're seeing new investments in battery factories are not necessarily the places that were supplying the parts and innards for internal combustion engine vehicles. And so in some of our grants and Congress gave us language to do this, we can create extra incentives for projects that are locating in communities that have or had an automotive facility. Or repurposing, I think there's funding for repurposing automotive factory supply chain factories, for battery factories.So there's some levers in order to kind of put the thumb on the scale of locational decisions and then some of it is getting the word out around what are the assets of these energy communities and getting that in front of investors and people who are looking at where they can set up shop. And that's what the Interagency Working Group is really doing, like trying to draw investments to these communities.David RobertsYeah. What I come back to again and again is the scale of these macroeconomic trends relative to these policy interventions you're talking about is the thumb on the scale. I have no doubt that in a few years there will be a few success stories you can talk about like oh look, this factory closed and this one opened. But does that seem adequate to the scale of the problem? Does anything seem adequate to the scale of the problem? Is there more you would like to see or more you think the government could do?Betony JonesYeah, I think that's a good question. I mean, I guess I approach this with a bit of curiosity. I mean, for years again working on climate change, I sort of knew that we weren't doing enough to combat the crisis and yet I kept working on it. And then we got like a pretty significant bill adopted to reduce greenhouse gas emissions by a lot if we're able to get through some of these hurdles that you're going to cover in your podcast series. And so I think right now, me and I think others are trying new and creative things, partnerships, bully pulpit, levers with the funding that we have and with the authorities that Congress has given us.And we're studying what works, and we're trying again and we're looking at what it's iterative. I feel incredibly optimistic. It might be because I don't have time to read the news or the headlines, which are always all so negative, but I see the kinds of things that we're putting into place for the long haul, and I sort of like I kind of can't imagine how it won't work.David RobertsWell, let me raise one possible way that it won't work, as my special talent is imagining problems. And this is probably not something you're going to want to answer since it's political, but one of the —Betony JonesThere is a big reason why it won't work.David RobertsYes. It's called the Republican Party. But let me flesh that out. One of the big trends we're seeing and there's been a bunch of headlines about this since the passage of IRA. IRA has spawned already billions and billions and billions of dollars of investments in factories, et cetera, et cetera. And most of them, the bulk of those investments are in red states. Most of the new investment is going to red states. And red states sort of notoriously have this kind of low unionization, low wage, you're on your own.Betony JonesYeah, they're all right to work states.David RobertsRight to work states, et cetera, et cetera. So in a sense, the Biden administration's quest to make these high paying unionized jobs is, it seems to me, going to run into red state's long-time habit and ideological commitment to worker precarity, lack of unions, low wages, high churn. There's this article in the Washington Post the other day about, "Oh, why are red states hiring more?" And then they looked more closely at it, and then "Oh, they're just hiring and firing more" because there's more churn, because these are crappy jobs —Betony JonesPeople are quitting.David Robertsmove through them more quickly.So do you worry about that? Do you have any way to circumvent that? Do you see any prospect that Republican policymakers might change their tune on those issues to attract those kind of jobs? What are your thoughts on that?Betony JonesYeah, I mean, you're right that it probably is too political to weigh on some of the specifics, but I do think that the Inflation Reduction Act is designed in such a way that I think Americans who haven't seen why they should care about climate change, their livelihoods, are now going to be tied to somebody caring about climate change. And how does that not sort of shift the way that people think? Not that people always vote in their self-interest, but —David RobertsI mean, Florida is sinking under the water and they're still — self-interest.Betony JonesBut again, your livelihood is tied to a battery factory and the electric vehicle transition, it has to change a bit how people think and how lawmakers think, I don't know. I mean, the other thing is red states. Companies are locating in, quote, red states for a lot of reasons. But I don't think it's primarily because they're right-to-work states or because they're cheap labor states. It's usually because the permitting is quick, they can break ground quick, and they can get going quickly. And maybe there's some tax credits thrown in as a cherry on top.And so there's a lot of factors that go into locational decisions. But I think, like, if you take Tennessee, for example, tons and tons of investment, well, that's going to make the labor market tighter, more competitive, and that will ultimately give workers more power. And so how do we change this dynamic? Some of it is going to be — the drive to organize your workplace going to grow right now that's seen a resurgence. Is that going to continue? Are workers going to feel empowered to ask for more? And how is that going to be a differentiator between companies in a state or between states?David RobertsWhat a fascinating dynamic. That will be fascinating and terrifying to watch. Well, I've kept you for too long. Let me finish with a sort of general question about your broad feelings about this area. So my analogy is sort of there's a lot of worry these days about the material specifically like minerals and metals requirements of clean energy. And there are a lot of sort of specific issues and specific problems and the solutions are not necessarily obvious or ready to hand. But generally my feeling is like, that's going to work itself out. Like of all the things that capitalism is good at, substituting materials and finding materials, is really good at that.So I can't necessarily give you chapter and verse why, but sort of my strong feeling is like in 10-20 years we'll look back and be like "Oh, that just sorted itself out." Is that how you feel about the workforce issues or does your worry run deeper? Do you worry that this could be an actual bottleneck, an actual slow work to slow the transition? What's your sort of general level of optimism about this stuff?Betony JonesFor the clean energy transition, I'm not at all concerned because I think there's the capacity of these jobs and industries to compete really effectively for workers in the broader economy and labor market. Where I'm concerned is like, am I going to still be able to get cheap takeout? Or like workers will come from somewhere and are they going to come from the service sector where we've gotten really comfortable with very low-cost services.David RobertsRight.Betony JonesSo that's more likely, I would guess, to be where things are going to change. But I would also say this, this is an incredible opportunity to get more workers who face systemic barriers to employment off the sidelines and into the labor market. There's workers with a history of incarceration that have a very hard time finding work. Can these jobs be more accessible to them? Or to veterans? Or to youth who've been funneled into these four-year degrees, taking on enormous debt, not being able to find jobs? Is this more opportunities for workers like that? Or for women who have sat out since the pandemic because they can't find good childcare?This is actually an opportunity to tap more of the full talent of the American workforce that hasn't been able to access it because of one barrier or another. And if we think more broadly around the workers that are available, if we do a little bit of work to help reduce some of those systemic barriers that are keeping people out, I think then I really don't worry. But I don't worry anyway.David RobertsSo we have the people.Betony JonesI think so.David RobertsThis is super interesting. I'm going to maybe slightly downgrade my worry about this particular horseman and compensate by worrying more about one of the other ones.Betony JonesWorry about permitting.David RobertsI worry about that plenty. Okay, Betony Jones. Thank you so much for coming on and talking with us. It was great.Betony JonesThanks for having me.David RobertsThank you for listening to the Volts podcast. It is ad-free, powered entirely by listeners like you. If you value conversations like this, please consider becoming a paid Volts subscriber at volts.wtf. Yes, that's volts.wtf so that I can continue doing this work. Thank you so much. And I'll see you next time. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.volts.wtf/subscribe

In this episode, Jenifer Fernandez Ancona of Way to Win discusses the ins and outs of Democrats’ notoriously ineffective political messaging, and what needs to be done about it. (PDF transcript)(Active transcript)Text transcript:David RobertsIf there is one thing upon which almost everyone in US politics agrees, it is that Democrats suck at messaging. They constantly find themselves on the back foot, struggling to respond on culture war issues that make them uncomfortable. Biden's approval rating remains abysmally low and the enormous accomplishments he and congressional Democrats have secured despite the barest of majorities remain almost entirely unknown to most of the public.But why? What exactly is the problem with Democratic messaging? That is where the agreement breaks down.Is it too liberal or not liberal enough? Has a young vanguard distorted the party's perspective and alienated it from swing voters or is an old guard holding back a diverse new coalition? Is Democratic messaging using the wrong words and phrases, or is the problem that it simply doesn't control enough media to ensure its messages are heard?To dig into some of these questions, I wanted to talk to Jenifer Fernandez Ancona, the co-founder, vice president, and chief strategy officer for Way to Win, a Democratic research, analysis, organizing, and fundraising group that came together in the wake of the 2016 election to make sure its mistakes were not repeated.Way to Win just released its final report on the 2022 midterm elections, digging into who exactly bought advertisements, where they ran, and what they said, as well as how they performed with various demographics. I’m excited to talk to Ancona about what Democrats are saying, what they’re not saying, who’s hearing it, and how they can do better.So with no further ado, Jenifer Fernandez Ancona, welcome to Volts. Thank you so much for coming.Jenifer Fernandez AnconaThank you so much for having me.David RobertsI'm excited to do this because like anyone who's followed U.S. politics for many years, I have beefs about Democratic messaging and theories about it and all sorts of stuff to say about it. And I found over the years that everybody has a lot to say about Democratic messaging and everyone feels that they're an expert on it. But what I've come to see over time is most people, probably including me, are full of it and are just going off instincts and hunches and projecting their priors overinterpreting their own particular epistemological bubbles on and on and on.So I'm extremely glad to have, I think, probably the closest thing the world has to an expert on this subject, on the pod to discuss it by way of bolstering that claim. Before we get into the details, let's just talk about Way to Win. Like, why did it come together and what has it been doing since the 2016 election?Jenifer Fernandez AnconaWell, we came together essentially in the wake of that election when we felt like the same strategies that led to that complete failure. And honestly, a lot of the losses that we had seen over the course of the last four years across the country at the state level and local level, that we needed new strategies to change, that we weren't going to get out of this crisis using the same strategies that got us into the crisis. And that is what we were hearing as we were in Democratic big, major donor funding circles at that time, a real inability to recognize that major shifts were needed and an unwillingness to even confront what had led to Trump's rise and ultimate power.David RobertsAnd one wonders what could shake people out of that kind of complacency if not that.Jenifer Fernandez AnconaExactly. Yeah. So a bunch of us came together, and it was those of us who had been working in the field of trying to bring more resources to movement building, progressive movement building, multiracial coalition building. Especially. We had Tory Gavito, who was one of our co-founders, who's now the CEO of Way to Win. She came from Texas. She's in Texas and was part of trying to, over time, flip Texas blue and had learned some really important lessons in the past few years. And we just felt like we needed to nationalize this idea of taking the fight to different places.So we got so stuck in a battleground state world, which was really focused in the Midwest, and yet so much of the population growth is actually happening in the South and Southwest. And we saw the importance of states like Georgia and Arizona coming into power, but not enough resources actually going there. So that was one of the things, is, like, we need to re-imagine the map and actually expand the places where we could go to build power and to take power from Republicans. So we were some of the first coming on the scene to say we need to put major resources into Georgia, just as Stacey Abrams initial campaign was going, but it wasn't on the map of most national political organizations.They still weren't talking about Georgia or even Arizona. So we were part of that. And we were saying we have to push into places like Texas as well as North Carolina, Florida, places across the South and Southwest that are growing and changing. So that was one thing. The second thing was funding politics in a way that actually leaves something behind. So when you only fund candidate campaigns, as you know, there's nothing left at the end of the day, the candidate wins or loses. There's no infrastructure to keep going, so you have to start over. So we wanted to create a way for donors to fund electoral victories in the short term, but that would also build toward the long term.David RobertsI think they call that losing well.Yeah, exactly. And knowing that if we're going to build in a place like Texas, we're going to lose statewide a few times, but we're winning in local areas, we're flipping counties, we're flipping congressional districts, we're showing how you can build over time. But then funding organizers, leaders, and groups that are going to be there the day after the election to continue to keep fighting. So that was two. And then the third thing was having essentially a three-part strategy, but a comprehensive strategy that would ensure not only we have, like I was saying, base expansion, community builder, power builders working in cities in states and actually growing and building a base over time also that the purpose of winning power is to pass policy.Jenifer Fernandez AnconaIt's not just about electing a democrat. We want to make sure that we're arming the communities in that place with the tools and the ability to actually push for policy, whether it's democracy, climate education, et cetera. And then the third part, which I know you're interested in, given your intro, is that we have narratives that shape the multiracial diverse coalition that we have. We need to be going toward inclusion. So we want to make sure that we're winning, but not in a way that is more divisive or causing different groups to fall out of our coalition.We need to continue to grow and forge this multiracial coalition that we have, our winning coalition. And we do that with a narrative strategy that is all about building across those differences.David RobertsRight. So it is this latter part I want to focus on this sort of research you've done, on what messages Dems are using and how they're hitting. But before I get into that, I want to address my main hobby horse in this area, which I come back to again and again, which is I come up in the climate area. So I'm most familiar with the sort of agonizing, over climate messaging that has been going on and on and on and on as long as I've been following this area, and mostly has manifested in endless research and resources put into these kind of focus groups where you get a group of college students in a room and you read them various paragraphs and then you see which ones they react well to, and then you wildly over interpret that as some sort of messaging strategy. In other words, this sort of obsessive focus on what words are we using, what are the words and phrases, is it national security, is it home and hearth? Like what's the right themes? And I have come to think over the years that this a little bit misses the forest for the trees in that the reason the right wing seems to dominate this kind of messaging sphere and that they're always on the attack and the left is always on the defense is not their cleverness, they're not particularly smart.A lot of their messages are quite stupid. They just are repeated over and over and over and over and over and over and over again in your face, everywhere you look. So in other words, it's not the cleverness of the message, it's ownership of the means of distributing messages. And that's Fox News, that's OAN, that's all the local newspapers they're buying up. All the local news stations they're buying up. Basically, right wingers are running Facebook now. Basically right wingers running Twitter now. I mean, they're just on a march through media, dominating media. And if you spend the money and exercise the power to dominate media, you can get your messages in the heads of the public, even if the messages are super dumb.So I guess what I want to ask you is, is this a fair dichotomy, this dichotomy between the sort of messaging focus versus capacity to get the messages out? Do you think that's a fair dichotomy? And how do you sort of view the balance between those, or, like, how should resources be divided up between those?Jenifer Fernandez AnconaYeah, it's a great question. The way I see it is not that it's not a dichotomy, because it really, I think, has to be both. And how I would think about dividing it is a good question, but I would say how we think about it is we absolutely need to be building different modes of ownership of media. Like, it should be a huge part of our strategy. We haven't focused on it enough. The right is certainly beating us, so I'd say we're behind there. I think we have to put significant resources there, but it really can't be the only thing, partially because that takes time to grow and build and we have low hanging fruit on the table.Now, that I think that's what I've really been focused on is how do we actually build a process that can understand where voters are through research, then make content that tries to reach them in an emotional way, and we can test that content. There's lots of tools that can help us see what does this actually move people the way we want to move them. So there's a lot we can do. Now, I think that's not about necessarily being clever or finding the right words. It's like, can you deeply listen to the community you're trying to move?Can you hear from them? Where are they actually? And not just trying to test in a poll with some words and see if they like what they hear. It's more like understanding how they think. It's like deeply listening is what we call it. And we use a lot of research tools that actually are much deeper than you would get from a focus group or for sure a poll. We use a lot of online panels where people actually you can kind of get underneath how they think. So that's what we're sort of about, like, how do we actually figure out what's underneath what people really, truly want, and then how we can speak to it in a message and then test that to see does it work or not?So for me, it's not about necessarily finding the right words, but it is about finding the right kind of frames and the right overarching argument that we're trying to make. And then it absolutely is about repetition, repetition, repetition. So I think we can do it at the same time we can get better and smarter about how we actually do our message work. A lot of Way to Win and a lot of our partners that we work with do. But it's not the norm of the Democratic establishment or major campaigns right now that's what we're trying to do is influence and push in that arena, because I think there's just low hanging fruit that we could actually reach do better.And I think that the midterms is a good example of where we actually did that. And so that just gives me hope. And we can talk about that if you like, but that experience just gives me hope that there is a way for us to get more aligned overall across the ecosystem, whether it's candidates, the president, groups on the ground, activists, et cetera. If we're all kind of rowing in the same direction on our message, it doesn't have to be all exactly the same words, but we're kind of saying the same thing in a big picture argument way that can actually break through.David RobertsHerding cats. Famously difficult to do on the left.Jenifer Fernandez AnconaIt is. But like I said, we did it in the midterms. I mean, we should talk about it as an example of what we did, because it was really interesting.David RobertsLet's get into that. I want to come back to the capacity question later, but let's get into that because I think the thrust of your report was that the midterms were a success story in terms of Democratic messaging, which you don't hear. Success story and Democratic messaging don't go together a lot.Jenifer Fernandez AnconaSuccess and warning signs.David RobertsI want to ask a semi specific question. So going into the Midterms, I think there was a piece of conventional wisdom among Democratic elites which went something like this the sort of positions of power in the Democratic coalition, the staffers, the people who are actually out there doing the work. That class has been kind of taken over by a young, very diverse, highly educated, highly liberal set of young Democrats who just talk to one another and convince one another that everybody's as liberal as they are. And they've sort of taken over the messaging, they've taken over the party's posture.And what they don't realize is that whatever Joe average voter, Joe average mid-state voter, those concerns and things that they value don't resonate with him. So there's one story that goes the Democratic establishment has been taken over by lefties and they're alienating everyone else. And I sort of want to know a couple of things. Like a was there a lot of lefty messaging in the Democratic advertising going into the midterms? Like, were people actually out there saying defund the police and make immigration legal and all these kind of things. A was that the face the Democrats were showing the public?And B is that the way the public actually does view the Democrats as sort of captured by their left flank, too far left? In other words, sort of like is the kind of rising left flank a vulnerability for Dems in terms of kind of messaging and posture?Jenifer Fernandez AnconaI really don't think so. I mean, my position is a couple of things. I think that those of us on the left and myself included, I consider myself progressive. Way to Win certainly has been funding a lot of progressive groups over time. So we're situated in that. We're progressives. We consider ourselves part of the left and the folks that we talk to in our coalitions really don't see things that way. I think we're very clear who our coalition is. Right? And it's ideologically diverse and it's racially diverse and it's diverse in terms of age too. And a lot of those things overlap, of course, but it's fundamentally a different task than the Republicans have.When you're looking at we have 42%, 43% of our overall people who voted for Biden are not white. And then on the Republican side, it's 92% white. Right. So they're essentially trying to consolidate one group while fracturing off as much as they can from the other. We actually have to hold a really big coalition together, white voters and all kinds of different voters of color. So it's just a fundamentally different thing. And there's a lot of ideological diversity in that. So I think we understand that that right now it's an anti-MAGA coalition, really. It's like against this kind of MAGA Republican.And that was partially the success of the midterms was making that clear. So I will say, number one, I think we're very clear what our job is. And we don't see the idea of a median voter. We see it in this diverse coalition way and needing to hold it together. Meaning you don't want to have messaging targeted to one part of the coalition that completely turns off and demobilizes the other. Right. You have to actually figure out how to get both to be persuaded and mobilized to vote for Democrats.David RobertsYeah, well, you have both factions basically accusing the other faction of using messages like that. Like your messaging excludes me. No, your messaging excludes me. Is there some magic message that doesn't exclude either of them?Jenifer Fernandez AnconaYes. I think we found it in the midterms when we talked about we need to protect our freedoms. We have these MAGA, extreme Republicans who are trying to take our freedoms away and it's our job to actually come together. We did it before, we rejected Trump, we can do it again. That actual overall message really worked for both sides. But back to your original question absolutely ridiculous. Because when we looked at the midterm, like you said, it's called TV Congress's report that we did, which looked at the paid broadcast advertising, which unfortunately is still a huge amount of money, it was like about around $600 million that we studied on both the Senate and just the Senate and the House on both sides.And so when you look at that spending, even on the Democratic side, just looking at Senate, it's $296 million. And looking at those ads, who's controlling that? It is not young, quote unquote, woke lefty liberals, okay? It is old school. A lot of consultants who've been around for a really long time, media firms, they are the ones who are driving this message. It is also not liberal. I mean, what's so fascinating to me about this debate within our party is it's like it misses the actual bad guy, which shocker, is the Republicans, okay? It's the Republicans who are lifting up defund the police, who are lifting up bad immigration narratives, who are talking a lot about crime and all of these racially coded things and attacks.It's the Republicans who are painting us that way. So if there's a perception among our voters, which