Volts

States don’t (yet) have the administrative capacity to smoothly implement the ambitious policies in the IRA; in this episode, policy strategist Sam Ricketts of Evergreen Action discusses how federal programs can help them get there.(PDF transcript)(Active transcript)Text transcript:David RobertsStates are central to climate and energy policy. After the failure of the Waxman-Markey climate bill in 2010, states carried the torch of climate policy during the long decade that Democrats were locked out of majority power in Washington, DC. Now that Dems have actually passed some federal policy — and they are unlikely to pass any more anytime soon — states are once again in the spotlight, tasked with implementing that legislation to maximize its effect.This raises the obvious question of whether states have the administrative capacity — the people, institutions, time, and money — necessary to implement ambitious federal legislation competently.They do not, says Sam Ricketts, but they could, and there are federal programs that can help them get there.Nobody is better positioned than Ricketts to address the issue of state readiness. He played a key role in Jay Inslee's pathbreaking presidential campaign, which was built off of successful policies in Washington and other states. Then, as senior strategist for Evergreen Action, a nonprofit he founded with other Inslee veterans, he helped shape the ambitious trio of bills the Democrats have passed in the last year and a half: the Infrastructure Investment and Jobs Act, the CHIPS act, and the Inflation Reduction Act (or as advocates fondly refer to them, Uncles Bill, Chip, and Ira). Now he’s working with Evergreen and the Center for American Progress to educate and prepare state and local lawmakers for the post-IRA world.I've known Ricketts for years, and there's nobody who better balances detailed knowledge of policy with a practical head for advocacy and activism. I'm excited to talk to him about the crucial role states will play in coming years, the kind of administrative capacity they will need, and the types of federal programs that can fund their capacity building.So, enough of that. With no further ado, Sam Ricketts, welcome to Volts. Thank you so much for coming.Sam RickettsThanks for having me, David. Pleasure to be with you.David RobertsI'm so excited to talk about administrative capacity, the sexiest of all podcast topics loyal listeners know this is an ongoing obsession of mine.Sam RickettsThey've come for the good stuff.David RobertsYes, exactly. So get ready to jump in. So I want to talk about state and local governments and whether they're up for this. But first, let's just briefly talk a little bit about just how central states and local governments have already been in climate policy in the US. So after you and I, well remember all too well the humiliating defeat of the Waxman-Markey Bill back in 2009, 2010. And after that, the sort of national scene was dead for ten years and everyone was off in the wilderness. And the only thing that was going on was states passing good legislation.So maybe let's start by just talking about those states being kind of the laboratories for democracy as it were and how the states sort of pioneered stuff and learned stuff that then went into informing the federal legislation that was just passed.Sam RickettsIndeed. So the first thing to your point, you mentioned that states and local governments have long been sort of the nation's leaders in developing and implementing climate and clean energy policy. And we're going to talk about what they need to do next in terms of implementation. But an important point, as you allude to here, is the progress that's just been given to us from Washington DC. The passage of Uncle Bill, Uncle Ira, Uncle Chip, the three climate uncles, so to speak. And the other initiatives that the Biden administration is advancing are really drawn from, inspired by, informed by the progress that states and local governments have made throughout the country.And this progress, as you mentioned, really jump started over the course of the last decade and sort of in the interregnum period between the last attempt at climate legislation and this ultimately very successful one. But it goes back further, right. States began passing clean energy laws decades ago. Years ago. I mean, the first renewable portfolio standard to require utilities to start utilizing clean renewable electricity was actually passed in Iowa 40 years ago. That activity last went through states red, blue and purple alike through the 1990s. In the early 2000s, you really saw an uptick in states beginning to target greenhouse gas climate pollution directly with laws that like Massachusetts' Global Warming Solutions Act, notably, of course, the AB 32 law passed in California in 2006, sort of set economy-wide programs and sectoral programs advancing climate action.And then in the 2000s, after the last failed attempt at federal climate legislation, you really saw this uptick. And states really carried the ball in a number of different ways and in ways that directly inspired the breakthroughs here. I mean, just a few of the items. In 2015, Hawaii became the first state in the country to pass a 100% clean electricity standard requiring utilities to get to all carbon-free electricity on their grid. And now over 20 states have that commitment in some form. About 15 have passed that requirement into law. And I would argue that that underlies President Biden's most important climate commitment that he's made and is trying to advance through both legislative and executive means towards 100% clean electricity by 2035.A couple of the other things that were passed by states and indirectly informed things in IRA in particular were tax credits tied to labor standards. So to ensure that we're building not just clean energy and not just jobs, but clean energy supporting good family wage, high quality jobs. And notably that was inspired by things like the Clean Energy Transformation Act passed in Washington state and signed by my former boss, Governor Jay Inslee in 2019. You also see in IRA and throughout the Biden administration's initiatives a prioritized investment in disadvantaged communities to advance environmental and economic justice and things like President Biden's Justice40 initiative, which was itself directly inspired by the New York State Climate Leadership and Community Protection Act that had that Justice40 commitment for New York that was also passed in 2019.So there's this rush of legislative and policy making in the second half of the last decade in particular, but really throughout the course of it just one more item because it's a favorite that really directly informs what we're seeing implemented now. And IRA is connecticut in 2011 was the first state in the country to establish a green bank. It's now been created in 23 state and local governments, I believe. And that directly, of course, inspired the creation of a greenhouse gas reduction fund, a $27 billion program in IRA that again is going to be now a critical tool for states and local governments to leverage to build the clean energy economy flowing out of IRA implementation.So the first thing here is this progress that we now have so much of. It builds on the foundation established by states and local governments throughout the country. And now it's of course going to be a critical thing for them to turn to, really being drivers in implementation of these bills.David RobertsYeah, I was going to say I wrote a piece for Vox a few years ago, I talked to you for it about the sort of general turn in policy thinking among climate people away from this sort of monomaniacal obsession with carbon pricing to what I called Standards Investments and Justice. SIJ never did quite get that term to catch on. But it wasn't just an intellectual turn. It wasn't just a sort of theoretical turn. It was very much states demonstrating that this is the politics that works, right. You can bang your head on that top-down carbon pricing wall over and over again.It is the sector-by-sector standards and investments that work to get political buy in. So this wasn't just an idle exercise. This was very much showing the federal government what's possible and what works.Sam RickettsTotally. Can I just say, you wrote eloquently about standards, investments, and justice. And really to your point, it's directly informed by what's really borne out in practical terms, particularly on state policy leadership, right? Both the politics and the policy conspired here to show a better and a different path that you're seeing inform the entirety of the Biden administration's climate agenda. They have advanced robust investments that are going to leverage even greater private sector investments to catalyze this clean energy transition. They are now utilizing federal administrative authorities to go after sector by sector rules to ensure they're holding automakers utilities, others accountable for following this clean energy trajectory that's now available to them, especially with robust public and private sector investment.And then they've got this central commitment for the first time at the federal level to justice this confluence of factors that again is directly borne out and directly inspired by the leadership of state and local governments throughout the country. Which leads us to where I guess we've got to go next.David RobertsLet's go there then. So the federal government passed all this stuff and I feel like everybody kind of gets on a general level that it's states and localities that are going to have to implement all this stuff but I think most people understand that in a very vague way. So maybe let's flesh that picture out a little bit. What are the kinds of things that federal legislation does that the states and localities are going to be directly responsible for administering?Sam RickettsThe first thing is the Biden administration. We hear a lot of talk these days about Bidenomics and there were sort of a return at long last of industrial policy at the federal level. Targeted investments, economic strategies to really seize on the country's strengths, develop and maintain the industries we're going to need for a thriving and just and healthy economy.David RobertsVolts listeners or everyone else should go back and listen to my podcast with Brian Deese a month or two ago all about that subject.Sam RickettsTotally. That was a great one and it really informs what's happening now in Washington DC. But also at the same time seeing industrial policy through in the country arguably has long been a larger part of the role of states and local governments, right, who implement federal dollars. I mean so many of the federal programs we know and love, the federal funding programs we know and love, be they Medicaid or education, energy and climate are dollars that the federal government or federal agencies pass down to states and to local governments and sometimes communities or individual consumers. But so much of it flows through state and local governments and then even the programs that don't directly flow through those governments they need to be the ones to take advantage of to help their companies and their consumers and their communities take advantage of clear hurdles, plan for, and execute on.So there's three different types of investments I point to here in these bills that are all going to be part of what states and cities need to be administering or being attentive to as they do so. And all of them are direct opportunities and some of them are massive like untold opportunities. So there are direct grant programs, there are financing programs and then there are tax incentives and all of which state governments, local governments need to be attentive to all three of these. So just give a few examples. Direct grant programs. There's a few different programs or actually a number of different programs of course in these bills that are provided to state governments or to local governments that they can then turn and leverage for climate, for equity, for public health, for good jobs.One is the Department of Energy has much discussed building energy rebate programs. Two different programs, one supporting energy, Home Energy Retrofits, another supporting electric appliances. Those programs are actually being run by the Department of Energy, but they're actually going to be dollars. The Department of Energy first provides to all state energy offices for those state energy offices to turn around and operationalize, working with contractors, working with local governments and providing consumers directly with rebates. Another program is the Greenhouse Gas Reduction Fund, which I mentioned is a program that combines a couple of different elements, but there's an element of it that provides money directly to states and local governments for them to deploy or to set up programs to deploy solar and storage technologies in disadvantaged communities.A third example of this direct grant program that I think we're going to talk about a little bit more is the Climate Pollution Reduction Grants, which is an investment program directly for state and local governments basically only, and tribal and territorial governments to be able to plan and then execute on programs and policies and measures to decrease climate pollution and build their own clean energy and industrial strategies that suit their needs.David RobertsYeah, we're going to come back to that one.Sam RickettsThen the second category is financing programs, programs the federal government has or is newly established where they provide financing tools, loan, loan guarantees, other financial mechanisms that individual companies and projects can use to leverage more private capital, to deploy zero emission technologies or build new manufacturing facilities. And there's a few different ones of these. One is again the new GGRF for Greenhouse Gas Reduction Fund which is a new program being stood up at the EPA. Another is the USDA Rural Utilities Service has about $10 billion for rural electric cooperatives to be able to leverage to securitize and retire their coal plants and instead build clean and renewable energy for sort of a next generation rural electrification agenda for the country.And then a third, the DOE Loan Guarantee program has got hundreds of billions of dollars of financing authority that states can help work with their local companies and projects to leverage to deploy much greater private sector capital. And this DOE one I'm particularly excited about because of its intersection with states, there's actually reforms made to the program in the infrastructure law. In Bill, Uncle Bill, the state gets a chance to work with the Department of Energy loan guarantee program to waive the technology requirement requiring this project to utilize a quote, unquote, innovative technology, one that hasn't been used before and if the state is a co-investor in the project, can leverage much greater private sector financing into deploying that project. So really a reform, a tweak to the DOE Loan Guarantee program that allows it to be more accessible and more usable, particularly state clean energy financing institutions.And then finally — let me come to the big one — because the majority of the investments flowing through IRA are actually tax credits. Sort of automatic spending in reverse for the federal government, which are resources that an individual project owner, company, or under IRA. Actual public sector entities like public utilities, nonprofit institutions can take and leverage greater private sector or co investment in speeding much more investment into clean energy, into renewable energy, into individual consumers purchasing of electric vehicles or heat pumps, clean manufacturing facilities. The tax credits make up the majority of the funding in the bill and notably so state and local governments need to be aware of them so that they can help their companies and their consumers and their communities take advantage of those incentives.And notably those tax incentives I mentioned have this new reform called direct pay where they are now eligible for use by those who don't have tax liability, including public institutions, including local governments who are operating with the, let's say municipal utility or even nonprofit institutions. And this amount of money notably is uncapped. So it can be as much money as we can all spend.David RobertsA theme Volts returns to frequently there's no upper limit to the amount that these tax credits could get sent out. There's no upper limit to the amount that could be spent on them. So as I pound the table and say over and over again the size of this bill, the size of IRA is not a fixed thing. It will be as big as there are people applying for the tax credits. So anyone out there who can organize and educate people and have more people apply for those tax credits, that's going to be a bigger bill. So states and localities here really have their hands on the lever of not only how to implement the bill, but literally how big the bill is.Sam RickettsAbsolutely. There's much talk about how this is a $370 billion or $380 billion investment. I mean the reality is there's a fixed number of grant programs or financing programs that Congress and President Biden have invested in. And then there are these tax incentives that are uncapped and that can range much greater. They are literally only tied to the amount of money that can be spent on projects that they can then benefit from those incentives.David RobertsYeah, Goldman Sachs I think, estimates $1.2 trillion rather than $3.7 billion, which is an enormous spread. All of which has to do with how many projects are going to qualify for these tax credits. And that is something that people can have control over.Sam RickettsThat's right. And the Treasury Department writes the rules of these things and they'll be the ones to dole out an individual cash payment as a direct pay grant or to send the tax refund to the company that takes advantage of the tax credit. But they're not out there searching out projects, working to ensure permitting works. They're not out there making sure communities are aware of these things. They're not there working hand-in-glove with companies on economic development projects. That is what states do. That is what counties do. That is what cities do. That's what individual community groups do.But there is this massive opportunity for companies, for communities, for individual consumers to take advantage of these incentives and the rest of these investments and whether or not they do that well is going to be a thing that state and local leadership is going to play a key role in seeing through.David RobertsExactly. You can have as much economic development as you can muster. Right? There's no upper limit. Like you can have all the economic development you want if you're willing to put in the work, organizing and pursuing it.Sam RickettsThat's right. And as we know we need to move urgently and build as much of this as we can because we are under some very tight climate math, right?David RobertsSo we've established then that states have been an inspiration to the federal government and now we've established that the new federal legislation that has been passed in these past couple of years very importantly requires states and local governments to implement it. And indeed how big and how efficacious the bills are is more or less up to states and local governments, how well they organize and get it done. So then this brings us to the inevitable next question which is are they ready for this? Do they have economic development offices that are aware of the tax credits and understand the procedures and understand where to direct them and understand how to attract companies around them?Do local governments have the offices to do outreach to local communities to clue them in on these tax credits? Do they have the sort of like manpower to do the research and just create the programs that can spend all this grant money? Are states and cities ready for the tsunami of money that is heading their way? Do they have the administrative capacity they need?Sam RickettsWell, look, there's a gap. I like to think of it as an urgent opportunity.David RobertsIt's an opportunity.Sam RickettsIt's an opportunity. An urgent one. Look, there's a definitive gap that exists across states and local governments and also tribal governments here too. I should probably mention that state and local and tribal governments are all sort of implicated as part of this sub-national government space of entities that are going to be helping to deploy dollars and are going to be dispositive about the success of these bills. They're all different. People regularly bunch them together. And here we're spending most time talking about state governments, a little bit about local governments and I'm going to continue to zero in on states because it's where I've worked before and it's what I'm particularly focused on in this moment.But they're all going to be really important in this work and they all lack capacity, certainly to varying degrees. But I'll say state governments even just sticking with states often lack capacity. The state agencies, even the ones who have been sort of leading the most on climate and sometimes in many respects do lack capacity. And this is simply people in seats doing the work. They can lack capacity because of budgets regularly. That's the biggest reason. And then there is kind of like how the tax credits in the bill can be spent up to the level of funding that we put into them.They'll get out what we put in. The same thing here with governmental capacity at the subnational level, there is an opportunity to do more because state agencies are regularly, red, blue and purple states alike, lacking in manpower to be able to take maximum advantage of these dollars.David RobertsDo you think it's fair to say that because industrial policy has been out of vogue and we've been living under this sort of well, I'll just use the word neoliberalism for the last 30 or 40 years with this sort of notion that markets are going to accomplish everything. Do you think that is part of the explanation for why some of this state capacity is lacking or has atrophied a little bit?Sam RickettsAbsolutely. I mean, the last 40 years of public sector disinvestment absolutely plays a role here. In particular, the public sector got hit hard after the Great Recession in particular.David RobertsRight.Sam RickettsAnd budgets have only recently kind of gotten back even to those levels. They got hit again, obviously, recently during the COVID hit. And there has been investment from the federal level. Think of their COVID recovery dollars, some of the stuff that's implicated in debates right now in Congress about what can be clawed back, these are vital. Just like public sector capacity building investments, state and local budgets have regained relative health kind of quickly after COVID recovery.But there still gaps. And there are gaps in particular in these areas where with state environmental, clean energy, industrial development that we've not invested as a society into sufficiently. And that's what leaves us with a gap.David RobertsAnd if you go look at part of the COVID money was grants to states arguably too much. But if you go look at what those states spent those grants on, it's not necessarily building their long-term administrative capacity. Sadly, obviously if you lack manpower, you lack manpower, and that's a problem. But maybe try to give us a little better sense of what are the concrete dangers here, what are the opportunities that states and cities are going to miss or botch lacking capacity? Like, one thing I worry about, and maybe this is silly, we can talk about the politics of this separately, but Obama and his stimulus money went overboard, bent over backward to make sure that none of it was misappropriated, that there was no fraud or graft.He put so much energy into that for all the good it did him. But one of the things I worry about is states and cities that lack administrative capacity also seems to open more room for shenanigans and graft and just petty local politics kind of stuff. So flesh out a little bit the danger of lacking administrative capacity.Sam RickettsA few different things, first of all, it's opportunity cost. These are all we talk often in climate policy in terms of carrots and sticks. And these are all carrots. And to the point here about being able to spend as much as we can spend. Well, carrots only deliver the nutritional value if people are eating the carrots. Right? Don't get me wrong, most people like carrots. Carrots are delicious. I like carrots. But in order to eat that carrot, people need to know that it's there. They need to know how to access it, how to ...David RobertsRight, somebody's got to go dig it up.Sam RickettsYes, right.David RobertsI don't know how far we can push this metaphor.Sam RickettsWe could take this metaphor, but that's an opportunity cost. And if there's people who companies don't know or can't access them, if the infrastructure is not built, if the community isn't aware, consumers aren't aware, that's going to result in less money being spent here.David RobertsCarrots going uneaten.Sam RickettsYes, carrots going uneaten. Thank you for grabbing that metaphor. Another thing here, and this is less of an administrative capacity challenge as it is more of wrong priorities or leadership challenges. Money being spent on the wrong thing, which is also, I mean, having administrative capacity and having it focused on the right things is critically important here. There has been some discussion about the infrastructure law, which is the bipartisan infrastructure bill and it's transportation infrastructure spending and how there is an opportunity and this is really an opportunity that exists under law with state governments and local governments, not the federal government, to use those dollars flexibly for low carbon transportation projects, not simply widening freeways and investing in more roads.That is a challenge. It's a challenge we're not always seeing fare out in the right direction.David RobertsI was just reading this morning a story in E&E about some of that infrastructure money being used for a giant kajillion dollar highway widening project outside of Houston that would wipe out huge swaths of low income community just like classic old school d*****s highway mistakes, but now paid for with our new infrastructure money. So yeah, can you stop that? Is there anything that can be done about that? Like states are going to do what they're going to do? Well, I guess advocates can pay attention.Sam RickettsYeah. No, the first thing to do is to be attentive to the issue and then to develop the strategies to address it. Sometimes the states who are investing in those projects are the same ones who have made ambitious climate commitments. And it sure would be helpful for people to point out that maybe how the incongruence of those things. But the final area where things I don't want to say could go wrong. But the final area that really calls forth the need for state leadership is that states need to lead here again and the next generation of clean energy leadership, right?Not only do they need to maximize the uptake of dollars for the job creation, for the equitable economic opportunity, for the emissions reductions that can be catalyzed by those dollars, but they also need to hold utility companies and automakers and building developers and the heavy industry accountable for using those dollars and push forward the next generation of policies that are going to cut emissions and drive the clean energy transformation. And people talk about states versus federal climate leadership and people talk about like states taking the baton now that the federal government's passed it. And I totally reject the premise.As someone who's worked before at the state level in a governor's office, think of it much more as like a band where the state and local governments are the rhythm section, the drums and the bass, if you will. Keeping time and just always keeping a level of climate and clean energy progress going even while the federal government fits and starts. Like a lead guitarist will riff on stage and then disappear. We'll see that happen here. Even the last couple of years while President Biden and Congress have been hard at work passing these bills and taking executive action, states have been leading too.Right, you've seen the next breakthroughs in state climate and clean energy policy continue to occur, whether that's New Jersey's groundbreaking cumulative impacts, environmental justice law, that's Washington State's Climate Commitment Act, that's Illinois's Clean Energy Jobs Act, et cetera, et cetera. And so the states need to take the next step and especially now that Congress is going to be divided and in that way states will have to take the baton because the lead guitarist is off the stage again.David RobertsYeah, exactly. He's backstage smoking a joint.Sam RickettsIt's not entirely fair because President Biden is of course advancing things through administrative action. But especially for the time being, while we don't see major congressional action again on the horizon, states are going to have that central role in driving forward the nation's energy progress again.David RobertsI feel like this is a little bit underemphasized aspect of all this is that one thing states can do with all this tsunami of money that's coming down on is just use it to boost their own legislation. Like this is going to change the financial and social and political landscape in a way that is going to make more ambitious policy easier. And especially if states are smart about how they do that, right? Like a smart state can use all this money to soften the ground, to go further, to get more ambitious on climate.Sam RickettsAnd just on that point, a few places to point to. For one, it's not all legislative. I mean public utility commissions who oversee utilities need to know that the electricity market, the system is entirely changed for the country now and the integrated resource plans that the utilities had provided them before IRA passed are not really worth the paper they were printed. On anymore because the economics of energy generation throughout the country has fundamentally changed. You add in federal rules coming down governing criteria or carbon pollution from power plants, another knock that utility commissions need to be aware of as they're engaging with utilities that they are regulating.And the utilities are saying we need this rate increase or this deadline extension or this thing or that thing. That work. That is capacity and that is the decision at that state level by utility commissioners, appointed by the governors or sometimes elected by voters.David RobertsWait. Just before you move on from that, I just want to pound the table on it a little bit, because when I think about I spend a lot of time thinking about sort of like, what are the potential impediments to this legislation doing as good as it could do. I think about workforce and NIMBY-ism, et cetera, et cetera. But one of the things I come back to is sort of utility intransigence or ignorance or intransigence or some mix thereof. I can imagine if utilities took the amount of money that's being dumped on clean energy seriously, as you say, it would completely transform all their plans, right?Every utility in the country, now that this bill is passed, should be back at the drawing board, completely rethinking what they're doing. But of course many of them for various incentive reasons, don't want to do that and don't see a way to make as much money doing that or just are stuck in their ways or have relationships, old boy network relationships that they don't want to upset, et cetera, et cetera, et cetera. The way to handle that impediment is with beefed up well informed utility commissions, which, as you say, is 100% a state capacity issue. It just means spending the money, getting the staff in place, getting the research done, really preparing them to force utilities to toe the line.Sam RickettsTotally.David RobertsAnyway, I just wanted to emphasize that because I think it's a hugely under discussed and important piece.Sam RickettsWell, not just a few other areas where states have been stepping forward and taking advantage already of that point to Minnesota, which just earlier this year, at the very beginning of the year, passed 100% clean electricity standard, taking advantage of these new investments. I mean, the leadership of State Representative Jamie Long and Governor Tim Walls and others in the state to really bring that over the finish line had been a long time coming and they've been fighting against legislative inertia, but Minnesota did that. But they've also passed a bill to explicitly tasking the administration to maximize the flow of federal funds.David RobertsInteresting.Sam RickettsAnd Minnesota is one of a few states, also looking at Wisconsin, Pennsylvania, New Mexico, a few others who are in the process of establishing nonprofit financial institutions, particularly to take advantage of the Greenhouse Gas Reduction Funds green finance program. Some states are passing incentives to sort of layer on what the federal government is providing and in some places to go beyond what the federal government has passed. Colorado just passed a robust suite of incentives and policies to go further.David RobertsYes, including for EVs, because a lot of EVs are not going to be available for credits for quite a while. There's this huge national controversy over this. Colorado just stepped in and be like, well, we're going to loosen the criteria and subsidize all those EVs that are falling out of the federal subsidies, which is like, well done, Colorado.Sam RickettsWell done. Exactly. Many states have established infrastructure coordinators housed by their governor or one of their agencies to coordinate across their state and with their city and county governments and stakeholders to maximize investment flows. Some of those have worked well and some of them haven't, state by state. But a key thing is there are states who are deploying different strategies to build capacity and coordinate a strategy around how to do this. Another interesting thing about it is it's happening in blue and red and purple states alike. Some of the major investments you're seeing, some of the big job creators, the battery manufacturing facilities, the big new projects are actually being announced or sighted and invested in red states or purple states.David RobertsMost, as I understand it, a rather large preponderance, is going to red states. Yeah, if I'm a state legislator or say I work in a state agency, I'm listening to this and I'm nodding and I'm saying, "Yes, I would love to have more effing capacity." Like, tell me something I don't know. I'm starving for capacity. I'd love to be able to do all this stuff." But state budgets are state budgets. Unlike the federal government, the state can't just print more money. So it's dependent on sort of business cycle year to year, dependent on booms and busts, and often have a lot of trouble finding stable funding for capacity.So let's talk about where states can go to get some money and help building capacity. As it happens, Uncle Ira also contains some of that. So tell me about the Climate Pollution Reduction Grants program, CPRG. What is it and what's it for?Sam RickettsSo the CPRG, the Climate Pollution Reduction Grants Program in IRA, is, I think, one of the most exciting provisions in the law. It is a new $5 billion grant program housed at the EPA, the Environmental Protection Agency, that can provide the opportunity to invest in state and local and tribal government capacity and to give states and tribal governments who want to lead additional resources, to empower them to do so, to lead in the clean energy and the industrial strategies that suit their unique needs and strengths and that will challenge them to compete amongst each other for the best plans most deserving of federal investment. To help them go further.David RobertsRight. So there's two basic buckets here, both of which are interesting, but talk first about the money for planning.Sam RickettsSo this is based on a program President Biden first proposed in his American Jobs Plan, State Clean Energy Challenge Grants, which was at the very beginning of a very long and arduous legislative process. We don't need to recap in detail now, but is worth its own story. The program contains three different parts: $250 million for planning grants that are in the process of being executed right now to all states, to all territories, about 70 to 80 of the nation's largest municipal statistical areas, MSAs, and then to a number of tribal nations. There is going to be later on this year, Part B, the $4.6 billion Implementation Grant round, which is like where the big money comes in.David RobertsHelp to implement the aforementioned plans.Sam RickettsExactly. With federal money to implement some of perhaps the best of the aforementioned plans. And then there is also, as an aside, because it's important, because it's about capacity building, $140 million in federal administrative costs that the Federal Government can use for its own cost of administering this program and can use to better support state and local governments and tribal governments with technical assistance. So, worth keeping an eye on that third bucket as well. But, obviously, the $250 million out to states and local governments and tribes right now, providing capacity as we speak and then providing opportunity for more money down the line.David RobertsSo that first bucket is for anybody who submits a plan.Sam RickettsYes. And this is a great innovation. This is capacity building. Really excited to see how EPA is carrying out the Planning Grant round of this. It's some of the first money that's going to go out grant wise under IRA, every state, provided they submit a notice of intent to participate that was due at the end of March. And then, provided they submit a work plan and application that was due at the end of April, has an opportunity to receive a $3 million grant that they put in the agency of their choosing, whether that's the Governor's Office or the Energy Office or the Department of Environmental Protection or otherwise.Every MSA gets a million dollars as well. Tribes also get investment, as I mentioned, as do territories. But these investments directly build capacity. They can use them to hire staff, hire consultants, build high quality tools they need, like greenhouse gas inventories, or cover other administrative costs of not just applying for the Implementation Grant in the future, but to take advantage of the rest of the money passed in IRA.David RobertsRight. When you invest and build the capacity, the capacity is there. Once you use it for this plan, it's still there, and you can use it for other things, like these investments in administrative capacity, pay back richly over time.Sam RickettsThat's