frankly there is, unfortunately, we still see it even today, there's a perception that Democrats are too liberal or Democrats don't care about you. It's not because of what Democrats are actually doing. It's because of how lockstep Republicans are in their messaging. I mean, it's absolutely mind boggling when you just see the amount of money that they spent trashing Biden, Biden, and Pelosi in their midterm advertising. It was over $200 million just attacking Biden.David RobertsYes. Even though Biden was notably not up for election.Jenifer Fernandez AnconaYeah, because they care about brand. They are trying to trash our brand, and they did it pretty effectively. And I think that plays into Biden's approval ratings being so low.David RobertsBut what would you say, though, they do use defund the police. I think it's fair to say that people on the right probably said the phrase "Defund the police" ten times more often than any liberal ever said it anywhere. Yes, but a few liberals did say it. You know what I mean? So they did get that ammunition from liberals. And so the argument ends up coming down to sort of like, on the one side, people saying liberals should stop saying stuff that's so obviously out of step with the mainstream, and then other side saying, well, you can't prevent all liberals everywhere.You just don't have that. Kind of like if a single liberal somewhere saying something goofy results in like a ten week Fox News campaign about it, there's only so much you could do. You can't control every liberal everywhere. So how do you think about that?Jenifer Fernandez AnconaWell, it's a different job. It's the job of movements to push the boundaries on what's possible. It's the job of movements to fight for their own lives, to fight for the things that they need and want. That's a fundamentally different job than winning elections. So those of us who are focused on winning elections. We actually have to just work with it. And that is what I think is our philosophy is like I was saying, we have a diverse coalition. We have to move them. So how can we actually figure out what they need and want? How can we talk to them in a way that they can hear?Because we can actually make the case on things like community safety, for example, which is where that defund piece comes from. Ultimately, when you actually talk to voters, they don't like that kids are being shot by cops unarmed. They don't like it. It's not popular. Like voters actually don't like that. In our own coalition that we're trying to move, they care about it. They care about violence. They want something to be done. And what the problem is I think that we've really been saying in which we said in our report, is like, we actually need to embrace it a little bit more.We need to figure out how to make comprehensive arguments on all of these things, whether it's crime or immigration or gender and LGBT issues, because what we've too often done is just ignore it. Like, think it's going to go away, dismiss it, try to focus on something else. Oh, it's just got to be about kitchen table issues. We can't actually address those things. We're not actually going to talk about crime, even though that's what the other guys are talking about. That's probably one of the biggest mistakes that I haven't seen us solve yet, and that is the focus of 24.David RobertsOne of the other big themes in messaging debates these days is you have, I think, I guess they're called popularists. I don't know if any of them still want that label or if that label means anything, but there's a group of people that say basically like Dems have a core set of issues on which they are extremely popular and they tend to be "kitchen table" issues. We're going to protect Social Security, we're going to give you better health care. We're going to put you to work. Economics and health, basically kitchen table issues. And by this way of looking at things, anytime Dems sort of focus campaigns on other stuff, typically culture warish issues, they suffer.And so what Dems should do is stick to their strengths, stick to talking about issues where they know they are popular. And insofar as they get drawn into these other debates, they're going to lose. I have so many questions about this narrative, including like, what the hell counts as a kitchen table issue? If I'm a young woman, abortion is an extremely economic issue for me. It's something about which I worry at the kitchen table, as a matter of fact.Jenifer Fernandez AnconaExactly, yeah. What kids are reading in school and how their teachers are treating them and what books they're banning are also kitchen table issues these days.David RobertsRight, but the conventional wisdom is sort of like these core economic and health issues or where Democrats should stick.Jenifer Fernandez AnconaRight, it's wrong.David RobertsA) you think that's wrong but first I'd like to hear sort of like did Dems do that in the midterms? Did they stick to those issues or what did they do instead and why is it wrong?Jenifer Fernandez AnconaRight? This is what I would say. It's another false dichotomy, honestly, to say it's got to be kitchen table versus culture, because it's all swimming together right now and we're not going to be able to have a conversation about one thing when the other side, which you noted has a very large set of megaphones and channels, is going to talk about the other thing. You can't ignore it. Politics isn't solitaire like our friend Anat Shenker-Osorio likes to say. So you have to know what the other side is saying and you can't expect to have a totally different conversation.What we looked at in the lead up to the midterms, because we knew this was going to happen, was figuring out how to actually tell a story that does merge these two ideas together in terms of an economic, focused narrative and that also addresses the contrast of what the other side is trying to do. So it was a structure that involved sort of three parts. One is really just saying what you're for leaning into what we believe in this case, the things Biden has done created all these millions of jobs. Democrats came together and passed this amazing Inflation Reduction Act.Like there were a lot of things we could point to of like this is what we tried to do, we actually did. We created millions of jobs with better pay and better benefits. These were think concrete things we did. Number two, you pointing out that the Republicans have completely gone off the deep end and this is what they're focused on. They're trying to ban your books, they attacked the Capitol with violence, all these things. You can actually point to the contrast and then at the end of the day just again remind people the third part that we are a diverse coalition and we came together before to say no to this kind of extremism and we can do it again.And that three part strategy for the message actually really worked in our research to show that it moved folks over toward Democrats whether they were liberal or moderate or even somewhat conservative. And it also worked across black, white, Latino, Asian American voters as well because it's a unifying message that doesn't try to separate these two big topics, whether it's economic, kitchen table and kind of culture war and our freedoms that the Republicans are trying to take away. There really is a way to talk about them together.David RobertsYeah, I mean one thing that should be noted is that Republicans talk about them together, like, Republicans, when you hear them address economic and kitchen table issues, it's always through a culture like everything's culture war. Now it's all woke, right? Like, they don't neatly distinguish between those two areas.Jenifer Fernandez AnconaNo, because they wrap their anti woke culture fear. We call it status threat. That's a term from academia. But status threat, it's like anything around race, gender, to try to make people feel threatened, to try to make people who are economically insecure in particular feel like there's someone else that they can blame for that. It's a way of deflecting blame for people rather than putting it where it should go, which is the actual Republican policy that has led to this kind of economy, which is for the elites, which is for rich people getting all the tax cuts, et cetera, et cetera.But they literally wrap their anti woke status threat messages around a core message about money and taxes and how you're going to get more if you vote Republican. So you're right that they completely merge the two. So that's why I never understand why Democrats think we can't or we can somehow separate them and only talk about one and not the other.David RobertsWell, I just think there's a fundamental and I think this runs deeper than argument. I just think there's a real and this is like, maybe it even dates back to, like, the 90s, when a lot of the Democratic establishment was sort of coming to political age. It's just the very deep sense that the general public doesn't share, like, that Democrats are that their positions on these culture war issues are sort of intrinsically unpopular and they're sort of quasi embarrassed by them. And so there's all this, like, let's just don't talk about that stuff. And that seems to me, as you say, a strategy that is not sustainable over the long term.Jenifer Fernandez AnconaIt's super outdated. It's an outdated way of thinking. I don't think in the age of Trump, when we can see what our coalition is I mean, Trump ignited a huge group of people that were not that engaged in politics before. And we've seen in the data they're still engaged, actually. I mean, the young people who came out in 2022 were the very same young people who came out in 2018 and even grew from there. So there actually is a different playbook that needs to be applied because our task is different, our coalition is different. We're not in the 90s anymore.It's a completely different world. And so you're absolutely right that that way of thinking is super outdated because abortion rights are popular, book bans are unpopular when you talk about it.David RobertsI can't believe they're banning books, and we can't make hay out of this.Jenifer Fernandez AnconaExactly.David RobertsMakes me bang my head against the wall.Jenifer Fernandez AnconaWe should we shouldn't be able to. And like, gun violence prevention reform is popular. All of these things are actually popular with the people we're trying to move. So some of it just comes down to are we actually clear about who the audience is that we need to move. And it includes the swing voters who you may have always thought about, who are a little bit older, but it also includes what we call the surge voters, who are much younger, much more diverse, and there's a lot of them, there's a lot more of them, actually, than the more traditional swing voters.So we got to figure out how to talk to them, but again, not at an expense of the other. So we did find that in the midterms, when we made an argument, look, the midterms were supposed to be a disaster. Everybody said we were going to get clobbered. There was a lot of hand-wringing about whether we should talk —David RobertsReally classic Democratic stuff, just classic Democratic hand-wringing, self-loathing doom saying, it was in full bloom.Jenifer Fernandez AnconaIt really was. But we could see in the data that there was some salient, like abortion was super salient. We saw that even before Dobbs happened that people were really mobilized when you talked about even what the Supreme Court did around the Texas law. So we knew that. And then the democracy issues, partially because of the January 6 hearings, and getting more salience in the minds of voters, the President really making it a priority in what he talked about. We could see in the data that we were looking at a real power in linking those two in a story and using the frame of freedom and freedoms.Because freedom is an American value. I mean, most Americans will say it's their top value, but the left has never actually tried to own it in the same way that the right has that's contested territory. I mean, we can't let them have freedom. And in fact, when you look back at our own history of progress, whether it's a civil rights movement or the LGBT marriage equality movement, freedom has been a powerful frame. So kind of reclaiming the idea of freedom because it's a frame that can actually tie a lot of different issues together. And we paired that with this idea in persuasion that's called loss aversion, which is like when people have something and they think it's going to get taken away, it's very motivating for them to take action.And so we combined those two tactics in the message that said, this election is about these MAGA Republicans who are trying to take away our freedoms, block everything we need, and we as voters can protect our futures and our freedoms by joining together and saying no to them. And that made a huge difference.David RobertsFor all Barack Obama gets sort of beat up in retrospect these days, I thought one thing he was absolutely great at is this loss aversion question. I did a whole pod on what's called "system justification," which is a slightly fancier term, I think, for roughly the same thing. Like, people tend to approve of the larger systems in which they are embedded even if they're sort of on the ass end of it and prospering from it. People are just sort of inclined to be averse to big — like we're going to change the system, we're going to burn it down, et cetera.So what Obama did is frame like the ongoing struggle for greater and greater freedoms and greater and greater equality and greater and greater prosperity spread more widely is the system. That is America. That's what America means. And so when we're doing that we are affirming the system. We're not trying to burn it down. I thought he played that twist really well and I always thought should run with that.Jenifer Fernandez AnconaYeah.David RobertsIn terms of this dichotomy, I'm a little curious where does climate change fit into all that? I mean I think the conventional wisdom on climate change and messaging is just that it's a very very low priority for voters.They don't really care. They don't really want to hear about it. Did you find anything to the contrary? How do you sort of view that issue amidst these others?Jenifer Fernandez AnconaYeah well I mean it's becoming more and more important just because of the rise of especially the Gen Z voting generation because they do really care about it very as you know, passionately and it's not something that they're willing to let go of and not care about. So what we found really is like a) it is important b) in the messaging study that we released there was very little TV advertising talking about the climate provision that Biden had passed, again, despite how popular they were with voters. So that was like a challenge and a miss that I think that we saw in our own research. It was like we didn't sort of quote unquote, try to figure out how to talk about climate but actually more when we listened to voters about what they cared about.Climate did always rise to the top. And again we talked to "gettable" voters across the board in several swing states, we call them gettable because they believed that Biden won the election. So we took out anybody who didn't believe that.David RobertsLow bar there.Jenifer Fernandez AnconaBut they weren't all Democrats. They were a mix. They were a lot of independents and people were there, white working class, Latino, working class, black, AAPI, across different class demographics. So it was a very diverse group of voters. It was about 300 people in qual studies that we ultimately talked to. And it's true that they saw the climate as a part of the future that they wanted.They would see a healthy climate as a part of it. There's also a definite pain that voters are feeling around the climate disasters that are happening and all the changes that are happening. So people are feeling it. I think it's how do you wrap it into the overall narrative, which is the chance that we have right now with all of the legislation that's been passed is actually framing it in terms of the kind of way that Democrats are working for you. Democrats are part of this world we're in right now is, like, we're trying to help people with lower costs.We're creating these clean energy jobs, lowering energy costs. Kind of like how do you grow the middle class? How do you have people feel like things are getting better for them? There's an economic narrative in that that I think climate really fits well into that narrative in terms of it's part of this different future we're creating. I think that's what we saw the most.David RobertsI would also say maybe this is like, getting a little ahead of things and maybe this message will work a few more years out. But in terms of the broader freedom narrative, I've always thought that we put up with a lot of horrible crap from fossil fuels because there's no alternative. They're the only way to get the prosperity we needed and have been for years. But now we have an alternative so we can be free of fossil fuels finally. And that, to me, is a great freedom message. Like, imagine being free of the fumes and all the geopolitical nonsense you have to put up with and just the worst people in the world being empowered, just like all the freedom from all of that.I think that's so fertile, a fertile message.Jenifer Fernandez AnconaI totally agree. And that was always part of our thinking with the freedoms message, that it does apply not just to abortion and democracy. It can apply to all these things, the freedom to earn a fair wage and to have a good life, to retire with dignity, to breathe clean air, to thrive. What does it look like for us to actually get to a freedom to thrive? Having freedom from fossil fuel companies, as you say, is a key part of that. So that's how I see it. The most success we've seen is fitting it into a larger story because your point is correct, that it's hard to focus on one issue like that with our voters.David RobertsYou say in the report, sort of the old, again, going back to sort of old conventional wisdom, and I think this is probably still the conventional wisdom among the aforementioned consultant class. But the idea is, like, you pick your issues, your message, your spin, and you just stick to it and repeat it over and over again and ignore everything else that's going on. And you say that no longer works. You say, we need offense across multiple issues and channels. So what does that mean? What is that mental shift and sort of operational shift that you're referring to there?Jenifer Fernandez AnconaYeah, I mean, one of the things that we talked about in our report was the compare and contrast of two different Senate races. One was Tim Ryan in Ohio and the other was John Fetterman in Pennsylvania. And it's kind of a perfect case of what you're talking about because when you look at what Tim Ryan wanted to talk about, it was China.David RobertsA lot of China.Jenifer Fernandez AnconaA lot of China, like, outsourcing. He hadn't made up his mind about what it was that he wanted to say, and it didn't really mesh with what Vance was saying. So you have Vance talking about, I mean, really, some of the most extreme, horrific, racist —David RobertsGood Lord.Jenifer Fernandez Ancona— sexist messaging. And you have Ryan being like "But I am bipartisan, and I want to work with the other side."David RobertsYeah, lots of, like, "I'm not like the other Dems" talk, which people in purple states just believe in their bones for some reason is going to work and never seems to.Jenifer Fernandez AnconaHe even spent a million dollars trashing Obama. Okay? So that is one thing. And when you look at some of the charts in our report, you can see it's like, here's what Ryan talked about, issue, issue, and here's what Vance talked about, issue, issue. They don't match. Like, there's nothing related to each other. Whereas when you look at Fetterman versus Oz, a different state for sure, but not completely different in terms of Pennsylvania versus Ohio. But you saw actually, the issues that are salient for voters, whether it was economy and jobs, crime, well, really, those two were the kind of the top inflation, crime, economy.Those are the issues that people in the state cared about. Oz talked about them, and Fetterman talked about them. So it was a way that he went on offense. So that was kind of what we were talking about before, where you could imagine, okay, Oz is going to attack Fetterman on crime, which was one of the biggest attacks that happened, and Fetterman could have just tried to deflect it or ignore it or try to focus it on something else. Well, I just want to talk about working-class blue-collar jobs. You could imagine that scenario, and that's essentially what happened in somewhat in Ohio.But instead, the Fetterman campaign, they took it on. They took it on head-on. They had a real argument about their vision for community safety and their take on what it would actually take to make people more safe and to reduce crime. And it involved gun violence reform. It involved things that were really popular for voters. So that's what I mean, is that we actually can go on offense. We have to be aware of what the other side is doing and what they're saying, and we shouldn't be afraid to address those things. Whether it's Vance's xenophobia racist sexist attacks, or any Republican who's coming at us around inflation or crime narratives.David RobertsOr even just Oz making a fool of out of himself.Jenifer Fernandez AnconaI mean, that helped.David RobertsIn addition to the sort of big picture you're talking about between Fetterman and Oz, just on a day-to-day level, the Fetterman campaign just seemed sort of like alive and awake and engaged, like they never let anything go by, even if it was just an opportunity to sort of mock Oz for being from out of state, like they were engaged. And I've always thought and I don't know how you would make, like, a quantitative case for this, but I've always thought one of the big things that Republicans have over Democrats is just that they seem to really believe what they're saying. And they say it no matter what, and they repeat it no matter what, and they just have the strength of their convictions. And that's what you got from Fetterman, is this sense that, oh, you want to talk about crime?Let's talk about crime. Let's do this. I believe in my own crime position, so I'm not going to go running away from you when you bring it up. And just that confidence. I think in addition to Fetterman's sort of general aura of big burly manliness, he just was confident in himself and his own beliefs and that's like, you can't really put a number on that. But so many Democrats just come off as like "What do you want me to say? What do you want me to say? I don't want to offend you." And it's just, like, you can't help but have a little sliver of contempt for people like that.Jenifer Fernandez AnconaYeah, that's absolutely right. And that's the brand shift that I think we're trying to say we need, right? We need to shift to actually making the case for what we already believe and what we already think in our own ideas.David RobertsWhat a thought.Jenifer Fernandez AnconaCoke doesn't run ads talking about how great Pepsi is, right? So we can stop running ads that make us sound like Republicans or that don't actually lean into the conviction of our own ideas. I really think that's a fundamental flaw. It does come from the triangulation, as you noted, and it's dead. Triangulation is dead. It doesn't work anymore. Our political messaging apparatus just hasn't caught up to that reality. There's many of us doing that kind of work, and we're doing great things and we're trying to push an influence, but I think that's fundamentally what it is.At the end of the day, we haven't caught up to the new reality that we're not in the 90s anymore.David RobertsYou cannot repeat often enough how unfortunate it is that an aging cadre elite is running all the levers of power in the Democratic Party is just like more and more glaring kind of how far behind they are from reality. But you are segueing perfectly into my next and one of my main questions and the one I've most interested in and sort of continually frustrated about, which is go back 50, 60 years, really, but certainly to the beginning of your Limbaughs and your sort of dedicated right-wing media. The main, absolute core of their message from the beginning was Democrats are bad. That is their number one thing.Everything else hangs off that that is the theme they return to over and over again. Every news story is used to illustrate that. Like, everything every Democrat says is used to illustrate that. Everything is around that point. Way more than you ever hear "Republicans are good on those things." Like, they often are grumpy about Republicans because they want them to be more farther right. But the one thing that entire side is unified on is Democrats are evil grooming, pedophile, Satan, whatever. You can't go overboard in saying horrible things about Democrats. In other words, they've defined their opponents as bad, which you might think, yeah, seems basic, but if you look at Democratic messaging and you look at Democratic advertising, they hardly ever say that.They kind of put their toe in the water this last cycle, and of course, all these high horses came out like "Oh, we don't want to be like them, and we don't want to be divisive. And voters don't want partisanship. They don't want this us or them stuff. They like us working with the opponents. They like bipartisanship and all this." Basically the way I've reduced this to a single word is branding. Like, Republicans brand Democrats. And Democrats, by and large, do not attempt to brand Republicans despite Republicans giving them so much material. I mean, as we said, they're literally banning friggin books. Now to make a 32 second ad, they literally are banning books for you. You couldn't ask for a better way to sort of say, like, this is who these people are. But we don't. So. Why, Jenifer? Why?Jenifer Fernandez AnconaWell, it's interesting. I really believe and I'll give credit to Dan Ancona, who you also know, my husband, who says that the party brand is an open source process. The party brand is open source. We should all have a say, right? So if you think about it in that way, you can see where some of the challenges are. It's like you've got these different factions of our side, right, and people tend to divide up around issues. As you know. People tend to divide up. We saw the spending in 2021. It was just completely divided by issue.So when all you talk about is one issue, you're not hitting into a larger brand about what this is about, right. You're not actually connecting it into a larger story. So the division by issue is a problem. There's a problem in the way that the Democratic Party establishment is focused or organized in that you've got people mostly working for candidates. So they're trying to provide a candidate brand. They're trying to elect one candidate. They haven't historically, I think that it's a big missed opportunity who is actually trying to brand the Democratic Party writ large because you've got the movement on the outside.They don't necessarily see that as their job. They don't see it as their job to brand the Democratic Party.David RobertsKind of the opposite. I mean, kind of their job is to hassle the Democrats and call the Democrats, sellouts and push the Democrats left, right.Jenifer Fernandez AnconaBut the party itself, it hasn't historically been organized outside of a presidential campaign. You'll see the DNC now starting to come in behind Biden, and there is kind of more larger branding messaging because they're getting ready for the presidential. But in between those cycles, it's the DCCC focused on House, it's the DSCC focused on Senate. It's like, never the twain shall meet. They don't actually talk about, well, what is the larger Democratic brand that we should be advancing here? And so that has been actually the role that we have tried to play a little bit in this outside movement where I sit. But with Way to Win it's much more about, like, we see it as part of our job to help push a larger, across the party inclusive and effective message and brand, especially when there's no presidential cycle because there's really nothing to knit it together right now in the current structure.David RobertsYeah, I mean, if you just go ask normal voters, like, why are Democrats good? Why would you vote for a Democrat? It's amazing how little standard narrative and mythology and just sort of phraseology and just that messaging is not out there. I don't think people could tell you what you end up with is like, Republicans want to be crazy, and voters will go along with them up to a certain level of crazy, and then they'll overdo it, and they'll be like, all right, well, what's the other one? Let's let the other one in for a while.But there's no positive reason for the other one because the other one isn't telling you and also not doing a very good job branding the other side. And this, to me, is crazy. Like —Jenifer Fernandez AnconaCrazy.David RobertsI went through, sorry, a rant here. I told you I had a few rants about this, but I went through the George W. Bush years. I remember thinking, like, after this, the Republican Party brand is going to be destroyed for a generation. Like, they will not soon recover from this. This whole series of fiascos, disasters, lies, scandals. Like, it's just comically over determined at this point that the Republicans are doomed. Ha ha. On me, it took all of two years until the 2010 midterms for them to just be back unashamed. Like, hey, we're back criticizing spending.I'm like, wait, but it was just a few years ago that you ran the deficit through the roof to pay for a war. What about — but what I realized over time is events do not tell their own story, right? The news does not tell its own story. If you want people in general to come to believe that about the Republican Party, that they're bad because of all the things they've done, you have to go out and say it, and no one's going out and saying it.Jenifer Fernandez AnconaWell, it's true. I mean, we saw it in the early lead up to the midterms in 2021 when we were seeing in our data and research like, wow, the Republican brand is really pretty toxic right now in the minds of our gettable voters. When we ask them, what images come to your mind when you think about the Republican Party brand? They literally put up so many images of the actual devil and like, things on fire. So it's true that that brand has tarnished and become more toxic in the minds of people just because of Trump. I think the rise of Trump and January 6 played a huge role in that.But at the same time, we found even in 2021, a resistance to actually calling them out for the January 6 attack. For example, for calling them as extreme as they were. We were saying, look, we're seeing this in the data, people are open to this argument, like we should really be branding them this way.David RobertsYou mean resistance from the message makers, the advertisers?Jenifer Fernandez AnconaYeah, from kind of people in some of the establishment, which is just like, well, we can't really do that. It doesn't really work. We've tried it before. That kind of, sort of we don't want it's going to backlash. There is definitely a timidness and kind of an overall fear, like you had said before, of just leaning into not only what we care about, but having a lot of conviction to call them out for who they are as well. But I will say so we saw in the 2020 Report that we did, the TV Congress Report, it was really wild to us because we saw very clearly the right was calling us crazy.They were calling us extreme, they were calling us radical. That was the most money —David RobertsAfter four years of Trump, is amazing.Jenifer Fernandez AnconaGuess what? We didn't say anything about that. There was one campaign, Lucy Macbeth in Georgia, who talked about their extreme position on abortion. And by the way, she was one of the few that won in the toss up in that district, but in other places they didn't do it. But we did see in our data in 2022 a complete turnaround. So we saw not only they use those words a little bit less, but we use those words much more. I mean, we definitely won that one in 2022.David RobertsDo you have an explanation for that? What was the shift in opinion that caused that? I mean, I know Biden coming out and saying it was somewhat significant, but I don't want to over ascribe too much to him.Jenifer Fernandez AnconaNo, it's like what I'm saying, this is how we can win is when you have people on the inside and people on the outside and people in lots of different campaigns saying the same thing, ultimately we got to it, right? So I was saying there was some initial resistance, but there are a lot of people who pushed we were pushing Anat Shenker-Osorio and her teams were pushing the research collaborative. You had people at the Center for American Progress really pushing the idea of a MAGA Republican and the extreme Republican. There were enough people in different parts from inside the beltway to outside in the movement saying it at the same time.And I think that that made a difference. Ultimately, it's that what I like to call Dems in array.David RobertsBut did here's another thing about Dems. They accidentally did a good thing and accidentally won. Will they learn that lesson and carry it forward? Are they aware that's why they won?Jenifer Fernandez AnconaI think so. I've definitely heard in a lot of the post mortems that I've been to since 22 a recognition that actually being in alignment around what we were saying about the Republicans was important. I mean, we're not totally there yet because like I said with Tim Ryan, we still saw people talking about bipartisanship too much, not actually branding them, but overall, especially in the House, which is honestly what we were supposed to lose, 30, 40 seats. We lost only five. I think people could see we made these surprise gains, and you could look at that kind of message where it was really clear.The branding against them was really clear. I think people are seeing that and saying, okay, so that did work, and that's something that we can do more of. But the warning sign piece is that we have to keep doing that around branding them. And it's not enough just to only attack them. We also have to have a brand for what it is that we're doing, how we want to run the economy, how we're going to make people's lives better. That's the meta narrative about the past few years that we just don't have yet. And that's why we see in the data, 80% of voters can't name one thing Biden has done to make their lives better.Or our Latino focus groups that we just came out of in Arizona, Nevada, saying, like "Nada", nothing they saw, nothing that Biden has done to help them. So that's our challenge going forward. Keep leaning into this branding of them that is really effective around how extreme they are, around MAGA, taking away freedoms, being out of touch, all of that. It's really good. It works. It's a narrative that we have to keep pushing together for 24.David RobertsBranding them and branding ourselves. I think we should all celebrate and lift up the woman from Nebraska. This would be a better story if I could remember her name, but she's in the Nebraska legislature filibustering their trans bill. You listen to an interview with her, and she's just like, "I don't want anything to do with these people. These are horrible, hateful people. They're trying to hurt my kids." None of this like, "Oh, we just disagree about the right vision, and we're all there's no red or blue America." None of that b******t.She's like, they're trying to hurt my kids. And she's just reacting to them the way you would react to someone trying to hurt your kids. Right? Which is like, screw these people, they're horrible. And it's just so refreshingly human. It just sounds human and not —Jenifer Fernandez AnconaIt does.David Roberts— focus grouped to a fare-thee-well.Jenifer Fernandez AnconaWe saw that with Mallory McMorrow, too, right, in Michigan when she went on that rant. So yes, I completely agree.David RobertsYes, speak like humans. Okay, well, we're almost out of time. I just have a final question, which I wanted to return to after bringing it up at the very beginning, which is back to capacity. So you've talked a lot about the kind of meta narrative we need about Democrats and about Republicans and the way to sort of weave together Democratic issues and the way to talk about them. But let's return briefly to capacity. The right has spent many decades very systematically trying to take over as much media as possible and now basically have their propaganda in everyone's face all the time, everywhere.It's going to clearly take a while to reverse or even make a dent in that situation. But what can people on the left do? Because I raise this all the time, and then people ask me, well, like, what do you mean? Should we buy a TV station? Should we start a blog? And I'm like "Oh, I don't really know. My job is just to complain about this. You have to figure out the solutions." But what can the left do to build media capacity that works in the 2020s? Not just sort of like an obsession with cable news.I know this cable news is still big, but like a more broader 360 degree view of the media landscape. Where does the left need to be trying to build capacity and how?Jenifer Fernandez AnconaYeah, well, it's got to be comprehensive, and I think it's a combination of things. I think it probably is a ten year strategy that we need to start now, right? Like, it is going to take time, but we have to do a lot now. We can't wait. We need to buy media properties that includes TV stations, includes radio. There's a really interesting project that's being done in Wisconsin right now where they've bought up kind of all the rural radio stations.David RobertsOh, yeah, I heard about that.Jenifer Fernandez AnconaYeah, that's really interesting. That's a model we could look out for other places. It's not about creating a lefty channel. It's about creating a more neutral channel, actually. It's progressive, but it's not about left versus right. It's actually about building a more of a coalition, like I was saying, across ideology. So that's interesting. There's the Latino Media Network, right? Like, building up in different particular audiences our own channels, which includes a lot of online YouTube, recruiting talent. Like, who are the Shapiros on our side? God invest in now, right? Because there are a lot of talented people out there, and there are people building audiences right now. So how do we support them in doing that? There's the world of micro influencers and people who are building on TikTok and Instagram. I think we need to do a lot more "always on" sort of — it's a funding stream. We have to create, actually, like people are artists and we need to pay them for their work. So we want them to talk about our message. Let's actually bring them in, make them fellows.David RobertsYeah. Are our billionaires — their billionaires clearly get that. They provided a lot of money, steady operational money for years. Do our billionaires get that?Jenifer Fernandez AnconaMore and more, I think you'll see more and more. It's just becoming really clear, and there's a lot of people out there talking about it on our side. I'm seeing a shift in terms of people actually paying real attention and putting real money and resources in. So I think we'll get there. There's a lot of great people doing work in this area. There's Accelerate Change, a group that has been buying up different online properties that either focus on audience or focus on things like news. There's a whole group that's looking at more sort of state-based news, which is a little bit different.Yeah, like state newsrooms, like creating a place where you could actually get real information around state news. That's happening. I think it's called State Newsrooms. That's really interesting. There's a lot of stuff happening, but it is these three things which are: We got to buy up things that exist, we have to build our own things, and we have to try to influence the properties that do exist now, too.David RobertsYeah. Working the refs.Jenifer Fernandez AnconaYeah. So it's a long-term plan, but I mean, that's supporting things like Crooked Media, which is one of our great owned media properties. They have a whole new thing people can do and become a friend of the Pod and support them. That's good. There are things that individuals can do as well as accountability on things like Fox, which we're in a moment now around. MoveOn has a really great campaign on that right now. So there are things individuals can do. Even if you're not a billionaire who can buy up a radio station.David RobertsYou could subscribe to a Substack. Throwing ideas out there.Jenifer Fernandez AnconaExactly. I love that idea. You should give them some links they can subscribe to.David RobertsWell, Jenifer, thank you so much. Thank you for listening to my rants about this, which I've been carrying around with me for years and for actually knowing something and doing real research and pushing on this. So I really appreciate your work. Thanks for coming on.Jenifer Fernandez AnconaThank you so much. It's been great.David RobertsThank you for listening to the Volts podcast. It is ad-free, powered entirely by listeners like you. If you value conversations like this, please consider becoming a paid Volts subscriber at volts.wtf. Yes, that's volts.wtf. So that I can continue doing this work. Thank you so much, and I'll see you next time. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.volts.wtf/subscribe

The podcast host announces the introduction of transcripts for all episodes in three forms. The host also discusses making the active transcripts available for free. Furthermore, a live event in Seattle is announced, featuring a discussion with a clean energy analyst to raise money for Canary.

Maryland passes the Promoting Offshore Wind Energy Resources (POWER) Act, targeting 8.5 gigawatts. Clever policy innovations promise politically resilient and economically just funding. Tax credits in the Inflation Reduction Act turbocharge the process. Discussion on Maryland's offshore wind bill challenges, subsidies conflict, funding and revenue aspects, and progress in passing energy bills. Impact of offshore wind policy and next steps towards transparency and procurement. Procuring energy for state buildings and future plans in Maryland.

Many transit systems are reeling financially in the aftermath of the pandemic, and the situation in California is particularly dire. In this episode, Nick Josefowitz of SPUR and Beth Osborne of Transportation for America discuss the urgent need for the state budget to boost transit funding, and the catastrophic implications if it doesn’t.(PDF transcript)(Active transcript)Text transcript:David RobertsThe pandemic was devastating to America's transit systems — not only the lockdowns, but the enduring shift to working from home that followed. It has left transit systems everywhere desperate for riders and funding.Nowhere is that more true than California. The state’s transit systems find themselves at the edge of a fiscal cliff. If they do not receive some new funding from the state in this year's budget — which will be decided and finalized by June 15 — they are going to be forced to implement dramatic cutbacks in service. Bay Area Rapid Transit (BART) could eliminate weekend service! It’s grim.As anyone familiar with municipal transit systems can tell you, once routes and service are cut, it is extremely difficult to bring them back. And without transit, it will be that much more difficult to build infill housing, get people out of cars, or revive flagging downtown districts.It’s a looming catastrophe — for climate, for social justice, for the state’s reputation. So where is the governor? Where is the urgency in the legislature to prevent this? The deadline is rapidly approaching and the escalating urgency of transit activists has largely been met with silence or indifference.To discuss the crisis, I contacted Nick Josefowitz. He’s the chief policy officer at SPUR, a California nonprofit focused on sustainable cities that has been one of the most prominent voices raising alarm about the situation. And to avoid total doom and gloom, I also contacted Beth Osborne, the director of DC-based Transportation for America, so she could share some stories about states that aren’t screwing up their transit systems.With no further ado, Nick Josefowitz and Beth Osborne, thank you so much for coming on Volts.Nick JosefowitzThanks for having us.Beth OsborneGlad to be here.David RobertsI have wanted to do stuff on transit for a while. It's always been a little difficult to know how to wrap my head around it, how to carve off a distinct issue or what angle to approach it from. But helpfully, reality has served up a horrible crisis. So just a wonderful excuse to jump into this subject. So before we back out to a more general picture, let's start there. Nick, with you. Just tell us, what is the transit funding cliff crisis and how the heck did it come to this?Nick JosefowitzWell, the transit fiscal cliff, as we're calling it, is sort of most acute in California, although it's something that's happening elsewhere as well. And as a result of more people working from home, fewer people are commuting every day. Transit agencies rely in part on fare revenue to sustain themselves, and in California, they rely more on fare revenue than in other places. And as a result, we are about to see massive service cuts for California transit agencies with the big transit agencies in the San Francisco Bay Area most impacted. San Francisco Muni is saying that they're going to have to cut one line a month for the next 20 months.David RobertsYikes.Nick JosefowitzBART is saying they would have to stop weekend service, potentially stop serving certain stations. It's a real mess. And it's the type of mess that once you're in it, it's very difficult to get out of it.David RobertsAnd this was just the natural upshot or consequence of the pandemic and work from home. There's nothing beyond that that came and took money out of the transit kitty.Nick JosefowitzNot really, no. It's really just sort of people commuting less. And so much of our transportation infrastructure and our transit systems were built around the commute, and that's what's sort of driven the crisis. But the fact that we've allowed ourselves to be on the precipice is a decision that we've all collectively made, or that I should say in this case, the state government has made. The federal government stepped up during COVID and provided operating support to transit agencies around the country to help them continue to run buses and trains.David RobertsThrough the infrastructure bill.Nick JosefowitzRight, exactly. Through all the COVID relief bills, there was really meaningful support for transit. But that's run out and there's not any more coming. And now it's really up to the state of California to support transit like other states have done.David RobertsAnd this is really coming down to the wire. So what is the wire exactly? What is the deadline here?Nick JosefowitzSo the deadline is June 15. That's when California is constitutionally required to adopt a budget. And so it's a good 15 days away. And so we basically have, I think, two weeks here to convince the state, the governor, the legislature that this year would be the year that we need to save transit.David RobertsAnd so what exactly are advocates asking the government to do? Is this taking money from some other bucket? Is this just raising taxes? Is reallocating something, or is there a pool of money that they have their eye on? In particular, what precisely would you like California legislators to do?Nick JosefowitzWell, there's really two things. The first one is that in the Federal Infrastructure Act, the IIJA, there was money that was allocated to transportation and it flowed through highway accounts but is eligible to support transit operations. And President Biden, even in his budget memo, said "Hey, states, we gave you this pot of money and you can use it on transit operations if you want." And so we're asking the state to use some of that money that is not allocated yet, over one and a half billion dollars, to support transit operations. And then the second thing is that California has a cap and trade system —David RobertsYes!Nick Josefowitzwhich I'm sure all your listeners are sort of familiar with. And transit is an essential climate strategy. We're almost certainly not going to be able to meet any of our climate goals without massive increases in transit ridership. And so we're also asking the state to take some of the money that's generated by cap and trade and put it into transit operations.David RobertsAnd I bet I'm not the only person that hears it this way. It just sounds weird to be in a blue state, a liberal state, an allegedly climate forward, climate leading state, you're begging them not to let transit die. Why do you have to beg them? Why isn't Gavin Newsom, the climate governor, et cetera, et cetera, why isn't he first in line pounding the table about this? Our legislators like, why on earth has it come to this? Why does this require advocacy at all?Nick JosefowitzThere's a lot of reasons, but I think, like with a lot of things, it comes down to political power. And the grandma on Social Security who takes the bus to go grocery shopping doesn't have a lobbyist in Sacramento and is not getting state legislators elected. And the interest groups, like the folks who the contractors who build highways, they do have many lobbyists in Sacramento and they're very powerful and very sophisticated. And I think it really comes down to that power dynamic. And not just the power dynamic in this moment, but as sort of a power dynamic that has built up over many, many years where the people that transit serves most are the least powerful people in society.David RobertsRight.Nick JosefowitzAnd so there is especially at the state level, they've really struggled to kind of get the state to pony up the resources that are really necessary.David RobertsYou just have to wonder how loud the clanging and banging about climate has to get before that changes. And also the other aspect of this is a lot of this is, as you say, people are working from home. They've abandoned downtowns. And so downtowns are hurting in California. Google San Francisco downtown and spend several days reading apocalyptic accounts. But the thing is, those people that used to come into downtown, at least half of them ish came in on transit. So if the state wants to revive these downtowns, as it alleges to, and there are some pretty powerful interests involved in those downtowns, commercial real estate and stuff like that, and lots of retail, what do they think is going to happen to downtowns if the transit gets cut? Why aren't they at the front of the line?Nick JosefowitzYou're absolutely right. For BART, for instance, 80% of BART trips start or end in downtown San Francisco, downtown Oakland or downtown Berkeley. And the geometry of downtowns in California don't allow them to actually be served by simply cars. So we estimated that if we were to replace just a fraction of the BART riders that come into downtown and they were to drive every day, we would need a new square mile of parking in downtown San Francisco. And downtown San Francisco is not much larger than a square mile. So it's a pretty existential issue for these downtowns. And in downtown San Francisco, you have office buildings that are 30 stories built with six parking spaces.David RobertsAnd the stadiums, too. I forgot about this. Aren't there downtown sports stadiums with very little parking?Nick JosefowitzYes, it's amazing. I think that the Giants stadium in downtown San Francisco has the least parking of any baseball stadium in the country.David RobertsYeah, that blew my mind.Nick JosefowitzSomething like that. Yeah, at least vying for that title. And so I think what's happened is that this is a crisis that has kind of snuck up on people because, like with so much of the discussion in California around climate, every politician says the right thing. They all say they care about it. They care about climate. It's their top priority. They vote for goals that sort of set the state on a path to zero carbon future. They all support transit deeply, deeply, deeply. And then to a certain extent, everybody was taking their word for it on this one, that they actually did care about transit.It was only about a week and a half ago when the proposals actually came out, that the legislature passed their budgets, that we realized that there was no money.Beth OsborneNick, I think you might be really hitting on something very important that goes back to something Dave said earlier, which is how loud does the clanging have to get on things like climate and equity before people realize they need to fund transit? And it comes down to the fact that, a, no one thinks about the transportation system and climate. They think they're going to electrify all the vehicles and everything will be fine. Two, they don't think about transportation policy really much at all. It's very much a build stuff and go to the grand opening sort of approach, even in the most thoughtful of states.And there is this perception, this mythology that Democrats are good on transportation. I don't know where this came from. There is no evidence of this. Some of the greatest updates to the transportation program, which are quite old at this point, having transit added to the federal program, happened in the early 80s, pushed by House members that represented cities. And at the time there were a fair bit of Republicans there. It was not a Democratic thing. It was not a progressive thing. It was an economic thing. And I often find that the best folks to convince to do transportation differently are those that are looking to make their money go further, not the climate and equity folks.It is the folks that are saying this doesn't seem to be working and it seems to be wasteful. And you can get further with conservatives on that a lot of the time. So laying back and assuming that so called progressives are going to stand up for transit has always been a losing strategy that somehow no one has noticed.David RobertsWell, let me ask you about that then, Beth, because you have sort of a national perspective on this. The fact that transit