right.David RobertsAnd so then the Implementation Grants, this is not going to be a give money to everybody who applies thing. This is going to be more of a competition type of thing.Sam RickettsYes. So the Planning Grant round is intended by congress to be spread widely. And I'm pleased to see how EPA has done that and done that quickly to make sure dollars are flowing in everywhere. Again, to address both like, hey, you can use this money to apply for an implementation grant in the future, but hey, you can also use this money to build yourself some capacity inside of your agencies because of all the other things that are flowing. But yes, then later this year, we're expecting an implementation grant announcement. EPA says it would come late summer, maybe it's the fall.We're hoping, the royal we all of us hoping together, they move these dollars quickly in order to get the dollars out the door quickly, certainly as early as they can in 2024. But these would really be grants that would bolster capacity and could reward those states and local governments who come forward with the plans that show they're going to lead to the greatest catalytic change. And what I'm hoping to see what I and others are hoping to see from them with this is really investing in the state driven, local driven strategies that fit their unique needs and that reduce the maximum amount of climate pollution and achieve those breakthroughs in places that are additional to that which may occur otherwise without these grants or that which may be possible otherwise, given these states unique policy environments.David RobertsAnd this is not a new format here the idea that states are competing for federal money, the whole Race to the Top idea, this is not the first time this has been tried with federal grants.Sam RickettsIndeed, it's not. Actually, a very similar amount of money was invested in a program called the Race to the Top Challenge Grants that the Obama administration executed about a decade ago, about $4 million that was spread around. I think twelve states were awarded grants that ranged in size from $75 million to $700 million or something, and those grants went to those states to pass or implement innovative leading edge education policies. But the fascinating thing about the program that I think should inform how the EPA thinks about this program is it wasn't only the states that got grants that executed their policies.Everyone got to work writing a plan. And the majority of states, even those who didn't get a grant, would later go on to implement at least some of those policies.David RobertsYes, this is what I always used to say about the Clean Power Plan, too, right? I mean, one of the that Obama tried and failed to pass, one of the great benefits of it is that it would have made every utility at least think about this stuff. And it's just a fact that once you start thinking about it, once you start planning, once you start doing the numbers, you realize, like, oh, these are good things to do regardless whether you get the federal money or not, right? So just catalyzing the planning itself does so much to generate future action.Sam RickettsThe Clean Power Plan is a great example of this, right? Because notably, utilities met targets much faster than they would have even if the plan had ...David RobertsActually catalyzed it without even passing it all. Look at the ...Sam RickettsAnd it catalyzed planning ... Actually that's a good example for this particular topic as well because having been in a state government at that time and been part of some of those conversations, it catalyzed planning not only by the utilities in the industry, but it actually catalyzed planning at the state government level. For the first time in many places you actually had environmental regulators who were going to be charged with implementing the Clean Power Plan, working with the PUC that regulates the utilities, working with the State Energy Office that writes the State's energy strategy.David RobertsRight, which is a brand new thing. So let me ask you to editorialize a little bit. You got this $4.6 billion bucket of money that you can use to help states and localities and tribal governments implement the plans that they sent to you previously. Obviously there's a ton of latitude within that. There's a ton of approaches you could take that you could do bunches and bunches and bunches of little grants. You could make it your mission to sort of give at least a little bit of money to everybody who has a plan. Or you could try to sort of concentrate money on a couple of big plans that you think could be transformative or could serve as an example to other states or some mix.So how would you like to see EPA approach handing this money out?Sam RickettsIt's a great question. EPA has wide latitude as to how they design and execute this Implementation Grant Program round. And I mentioned it's $4.6 billion. I mean, recall that we were talking just a bit ago about they have an opportunity here to do a couple of different things. One is build capacity in states and local governments basically across the board, right? Because everyone needs some version of help here in order to take advantage of all of the resources that are here. But then they also have an opportunity to reward those states and local governments who are going to take advantage of that next generation of clean energy industrial policy leadership who want to use the resources to go further.David RobertsRight. You can fund the laggards to get them up to the starting line or you could fund the leadersSam RickettsAnd you can do a little bit of both. Like you can cover that for one, using some of the money, a small chunk of the money to build additional capacity. Recall that capacity building investments already been made by EPA with the Planning Grant round. What happens if they did that with basically a second planning Grant round or maybe a second, twice of the size, Planning Grant round? And that would give some money across the board to continue building capacity which, as we've just talked about, is a ubiquitous problem regardless of the state's level of leadership on clean energy.And then you could save the majority of the funding to slice up for a select number of grants that can range from eight to nine digits of major investments. That can help provide a locus of organization and momentum for that state and local government to execute on a truly ambitious clean energy industrial strategy, again unique to its own needs, and ensuring that especially EPA should be looking out for opportunities to invest in clean energy leadership where it wouldn't be otherwise occurring. So additionality is key here, I think the EPA should obviously also be looking at plans that are going to support disadvantaged communities.David RobertsI meant to ask about that specifically, actually, isn't the 40% rule that 40% of all these monies have to go to disadvantaged communities? Does that apply to this bucket as well?Sam RickettsIndeed it does. Actually, there's two different ways that sort of equity applies to the requirements that the administration should set out for. One, to your point, this is one of the programs that falls under the Biden Administration's Justice40 Initiative, meaning that applicants should be showing how no less than 40% of the investment benefits from their plan are going to benefit disadvantaged communities. And there's actually a second one in the statute which Congress said EPA has got to require these plans to show how they're going to reduce climate pollution both overall and in disadvantaged and low income communities.So a couple of different ways. EPA already also in the planning grant guidance has required states to work with their city governments in developing their plans or municipal governments, and they've encouraged them also to work with disadvantaged communities. And that's an opportunity here for EPA and the Implementation Grant round as well to task applicants to show how they're going to work with and benefit disadvantaged communities with their investments, how they're going to support good jobs with their strategies. EPA has latitude here as to how to design this program. I think also there's an opportunity here to encourage states and local governments to work together, whether that's in a region and are in multiple parts of the country.This is a time for creative strategies and for calling forth sort of that unique next generation of state clean energy leadership that we're going to need to see now and throughout the coming decade.David RobertsRight, one more note about this program before we move on and wrap up, because I just personally found it so delightful and clever. Listeners will recall when Obama said, "Hey, states, how would you like to have billions and billions of dollars of free money to help have better health care for your poor people?" And red states just flat turned it down. They turned down free money, which is insane, but certainly something you can imagine happening here too. But there's actually a somewhat clever and innovative feature of this program meant to address that eventuality. So tell us about that.Sam RickettsIndeed, this is a really innovative piece of what EPA has done with this program. I mentioned earlier that $3 million of planning grant money is available to all states. What they had to do was submit a notice of intent to participate and follow that on with an application and a work plan. Notably, if a state chose to decline that $3 million grant, the money wouldn't dry up or disappear. It would actually be available to the largest metropolitan statistical areas in that state, MSAs in that state and across the country. And so the dollars would go to somebody and it kind of provides a double incentive for the states to say yes.And notably, they did. 46 out of 50 states submitted a notice of intent to participate and receive their $3 million.David RobertsYeah, it's one thing to say no to money. It's another thing to say no to money when you know your nemeses in your blue cities are going to get the money you're turning down. That's such a clever twist.Sam RickettsAnd we want some national governments tool one to say yes to this, right. Because if they take the money, they're going to go build a plan that's going to reduce emissions. It might be their unique flavor of that. It should be their unique flavor of that. But it gives them an opportunity to put people in seats and to start designing strategies that are going to reduce climate pollution and that are going to allow them to build the industrial strategy that's going to work for them in the 21st century clean energy economy. And we're going to need everyone doing that eventually at some point.David RobertsAt every level, okay, by way of wrapping up then, could we touch on I mean, this is a big $5 billion and especially $5 billion is how big is money these days? Who can judge? But like $5 billion when you're talking about state budgets is quite a bit of money. You can move some needles with that. Are there other federal programs that states can draw on or states and cities specifically to help them build administrative capacity?Sam RickettsReally good question. The first thing I want to say is these investments will allow states and cities and tribal governments and territories to take advantage of the rest of the funding flows in IRA and Bill and CHIPS in new and more ways like we're talking about because they're going to build the capacity that empowers them to do so. The second part is though, there's not a lot of capacity building types of investments in these bills. There are a couple. I think the other main one spend a lot of time thinking about is the state energy program of the Department of Energy, which is the program that Department of Energy uses to support state energy programs throughout the country.Sometimes they provide, frankly, the only funding that underpins a state energy program in some states. So a vital program, not a lot of money. It's actually money that came through that program was reauthorized and funded through the Bipartisan infrastructure law, not through IRA. But there aren't a lot of dollars in capacity building. There are other capacity building programs and technical assistance programs. Federal government and EPA actually has just announced investments in a number of TICTACs. I'm forgetting what precisely that stands for other than a delicious breath mint, which are regional entities that are going to work to provide technical assistance for disadvantaged communities in particular to help them take advantage of and community based organizations.So there's the thriving communities program. There's a suite of federal TA programs, but not a lot that go directly into juicing the capacity of states and local governments throughout the country.David RobertsRight. It does seem though, like if you're a state and you're given money to do X, it makes perfect sense to spend some portion of that money to build the capacity to do X, right? It seems like you could states could spend a lot of different buckets, at least a little bit on capacity because otherwise otherwise you can't really take advantage of the money.Sam RickettsNo, absolutely. And there's other piece of it. The Greenhouse Gas Reduction Fund has some dollars that can be used for particular assistance. There are others, don't get me wrong. However, the flexibility provided to individual states to look across programs, some of them will get very tied into a grant associated with this particular strategy. And that's a little bit different than empowering the state or the city or the county to design its own strategy that works for it or to shift from one day to the next from one program or one project to the next, which is also a challenge.David RobertsRight. Okay, final question. We've been talking about governmental capacity, basically administrative capacity, which is great in rules. Is there anything that just ordinary people advocates or activists or maybe philanthropies, private philanthropies can do on this subject other than just like pay attention and cheerlead?Sam RickettsYeah, I mean, the first thing to know, as with most things, is that this is a challenge worthy of attention. That's sort of first things first. Lots of effort went in over many years to getting these bills passed for many people. Right. And there's a whole apparatus of advocacy that zeroed in on that for a very long time, as you and I know. And this is kind of a different line of work. Implementation is kind of a different line of work and it's the talk of the town now, but it's very much like attention to state and local governments is going to be dispositive in our success or failure with these bills and what we're trying to do with decarbonization and with building a just and thriving clean energy economy.And that the attention that advocates need to provide, just like they've provided it at the halls of Congress, just like they provide it at President Biden and at his EPA and at his Interior Department, et cetera. They need to not be providing it with their City Council, with their state legislature, with their Governor's Office, with their Public Utility Commission. In some ways, it's not advocacy. In some ways, it's partnership with spreading the word to disadvantaged communities, to individual consumers that, hey, there's incentives available to you, there are investments available to you. Let's go take advantage of them and build some new, clean, better futures for our communities here.David RobertsAwesome. This has been excellent, Sam. And I bet if state and city people are listening to this, they are gratified to hear it wrapped up and get a little focus and direction. So thank you so much for all your work over the years. And also thanks for coming on.Sam RickettsThanks for having me, David. Real pleasure as ever.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 Volt 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, Jessica Wilkinson and Nels Johnson of The Nature Conservancy discuss the pathway they see for a rapid, low-cost clean energy transition that minimizes impact on environmentally sensitive land.(PDF transcript)(Active transcript)Text transcript:David RobertsA great deal of confused and misleading information is circulating about the land-use requirements of the energy transition. Everyone agrees that building the amount of clean energy necessary to reach net zero carbon emissions by 2050 will require an enormous amount of land.But is there enough land? Will the transition require industrializing green fields and virgin forests and other environmentally or culturally sensitive lands? Can the energy transition be done big enough and fast enough while still remaining respectful of natural resources and other species? What mix of technologies will go most lightly on the environment?To provide a definitive answer to these questions, The Nature Conservancy launched its Power of Place project — first in California, then for the greater American West, and now, this week, for the entire nation.Using various metrics related to wildlife, ecosystems, cultural resources, and protected natural areas, the Power of Place project attempts to comprehensively map out sensitive land areas. It then tallies up the amount of clean energy required to reach net zero by 2050 and tries to match those needs to the available lands, to see if there is a pathway to net zero that protects them.The good news is that, with some wise planning, the amount of environmentally sensitive land impacted by a business-as-usual clean-energy transition can be substantially reduced at relatively low cost. To discuss this and other findings of the report, I contacted Jessica Wilkinson (Power of Place project manager) and Nels Johnson (the project’s science and technology lead) of The Nature Conservancy. We discussed the technology shifts that will enable a lighter footprint, the policies that could help encourage them, and the best ways to avoid community resistance.Alright, then. Jessica Wilkinson and Nells Johnson. Welcome to Volts. Thank you so much for coming.Jessica WilkinsonThank you for having us.Nels JohnsonYeah, thanks for having us, David.David RobertsJessica, let's start with you. The subject of land-use and renewable energy, there's a lot of weird information and misinformation floating around about this, a lot of weird myths, a lot of sort of people with strong opinions who don't know what they're talking about. So what inspired this series of reports, the Power of Place reports? What inspired you to start undertaking this project?Jessica WilkinsonYeah, this is precisely one of the reasons that we were inspired to do this project under sighting, as usual. Like the way that we're proceeding now with a renewable energy build-out, we are seeing an increase in local opposition, and we are seeing concerns about land-use issues. And land-use and environmental issues are indeed kind of one of the obstacles that's popping up in the way of us being able to meet our clean energy goals and meet our clean energy goals rapidly. So we really started this work in California, which was the first time we kind of developed this Power of Place methodology and that refurbished report came out in 2019.We refined it and then released Power of Place West in 2022. And this is kind of the next iteration where we further refined it. And each time we've kind of added new kind of levels of detail and asked some slightly different questions. But the land-use issue is exactly one of the reasons we've done this. So really what we're trying to do is question the premise of whether or not we really need to make these huge trade offs between conservation and climate.David RobertsI think the conventional wisdom is that if we switch from fossil fuels to renewables there are a lot of advantages. But one of the disadvantages is you need a bunch of land and you're going to end up consuming a bunch of crop land or environmentally sensitive land or land that the locals don't want you on. All this kind of stuff. And so your take is that that stuff is exaggerated. So what is the power of place? What is it meant to convey?Jessica WilkinsonYeah, it's not to say that it's exaggerated, it's real, it's happening. The question is how much of it is avoidable?David RobertsRight.Jessica WilkinsonSo what we are seeking to do is ask that question do we need to make all these huge trade offs for nature and for people on the path to decarbonization? So we've asked in Power of Place, it's a modeling exercise and you can ask the model, okay, go achieve net zero emissions by 2050, economy-wide. And model please kind of exclude these environmental data layers and let's see if that changes, whether we can get there, the pace at which we get to that goal and what the cost differential is.David RobertsRight before we jump into what you found, how would you describe the status quo of land-use planning and energy?Jessica WilkinsonThis is a relatively new land-use, right? I mean, this is not something a lot of communities have seen before. They're leasing it for the first time and they may be seeing it come at them really quickly. And so there is a response. Just like local governments adopt local land-use planning and zoning for industrial uses, for commercial uses, for residential uses, they are adopting ordinances to ensure that the renewable energy is going to places where that community would prefer to have it. So we are seeing a lot of local ordinances go up around the country.There have been projections from NREL. That report they released recently said that there were 3,000 local governments that adopted ordinances. And I think it's important to keep in mind that just because this is happening, just because these ordinance are being adopted doesn't necessarily mean that they're being adopted to block wind and solar. In every case, some of them are again, just a natural reaction to land-use planning and a desire to direct it to places that the community feels is most appropriate. Certainly, and the NREL study from 2022 showed that some of them are overly restrictive and likely intended to be.But I think it's important not to assume that just because there is an ordinance, it was intended to block renewables.David RobertsTo what extent is this response and there is a very widespread backlash happening. To what extent is that a fair critique of the way renewable energy has been planned and cited thus far? And to what extent is it just sort of an inevitable reaction to social change?Jessica WilkinsonRight. We have looked at this and we do think that more or less about half of the renewable energy that is being deployed now is in areas that at least the Nature Conservancy might consider to be highly sensitive to wildlife inhabitant.David RobertsYeah, that's a lot.Nels JohnsonI'll just add one sort of thought here about where are we today in terms of planning for this major infrastructure build-out that's coming our way? So first of all, just the scale of it is really huge. It's something like on the order of the interstate highway system that we built between the, in terms of the land area, in terms of the investment, in terms of the pervasive effects, mostly for good. But if it's not done in the right places, it can cause adverse impacts to natural areas, to local communities. So one way of thinking of this is we plan a lot for transportation, for housing, for commercial and residential development.And up until now, we really haven't done spatially explicit energy planning. And that's one of the things we're hoping to accomplish with this series of power place studies is encouraging at all levels. Utilities, state energy offices, the federal government, regional transmission organizations, all to get more explicit about where are the best places to put all this infrastructure, and engaging the public at the community level, variety of levels to provide input into that planning.David RobertsWell, it does seem like if you sort of measure the amount of backlash that has been produced by the amount of renewable energy so far, and then you multiply that by the amount of renewable energy we're going to try to build over the next decade or two, if you apply that same multiplier to the backlash, that's a very big backlash. Right. I guess part of the point here is that it's less, maybe less about poor planning than just no planning. There's just not a lot of coordinated planning around the renewable energy build-out yet.Nels JohnsonYeah, I think that's fair to say that right now there's very little planning that the public has an opportunity to engage in and that needs to change to promote wider acceptance of this build-out. People have to have a voice in what that energy future looks like for them and they need to be reassured that they're going to get benefits out of the development that's taking place and that the energy isn't just being produced in their backyard and sent hundreds of miles away to a different user.David RobertsI want to come back to this question of public participation because I have a few troubled thoughts about it. But first, so this report, this is a national report and you created several different scenarios for different kinds of pathways to zero carbon by 2050, which have varying impacts on sensitive lands. And sort of like you did these increments like here's, we can avoid 10% of these damages, 20% of these damages, all the way up to 90%. So one question I had about the scenarios up front was because I feel like this is another sort of mythology that's floating around is in any of these scenarios, did you run into an absolute shortage of good land?In other words, did you at any point encounter like there's just not enough suitable places to build enough renewable energy to do what we're talking about doing? Did that come up at all?Jessica WilkinsonYeah, I mean, you'll see that kind of our big take home message that we really lead with is that we can get to net zero emissions by 2050 while avoiding impacts to most natural and working lands. Not all, but most. And we recognize that there still are going to be trade offs. However, what this study did show is that we can reduce those trade offs significantly with some better planning. So there won't be none, there won't be zero trade offs. We think we can reduce those trade offs significantly and but by doing that, by reducing environmental and social trade offs, we really can accelerate the renewable energy build-out and avoid some of that conflict, which some of which is unnecessary.Nels JohnsonWe've found that there is enough land for all of those scenarios to get built. What's important to recognize is that wind is probably the most land intensive of these technologies. And so as you reduce impacts, you do start to constrain wind a little bit more. But even so, there's more than enough land for wind to be accommodated. So for example, in the Power Place West report, we found that there was three times the amount of land available for low impact wind sighting in the western United States. Even under the most protective approach to natural areas and agricultural lands, we would still have more than enough to accommodate wind.David RobertsRight. So whatever land issues we run into, not having enough land is not going to be one of them. Because I think people have in their head some very inflated ideas about because this stuff about land-use has been floating around so long. I think people have very inflated ideas about the amount of land required and just thought we should clear that up front. There's enough land.Nels JohnsonYeah. And with solar in particular, we have lots and lots of flexibility for where we put solar.David RobertsWhat the report shows is here's the energy mix for a 10% reduction in land impacts, 20%, 30%, 40%. And as you are moving up that scale and avoiding more and more of these impacts. What you see is that wind declines and solar grows. So insofar as you are taking land-use impacts into account, you are shifting somewhat from wind to solar, at least relative to sort of baseline projections. I just want to know why that is, because it's a little bit counterintuitive to me, because my impression is, and I think a lot of people's impression is that solar takes the most land, is the most sort of like sprawling per kilowatt.So why is it that when you restrict land-use to more appropriate swathes of land, why do you shift from wind to solar? Just maybe explain that a little bit more.Nels JohnsonWell, so the main reason, David, is that solar project actually are much more efficient in the use of land compared to wind. So, for example, a wind project that's 100 megawatts needs about 9,200 acres to accommodate those turbines. Those turbines have to be separated by a certain distance so they don't interfere with each other. And so you need a project area, about 9,200 acres. A solar project the same size 100 megawatts nameplate capacity needs about 430 acres. So it's significantly smaller. Now, within that wind project area, of course, not all the area is being impacted. In fact, only about 3% of it is.You have the turbines and you have the road, and you have a power line that's connecting it all to the main grid, and those areas in between are available for agriculture. Right? So wind is really compatible with agriculture, but when it comes to species, when it comes to habitats, that's not always true. So when, for example, you clear a turbine pad, if it's in a forest, for example, you create what's called an edge effect, and that extends about 400 feet into the forest. And so that area is no longer good habitat for a variety of species, and it changes the kinds of plants that will grow there and other things.David RobertsBut even so, if you're only impacting 3% of that 9,200 acres, I mean, even if you have little islands of impact around the turbines, it still seems like a relatively small area that you're impacting them.Nels JohnsonYeah, of course, it depends on the species. So when you take prairie chickens, lesser prairie chickens and greater prairie chickens, they're both very sensitive to tall structures in grassland environments because tall structures are associated with places that hawks and eagles can see. And so they have an aversion to being in areas near large tall objects, including wind turbines. So that area is larger than the separation distance from those turbines. I see. That's kind of the indirect or displacement effect we see for certain species. So bottom line is, wind is very compatible with agriculture. It's less compatible with some species, particularly birds and bats.David RobertsSpeaking of compatibility with agriculture, let's talk a little bit about ... Jessica, one of the things the report does is focus on a couple of strategies, I guess, to build out renewable energy in such a way as to impact lesser use. One of those is colocation. One of those is agrovoltaics. Can you maybe just tell us real quick what those two are and why the report sort of singled those out?Jessica WilkinsonYeah. So this Power Place National really, again, was an evolution from some previous work where we were trying to ask some novel questions. And this issue in particular land saving approaches, really is a novel approach to decarbonization scenario planning. And what we wanted to do is in addition to considering how the mix of technologies changes the footprint, we wanted to consider how land saving approaches and there's a lot of different land saving approaches out there. One could argue nuclear is a land saving approach, but we wanted to consider how some land saving approaches could again affect the overall footprint and therefore kind of maybe by reducing that footprint, reduce some conflict.And the three kinds of land saving approaches that we're able to really kind of dig into because the data were there were agrovoltaics colocation of wind and solar and then fix tilt solar. So those are the three that we really kind of dove into deeply.David RobertsAnd was that because you thought that those were the three most potent or just three common ones? Or why those three?Jessica WilkinsonThere was robust data that was robust enough for us to consider this. This is the first time folks have taken a stab at this. So it's pretty novel approach. And for the colocation of wind and solar there, we're looking at wind and solar on the same project area. And when we looked at this approach, it was really promising for agrovoltaics. It's again an apportment and promising strategy for producing food and generating solar energy on the same land. Not all crops are compatible.David RobertsJust so listeners know what we're talking about, agrivoltaics is just putting solar panels on agricultural land, on the same land where food is being grown.Jessica WilkinsonExactly. And it's very popular conceptually. It's not like, at the moment, super scalable. But we wanted to ask how much more agrivoltaics could we do as a way to again get some of these co-benefits? And what we did find was that by using agrivoltaics we could grow the amount of agrovoltaics we currently are projected to have from 216 square miles to about 600 square miles. So that's a significant increase.David RobertsIt's a significant increase. But is it a significant impact in the context of the overall land-use picture? Like, is this a big player in the final mix, do you think?Nels JohnsonIt's not currently a big player. And we don't project it to be under the assumptions we used. We do think it has the potential to grow with technological innovations and more incentives and more experience. So, for example, agrivoltaics that we looked at primarily are focused on fruit and vegetable crops there is some evidence that potatoes, wheat, cattle can benefit from agrivoltaics too, but there's just not enough data for us to be able to model the effects of agrivoltaics in those settings. But hopefully over the next few years we'll start to see more experience and that may expand the role that agrivoltaics can play in the future.David RobertsWhy agrovoltaics and not aggri-wind, wind-agra, whatever the wind equivalent is? It seems like I mean, intuitively there's so much space between wind turbines, it seems almost more sensible to try to do agriculture amidst the wind. Is that not a thing?Nels JohnsonIt is a thing. And in fact, a fair amount of the wind that's being deployed now is in agricultural landscapes. And that's what we show as well. The area that we show being directly impacted in agriculture, that's cropland, that's a subset of the most productive, at least from a human food point of view, areas croplands, about 2% of them we project could be directly impacted by 2050. But that indirect impact or the area of agriculture that's in wind projects is going to be significantly larger than that. But that land benefits potentially from those wind turbines because the farmer or the rancher is getting an income stream not just from the agriculture they're doing between the wind turbines, but also the revenue they get for leasing land for that energy production.David RobertsPeople understand the land saving benefits of agrivoltaics are very sort of intuitively obvious. Similarly with colocation, like if you put the wind and solar in the same place, then you don't need two places. It seems straightforward enough. But what's the deal with this fixed tilt solar? Explain that a little bit. The land saving benefits, what's involved there?Nels JohnsonThe main land saving benefit from fixed versus tracking is that the fixed panels are able to be packed together in tighter rows than the tracking. The tracking needs more space between the rows of PV panels in order to do that tracking. So that makes those tracking panels have a higher capacity to convert sunlight into energy. You can actually squeeze more energy capacity into the same amount of land using fixed PV. So at least in areas where there's not that much difference in the capacity advantage for tracking over fixed, fixed can be one of your land saving approaches because it uses somewhat less land than the ...David RobertsOh, interesting, that is not at all what I would have predicted. I would have predicted that tracking because it has higher capacity, because it produces more power, you just need less of it and thus would cover less land. But that turns out to be wrong.Nels JohnsonWell, except as you go further south, then the advantage for the tracking really starts to pay off, including and exceeds what you can gain by packing more fixed into the same amount of area. Because that tracking differential, once you're further south in the southwest, places like Nevada or places like Georgia and Florida, there you're always going to have tracking is going to be the technology of choice. Fix probably doesn't make sense in those kinds of settings.David RobertsInteresting. Okay, so the report takes sort of a close look at these three land saving, let's say, technologies fixed versus tracking, agrivoltaics and colocation. But those are mostly just novel inquiries to figure them out. The bulk of the land saving that's done in these scenarios is by shifting the technology balance. Is that fair? Like that's the primary instrument in what is or is not saving some land.Nels JohnsonSo there are three steps that we kind of recommend. So one is use environmental and social data no matter what technologies you're using. Then look at those technologies you have available and figure out which combination makes sense for your region, for your landscape to achieve your climate goals, as well as your conservation and local community goals. And that may involve substituting solar for wind and maybe adding storage to the solar so you can better make up for the gap that the wind might leave behind.And then the last is within those technologies that you have, say, solar. What are your options for saving land, for example, agrivoltaics. One thing I want to say about land saving approaches are two things that we didn't model as variables, but we assumed fairly high levels of implementation and that is efficiency and distributed or rooftop solar. So we made some pretty aggressive assumptions about how much rooftop solar will be built by 2050. We assume that about 35% of available rooftops would have solar 30 years from now, which is at the high end of projections that are out there. And so it's a decent chunk of the solar contribution, but it doesn't get us all the way to where we need to go.It gets us something like about 10% of how far we need to go.David RobertsBut a big piece of land saving via solar is by moving the solar onto rooftops.Nels JohnsonIt is an important piece and we should certainly support efforts that make economic sense to get solar on rooftops because it means there's somewhat less that has to go out in the landscape somewhere else.Jessica WilkinsonBut I would say if you look at the main kind of figure that shows how total land-use impacts shift based on the different impact reduction scenarios we looked at and how the mix of technologies changes, I guess one way to look at it is we didn't challenge the model super hard on pushing the envelope on rooftop. We asked the model to kind of push the envelope as much as possible in considering how shifting technologies makes a difference, how agrovoltaics and colocation and switching from tracking to fixed makes a difference. There's a lot of opportunity, I think really to push the envelope more and challenge some of those assumptions about rooftop solar and policy policies that we can get in place really to kind of nudge us up as much as we possibly can because ultimately that and energy efficiency are some of the best land saving approaches.David RobertsRight. And energy efficiency, I guess, is obvious enough that don't have to spell it out too much, but just the less energy you use, the less you have to build, so the less land you use. Yeah, I meant to ask about efficiency in rooftop solar because I noticed that they were not highlighted, but those are the main things I generally hear from people when they talk about how to save lands. Another question, Jessica. You mentioned earlier that you could view nuclear power as a land saving technology. This is something you hear very frequently from nuclear fans, that it uses tons less land than wind and solar for the same amount of power.So I was a little surprised. I mean, I guess I would have expected that as you move toward reducing these impacts, you're going to get lots and lots more nuclear out of the model. But that didn't happen. It was a big shift from wind to solar, but there wasn't really a huge shift in anything else. I guess sort of bioenergy kind of declines sharply once you get up to avoiding a bunch of impacts. But the main technology shift was from wind to solar. So what explains that? Why not more nuclear if you're trying to save land?Jessica WilkinsonI think it really comes down to cost.David RobertsNuclear's old Achilles heel.Jessica WilkinsonYeah. And as part of this study, the modeling, we work very closely with Evolved Energy and Montara Mountain Energy and Grace Wu at UC Santa Barbara. And Evolved has the kind of energy capacity modeling expertise. And so what we're telling the model to do here is try and avoid natural and working lands as much as you can model and consider cost. And so as we're seeing cost play out in how the mix of technologies changes and it would select nuclear if it were competitive from a cost point of view to more wind and more solar.David RobertsSo then a follow up question about that. Then you say rooftop solar can save X amount, but advances in technology or policy, we could and should push that higher in the name of saving land. Do you take that same basic approach with nuclear? Like, would you support reforms? Do you support reforms that make nuclear either technologically, these smaller, allegedly cheaper nuclear plants that are allegedly coming sometime soon, or just regulatory reform? Do you support pushing the envelope on nuclear as well in the name of land preservation?Jessica WilkinsonSo the Nature Conservancy, kind of, has focused a lot on the process also being incredibly important, having the local communities have a very important role to play here. And this is one of those technologies that for sure that we need to be particularly sensitive about. But we do acknowledge that current nuclear production is really necessary component of reducing emissions in the short term and even possibly in the long term, provided there are improvements for people and wildlife in the cost, safety and environmental performance of nuclear technology and as well as waste storage and mining practices.David RobertsNels, one thing that jumps out at me as a longtime fan of electrification is that the scenario that performs best in terms of land preservation, sensitive land preservation, is the high electrification scenario. Why is that?Nels JohnsonBecause it gives you more flexibility in how you get to net zero. So you have a range of technologies, some of which are more spatially efficient than others, and so that gives you the option. So nuclear, for example, is one of those very efficient options. And so as we reduce impacts, push really hard to reduce impacts, the model starts to choose some additional nuclear because it is so efficient.David RobertsSo it does boost a little bit. Nuclear does get a little bit.Nels JohnsonIt about doubles the amount of nuclear that's online by 2050 when we really work hard to reduce impact. So it's not a lot, but it does increase somewhat. Keep in mind that the experience with the small modular nuclear plants isn't in the commercial space yet, so our data is very limited. And so the model just isn't able to really get enough good data to make it a cost effective option. Based on what we know now, that may change in the future. And I'll just say that's true of all technologies. So could be technology breakthroughs in lots of different places.For example, I was listening to the show with Jamie Beard on geothermal not too long ago, and that's one of those technologies where there really could be a breakthrough that really makes it a much more attractive way of getting to net zero. But currently our data on geothermal is not exactly very promising in terms of cost effectiveness. But there's some really interesting innovations going on right now, really change that picture.David RobertsAnd it is notably light on land geothermal.Nels JohnsonIt is.David RobertsThat is worth noting.Nels JohnsonThat isn't to say there aren't other issues, but generally it's more spatially efficient. You do have to look at aquifer effects and things like that and there can be things that are important to really avoid or mitigate with geothermal. But yeah, overall breakthroughs in geothermal could lead us to much more land efficient approaches to getting to net zero in 30 years.David RobertsJessica, what are energy communities and what role do they play in this? One of the results is that if you move to this more land sensitive approach, these more land sensitive scenarios, you end up with more jobs in energy communities, which seems like a good thing, but A. what's an energy community? And B. why do you end up with more jobs in them?Jessica WilkinsonYeah, so we didn't necessarily say anything about jobs, but when we were working on the modeling and building the assumptions, we had the passage of the Inflation Reduction Act, so big deal. And so we wanted to consider. How that tax credit that is included in the Inflation Reduction Act would affect ... So IRA gives a 10% tax credit for clean energy deployment in energy communities and it has super wonky definition, as you would expect, it includes areas with historic fossil fuel production and processing.David RobertsRight. So these are communities that were embedded in the fossil fuel economy and we're worried about them because we're moving away from fossil fuels.Jessica WilkinsonRight. And energy communities, the definition also included brownfields. But treasury is still working out kind of the technical definitions for a lot of this.David RobertsRight.Jessica WilkinsonWhich made it hard when we were building this model several months ago. But kind of the mapping that has been done around the fossil fuel production aspects of energy communities is a little bit clearer. So we looked only at those and we were able to model areas again, those areas associated with historic fossil fuel industries, as I mentioned, evolved models, the evolved energy energies, their models takes into account kind of price. And we weren't able to kind of build that 10% tax credit into the energy model just because the rules haven't been set quite yet. Instead, and we might get to this, we use this dynamic scoring approach in this study and we basically put a finger on the scale in favor of these communities.We gave them a negative social impact score to just see whether or not if we're incentivizing them, we see more of the renewable energy build-out in these communities.David RobertsSo kind of an attempt to simulate an incentive.Jessica WilkinsonExactly. And what we did find was that when we do that, we do see an additional 10% of the clean energy deployment being directed to these communities. So about 32% of the total 2050 energy portfolio in our scenario is built in these energy communities. And under one of the scenarios we looked at most closely, the 70% impact reduction scenario, 23 million people in those communities — live in those communities that host clean energy projects compared to 21 million people in the setting as usual scenario. So we do see a larger percentage of the portfolio happening in these communities and more people live in those communities.When we again put our thumb on the scale for those energy communities.David RobertsAnd are there land implications to that or is that just more about social impacts?Jessica WilkinsonSure, there's land implications as well. Yeah, so there's going to be benefits to those communities and there'll be impacts as well.Nels JohnsonOne thing I'll just point out about the energy communities, one of the reasons why the modeling finds them very attractive for energy development is because it's likely they have the infrastructure and the energy capacity models out there looking for places that have certain characteristics. And these energy communities have the kinds of characteristics energy models looking for. So that makes them relatively attractive for new energy development. It's obviously a different kind of energy development, but it can take advantage of some of the same infrastructure. There are likely already existing transmission lines. There's road access, there's a worker force nearby.So that's partly why we see such a large proportion of the build-out going to these communities.David RobertsAnd the land is sort of already affected.Nels JohnsonYeah, from a conservation point of view there's some benefit because these communities often have lands that have been previously developed for earlier forms of energy production.David RobertsRight. One other technical question is you're modeling finds as all modeling finds that building out renewable energy to hit the 2050 target is going to require an extraordinarily large amount of transmission infrastructure, new transmission infrastructure. But you find that an approach that is sensitive to these land and social impacts ends up using a lot more transmission, but a lot less more than in the baseline scenario. So why is that? What is it about being sensitive toward land that gets you less need for transmission?Nels JohnsonThe main story there, David, is that as we're reducing impacts to natural areas and to croplands, it's moving away from wind projects, for example, in the Great Plains that are quite distant from population centers where the energy demand is, to solar projects that are typically located closer to population centers and demand centers. So that is a big part of the explanation.David RobertsSo the shift from wind to solar sort of carries a reduction in transmission.Nels JohnsonAnd then that reduces the transmission need both in terms of interregional transmission movement because you don't have to move as much between, for example, the Great Plains in the Southeast, as one example, but also the gen-tie lines. These are the lines that connect the wind project or the solar project onto the grid. And so both of those transmission requirements goes down. It's still a massive increase in what we have today. So we need at least two and a half times, or three and a half times at the upper end to move energy between regions of the country to get to net zero.So that is a massive expansion from where we are today. The last two decades we saw very little expansion in transmission and that's really going to have to change as we convert most of the transportation fleet to electric vehicles. That is just going to really require us to expand transmission to keep up with all that new demand.David RobertsAnd given how difficult it is, that does seem to serve as a recommendation for this sort of land sensitive approach since anything that can avoid the need for transmission is probably also going to avoid delays.Nels JohnsonYeah, and one thing we looked at more closely in the Power Place West report, we didn't have the time and the computing power to do it at the national level as much, but we looked at, well, what are the forms of transmission expansion that are available? And it's not just necessarily building a new line through a new right of way, but it can be things like colocating new wires on existing transmission towers. It can be reconductoring, that is, replacing the steel cable with carbon cables. It can be using what are called grid enhancing technologies that are software, for example, or new conductors and things like that, which enable the system that you already have to move more energy more efficiently.And then, for example, two way energy flows in places where you only had one way energy flow. So all those things together we found in the west could account for half of the transmission capacity that we need to grow in the next 30 years. So that's a really good news story that we can invest in these approaches right here and now and make a big difference in that capacity while trying to figure out where are those big new lines going to go because we inevitably are going to need new transmission lines.David RobertsRight, but we can get a lot of just to sum that up, we can get a lot of new capacity without new lines or new land.Nels JohnsonYeah. So the idea here is to focus on those options as much as we can now, to make as much progress as we can while the longer term planning and investment for those new lines that inevitably are needed can take place.David RobertsRight. Jessica, let's get to the $6 billion question on everyone's mind, which is when you ramp up these strategies for being more sensitive toward land, avoiding environmentally sensitive land, avoiding adverse social impacts, how much is the additional cost over and above sort of the baseline status quo projections?Jessica WilkinsonRight. Well, at least the $1.87 trillion question. So existing studies have shown that as resighting today using sighting as usual scenario, the cost of meeting net zero emissions by 2050 is $1.87 trillion. So a significant price tag and that scenario where we use sighting as usual will also impact 250,000 sq mi of land. So that's an area larger than the state of Texas. So we looked at how under these kind of impact reduction scenarios from setting as usual, ramping it up to a 90% impact reduction scenario, how the cost change. And what we found was that half of the impacts to land can be reduced.So under that 70% impact reduction scenario, half of those impacts can be reduced.David RobertsSo that's half of wait, that's half of the amount of land is going to be impacted.Jessica WilkinsonYes. Under that 70% impact reduction.David RobertsHalf of the 250 what you ...Jessica WilkinsonYes.David Roberts250,000. So the 70% reduction case gets you down to 125 ...Jessica WilkinsonAbout right, yes.David Roberts... thousand acres?Jessica WilkinsonYou save an area the size of Arizona. Not too bad.David RobertsAnd how much does it cost to save an Arizona-sized amount of land from development?Jessica WilkinsonRight. So that comes at a 6.3% cost increase over the current trajectory.David RobertsInteresting.Jessica WilkinsonAnd that's not nothing, particularly for lower income communities and families. However, we really think that is kind of likely to be pretty high because those costs may be offset by lower cancellation rates, shorter permitting times, and lower monitoring and mitigation costs. So into the sighting as usual scenario, we expect a lot more conflict, and we see higher cancellation rates, we see longer permitting times. If there's a lot of both environmental and social kind of value in an area as that Q and A defines it, and we think that although it comes at a 6.3% cost increase, it really can be kind of offset by some of those lower cancellation rates.David RobertsTo what extent does the model of the status quo incorporate those conflicts? I mean, you sort of can't can't you're just sort of guessing how big those impacts are going to be? But they're going to be there, right? I mean, does the model take them into account at all?Jessica WilkinsonIt really can't. There's there have been a few studies that we've relied upon that show kind of how much these, you know, sighting in sensitive areas from an environmental perspective does drive up the costs. And the studies that do exist demonstrate that when projects are cited in the more environmental sensitive areas, they have a higher cancellation rate, they have longer permitting times, and as one would expect, more monitoring is required. And there may be other kinds of ways to minimize impacts that would be asked of the developer than if they were in an area that, for example, was a mine land or a landfill or other kind of degraded lands.David RobertsSo you think 6.3% is what the model shows as additional cost, but we think maybe the status quo modeling is underestimating costs because it's not being able to predict all these conflicts over land-use. So maybe the costs are closer to comparable than at first blush. You think?Nels JohnsonYeah. David, those soft costs are just not really available for monitoring. As Jessica said, we have some specific places where we have pretty good evidence of what those costs are, but we just don't have nationwide data. The other thing that's important to notice is that we're also avoiding costs that are occurring when we convert natural habitats or croplands. And there's a cost of that, too, which isn't in the modeling.David RobertsOh, you mean the cost of, like, lost nature?Nels JohnsonLost nature. If we could put a dollar price tag on that, if we could.David RobertsSo those aren't in the model at all. They're priced at zero.Nels JohnsonThey're not. We're just modeling technology and land costs when it comes to these costs.David RobertsRight. So if you wanted to say that untouched land or unmolested land has some value that you would destroy if you developed it, that would change the final sort of cost balance outlook?Nels JohnsonIt could. We just wanted to take as narrow a view of costs as we had really good data for just so that we could have an apples to apples kind of comparison here. And that's why we limited ourselves to data that's really well vetted and reliable and that's the technology cost data and land cost.David RobertsRight, but I think it's fair to say that how you are going to view that 6.3% additional cost varies quite a bit based on how much you value land right. And how much you value untouched natural land.Nels JohnsonAbsolutely. And by the way, in terms of those soft costs that we talked about, project cancellation rates, permitting delays, there's really an important business case to be made here and we and others are working on that, but we just don't yet have the nationwide data.David RobertsRight. The business case just being it's more sensible to go to more appropriate land if for no other reason than to avoid the hassle and blowback and lawsuits and et cetera.Nels JohnsonYeah, the way I've heard some energy developers call it, it's kind of the land analytics. What is it about the place? You're thinking about the analytics, about a bunch of data related to that piece of land that relates to project success. There are lots of analytics that wind or solar developers look at.David RobertsDo we know that? Is that sophisticated yet? Like, do we have a good sense of the full characterization of land that ends up being economic to develop?Nels JohnsonWe don't have good enough data. Companies probably have better data than we're aware of because it's a business and that data can be proprietary. But we think there are a growing number of companies that actually are starting to pay attention to, as I say, this notion of land analytics.David RobertsInteresting. And Jessica, one of the ongoing discussions, let's say, areas of discourse in the clean energy world is about NIMBY-ism and about community feedback. And the sort of gathering conventional wisdom, I think, is that there's too much too many ways for communities to slow and halt things, too many ways for them to sue, too many laws and regulations that they can exploit. And thus that, like NIMBY-ism has all the power. And part of the solution is to move power out of local hands up higher on the chain, up to the.David RobertsState or federal government.David RobertsBut you in this report at the end recommend more public process, more engagement with the public. So how do you square that? How does that not end up slowing things down?Jessica WilkinsonRight, I mean, we think there needs to be a balance. We need to make sure that the communities where this infrastructure is being developed have a voice, not only that, but that they're meaningfully engaged. And we also see a backlash when states try to go too far in taking away that local community role. And it can exacerbate, frankly, the backlash against renewable energy. This transition is not going to happen in the next five years. It's going to happen, we hope, as soon as possible, but it's going to take a few decades. And we really need to have these renewable energy developers have a long term social license to operate.So we need to be finding ways not only to get that balance right between state control and local control, but we also need to make sure that we get the balance right in terms of how we share the benefits of this transition. And I think there's growing recognition about that as well. I think there's some encouraging signs there. The Infrastructure Investment and Jobs Act directed about $760,000,000 in grants to state and local governments for economic development activities and communities affected by transmission, actually. And I think New York State is a place where they were trying to find the balance of that in their 2019 legislation, where they created this one stop permit review process.That is great. And then they also acknowledge that in order to be eligible for that, you needed to demonstrate that you've consulted, hopefully more than just consulted with the host community and that you have a community benefit agreement in place. We need to make sure that the local communities that may be seeing a lot of this development in their communities are sharing in the benefits as well.David RobertsYeah, I feel like that's an underrepresented perspective in this debate, which is that maybe if you engage communities earlier and share more of the benefits with them, you could speed things up and then maybe part of the slowness is your standard capitalist rapaciousness trying to capture all the profit and not share any with the communities involved. Like maybe you could speed things up if you shared some of the money, basically.Jessica WilkinsonAbsolutely.Nels JohnsonWe really want to emphasize that when developers do the right thing, they show how they've avoided impacts, they show how they are working with communities to deliver benefits that the community wants they should be rewarded. And we think one of the most effective ways to reward them is to get them at the head of the queue in terms of permit review, in terms of interconnection queues. Because if companies go beyond what some of their competitors are doing to do the right thing, they need to be rewarded for that.David RobertsInteresting. Well, that segues perfectly to my final question, which is sort of what policy recommendations fall out of this? One that seems very obvious is instead of not planning, let's plan. What are the others? Jessica, what are the main sort of policy recommendations that fall out of this for you?Jessica WilkinsonYeah, so we really were thinking about our audience as being those that do energy planning, state governor's offices and energy offices. So we kind of thought about the recommendations in terms of those audiences. And for energy planners at all levels, local, state, regional, national, kind of our solution is that they use the methodology outlined in Power Place to make sure that as they're planning for a clean energy future, they're doing so in a way that maximizes benefits to climate, to nature and to people.David RobertsAre they just not doing that at all now? Is it land? Is this sort of like environmental sensitivity of land, is that playing any role at all in the planning right now?Jessica WilkinsonOnly a little bit. I mean, to the extent that they do and there have been some states that have they maybe are taking off the table, like in the way that you are telling the model avoid this place if you can, if you can't, but take it into consideration. They will, for example, include those lands that are currently off the table, like national parks and wildlife refuges and that really are off the table, but they tend to not include those other lands that maybe aren't regulated in that same sense. They're not designated as high priority conservation areas but we know they're really important either because they're wetlands or they are endangered species habitat or are lands that are going to be important under the changing climate to ensure that we have resilient and connected land in the future.David RobertsSo the first recommendation is just take this into account when planning.Jessica WilkinsonTake this into account, use the high resolution conservation, land-use and demographic data that we do have. And then for policymakers, what we show in some of the particularly in the regional snapshots we have in this report is that different geographies are going to need different incentives and we need to tailor those incentives to the particular geographies and the specific kind of conditions. Is it highly agricultural? Is it amenable to agrovoltaics? We're going to need to adopt incentives to encourage the right mix of technologies and land saving approaches that make the most sense in those geographies. And then as Nels alluded to for those projects that are well designed and have lower environmental, social and economic risk, we do think that it's appropriate for them to be able to jump the line, not cut the line, but get to the front line for interconnection consideration and for environmental and environmental review and permitting.Nels JohnsonAnd it's really important to recognize that there are states where this is starting to happen. New York, California in particular have explicit approaches to avoiding and minimizing environmental and social impacts.David RobertsWhat are they using? Is it just like a financial incentive or is it a jump the queue kind of thing or what? Do we know what works?Jessica WilkinsonI think we're still learning. We're very much in the learning stage. There are states that incentivize provide incentives to solar developers, for example, that build on landfills and mine lands and brownfields. There's a lot of great examples of that. Does it solve the problem? No, probably not. But it certainly helps. And then New York was that example where they do have this one stop shopping for renewable energy permitting if you are consulting with the community and demonstrate that if you have a community benefit agreement. So we are seeing a lot of really interesting innovation and I think we're in an exciting time right now to try and get this right.And now is the time we really need to get it right.David RobertsYeah. Before we headlong into this stampede of growth, which just makes as someone who has become, over time sensitive to these possibilities for blowback, just the whole prospect of this giant wave coming, just the number of possible problems, it just makes me clench up.Jessica WilkinsonI think our findings are really encouraging. We we can avoid a lot of these impacts, we believe, but we need to get the planning and the policy incentives right, and we need to do it now.David RobertsAwesome. Okay, well, that's a perfect note to wrap up on. Jessica Wilkinson and Nels Johnson, thanks so much for coming, this fascinating report.Nels JohnsonThank you.Jessica WilkinsonThanks so much for having us, David.David RobertsThank you for listening to the Volts podcast. It is ad-free, powered entirely by listeners like you. If you value conversations like this, please consider becoming a paid Volts subscriber at volts.wtf. Yes, that's volts.wtf, so that I can continue doing 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, Washington State House Rep. Jessica Bateman talks about championing an ambitious and successful bill that aims to increase housing density in Washington, and the politics of housing in general.(PDF transcript)(Active transcript)Text transcript:David RobertsAfter decades of effort by urbanists, which often felt like the work of Sisyphus, housing has arrived as a political issue. Big environmental groups have come around to the idea that dense housing is a crucial climate strategy, support is growing from unions worried that their members can’t afford to live where they work, and polls show that the public is increasingly convinced that there is a housing crisis. Over the last five years, a wave of good housing legislation has been building on the West Coast, spreading from California to Oregon and now to Washington state. In this last legislative session, some 50 housing bills were put forward in the Washington legislature and more than a half dozen passed, any one of which would have been historic.One of the most significant bills that passed this session — and one of the biggest surprises — was House Bill 1110, which legalized so-called “missing middle” housing statewide. Every lot in the state will now be permitted to build at least two units of housing, four units when located near transit, and up to six units if some portion are set aside for low-income homeowners.And that's just one bill. Other bills would legalize accessory dwelling units (ADUs) on all lots in the state, require municipalities to integrate climate change into their growth plans, sharply restrict local design review, and ease permitting of multi-unit residential housing. It's a feast.The lead sponsor of HB 1110 is Rep. Jessica Bateman, who represents the capital city of Olympia. She was elected in 2021 and quickly established herself as a champion of equitable housing and a tireless organizer. Through sheer force of will, she brought together a broad coalition that was able to push the bill over the finish line, defying predictions.Like Washington state Rep. Joe Fitzgibbon, who I interviewed for Volts back in 2021, Bateman is widely seen as a rising star in the legislature. I was excited to talk to her about her bill, the wave of other housing bills this session, and the broader politics of housing at the state level.Alright, then. Representative Jessica Bateman. Welcome to Volts. Thank you so much for coming.Jessica BatemanThank you so much for having me.David RobertsI'm so excited to talk to you. I've got so much I've got so much I want to ask you about. But let's just briefly start before we get into the nuts and bolts of the bills, et cetera, maybe just tell us a little bit about you're new to the Washington legislature as of 2021. So maybe just tell us a little bit about your history and how you came to the legislature and how you picked up an interest in housing along the way.Jessica BatemanWell, I am new to the legislature, but I'm not new to legislative politics. I was a legislative assistant for three and a half years to former State Representative Chris Reykdal. He's now the Superintendent of Public Instruction. And before that, I came to Olympia to go to Evergreen. That's how I got involved in politics in my first campaign for I-1163. That's how I got started working as a legislative assistant, and then I became a planning commissioner for the City of Olympia working on comprehensive planning, and then I ran for City Council, was there for five years.On city council. We dealt significantly with a growing unhoused population in Olympia and how we were going to manage and deal with that, which led me to working on permanent supportive housing and also more broadly, housing policy and how we create and build housing in Washington and the systemic barriers to doing that. We also worked on passing middle housing legislation while I was there. And when I came to the legislature, my goal was to legalize middle housing statewide. I didn't know I was going to do that in my second year as a legislator.David RobertsDon't get used to this heady success. I don't think it's typical.Jessica BatemanIt was just by happenstance representative Nicole Macri had sponsored a middle housing bill for a couple of years, and she had other work that she was doing. So last year in 2022, I sponsored House Bill 1782, and then this year it was House Bill 1110.David RobertsWell, we're going to get into that in just a minute. So you've had your hands on housing policy directly at a municipal level, and this is kind of where the rubber hits the road with all this stuff. A slightly more general question, it seems like I and a bunch of other people I mean, not really me. I'm peripherally interested. But I know a bunch of people who have been banging their head on this wall for years. Decades of just urbanism housing in general, the dominance of cars, the lack of housing, et cetera. All this. And it seems like in the last, I don't know, call it five years, the dam has broken a little bit and things are happening.Like, there's tons of bills passed in California recently, Oregon, and now Washington. I was looking at the list on Siteline for the listener. Sightline is a local non-profit research house. Awesome on housing. They list 50 bills related to housing that were proposed in the ledge this session. I mean, obviously not all of those passed, but it seems like housing has finally kind of roared onto the agenda. And I just wonder if you have any insight into how or why that happened and if you feel like do you have any sense that you're part of a movement, like a group of people here who are pushing this?Or is this just like one of these things where the time was right and history turned and things changed?Jessica BatemanI think it's a lot of all of those things. Honestly, the reason why we were able to take action on housing this year is multifaceted. One of the core issues is that our housing crisis continues to get worse. And as it gets worse and is experienced by people across the state, different generations, people are seeing their kids living at home. People like my dad, who just retired from Boeing, and watching his youngest, my little sister, who's a nurse, not being able to get a starter home of her own like he did, build her own family. It's a lot more relatable how the housing crisis is impacting people.And it's a kitchen table issue that people, if they're not struggling with not being able to find a first home, which in Washington, first time homeowners, can only afford a home in three counties, and they're all in eastern Washington. That was a number from session, it might have gotten worse now. They're struggling with rent prices and seeing hundreds of dollar rent increases that put them more at risk of becoming homeless. And as a result of that, they're asking questions like, why can't we have more housing? Or what can we do to stop this? And thinking about having neighbors that live in middle housing becomes less ...There's less stigma associated with it when people see it as something that their families could benefit from. Having said that, we've had a housing crisis that has been growing for years. And we have seen those that are in housing policy have really experienced a lot of frustration watching a lot of good housing bills die over the years. And last year, 1782, my middle housing bill died. Fantastically. In a year when the housing crisis was bad then, we'd seen 15%, 20% year-over-year increases in home prices. And so last interim, I and a group of other House Democrats got together, and we're talking about what are the barriers to passing housing legislation.And there's a number of them, but one of them was the structure and the way that we organized our committees. We had a local government committee, which is where all the zoning and land use policies went. That's how you create more housing. And then all the symptoms of not having enough housing, like tenant protections, helping folks stay where they are, keeping them housed, that was in another committee. And then you had the investment in truly affordable housing through the Husing Trust Fund in a different committee. So we worked to create one committee that was all housing, everything housing holistic view.And I think that was integral because as you saw, I mean, if you look last year versus this year, how many housing bills made it through the process, there was a significant uptick. And I also think us talking about the connection between housing and climate. I've been working on this issue for eight years, and my very first City Council race, the environmental organizations in my community, called me a developer-shill, because I was pro- unabashedly pro-housing.David RobertsThat's just automatic now, though. That's just like part of the landscape ...Jessica BatemanTotally, which is why come up with something new because that's what's been thrown at me for eight years. However, it is frustrating as someone who partners with organizations and environmental groups to have them not see that connection, which is very real. Like if we're not going to address land use, then we're not going to realistically address our climate goals in Washington state. So to see premier environmental organizations stepping up and saying land use and climate are inextricably linked, we have to address both. And also, on the other side, equity. The way that communities have excluded people by race and by economic means through single family neighborhoods is very explicit.And so we had a coalition this year that really focused on working families, communities of color, the environment all coalescing around the one issue that really does impact all those different facets. Because even though we're going to get into a wonky conversation, I'm sure at the end of the day this is really about people. And people having an opportunity to have a home, people having stability, people having the ability to put down roots in their community, to build equity, start families, have livable, walkable neighborhoods, have a future. That's what this is about.David RobertsI love both sides of that answer, but I particularly love the first side since a recurring theme on this podcast is that in the spirit of Elizabeth Warren procedure matters, the structure of the bureaucracy matters, administrative capacity matters, it's boring, no one pays attention to it, but it really does matter. It really does affect results. Okay, one more general question. I think sort of ordinary people at this point have probably grokked that there's housing problem going on. But some of the questions I get are like to what extent is it a West Coast thing versus a countrywide thing?To what extent is it an urban thing versus a statewide thing? How universal is it? Like is Washington particularly bad or is it