had an anemic, let's say support, grassroots support, and then relatively anemic support, even among Democrats, has been true for a long time. All you have to do is look at where states spend their transportation dollars, like in blue states and red states. It's all going to highway, highway, highways. But it seems like to me, at least in parallel with the rise of the clanging and banging about climate change, there's been the rise of the YIMBY movement and the movement about more housing and the moving about cities and urbanism and transit and bikes, et cetera, et cetera, et cetera.It seems like there is something like a grassroots upswell happening. Do you see that being of sufficient size and scale to change that basic calculus? The calculus being nobody loves transit, nobody will fight for it.Beth OsborneWell, I think it's growing and it is moving in that direction. It's really positive to see people pushing back on things that used to be considered too nerdy, too in the weeds to get involved in, like fights about parking minimums and fights about single family housing and things like that. So there is something happening that is positive. We have a lot of ground to make up and we have a very short period of time to do it. But I don't know that it's a lack of love for transit. I think it's a lack of thought about transportation and transportation policy. That people don't feel like they need to go deep on this because transportation is just the bipartisan good news story that doesn't have deep policy connected to it for most elected officials.That is not always true. There are some excellent examples otherwise, particularly the leaders in Minnesota who really just showed the rest of the country up.David RobertsWe're going to get to that later so that we're not depressed the whole time we're talking.Beth OsborneBut I will remind us all that the fight here in DC, to come up with that federal operating support, happened with a Republican Congress under the Trump administration. And a great deal of that money, that original $25 billion that we got in 2020, was to a large extent thanks to Senator Wicker from Mississippi, who really stepped up on behalf of his own transit systems in Mississippi and he knew that they were important.David RobertsI don't associate Mississippi with transit.Beth OsborneLet me just say that Senator Wicker also, from an economics perspective, is the reason we have a robust rail program in this country. So the champions come from many different places. But I have to say it's rarely amongst the big elected, so called climate champions, it really tends to be people who see some real potential locally. Senator Wicker has been very involved in starting Gulf Coast inner city passenger rail service, and he's very close with his transit agencies and his local governments. So that fight was successful in DC. Because people understood fundamentally that if we didn't have transit for nurses and lab techs and people like that to get to the hospital during the COVID crisis, it didn't matter if you had a car.And that was so obvious to everybody then that we were actually at my organization, Transportation for America, making the case for more money than even the American Public Transit Association was asking for, and we got it. So it was not a hard fight. People instinctually understood that we needed transit to survive and that the feds, who have never supported operating assistance at that level before and certainly not in cities, stepped up and made it happen. So there is an understanding and a way to make this case, but I think that a lot of us are going to have to learn to be a lot more tough on the progressive, particularly governors who have not been asked to really put their action behind their words.David RobertsNick you're in Sacramento. You're talking about like, there's $1.5 billion of cap and trade money or whatever and you're begging for I mean, this is not like you're asking "Hey, I'd like 50/50 here" you know what I mean, for transit and highways and cars or even close to that, you're really begging for scraps margins. And you would think if you just take a step back from it that in a state like California with its housing problem, with its climate problem, et cetera, that transit would be not the afterthought, not the marginal extra, not the sort of thing that you toss scraps to at the end. Do you see anything like that kind of fundamental shift coming?Nick JosefowitzI don't, though I would really like it to come. And I think there is potentially a moment where transit in California suffers so much that people stop taking it for granted and start to really plot a path forward for it to not just survive but thrive in the future. And there's a real risk for doing that because in many parts of the United States, in many parts of California, transit has gone away and transit systems that people never thought that they could live without just went away. They weren't supported by the state, they weren't supported by the local communities, and they just went away.And then it becomes incredibly difficult to bring them back, incredibly expensive. So there's advocates that are this weekend putting on a series of transit funerals all over the Bay Area to try and try and help make it real for decision makers. And there's going to be a priest that buries the bus and there's going to be a band that plays Taps and the whole thing, right? But I think people struggle to really internalize that these transit systems, this transit service is really at risk in the way that it is.David RobertsOne more question for you, Nick, before I get back to you, Beth, with some more national stuff. But in terms of California, I mean, obviously this is a crisis and what is most needed in the short term is just money to save these things. But are there other particular reforms that you would like to see in how transit gets funded that might make it, let's say, less crisis prone, more stable in the future or even, god forbid, have enough money to expand and not just limp along, barely surviving?Totally, and I think that that's been a really important part of the discussion because we don't want to just kind of get over this particular crisis, get the money to avoid this particular crisis and then be in the same crisis again in a year or two. Yeah, there's, I think, a lot of really simple stuff that's not that expensive that we could do that would really transform people's experiences of riding public transit and get many more riders on the buses and the trains. And in a place like San Francisco, you'd think that this was already the case, but it's not. Making sure that riders know exactly where their buses are and exactly where their trains are so that they know when they're coming.Nick JosefowitzReal-time transit information, making sure that that's universal would make a huge difference. For instance, one of the things that San Francisco has done quite well, but which it could do a lot more of, is put in place bus lanes, prioritize buses on the street. And there's on one of the big sort of thoroughfares in San Francisco, Van Ness Avenue, during the pandemic, there was a major new bus lane that was rolled out and ridership increased by 30% because it was just faster and it was more reliable. And what's not to like about that? That's kind of what everybody wants out of their bus.And so I think there's some really sort of concrete changes that one can make that would really make a difference and would set transit up to thrive. But I think it's also important to appreciate that transit thriving is not something that transit agencies can do on their own. We have almost a century of car-oriented planning of cities being built around cars. And it's going to take a long time to kind of shift that to stop sort of subsidizing people driving alone in their car and to start sort of creating the urban fabric that is conducive to people walking to a bus stop, taking a bus to where they need to go, and then being able to walk to their destination.David RobertsWould you like to see California transit move away from its degree of dependence on fares, or do you think fares are a perfectly good way to fund things?Nick JosefowitzI think in the long run, that's really important. And we were saying that transit agencies in California get much less operating support from the state than in other places. BART, for instance, gets 5% of its operating budget from the state of California. SEPTA in Philadelphia gets 50% of its operating budget from the state. And many of California's largest transit operators compared to their peers are dramatically underfunded by the state. And that wasn't really sustainable before COVID and it's hella not sustainable now. And that's something that I think the state really needs to step in on and it has the resources to do it. It just needs to make the right decision.David RobertsYou also have a bunch of transit agencies. Like isn't it a county by county thing in terms of transit administration?Nick JosefowitzYou know, there's 29 transit agencies in the Bay Area. There are many more in LA metro area.David RobertsThat can't be the right way to run things, can it? I mean, when I hear local control like that, I think somebody at some point did that because they wanted to block transit. That's why you bring control to a local area, right, is because you don't want transit, because you don't want the poor people coming. Did I guess right about how it ended up that way?Nick JosefowitzWell, that's certainly the case for a lot of it. And then sometimes it's someone really wanted to build some rail extension and it didn't make sense to anybody else and so they decided to create their own transit agency just to build their own rail extension or whatever it is.David RobertsIs consolidation in the cards or do you think it would help?Nick JosefowitzI think the challenge is that consolidating transit agencies is really hard. And you even see this in the corporate sector where mergers often go bad. And I think in government it's really difficult to ring out efficiencies from merging agencies. And what we do know is that in the short term there will be significant costs as there are with all mergers and the benefits will be felt over time. And so I think it's difficult at this moment when we're really trying to help transit survive to impose another cost on them and say, "Okay, now you also have to merge."So I think it makes sense to kind of think about it and to sort of put in place a structure where that can happen in the future. But I don't think it's the right thing to do now because I don't think it will actually deliver all that much benefit, even though it'll certainly be nice. It'll feel better.David RobertsMore conceptually neat and tidy.Nick JosefowitzSymmetry to it.Beth OsborneI don't know if I think it's that useless. There are ways to make them at least coordinate investment packages, operations planning, and things like that that then make the preservation of their fiefdoms less useful or attractive. So there are ways to go in that direction. There are certainly ways to award those that do that. There's an example of some transit in Maine that's often very tourist-focused. But while they do have different transit agencies behind the scenes, the public-facing profile looks totally unified. So there are things that can be done that make it work better.There are also things we need to do with transit to make it serve all trips instead of just the commute trip. Remember that transit has always been the secondary concern, or maybe even tertiary, where the reason in our country will fund transit is to benefit the driver by moving people during rush hour to work, which is rush hour. That work commute is 95% of our focus in the transportation program because congestion relief is almost 100% of our focus.David RobertsYes, Seattle just got done after 1000 years of trying, putting light rail in place. We raised billions of dollars to build light rail and we ended up just putting it alongside the interstate where its only use is a commuter substitute. Right. It's just a different commute. And all the other benefits of public transit, which as you both know are manifold, were wasted. It was maddening.Beth OsborneBut I think it is important to point out that there is an opportunity now to revisit some of those assumptions. And while the highway building complex is going to justify massive highway expansions, even if the commute never returns to where it was and will probably get the money they want, in spite of the fact that the car trips will not necessarily show up, transit has to justify itself. And so we can use this as an opportunity to think about serving those short trips, those neighborhood-focused trips, going to the grocery, going to school, going to the doctor, all those sorts of things. There's a lot that we can do and Nick hit on some of it just with things like painting bus lanes and giving buses the ability to get through lights faster and things like that.I myself can tell you that my commute has benefited immensely from the fact that some bus-only lanes were painted on 16th street in Washington DC. Even with less frequency than before COVID it is a better trip because they don't have to be in the main travel lanes. So there's a lot that can be done.David RobertsSo Beth, let's pull back a little. I assume that the catastrophe that struck California transit during the Pandemic struck all transit everywhere across the country. Is there a national transit crisis to echo this one in California? In other words, are there lots of transit services that are on the verge of serious service cuts or have other states figured out how to get through this?Beth OsborneOh yeah, this did not sneak up on everybody. This has been something people have been worried about. I do worry that other activists are taking their elected officials' words and not really holding them to account. And so this could happen in other places. But yeah, this is an issue here in the Washington DC area. It's definitely something that SEPTA in Philly is seeing. The MTA in New York. I mean this is everywhere. As we are adjusting back to post-COVID times and especially in big cities, a lot of employers are offering people more flexibility, and you can't choose a mode of transportation to go to work if you don't travel to work.The bus does not serve my trip to my basement office. So it's something that is hitting a bunch of folks. Look, several states are stepping up and making sure that transit gets through this. Most are just trying to help it eke its way through rather than thinking big about how to make transit really robust.David RobertsDo you think it's inevitable that basically transit, nationally speaking, is going to come out of this worse than it came in? Is it inevitable that there's going to be sort of a national reduction in service and frequency. You don't think so?Beth OsborneNo, I think it will come out worse in some places and better in other places. There are places that are really rethinking the way they provide transit to their constituents as a result of this crisis. And that is a wonderful updating, and it's thinking creatively and grabbing the opportunity, taking the challenge and turning it into opportunity.David RobertsDon't let a crisis go to waste. Like whoever said that.That's exactly right. And I think some transit leaders are stepping up and offering some visionary approaches, and some elected leaders are also stepping up. And so, yeah, I think we will see some areas come out of this stronger than ever, and others not.Tell us what the 80/20 rule is and what it governs and what its effects are and whether that is. Because that seems to me the core of it. Basically, it comes down to money. What is it, and is there any hope of getting around that or changing that very fundamental misallocation, in my opinion.Beth OsborneSo that's at the federal level. And it goes back to something I mentioned earlier, that back in the early 80s, when the Reagan administration was pushing a gas tax increase, a bunch of House members from urban areas stepped up and said, I'm not going to support pouring a bunch of new money into a highway program that's going to be spent outside of my jurisdiction. I want to see some of this money dedicated to transit. And so they raised the gas tax by five cents, and one penny was reserved for transit, and the other four were for highways.80/20 split 1982, 41 years ago. I have to say that's the last time urban members really stood up and demanded and got something big in transportation, they've really rested on their laurel.David RobertsSince it's wild, there are more of them now. I mean, you'd think urbanity in general would play a bigger part in our politics these days because the world is urbanizing, US is urbanizing. That's where our economic growth comes from. And yet we still have this weirdly rural-focused —Beth OsborneWell, that's partly because of the Senate. And every member of the Senate thinks they represent a rural state. They'll all tell you that. I remember Barbara Boxer saying that all the time when she was representing California. But the other thing is, in the interim, the transportation program was trust funded, which means the gas taxes that came in were protected from the annual spending debate. And I think that cut off knowledge, creativity, innovation, and debate. I think that this is a very Beth Osborne thing. Very few people will agree with me on this, but I really think that protecting the gas tax has been terrible for transportation policy and accountability.So at the federal level, we did start pushing in this last reauthorization to go from an 80/20 split to a 50/50 split. And there was some beginning interest in the House. The Senate was not open and President Biden, who is a statewide elected Democrat, who, as I pointed out before, is not normally at the vanguard of transportation thinking, but also a creature of the Senate, also was not a participant in that conversation.David RobertsBut come on, Joe, he's a train guy.Beth OsborneHe's a train guy, not a transit guy. Trains and transit are different. And I doubt he does spend a lot of time riding the transit in Wilmington.David RobertsI doubt a lot of senators spend a lot of time on transit.Beth OsborneNow, I do want to point out that at the state level, this is very different. States handle things totally differently and they're not wrapped up in the 80/20 split. But more than half of the states have constitutional prohibitions against spending their gas taxes and highway user fees on transit.Nick JosefowitzOh, yeah, California has that too.David RobertsSpecifically, you can't spend it on transit or just specifically, you can't spend it not on anything but highways.Beth OsborneYou have to spend it on highways. Now, I would argue that a lot of those constitutional prohibitions could be gotten around because they aren't phrased very well. They weren't drafted very well. So a highway expenditure could certainly include a bus-only lane. That bus-only lane is on the highway. The sidewalk can be part of the highway. And Colorado back about 20 years ago, just legislatively defined the word highway to mean highways, transit, walking, and biking.David RobertsOh, hilarious. Well, that's one way to do it, I guess.Nick JosefowitzSo California has this same constitutional prohibition, and I think actually one of the big opportunities to get rid of this kind of 80/20 rule and the equivalent of it in states is when we transition away from gas taxes.David RobertsRight. Which has to happen anyway, right. I mean, that's got to — the gas tax supporting everything is not sustainable as gas.Beth OsborneCorrect.Nick JosefowitzExactly.David RobertsCars decline.Nick JosefowitzAs cars get more efficient. As more and more cars are electrified, we're just going to be using less gas, hopefully. And so I think with a new revenue source, there's a moment to decide "Okay, how do we want to actually allocate that new revenue source?" And we don't have to do the thing that we decided we want to do in the 1970s or the 1980s, which we haven't really been able to revisit since then.David RobertsBut what about culturally, Beth, there's the money formula and the history of the money sources and then there's just kind of the culture at State Departments of Transportation. I know Washington best, and I have been listening to transit advocates rail against the State Department of Transportation, which has basically occasionally fought the Seattle Department of Transportation, forcing highways, forcing this sort of focus on the commuters that want to come into Seattle from the outside. Is that problem as bad as I have it in my head? Like, are State Departments of Transportation sort of uniquely reactionary corners of the state government, or is that overstating it?Beth OsborneWell, I think again, a lot of them have funding that's trust funded. And as trust fund brats, they don't have to answer to a lot of people and they're often not held to account for their products. And that's a fault, again of citizens and the advocates and elected representatives. But the trust fund makes it easy to just kind of move along and do the same things you've always done. But I think it's really important to think about what is expected of the state DOTs. They didn't make this up because they have deeply held hatred for transit.They were created to build a highway system. That was why they were brought into being. And as they built a highway system, a lot of them had more piled on top of that original purpose. But it wasn't necessarily piled on top with new priorities and robust funding. It was more like while you're doing your main thing, which is that highway building, you should worry about things like transit and pedestrian safety. And like anybody who is charged with a big task and then told to just do extra stuff on the side, you're not going to do that as well as you could.And again, state legislatures are a big part of this. A lot of times it is the legislature that is demanding this kind of funding and approach. And if the DOTs do anything but focus on vehicle movement, vehicle speed and congestion reduction, they get torn apart by their state legislatures and frankly, by a lot of the press, because across the country, most of the press that covers transportation really only covers the traffic report, not really transportation policy. We are starting to see a change in that. There's been some extraordinary leadership from the L.A. Times that looked at highways and the harm they do to black and brown communities from taking property next to highways.And here in the Washington Post and the New York Times have written really outstanding articles on what highway building and expansion really does for congestion reduction. But this is super new.Nick JosefowitzI think one can overstate the power of the bureaucracy as an immovable object and every time we talk about it, it feels a little deep statey when we go there.David RobertsTalking about state DOTs makes me feel very deep statey Nick.Nick JosefowitzNick yeah, well, we all need to somehow indulge that. But what we've seen is that the leadership is appointed by the governor and sometimes there's commissions that are appointed by the governor in the state legislature and who is in those leadership positions makes a huge difference. And with a sort of — if you put people in leadership positions and you keep them there and you put people with similar values in those positions for a number of years, you can really change cultures of agencies. I don't think one can just kind of wave one's hands and say, we're never going to shift these bureaucracies.I think there are really powerful tools that the governors and the state legislature can wield. And you've seen that in California. California has been setting climate targets since before I was born, I think. But it was only a few years ago with a really great DOT head that we managed to actually put in place climate targets for our transportation system that weren't just focused on electrification, they were actually focused on reducing how much people drive in a meaningful way.David RobertsIt's only the recent round of sort of state level energy and climate policy where transportation is being treated as part of it, as part of the whole complex, and state DOTs are getting drawn in. So Beth, before we run out of time, though, California seems to be butching this, but let's talk about Minnesota. I had a pod a few weeks ago about Minnesota's amazing climate and energy bills. It's passed. If anybody is out there who has not been paying attention, go look at what the Minnesota legislature has done in the last two years. It will blow your hair back.It's amazing. It's climate stuff, it's like justice stuff, the abortion stuff just down the line. Amazing. And transportation. So Beth, tell us, what did Minnesota do that you would like to see other states learn from?Beth OsborneYeah, and there actually is some real good news across the country as well. And we can copy off of states that have done great things. So in Minnesota, they've got some truly extraordinary transportation leaders, including Senator Scott Dibble and Representative Frank Hornstein, who are both just deep transportation nerds and wonderful for it. And so they both have some transportation policy and funding that will be real game changers. They raised the gas tax and they came up with other funds that will put a great deal of new money in passenger rail and transit. They've filled the funding gap, the operating funding gap for the Twin Cities transit system.And they have put a large amount of money into big efforts to expand service, the Bus Rapid Transit system, and passenger rail between the Twin Cities and Duluth. There's also funding for tax credits for people to get electric assist bicycles and funding for better transportation connections for people experiencing homelessness or mental health and just really outstanding thought there. And then there's also a requirement in their new law that Minnesota DOT has to project how much carbon emissions will come out of their projects. And if a project is going to increase greenhouse gas emissions, they either can't move it forward or they have to move it forward with a bundle of transportation projects that will offset that increase.David RobertsInteresting. That would be so fundamentally transformative for so many state DOTs.David RobertsIt would.Beth OsborneAnd Colorado has done something interesting and similar as well. They set up a regulation that requires the same thing, a projection of greenhouse gas emissions from their projects and the requirement that if there's an increase, it's offset by other investments. And that was led by their transportation secretary. Going back to what Nick said about leadership really matters, Shoshana Lou, who I got to work with at USDOT, and really just very thoughtful engagement to get to that role and real buy-in across the state.Nick JosefowitzShoshana is amazing. She is a real leader.Beth OsborneYes.David RobertsYeah.David RobertsI feel like Minnesota and Colorado are sort of like the two liberal kind of superstars of the last few years that don't really get as much hype and praise as the coastal states. But in terms of accomplishments, they both have been just crazy productive. Are there other leading