just bad like all the other states are bad because housing policy is bad everywhere.Jessica BatemanI mean, the country has millions of homes behind to keep up with population growth for building and constructing housing. So it's obviously not Washington state, or West Coast specific. However, you do see the real struggle to build housing commensurate with population growth in especially those high opportunity areas where people are really going to for jobs and economic opportunity. They also can be areas that are really good at weaponizing public policy to prohibit housing from being built. And that's a real challenge, which is one of the reasons why we have to address it at the state level.Which is why you've seen California and Oregon. Oregon was first. But Oregon, California and Washington state. I do think if there's data that shows that Washington is particularly bad in terms of our per capita construction of housing, I think we are the lowest for that.David RobertsNo kidding. Yikes.Jessica BatemanSo we do lead the pack, unfortunately. But on the West Coast in particular, it is nationwide, but it is also really, I think, dramatic on the West Coast, where you see so many people wanting to come here for jobs and for opportunity. And in Washington state, it's not just impacting the large cities like Spokane, Seattle, or Tacoma, that statistic earlier about first time home for first time home buyers. It's only affordable in three counties, and they're all on the east side of the state in really kind of rural, expansive counties where there's not a lot of job opportunity.So a part of this is about where do people want to live and what systemic policies do we have that make it difficult to build housing? And that is not specific to any one city. The vast majority of cities outlaw middle housing or anything other than single family homes in the vast majority of their areas where they can build housing. That's not specific to only Washington state. Other states are also in that vein as well.David RobertsSo let's get to middle housing then, in your bill. I want to cover this bill, and then maybe we can mention talk about a couple of the other bills briefly at the end. But just by way of introducing this subject, I have like a little 32nd rant. I feel obliged to deliver because every time I talk with a policymaker in Seattle, I talk about this. What you see in Seattle, and I think this is typical of a lot of growing cities, is you got a lot of people coming here, you've got these single family neighborhoods that are fixed in place that won't allow anything to be built.And so all new population, basically any working class people who move here, are put in big apartment buildings along giant arterials. So what you have increasingly in Seattle is a completely two-tiered bifurcated system. You're either living in a nice house in a quiet single family neighborhood, or you're in a big apartment building on a five lane, six lane street. And it's terrible on so many levels, but it's just so grossly unjust. And it just puts this sort of economic inequality in physical form all around you. And what's missing there? What's missing between these big apartment buildings on the arterials and the quiet single family homes, is what's called middle housing.So maybe just start by telling listeners, maybe who aren't up on these debates, what do we mean by middle housing? And then let's talk about your bill.Jessica BatemanWell, your observation is correct both in the description of what middle housing is and constitutes. So middle housing is everything between a single family home and an apartment or multifamily housing. So that could be a duplex. Two units that are connected, threeplex, fourplex, sixplex. My bill goes up to a sixplex. I think technically middle housing can go. I'm not sure how large they can go, but the largest that we have in my bill is up to a sixplex. The description that you gave is very apt in Seattle and the vast majority of cities, but using Seattle as an example, they only allow the construction of single family homes in over 75% of the city.And so you have this economic and racial segregation where people that have historical wealth or connections or intergenerational wealth, they've been able and they have these homes. The median home price in Seattle is almost a million dollars. And then you have the new people that have no way of accessing homes like that to buy or to rent. And it's also about a person's health. Whether or not you get cardiovascular activity is do you live near a park? Do you feel safe to go to that park? Do you have sidewalks?In terms of upward mobility and our investment in that from the state and education, well, so much of your lifetime income earning potential and your opportunity is based on your zip code and the people that live around you and the opportunities that are provided.David RobertsAnd also if I could just insert also I've seen it. I'm pretty sure this has been said explicitly in Seattle planning documents is that these people who live on the arterials are referred to by city planners as buffers, basically for that air pollution that the cars create and the noise pollution that the cars create. Buffers to protect the single family homeowners from that nasty pollution, which is just, like, manifestly grotesque, I think.Jessica BatemanRight, and our opportunity is really dependent upon that opportunity being available to others. And so I have a little sister, she's 27. I own a home. I won the lottery, I got lucky and I bought a home at just the right time. I have a fixed mortgage. I know year over year, give or take, how much that's going to increase. There's a significant amount of stability there that I want other people to have. And also, I couldn't afford my home today if I had to buy it now. As a legislator who has two jobs, so also as a city council member, having gone through that experience, we tried to pass middle housing legislation and it took us over two years, 44 public meetings, 1,200 pages of written comment, three public hearings.And I can tell you that the way that we have these processes at the local government level, we hear from predominantly homeowners and older whiter, male homeowners that would like to maintain their property values. They have a definite stake in the status quo staying as it is. And it's by design, and it's been that way forever. And it's not embedded with equity because folks that don't live in the community yet, they're not voicing how new housing would provide them with an opportunity. You just add so many layers.So that's why having a statewide floor for zoning is so important. It also creates stability and predictability for people that build housing so they can know statewide it's predictable, which is great. So the bill as it stands now, it went through a lot of changes in the process. It would apply to cities 20,000 or greater. Cities that are 20,000 to 75,000 would have to allow, will have to allow two units on all parcels, that allow residential construction. They would also have to allow four units near transit and four units anywhere if one unit is affordable. And that's up to 60% AMI for renters and up to 80% for a person who's going to buy the home.David RobertsOne of the things I was wondering about, reading about this is this category of cities from 20,000 to 75,000 is that most of them what is the sort of distribution of cities here? Because I know the cap for that was lower in the previous bill and it got raised some. So you're including more cities now. And I don't have any sense of what percentage of cities or which.Jessica BatemanI'd have to look at the numbers. What I can say is the bill started at any city of 6,000 or greater, so it impacted more cities when it started. And that was by design. We wanted to be really ambitious at the start. The vast majority of cities in Washington are small. There are over 260 and most of them are small. So when we increase that population threshold, the implementation at 20,000, we knocked off a whole bunch of cities. But the ADU bill that passed, which we can talk about, applies to all cities. And so the thought was for these smaller communities that really pushed back on how this change in housing would impact their community and what their community felt like and what their community needed, we could argue that, okay, well, the ADUs felt they felt less opposed to that.David RobertsRight.Jessica BatemanThat drives me crazy because it's not embedded in best practices or data or science.David RobertsWell, what in a housing policy is not ultimately like comes down to feels. There's not a lot of rational discussion around this where you look. So from 20,000 to 75,000 every lot, you can build at least two things. And if you're close to transit, four things. And if you set aside one apartment for low income housing, four things.Jessica BatemanCorrect.David RobertsAnd then 75,000 up is all one big category?Jessica BatemanYes. That's four units anywhere, six units near transit, and six units anywhere, if two are affordable.David RobertsHas Inslee signed it yet? It is passed the House and the Senate, and it's waiting for a signature, or has been signed?Jessica Batemanit's going to be signed on Monday the 8th.David RobertsBy the time this pod is out. So when this is law, if I'm a single family homeowner anywhere in the state, in a big-ish city, I can sell my home and my lot to a developer. The developer can knock down the house and build a fourplex. That can happen anywhere in a city over 75,000?Jessica BatemanCorrect.David RobertsSo it's four anywhere, six close to transit, and then six with some affordability?Jessica BatemanRight. And then we have that third category, which is the contiguous cities, which are cities that are right up along it's kind of technical, but the largest city in a county of 275,000 or greater, so using Thurston County, Maya County, for example, the largest city is Lacey. Any smaller city that abuts up to it is a contiguous city has to allow duplexes everywhere. And so that was it started out being in the 75 category, so it would have allowed more homes and hounds near transit and anywhere if one or two were affordable. That got narrowed down in the Senate so it's just two anywhere.David RobertsBut just for listeners, the reason this category exists is because there's all these like Seattle is surrounded by all these little communities, sort of satellite communities that are kind of part of the Seattle sort of municipal area. They're not really small towns per se.Jessica BatemanYeah, the thought being we want to make more housing available and abundant where people are and where people want to go. And naturally that's where economic opportunity and social opportunity exists. So Seattle being the largest city in the state, you have all of these smaller cities that are adjacent. It makes sense that they would also we want housing to be there too.David RobertsWell, this is huge. This seems like a genuinely huge and fundamental change. We can get into the politics of it later. But I want to touch on a couple of other aspects. What does it say about parking? Because parking is also sort of roaring onto the agenda as a thing people are starting to care about and look at and think about the negative effects of what does it say in particular about — because a lot of cities, I think listeners are familiar, a lot of cities have parking minimums. So theoretically one way a city could avoid this missing middle housing is by putting parking minimums.So if you build four units on your lot, if you're required to put four parking spaces in, that kind of is going to eat a lot of the space and inhibit a lot of the growth. So what does it say about parking?Jessica BatemanLove the parking. All the feels about parking. Parking adds ... not only does it add cost to constructing homes, it also takes up in our urban areas valuable space that could otherwise be used to house a person. So we prioritize vehicles over people when we create minimum parking requirements. It also doesn't make sense because you would want the person who's building the housing to make a market-based decision about: is it marketable to build this now? Will I be able to sell it or rent it if there is no parking? They're going to be much more aligned with that objective.David RobertsYeah, there's something weirdly Soviet about how we think about parking. Why should bureaucrats be picking a number out of the air and deciding that's the minimum, it's just so goofy. We don't do that with any other service, product or service.Jessica BatemanSo much of housing policy is really about the people that are currently housed wanting things to stay the same. And when other people move here, they inevitably it's more people, it's more traffic, it's more noise, it's more interactions. And so a lot of these policies underneath them, it's really about the people that are currently here kind of wanting to buffer themselves from any kind of impact.David RobertsYes, I am subscribed to my local next door, and I can tell you anytime a new apartment building is announced, anytime new housing is announced anywhere, that is the first comment. Where are people going to park?Jessica BatemanYeah, people get really upset about it. So the bill started out more ambitious, and it ended up you cannot have minimum parking requirements for the homes that are available near transit. So for the two units and the four units near transit, no parking minimums in the neighborhoods. We initially started with only being able to require one space per lot, and that got expanded to one space per unit. So if it's a duplex, you can require two parking spaces if it's a fourplex, four and sixplex. Six. And yeah, your guttural response is correct. That was a concession that I had to make.They can also, if they want more parking, they can go through a process to appeal essentially to the department of commerce to say, we feel like more parking is necessary, but they have to demonstrate that it is because of some impact to public safety. We were pretty explicit in how they actually have to provide evidence for that, because, well, cars are kind of inherently dangerous anyway, so it'll be hard for them to make that case. So there is some restriction on how much they can require. It's not as much as I would have liked, but again, this is a watershed moment in terms of land use policy in Washington state, and I'm optimistic about us in the future being able to come back and make tweaks if necessary.David RobertsKind of a side note, but I'm curious. A lot of these bills pivot around what is and isn't close to transit. So are there complications in identifying exactly what does and doesn't count as a transit stop, or what does and doesn't count as close to transit? Because a lot of money and a lot of rules are now hinging on that distinction?Jessica BatemanYeah, and I know one question came up recently about, I think, trolleys in Seattle, which was not something that we accounted for in the bill, but actually, apparently by the definition in the bill for frequent transit would qualify. So the department of commerce is going to be going through a process to answer some more of these specific questions as it relates to what constitutes the different forms of transit. It does get really technical really quickly. And we were also concerned with one thing we heard a lot was bus stops can change and that is technically true.But we want housing near transit because the utilization of transit is predicated on density. So that's really necessary. But there's going to be some more fine tuning of specific definitions around things like whether trolleys qualify or not. We did take out ferry terminals. That was something that was taken out. I have to go back and look at the exact specific definition that we ended up with for transit, though.David RobertsI'm curious about how exactly this is going to interact with local municipal government. It's worth stating, does not dictate any citing or design issues. It doesn't tell local governments that they have to cite anything anywhere in particular or design anything any particular way. It's just sort of minimum requirements. But I'm sure there was and will be resistance from some local governments sort of notoriously around Seattle, like out on the islands, Mercer Island and whatever. They are enthusiasts about pulling up the drawbridge and not letting anybody else come out there, not letting anybody else live there, not letting transit come there.So I'm wondering, are you worried about shenanigans by local governments trying to circumvent these things? For instance, I think there's an exception for environmentally sensitive land and maybe there's something about historical land. I can imagine local communities abusing those rules. Sort of like what do you foresee in terms of the push and pull between this law and local governments who for whatever reason don't want to do it?Jessica BatemanRight, I think it's human nature to want to keep things the way that they are. And I don't inherently have ill will towards people that think that way because it's just kind of like how people tend to operate. But I do think it's our responsibility as lawmakers to be thinking about planning for the present, but also the future. And so that's why the statewide legislation is so important, because at the local level, so much of the response is inflammatory. It's an inflammatory and I'm talking like inflammation because people get really upset and they go to their city council folks and you are the closest to the people there and you just naturally want to make them feel better.And you also I think there's a part of this that some cities feel like the state's coming in and telling them what to do. So I do anticipate that cities will try to find creative and innovative ways to circumvent this legislation. And I'm already thinking about ways that we can ensure that cities are held accountable for their responsible, fair share of providing housing. California has created an Office of Housing Accountability and they actually review housing elements in good detail. And the Attorney General there has a way of holding folks responsible if they don't do what they're required to by state law.So that's one thing that I'm looking at. And then also really analyzing how historic districts are deemed valid.David RobertsOh my goodness, so much shenanigans there in Seattle. Please do something about that. All of Wallingford neighborhood is trying to become historical, which is just goofy.Jessica BatemanSo we need parameters, I think on I am a fan of historic architecture. I'm a housing nerd. I'm going to Palm Springs next week and I'm going to take a tour of the mid-century modern houses ...David RobertsI did that very fun.Jessica BatemanRight? And we also know as people have weaponized SEPA, a really good environmental policy to obstruct creating more housing. They also weaponize things like historic districts to obstruct the creation of more housing and to keep their neighborhoods kind of covered in amber and staying that way for all time. So those are kind of two areas that I'm looking at.Also, I would say that these laws will become effective in the next round of comprehensive plan updates. So it's going to be a rolling implementation based on the city's comp plan update. The largest cities going in 2024 and then they've got six months for implementation to pass their building codes. So 2024-ish for the next round, the first round of cities. So we have some time, but I'll be thinking this interim about ways that we can prevent those very things from happening.David RobertsAnd is there provisions in there about homeowners associations and their covenants and things like that? I feel like I saw something mentioned that it's ...Jessica BatemanSo the bill applies to all future homeowners associations. So if you create and build a homeowners association, this law applies to you. It does not apply to homeowners associations retroactively because we can't change the land use of a contract that already exists that people entered into when they purchased a home.David RobertsInteresting.Jessica BatemanSo there are people that argue that we can and there're really smart legal experts that tell us, no, you in fact cannot do that. Other states that have passed similar legislation have not made it apply retroactively. I would also add the bill itself, it was kind of a wing and a prayer that this bill survived this year.David RobertsYes, I know. I've been reading about it.Jessica BatemanIt came back from the dead a number of times. So I think there's an interest definitely because there was a lot of conversation about there's no secret that not having this apply to current homeowners associations. There are a number of them in Washington state.David RobertsYeah, I was going to ask, do we have a sense of how common that is, how big of a swath of housing those covenants cover?Jessica BatemanI don't have that figure off the top of my head, but it's larger than one would assume and the equity component is really bad. I mean, if you look at some of the areas, this bill will not be applying to some of the wealthiest whitest economically.David RobertsThose are the places with the covenants, right? I mean, those are the places with homeowners associations.Jessica BatemanYeah. So there's an interest because of this bill. I think a lot of people in the legislature are talking about, hey, what can we actually do? And how can we push the envelope and look at this issue of homeowners association? So I anticipate we'll see some legislation on that next year.David RobertsAnd is there anything in the bill along economic justice lines sort of anti-displacement? I know the one provision is you can build bigger buildings if you set aside a unit for affordable housing. Is there more all along those lines?Jessica BatemanSo one bill that we passed a couple of years ago was House Bill 1220, which requires all cities to assess displacement risk. And Seattle has done that. You can see a map that Seattle has. And so what this bill does is it allows cities that have deemed an area to be at risk, a high risk for displacement. They can basically pause implementation for up to ten years. That law, House Bill 1220, requiring cities to do an assessment of at risk for displacement. It also requires that they have a better mapping out of the housing needed for different income bands.We can go really into the weeds on comprehensive planning processes in Washington state, but cities have never been required before to go into detail on the different income bands of housing needs. So those two things were brand new. They just went into effect. They're in effect now, brand new. And so the question came up with the bill was, how do we protect for displacement in areas with classic examples, south Seattle, and I don't think we've answered that question thoroughly yet. I don't think cities know how. And that's what they said to us when they realized what they were going to have to do for implementation of 1220.We don't know what to do for displacement. And they kind of looked at us like, give us money to give people money. And the state, you want to talk about the numbers? I mean, we need a million homes over the next 20 years. Half of them need to be affordable at up to 50% AMI. That is not a number that the state can budget for the Housing Trust Fund. I mean, as a comparison, just the data, the Housing Trust Fund, which is our largest bucket of funding for affordable housing in Washington, that's capital dollars for the construction of truly and meaningfully affordable housing, was created 1986.We've built 55,000 affordable homes since then.David RobertsYeah, not quite on pace for half a million.Jessica BatemanRight, so what that tells me, and the whole premise of House Bill 1110 and some other supply side bills, is we need to figure out sustainable and progressive funding and revenue for massively increasing our investment in truly affordable housing. And at the same time, we have to make it systematically easier to build homes of all shapes and sizes a. to respond to the market and the demand there because let's be clear, half of those homes also need to be 50% and above AMI. And we have nurses like my little sister that also can't find an affordable home for her which is not spending more than 30% of her income on housing. So we need housing all over the place and of all shapes and sizes.And the supply side bills this year are really focused on looking at there's some obvious low hanging fruit ways that we are making it difficult, in some cases impossible to build nimble, smaller, more modest homes that are also better for our environment and also increase equity in our communities.David RobertsRight. And for some reason this is controversial, but I feel like it's also worth noting that just building a bunch more homes is in and of itself an affordability strategy that's when you increase supply, prices come down. This is not controversial in any other market or any other area of public policy, but for some reason it's very controversial here. But ...Jessica BatemanIt is.David RobertsHousing supply is an affordability policy.Jessica BatemanRight. I mean, one of the other things I think about with our investment because advocates for affordable housing will rightfully say, well, you need to increase the investment in the housing trust fund. And I agree that we do. As long as we have these restrictive policies that make it really difficult and expensive to build housing, the price per unit cost that the state is investing. We'll house more people if we make it easier and cheaper and more efficient. And that's not just like me saying that as a talking point, that's really true. There's a ton of research that shows us how we make it more difficult and expensive to build housing.But minimum parking requirements are a clear example and we get pushback the same people who demand that any new housing has to be affordable also push back on maintaining minimum parking requirements. So going back to the displacement question, we're going to have to continue to do more work because I think simply saying that we can pause implementation of building more housing is not a sufficient answer to anti-displacement.David RobertsYeah, well, let me ask on that exact note, maybe this is obvious and I'm just not getting it, but why do we assume that enabling more middle housing in these areas would produce displacement? Like what's the connection there?Jessica BatemanThe argument that we heard from a couple of cities was you're going to see land values increase and demand in these areas already exists and with the opportunity there, you're going to see people being priced out either in their rent or selling their homes and having a developer come in and build the sixplex. That is then not affordable. And I can't argue that the value will go up and we will see some tear downs happen, although tear downs of existing structures happen only when it's economically a good decision for a developer to do that. Like in Olympia, my home and my property.The structure is the most valuable asset on the property. It would make no sense for a developer to come in and bulldoze it down unless they were going to make a significant amount to recoup those costs and then make a profit. But in some areas, like Seattle, that might happen because of the land value, cost is so high and the demand is so high. But I would also argue on the flip side that say a black family that owns a single family home, should they not be able to sell it and make that profit and make decisions about what they want to do with that investment?David RobertsIt seems like a species of argument, which I hear a lot of, which always slightly baffles me, which is like we can't let these places get nice because then people will want them and come buy them. So the only way to protect poor people in their housing is to keep the places they live grimy and unattractive and low value. That does not seem like a viable or attractive long term solution to me. Like that can't be the way we're protecting people.Jessica BatemanRight. And that's what the cities, they're saying it's inherently more affordable housing, naturally occurring more affordable housing. And that by legalizing middle housing in those areas, we are going to displace the people that currently live there. And so that was the argument that we heard and the compromise was allowing for the folks, those areas to pause implementation.David RobertsRight. Let's talk about a couple of other bills. This one, the middle housing bill, is sort of your baby. A couple of others which you did not sponsor but voted for, which I think are at least worth noticing. The other big one I think on housing is ADU reform accessory dwelling units for people who are not nerdy on this topic, which just means you can build a nice little unit on your property, a second unit on your property and rent it out or sell it to someone. What does the ADU bill do?Jessica BatemanSo that's House Bill 1337, sponsored by Representative Mia Gregerson, who has been fighting for this bill for years and it finally passed, which is amazing. You can build an ADU on any lot. Actually, I think two ADUs on any lot, it lifts local barriers on ADUs.David RobertsAny lot period in the state.Jessica BatemanYeah, it impacts cities smaller than the middle housing bill. Yeah. So for the cities that are included in the middle housing bill, they'll have the choice, the ADUs count towards the unit count. So unfortunately you won't be able to like in cities where fourplexes are legal, you can't do a fourplex and two ADUs, but you could do a duplex and two ADUs. The whole point, both of them, is to offer more flexibility and that is successful. So it caps impact fees and parking mandates, legalizes two per lot and sets baseline standards for minimum lot sizes and the ADU size and height.I didn't sponsor that bill, so I don't know all of the technical details, but I do know that it works in concert with House Bill 1110.David RobertsRight. And then one other worth mentioning, just for my friend Mike's sake, is single staircase buildings have been legalized. This is way nerdy in the weeds for housing people, but this is something that a lot of people have really set their hearts on. Were you involved in that at all? Or could you explain the benefits of a single staircase building or why that's an issue at all?Jessica BatemanYeah, I wasn't involved at all, but I was thrilled to see it move forward. And I think we made some changes in the house that requires the state building code to develop recommendations for single stair buildings for up to six stories and to adopt those changes by 2026. And that's important because when you have the requirement of two staircases that takes up valuable space that could be used for housing people, it also puts limitations on where things like windows can be in terms of the architecture of the building and the design of the building. So it can make it a much more livable space by being able to utilize that square footage for something other than a staircase.They do that in other countries and it's completely safe up to six stories. So it was really a common sense solution, I think. And I know that the people who build houses and architects and designers are very excited about it, and rightfully so.David RobertsOne of the things that has vexed local urbanists here in Seattle and I'm sure in other cities too, is what's called design review, which is you propose a building, you come up with the plans, your building, obeys all the codes, is ready to go. And then it has to go through this design review process where a board of architects ...Jessica BatemanVolunteer architects.David RobertsYeah, volunteer architects come and be like that brick shade is a little too dark red. I'm into more of a lighter red. And then you have to have another meeting and another meeting, and this adds millions of dollars onto the cost of building anything and takes forever and appears to benefit no one, as far as I can tell, other than the volunteer architects who get a sense of power over all the buildings.So that ODS process has been not nuked. There was a bill that would have nuked it that didn't pass, but it's been ...Jessica BatemanI know, I wanted that one.David RobertsIt's been reduced to one meeting, right? Is that what happened?Jessica BatemanYeah, one meeting. And it requires the local design standards to be clear and objective. And so that means subjective is what the current process is, where you have volunteer ... listen, I get it. Architects, that's what they do. That's their job. And when you're given it's like the luxury of infinite choices and the luxury. So much of this process is all centered around the people that already have housing. Like the people that are on the committee, the volunteer architects, they have homes and they're being asked like, what shade of terracotta versus brick red should it be? And when it's the most obnoxious.It's when they're making these decisions about something that is currently a parking lot, a completely unused space that could be housing during a housing crisis. And they're taking years to do it. And so by establishing this as clear and objective and not subjective is a huge improvement. And then also by not allowing more than one public meeting is also a huge improvement. One of my observations is this is so asinine for people that are not in these circles, that don't see these processes all the time, but the people that have been doing it for years, that are on these design review or local governments, this is just how they work.Right. And so it takes people from the outside looking in, going, this is not the best way to do things we do need.David RobertsOh my god. Anybody I try to explain it to, they're like, really? That happens to every building. What?Jessica BatemanRight. And you can have a set list of like, here are the shades of color for a certain area. It's in a book. Like, it doesn't have to be this group of people that is really subjectively looking at this and evaluating it.David RobertsRight. There were a couple of other bills that reduced permitting barriers that were good. The one other bill I did want to call out is 1181, which is basically tells cities to integrate climate change into their planning. Maybe you could just tell us what that bill does.Jessica BatemanYeah, House Bill 1181 is sponsored by Representative Davina Duerr and it requires cities to add a climate element to their comprehensive plans, which is a mandatory planning process they have to do. It's incredibly important because it does things like have them account for how are you going to reduce vehicle miles traveled and making the connection between land use and vehicle miles traveled and where you put housing and how you have energy in your buildings and putting those things all together. It's really essential for cities to be required to do that. Some cities were already doing things like that, but it was really only certain cities and usually more progressive liberal cities.David RobertsRight. So this is just you have to consider that stuff. You have to take it into account.Jessica BatemanYou have to take it into account. You have to plan for how you're going to address it.David RobertsRight. That's a lot of bills. A lot of pretty big bills. There are a couple of big ones that didn't pass. I think probably the most significant one that went down this year was the one about transit-oriented development, which again, for non-nerd listeners is just this idea that transit stops, transit locations are obvious areas for density. That's where you want to put a lot of people. You want a lot of development around transit stops. And a lot of times that's just prohibited by current law. I saw a lot of predictions at the beginning of the session were that that was the one that was going to pass and that your bill was going to have trouble.And then one thing happened, and then another thing happened and somehow yours got through and this one didn't. Can you explain what that bill does and is it going to rise from the dead next time around?Jessica BatemanSo the Transit Oriented Development Bill is sponsored by Senator Leos and it would require cities to legalize higher density housing near major transit areas and more frequent transit. The idea being like in Seattle and these high economic opportunity areas in and around transit, you want to have more housing be the standard. So things like more stories of housing being an option for multifamily housing, more.David RobertsThan sixplexes, presumably. Right.Jessica BatemanWe're talking about 100, right? Yeah.David RobertsBig buildings.Jessica BatemanYeah. They ended up using far floor area ratio in the bill, which is really talk about wonky and confusing. No offense. Sightline. Thank you. So the bill did not it made it through the Senate. And I think, honestly, that people didn't really understand what it did, which happens sometimes. And then when it got to the House, a lot of emphasis and focus was on the fine details and there became a lot of negotiation and concern and feedback, a lot of conversations about minimum affordability requirements. There continues to be a growing number of people in the Democratic Caucus in the House that really believe that you have to have affordability requirements if you're going to let developers build this higher density housing.David RobertsI don't want to beat the subject to death, but I have to pause there. Again, I'm sure you've been involved in these discussions. I just want to know. It sounds to me like those worries about affordability requirements were a big part of what led to the bill not passing. And I'm just like, in what world is the no bill passing better than the status quo? Because as we were saying, build a bunch of big apartment buildings around transit, it's going to lower the average housing prices. Like it is an affordability strategy. So what is the ... could you explicate that debate a little bit more so I understand what the hell is going on.Jessica BatemanI've heard people say that it's possible to build more affordable housing because where I come from, you know, the work that I've done, you know, I've talked with developers. I'm not an expert in the creation or construction of housing, but I tend to believe that we should make it easier to build housing of all shapes and sizes because we make it incredibly difficult, expensive to do. And we have to own that. We have to be really honest about that accept what the problem is. And then if we want truly affordable housing, we need to subsidize it, we need to pay for it because expecting someone to do that themselves, whether or not that's a noble goal, it's less likely to happen than if we make it easier to build the bare minimum.You can't build what's not legal to build, so you can't build a seven story building if it's illegal to do so. Middle housing, you can't build a sixplex if it's not legal to do so. In my bill, there is an incentive to go higher and include affordability. That's a choice. Some non-profits, especially things organizations like Habitat for Humanity, will take advantage of that. We have folks that believe that the developers can, if we do a minimum threshold of affordability requirements, that they absolutely can do that. We should expect them to do that. And then we have folks that think that you should let the market decide.And then some folks like me that think we should also be investing more in affordable housing and subsidizing that cost and increasing that investment. There's a lot of other tools and things that we can do to do that. Also things like Land Trust and how can we partner with communities so they can invest in some of these opportunities and create truly affordable housing with our help and assistance? At the end of the day, if the housing doesn't get built, no one gets housed. And that figure of up to a million people over the next 20 years, half needs to be truly affordable and half needs to be 50 AMI and above.We still need housing for the 50 and above. So no housing versus housing. I mean, I can't really understand that argument either. However, what I will say is that Representative Reed was the person who worked diligently once it got to the house and she did a tremendous job trying to piece that thing together and keep it moving and ultimately was not able to do that. The other thing I would say is that 1110 was worked on much further in advance, had more time for people to process. It was introduced last year and then during interim I was meeting with people across the state, building a coalition, visiting with the AWC.The TOD bill was relatively new for people. They didn't weren't as familiar with it. We are going to have to come back to it because if we're going to be honest with ourselves about transit and the CO2 that comes from it in Washington, I don't see how we're going to be able to address that without having TOD.David RobertsYeah, people have a lot of really weird hang ups about tall buildings. I think this bill invokes a lot of those. But if you go to the Vancouver suburbs, they have rail stops and they're surrounded by tall buildings and then they sort of go out from there and it's perfectly nice tall buildings are not scary.Jessica BatemanYeah, we're running out of land. We have a growth management act that stipulates where we need to build new housing, which is in cities. We need to preserve our rural areas, our farms, our forest lands and ecosystems. We have to build up. And what I ask people when they're opposed to housing is where are the magical homes going to be built? Because we have to build them somewhere. We are not going to stop people from moving here or people from having children. You have to go up. That's the only option. So I'm looking forward to a future where we have abundant homes of all shapes and sizes for everyone and where people aren't afraid of taller buildings and it doesn't disrupt what they think is the character of their neighborhood.I think the character of the neighborhood is defined by the people that are in it and a sense of community and opportunity. So I think we're in the liminal space right now where people are coming to terms with the single family home with the white picket fence and the garage and the lawn. That's not the reality for all the homes in the future like it was in 1950. And it wasn't environmentally good back then either.David RobertsSo you're pretty confident the TOD bill will be back next time around?Jessica BatemanI think so. And I think there's going to be a lot of work that will be done during interim to see where we can get more support for that bill and see how to move forward.David RobertsAnd then another bill that failed was lot splitting, which maybe just very briefly explain what the significance of that is and why you think it failed.Jessica BatemanOh, boy. So it was really sad that the lot splitting bill died. That was by my co-conspirator in housing Representative Barcus, and it allows for people to more easily split a lot. So, for instance, I have a good friend, single mom, she's got a lot. She's got a single family home. It's large enough. She'd like to split it and build an adu and sell it. And the process is quite cumbersome, difficult to navigate and expensive. And so this bill would make it easier for people to do that legally so they can sell the second unit.And it's important for opportunity when we have bills, legalizing ADUs and middle housing because people will want to take advantage of those things and they want to be able to create equity and make an investment. So it makes that more difficult.David RobertsRight. And this, you think, will also be back, or is there some irradicable level of opposition somewhere or is this just something that also you think people need to sort of wrap their heads around?Jessica BatemanI think the bill will come back next year. I think that there's an entire year from now for people to kind of wrap their minds around all the bills that passed. And I think they'll become more comfortable with something like that. I think there was some concern around the overabundance of housing that might be created if lot splitting passes two. I definitely think that was a part of it.David RobertsOh, right. Because if you split your lot in two, then all of a sudden you can make four units because you have two lots, right?Jessica BatemanTheoretically. However, there are some real constraints that are just naturally occurring. Like, you can't feasibly build more than so many units on a space because cities still have the ability to maintain and create things like setback requirements, minimum lot sizes, et cetera. So height restrictions, if they have a two story height restriction in a single family neighborhood, that would apply to a Duplex as well. So I think so much of this is making people comfortable with what is the new normal and that this is not going to result in a complete overhaul of neighborhoods, that the cranes aren't going to come in and make everything look completely different.It's going to kind of meld seamlessly. I live in Olympia, and I live down the block as little apartments and ADUs and a school, and there's a shelter and a grocery store. It's all a part of my close knit community and it's cool.David RobertsAnd it's fine. It's all fine.Jessica BatemanRight. And it's going to be great.David RobertsThe one other thing that didn't pass that I wanted to mention, because insofar as there's any sort of note of off note or note of dissent about all the great housing progress that got made this year, is that the tenant protections bill did not pass. And I think there are people in the environmental justice community saying sort of the housing supply without the tenant protections is just going to screw us again. So maybe just explain what were the tenant protections and do you think they'll be back?Jessica BatemanYeah. There were two bills. One was basically a rent anti-rent gouging bill that would have given the Attorney General the authority to take people to court if they are deemed to be increasing rent at a rate that is exploiting people and rent gouging super important. That did not pass. And then we also had a bill that would cap, like an inflationary cap on how much a landlord can increase rent year over year. Neither of those bills passed. These types of bills have for years failed to move forward in the legislature. I think there's a significant skepticism amongst lawmakers that these are bills that will help solve the problem.So I think there's a lot of work that continues to need to be done building a coalition to make that reality different, to see a different outcome.David RobertsDo you think they'll solve the problem? Like, is this the policy you would pick to protect sort of low income homeowners?Jessica BatemanI support a reasonable cap on, like, an inflationary increase like they did in Oregon. I don't think that's going to solve the problem. I think it's going to be a near term fix that will ultimately not address the underlying issue, which is a lack of supply. I haven't seen a lot of data tell me that rent control actually results in lower prices for renters. And the underlying solution is really that we need to make housing available to more people. We need housing that's abundant. We need people to have choice. There needs to be competitive options for people, which right now it's essentially a monopoly.And there's so much of a limited supply that people are able to just the demand is so high, they're exorbitant costs. But this is going to continue for a while. So in the meantime, we will continue to have people that are getting hundreds of dollars rent increase, $1,000 rent increase. And I am terrified as a lawmaker about my constituents being evicted and not having anywhere to go, because there is literally nowhere to go. So I see that as an interim step. The rent gouging. I think that if there is an aggressive and systematic increase in rent that is deemed to be gouging, I think that the Attorney General should have the ability to investigate that and hold people accountable for that because that is happening.But there are people that really fundamentally believe that rent control is an essential solution and without it, that we are not going to see people be protected, that people will continue to fall victim.David RobertsYeah. This is a deep and long standing debate in the urbanism world, a very heated debate. Are those kind of forces fixed in place or do you think there's enough wiggle room that this has a chance next time around?Jessica BatemanThere would need to be a significant amount of work to build a coalition and to talk with lawmakers and to make I mean, the reality is that rent control bills and rent stability bills have died year after year in the legislature. So you have to be really honest about how do you change that outcome. And if there's not enough support amongst lawmakers now, how do you change that? And you do that by talking to them, getting broader coalitions of people together to talk about what's happening now to people and what will continue to happen, and coming up with a solution that legislators can support.The legislature is filled with groups and organizations that represent them and the people that represent the landlords and the multifamily housing associations have a very large presence in the legislature and are there every day.David RobertsAnd people who get evicted do not have a large lobbying presence.Jessica BatemanNo, they don't.David RobertsSpeaking of forming coalitions and changing the political balance of power and political dynamics, I got some questions about how that happened. I talked to some of your colleagues and people who are involved in and around this stuff and they all you were singing your praises along exactly this lines, which is this middle housing bill failed last time and then you did the work of building a bigger coalition. Because in the politics, from my point of view, like someone who lives in Seattle and is continuously frustrated, it just seems like NIMBYs are like, everywhere and have a lock on everything and have a lock on every process from the local level to the state level. Somehow you overcame that.So maybe just tell us a little bit about what the modern pro-housing supply coalition looks like.Jessica BatemanWell, first we had the most diverse freshmen class of lawmakers arrive this year, and so ...David RobertsThe young people are coming. The young people are coming.Jessica BatemanExactly. Young people. They're closer to the issue of housing instability, insecurity. They're more likely to be renters.David RobertsYeah, they're all living it.Jessica BatemanRight. We've got members of Color now in our caucus. That number keeps growing as well. They also are disproportionately them and their constituents are disproportionately impacted by a lack of housing. So that was huge because they ultimately really changed the dynamic towards the more progressive side of this conversation. And I made it my mission. Last year, I went out and met with people in District. I went and met with the association of Washington Cities who was very much opposed to my bill last year. I met with their Legislative Priorities Committee and said, this is why I'm passionate about this topic.David RobertsThey ended up endorsing your bill, didn't they?Jessica BatemanYeah, a week before it passed.David RobertsStill though.Jessica BatemanAfter 25 hours of negotiating with them, they ...David RobertsStill kind of blew my mind, I mean, this is for listeners. This is the AWC. The association of Washington Cities.They just represent all these little, whatever, 260, all these little cities and towns around Washington. And I would say it's fair to generally characterize their past behavior as on the NIMBY-ish side of the spectrum.Jessica BatemanThey've been opposed to legalizing middle housing statewide for years. And so last year they didn't take it really seriously in terms of negotiating. And this year we did a lot of work. Prior to session, I reached out to them, and then during session I continued to do that. But I think fundamentally, when I looked at the problem of the bill not passing last year, I thought, this bill is being talked about in such a wonky way. From a zoning perspective, we have to talk about this like it's a kitchen table issue because it is. It's impacting where people are growing up, where they're not growing up, where they're taking jobs.If they're taking jobs, it's impacting people like my dad who contemplated postponing retirement so he could help his daughter with a home. It's impacting people's daily lives in all types of ways. And we needed to talk about it like that. And because it impacts the environment and climate change is something we've talked about, we need to be talking to environmental organizations. And because it impacts and exacerbates these inequities with opportunity we need to be talking to organizations and communities of color labor, and we also need to be talking with people that build housing.David RobertsYeah. How would you characterize labor's disposition toward housing supply currently?Jessica BatemanWell, the Washington State Labor Council last year at their conference passed a resolution stating that they supported eliminating single family zoning.David RobertsHey, well, alright. It's one of these things that I've learned when talking about unions, never to sort of assume the obvious thing, but you'd think, like, building lots more housing would be looked upon favorably by the people who build houses. But I guess you can't always assume that.Jessica BatemanIt took them some time to come to that conclusion. The young people are coming. Like the environmental organizations that supported this bill five years ago, I don't think that would have happened. They had an influx of new, young, diverse members getting on their boards and saying, hey, climate and housing are definitely linked, and we need to be taking this seriously.David RobertsSo you think environmental groups coming around that was significant in the politics of this?Jessica BatemanOh, 100%. Absolutely. Futurewise was the premier organization that I worked with last year. It was sightline. So to have Futurewise really leading the charge with an actual dedicated lobbyist, this was one of their two priorities that their board voted on. Sierra Club, Washington Conservation Voters. Absolutely.David RobertsThat's great.Jessica BatemanWe have folks that are serving in the legislature that they associate the old school environmentalism as a different one than today. Today we know that dense housing is good for the environment, and it didn't used to be associated that way.David RobertsAnd population, the old school environmental, if you told them if you limit housing, you're going to limit inflow of population, they're like, exactly right. Population. People are bad, people are bad. You still hear some of that, but I think that's fading, at least in terms of their active public.Jessica BatemanI've been working on this issue for eight years, and I've seen a change in how environmental groups talk about this issue and who's showing up at those tables for environmental organizations. Personally, when Futurewise told me that they were making this bill one of their top two priorities, I almost cried. And I said thank you, because not only I would love your help as a lawmaker, it really helps to have an organization support your work, but also to me, it did represent a C-change in how we're talking about housing and land use, and that gives me a lot of hope for the future.David RobertsSo you got environmentalists on board more or less. You got unions more or less on board. Even the AWC, the Association of Cities, is titularly on board. If I'm thinking about state politics, who do I identify as sort of the concentration of opposition? Is there like, an organized faction that opposes this stuff, or is it just kind of ambient NIMBY sentiment?Jessica BatemanBefore it was the AWC, but not this year. So the entire time that I worked with them, they were negotiating in good faith in terms of wanting to eventually get to a yes if they could. And so they were not actively opposed to the bill. They were neutral, and then they got to support at the very end. We did have a lot of the old school environmentalists individually emailing legislators and saying that middle housing conflicts with preserving the environment and tree maintenance.David RobertsThe trees, my God, it's like a trigger word for me.Jessica BatemanNow. Tell me about it. I was on city council for five years. So yeah, that was kind of it. And then individual cities that were members of the AWC, but not speaking for the whole association, like the city of Auburn being a prime example, they were very much opposed. But that was basically it. There was no organized those were more tangential. There was no organized group.David RobertsAnd a similar question, how would you characterize the Republican Party's disposition toward these issues? Certainly at the federal level and in the sort of face of the party is very much like, we must preserve the suburban style of life at all costs. Joe Biden is coming to force you out of your house, et cetera. But you had a Republican co-sponsor, which is somewhat brain scrambling for me. So are they split on it? How would you characterize where they're at on these issues right now?Jessica BatemanI would say at first that politics nationally is different than it is at the state level. And I know that's what we see in the news, and I don't watch the news, but that's what people are used to and accustomed to for their lens at the state level. I work with Republicans. I get along with Republicans. We could be on the opposite sides debating a bill, and then we go to lunch in the member cafeteria and we sit next to each other and talk about kids and pets and it's very cordial and affable. So I would say that legalizing middle housing, despite being like a free market, right aligned theory policy, that a lot of Republicans, it conflicts with their big government, the state telling cities what to do, when actually, in reality, cities are telling property owners what they can and cannot do with their properties.So it really ...David RobertsThese people are supposed to hate meddlesome regulations, right.Jessica BatemanThe message of local control, which is current law, middle housing cities currently have the authority to make their own local zoning decisions, and that's called local control colloquially. Well, this is when people talk about it, they call it preempting, preemption of local control. It's very much of like the federal government coming in and the state government coming in and preempting. Well, local control doesn't have a really great history either if we want to go back in history on that. And yet that message is really hard for Republicans to get away from because that strikes a chord with them.David RobertsWell, also local control disproportionately empowers the aforementioned older and whiter people, which also coincidentally happen to be the sort of base of the Republican Party, so it's not the ...Jessica BatemanAlso the Democratic Party.David RobertsThis is not all about policy. It's very much about them having power.Jessica BatemanYeah, I mean, the people who vote in elections tend to be older whiter property owners. So that could be said, it could be true of Democrats as well.David RobertsTrue.Jessica BatemanHowever, we did get some Republicans. So the fact that Representative Barcus was a co-sponsor was huge. He was my number two on the bill. He didn't just co-sponsor it. He was the number two, which is extremely significant. Actually. His office is right across the street from my house.David RobertsWho does he represent?Jessica BatemanHe has a property management company and then he represent, I think it's District 2. It's like right abuts my district, south. So Lacey and Tumwater south. And so he believes fundamentally that we need to have more housing that's available and that abundant housing is a significant pathway to a solution. That's why he co sponsored the bill. And he did a tremendous amount of work outwardly, talking with people, going on interviews, podcasts, radios, really stepping out and defending this bill. And then in his own caucus, when it came to the floor, he had to describe it to his caucus members and whatever he said to them inside, that caucus was successful because we got a ton of Republicans to support the bill in the House.David RobertsReally?Jessica BatemanYeah, it was a vote. We have 98 members.David RobertsSo this was bipartisan in a real way, not just the, like, one rebel Republican?Jessica BatemanNo, they voted a significant number of them voted for it on the House floor.David RobertsDoes that extend to other housing bills? Is that a general move on housing policy? Or was there something in particular about middle housing that resonated, do you think?Jessica BatemanI think the middle housing bill, I mean, it was pretty amazing objectively how much support it got. I think some people voted for the bill honestly because they just saw how hard I worked it and were like, just, okay, fine, leave us alone, Jess. I hope not. I hope that they really wanted the policy, but me meddling and getting in their way might have had something to do with it. But he really cultivated a sense of what the bill was, helped them understand it. That's the other thing that people underestimate the influx of bills that we get and how the sheer number and magnitude.So when you have someone right in the other party that is shepherding it, that's the other thing. Like throughout the whole process when I was negotiating with the AWC, I was constantly checking in with him, letting him know what was happening, where it was going. So he was attuned so when it eventually got to the House floor, he knew the bill. It wasn't like a different bill because it changed a lot. But then it went to the Senate and we didn't have a Representative Barcus in the Senate. So all the Republicans over there, that was a brand new bill to them that they didn't understand and know.And Senator Trudeau was the sponsor in the Senate. It didn't move in the Senate. So then she was the person who shepherded it over there and did an incredible job getting that bill passed. I still don't believe that it passed. It's going to be signed on Monday and until it's signed, I still don't believe that it happened.David RobertsThis is how I feel about the Inflation Reduction Act to this day. Is there a Republican co-sponsor for the TOD bill, for the Transit Oriented Development Bill or any of these other sort of big ones?Jessica BatemanI don't think that the TOD bill got a Republican co-sponsor. And a lot of the supply bills, they garnered Republican support because like the streamlining permitting process and design review, et cetera. But the TOD bill the Republicans are not shy about telling you they will not support a bill that has minimum affordability requirements in it.David RobertsThat's just what a bizarre place to draw a line in the sand. We will not help poor people. If you try to help poor people, we're out.Jessica BatemanWell, they view it as and you could talk to Representative Barkus about this because he's kind of the housing lead over there. But I think from what I've heard, the best way to get more housing is to make it easier to build more housing. And there's certain things I agree with that, I think ...David RobertsWhy not both?Jessica BatemanRight. There's also politics and I think there might be political reasons why they might have that position as well. I'd let them articulate that. But my point is that if we want a bill to pass, we have to figure out we have the majority in the House so we can move it on our own.It always helps to have Republican supporters as well, if possible. So any path forward would have to figure out that in some way.David RobertsYeah, I'm just so curious just from a political standpoint about because this issue does not on the merits cleanly fall along what you would think of as ideological lines. It's more of a culture war split. And I'm just so curious. But to summarize, it's not monolithic opposition to anything having to do with housing as it is on, let's say, many other public policy issues, at least it's mixed.Jessica BatemanIn the House especially. I mean, the Republicans, they have a listserv that I subscribe to and they talked about the progress that they made on housing and they mentioned the middle housing bill. And so leadership has supported the fact that their members supported that bill and they're talking about it publicly. That's awesome to a significant degree. Yeah. But I think the Senate was a little different. We heard the floor speeches on the Senate be different than they were in the House, much more focused. I mean, Senator Fortunado in the committee, in the Housing Committee, his first question was, he said, I don't like this bill, and I don't like it because my next door neighbor might sell their property and someone might build multifamily housing on it, and that would be right next to me.David RobertsWell, at least he's effing honest, right? This might personally inconvenience me and reduce my property value.Jessica BatemanI think he also added renters might live there because then ...David RobertsWorse yet, imagine they might even ride bikes.Jessica BatemanAnd Representative Barcus, I looked at him and I was like, do you want to respond to that? And he said, well, first, we love renters. Thank goodness. Because I was like, I don't even know where to go with that. I mean, I was in shock. I'm newer here, and this is my first in person session. So I was a little surprised by the comment, but Representative Barcus did a really good job. But my point is, I think as younger Republicans maybe get elected or the same kind of diversity of their caucus happens, hopefully we'll see the change in attitude around what used to be a controversial issue and I think is now becoming much more mainstream and honestly supported by the average constituent.David RobertsInteresting. I'm a little curious. When will the middle housing take effect? I'm sort of curious. Once the aforementioned older whiter people who live in the single family neighborhood see things happening, I'm guessing at least some of them are going to go complaining to the representatives, and it will be the politics for Republicans will get complicated somewhat. So A, when will things start happening as a result of this bill? And B, are you worried at all about kind of backlash to implementation?Jessica BatemanI'm not worried about a backlash to implementation because of my own experience in the city of Olympia after we passed our own middle housing. It is not a fundamental change that happens overnight. And in fact, we're going to have to do more work. It's not just about legalizing these home types. It's making sure that we have the workforce to build them, which we currently don't, that we have financing products for people to buy these different types of homes that typically haven't been purchased by people. There's a ton of work that's going to have to go into incentives, like a ton of stuff, when it will be implemented.It's going to be a rolling implementation based on cities and which counties they're in based on their comprehensive planning process updates, super wonky. I know the largest more populated counties, Snohomish, King, Pierce. They're going to be implementing in 2024. They're the next cycle. And then 2025, another group of cities, and 2026, et cetera. So it's going to be a rolling implementation. They have six months to adopt building codes, which are the codes that allow for the housing. Department of Commerce is going to be doing model ordinances for them because some of the smaller cities are like, we don't have the staff, we don't ever done this before, which isn't a hollow argument actually.And so Department of Commerce is going to be doing a lot of work in the next year and ongoing I anticipate coming back next session and there are a lot of other things that we're going to have to address and so I'm looking forward to working on more housing legislation in the future.David RobertsAwesome. Okay, final question. I kept you much longer than I said I would, but I love this housing stuff. I think most of where housing policy, the rubber hits the road is the sort of interplay in local municipalities and states. But is there anything in particular that the federal government could do that would make your job substantially easier, that would make these housing reforms substantially easier? Is there one or two things you could point to?Jessica BatemanI mean, they could say that any federal funding, the requirement is you have to legalize, you can't make it illegal to build middle housing.David RobertsRight nationwide middle housing bill, that would be something.Jessica BatemanI mean, it's not legalizing middle housing nationwide. It would be saying if you want our money, you need to have policies that are aligned with our climate and equity goals. You can't have climate and equity policies that conflict with our goals if you want our money. And right now they've taken what was considered a proactive and progressive position of incentivizing based on making these good decisions. So much more of a carrot approach. But listen, we are not going to make progress like New York. They just went through and we're trying to be more aggressive with legalizing, more modest home types statewide and that quickly fizzled out with pressure from stakeholder groups that were opposed.And that was a governor supported initiative. Just like last year, 1782 was a governor request legislation. We don't have time. The urgency to make sure that we have a planet that we can live on, that we have housing that's affordable for people in places where they want to live. I mean, the time was ten years ago and we need to take it really seriously and do everything. There's just really common sense things and making funding a prerequisite that you have policies that allow people to live in your cities is one of them.David RobertsAwesome. Well, thank you so much for this super educational and interesting and heartening and thank you so much for all your work on this issue. I feel like the state is going to be better for your efforts. So, Representative Jessica Bateman. Thanks again for coming on.Jessica BatemanThank you so much for the opportunity.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, Vero Bourg-Meyer of the Clean Energy States Alliance discusses the barriers that keep lower- and medium-income customers from installing rooftop solar, the types of efforts most likely to overcome these barriers, and how to keep momentum moving forward.(PDF transcript)(Active transcript)Text transcript:David RobertsFor all its explosive growth in recent years, rooftop solar is far less frequently installed by low- and middle-income households than by wealthy ones. Though that disparity is diminishing somewhat over time, it remains large.The barriers keeping lower-income consumers from solar go well beyond the financial (though financial barriers are substantial), ranging from credit histories to low-quality and poorly insulated buildings to lack of supportive policy.State policymakers, foundations, and non-profit groups have been trying for years to overcome this problem. Finally, the pieces are beginning to fall in place and it is becoming clearer which kinds of interventions work and which kinds don’t.No one knows more about the history, design, and successes of these programs than Vero Bourg-Meyer of the Clean Energy States Alliance. She has been analyzing and advocating for these policies for years (she just came out with a report on how foundations can help), so I was eager to talk to her about the rationale for low-income solar programs, the features that make them work, what's in the Inflation Reduction Act that can help, and what further policies are needed.Okay, then, with no further ado, Vero Bourg-Meyer, welcome to Volts. Thank you so much for coming.Vero Bourg-MeyerWell, thank you so much for having me. I'm delighted to be here.David RobertsCool, so there's a lot to talk about here with this topic, which I've had sort of, like, in the corner of my eye for years and years now, these programs for low-income and mid-income solar, getting solar to low-income, mid-income people, I sort of had it on my periphery forever. And so I'm happy to jump in directly. My sense of the sort of state of play among the wonks is the best way to help poor people is to give them money. And if you have money to help them and you want to do something other than just give it to them, you need to sort of justify, like, why is this better than just giving them money?Vero Bourg-MeyerYeah.David RobertsSo I guess to start with, my first question is just why should we care about specifically getting solar on these households versus just helping them with money? So what is the sort of justification for this kind of whole area? Why do we want to get solar on low- and middle-income households?Vero Bourg-MeyerWell, so there are two questions in there, right? So one question is that there's a climate question. Obviously, we want solar not because we think it's great for savings and all that, but also because we have a climate crisis that's ongoing and we need to do something about this. So that's the reason why we want solar. But why LMI communities and I'll use LMI in a kind of loose way. LMI stands for low- and moderate-income. LMI sometimes is just low-income and that generally means kind of in this area, generally it means below 80% area median income.Some people also define it as below 120%, but without going too much in the details, that's generally what it means. So the reason why you want to make sure people have access one of the reason you want to make sure those people have access to solar is they spend a much higher percentage of their income on their utility bills as the rest of us. About almost four times as much as you or me. And I'm lumping us in the same income brackets. I don't know if that's correct. So they spend a lot of money on their utility bills.And so obviously when you're giving them away month after month after month to reduce those utility bills, that can have a really outsized effect on them. Right? So it's not just the cost of purchasing the solar to begin with, it's the continuing saving over the lifetime of the asset that you'd have to kind of look at.David RobertsIt's kind of like giving them money every month.Vero Bourg-MeyerYeah, essentially. Yeah. Assuming there is a saving, which it has to be structured that way. It doesn't just happen like that. And then there is the resilience benefit that you can get when paired with batteries. And I was saying earlier, I'm going to use low-income communities as kind of LMI communities, very generally speaking. But we're also talking here about communities of color in communities that generally, because of redlining, have older housing stock houses that are not well insulated. When you start with that and you add storage, you get a really huge resilience benefit for them.LMI also means higher rate of chronic diseases, right. So you need your dialysis machine to work all the time, not just some of the time. So that's another really big reason. But I'd say your question though, about why not just give them money? If you kind of put aside, is it politically pragmatic to just give them money? Which I don't think at this stage it is. We tend to wage a war on the poor instead of waging a war on poverty in this country, right?David RobertsYes.Vero Bourg-MeyerSo setting that aside, if you're looking at who deploys the solar in this country, it's the private sector, right? And there are other barriers that are kind of standing in the way of LMI communities getting solar other than just the initial funding. The initial funding is a big part of it, but there's also lots of other reasons why customers don't trust the developers. Developers are not interested in serving or generally not all of them.David RobertsLet's talk about those a little bit. Let's talk about those barriers. Because I know intuitively, as you say, the obvious barrier, I think, which jumps out at everybody is just not enough money. That's what low-income means. But that's not the only reason that deployment of rooftop solar is lower in these communities even than what you would predict based on income, right? The barriers that go beyond income. So let's talk about some of those. Like, what are the kind of things that are stopping these households from accessing rooftop solar?Vero Bourg-MeyerWell, so the funding one, I don't want to just fully put it aside, right. Because that's a really huge one, the upfront cost, and just for your listeners who may not be familiar with the cost of solar for a regular household. So if you look at the average size of a solar asset in this country, which is about seven kilowatt, I believe, and then the average cost between $3 and $4 per watt. So that's what? That's $25,000, roughly, that you have to find.David RobertsThat's not small for anyone ...Vero Bourg-MeyerIt's not small. And that upfront cost you and I have access to other kind of funding. We have access to financing, right? Low-income communities might people might have a lower FICO score or no FICO at all, or maybe even no bank.David RobertsFICO is just a credit score, right?Vero Bourg-MeyerYes, that's right. Yeah, that's a credit score that's being used by lenders to decide how much they want to charge you, essentially, and whether they will even charge you, whether they will agree to give you a loan. Not to mention if you are really struggling to put food on the table, the idea of taking on additional debt is just not always interesting, at least not for everybody. We can get back to that. So a big barrier beyond the funding is the physical barrier, right?So the site suitability, what's called site suitability criteria, roofs could be in a really poor shape. If you have issues of lead and asbestos in your house, it's really hard to get a contractor to go in and crawl in your attic to