lights that we might not know about?Beth OsborneYeah, something else that snuck by a lot of people was the leadership of Virginia DOT over the last eight years or so. They put in place back in 2014, legislation that was approved unanimously by a Republican legislature and signed into law by a Democratic governor, a scoring procedure to prioritize new capacity transportation projects across all modes. That includes measurements that are not typical to transportation. So instead of just looking at congestion relief, they looked at the amount of access to jobs by all modes of travel. And after they passed that into law, they had to figure out how to do it.And not only did they figure it out, their partners, actually at the University of Wisconsin, the State Smart Transportation Initiative produced a manual so anyone can do what they have done.David RobertsInteresting.Beth OsborneAnd they particularly look at access to jobs for people who are in the 20th percentile economically. And then there's another prong where they have to look at coordination between transportation and land use, which they have translated is access to everything other than jobs. So banks and schools and groceries and retail and parks and all those sorts of things. And it turns out that measure is very tightly connected to how many cars one has to own, how much you spend on transportation, how much you emit.There's so much connected to that one measure that wraps up a lot of the climate and equity concerns people have, and again, points out why I don't understand what Governor Newsom is doing because he is already dealing with an affordability crisis and transit and walkability is the key to affordability for household expenses. But Virginia really hit it out of the park on that and created a great system. I'll also point to Washington state that now requires a redesign of roadways to safely move everybody, whether they're in or out of a vehicle, on any project that costs more than $500,000. So that's basically every project.And a state like Florida, which has really spent the last five to ten years updating all of their rules, procedures, and design guides to think about how to design roadways for all people and have some extraordinary guidance out there for folks to look at, they could apply it a little more consistently.David RobertsYeah. Isn't Florida rock bottom on pedestrian fatalities? Or am I making that up?Beth OsborneWell, according to our report, Dangerous by Design, they were recently leapfrogged by the state of New Mexico.David RobertsOh. Congrats, New Mexico.Beth OsborneNot because Florida got safer, but because New Mexico got so much less safe, they jumped over Florida.David RobertsOh, great.Nick JosefowitzAs an American, this is inspiring all the amazing things that are happening. And as a Californian, it's rather depressing that we can't be emulating them.David RobertsIt's striking that California is not in the lead in so many other areas, so many other climate-related and progressive-related areas.Beth OsborneWell, let me give California one shout out along with some other states that I'm excited about. The new leader of the DOT in Connecticut is outstanding. And we've been working with Connecticut, California, Tennessee, and Alaska to do quick build pilot demonstration projects to improve safety for people walking.David RobertsInteresting.Beth OsborneAnd basically, it's almost like tactical urbanism on state highways. And the states are figuring out what procedures they need to put in place to make these things happen. And a lot of these projects are going live as we speak. And California Caltrans is right in there trying to figure out how to adjust their procedures to allow this to happen, to be more innovative and test things out and try new things on their roads to better accommodate people walking and keep them safe. So there is some really exciting things happening, even at the lower bureaucratic level, to make their products better.David RobertsYeah, I've always thought I feel like narratively ordinary people hear talk about transit and walkability and all this kind of stuff, and they hear it as sort of like a liberal do-goodery, just sort of liberals' aesthetic preferences. They want people to live close together and all this stuff. The whole 15-minute city backlash is hilariously depressing. But I feel like it would be great for transit advocates if we could help spread the narrative, which Strong Towns has done such a good job on, which is that car culture and car-focused culture and car-focused building is bad for state budgets.Like dense cities produce GDP. And the less dense they are, the more cars they have to accommodate, the more that goes down. So you get upkeep of highways and upkeep of roads, all the upkeep of sprawly development and all the health drawbacks of particulates and all that, and it's just a net like, car culture is a net negative for state budgets, regardless of your feelings.Nick JosefowitzYou're absolutely right. And it's not just the state budgets. As part of the kind of the effort to try and help the state of California realize they should save transit, TransForm, an advocacy group that we work with closely published a report that showed that for every dollar of state underinvestment in transit, that costs low-income people $2 in additional costs of having to buy and maintain cars and buy gas and all that stuff. It's also this fundamental drain on people's wallets as well as on state government.David RobertsYeah.Beth OsborneAnd I will say the governor that has done the best job, in my opinion, of making this argument is Governor Burgum of North Dakota.David RobertsYou're bringing out some obscure states here.Beth OsborneI got to tell you again, I don't know where this mythology came from that progressives get transportation. Do not get it. Some of the most exciting changes are coming out of much more conservative thinkers who recognize we're just wasting money.David RobertsSo what's happening in North Dakota?Beth OsborneWell, Governor Bergam, I believe, he was involved in developing before he became governor. I remember his Main Street page when he first became governor, talking about how a city the size of Fargo or a lot of those upper Midwest cities because they're so big, they have to spend so much more on operating their roadway system per capita. So just snow removal and things like that become extraordinarily expensive versus something that's more compact and has more traditional mixed-use development. He just fundamentally gets that. One of the top mayors that I enjoyed working with is the former mayor of Indianapolis, who was a Republican and former Marine who just recognized it was good for attracting talent in business to build bike lanes and to put showers and bike parking downtown, because that's what people who had options wanted.They weren't going to move to a city —That's what the youngs want.— where they had to drive everywhere. And so he came into some of those one-way, five-lane roadways and took space away from cars and expanded the highways and created a massive bike ped network. And when people complained to him about him slowing down traffic, he said "Absolutely, I did, and you're welcome. I have made things so much safer."David RobertsHis lips to God's ears. That's amazing. Well, we're out of time. This is super interesting, super educational. But Nick, I wanted to end with you since we began with the crisis. Let's end with this crisis. Namely, if you are a Californian who's concerned about this upcoming fiscal cliff, that transit is about to go off and these huge cuts in service that are looming, what should you do? Is there a clear mechanism of feedback? Or is there a bill to push or what's the mechanism to make your voice heard on this?Nick JosefowitzSavecaliforniatransit.org is where you can go, and it will give you the tools and the information you need to contact the governor, contact legislative leaders, and say that you don't want California without transit. You don't want a Bay Area without BART. You want to be able to still get on the bus, come next year.David RobertsYes. And I think nationally, we should be able to agree. We're to the end of the period where you're allowed to call yourself a climate champion if you're not on the case, on land use and transit and density, et cetera.Beth Osborne100%.Nick JosefowitzThat ended on this podcast right here, right now. You are no longer allowed to do it. It's over. It's cold.David RobertsAll right, Nick, Beth, thank you all so much for coming on.Beth OsborneThanks for having us.David RobertsThank you for listening to the Volts podcast. It is ad-free, powered entirely by listeners like you. If you value conversations like this, please consider becoming a paid Volts subscriber at volts.wtf. Yes, that's volts.wtf so that I can continue doing this work. Thank you so much, and I'll see you next time. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.volts.wtf/subscribe

In this episode, Emily Morris of startup Emrgy discusses the promise of small-scale hydropower and the opportunities it could provide for both power infrastructure and water management.(PDF transcript)(Active transcript)Text transcript:David RobertsHello Volts listeners! I thought I would start this episode with what I suppose is a disclaimer of sorts. I suspect most of you already understand what I’m about to say, but I think it’s worthwhile being clear.Every so often on this show, like today, I interview a representative from a particular company, often a startup operating in a dynamic, emerging market. It should go without saying that my choice of an interviewee does not amount to an endorsement of their company, a prediction of its future success, or, God forbid, investment advice. If you are coming to me for investment advice, you have serious problems. I make no predictions, provide no warranties.The fact is, in dynamic emerging markets, failure is the norm, not the exception. My entire career is littered with the corpses of startups that I thought had clever, promising products — many of whom I interviewed and enthused about! Business is hard. In most of these markets, a few big winners will emerge, but it will take time, and in the process most promising startups will die. Such is the creative destruction of capitalism. I'm not dumb enough to try to predict any of it.More broadly, I am not a business reporter. I do not have much interest in funding rounds, the new VP, or the latest earnings report. (Please, PR people, quit pitching me business stories.) I do not know or particularly care exactly which companies will end up on top. I am interested in clever ideas and innovations and the smart, driven individuals trying to drag them into the real world. I am interested in people trying to solve problems, not business as such.Anyway, enough about that.Today I bring you one of those clever ideas, in the form of a company called Emrgy, which plops small hydropower generators down into canals.Now I can hear you saying, Dave, plopping generators into canals does not seem all that clever or exciting, but there’s a lot more to the idea than appears at first blush. For one thing, there are lots more canals than you probably think there are, and they are a lot closer to electrical loads than you think.So I’m geeked to talk to Emily Morris, founder and CEO of Emrgy, about the promise of small-scale hydropower, the economics of distributed energy, the ways that small-scale hydro can replicate the modularity and scalability of solar PV, and ways that smart power infrastructure can help enable smarter water management.Alright, then, with no further ado, Emily Morris of Emrgy. Welcome to Volts. Thank you so much for coming.Emily MorrisThank you for having me. It's exciting to be here.David RobertsYou know, I did a pod a couple of weeks ago about hydro and sort of the state of hydro in the world these days. And one of the things we sort of touched on briefly in that pod is kind of small-scale, distributed hydro, but we didn't have time to really get into it. And I'm really fascinated by that subject in general. So it was fortuitous a mere week or two later to sort of run across you and your company and what you're doing. Your sort of model answers a lot of the questions I had about small-scale hydro.Some of the problems I saw in small-scale hydro, just because it just seems to me so at once small, but also kind of bespoke and fiddly. And your model sort of squarely gets at that. So anyway, all of which is just to say I'm excited to talk to you about a model of small-scale hydro that makes sense to me and some of the ins and outs of it.Emily MorrisYeah, absolutely. And I'm thrilled to be here. I'm thrilled to tell you more about our model. And I love that you called small-scale hydro bespoke because I was talking with one of the larger IOUs a few weeks back and they referred to hydro as artisanal energy. And I got such a kick out of that because it is in so many ways, hydro can often be a homeowner's pet project that has a ranch or something like that. And bringing hydro into a world in which solar panels are taking over distributed generation and utility scale, and doing it in such a standardized, modular, repeatable format, bringing that architecture into water, is something that hasn't yet really been done successfully. And what we're trying to do here at Emrgy.David Robertsit is kind of like a lot of this echoes solar. It's sort of an attempt to sort of replicate a lot of what's going on with solar. But we're getting ahead of ourselves. Let's start the business model is, to put it as simply as possible, is you make generators and you plop them down into canals. So let's start then with canals, because I suspect I am not alone in saying that I've gone almost all my life without thinking twice about canals. I know almost nothing about them. Like, what are they? Where are they? How many are there?This water infrastructure kind of surrounds us is almost invisible. So just talk about canals a little bit. What are they used for and where are they and how many are there? What's the sort of potential out there?Emily MorrisYes, canals are almost invisible, but my goal is that after this podcast, you'll never look at a canal the same way you'll look at it, as a source of energy. That, man, we should be tapping that energy and using it. Canals are our main target market. They're really our only target market right now. We get asked all the time, well, couldn't you do this in a river? And couldn't you do this in tides? And the answer is yes. If you're focused on the engineering but as a commercial founder at Emrgy, I'm focused on the market and where can we install projects today that can be immediately delivering economic benefit and environmental benefit.And so canals are that market. A canal is an open channel of water conveyance that's moving water from one place to another for a specific purpose. That purpose might be because it's raw water that's being delivered into the city to be treated for drinking water. It could be that it's an agricultural channel taking water from a river out to farmland. It could be an industrial flow of water that's coming from a large brewery or a large factory and delivering that into either a river or another piece of water conveyance. But canals are seemingly invisible. I'll be honest, when I started Emrgy, I thought that the technology would first thrive in a water treatment environment.There's 30,000 water treatment plants in the US. And many tens of thousands all around the world. And that water is running 24 hours a day, seven days a week, 365. And man, the ability to take something modular that looks and feels like solar in terms of its ability to seamlessly integrate into the surrounding infrastructure, but deliver power in a baseload format was something that immediately, I thought, water treatment. Yet when I was really early in my entrepreneurial journey, we did our first pilot at the city of atlanta's largest water treatment plant. And I went out to Los Angeles and gave a white paper on it at LADWP.And when I was there, the city of Denver had two representatives there. And they came up to me after my presentation, and they said, we think you're thinking about this all wrong. You got to come to denver and see what we've got in terms of water infrastructure. And when I went out to Denver that next couple of weeks, I spent three days touring probably 500 or 600 miles all around the Denver metro area of canals that are transporting water. You may not know that the water you drink in denver actually comes from the other side of the continental divide, and they bring it into the city of denver through a series of canals and storage reservoirs that allow for the appropriate amount of treated and stored water for the city.And so when I was there, I thought about, okay, as a business model, being able to deliver one to ten of these modules at 30,000 water treatment plants sounds like I need a big sales force. And then looking at the Denver infrastructure and seeing hundreds of miles of uniform canal that's transporting water where thousands or tens of thousands of these generators could be deployed with one partner just made a ton of sense. And so then I started peeling back the curtain on that.David RobertsYou say one partner. So are most of these two of the sort of features of canals? That came as somewhat of a surprise to me, and I'm sure you're familiar with this response is, first, when I thought of canals, the first thing I thought of was agriculture. I assumed they were mostly out in farmland. But what you have discovered is that they are laced throughout urban infrastructure, they are in cities.Emily MorrisOh, absolutely. It's both. It's certainly both. Our project we have a project with the city of Denver that overlooks the Denver skyline right there near the city. And if you overlay a map of Phoenix roadways with map of Phoenix waterways, you can see two highly sophisticated transport systems all throughout the metropolitan area. Not just Phoenix, think of Houston 22 canals and bayou's flow all throughout the urban metro area that are both a source of water or even an attraction for the city, but also have an inherent energy, sometimes too much energy during hurricane season and whatnot to be able to harvest and hopefully deliver value from as well.David RobertsYeah, and so the other feature is they're not privately owned for the most part. Most of these canals are operated by a city municipal water district.Is that sort of the standard?Emily MorrisYeah, that's correct. Typically there is an organization that manages the water infrastructure, the canal infrastructure. It is often public. It can be a political subdivision, like a municipality or a local not for profit organization or co-op. It also can be a private canal company, although those typically remain nonprofits. They're typically a public service for the good of the recipients of the water.David RobertsBut the point is, you are not having to track down a bunch of individual owners of individual canals. You can get at a bunch of canals through one partner.Emily MorrisThat's absolutely the case. And it's all public record the managers of water infrastructure and their contact information. You're not going and knocking on someone's home asking if you can put something in the backyard or something like that. This is an operated and often, from their contractual perspective, they're typically buying water from an entity and selling water to a series of entities, buying water from the US Government and selling it to farmers, something like that. And so the reporting aspects about that water that flows through, they tend to be detailed. They tend to be long running. And so as you think about developing a resource assessment of how much energy is inherent in that water that you can produce electricity from, it's not necessarily like needing to go build a MET station and understand exactly what resources there.They're typically well organized, well operated, and well documented.David RobertsA well characterized resource.Emily MorrisAbsolutely.David RobertsOkay, so you go to these canals. You make a deal with the owners of these canals, and then you go plop down energy generators into the canals. Let's talk about the generators, try to give the listeners kind of a sense of how big one of these things is and kind of what it looks like. What are you plopping down into the canal?Emily MorrisIn terms of physical size. Our generators are an eight foot cube, and they have their own precast concrete structure that holds them together. So you can think of sort of half of a precast concrete culvert, if you are familiar with the construction world, that is an eight foot cube. We do that strategically, they are easy to lift and handle.They're easy to transport by trucking or other means. You can even containerize them if you need to. And we place those into the channels without doing any construction, any modification, any impounding of the channels, which is a really important part of the canals, because, as I mentioned before, that water is going to a destination for a purpose. And so going in and saying, yeah, we're just going to build a dam right here in the middle of your canal doesn't seem to resonate so well. And so being able to bring something in that's fully self supported can be placed into the channel and held there by its own weight.And it only weighs about seven tons, so it's not a super heavy lift, but it's hydrostatically, designed to not shift or slide or overturn once the water hits it. And inside of that culvert or the concrete structure, there is a vertical axis turbine that looks probably very similar to vertical axis wind turbines that many of the listeners will be familiar with. And so they take advantage of the kinetic energy in the flow using the swept area of the turbine and the speed of the water, and generate torque and speed around the shaft up to the power takeoff and the generator. And so physically, they're eight foot cubes.But from a power perspective, our smallest turbine that we sell is a 5 kilowatt turbine. And it's the same physical footprint that the 8 by 8 cube, but it can generate mechanically and electrically up to 25 kilowatts per turbine based on the depth and the speed of the water.David RobertsI was going to ask whether the sizes vary. So the generator, the eight foot cube is standard. All the generators come in these eight foot cubes, but the generators themselves vary in size based on the water flow.Emily MorrisYeah, that's exactly right. We do have a deeper water platform that goes up to about 18ft of water, and then we're working on an even deeper platform in conjunction with the DOE. But right now, our main platform is the eight foot cube. And the beauty of water is that the power is exponential by the speed of the water. And so we can place a turbine in and it can generate 5 kilowatts at say a shallower, slower speed. Or that very same equipment can put out five times the power output if placed in a different location. And so as we think about coming down the cost curve, growing to scale, we can immediately find higher density resources that make sense today, even as a young company that hasn't quite gotten fully to the quantities that other adjacent industries like solar and wind have.David RobertsRight. So I have a bunch of questions about that. But just this question about size brings up the question about canal size. If you have a standard sized module, I'm assuming that canals themselves are relatively standardized in size. With this eight foot cube, can you confidently say, we can go to more or less any canal and it'll work? Or do canals also vary?Emily MorrisCanals vary, but not substantially. There are standard sizes, and our eight foot cube does cover a wide envelope of canals in the US. And abroad. We do see, though, that this is the array planning and array specification, which is how we deploy these. We never deploy them as single turbines, but really as arrays, just like solar and wind, that with the arrays. It's a very similar planning method to solar is you look at your total square footage across the canal, you look at the gradient of fall along the canal, and you plan out the optimized number of turbine modules that make sense for that canal.So sometimes if you have a canal that's 18 feet wide, rather than build two 9 foot cubes, all of a sudden, you do two 8 foot cubes, right. And you standardize and you optimize for cost even if you're not squeezing every single ounce of power out of that flow. And I think that's one big thing that differentiates energy and distributed hydro from traditional sort of small-scale hydro is we're optimizing for cost and scale rather than for utmost efficiency, which is typically where hydro really focuses.David RobertsRight. And Volts listeners are very well educated on the fact that the modularity, the small-scale and modularity of solar panels are a huge piece of why they have proven so adaptable and grown so fast. Like the advantages you get from standardization and modularity vastly outweigh whatever sort of marginal gains you could get on either side in a particular canal.Emily MorrisAbsolutely. We're big believers in that, our smallest module is an order of magnitude larger than a solar module. But you should think of it absolutely in that same way. We do have people, especially the folks that are really focused in hydro, they say to us, "Oh, your modules are so small, 5 kilowatts or 25 kilowatts, that's so small." And I say to them, "No one ever goes to the solar field and say, 'Hey, your panels are so small.'" It's a totally different mindset that you have to be thinking of the module as the panel, as the individual generator that ultimately goes into the array. And yes, our arrays will likely continue to be on the distribution scale rather than on the utility scale or the large transmission scale. But no question the aggregation of modules is how power grows, this generation of renewables.David RobertsWell, let's try to get a sense of just how big they are power wise. So, 5 kilowatts to 25 kilowatts, what's a typical array, and then what's the output of a typical array, and then maybe just to help the listeners kind of get their head around it, how does that sort of compare to an array of solar panels? Like, if I'm the owner of a canal or a network of canals, and I'm trying to decide, do I want to put a bunch of these in there or do I want to say cover the canals with solar panels? What's the scale comparison there?Emily MorrisWell, if you're asking me which one you should do, I would absolutely say both. The answer is both. One does not preclude the other, because this is a great real estate segment to be able to convert to renewables of all types. But when you think about our systems at 25 module, let's say that's 40 turbines to be a megawatt. And some canals are on the smaller side that we look at maybe enough for two or three modules across, some of them maybe ten modules across, just depending on the width of the canal. And so you could place 40 modules as close as, say, half a mile away across those four rows of ten, or it could be spread a much longer distance, it could be a mile or 2 miles for that.And really we're optimizing for spacing. Obviously, you don't want to run cable to the point of interconnect any further than