go install something. They're just not going to want to do it. And then there are some things that are kind of more linked to the type of housing you might be looking at, right. So single family homes is one thing. Multifamily homes have specific issues. You could think of where the meters are located. That's kind of a dumb one, but it really is a problem.So if you have meters that are specifically dedicated to apartments, that's great. If you have one meter and then everybody kind of shares, that's creating kind of more issues. So, yeah, physical barriers are a big one. And also the way that the subsidies that we've mostly been using for solar up to this point so the tax credits, primarily. So the investment tax credit, up to this point, the PTC, the production tax credit, wasn't open to solar. Now it is with the IRA. You can't monetize the ITC if you don't have a tax basis, right. The non-taxable entities, affordable housing, the non-profit developers, none of those can access the ITC.Could access the ITC until the IRA with direct pay. And then as an individual, a homeowner that does not pay taxes cannot utilize that in a very obvious way. So there are ways to kind of go around that. But generally speaking.Isn't it also the case that LMI people are more likely to rent or more likely to live in apartment buildings where they don't?Well, it depends actually ...David RobertsIsn't that also a problem?Vero Bourg-MeyerI mean, it is an issue. You'll find those traditional kind of split incentive issues, but it's not necessarily the case that it's everywhere. I don't have in mind the number, the percentage of renters versus homeowner on top of my head, but it really depends on the states. And I think that's when you're a state policymaker, you're looking at kind of building a solar program. Your housing market is not a monolith, and your solar market as a result is also not a monolith. So you have to really dedicate brain space to creating solutions that are really tailored to what you're trying to tackle to specific issues in your state.David RobertsSo, barriers, we've got the obvious one. Finance and funding got physical site suitability, meaning like, the actual buildings themselves might need work before they're even ready for ... One that springs to mind always when I think about these communities is just who's reaching out to them and talking to them and educating them. Is awareness a big barrier?Vero Bourg-MeyerBig time. And I would say those kind of behavioral barriers exist both on the developer side and on the customer side. On their developer side, they just will not market to them, right?David RobertsRight.Vero Bourg-MeyerThey just viewed as not good customers, which is definitely not the case. There are studies out there showing about the same kind of default rates as ODA loans, right?David RobertsOh, really?Vero Bourg-MeyerGood enough. Yeah. So if it's good enough for a giant trillion dollar industry, I think it should be good enough for solar. And there's nothing as boring as an ODA loan. So I think we could do this. But on the developer side, that's really just a perceived risk kind of issue. And on the customer side, there are trust issues as well. Right?David RobertsYes.Vero Bourg-MeyerLots of fly by night action.David RobertsYeah, I was going to say scams are quite common. These people tend to be targets of a lot of scams.Vero Bourg-MeyerYeah. So one that you hear about and I don't have specific data on this, just kind of stories, but one that you hear about all the time is developers coming in and then promising a big government subsidy because they're thinking about the tax credit, and then a homeowner will just go for it and then realize oh, wait. I can't monetize this at all. This is not working for me. I'm not getting the money. This money is just paper and I don't have anything to apply it to. So, yeah, that's dishonest. Business practices are also out there.So all is to say it requires a lot more effort for customer acquisition and you can't just sit and expect those customers to come to you. And obviously, as a developer, if you have the choice between targeting that group over here that you think is going to be much better at paying, which it isn't, but you think it's going to be the case, and also naturally trust you more versus a population that trusts you less and it's harder to get to. Well, the choice is easily made.David RobertsRight, there's all these sort of like, I don't know what to call them, soft costs, I guess. Just like developers tend to be in the socioeconomic bracket of a certain type of customer and then everything becomes easier. Communication, right. Like they understand one another, et cetera, et cetera.Vero Bourg-MeyerAnd then you have other things like language barriers, obviously.David RobertsRight.Vero Bourg-MeyerAnd that can be a big one in some communities.David RobertsSo it's not just effort, it's who is going to talk to them. Like choice, finding someone that is trusted within those communities to communicate absolutely is a big deal.Vero Bourg-MeyerYeah.David RobertsSo we're going to get a little bit into how states are doing this later. But just I want to start with the IRA because obviously everything in the energy world is different now. We're in a new world. We're all discovering this new world. So what specifically did IRA do for LMI rooftop solar?Vero Bourg-MeyerLots.David RobertsOf course.Vero Bourg-MeyerI would say lots, but lots in ways that aren't necessarily fully clear at this stage. I mean, the way I think about it is because I work at the Clean Energy States Alliance, right? I look at it from a state policy maker perspective. How can they build programs around what the federal government put together and that kind of funding? So the three big buckets and I'm not telling you anything you don't know, obviously, but just to organize my thoughts, the three big buckets are the tax credits, the Greenhouse Gas Reduction Fund, and the Loan Program's office.And I'll start with the least obvious one, which is the Loan Program Office, the innovation ... so there's something called Title 17 that offers clean energy loan guarantees, right? And that up to IJA. So that's pre-IRA, until IJA, someone applying for this, was required to show some sort of innovative element, right?So the loan program's office wasn't going to say, "Oh sure, I'll guarantee your solar thing over there, that looks great." No, it has to be something a little bit more exciting than that.David RobertsThat's sort of the point of LPO, right? Seed innovative things.Vero Bourg-MeyerYeah, well, since IJA that's not the case anymore.David RobertsAnd by the way, we. Should say IJA is the hell I don't know what it stands for. The infrastructure ... the Infrastructure Act.Vero Bourg-MeyerThe Bipartisan Infrastructure law. So what does I stand for? Infrastructure and Investment and Jobs Act or something. So the kind of the first big piece of climate legislation passed in this new era that we are in the projects that are supported by a state energy finance institution can access loan guarantees now from Title 17 from LPO without having to show that they're super fancy and innovative. And the funding then for LPO was also expended through IRA. The IRA really put in a lot more cash into this thing that they started doing. I'll give you an example to show you how this relates to low- and modified-income solar.So imagine a community solar developer wants to develop some solar that benefits LMI communities and they go and get some grants from the state to serve a specific area. The developer now has access to an LPO loan guarantee and they could say, I need a construction loan. Go out, find that construction loan is typically the most expensive part of the process in terms of capital cost. And now they can talk to their private lender and say, hey, I got this grant from the state. That means I can apply for this loan guarantee. How about you give me a lower rate because DOE is going to be there and guarantee that I'm a good bet for you. Right?So that's a really interesting kind of piece of the equation that I guess doesn't really get talked about much unless you work at LPO.David RobertsFederal loan guarantees can basically lower the cost of capital for developers.Vero Bourg-MeyerAnd it doesn't have to be that the state participates in the way of grants. They could be doing things like a loan loss reserve or straight up loan. They could invest in however way that they want. They just have to support the project, at which point the project becomes eligible for an LPO guarantee. And that's as long as that support is being done by this state energy finance institution. Which can be a big number of things, but it could be a state energy office. So the folks I work with.David RobertsOr a state green bank.Vero Bourg-MeyerYeah, absolutely. So that's one pocket of money in the IRA. The next kind of pocket of money that can really have an impact on LMI communities in terms of solar deployment would be the Greenhouse Gas Reduction fund. So that's an EPA program in total. So it's got a bunch of buckets, it's got a $7 billion bucket that they're calling it Solar For All. Actually, the implementation framework came out yesterday from EPA, so it's all very new and exciting. This was the talk of the town this morning. So there's a $7 billion bucket for cold solar for all that will only apply for the benefit of LMI communities.And that's $7 billion that the states can apply to, in its states, municipalities, tribes. But essentially what EPA wants to see is they want to see solar, rooftop solar, community solar distributed storage and upgrades. And the really cool thing about that and the rules that we just learned about yesterday is that electrical panel upgrades, roof repairs, they are covered under that.David RobertsThis addresses the site suitability stuff we're talking about so you can get some money to prepare your house for solar.Vero Bourg-MeyerAbsolutely. And hopefully you can enjoy the benefit of a well built solar program that your state are going to put together.David RobertsRight. So states put together some kind of program and then go to the EPA and say, hey, we have this program, give us some money to fund it.Vero Bourg-MeyerThat's the idea. That's the idea. And then there are two more buckets in there that could apply to solar. I mean, solar is part of it, but then it's open to kind of different types of applicant. There's a $14 billion bucket that focuses on kind of clean investments. So that's going to go to two to three national non-profits. So the point there is to leverage funding and private sector lending or investment, generally speaking, at a national level. So do things really big, essentially. And 40% of that is as part of the justice 40 framework, is going to go to LMI communities and the remaining $6 billion is to capitalize organizations that are directly lending or providing financial assistance and technical assistance to LMI communities.So the $6 billion bucket and the $7 billion bucket are all LMI and the $14 billion bucket is 40% LMI.David RobertsThat's a lot of billions.Vero Bourg-MeyerYeah, that's a lot of billions. Exactly. And I think the fun part of this is when you work in and around state government is everybody is super excited but no one knows what's going to happen. And there's a lot of like, how are we going to do this?David RobertsYeah. I guess it goes without saying that these monies have not started dispersing yet, right? We're just figuring out the rules for them. So no state has yet gotten this money?Vero Bourg-MeyerNo, not yet. But then at CESA we are actually going to be working on trying to build some sort of a template program for states that they can use and replicate. Because the key here, particularly with the $7 billion bucket, is that it's going to go quick. I know it sounds ridiculous, it's a ridiculous thing to say, but they are opening in the summer and then the money has to be out of EPA within like a year, essentially.David RobertsNo s**t.Vero Bourg-MeyerYeah.David RobertsWow.Vero Bourg-MeyerYeah.David RobertsSo there's like a bunch of we're hurting toward the trough here.Vero Bourg-MeyerYep.David RobertsAnd once you divide that up among 50 states, I guess it's maybe not as big as it looks on the surface. So I guess the other bucket is the tax credit which ...Vero Bourg-MeyerYes, the tax credit. And so the tax credit is a fun one because ... I mean, they're all fun.David RobertsNothing like money. Nothing like money for the study.Vero Bourg-MeyerYeah, exactly. Going to solar for LMI communities to get us excited. But the tax credit is really big, right?And it seems like every other week there is another study that comes out and says, "Hey, this is going to be this big. No, it's just kidding. It's this big."David RobertsRight? It's uncapped. Which means we've been over this on the pod before, but just for listeners who don't know, these tax credits are not ... there's no upper limit set. So how much money the Feds are going to spend on these tax credits depends entirely on demand just how many people apply for them. And so, as you say, we keep getting these new analyses saying, "It's going to be a $3 billion program, no, $5 billion, no, $10 billion." The estimates of how much of this is going to be demanded keep going up and up.Vero Bourg-MeyerYeah. And it's really big. There's one piece. So the part of it that ... there are a couple of parts that are exciting. There's one piece that's the structure, the change in the structure of the tax credits that can make a huge difference in some institutions that before the IRA did not have access to tax credits, now can have access to tax credits. And then there is a piece of it that actually is capped, but that we don't exactly know how that's going to work. So let me start with this last one first. There is a new LMI, what we're calling an adder.So it's an allocation and it will be either 10 or 20% extra. So 20 percentage points or 10 percentage points extra on top of whatever else you have. So either your 30% base or your 40% or your 50% if you're meeting all of the criteria that the statute has set. And that is capped at 1.8 gigawatt per year. So the way this is going to work is not like the rest of the tax credits where you just kind of go through your projects and your tax credits work the normal way. This one is allocated after the fact.So it's a whole process that projects are going to have to go through with treasury. And at this stage, it's a little bit unclear how this is all going to work. There are some rules that were just issued, I want to say about a month ago, but don't quote me on that just recently, let's say. And the way this is working for 2023 at least, is that we're only going to have about 60 days, depending on the category. You find yourself in 60 days to apply for the tax credit within a whole year.David RobertsAfter your project is done.Vero Bourg-MeyerWell, no, that's the kicker. That's the kicker. You can't apply retroactively. You have to wait. You can't place in service your project before those 60 days. So that's the part where we're not too sure how this is going to work. And then DOE, treasury are going to have to figure this out because it doesn't quite fit a traditional residential solar business model.David RobertsThis is sort of like where non-profits like CESA come in, right? Like you figure this out, hopefully you set up some sort of template, right, some sort of template that businesses can use so that every project doesn't have to sort of learn all of this from scratch.Vero Bourg-MeyerWe can help find the information list. But yeah, at this stage, we're not sure how that's going to work, but it's potentially still very big. And then on the structural front, so direct pay and transferability are those new two fancy things that we can do with tax credit. So direct pay being you go through your project, you finish your pleasant service, et cetera, et cetera, and instead of receiving tax credit at some point, so after you file taxes and request all that, at some point you get direct payment from the government. So that's really exciting for all the non-profits that previously did not have access to that.And I'm talking there's so many non-profits, I think maybe that's something that people don't necessarily see. There are a lot of non-profits working with and for and organized by as well, LMI communities, right?So we're talking affordable housing, we're talking health clinics, we're talking homeless shelters, all sorts of stuff.David RobertsSo just the shift to direct pay alone is sort of an equity is a justice thing, right, because it's mostly going to be non-profits.Vero Bourg-MeyerYeah, I mean, it's too bad that they didn't want to just when we're talking about kind of giving money directly, I think tax credits are way that the government kind of gives out money directly, right? And they decided when they passed the IRA, Congress decided, "We're going to do this only for non-profits." Why not for people? I don't know.David RobertsYes, you do know, though. His name is Joe Manchin, right? Let's not pretend we don't know why all the flaws in this bill are in there.Vero Bourg-MeyerYeah.David RobertsOkay, so there's buckets and buckets of money in the IRA of various places for LMI communities, LMI developers, non-profits who want to work with LMI communities to go get so let's talk a little turkey then about what these programs look like. What are the sort of tools that states use to reach these communities? And maybe if you want, you can use Connecticut as your sort of standard bearer, because as I understand it, they have the top of the line program.Vero Bourg-MeyerYeah. But I should say they had because it's finished. It terminated. The program terminated.David RobertsOh, it was like a set amount of money they dispersed and then ...Vero Bourg-MeyerNo, they were looking for a specific megawatt capacity and they reached out and then the legislature was like, "Yeah, you're done. You're moving on to solar, to solar and storage." So now they're doing solar and storage with justice instead of just solar with justice, which is also really exciting. And I should say part of my work at CESA is working as part of the Scaling Up Solar project, which is a DOE funded project. So my salary, part of my salary comes from DOE. We tried to help states replicate the Solar for All program from Connecticut, and it was a really successful program.I like to talk about it in terms of how much of the savings that people get, because that always blows people away. So there is a VIC study that kind of shows the kind of savings that the customers from the Connecticut Solar for All program received. And we're talking $1,300 a year. That is ginormous.David RobertsPer household.Vero Bourg-MeyerYes. That's not chump change, nothing. And then within that, you have about $700 worth of solar and then you have efficiency stacked on it. So what they did that was really smart to start with is that they looked at all the incentives that were available in their states and there was part of it, the efficiency part, that was really just managed by the utilities, and they were like, well, let's make sure that we do those two things together.And solar plus efficiency in general, it's a winning combination. I want to say, in terms of savings for anyone, not even just for LMI communities, but if you stack your incentives and you stack your products, solar and efficiency together works really, really well. So you remember at the beginning when we're talking about how this upfront cost is really an issue and there is no access to financing that's available for you if you are in a certain income bracket. So the program is really a lease program. So it's third party ownership, TPO. And I should mention that there is a bit of a debate in the advocacy world out there on the kind of the value of TPO versus direct ownership.So some people are really married ...David RobertsYeah, I've been tuned into this for a long time and I heard debates about it. Not only like, financial debates, like, which is better financially, but also which is better for the homeowner and obviously third party ownership, which, just to explain to listeners who don't understand it's, just a company owns the solar panels on your roof and what you're buying from them. You buy the power from them, basically. So you as the household do not have to pay for the panels and the installation. The company pays for that, they own it, and you're just basically buying the cheap power.So that's what third party ownership means. So what is the debate?Vero Bourg-MeyerSo the debate is, when you're using third party ownership, some people will say, well, you're not getting all the benefits, all of the wealth creation that happens with solar, which if you're looking purely financially that's true. Yes, that's correct. I don't think there is any need to debate that. Anyone who's ever looked at a solar model can tell you that's true. But the issue there, I think, is that what I personally think is that we can walk and chew gum at the same time. We can utilize third party ownership models for what they're really good for, which is giving access to solar, to families, so that they can get savings right now, right?Not tomorrow, not in five years, when we figured this out, not hypothetically, once a project magically comes online, maybe potentially, perhaps mayhaps in the future, but like right now. Right. And in most of the programs that I can think of, state programs that focus on third party ownership, there is some aspect of trying to convince the developer that there needs to be a pathway to ownership. Right?And I think that's actually been folded now into the greenhouse gas reductions fund solar for all competition that we were just talking about.David RobertsIsn't it standard in these TPO arrangements that you can buy the panel at the end of whatever the lease period is?Vero Bourg-MeyerRight. Yes, it is very standard. I think what we're talking about here is accelerating that. Right. So how do you make a pathway so that at the end of, let's say six years? Because that's about when tax credits or tax equity investors would get out of that investment. In about six years or seven years, is there some way that you can help that customer actually purchase the panels directly? Straight up. Right. And I think there are developers out there thinking through this. There are states out there thinking through this. And I don't think we need to be married to one system or one deployment model over another.I think they all are good for some things and less good for other things.David RobertsSo you can get a little bit of a hybrid, then you can get some sort of benefits of TPO and then maybe ownership in the longer term.Vero Bourg-MeyerYeah, absolutely. And then to go back to the Connecticut, because I kind of went astray there to go back to the Connecticut model, it's a public-private partnership between the Connecticut Green Bank and a company called PosiGen. They are a developer that was born out of Katrina, essentially, and that really was born in New Orleans to try to help folks get over the consequences of Katrina and really bring some resilience benefit to customers. So what they do is that they stack up efficiency and solar incentives, as I was mentioning earlier. And what the state of Connecticut also did with the Connecticut Green Bank did, is that they created an elevated incentive.So an extra amount of money if you met some income qualification criteria. So if you are meeting those criteria, you're getting extra money, PosiGen comes to your house, and then no matter what, you have to go through what's that called? An efficiency test, essentially.David RobertsEfficiency audit.Vero Bourg-MeyerThank you. So you go through your audit and then the company will tell you, okay, well, here are the things we can do kind of on the cheap, the minimum we can do. Or here are some extra kind of much deeper retrofits that we could do on your house that will bring you much deeper savings.Which one do you want? And they give them a choice. And in addition to that, you get your solar. So the other thing that the Connecticut Green Bank did at the time, which is not necessarily required for that kind of a project to work or that kind of a program to work, but that was really helpful in the context and that's something that states have to think about was to support the company in a different way financially as well. So they offered subordinated debt to the company because at the time PosiGen was a new company, the market was untested.They were like, "Okay, well, if you need to be successful serving these customers, if you need an extra bit of support over here, we'll provide that and that money goes back to the state." So it's just an investment like any other investment. And that really helps that developer be motivated to serve those customers really well. So these are kind of just on the financial side and on the behavioral side ...David RobertsJust pause here on the financing. So the idea here is PosiGen comes to your door and says, we'll give you an efficiency audit. We'll figure out what you'll need, you'll stack it up and we'll do it for no money down.Vero Bourg-MeyerFor no money down, right.David RobertsFrom the homeowner or the building owner's perspective, this is just a no brainer, right? Does anyone say no to this?Vero Bourg-MeyerThe no money down is just the first piece, I think it's no money down and cash flow positive, right?David RobertsRight. So you're making money off it from the word, from the word go.Vero Bourg-MeyerFrom the get go, you got to make a certain target. And the way that they access those customers as well and how they decided who to enroll in the program, they did not use FICO scores. So as a company, just generally speaking, they do what's called underwriting to savings. So they look at how strong of a saving they can give a customer and then they essentially bet that it's going to work and that it's going to be strong enough for them to be able to recover their money. So if the customer doesn't make money, they don't make money.David RobertsOkay. So that seems to me to overcome or at least substantially overcome the funding barrier. And then if you're not using FICO scores, you're sort of overcoming or getting around the kind of credit score barrier. What about just the sort of like education and community engagement piece? How did Connecticut approach that?Vero Bourg-MeyerSo they did a lot of community based marketing and that's been shown to work really well to sell solar in general. And there's been actually also studies looking at the type of messaging that works in LMI communities versus non-LMI communities and turns out the messages need to be about the same. People want savings. People want something fancy and new that works really well, and they want environmental benefits.David RobertsLet me put something cool on your house and you'll make money from the second yeah, you don't have to fine tune that a lot for different audiences. It seems like a pretty universal appeal there.Vero Bourg-MeyerYeah. But one of the reasons that really worked is that the Connecticut Green Bank was super involved in selling the program really hard. Right. So no one wakes up in the morning and says, oh, I'm going to figure out how to put this expensive piece of infrastructure on my roof.David RobertsNot these households, right? That's probably not the top of mind.Vero Bourg-MeyerExactly. And even without that, I can't remember when that was exactly. But a few years ago there was some study about priorities in spending for people. Energy was like the last one.No one wants to think about it, basically.No one wants to think about it, just people interested.David RobertsSo Connecticut was aggressive then at sort of like very aggressive reaching these communities.Vero Bourg-MeyerYeah. And that means going to fairs and running solarize campaigns, which are bulk purchasing campaigns for solar and co-branding stuff. Right. So you talk about this trust issue question if the state is there to say, no, seriously, this is a good program, we stand behind it, we picked these people. And then in addition to that, they also vetted all of the contractors that were being used. So it's more believable for a customer that has trust issue than if some guy came to your door and said, yes, trust me, I'm totally going to put something free on your house.It's going to be great.David RobertsSo it has official state backing, right?Vero Bourg-MeyerYeah, absolutely. Which I think is really important.David RobertsAre there other pieces of the Connecticut program that are particularly that other states should.Vero Bourg-MeyerIf you're looking at purely the lease program? Well, I should also mention it's a lease, right. It's not a PPA, so as opposed to a PPA where and there are pros and cons to using each of those. But a PPA, a customer's bill will go up or down depending on how much the sun is shining that particular month, right. And if you're very low income, that could be a problem for you. Right. Seasonality could be an issue. If it's the summer and I don't know, if you're not in a state that has good net metering policies, you could end up paying more than you anticipated.And that's problematic, obviously. A lease the big difference is that the payment is stable. It's always the same thing every month. So it's nice that kind of being able to see over the horizon and say, yeah, this is how much I'm spending for energy. And so there are lots of other things that they did on the financing side and on the kind of the state programming side that are, I'd say, a little too complex to explain without a paper support. But they're really cool programs at the Connecticut Green Bank. I encourage anyone who's even just a little bit interested in kind of state level policy innovation to really go and look at the annual report is a great place to start because they do really cool stuff.David RobertsAre other states taking note? I know Rhode Island. I've seen in your work that Rhode Island sort of learned, seems like learned from Connecticut and more or less kind of took those lessons. Are these things actively spreading in states or other states?Vero Bourg-MeyerHopefully, if we do our job right. Hopefully. And in Rhode Island. So the format that was followed was pretty much the same, except that we didn't have efficiency there. As an added piece, the main difference is that Rhode Island, the Rhode Island program, so the Affordable Solar Access Pathways, or ASAP, that came out post IRA. So that means the low-income adders, the ITC adders, are folded into the program.David RobertsSo it's sort of built around the IRA money.Vero Bourg-MeyerYes. And then the way that this is going to work so they also just selected they ran an RFP and selected a vendor, which also happens to be PosiGen. That's going to be the first. So that's brand new information. I think it's public for PosiGen, but I'm not sure whats fully public yet. But I cleared it with them. I'm allowed to say it. The big thing there is that when the RFP was launched, we asked the private sector, what level of incentives do you need to get to this level of savings for a homeowner? And then not only that, but what levels of incentives or what kind of money are you going to send back to the consumer or to the program?Whichever you choose. If you get access to extra incentives through the tax credits. Right. So now you have not 30%, but maybe 40%, maybe 50%, maybe 60%. How is that shared with the customer, with the ultimate customer? So that's one of the questions that was being asked in the ...David RobertsYeah, I guess you do want to take care to design these things. So you're not sort of like inadvertently just using public money to make a particular solar company richer, super rich.Vero Bourg-MeyerYes. Because, I mean, it's great that they're motivated to do this and you do want the private sector motivated to do this, but ultimately it's got to create benefits for the LMI consumer.David RobertsRight.Vero Bourg-MeyerThat's the most important piece of this.David RobertsSo if I'm a state and I am looking at Connecticut and saying, "Hey, that's cool what you did. You created enormous savings for these households. You installed whatever megawatts of new solar. Our state wants to do something similar." It strikes me that this is, among other things, just administratively there's a lot of pieces of the puzzle here. There's a lot of sort of so what are the kinds of things that if I'm a state that wants to replicate this or do something similar, what do I need in place before I do this? And then one of the questions that always comes up for me is a simple one, which is just sort of how do you identify LMI communities?Is there a common national metric or is every state sort of every state kind of bespoke figuring it out on their own? And just in general, if I'm a state, what do I need to do to get ready if I want to do something like this?Vero Bourg-MeyerSo on the question of what the states have to do to get ready, I think that probably the most important thing. If you wanted to do the same thing as Connecticut, would be make sure that your legislation enables third party ownership very clearly because there's nothing that turns off a contractor or developer quite so quickly as telling them. So we're not too sure, we're not entirely sure what the regulatory context is like. But just before you can enable LMI solar, you have to have a friendly solar policy, just generally speaking. Right?So do you have net metering enabled? What I'm going to say is not relevant to the Connecticut program, but do you have community solar enabled? Is it authorized in your state? Can everybody do it? Or is it something that only the two utilities that are in the state can do and oh, by the way, they don't want to do it, so it's just not happening. So these things are good places to start. But in terms of how you figure out where your low- and moderate-income communities are located, there's tons of different ways of doing it.There are states that have gone through very lengthy process stakeholder processes and regulatory processes you can think of. California is one, New York is another, to try to figure out what constitutes a disadvantaged community or low- and moderate-income community. There are lots of different terms floating out there. And those states have gone through the process and they've talked to people whose livelihoods are really directly touched by these things, right. Not just policymakers, but people in communities. And then the federal government kind of stacks on top of it and says, well, I'm going to define low-income community for this program this different way, and then for that other program a different way.So it's a bit of a mishmash of all sorts of definition. Often you'll have for the state definitions, a mix of ethnic and racial kind of threshold, foreign languages. You'll have poverty levels, essentially. You can have sometimes unemployment levels. But yeah, this mapping question is complicated.David RobertsWell, the IRA has a ton of adders and sort of set asides for justice communities. So it seems to me like this is a national concern. You need some common metric because there's so much money at stake here, it really matters how these things get defined.Vero Bourg-MeyerSo you do need some common metric, but also states are very different, right? So a state like Vermont, which is very rural and very white, is going to be different from a state like, I don't know, California, which has a lot of urban spaces and a lot of people of color, big Hispanic population. So you can't quite blanket define everything. But I think some at least definition of what the factors need to be. Right?So states maybe need to have a definition that fits those four criteria that include race and ethnicity, that include poverty level, that include XYZ with kind of flexibility, and what those need to be might be helpful. One of the things that we're trying to do that we're working in Colorado on a community solar program and on a community solar project or pilot project for manufactured homes. And Colorado does a lot of work with the Weatherization Assistance program WAP. They've been doing a lot of work on that for a long time. And they were the first state to use federal dollars to be authorized to use federal dollars from the WAP program to install solar.They're moving away from that at the moment because it's too complicated. But they still want to coordinate the WAP program and the solar program. The Web program is going to use whatever the WAP program uses, which is a percentage of the federal poverty level, whereas the other programs that they're going to build are going to be using their local flavored, definition of income and race and ethnicity and et cetera, et cetera. Right. So it's all a big mess, but a big beautiful mess.David RobertsBig, beautiful mess. Oh, one thing I wanted to double back on, I meant to ask you this when we were talking about Connecticut, specifically about the renter issue, because this is something, this is something I get questions about all the time, like I rent, like what can I do?Vero Bourg-MeyerCommunity solar.David RobertsIs this how I mean, you mentioned that Connecticut doesn't have community solar as a big piece.Vero Bourg-MeyerNo, they do have community solar.David RobertsIs this the primary way of overcoming this sort of landlord tenant split incentive?Vero Bourg-MeyerI think it is. I think it is, although so there are some programs there's a program in Hawaii, for instance, through the Hawaii Green Infrastructure Authority that's allowing renters to participate in leases, essentially, and they have on bill financing that's enabling that with the Hawaii Electric Company. And that's working, I think hopefully it will work really well. That's a new program. It's called the Gems Energy Services program. But yet, just generally speaking, outside of exceptions like that of Hawaii, community solar is definitely the way to go. I mean, it's the way to go not for renters only, but also if you just have trees around your house and you can't access the sun.David RobertsWhat if you want to get solar panels on a big apartment building, an apartment building, say, that is occupied mostly by LMI people? Is there anything in these programs that can work with landlords or get around that?Vero Bourg-MeyerYes, so I think the SOMAH program in California would be one that applies to that. And it applies to affordable housing, really. So the way that it's structured, and I'm not super familiar with it because it's not what I focus on. But one of the interesting pieces is, so heard, the way that they define the Department of Housing and Urban Development, the way that they provide funding for folks is that they request that the rent and the utility be kind of lumped into one payment, which is good for a number of things. But then when you start installing solar on something, it makes it more difficult because any changes to how much you pay in utility will trigger an increase in your rent.So that's not super helpful. And they worked with the program in California. They worked with HUD to kind of get rid of that. So that was a good piece of the puzzle. And they are renters. They're renters. But you got to work directly with the non-profits that own the affordable housing. And that's not easy. They have lots of things to figure out and lots of other issues to figure out. Right?David RobertsYeah. That seems like an area where, like a super simplified model that you could just replicate across would be helpful. We're running out of time. And one of the big things I wanted to ask you about was the reason that this whole conversation was prompted in the first place was a new report that just came out, which is specifically looking at how non-profit foundations can sort of enter this LMI solar space induce, help, support. We don't have a ton of time, but maybe you could just say a few words about if I'm a foundation and this seems like a good thing that I want to do, are there models?How do I get involved?Vero Bourg-MeyerYeah. So first you should read the report.David RobertsOf course, always read the report.Vero Bourg-MeyerEnergize your impact. It's on the CC website. But what I'm going to say is true, I think, for states, it's true for the federal government, it's true for the foundations, it's true for the green banks. If you are building or looking interested in supporting LMI solar, you need three pieces. You need the capital, you need the customers, and you need the capacity, the capital. There are tons of different ways for foundations to provide capital. That's what the report is about. And we focus on really we go in depth in some of the fancier ways, the guarantees, the equity investments.David RobertsThere's grants, there's loans, there's loan guarantees.Vero Bourg-MeyerYeah. And equity. I didn't know that before starting this research. I had absolutely no idea that foundations could do equity investments. It blew my mind when I thought that was possible. So that's your capital. Then you have your customer side. Where are you going to find your customer? How do you help people find customers? That's the second big bucket. And the third bucket is the capacity. And there are models in there that kind of look through how you build capacity in LMI communities, and particularly in either the LMI serving institutions or the non-profits that kind of support these communities.And one model I guess that I'd like to point out is called Technical Assistance Fund from our sister organization, the Clean Energy Group that's explained in the report is really about finding that trusted third party advisor to help a community figure out or a community institution figure out, like, what are the options out there. To start with, if you want to build a pipeline of projects, you need to actually help the projects be born. And that sounds completely obvious to say, but you can have all the capital in the world if there are no projects to apply it to because people don't know what they need. Do I need a big battery or a small battery?Do I need a battery at all? Like, what kind of solar can I use? Can I put it on my house? Can I put it on my hospital? Should I put it in a field over there? How does this work? Just generally speaking.David RobertsWho is that? Who is that? Who are those trusted? How do you find those people? Who are those entities?Vero Bourg-MeyerThey're contractors. And I think the fact that they're trusted just means that they're not selling you the final products, right? So generally speaking, developer will be the person that tells you, this is what you need. Believe me, this is what you need, and I'm going to sell you. Exactly. And that does not necessarily inspire trust. So you really want kind of a third party there to be able to help figure out what the options are. And these are just essentially engineering firms that look at your situation, look at your needs, and try to help you make sense of it.So that's a big thing.David RobertsSo a foundation can just support and fund those?Vero Bourg-MeyerYeah, absolutely. I think that's a really fundamental piece of the equation. There's a piece, an editorial piece that was written by Joe Evans, who works at the Kresge Foundation and who is absolutely brilliant in all this stuff, but also wrote an op-ed aptly named "It's the demand side, stupid." And I think it's not subtle, but it gets to the point, right? It's like you need all of it, right? You need the capital, the consumers, and the capacity for this to be successful.David RobertsAnd you need to basically cultivate and educate customers. Like, this is one of those kind of areas where you just can't rely on a market in some sense because you're creating market demand by educating.Vero Bourg-MeyerOh, it's absolutely it's all about building markets. It's all about building markets.David RobertsRight. This has been awesome. As a final question, I just was wondering sort of what is the prize here? Say we just got low- and moderate-income households up to parity so that they're installing solar at the same rate, say, as other households. How much power in terms of like megawatts and gigawatts, is this a substantial amount of energy we're talking about, or is this mostly about these sort of extra energy benefits for these communities or is this really a substantial amount of it's big.Vero Bourg-MeyerYeah, it's big. I was thinking earlier, if you don't care about all the reasons why you would need solar on LMI buildings, if you have no human there's not a human bone in your body that thinks it's just fair and good and just and for some reason you only think about the grid.David RobertsI know some people like this.Vero Bourg-MeyerYeah. They're out there. There are some of them. The solar potential of low- and moderate-income household is about 40%, 42% to be precise, according to NREL, of the total US residential potential, right. It's a pretty big chunk that's out there.David RobertsSo it's almost half the rooftops.Vero Bourg-MeyerYeah.David RobertsSo that's not a small market too.Vero Bourg-MeyerNo, it's not a small market. It's a big market. It can have a huge impact in terms of the grid and the climate and obviously a huge human impact for the people that are buying it.David RobertsRight. And it's worth saying, because I don't know if we mentioned it earlier, but the households themselves get immediate benefit in terms of their energy bills lowering, and they get positive income to start off with. But over time, this stuff also accrues right. These benefits also accrue to the next generation. Air pollution lowering affects children. So these benefits are ...Vero Bourg-MeyerCompounding.David RobertsCompounding over time.Vero Bourg-MeyerAbsolutely.David RobertsVero, thank you so much for coming and decoding this area for me. It sounds like lots is happening.Vero Bourg-MeyerNo, thank you.David RobertsThe money is raining down and we're all dancing around.Vero Bourg-MeyerYeah, we're all dancing around trying to figure out how is this all going to work? This is a very exciting time. And if there is one thing that I would want people to remember, is that LMI solar really matters. It can make a huge difference in people's lives. And it doesn't happen by accident. It needs to be designed. So get out there and design stuff.David RobertsAwesome. Thank you so much for coming on.Vero Bourg-MeyerThank you so much. Bye.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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The Inflation Reduction Act is ambitious climate policy, but history shows that ambitious policy is not always followed by ambitious implementation. In this episode, Hahrie Han of Johns Hopkins University and David Beckman of the Pisces Foundation talk about Mosaic, a grant-making coalition that aims to help build a robust movement infrastructure to ensure that vulnerable and underserved groups can take full advantage of the significant funding offered by the IRA.(PDF transcript)(Active transcript)Text transcript:David RobertsFor all that has been written about the Inflation Reduction Act, the most salient fact about it remains widely underappreciated. What is significant about the bill is not just that it sends an enormous amount of money toward climate solutions, but that the money is almost entirely uncapped.The total amount of federal money that will be spent on climate solutions via the IRA will be determined not by any preset limit, but by demand for the tax credits. The more qualified applicants that seek them, the more will be spent. The Congressional Budget Office estimated the bill’s spending at $391 billion, but a report last year from Credit Suisse put the number at $800 billion and a more recent Goldman Sachs report put it closer to $1.2 trillion.Big companies will have teams of lawyers to tell them when they qualify for the tax credits, but there are also billions of dollars in the IRA that are meant to be spent on vulnerable and underserved communities. Those communities do not typically have teams of lawyers.Who will work to enable them to take full advantage available of the money? Getting that done will require campaigns, relationships, and grassroots mobilization. It will require movement infrastructure.A relatively new grant-making coalition called Mosaic is attempting to help build that infrastructure by dispersing money to the frontline organizations that comprise it. Mosaic is a cooperative effort among large national environmental groups like NRDC, big foundations, and various smaller regional, often BIPOC-led groups.It has pooled philanthropic money and thus far given almost $11 million of it to dozens of relatively small groups and campaigns — 85 percent of them BIPOC-led, 87 percent of them female-led — selected by a governing committee from well over a thousand applicants. The governing committee contains a super-majority of representatives from frontline communities; the foundations have a super-minority.To discuss the need for movement infrastructure, the Mosaic effort, and the possibilities IRA offers for frontline communities, I contacted Dr. Hahrie Han, a professor of political science at Johns Hopkins University, and David Beckman, one of the founders of Mosaic and the current president of the Pisces Foundation. We talked about what movement infrastructure is, the failure of the climate movement to build enough of it, and Mosaic’s theory of change.So, without any further ado, Hahrie Han and David Beckman. Welcome to Volts. Thank you so much for coming.Hahrie HanThanks so much for having us.David BeckmanYes, thanks David.David RobertsI want to start with you, Hahrie. You have written in the past, and one of the themes of your work is that social welfare legislation or policy can often fail to reach, let's say, its full potential if there isn't the sort of civic and movement infrastructure around it to help it succeed. So maybe you can just talk for a little bit about what do we mean by infrastructure here? What does infrastructure mean? And maybe also what I think would be helpful is maybe you could cite some examples of times you think legislation or reforms fell short of what they could have done because of a lack of infrastructure.And then maybe some examples of when there was infrastructure and that was helpful.Hahrie HanYeah, I think that's a great question. There are so many instances when in trying to tackle some of our stickiest social problems, we put an enormous amount of attention and effort into trying to build the coalitions that we need to pass the policies that we want. If we think about any of the landmark legislation that we've had in recent decades, from the Affordable Care Act to the IRA to any other of these big kind of efforts, they've taken years or decades even to pass because of all the work that it takes to get them through. But then what so much research and so much history has taught us is that if there isn't the same kind of effort that goes into the implementation, that the gains that we made with policy alone are really fragile.There's one famous book that looks at some of these gains, these policy wins, and calls them a "hollow hope" if they're not accompanied by the kind of infrastructure that you're talking about. And we just have a lot of those kind of examples throughout history. So to give a couple of them. For example, this book, "The Hollow Hope," starts with landmarks court legislation like Brown v. Board of Education, where, if you actually look at the ability of that one decision by the Supreme Court to actually translate into integration on the ground. It didn't actually achieve its goals, and its actual outcomes felt really hollow until you saw this mobilization of a lot of the school districts and parents and communities on the ground to make real the promises that were in that Supreme Court hearing.David RobertsThat particular example is kind of telling since that infrastructure withered a little bit and now those gains are being reversed. So it's not just a one time thing like sort of implementing it and making it real is perpetual effort.Hahrie HanYeah, I think that's a great point, right, because the thing that I always like to remind people is that any policy gains that we have are really fragile because they can always be reversed on the one hand, as you point out. But then also because oftentimes when policy gets implemented, it drifts away from what the original goals are. There's a famous political scientist, Jacob Hacker at Yale who looked a lot at basically welfare policy and a lot of social policies. And what he finds is that if you look at the impact of those policies on people's lives, that often there's a big gap between what legislators intended and what actually happened because of that process of drift.And that I think is also a really important point because what it tells us is that you don't need Congress to take another action to reverse policy gains, but in fact, it can just be ignoring a process that can lea to that kind of drift.David RobertsEntropy, basically. Like if you're not continually reinforcing it, it naturally will start to erode.Hahrie HanYeah, exactly. That there's just kind of natural chaos in the system. Or sometimes there are people that are actively working to undermine the ability to achieve those goals.David RobertsYes.Hahrie HanTotally.David RobertsAnd they never quit. And they seem to have great infrastructure. If I could just insert one of my perpetual gripes in there. Like infrastructure working against social welfare legislation is just robust and seemingly permanent.Hahrie HanYeah, it's easier to stop something than to create something new. And it's also easier to organize people around their prejudices and to organize people around hope.David RobertsYes, indeed. So what are some examples then of the other side where sort of the infrastructure has come together around a law and made it?Hahrie HanSo one example that I like actually is the Community Reinvestment Act, which is not a perfect act by any stretch of the imagination. So I know that there are lots of ways in which we wouldn't necessarily hold it up as a paragon of legislation.David RobertsCan you tell us what that is?Hahrie HanBasically, the Community Reinvestment Act was passed essentially to try to stop redlining in poor and Black communities. And so when it first began to come out in 1970s, 1980s, a lot of banks weren't lending to certain communities because they would literally draw red lines around neighborhoods where they wouldn't make investments. The Community Reinvestment Act was passed as a way to try to stop that redlining. One of the things that was really important that they did in passing the Community Reinvestment Act is that they essentially created these mechanisms through which communities could have continual oversight over the way that banks were acting.And so the Community Reinvestment Act essentially created these boards that were an accountability mechanism for banks. And alongside the Community Reinvestment Act, there was a bill called the Home Mortgage Data Act. HMDA, it's what it's called for short. And what HMDA did was it made available the data that these local communities would need to be able to look in and see whether or not the banks were making investments in the ways that they should. So that alone doesn't actually cost government a ton of money. But by creating that accountability mechanism, what it did was create this ongoing hook, essentially around which communities could organize and essentially hold banks accountable.And so over time, we've seen trillions of dollars of investments being driven into lower income communities because of the Community Reinvestment Act.David RobertsAnd so what do we mean then? I mean, we're talking about infrastructure here, sort of vaguely. What do we mean concretely by having the infrastructure in place to make these laws perform the way we want? What is it comprised of?Hahrie HanSo, that's that's a complicated question. In my mind, movement infrastructure has a lot to do with the relationships, with the structures and the vehicles and the resources that a movement needs to be able to respond to the kind of strategic challenges that are going to come its way. And so I think one mistake that people make a lot in thinking about movements is to think about the most effective movement as being the one that has the best plan at the beginning. But actually, what we find is that the most effective movement is the one that can best respond to the contingency that comes up that it didn't expect.And what do you need to respond to contingency? Well, you need to have strong leaders, good people who are interconnected with each other. You need to have resources that you can deploy. You need to have vehicles that can move nimbly and agilely in response to things that might come up that you don't expect. There are a range of those kinds of things that I think comprise the movement infrastructure that enable that response.David RobertsDavid, let's go to you for a second. The Mosaic effort is an effort to build this kind of infrastructure. So I want to talk about what that infrastructure is, but let's back up a little bit. Mosaic is a coalition of all these big, long-time foundations and big green groups that have come together with the sort of explicit goal of changing the way environmental philanthropy is done. So let's start then, with that. What is wrong with environmental philanthropy? Why does it need to change? What are its sort of flaws and shortcomings today?David BeckmanWell, that's a big question, too. Let me just say about Mosaic. It is really the name hopefully paints a picture of the idea and the theory, which is that it's not just the big organizations, but it's all of the organizations and the people, the activists and the advocates that are individually doing important work but are not collectively able to keep pace with the extraordinary challenges and the opponents that you referred to. They can do better in a more connected fashion. And what's been missing is the investments in that connectivity and the tools that Hahrie discussed. And we can talk about what they mean in the context of the IRA.But part of the reason that those tools that are so essential to movement success are missing is because, in the main, big philanthropy hasn't invested in them. Bridgespan, one of the leading social sector consultancies, has published a whole report about how field building, which is another way of looking at this, is one of the most effective, yet underinvested strategies in philanthropy. So this is an endemic problem, I think, that has a lot to do with the fact that infrastructure is so important, but it's invisible in some sense. It's not vivid. It isn't like you can't take a picture of the forest that you've saved.It's the conditions, the how that you get to that result.David RobertsRight, it's not obvious also what the metrics are, right? Like, if you're doing it right or not, it's not clear what you're it's difficult to measure.David BeckmanThat's right. It's difficult to measure. So your question about philanthropy, of course there's lots of different philanthropies and there's more coming on the scene happily every day. But in the main, big environmental philanthropy funds in an atomistic way. It funds narrowly. It funds in a way that is exclusive instead of inclusive, and it tends to concentrate power. So four aspects that are not well suited to big scale social change and not well suited to implementing something of the scale of the IRA. And let me just give you a couple of facts about this. The atomistic part is really concentrating resources in single organizations and not building the fields that make them stronger.The connections that Hahrie is talking about narrow. In 2018, the Environmental Grant Makers Association, which is not an association of every environmental funder, but many of the really large ones, surveyed its members and found that just 200 nonprofits of the perhaps 15,000 that focused on the environment got over 50% of the $1.7 billion that its members donated in 2018. And that is astounding, if you think about it, 15,000 or so registered 501(c)(3)s and 200 are getting half the money. And that year, five nonprofits got 13% of that $1.7 billion funding pie. The Nature Conservancy, World Wildlife, EDF, and the place I used to work, NRDC, four of those got $100 million dollar grants from the Bezos Earth Fund a couple of years later.So you've got deep concentration. And then BIPOC organizations are funded at just a fraction between, say, 1% and 10%, depending on the study you look at. So there's not an inclusive focus. And last, something we're trying to address with Mosaic, most of the decisions are made by program officers and boards. Relatively few people with a certain type of demographic background, usually not always. And so there isn't much investment in participatory grant making, which is what we're modeling with Mosaic, where leaders actually get to compare and to cogenerate strategy and then to deploy money themselves as opposed to having to ask for it from a philanthropy.So atomistic narrow, exclusive and concentrating isn't a recipe for success in general, and certainly not with respect to the IRA.David RobertsThis is so reminiscent like this is a critique of left versus right philanthropic funding that goes back decades, since I remember paying attention. It's always the right is investing in infrastructure, right in the organizations, in the relationships. Like, you look at the Federalist Society that is basically all about relationships and look at the tentacles it has sent out into US society, just remarkably successful. And then you hear people on the left saying, "I can get a grant for a particular campaign or a particular accomplishment or a particular policy, but it's impossible to get just operational funding, just basic funding for my organization to survive."And those who do get it, as you say, are so concentrated, and when a single group gets so much money, it creates this perverse incentive for the group to sort of put its own interests first, right, to keep getting the money. So you get almost a resistance to cooperation and a resistance to working with others.David BeckmanYeah. Well, the competition for money I have experienced myself when I was an advocate and lawyer doing environmental justice work and water advocacy and the things I did at NRDC, there's no question that it gets in the way. And part of the problem is there's not enough money because the organizations I mentioned, I think, are good organizations. So the issue isn't that they shouldn't be funded. It's that everyone else needs to be funded, too. And money needs to flow in ways which are both equitable and fundamentally effective for large scale social change and philanthropy in the main.Not always, but in the main has missed that. And that's a big problem.David RobertsI wanted to ask kind of a practical question about Mosaic. So you have this grant making board, this representative board that has a lot of diverse people on it, and you have over 1000 relatively small scale applicants and what sounds like a really labor intensive process by which all these applicants are vetted. And the board discusses them with one another and they're winnowed down and et cetera, et cetera. I mean, I was reading about this in The Chronicle of Philanthropy or whatever the heck it's called, and it just sounds exhausting. People involved were saying it's exhausting.It's like finals week all year. And yet the result of that is $11 million, which is, in the context of these small groups, obviously nothing to shake a stick at. But like Bill Gates, it's just dropping $100 million here and there on this and that company. So I'm just asking about, I guess, the ratio of soft costs of work, of time intensiveness versus the amount of money that's being deployed. Do you think that's sustainable in the long run?David BeckmanYeah, it's a good question. Well, the good news is that Mosaic is about to announce $10 million in additional funding. So it's a new effort that is beta testing a lot of the concepts that we're talking about and learning along the way. So I've been able to participate, which is a really interesting experience as somebody who also spent a decade and a half as an advocate and then runs a foundation, a private foundation that's in a more traditional mode. And it's true it takes a lot of time, but I'll tell you, it takes a lot of time the other way, too.So it's not really a question so much of how much time, but what is the quality of the time that's invested. And I think the benefit of participatory grant making that I see, particularly when it's done well and leaders are involved, is that it itself is infrastructure. There are relationships that are formed, ideas that are exchanged, trust that is built, theories of change that are debated. And the environmental movement, as you know, both of you know, is fractious and doesn't always agree with each other. And so there's a value there that I think is differentially impactful compared to several program officers or one making decisions.Should there be more money in participatory grant making? Absolutely, and in fact, there's a study that says that just a fraction of foundations participate in any way with grant making approaches that devolve power to other people. And I think that's partly because there's not a lot of good examples of where it's worked. So hopefully, one of the things that Mosaic and other efforts can do is to demonstrate the benefit of this approach for others.David RobertsCan you just very briefly describe the approach? It's a committee and there are meetings. Is there more to it than that?David BeckmanYeah, it's just like a meeting, David. There are a couple of things. First of all, the application process seeks collaborative proposals. So that in itself is different. Usually, in my experience, it's like a single NGO approaching a single foundation. So already, from the beginning, the proposals are done in a different way. They're done online, they can be done verbally, which I think is a really good progressive approach. There's no long 15-page proposal that is required. So that's an attempt to lower the barriers of entry. And then there's this fabulous staff that has incredible data crunching capacity, that looks for heat maps and does some initial vetting.And then the leadership that makes the decisions is not involved in all of that. So it's not that everybody's engaged at that stage. But then we met in for three days and went over, did a whole kind of retreat, and reviewed the top section of proposals that the staff had prepared. And that was a debate like some of the best debates I've been involved as an environmental advocate, where people are talking about what is needed, where how do you compose a grant slate that's equitable and effective? How do you fund the grassroots? How do you fund relationships between the Big Greens and others, networks and communications and the rest?So what comes out of it? I think and I can compare because I run a foundation, I think is a really good way to approach things that really deserves a place much more solidly in the mainstream of environmental grant making.David RobertsHahrie from your perch as Mosaic is sifting through all these applicants, what kinds of things should it be looking for? What are the ingredients of this sort of movement infrastructure that you're talking about that you can identify in groups? Are you looking for certain kind of people, certain kind of strategies, certain kind of goals or financial structures. How would you go about building movement infrastructure? What are the sort of indicators that you're looking for among grantees?Hahrie HanIt's a great question. So I think that in thinking about movement infrastructure, in the end what we're trying to do is identify individuals and organizations that aren't just the kind of individuals and organizations that can do a thing, but that can become the kind of people that do what needs to be done, right? And so this kind of gets back to the idea that when you're thinking about implementing a bill as large as the IRA or building a movement as broad as what we need in the environmental movement, you have to anticipate the fact that there are going to be challenges coming your way. You can't anticipate.And so I have to think about who are the kind of people that are going to be able to respond to that? What are the kind of organizations that can respond to that? And so then how do I actually think about and identify that at time one without knowing what the challenges are that they're going to be investing in time two?David RobertsYeah, exactly.Hahrie HanThe things that would look for would be things like what is the extent to which they're building networks among their people that are bridging versus just bonding. And so the idea of a bonding network is one in which people are connected to other people who are a lot like them. Bridging networks are ones that not only create those bonds, but also enable people to bridge across to different kinds of people who aren't necessarily like them. And so what that means is that you have an organization that's constantly growing and renewing itself. I would look for organizations that are investing in building a kind of inclusive leadership in the way that David was describing, partly because I think obviously there are moral reasons why we would want to make sure that we have an inclusive leadership, but partly also for strategic reasons.There's a lot of research that shows that the movements that can best anticipate and respond to contingency this is true not only for movements, but actually for corporations as well are ones that have lots of different kind of for lack of a better word, kind of sensors out in the community to sort of understand what are the changes that are coming our way and how do we figure out how we can anticipate, how we need to remake ourselves for the future. And so if you don't have that kind of diversity of people giving you input, then you're not able to respond nimbly to the constantly changing world around you. So there are a lot of things like that that I think begin to give us a sense.David RobertsYeah, I think this is such an important point and maybe I'll touch that back to you also, David, because I feel like and I've done a couple of pods on this recently, been thinking about it recently and this idea of trying to fund a more diverse give money to more diverse groups and et cetera. It's so often framed in terms of sort of representation as kind of an end in itself, like a moral good in itself. It's just good to have other people there because you want to check the box. But the point of all this and this is the point that comes across in management literature and all this is not just that it's good, but that diverse groups make better decisions.It's an improvement in your ability to do good things. It's not just for looks or not just for box checking. It makes you perform better. And I wonder David, if you've you know now that you've really gotten your hands dirty trying to assemble a group like this, I wonder your thoughts on that, if you found that to be the case.David BeckmanAbsolutely. And I would just to add to what you said a second ago for many grant makers, again, not all, but I see and hear a lot that makes me think that equitable grant making for some is their charity, not their strategy.David RobertsRight. Yes.David BeckmanAnd there's a big difference. There's a big difference. There's certainly a moral imperative to fund communities and people who have more than their fair share of problems and who have been deprived of money from big institutional funders historically. So that stands on its own. But the point you're making is not only I think about the fact that better, more creative and interesting solutions come up which do, but that you can build power that way. As Hahrie's pointing out by bridging between what could be sort of atomistic, semi-competitive or worse, communities within a movement and to find some sort of working relationships, if not stronger relationships, productive relationships that allow big, important social change to happen.And that I think is one of the most important things that's missed when we pick fractions within a movement, either the Big Greens if you're talking about the environmental movement or frontline organizations, I think both can play a role and they can play a synergistic role when their collective impact is built on some relationship. And sometimes that isn't that we're going to totally agree, it's not kumbaya, let's all get along. It's that often when you're in relationship and you're in those rooms you can find that you might disagree about two or three things and maybe those are not going to get resolved but there's three or four things that you can agree on and through that kind of doorway you can make progress that you couldn't make otherwise. And that's why some of the effort in answering the question you asked earlier I think is worth it because it's not just process or overhead, it is actually the work, it is actually the infrastructure.David RobertsAnother question for you Hahrie is about backing up from the implementation, just the legislation itself. It seems to me like not only should environmental philanthropists be thinking in terms of infrastructure and implementation, but obviously legislators should too. Like, you can do better or worse in the text of a law on those terms. And this is something I feel like this is another critique of Democrats that goes way back, which is that they don't lose well, right? Like they don't lose in a way that improves their chances the next time. And even when they do pass legislation, it's not like always part of the goal of the legislation should be to make future reforms easier, to make future reforms more likely.So I wonder, a. do you see anything in the IRA that qualifies as kind of that like an eye on infrastructure building?Hahrie HanRight.David RobertsAnd if not, what would you like to see, like, in future legislation? What are the sorts of things you might put in legislation that would help this infrastructure building?Hahrie HanYeah. I think it's so important in designing policy to think about what the feedback effects that you're creating, because a lot of the most effective policies that we've seen throughout history are ones that have these feedback effects that essentially what you want to do is create a feedback effect that strengthens the constituencies that you want to strengthen and then either weakens or divides the opponents to the bill, right. And that's how you create the kind of loops that you're talking about that enable the passage of the next set of reforms, make them even more likely than they were before with the IRA.I think the opportunity that's on the table is the fact that so much of this money is essentially being delegated out through state agencies and other local governmental agencies that are operating at many different levels of government. And the extent to which this money can be doled out in a way that builds what I like to think of as relational state capacity, right. The ability of these governments to co govern and work in partnership with community leaders and community groups on the ground that only then makes the next generation of reform and policy and funding and implementation that much stronger.And so I feel like a lot of the design questions that we have on the table right now about how this money gets allocated through this network of state and local agencies and other intermediaries is going to be really important in helping determine the extent to which we have those kind of feedback loops or not.David RobertsYeah. And something I've actually heard from people in the back rooms involved in building IRA is that among Democrats in Congress, there's been a learning, let's say, that you don't necessarily want to channel all your money through state governments, right. Because there are a lot of perverse state governments who will do things like refusing billions of dollars of free. Federal money so that they can keep their poor people from having health care, that kind of thing, right. Like they've learned from the past that you can't rely on. So a lot of the IRA is sort of built around the idea of going straight to communities, straight to local communities, which I thought is heartening that the Democratic establishment is learning things.Hahrie HanRight, yeah. And it's heartening, partly because it's learning how to play that political game, right. But also heartening because then that implicitly builds this capacity and these capabilities in these local communities in a way that can have greater effects down the road.David BeckmanYeah. And if I could just add to that, just to connect something we've been talking about. So what does it look like to make a grant on movement infrastructure? A couple of the grants that Mosaic is making this year focus on a really bridging network of 17,000 plus climate advocates, policymakers, academics. It's just connecting that group. Another grant is facilitating rural implementation and trying to create networks that make it easier for folks who may not be as commonly working in the areas of electrification and tax incentives and so forth to pry those opportunities. And there's another grant that's actually focused on government officials themselves and educating them about the opportunity, not in environmental terms, even necessarily, but in terms of what they can do for their communities.So those are ways of sort of spurring the kind of relationships that Hahrie is talking about.David RobertsFrom where you're sitting here. So you got a bird's eye view of dozens and dozens and dozens of small groups who want money. So I wonder part of shifting funding from a couple of big groups to a wide variety of small groups is about just sort of like hedging your bets and building infrastructure. But I wonder if you found among the applicants just ideas and strategies that are not represented among the big groups. In other words, like genuinely new ideas