you have to. We're optimizing for hydraulics. You want the energy to recover after being taken out by our turbines as it flows downhill. And then ultimately, we want to co-locate these with the offtake and whether that's directly into the grid or behind the meter with a particular industrial or municipal client. Those are typically how we think about this. But when you think about covering a canal in solar panels, I don't have the specific statistics on how many linear feet equates to a megawatt or things like that, necessarily, but you're going to see, most importantly, that you need three times the power output or potentially more to overcome the differences in capacity factors. So with our system, they're typically operating 24 hours a day.David RobertsSo in these canals that water flows through, water is constantly going through there 24 hours a day. I would think some of it at least would be sort of like scheduled or go in one direction and then another direction. Are they all steady 24 hours flows?Emily MorrisNot everything is consistent, of course, but I would say that in the water space, the capacity factor is determined by seasonality and or maintenance schedules, but less by intermittency. It's actually pretty bad for a canal to be turned on, turned off, turned on, turned off, because you end up having other maintenance challenges, things that break issues in the canal.David RobertsSo they want to run them?Emily MorrisThey want to run them continuously. Yes. And so depending on what the water is being used for, whether it's a certain area of cropland and therefore there's a seasonality to the flow that's fairly common, or if it's municipal, it may be a year round flow. Or depending on your region in the arid Southwest, you'll see perennial flows a lot more frequently than you will, let's say in Montana or Idaho, where there's obviously quite harsh winters.And so in our case, we target canals that can be the most predictable in their flow and the most continuous. Yet if you have a site that is only running six months out of the year, getting to that 40% to 50% capacity factor because let's say it runs constantly through that six months of the year can still lead to an incredibly exciting impactful project overall with good returns, even though it's not on every day. Right? It's a different mindset.David RobertsRight.Emily MorrisI have definitely had water districts say. "Well, what do I do in November, December, January if we're not flowing water?" And I said, "You may not think about it, but every night when you go to sleep, your solar panels also aren't working." It's just a different mindset of something not working every day for 90 days rather than not producing every night. And so doing that educational piece to where projects in terms of their output and their economic value can be highly competitive even at the shorter seasons with canals.David RobertsRight. So the basic point here is that while these generators may not crank out as much power as a solar panel while they're generating, they are generating much more often. They're generating around the clock. And so you have to have kind of three times the power output from a solar panel to end up matching the total power output.Emily MorrisThat's right.David RobertsThey have the advantage of being base-loady, basically.Emily MorrisExactly. That's typically what we see is that for canals that are running the majority of the time, you'll ultimately need if you want the equivalent amount of annual energy, you'll need a power capacity on your solar that would be about three times larger than what you would need on the hydro side.David RobertsInteresting. Okay, so you go to a water district, you say, "Hey, we want to generate some power from your canals." You do an analysis of the sort of optimal kind of spacing and placing and then what, a truck comes in or a crane comes in and just sort of like drops these things one by one in the canal. It sounds like installation would be pretty straightforward and pretty low footprint, is that true?Emily MorrisThat's absolutely true. It sounds too simple to say in some ways, but yet simply lifting the turbines and placing them into the channel, making sure that they're level, making sure they're not sitting on top of debris, or boulders or something like that, that may have fallen in the canal is important. But placing them in the canal correctly is the most important aspect of the installation. That's unique to Emrgy.David RobertsSo they're not connected in any way it's just the weight of the thing holding it in place. It's not literally not connected to anything. There's no screwing or attaching or bracketing.Emily MorrisThat's correct. There is nothing that is physically attaching it to the canal.David RobertsSo easy to take out.Emily MorrisOwners love this. Yes. Because they can take it out if they needed to ...David RobertsOr move itEmily Morris... often. Because these are operated channels they often will, once every five years or on some periodic schedule, drive up and down the canal or drive a bulldozer down and make sure that all the debris is out or something like that. So they love the flexibility. We tend to see that canal owners like the flexibility of being able to take them out. Now onshore each turbine, or each cross section, I should say, has a power conversion system that has both the control system as well as the power conditioning. And that is something we deliver as well. And it sits on a concrete pad on the side of the channel. But then as you connect those together electrically and then connect them to the grid, there's no innovation from Emrgy there. It's just optimization based on the appropriate electrical balance of system design.And so as we think about partnerships with other types of developers, other renewable developers, there isn't a special skill set that installers would need to have to be able to install our system. The balance of system is essentially exactly the same as distributed solar. And all you would need to do is be able to place the turbines in the canals correctly.David RobertsInteresting. Yeah, I like simple and dumb. That's resilient and that's what can spread fast.Emily MorrisAnd maybe I'll just mention that when I first started this business, I thought it was too simple. I assumed that somebody had already done this before, that it seemed pretty obvious. And as I looked deeper into it, I learned really the two things that I believe have held this space back that now are no longer barriers. One of them is regulatory. And that gets a little bit back to why we focus on canals in general, is that up until 2015, I believe it was all water in the US was permitted for power in the same way. So to place our system in a canal would have been permitted and regulated the same way it would in a river. And in 2015, FERC enacted the qualifying conduit exemption which stated that electric projects within water conduits or conveyance systems were exempt from FERC licensing up to 40 megawatts per project.David RobertsInteresting.Emily MorrisAnd so now our projects are fully exempt from FERC licensing. And it's a 30-day notice of intent to FERC requesting that exemption, which is lightning fast compared to other projects.David RobertsYes. So you're not dealing with permitting issues, NIMBY issues, all the sort of like land issues, all the stuff that's bedevilling wind and solar right now you're sort of doing an end run around that stuff.Emily MorrisWe'd like to think so. I mean, projects are always controversial to some extent, and every neighbor may have an idea of what they'd like to see in the canals. But in terms of general regulatory approvals and project buy in, we tend to see this being much lower barriers than many of the other types of land based systems. The other thing that was a major barrier that has since been lifted is the growing ability to use solar designed or solar inspired smart inverters for technologies and generators other than solar.David RobertsLet's talk about that first. Maybe, I don't want to assume first, maybe just tell listeners what does an inverter do and what does it mean for it to be smart? And maybe tell us about how those were developed in solar.Emily MorrisSure. So the generation of the power from the water or from the sun typically has been done over many decades and even centuries in terms of hydro, very successfully. The physics of getting energy out of a resource is something that is fairly straightforward. Now, the modern scalability of being able to replicate that in thousands of locations all around the world, conveniently into our modern electricity grid, is something that I would say has been hugely influenced through the development, industrialization and scalability of the smart inverter. And what I mean by that is actually readying the power, conditioning the power, making it grid compliant and ready for delivery into the grid, has received billions of dollars of industrial development in the solar industry to take it down in size and form factor as well as in efficiency.And if that was not available to us, and Emrgy had to build out an industry much like solar to drive industrial development of power conversion and power delivery, to be able to install it globally, we would be on a 20- to 30-year timeline. We would need billions of dollars and or it would just be really slow. If we had to do all custom power equipment, then every utility would have to come in and do a full engineering review of what we were building, whether it would cause problems to the grid. And what we have been able to take amazing advantage of is the ability to utilize a smart inverter that was originally designed for solar and largely used in solar, and be able to use that to control our hydro-generator without invalidating its utility certifications.You have to know quite a bit about power systems, perhaps, to know that controlling the power curve in a hydro-turbine and controlling the power curve in a solar panel is very different, a lot trickier than one might think. And being able to manage the torque and speed, to be able to manage and optimize a power point along the curve is tricky when you're trying to use a device that was made for a different industry. And so one of the biggest areas of Emrgy's technology, development and innovation is not necessarily in the. Physics in the water of how we're getting energy out of the water.It's really how are we delivering that electricity now to the grid in the most cost effective, high efficiency and streamlined way. And being able to use the same inverters that the solar industry is using helps put us on a much closer playing field to be able to deploy these projects in an apples to apples way. And even, as you mentioned, do you do solar or hydro and canals? It's great to do both and potentially even put them right into the same inverter. And that's the beauty of where distributed generation, I believe, is going, is to a flexible environment where you can have that base load, have your peaking load, have your energy storage and share as much of the cost along the system as you can.David RobertsSo you can just use smart inverters that are designed for solar off the shelf. There's no engineering or tweaking or fiddling you have to do.Emily MorrisSo we're prohibited from doing a ton of tweaking inside the inverter because obviously they go through quite a level of utility compliance and we can't necessarily change that. However, what we have is a power controls unit. It's a NEMA panel that looks like a standard electrical panel that sits right next to the inverter and that contains all of our fairly sophisticated controls and mechanisms to allow us to control our system and have it communicate with the solar inverter in a language that the solar inverter understands most of our innovation. And IP in that area sits in that power controls unit rather than in the inverter itself.David RobertsGot it. And so what do we mean when we say smart inverter? I've always kind of wondered, do people just say that because it's like sophisticated? Or is there a clear distinction between a dumb inverter and a smart inverter?Emily MorrisI'm probably not best equipped to handle that question, but I can say that from our perspective, using the inverters that we do use enables us to have both the smart capabilities as it relates to grid following, ensuring the grid islanding or other types of issues are matched. But also for us, having the data aspect of what's collected in that inverter and the amount of information that we can pull off of it is very helpful for us. I mean, we collect data in a number of ways and using the solar inverter or the smart inverter helps us to triangulate and calibrate that data to ensure its accuracy. So, for example, the inverter will give us power output, real time data in that regard, while we also have sensors off board the system in the water that reads flow information, speed information.And so we know if there's a change in power, is that related to a change in flow and we can calibrate that via the sensors, or is it related to an issue in the system? And using both the data off the inverter as well as off of our other data collection systems, helps us to diagnose and monitor device health as well as to especially as we continue to innovate, predict and alert water infrastructure owners of decisions they may need to make.David RobertsThe obvious service you're providing to a water district is we're going to give you some power, some economical power. But I'm wondering about, if you're collecting so much information about water flow, is that information helpful to the canal owners? In other words, are you able to improve the actual operation of the water infrastructure itself?Emily MorrisWe are, and I believe that this will continue to evolve as the industry continues to evolve as well. But right now the water management, especially out in the field, is managed by an aging population. I think the last figure I saw that the average what they call a ditch tender or ditch rider, someone that is monitoring the health of the water conveyance system, the average age of that title is 56 years old.David RobertsA familiar story in so many of these areas.Emily MorrisYeah. So recruiting young talent, recruiting the right type of personnel is tough and so being able to provide data that can integrate back into a SCADA system or otherwise be able to inform those that are not in the field things that may be happening in the canal is definitely valuable. Now over time as well. The canals have been operated for mainly one purpose for many decades now, which is to deliver water and earn revenues off of delivering that water. They're selling the water now as they will be running water and earning revenues from generating power along the way.Working with water districts to optimize their irrigation schedules or their deliveries, to be able to take advantage ...David RobertsSo they could change the way they do things to optimize power delivery too?Emily MorrisYes, I mean, this is one of the very few generation types, particularly on the distribution grid, that is a controllable feedstock. And so to the extent that a water district can generate double the revenue by flowing water during specific times, there are incentives to do so.David RobertsInteresting.Emily MorrisAnd we can provide those. And so aligning incentives between the water district Emrgy and the farmers that they serve to be able to really bring a powerful force of renewable energy onto the grid at the right times of day or the right times of year is something that we believe distributed hydro has a unique ability to do.David RobertsSo I'm guessing that this is in early days, this idea of a water district sort of co-optimizing water usage and power output. I would guess that there's a lot of running room there to find efficiencies and find better ways of doing things.Emily MorrisThat's right there is it's early days. I mean, we are working one of our municipal clients, the canal that we're installed within, its only job is to manage water levels between two reservoirs. So there is a ton of operational flexibility within that section and being able to work with them on optimization of the water flows to drive power is something very straightforward. Now, there are other districts that have been doing things the same way for 50 years. And perhaps they're going to be more of the districts where you have to put the incentive out there first, let them start to see how it changes their income with a change in flow and guide them on that, and we'll see it over time.But this is one thing that we talk about a lot at Emrgy, is how to adequately predict future behaviors with water as a function of how this partnership can work together and provide them both the data, the revenues and other services that are helpful.David RobertsYou could even imagine water districts with an array of these turbines installed maybe playing a role in demand response type things. In other words, they might have the ability to sort of turn it up and down on demand as a source of value.Emily MorrisAbsolutely, and they can do it both on the water side as well as somewhat on the power side as well. If you're familiar with the energy water nexus, the concept that it takes quite a bit of electricity to move water, move and treat water, a lot of these water districts are huge electricity consumers. And so one thing we often talk about with districts is what are their highest consumers of electricity? Is it a particular groundwater well? Is it a particular pumping plant? Is it a particular water treatment facility? How can we both utilize the water to drive demand response and to drive smart operation of water and therefore power?As well as should we cluster these systems around some of those highest consumers even in some ways behind the meter or along with energy storage to where they're able to keep that demand down into a whole different echelon from what they've been operating at?David RobertsRight. Well, this raises the question of in your installations so far, who's buying this power? Who's the modal kind of consumer? Is it the water districts themselves? I mean, they're big electricity consumers. You can see this as kind of a self contained loop kind of thing where they're sort of generating the power that they're using or are you selling it into the grid? Are you selling it to particular off takers or is there a standard model yet?Emily MorrisThere's not a standard model yet. I would say the most common models are power purchase agreements directly with the water district so buying power from us rather than from the grid. And in many cases, if we're in states that have advantageous net metering, which I know are becoming fewer and fewer each year, but able to use that type of arrangement where essentially they're receiving a bill credit and then remitting those savings onto EmrgyDavid RobertsAnd net metering works the same here as it does for solar panels?Emily MorrisYeah, exactly the same. Exactly the same. Down to the same form you fill out from the utility, all the same. And then there are certain states that have advantageous hydro avoided cost contracts where we can just pull directly on a standard offer from the IOU in the area that can allow for a bit of a streamlined contract negotiation. Then when you're meeting with the district, you're only talking about how much we're going to be paying the district to host the system and share those revenues with the IOU rather than contracting with them on power purchase directly.David RobertsRight. A little easier for them. And that sort of raised my next question, which is, is the business model that you go to a water district and sell it these turbines and then it operates these turbines, or is this a power as a service type of arrangement where you own the turbines and operate them and just sell the power to the districts?Emily MorrisYeah, Emrgy has always been organized with a goal toward power as a service. We're currently doing that, although in our first reference projects, we needed to sell the turbines just to get equipment out there, get people familiar with it, which we were successful in doing. Now we're focused primarily on a power as a service model. Although water does tend to be an industry with a high value on ownership. And so many of the districts we work with, they're either interested in being a part owner, they're interested in a future buyout option or transfer of ownership option, just because it's quite common that the manager of the water district grew up at the water district, had maybe a father or grandfather that worked there.And so they focus on generational outcomes. They want to see long lasting systems. They don't want to see us come in, plop something in and then blaze off. They want to know that we're going to be there for the long haul, which with water power that is one of the other benefits is that this is an electromechanical system that if properly maintained, will last for many decades. It doesn't have that inherent chemical degradation.David RobertsRight, solar panels are I think the official is 20 years, or in practice they last a little longer than but I think they're like generally certified for 20 years of operation. What's one of your turbines? Is there a specific fixed time period that you guarantee or how long will these last?Emily MorrisYeah, well, we market 30 years. We seek out 30-year contracting arrangements on both site hosting and power production and sales. But truly there's nothing that drives that 30 years aside from that's what our clients are used to seeing from solar or wind or other types. For us, if these systems continue to be maintained, well, we do do an overhaul every 15 years and make sure that all the equipment is well maintained. But ultimately I was just in Idaho, a few weeks ago and there was a hydro-plant there that had similar materials, similar bearings, similar turbine blades, generators.It was 113 years old. And I won't live long enough to know if one of our turbines can last that long, but there isn't anything inherent of the system that just breaks down and ultimately causes it not to function.David RobertsRight. So another question is which these days I find myself asking every guest, which is what is IRA doing for you? Is the Inflation Reduction Act helping you in some specific way either in manufacturing these things and by the way, they're manufactured here in the US?Emily MorrisThey are.David RobertsSo that's domestic content, what's your relationship with the IRA?Emily MorrisWhile we are still early in how the IRA is being implemented and transacted against within our projects, the understanding of how the IRA will provide advantage to the projects is massive for us. You're spot on. Our systems qualify for both the production tax credit and the investment tax credit. And by both, I mean either we can use either one. We meet the requirements for the domestic content requirement, and many of our projects that we're seeking are in energy communities as well.David RobertsOh, right.Emily MorrisAnd so the opportunity for quite a substantial tax benefit as a function of these projects. And I'll say, in addition, some of the other major IRA programs or BIL programs that funded both the Department of Energy's Office of Clean Energy Demonstrations, OCED, or the USDA's Rural Energy for America program, the REAP program, are also incredibly advantageous to our projects. A substantial amount of our project pipeline right now is in USDA REAP eligible census tracts, which means that they qualify for either loan guarantees, which provides for commercial lenders to be able to offer lower interest lending to the project, or grant programs for renewable energy systems up to a million dollars each. And so these can provide, especially given that these are not exclusive, so we can bring in both REAP loan guarantees as well as the IRA tax benefits into the same project, making them incredibly attractive even in an earlier stage of a company where we haven't yet optimized cost and whatnot.David RobertsInteresting, so you're already in a position where you can go to a water district and offer them a pretty sweet deal, very low upfront costs, a new revenue stream, fairly minimal maintenance. A couple of final questions. First off, you talk about sort of scale and reducing costs. These are pretty simple, as I said before, as one of the benefits. Sort of simple. You have a concrete bracket, there's a vertical turbine, there's some wires and some power control stuff. Where is the room here for technological advancement or is there room for a lot of tech advancement or are you going to get more cost reductions out of scale?Or are you, do you think, pretty close already to this being as cheap as it can get?Emily MorrisYeah, I mean, in terms of tech advancement. I often describe our systems as sort of like when you drive past a wind farm and you can just tell that it was built in wind 1.0 all the turbines are sort of facing the same direction and they're sort of spaced in a finite manner. And then you drive by a newer wind facility and you can tell they're taking advantage of all of the wake of all the different turbines and they're all oriented differently and they're spaced differently. I call our system still a bit of like that 1.0 feel right?We're designing systems and optimizing them for the canals, but there's things that we just can't simulate in any fluid dynamic software until we've got hundreds or thousands of these turbines out there operating.David RobertsSo learning some learning by doing here.Emily MorrisOh, absolutely. I mean, there are times we've seen in practice where the turbines are all generating and then let's say the water district starts to they lower their flow and the turbines are no longer fully submerged in the water. And we found that if you ease off of one of the turbines in terms of its electrical loading and it starts to spin faster in freewheel, then it can ultimately push water levels up and the turbines upstream push into their optimal generating capacity. And that gets a little technical. Maybe folks listening want to call me a nerd out about that sometime, I'd love to ...David RobertsAbout hydraulics.Emily MorrisBut nonetheless, we are definitely at the tip of the iceberg in terms of understanding all the different wake effects and how to create an array that is more than the sum of its parts. So I'd say that's a big area for tech advancement. We are currently funded by ARPA-E in advancing that what we call the term we use is called dynamic tuning, tuning the systems as things dynamically change around them. Another area for advancement is certainly around hybrids and micro grids. So you made the comment earlier about solar or this and we really believe that to really become carbon free at the distribution level, it's going to be many different technologies, not one silver bullet.And so there's no reason why you shouldn't combine either floating solar or ground mounted or spanning solar together with our system, share as much of the balance of system as possible, drive LCOE down and have a hybrid. Adding in energy storage or even adding in renewable fuels production is absolutely something that you could use our system with. And we're actually, we're funded with DOE on another one of these projects looking at micro-grids for resiliency, because a lot of times that resiliency piece in a micro-grid is diesel, right? When all else fails, you have your diesel.And so how can we create something where hydro can be that resiliency piece as something that we're currently working on as well for tech advancement?David RobertsInteresting.Emily MorrisAnd I think you'll see a lot of we see Emrgy as sort of the base platform, the distributed hydro as the base platform. But ultimately we're interested in pursuing how water infrastructure, which spans, as we already talked about, both rural and urban environments, can ultimately become a key facilitator of the energy transition, not just something that's invisible.David RobertsWould you Emrgy get into designing and installing hybrid systems or would this be like a partnership with a solar company? Or is it too early to know?Emily MorrisWe already are into designing and specifying hybrid systems and really more so on creating, for lack of a better term, sort of the universal plug right, where you could plug our system and solar and other things into our overall power architecture. And so we're not necessarily out there innovating on the solar side or on the energy storage side, but creating a way that whether it's with a codevelopment partnership or whether it's something that we can source from a manufacturer, the same way that other developers do, with a very flexible and universal application for combining generation and storage types.David RobertsYeah, because if there are efficiencies available in optimizing one of your systems, I can just imagine once you get into optimizing systems that are small hydro turbines and solar panels and batteries, the more pieces you have, the more sort of room for optimization and efficiency you have, and the more sort of runway there is to bring down costs for the total system.Emily MorrisAnd the more controllability you can add, then the more ultimately this becomes meaningful. At the distribution scale, I think we need more controllability and dispatchability at the distributed scale and providing that baseload resource is one of the key pieces to getting there. And so we don't claim to be experts in microgrid controls or anything like that and definitely seek partnerships in that regard. But I definitely see this as an important piece to the puzzle in how we get to be a more resilient set of carbon-free communities.David RobertsMaybe just say a word or two about why you think, because there's a long running argument in the clean energy world where you see this, especially in solar, where people say, well, the industrial size, utility scale solar, you get cheaper per kilowatt hour output, which I don't think is controversial. Like if you're just measuring on a per kilowatt hour basis, you're going to get cheaper power out of giant fields of solar than by scattered multiple installations. So what do you see as kind of the advantage of doing all this work in a distributed way rather than just say, like adding some big new dam or some big turbine to some big river somewhere? What do you see as sort of the advantages of power generation being distributed through urban and rural areas in water infrastructure like this?Emily MorrisI wouldn't call myself an expert on the math, but while I think you're right that at the field the cost per kilowatt hour of a large solar farm is less. Although I don't know that that math holds. If it's the cost of that kilowatt hour to your home, and if you calculated the per kilowatt hour cost to your home for utility or transmission level solar versus local distributed energy, whether that's solar or Emrgy or anything else, I think the number is probably a lot closer and maybe surprising. I'm sure people have done the math. I personally don't know it, but I believe that as we start looking and staring down the barrel, truly, of what it's going to cost our grid, our transmission grid, to maintain modernization and resiliency, if all we do is keep building large utility scale solar farms, the price of delivery to the house is no question going to become higher and higher.And if we can successfully generate local energy, then it should be lower cost because you're not going to have those massive grid upgrades. It should be more resilient so that if there's a wildfire halfway across the state, it doesn't affect you.David RobertsThe micro-gridding and ability to island is huge, especially if you imagine it sort of multiplied out to every place with a series of canals, which is more or less every city of any size.Emily MorrisNo question. And so we're big believers in the distributed scale, but again, large hydro and large solar provides such a huge benefit. I think we often take strong stances without realizing all the benefits we enjoy from all the various types of assets that are on the grid. And so I think there's a need for all of it. But I absolutely think that there is a better way to becoming net zero than just covering all of our remote fields in solar and all the batteries that are needed to get there. So being able to bring that more locally in a more continuous format is one solution of, I think, all the many that we'll need to truly become net zero.David RobertsSo, final question is a question that, as you say, you get asked a lot. Do you have an eye on other kinds of distributed water infrastructure or is this like a canal play more or less exclusively? Or are there other like, I didn't even really know about canals, so are there other hidden water infrastructure that I don't know about hiding around? Or can you imagine something this simple and modular and low footprint working in natural water features, streams or rivers or something? What's the sort of next step beyond this?Emily MorrisYeah, I mean, we get asked for all sorts of applications that would probably not be on your radar. Whether we can hang these off of oil rigs out in the Gulf, or can we take advantage of the intercoastal waterways on the barrier islands in Florida, or could we use these in tidal environments in Australia or in LNG plants in Singapore? I mean, you name it, we definitely get asked about anytime someone either is driving in their car, looks out the window and sees a flow of water, and they think, "Oh, we should be able to tap into that energy."David RobertsRight, there's energy in all of it.Emily MorrisThey're absolutely right from a physics perspective, but Emrgy is super focused on what we can do and bring value today. Because for me, a clean kilowatt hour generated today is far more valuable than a clean kilowatt hour that I have to plan for and engineer for and design for that can be generated in 2028. And so we're focused on what are near real term opportunities. I would say that we're coming full circle back around to some of the water treatment applications.David RobertsYeah, I was going to ask, what if there's stuff in the water? I meant to ask this much earlier. Are most of these canals carrying clean water? And if it's not clean, if there's stuff in it, does that muck with your turbines?Emily MorrisCertainly. If there's undesirables in the water, it's going right through our turbines. We design the turbines to avoid as much as that as possible with some fluid mechanic designs, but we have an operating mode that essentially will flush the turbines if needed. If they're stuck, if there's debris or algae or something on there, that's a very similar mechanism to what you find in a pump to flush it and get rid of any alien items. But nonetheless, I would say that in terms of water treatment, we'd be focused on effluent channels of already treated water that's returning out to a different water source.As I mentioned before, we are doing some R&D work related to riverine and tidal resources. When I started Emrgy, I said, "Hey, we're going to pick a market that we can really master. And if we can master the product and master the base platform that can scale, amending it for a specific environment is much easier than trying to create a product in lots of different environments at the same time." So over time, perhaps you'll see us in rivers or you'll see us in tides. I don't think it'll be anytime soon. The UN Food and Agriculture Organization estimates that there's 2 million linear miles of surface water infrastructure in the world over the globe.And so we'll be pretty busy in the canal market for a long time. And I think building a really impactful technology for this space along the way. But certainly we'd be open to collaborations or exploring other markets as those become, I believe, more accessible and developable.David RobertsIt's exciting to me because this is sort of, as we said, modular and repeatable in the way that solar was, but at the very, very beginning of that journey that we've seen solar go through, which is scale expands, it gets cheaper. You find your ways into new niches. You find your way into applications you didn't even know you were going to get near. Just sort of like it's a self reinforcing cycle of sort of scale and cheapness and then spreading to new applications. That's been fascinating to watch in solar, and it's sort of just at the outset here in small-hydro.Emily MorrisAbsolutely. We hope we can leapfrog some of that, having learned from all the things that they've done and being able to actually adopt many of their innovations like the inverters and whatnot. But no question, this is an emerging asset class. There's still tons to learn. And as we scale, I'll like to look back on this podcast a few years from now and see how many of my predictions help.David RobertsYeah, we'll have to have you back on. Alright, Emily Morris of Emrgy, thanks so much for coming on this really intriguing and exciting new area here, so I appreciate you sharing with us.Emily MorrisThis was great, thanks for having me.David RobertsThank you for listening to the Volts podcast. It is ad-free, powered entirely by listeners like you. If you value conversations like this, please consider becoming a paid Volts subscriber at volts.wtf. Yes, that's volts.wtf, so that I can continue doing this work. Thank you so much, and I'll see you next time. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.volts.wtf/subscribe

In this episode, environmental social scientist Holly Jean Buck discusses the critique of emissions-focused climate policy that she laid out in her book Ending Fossil Fuels: Why Net Zero Is Not Enough.(PDF transcript)(Active transcript)Text transcript:David RobertsOver the course of the 2010s, the term “net-zero carbon emissions” migrated from climate science to climate modeling to climate politics. Today, it is ubiquitous in the climate world — hundreds upon hundreds of nations, cities, institutions, businesses, and individuals have pledged to reach net-zero emissions by 2050. No one ever formally decided to make net zero the common target of global climate efforts — it just happened.The term has become so common that we barely hear it anymore, which is a shame, because there are lots of buried assumptions and value judgments in the net-zero narrative that we are, perhaps unwittingly, accepting when we adopt it.Holly Jean Buck has a lot to say about that. An environmental social scientist who teaches at the University at Buffalo, Buck has spent years exploring the nuances and limitations of the net-zero framework, leading to a 2021 book — Ending Fossil Fuels: Why Net Zero Is Not Enough — and more recently some new research in Nature Climate Change on residual emissions.Buck is a perceptive commentator on the social dynamics of climate change and a sharp critic of emissions-focused climate policy, so I'm eager to talk to her about the limitations of net zero, what we know and don't know about how to get there, and what a more satisfying climate narrative might include.So with no further ado, Holly Jean Buck. Welcome to Volts. Thank you so much for coming.Holly Jean BuckThanks so much for having me.David RobertsIt's funny. Reading your book really brought it home to me how much net zero had kind of gone from nowhere to worming its way completely into my sort of thinking and dialogue without the middle step of me ever really thinking about it that hard or ever really sort of like exploring it. So let's start with a definition. First of all, a technical definition of what net zero means. And then maybe a little history. Like, where did this come from? It came from nowhere and became ubiquitous, it seemed like, almost overnight. So maybe a little capsule history would be helpful.Holly Jean BuckWell, most simply, net zero is a balance between emissions produced and emissions taken out of the atmosphere. So we're all living in a giant accounting problem, which is what we always dreamed of, right? So how did we get there? I think that there's been a few more recent moments. The Paris agreement obviously one of them, because the Paris agreement talks about a balance between anthropogenic emissions by sources and removals by sinks. So that's kind of part of the moment that it had. The other thing was the Special Report on 1.5 degrees by the Intergovernmental Panel on Climate Change, which further showed that this target is only feasible with some negative emissions.And so I think that was another driver. But the idea of balancing sources and sinks goes back away towards the Kyoto Protocol, towards the inclusion of carbon sinks, and thinking about that sink capacity.David RobertsSo you say, and we're going to get into the kind of the details of your critique in a minute. But the broad thing you say about net zero is that it's not working. We're not on track for it. And I guess intuitively, people might think, well, you set an ambitious target and if you don't meet that target, it's not the target's fault, right. It's not the target's reason you're failing. So what do you mean exactly when you say net zero is not working?Holly Jean BuckWell, I think that people might understandably say, "Hey, we've just started on this journey. It's a mid-century target, let's give it some time, right?" But I do think there's some reasons why it's not going to work. Several reasons. I mean, we have this idea of balancing sources and sinks, but we're not really doing much to specify what those sources are. Are they truly hard to abate or not? We're not pushing the scale up of carbon removal to enhance those sinks, and we don't have a way of matching these emissions and removals yet. Credibly all we have really is the voluntary carbon market.But I think the main problem here is the frame doesn't specify whether or not we're going to phase out fossil fuels. I think that that's the biggest drawback to this frame.David RobertsWell, let's go through those. Let's go through those one at a time, because I think all of those have some interesting nuances and ins and outs. So when we talk about balancing sources and sinks, the way this translates, or I think is supposed to translate the idea, is a country tallies up all of the emissions that it is able to remove and then adds them all up. And then what remains? This kind of stuff, it either can't reduce or is prohibitively expensive to reduce the so called difficult to abate or hard to abate emissions. Those are called its residual emissions, the emissions that it doesn't think it can eliminate.And the theory here is then you come in with negative emissions, carbon reduction, and you compensate for those residual emissions. So to begin with, the first problem you identify is that it's not super clear what those residual emissions are or where they're coming from, and they're not very well measured. So maybe just explain sort of like, what would you like to see people or countries doing on residual emissions and what are they doing, what's a state of knowledge and measurement of these things?Holly Jean BuckSo the state right now is extremely fuzzy. And so I'll just back up and say that my colleagues and I looked at these long term strategies that are submitted to the UNFCCC under the Paris Agreement. Basically, each country is invited to submit what its long term strategy is for reaching its climate goals. And so we've read 50 of those.David RobertsGoodness.Holly Jean BuckYeah, lots of fun. And they don't have a standard definition of what these residual emissions are, although they refer to them implicitly in many cases. You can see the residual emissions on these graphs that are in these reports.But we don't have a really clear understanding in most cases where these residual emissions are coming from, how the country is thinking about defining them, what their understanding of what's truly hard to abate is. And I emphasize with this being a challenge, because what's hard to abate changes over time because new technologies come online. So it's hard to say what's going to be hard to abate in 10 or 20 years.David RobertsRight.Holly Jean BuckBut we could get a lot better at specifying this.David RobertsAnd this would just tell us basically without a good sense of residual emissions across the range of countries, we don't have a good sense of how much carbon removal we need. So is there something easy to say about how we could make this better? Is there a standardized framework that you would recommend? I mean, are any countries doing it well and precisely sort of identifying where those emissions are and explaining why and how they came to that conclusion?Holly Jean BuckSo there's 14 countries that do break down residual emissions by sector, which is like the first, most obvious place to start.David RobertsRight.Holly Jean BuckSo, number one, everybody should be doing that and understanding what assumptions there are about what sectors. And generally a lot of this is non-CO2 emissions and emissions from agriculture. There's some emissions left over from industry, too, but having clarity in that is the most obvious thing. And then I think that we do need a consistent definition as well as processes that are going to standardize our expectations around this. That's something that's going to evolve kind of, I think, from the climate advocacy community, hopefully, and a norm will evolve about what's actually hard to abate versus what's just expensive to abateDavid RobertsKind of a small sample size. But of the 14 countries that actually do this, are there trends that emerge? Like, what do these 14 countries currently believe will be the most difficult emissions to eliminate? Is there agreement among those 14 countries?Holly Jean BuckWell, it's pretty consistent that agriculture is number one, followed by industry, and that in many cases, transport, at least short transport, light duty transport is considered to be fully electrified. In many cases, the power sector is imagined to be zero carbon. But I will also say that the United Kingdom is the only one that even included international aviation and shipping in its projection. So a long way to go there.David RobertsAnd this is not really our subject here. But just out of curiosity, what is the simple explanation for why agriculture is such a mystery? What are these emissions in agriculture that no one can think of a way to abate?Holly Jean BuckI mean, I think it varies by country, but a lot of it is nitrous oxide. A lot of it has to do with fertilizer and fertilizer production, fertilizer over application and I think obviously some of it is methane too from the land sector, from cows. So I think maybe that is considered a more challenging policy problem than industry.David RobertsYeah, this is always something that's puzzled me about this entire framework and this entire debate is you look at a problem like that and you think, well, if we put our minds to it, could we solve that in the next 30 years? I mean, probably. You know what I mean? It doesn't seem versus standing up this giant carbon dioxide removal industry which is just a gargantuan undertaking. This has never been clear to me why people are so confident that carbon dioxide removal is going to be easier than just solving these allegedly difficult to solve problems over the next several decades.I've never really understood that calculation.Holly Jean BuckI think it just hasn't been thought through all the way yet. But I expect in the next five years most people will realize that we need a much smaller carbon removal infrastructure than is indicated in many of the integrated assessment models.David RobertsYeah, thank you for saying that. This is my intuition, but I just don't feel sort of like technically briefed or technically adept enough to make a good argument for it. But I look at this and I'm like which of these problems are going to be easier to solve? Finding some non-polluting fertilizer or building a carbon dioxide removal industry three times the size of the oil industry? It's crazy to view the latter as like, oh, we got to do that because we can't do the first thing. It just seems crazy. Okay, so for the first problem here with net zero is we don't have a clear sense of what these residual emissions are, where they come from, exactly how we define them, et cetera.So without that, we don't have a clear sense of the needed size of the carbon dioxide removal industry. That said, problem number two here is that even based on what we are currently expecting CDR to do, there doesn't appear to be a coordinated push to make it happen. Like we're just sort of like waving our hands at massive amounts of CDR but you're not seeing around you the kinds of mobilization that would be necessary to get there. Is that roughly accurate?Holly Jean BuckYeah, and I think it follows from the residual emissions analysis because unless a country has really looked at that, they probably don't realize the scale of CDR that they're implicitly relying on.David RobertsRight, so they're implicitly relying on CDR for a couple of things you list in your presentation I saw and residual emissions is only one of those things we're expecting CDR to do.Holly Jean BuckThere's the idea that CDR will also be compensating for legacy emissions or helping to draw down greenhouse gas concentrations after an overshoot. I don't think anybody is saying that exactly because we're not at that point yet, but it's kind of floating around on the horizon as another use case for carbon removal.David RobertsYeah. So it does seem like even the amount of CDR that we are currently expecting, even if most countries haven't thought it through, just the amount that's already on paper that we're expecting it to do, we're not seeing the kind of investment that you would want to get there. What does that tell you? What should we learn from that weird disjunct?Holly Jean BuckFor me, it tells me that all the climate professionals are not really doing their jobs. Maybe that sounds mean, but we have so many people that are devoted to climate action professionally and so it's very weird to not see more thinking about this. But maybe the more nice way to think about it is saying oh well, people are really focused on mitigation. They're really focused on scaling up clean energy which is where they should be focused. Maybe that's reasonable.David RobertsYeah, maybe this is cynical, but some part of me thinks, like if people and countries really believed that we need the amount of CDR they're saying we're going to need, that the models show we're going to need, by mid century they would be losing their minds and flipping out and pouring billions of dollars into this. And the fact that they're not to me sort of like I guess it feels like no one's really taking this seriously. Like everyone still somewhat sees it as an artifact of the models.Holly Jean BuckI don't know, I think the tech sector is acting on it, which is interesting. I mean, you've seen people like Frontier mobilize all these different tech companies together to do these advanced market commitments. I think they're trying to incubate a CDR ecosystem. And so why does interest come there versus other places? Not exactly sure. I have some theories but I do wonder about the governments because in our analysis we looked at the most ambitious projections offered in these long term strategies and the average amount of residual emissions was around 18% of current emissions. So all these countries have put forward these strategies where they're seeing these levels of residual emissions.Why are they not acting on it more in policy? I think maybe it's just the short termism problem of governments not being accountable for things that happen in 30 years.David RobertsYeah, this is a truly strange phenomenon to me and I don't even know that I do have any theories about it, but it's like of all the areas of climate policy there are tons and tons of areas where business could get involved and eventually build self-sustaining profitable industries out of them. But CDR is not that there will never be a self-sustaining profitable CDR industry. It's insofar as it exists, it's going to exist based on government subsidies. So it's just bizarre for business to be moving first in that space and for government to be trailing.It just seems upside down world. I can't totally figure out government's motivations for not doing more and I can't totally figure out businesses motivations for doing so much.Holly Jean BuckWell, I think businesses acting in this R&D space to try to kind of claim some of the tech breakthroughs in the assumption that if we're serious about climate action we're going to have a price on carbon. We're going to have much more stringent climate policy in a decade or two. And when that happens, the price of carbon will be essentially set by the price of removing carbon. And so if they have the innovation that magically removes the most carbon, they're going to be really well set up for an extremely lucrative industry. This is all of course hinging on the idea that we're going to be willing to pay to clean up emissions just like we're willing to pay for trash service or wastewater disposal or these other kind of pollution removal services.Which is still an open question, but I sure hope we will be.David RobertsYeah, it's totally open. And this is another area where this weird disjunct between this sort of expansive talk and no walk. It's almost politically impossible to send money to this greenhouse gas international fund that's supposed to help developing countries decarbonize, right? Like even that it's very difficult for us to drag enough tax money out of taxpayers hands to fund that and we're going to be sending like a gazillion times more than that on something that has no visible short term benefit for taxpayers. We're all just assuming we're going to do that someday. It seems like a crazy assumption.And if you're a business and you're looking to make money, it just seems like even if you're just looking to make money on clean energy, it seems like there's a million faster, easier ways than this sort of like multidecade bank shot effort. I feel like I don't have my head wrapped around all those dynamics. So the first problem is residual emissions. They're opaque to us, we don't totally get them. Second problem is there's no evident push remotely to scale of the kind of CDR we claim we're going to need. And then the third you mentioned is there's no regime for matching emissions and removals.Explain that a little bit. What sort of architecture would be required for that kind of regime?Holly Jean BuckWell, you can think of this as a market or as a platform, basically as a system for connecting emissions and removals. And obviously this has been like a dream of technocratic climate policy for a long time, but I think it's frustrated by our knowledge capabilities and maybe that'll change in the future if we really do get better models, better remote sensing capacities. Obviously, both of those have been improving dramatically and machine learning accelerates it. But it assumes that you really have good knowledge of the emissions, good knowledge of the removals, that it's credible. And I think for some of the carbon removal technologies we're looking at this what's called MRV: monitoring, reporting, and verification.Is really challenging, especially with open systems like enhanced rock weathering or some of the ocean carbon removal ideas. So we need some improvement there. And then once you've made this into a measurable commodity, you need to be able to exchange it. That's been really frustrated because of all the problems that you've probably talked about on this podcast with carbon markets, and scams, bad actors. It's all of these problems and the expense of having people in the middle that are taking a cut off of the transactions.David RobertsYeah. So you have to match your residual emissions with removals in a way that is verifiable, in a way that, you know, the removals are additional. Right. You get back to all these carbon market problems and as I talked with Danny Cullenword and David Victor about on the pod long ago, in carbon offset markets, basically everyone has incentive to keep prices low and to make things look easy and tidy. And virtually no one, except maybe the lonely regulators has the incentive to make sure that it's all legit right there's just like there's overwhelming incentive to goof around and cheat and almost no one with the incentive to make sure it's valid.And all those problems that face the carbon offset market just seem to me like ten times as difficult. When you're talking about global difficult to measure residual emissions coupled with global difficult to measure carbon dioxide removals in a way where there's no double counting and there's no shenanigans. Like, is that even a gleam in our eye yet? Do we even have proposals for something like that on the table?Holly Jean BuckI mean, there's been a lot of best principles and practices and obviously a lot of the conversation around Article Six and the Paris agreement and those negotiations are towards working out better markets. I think a lot of people are focused on this, but there's definitely reason to be skeptical of our ability to execute it in the timescales that we need.David RobertsYeah, I mean, if you're offsetting residual emissions that you can't reduce, you need that pretty quick. Like, this is supposed to be massively scaling up in the next 30 years and I don't see the institutional efforts that would be required to build something like this, especially making something like this bulletproof. So we don't have a good sense of residual emissions. We're not pushing very hard to scale CDR up even to what we think we need. And we don't have the sort of institutional architecture that would be required to formally match removals with residual emissions. These are all kind of, I guess, what you'd call technical problems.Like, even if you accepted the goal of doing this or this framework, these are just technical problems that we're not solving yet. The fourth problem, as you say, is the bigger one, perhaps the biggest one, which is net zero says nothing about fossil fuels. Basically. It says nothing about the socioeconomics of fossil fuels or the social dynamics of fossil fuels. It says nothing about the presence of fossil fuels in a net-zero world, how big that might be, et cetera. So what do you mean when you say it's silent on fossil fuels?Holly Jean BuckYeah, so this was a desirable design feature of net zero because it has this constructive ambiguity around whether there's just like a little bit of residual emissions and you've almost phased out fossil fuels, or if there's still a pretty significant role for the fossil fuel industry in a net-zero world. And that's what a lot of fossil fuel producers and companies are debating.David RobertsYes, I've been thinking about this recently in the context of the struggle to get Joe Manchin to sign decent legislation. Like, if you hear Joe Manchin when he goes on rambling on about climate change, it's very clear that he views carbon dioxide removal as basically technological license for fossil fuels to just keep on keeping on. Like, in his mind, that's what CDR means. Whereas if you hear like, someone from NRDC talking about it, it's much more like we eliminated almost everything. And here's like, the paper towel that we're going to use to wipe up these last little stains.And that's a wide gulf.Holly Jean BuckI don't want to seem like the biggest net-zero hater in the world. I understand why it came up as a goal. I think it was a lot more simple and intuitive than talking about 80% of emissions reduction over 2005 levels or like the kind of things that it replaced. But ultimately, this is a killer aspect to the whole idea, is not being clear about the phase out of fossil fuels.David RobertsAnd you say you can envision very different worlds fitting under net zero. What do you mean by that?Holly Jean BuckWell, I mean, one axis is the temporality of it. So is net zero, like, just one moment on the road to something else? Is it a temporary state or is it a permanent state where we're continuing to produce some fossil fuels and we're just living in that net zero without any dedicated phase out? I think that right now there's ambiguity where you could see either one.David RobertsThat is a good question. In your research on this, have you found an answer to that question of how people view it? Like, I'd love to see a poll or something. I mean, this is a tiny subset of people who even know what we're talking about here. But among the people who talk about net zero, do you have any sense of whether they view it as like a mile marker on the way to zero-zero or as sort of like the desired endstate?Holly Jean BuckYou know, it's funny because I haven't done a real poll, but I've done when I'm giving a talk at a conference of scientists and climate experts twice I've asked this question, do you think it's temporary or do you think it's like a permanent desired state? And it's split half and half each time, which I find really interesting. Like, within these climate expert communities, we don't have a clear idea ourselves.David RobertsAnd that's such a huge difference. And if you're going to have CDR do this accounting for past emissions, for your past emissions debt, if you're going to do that, you have to go negative, right. You can't stay at net zero, you have to go net negative. So it would be odd to view net zero as the end state. And yet that seems like, what's giving fossil fuel companies permission to be involved in all this.Holly Jean BuckYeah. No, we do need to go net negative. And I think one challenge with the residual emissions is that carbon removal capacity is going to be finite. It's going to be limited by geography, carbon sequestration capacity, ecosystems and renewable energy, all of these things. And so if you understand it as finite, then carbon removal to compensate for residual emissions is going to be in competition with carbon removal to draw down greenhouse gas concentrations. And so we never get to this really net negative state if we have these large residual emissions, because all that capacity is using to compensate rather than to get net negative, if that makes sense.David RobertsYeah. Given how sort of fundamental those questions are and how fundamental those differences are, it's a little this is what I mean when I sort of the revelation of reading your book. Like, those are very, very different visions. If you work backwards from those different visions, you get a very, very different dynamic around fossil fuels and fossil fuel companies and the social and political valence of fossil fuels, just very fundamentally different. It's weird that it's gone on this long with that ambiguity, which, I guess, as you say, it was fruitful to begin with, but you kind of think it's time to de-ambiguize this.Holly Jean BuckYeah. Because there's huge implications for the infrastructure planning that we do right now.David RobertsRight.Holly Jean BuckIt's going to be a massive transformation to phase out fossil fuels. There's a million different planning tasks that need to have started yesterday and should start today.David RobertsYeah. And I guess also, and this is a complaint, maybe we'll touch on more later, but there's long been, I think, from some quarters of the environmental movement, a criticism of climate people in their sort of emissions or carbon greenhouse gas emissions obsession. And when you contemplate fossil fuels, it's not just greenhouse gases. There's like all these proximate harms air pollution and water pollution, et cetera, et cetera, geopolitical stuff. And I think the idea behind net zero was, let's just isolate greenhouse gas emissions and not get into those fights. But I wonder, as you say, we have to make decisions now, which in some sense hinge on which we were going to go on that question.Holly Jean BuckYeah, I mean, it was a huge trick to get us to focus on what happens after the point of combustion rather than the extraction itself.David RobertsYeah, it says nothing about extraction, too. So your final critique of net zero fifth and final critique is that it is not particularly compelling to ordinary people, which I think is kind of obvious. Like, I really doubt that the average Joe or Jane off the street would even know what you mean by net zero or would particularly know what you mean by negative carbon emissions and if you could explain it to them, would be particularly moved by that story. So what do you mean by the meta narrative? Like, why do you think this falls short?Holly Jean BuckI mean, accounting is fundamentally kind of boring. I think a lot of us avoid it, right? And so if I try to talk to my students about this, it's really work to keep them engaged and to see that actually all this stuff around net zero impacts life and death for a lot of people. But we don't feel that when we just look at the math or we look at the curve and we talk about bending the curve and this and that, we have this governance by curve mode. It's just not working in terms of inspiring people to change anything about their lives.David RobertsYeah, bending the curve didn't seem to work great during the pandemic either. This gets back to something you said before about what used to be a desirable design feature when you are thinking about other things that you might want to bring into a meta narrative about climate change. Most of what people talk about and what people think about is sort of social and political stuff. Like, we need to talk about who's going to win and who's going to lose, and the substantial social changes and changes in our culture and practices that we need. We need to bring all these things in.But then the other counterargument is those are what produce resistance and those are what produce backlash. And so as far as you can get on an accounting framework, like if the accounting framework can sort of trick various and sundry participants and institutions into thinking they're in a value neutral technical discussion, if you can make progress that way, why not do it? Because any richer meta narrative is destined to be more controversial and more produce more political backlash. What do you think about that?Holly Jean BuckNo, I think that the problem is we haven't invested at all in figuring out how to create desire and demand for lower carbon things. I mean, maybe the car industry has tried a little bit with some of the electric trucks or that kind of thing, but we have all this philanthropy, government focus, all the stuff on both the tech and on the carbon accounting pieces of it. We don't have very much funding going out and talking to people. About why are you nervous about transitioning to gas in your home? What would make you feel more comfortable about that?Those sorts of relational things, the conversations, the engagement has been gendered, frankly. Lots of times it falls to women to do this kind of relational work and hasn't been invested in. So I think there's a whole piece we could be doing about understanding what would create demand for these new infrastructures, new practices, not just consumer goods but really adoption of lifestyle changes because you need that demand to translate to votes to the real supportive policies that will really make a difference in this problem.David RobertsYeah, I very much doubt if you go to talk to people about those things they're going to say, well, I want to get the appliance that's most closely going to zero out my positive conditions. You're not going to run into a lot of accounting if you ask people about their concerns about these things. So these are the problems. We're not measuring it well. We're not doing what we need to do to remove the amount of CDR we say we need. We don't have the architecture or the institutional structures to create some sort of system where we're matching residual emissions and removals.And as a narrative it's fatally ambiguous about the role of fossil fuels in the future and plus ordinary people don't seem to give much of a s**t about it. So in this presentation you sort of raise the prospect that the whole thing could collapse, that the net-zero thing could collapse. What do you mean by that and how could that happen?Holly Jean BuckSo I think this looks more like quiet quitting than anything else because I do think it is too big to fail in terms of official policy. There's been a lot of political capital spent.David RobertsYeah, a lot of institutions now have that on paper, like are saying on paper that they want to hit net zero. So it seems to me like it would take a big backlash to get rid of it.Holly Jean BuckYeah. So I don't think some companies may back away from targets. There'll be more reports of targets not being on track. And I think what happens is that it becomes something like the Sustainable Development Goals or dealing with the US national debt where everybody kind of knows you're not really going to get there, but you can still talk about it aspirationally but without confidence. Because it did feel like at least a few years ago that people were really trying to get to net zero. And I think that sensation will shift and it'll become empty like a lot of other things, unfortunately.But I think that creates an opportunity for something new to come in and be the mainframe for climate policy.David RobertsNet zero just seems like a species of a larger thing that happens. I don't know if it happens in other domains, but in climate and clean energy it happens a lot, which is just sort of like a technical term from the expert dialogue, worms its way over into popular usage and is just awful and doesn't mean anything to anyone. I think about net metering and all these kind of terminological disputes. So it doesn't really I'm not sure who's in charge of metanarratives, but it doesn't seem like they're very thoughtfully constructed. So let's talk a little bit about what characteristics you think a better metanarrative about climate change would include.Holly Jean BuckFirst, I think it is important that we are measuring progress towards a goal for accountability reasons. But I think there needs to be more than just the metric. I think we have an obsession with metrics in our society that sometimes becomes unhealthy or distracts us from the real focus. But I do think there should be some amount of measuring specific progress towards a goal. I think that the broader story also has to have some affect or emotional language. There has to be some kind of emotional connection. I also think we have to get beyond carbon to talk about what's going on with ecosystems more broadly and how to maintain them and have an intact habitable planet and then just pragmatically.This has to be a narrative that enables broad political coalitions. It can't be just for one camp and it has to work on different scales. I mean, part of the genius of net zero is that it is this multi-scalar planetary, but also national, also municipal, corporate, even individual does all of that. So those are some of the most important qualities that a new frame or a new narrative would have to have.David RobertsThat sounds easier said than done. I can imagine measuring other things you mentioned in your book several sort of submeasurements other than just this one overarching metric. You could measure how fast fossil fuels are going away. You could measure how fast clean energy is scaling up. There are adaptation you can measure to some extent. So I definitely can see the benefit in having a wider array of goals, if only just because some of those just get buried under net zero and are never really visible at all. That makes sense to me. But the minute you start talking about a metanarrative with affect, with emotion, the way to get that is to appeal to people's values and things that they cherish and feel strongly about.But then we're back to the problem we talked about earlier, which is it seems like especially in the US these days, we're just living in a country with two separate tribes that have very, very different values. And so the minute you step beyond the sort of technocratic metric, which in a sense is like clean and clinical and value free and start evoking values, trying to create emotion, you get greater investment and passion in some faction and alienate some other faction. Do you just think that that's like unavoidable and you have to deal with that or how do you think about that dilemma?Holly Jean BuckI actually think people do have the same values, but they're manipulated by a media ecosystem that profits from dividing them, which makes it impossible for them to see that they do have aligned values. And I base that just on my experience, like as a rural sociologist and geographer talking to people in rural America. People are upset about the same exact things that the leftists in the cities I visit are upset about too. They really do value justice. They think it's unfair that big companies are taking advantage of them. There are some registers of agreement about fairness, about caring for nature, about having equal opportunities to a good and healthy life that I think we could build on if we weren't so divided by this predatory media ecology.David RobertsI don't suppose you have a solution for that, in your back pocket?Holly Jean BuckI have a chapter on this in a forthcoming book which you might be interested. It's edited by David Orr. It's about democracy in hotter times, looking at the democratic crisis and the climate crisis at the same time. And so I've thought a little bit about media reform, but it's definitely not my expertise. We should have somebody on your podcast to talk about that too.David RobertsWell, let me tell you, as someone who's been obsessed with that subject for years and has looked and looked and looked around, I don't know that there is such thing as an expert. I've yet to encounter anyone who has a solution to that problem that sounds remotely feasible to me, including the alleged experts. And it kind of does seem like every problem runs aground on that, right? Like it would be nice if people had a different story to tell about climate change that had these features you identify that brought people in with values and drew on a broader sense of balance with the earth and ecosystems.But even if they did, you have to have the mechanics of media to get that message out to tell that story. You know what I mean? And so you got one whole side of the media working against you and one at best begrudgingly working with you. It just doesn't seem possible. So I don't know why I'm talking to you about this problem. No one knows a solution to this problem. But it just seems like this is the -er problem that every other problem depends on.Holly Jean BuckYeah, I mean, we should talk about it because it's the central obstacle in climate action, from my point of view, is this broken media ecosystem and if we could unlock that or revise it, we could make a lot of progress on other stuff.David RobertsYes, on poverty, you name it. Almost anything that seems like the main problem you talk about. The narrative must be able to enable broad political coalitions, but you are working against ... I guess I'd like to hear a little bit about what role you think fossil fuels are playing in this? It seems to me pretty obvious that fossil fuels do not want any such broad political coalition about anything more specific than net zero in 2050, right. Which, as you point out, leaves room for vastly different worlds, specifically regarding fossil fuels. It seems like they don't want that and they're working against that and they have power.So who are the agents of this new narrative? Like, who should be telling it and who has the power to tell it?Holly Jean BuckSo I think sometimes in the climate movement we grant too much power to the fossil fuel industry. It's obviously powerful in this country and in many others, but we have a lot of other industries that are also relevant and powerful too. So you can picture agriculture and the tech industry and insurance and some of these other forms of capital standing up to the fossil fuel industry because they have a lot to lose as renewables continue to become cheaper. We should have energy companies that will also have capital and power. So I do think that we need to think about those other coalitions.Obviously, I don't think it needs to be all grounded in forms of capital. I think there's a lot of work to be done in just democratic political power from civil society too. What I'd love to see is philanthropy, spending more money on building up that social infrastructure alongside funding some of this tech stuff.David RobertsYeah, I've talked to a lot of funders about that and what I often hear is like, "Yeah, I'd love that too, but what exactly be specific, David, what do you want me to spend money on?" And I'm always like, "Well, you know, stuff, social infrastructure, media, something." I get very hand wavy very quick because I'm not clear on exactly what it would be. So final subject, which I found really interesting at the tail end, I think it's fair to say your sympathies are with phasing out fossil fuels as fast as possible. And there's this critique you hear from the left-left about climate change that just goes, this is just capitalism, this is what capitalism does.This is the inevitable result of capitalism. And if you want a real solution to climate change on a mass scale, you have to be talking about getting past capitalism or destroying capitalism or alternatives to capitalism, something like that. Maybe I'm reading between the lines, but I feel like you have some sympathy with that. But also then we're back to narratives that can build a broad political coalition, right? Narratives that can include everyone. So how do you think about the tension between kind of the radical rethinking of economics and social arrangements versus the proximate need to keep everybody on board?How is a metanarrative supposed to dance that line?Holly Jean BuckYeah, unfortunately, I think in this media ecosystem we can't lead with smashing capitalism or with socialism. It's just not going to work, unfortunately. So then what do you do? I think you have to work on things that would make an opening for that. Having more political power, more power grounded in local communities. It's not going to be easy.David RobertsEven if you let the anti-capitalist cat out of the bag at all, you have a bunch of enemies that would love to seize on that, to use it to divide. So I don't know, what does that mean? Openings, just reforms of capitalism at the local level? I mean, I'm asking you to solve these giant global problems. I don't know why, but how do you solve capitalism? What's your solution to capitalism? What does that mean, to leave an opening for post-capitalism without directly taking on capitalism? I guess I'd just like to hear a little bit more about that.Holly Jean BuckSo I think that there's a lot of things that seem unconnected to climate at first, like making sure we have the integrity of our elections, dealing with redistricting and gerrymandering and those sorts of things that are one part of it. Reforming the media system is another part of it. Just having that basic civil society infrastructure, I think, will enable different ideas to form and grow.David RobertsDo you have any predictions about the future of net zero? Sort of as a concept, as a guiding light, as a goal? Because you identify these kind of ambiguities and tensions within it that seem like it doesn't seem like it can go on forever without resolving some of those. But as you also say, it's become so ubiquitous and now plays such a central role in the dialogue and in the Paris plans and et cetera, et cetera. It's also difficult to see it going away. So it's like can't go on forever, but it can't go away. So do you have any predictions how it evolves over the coming decade?Holly Jean BuckWell, it could just become one of these zombie concepts and so that really is an opportunity for people to get together and think about what other thing they would like to see. Is it going to be measuring phase out of fossil fuels and having a dashboard where we can track the interconnection queue and hold people accountable for improving that? Are we going to be measuring adaptation and focusing on that? Are we going to be thinking more about the resources that are going to countries to plan and direct a transition and trying to stand up agencies that are really focused on energy transition or land use transition?I mean, we could start making those demands now and we could also be evolving these broader languages to talk about and understand the motion. So we have some concepts that have been floated and already sort of lost some amount of credibility, like sustainability, arguably just transition. We have Green New Deal. Will that be the frame? Is that already lost? What new stuff could we come up with? Is it regeneration or universal basic energy. I think there's a lot of languages to explore and so I would be thrilled to see the Climate Movement work with other movements in society, with antiracist movements, with labor movements and more to explore the languages and the specific things we could measure and then take advantage of the slipperiness of net zero to get in there and talk about something else we might want to see.David RobertsOkay, that sounds like a great note to wrap up on. Thank you for coming. Thank you for the super fascinating book and for all your work, Holly Jean Buck. Thanks so much.Holly Jean BuckThank you.David RobertsThank you for listening to the Volts podcast. It is ad-free, powered entirely by listeners like you. If you value conversations like this, please consider becoming a paid Volts subscriber at volts.wtf. Yes, that's volts.wtf, so that I can continue doing this work. Thank you so much and I'll see you next time. This is a public episode. 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