for how to approach things. I wonder if you could just talk about some of the applications and the patterns that emerged.David BeckmanWell, one of the things that's amazing is that it's such a diverse set of ideas. And from a philanthropic practice perspective, when you're not relying on a single individual to vet potential proposals, I mean, nobody knows everybody, and everybody's got a limit to their day. You just get an eye-opening kind of response. And I think that was something that everybody CEOs of big groups are part of Mosaic CEOs of smaller groups, EJ groups, felt. So some of what we saw is a desire to sort of shift the terms of debate. And I don't know how that, I don't think, is very well-funded in mainstream environmental philanthropy.Different theories of change, different approaches to the economy, questions around how to frame economic growth in different ways, indigenous perspectives on the protection of the environment and elevating the rights of nature. As a theory, these are not directly related to a tax incentive for decarbonizing your house, but they come through and they're interesting perspectives that don't get a lot of play. More practically, we saw a lot of really interesting collaborations between different organizations, some of which work together, some of which don't, and are using the opportunity to apply for a collaborative grant to stretch their wings in ways which, as Hahrie saying, may grow into something that has nothing to do with the proposal before us. One interesting proposal was to build solar capacity in communities of color using the tax incentives and actually, I think, direct grants that are available for solar installation, not only generally, but in underserved communities to turn that into a workforce development effort for brown and black people.So there's a whole set of things that I think are going to be helpful in actually reaching the goals of the IRA which are not guaranteed to happen and can build for the future.David RobertsOne other question I wanted to ask in terms of what was on your mind as you're picking grantees is, and this is anyone who listens to the pod will know that this is an enduring obsession of mine. But it seems like one of the basic headwinds facing implementation of the IRA, facing basically any progressive effort, is this massive, extremely well developed propaganda apparatus on the other side that has basically captured rural America, has almost entirely captured rural America. And in a sense, like any attempt to do anything reality based in the face of that just gets swamped. So I wonder if there were a lot of ideas among the applicants about, to put it dramatically, information warfare about how to fight back against what is the inevitable tide of misinformation about this bill, about these technologies, et cetera, et cetera. Was that a theme?David BeckmanYes, but maybe in a more positive sense that the IRA, I think to the credit of its designers, is itself a pretty profound attempt to push back on that narrative. But because really what we're talking about is decarbonization in theory, but the practice of it is through electrification of power and cars and incentives for clean energy and right down to what any of us, as people who live in a home could get a credit or a refund for purchasing like a heat pump. And there is, in the IRA, specific money that goes both to vulnerable communities, EJ communities, as well as to rural communities, which there are 40 million people in the US who live in rural communities, 50% of the land mass of the country.And so we're talking about a significant space in the country and a lot of people. The opportunity, for example, to decarbonize rural electrical cooperatives which have really relied on coal, which has very significant public health impacts, in addition, is a huge opportunity that isn't necessarily cloaked in environmental terms. It's a great opportunity to reduce cost and to create jobs. And there's a whole set of parts of the IRA that are entirely focused on farm communities and forest communities that involve credits and other types of incentives for regenerative agriculture, for dealing with water scarcity, increasing water scarcity, and things that just have basic bottom line benefits economically and are part of cleaning up and making the economy greener in those areas.So I see those set asides, or those components, set asides is probably not the right word, for environmental justice and for rural communities as a really powerful step. And I think it connects a lot to what Hahrie is talking about in terms of will this change the experience of people who might think of environmental groups as not their friend and really recontextualize what this is about.Hahrie HanAnd if I can chime in here just on the question of disinformation that is spreading in so many of our communities and especially in a lot of these rural communities. I've been doing a lot of work recently studying evangelical communities which operate in a variety of different kinds of contexts. But one of the things I've really learned from the way a lot of evangelical churches organize their communities is they have this idea that belonging comes before belief. That so often, I think, when we think about building an environmental movement, there's sort of this implicit assumption that belief comes before belonging, right?Like that you've got to sign on to this idea that we all need to decarbonize before we're going to invite you into our meetings. And if you show up in your Range Rover and your hunting gear, maybe you're not going to feel as welcome as you do otherwise. And these churches have the very opposite idea where they say, look, you don't have to believe in God. You don't have to believe in any God, and especially our God. We're not going to be shy about what we stand for, but you're a part of us no matter what.And they have this attitude of radical hospitality. And that's really undergirded by a lot of research that we have on disinformation, where when you're trying to combat that kind of propaganda, the least effective thing you can do is throw a lot of scientific evidence at someone who ...David RobertsFact sheets.Hahrie HanRight. But the best thing that you can do is have someone who they trust, with whom they feel this sense of belonging, come and talk to them and present an alternative narrative. And so, in that sense, I feel like a lot of the work that Mosaic is doing in investing in these community based organizations that can build those communities of belonging in rural areas across America is another really important piece of combating this kind of disinformation.David RobertsYeah, I think that's such an important point. I mean, you have results that support this basic conclusion from sociology, from neurology, name your field. It all is coming together to basically show that social relationships are primary and very often your beliefs are derived from those rather than vice versa, as you're saying. This is also a long-time criticism of the left and this is sort of conventional wisdom at this point. Unions were sort of the left's tool. Unions and liberal churches were the left's tool for doing that, just for literally bringing people together in the same room so they can see and smell one another and share beers.And that stuff is so important. And unions have withered notoriously and liberal churches have kind of withered and the left has nothing to replace them. So in that sense, I think it's just great to be funding these super basic, just like get in a room together, group type things.David BeckmanAnd if I could just say, one of the challenges practically with the Hahrie's talking about radical hospitality is that let's just say that the federal government doesn't come with radical hospitality even if it's offering billions of dollars that can be used. So breaking that down, how do you apply for money? How do you even track? I'm a lawyer. I have difficulty with the Federal Register and I was trained and supposedly I'm supposed to be competent in that. And a lot of the investments that we're making and others I think hopefully will be too, is about creating some basic kind of open doorways that make the opportunities accessible and relatable when they are not, in any of our lives necessarily top of mind.We're also supporting faith communities through Mosaic and veterans who are trying to organize around climate change and other new or newer voices, nurses and healthcare professionals who I think reflect some of the experience and the research that Hahrie is talking about where it's a lot better to have somebody who you trust, who is in relationship with you, talk to you about an issue that you might not hear. The same if it's sort of an environmental leader on television or something like that.David RobertsYeah. And this is to Hahrie's earlier point. Once that relationship is established, it works for the next thing too, right?David BeckmanYeah.David RobertsThat's, I guess, what we mean by infrastructure. Like, once it's there, it's built and it operates beyond the immediate context. Hahrie, I wonder one sort of question I had is a lot of the money in the IRA is just for very practical, prosaic stuff machines, retrofits, whatever. And so most of the attention around all this is sort of building these networks, building this infrastructure to allow people to access that money. But I wonder if you've given any thought or David, I'd be interested to hear your thoughts on this too, is whether the money itself can be spent in such a way as to serve this goal.Spent in such a way as to encourage infrastructure. You know, not only sort of trying to get the money, but trying to direct the money in ways that are reinforcing of this larger goal.Hahrie HanYou know, one thing that I think about is this question of what are the mechanisms of accountability that are being created through the way the IRA gets deployed? Because ultimately that question of accountability is the one that's going to determine the extent to which these ongoing feedback loops are created in the ways that would favor ongoing reform or not. And so as all this money is being deployed for heat pumps or other basic machines that are needed to help decarbonize the entire economy, I think it's not just about spending that money once, right, but it's about restructuring the way the economy works in these certain kind of communities. And how can that be done in a way that will continue to ensure that the kinds of voices that we want at the table are continually there and that those voices are strengthened through the development of this whole new system?David BeckmanYeah, two thoughts on that. One, that a very kind of visual thing came to mind because there's a part of the IRA that is focused on environmental justice and on transportation projects in the that literally physically split communities, usually Brown or Black communities. And the opportunity actually to reconnect is quite a beautiful visual metaphor for what you're asking about and I think would almost naturally create the opportunities for communities to rediscover their connections in ways that have been literally physically severed by decisions. But beyond that, and more broadly, I think this is where advocates activists come into play because I think a couple of possibilities are out there.One is that the IRA is successful, but the experience of individuals and even companies is very solitary. I go to Home Depot, I get something from my house that costs less, or I can fill out a form and get a rebate check from somebody. That's a solitary experience. It may be very marginal in terms of anybody's psychological thinking about these issues, but if environmental organizations or those that are interested in these issues are able to surround those sorts of economic activities with new connection opportunities, information that as Hahrie says it is relatable where trusted messengers are delivering it.So that act of participating in the IRA's opportunities is also an act of stepping forward and opening yourself up to, well, you know what? That heat pump actually performs better than what I had before. Maybe some of these environmental ideas aren't so crazy. That's where you get chess not checkers. And that's so essential that activists and advocates working on climate really seize this opportunity to work dimensionally around these opportunities. Because if they don't, I think we could have a different level of success, but not something that would be as systemically transformational as is possible.David RobertsRight, yeah, I think about the analogy in fitness or weight loss, one of the sort of most common forms of advice now is find a group or a community or even just another person and make your goals public like put your goals out there and then be sort of accountable to that other person. Or I think about the conversation about game-ifying things. Just sort of like make things that are solitary social in some way, where you get social reward or social feedback or you have social accountability. A., that's good for you to have those networks, but also, like, you're just more likely to do those individual things if you have some social network that they're involved in.And your answer made me think of how you would think about doing that with IRA, right? Like somehow making the act of going to get your heat pump social in some ways so that it brings some feedback or accountability or so it weaves you more into some sort of group setting.David BeckmanRight, that's the play. That's the thing to do. And that can make a huge difference. Ask can organizing around money that is not actually available to individuals but is going to so many parts of the economy that impact people directly? Like ports, there's $3 billion for ports and $3 billion for reconnecting communities, I mentioned that a minute ago. And on and on. And that involves influencing government actors, as Hahrie was pointing out earlier, both to take advantage of the opportunities and then to do so well to propose projects that are going to make a difference. That's a classic organizing opportunity.David RobertsAnd of course, if you have the infrastructure in place, you can reward politicians who do the good thing, thereby showing the other politicians that there's positive feedback to be had in this direction.David BeckmanYeah.David RobertsDavid, one more question for you, which is slightly prosaic, but I have been thinking about it a lot, which is just this sort of initial round of throwing open the gates of environmental philanthropy money to this much wider variety of participants, smaller groups, et cetera, et cetera. In a sense, the initial rush of it is like a sugar high. Like it's great, I think everybody's excited. But over time you do need the foundation's obsession with metrics and accountability, I think we can all agree, has maybe sometimes gone overboard and results in a lot of paperwork and a lot of unnecessary difficulty and gatekeeping.But those needs are not made up, right? So are there any sort of performance metrics or what does accountability look like when you're moving into this kind of fuzzier relational stuff? What would it take for a grantee to lose their funding? What do you have in place in terms of accountability? Or have you thought about that a lot?David BeckmanWell, it's a good question and it's a question, I think that people in philanthropy and people who are looking for money think about a lot. The baselines, I think, are important, what's the context in which we're operating and a lot of the there's kind of basic due diligence that an organization is a 501(c)(3) and so forth and so on. But beyond that, whether it's a Mosaic context or a more traditional foundation. A lot of the metrics are artificially simplified, and they become, at times, bean counting operations. And I know this because I used to propose those to foundations when I was doing advocacy.David RobertsIt's easier, right? I mean, one of the things about it, it's very easy if you have a simple marker.David BeckmanRight, I'm going to write a report, and then I can send the report to the funder and say, look, I wrote a report, and if I'm lucky, I got on David's podcast, so I got brought attention to it. And I'm not suggesting that those things don't make a difference. I used to write reports, and I think they can make a difference in the right circumstances. So the question becomes, what are we comparing to? And I think where we are right now is sort of a bit of an artifice. Having said that, you can evaluate and learn from movement building just as you can grants, just as you can from any other.You just need a much more relational touch. And I would ask Hahrie might want to jump in on this because she's looked so carefully at the types of outcomes that occur. And I think the outcomes that we're looking for, we're looking to be patient funding. We're looking to recognize that we're not going to necessarily see some sort of vivid and tangible, like ribbon cutting, in a year, and that we're not really asking people to propose things to us which we know as a collective. Making decisions from the advocacy community, from the field, are simply unrealistic. So I think one of the most important things to do is to recognize that if we're going to build resilient organizations, that that in itself is the outcome we're looking for, as opposed to some sort of simplified, kind of artificially linear, kind of gantt chart that we can say was met or wasn't met.Hahrie HanI totally agree with what David was saying. And an analogy that I use sometimes in thinking about this is the idea that in the corporate world, in the for-profit world, we invest in companies all the time based on their assets, right? And that I would be foolish, in fact, as an investor, if I only evaluated a company's profits in the prior year and didn't look at their assets going forward, that I should, in fact, be really making judgments based on what they can do in the future. And I think in the same way, for movements, a lot of philanthropy, I think, tend to only hold movements accountable for the equivalent of their, quote unquote "profits."But really, what they should be investing in is what those assets are going forward. And I think one of the things that's really exciting about what Mosaic is doing is trying to strengthen those assets and then continually invest in them over time.David BeckmanYeah. One, just as a quick vignette, we've been doing this only a couple of years but it's long enough now to start hearing from grantees who themselves report in excited tones how amazing it is from their perspective to be able to get funding for things that would simply not even be possible in other contexts. And what it means if you're a small hub for advocacy in appalachia to have some communications money or to have some of the things that maybe the larger organizations just take for granted. And we're going to be developing a lot of that information because I think you're onto something, David.That mainstream philanthropy. To move hundreds of millions and billions in these directions is what we need to do. And that we're not going to be able entirely to tell people just to trust us, that we have to meet folks where they are and focus on developing sort of a comfort and a conversance with what we're attempting to do here.David RobertsWhat about and I guess I throw this one to both of you too. We're so behind the eight ball on climate change and a lot of other environmental problems that a lot of solutions are relatively obvious. Like, a lot of the things that need to be done are relatively obvious and uncontroversial. But you can sort of imagine different demographics coming at this from different places having some pretty fundamental disagreements about the theory of change or even sort of what kind of society we're shooting for. There's sort of a climate socialist left and then there's like a very sort of establishment center-left kind of big environmental group.And there are real philosophical and ideological disagreements. And I wonder just how do you deal with those when they can we find enough in common that they can be kind of papered over and we can move forward together? Or do you worry about those emerging in a more enduring way?David BeckmanWell, I mean, as you know, David and Hahrie those cleavages have already emerged in enviornmental advocacy. And I think we're in the midst of a reckoning about how larger organizations have operated, how big philanthropy operates the role of a just transition versus simply looking for tons of reduction. Part of Mosaic's, kind of, birth came not from me but from 18 months of really cogentive development with 100 different leaders that really looked at those questions. I think as much as infrastructure is important intangible ways as Hahrie is emphasizing, the relational components are essential. And they don't resolve every question whether you're in business or you're in sports or whatever you're doing in life, your own relationships.The fundamental question isn't whether people can truly agree on every last detail. It's whether they can form more productive relationships in the advocacy work they're doing. That's the goal. And if you can make an advocacy community of 15,000 organizations like 10% better that is a net effective investment that's huge in terms of its outcome. So we're having these conversations as part of Mosaic and they're going on across the field. And the question is, where do you build the infrastructure to have them in ways that are reperative? One of the focuses of Mosaic is about relationships and trust.And some people look at that when we show a PowerPoint. They're like relationships and trust. What does that have to do with the environment or climate? Well, actually ...David RobertsIt has everything has everything to do with everything.David BeckmanThat's right. But it's not a commonly you can look at a lot of foundation websites before you're going to find relationships and trust.Hahrie HanDifference and disagreement is inherent to any kind of collaborative effort, especially one at the scale, though, that we're talking about. And I think the idea that we're going to be able to either paper over or ignore those differences or get everyone to just get along sometimes feels like it's a frustrating way to approach the problem. And what we know from a lot of previous experiences and research and so on, is that what makes it possible for these kind of coalitions to navigate those kind of deep strategic differences like the ones you're describing about? Is the extent to which they create equitable power sharing agreements so that the super left-y groups and the center-left groups can kind of have the sense that we know we're not going to all agree on everything in the end, but we're going to be really clear about how we're going to make decisions together, about what we're going to do and how we're going to allocate resources.David RobertsWe're going to be heard, right. So often it's just about that as much as anything else.Hahrie HanRight, and so having a participatory board where there's this transparent governance process just kind of starts to create those habits of learning how to share power across lots of different theories of change.David RobertsI think that working together in person or like face to face often shows people that despite our differences, there is actually a time we can work together on there and we do have more in common than we thought. Whereas the common communicative environment these days of social media is more or less structured to have the opposite effect, right, to sort of exaggerate differences and to encourage people to dig in and be the most extreme version of their selves. So anything that works against that is a social good in my book.Hahrie HanYeah. I think that sometimes we mistake attention for power. And part of why social media can be so alluring is because it gets you lots of attention and the more divisive you are, the more attention you get. But to actually build power, you have to build those kind of bridges. And so what we have to do is kind of break that idea that having more attention is necessarily the same as having power.David BeckmanYeah. And I'll just say quickly that Mosaic launched into the teeth of the pandemic and we've made far more progress when we were able to actually meet together. It's a very different thing to look at somebody through. Effectively, whether it's your handheld screen or a screen on your desk, tends to reinforce the sort of archness that people can bring into a room where there are diverse perspectives, but there's nothing like the in-person meetings and even the socialization between people who don't know each other just to create a little bit of grace between them.David RobertsA final question that I'd like to hear you both weigh on, which is very general, but just this shift in approach that Mosaic sort of represents, of focusing on movement infrastructure, focusing on relationships and just sort of infrastructure building and having a much more diverse, pluralistic decision making structure, sharing power, all this kind of stuff. Very much for reasons we've discussed. Tax against a lot of the sort of trends and tendencies on the left in the past few decades. What's the theory of change here? What would you like to see if this catches on? Like, you know, in a positive world where this new strategy catches on?What would you like to see in, like, five to ten years? What can you imagine improving? What is the sort of theory of change here if this new approach takes over? What do you think is possible in the next five to ten years?Hahrie HanMy mind goes back to the point that you were making, David, earlier, which is that there's been this long standing pattern where it feels like the right invests in the kind of deep work that is needed to make large scale shifts in society and politics. And the left feels like it's swimming along in the shallow end all along the way. And we're in a moment right now where clearly the change that we need is deep and not shallow, and it's got to operate quickly and also in the long term. And so for me, it's like when you build this kind of infrastructure and mechanisms like Mosaic, what I would love to see in five years, ten years, is a kind of deepening of the movements and the network of organizations that are able to continually advance the kind of agenda that we really need.And so you can think back to the early decades of the rise of a lot of the kind of organizations that comprise the right. They sort of started at the same place that we are now, in a way, and steadily built over a couple of decades. That kind of death that is now being deployed.David BeckmanYeah. And I'll just build on that. I think, from a very practical sense, the conversation we're having today is about profound existential challenges that we're facing with climate change and beyond. I hold, as somebody who's devoted my professional life to this, both real pride in our grantees and the work that's being done. Where would we be without the laws that we've got and the work that's. Been done. And at the same time, this recognition that so many have that notwithstanding our best efforts, that those efforts aren't adding up to keep pace with the scale of the change that we're facing.And so, very practically, Mosaic and things like it, if it can be a model, is designed to create a more powerful and effective environmental movement that can effectuate the big change that we need. Not just theorize about it, not just plan for it, not just write about it, but actually implement it at scale and over the time period that's available to us, which, with climate, is not that long, by 2030. That's what we need to be focused on, and that's what Mosaic and things like we've been talking about today are really directed toward.David RobertsA positive note to wrap up on. Hahrie Han, David Beckman, thank you so much for coming on and talking through all this stuff, and good luck with your efforts.David BeckmanThanks so much.Hahrie HanThank you 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, Sabeel Rahman, former acting administrator of the federal Office of Information and Regulatory Affairs, discusses updates to regulatory policy that reflect a positive new approach to how climate (and other) regulations will be assessed and crafted.(PDF transcript)(Active transcript)Text transcript:David RobertsWhen President Biden first took office, his administration released a series of "Day One executive actions." Among them was reforming the way federal regulations are developed and evaluated. This is not exactly something the public was clamoring for, or even aware of, but it is foundational to the administration's ability to achieve its other goals.The agency in charge of reviewing proposed federal regulations is called the Office of Information and Regulatory Affairs, or OIRA, which sits inside the Office of Management and Budget (OMB). It is a fairly obscure corner of the federal bureaucracy that doesn't come in for much public scrutiny, but as the gateway through which all federal regulations must pass, it is immensely powerful in shaping the space of possibilities for any administration.A few weeks ago, OIRA answered Biden's call by issuing updated versions of two crucial documents: circular A4 and circular A94. The former contains guidance for agencies on how OIRA will evaluate regulations; the latter contains guidance for how it will evaluate public investments.These guidance documents have not been updated in more than 20 years, so this development is long overdue. The new circulars contain some fairly technical updates to the way OIRA does cost-benefit analysis — and the goals toward which it deploys cost-benefit analysis — but they are incredibly important, evidence of a generational philosophical shift.To unpack these changes, I talked with Sabeel Rahman of Brooklyn Law School, who served as acting administrator of OIRA last year while its current leader was being confirmed by the Senate. Rahman was intimately involved in designing the updated guidance, so I was eager to talk to him about the new approach, how it was developed, how it reflects Biden's priorities, and what it means for the future of climate and other regulations.I know this sounds wonky, but it is worth your time. I promise you will come out of it excited about cost-benefit analysis.With no further ado, Sabeel Rahman, welcome to Volts. Thank you so much for coming.Sabeel RahmanThanks so much for having me.David RobertsThis is awesome. I'm so excited to talk about this.Sabeel RahmanIt is wonky, but it is awesome ...David RobertsWonky and awesome. I've had sort of a side obsession with these issues for a long, long time, and this is really a perfect opportunity to jump into them. But before we jump into too many wonky details, I want to do some scene setting just so people know, kind of have a sense of what we're talking about in general. So when Biden came in, he issued this sort of list of "Day One," what they call "Day One priorities." And one of those was to update regulatory policy, basically how regulations get assessed and crafted. This is not something I think the public is beating down the door demanding this.This is something that has a behind the scenes air about it, but it's also clearly a political priority. So maybe just to start with, let's just talk about what is the Office of Management and Budget, OMB, what is OIRA, which is the Office of Information and Regulatory Affairs?Sabeel RahmanYes, absolutely.David RobertsFirst try.Sabeel RahmanThere we go.David RobertsWhat, OIRA is within it, and why what they do seems to have such political presence in the administration that it made its way to the top of this Day One priority list just to sort of set the scene.Sabeel RahmanYeah, absolutely. That's great. And thanks so much, David. And you're exactly right. This is very much kind of behind the scenes type of sets of issues, but really, really important for all the day-to-day stuff that government needs to do, and especially in this moment when we're thinking about the climate crisis or we're thinking about trying to address systemic inequality. So the fact that this was part of the Day One suite of actions from the present is, I think, pretty indicative. So there was the headline stuff, the new climate regulations, the Equity Executive Order, responding to COVID right there's, all of that headline stuff.And then this regulatory review piece was also there because that's actually part of the back-end to make all those other policies work. So we're used to thinking about the President comes in, president can make all kinds of sweeping policy decisions or kind of really important policy decisions. The day to day of how that happens involves the federal agencies. And the agencies, they can make enforcement actions, they can spend money or they can write rules. And it's that rule writing part that goes through the Office of Information and Regulatory Affairs. And so this office that you talked about, OMB, the Office of Management and Budget, builds the President's budget every year.They handle the budget side, but they also do a lot of really important work in terms of management. So how do agencies manage their personnel, operate strategically, have the highest impact for the resources they have. And then there's OIRA, which is the regulatory part, sort of the third pillar of OMB. OIRA works with the agencies will review under executive order going back to Clinton era and a practice actually dating even further behind that, OIRA will review major federal regulations, in part for the policy, in part for legal issues, but also, most importantly, to make sure they're consistent with the President's vision.And that makes it a really important nexus for all of this stuff, which is also partly why it can come in the crosshairs at times.David RobertsRight? And a question about that, OIRA, what sort of police powers does it have? If an agency develops a regulation, sends it to OIRA for review, and OIRA finds a problem, can OIRA just say, "No, you got to go back and try again"? Or is it suggestions? What power does it have?Sabeel RahmanRight, so it's quite a powerful office, and I should say, obviously spent the first years of the Biden administration in OIRA and was acting head of the office until the confirmed administrator came in a few months ago. But the powers under the original Clinton Executive Order, which continues to be in effect to this day, really makes OIRA the kind of last stop in the policy making approval process. So agencies have to get OIRA clearance for significant regulations now to get OIRA clearance. That's not just what does OIRA think, what does that office think? The wire clearance process is really a kind of governmental peer review.So the idea is that through OIRA, OIRA will get sister agencies, other parts of the West Wing, anyone who might have a point of view on the policy at hand to make sure everyone's on the same page. Right? And it's really that coordination that's the biggest kind of stick in that. If someone's got a problem, if people aren't on the same page, the rule is not going to go forward until there's at least an understanding about, okay, here's what it does, here's what it doesn't do. Everyone's comfortable with this, right?David RobertsSo it's sort of like the last stop a regulation goes to before going out to the public and consequently has enormous gatekeeping significance, even though it's completely more or less outside of public view, unless except for a small handful of nerds paying close attention to these things. And just to mention, you mentioned this in passing, but just to clarify to listeners, you were the acting administrator of OIRA for the first two years of Biden's term while the current administrator was going through the process of getting confirmed. So these changes we're going to talk about. You were central in shepherding them through and shaping them, were you not?Sabeel RahmanYeah, I think that's fair to say. There was an acting administrator in the first year, and I came in as the number two and then took over in the second year. But this was very much a big part of our day to day and a big part of the important work. Because going back to your first question, you can think about the individual regulations that are important trying to move good policy on labor issues or on COVID or on equity or on climate, but they all have to work through this existing regulatory review process. And so if we don't update that right.This process has been in place for decades, then you're trying to shoehorn kind of cutting edge policy through very old procedures, right? And it's got to be updated. So this is a big part of the work for sure.David RobertsYeah, and a final note on staffing, the administrator in question who has just confirmed is Richard Rivez. Richard Rivez, who is a law professor at NYU, one time dean of the NYU Law School, and a longtime heavyweight academic expert in exactly this stuff, cost-benefit analysis, et cetera, et cetera, which I just think is sort of an indication you watch staffing to see what administrations care about. This is, to me, appointing him indicates that Biden is taking this very seriously.Sabeel RahmanYeah, I think that's right. And Ricky is fantastic. His leadership has already been tremendous in his first couple of months. But exactly right. He's certainly an expert in cost-benefit analysis in the regulatory state. He's done a lot of work on climate and energy. A lot of his academic work coming in was also about how to make sure that distributional questions don't get lost in conventional analysis. And when you look at the draft, you'll see a lot of those sensibilities woven through. Now, that's not just Ricky, right? The President, in his Day One memo calls out specifically climate, equity, distribution, future generations, human dignity, all these things that we want good policy to be able to speak to.The charge was to go look at the review process and make sure that those values don't get squeezed out, don't get lost, that they're incorporated in a way that's rigorous and evidence based and all of that kind of stuff.David RobertsRight. One more background kind of philosophical note just to sort of set the table here also is debates about cost-benefit analysis go way back and are vigorous and ongoing. And there is a school of thought that says the process is sort of inherently conservative, inherently against pro social, long term action, and it should be scrapped in favor of something else. And then there's this other sort of school of thought, which I think Ricky Rivez is a good example of, which says, no, it is possible to sort of rethink and reimagine cost-benefit analysis in a way that serves pro-social, dare I even say progressive ends.And what we're looking at here is that school of thought showing what it can do. Overall, what we're seeing here is an effort to make cost-benefit analysis more, let's say, pro social and far seeing and less of the sort of conservative process that it has traditionally been. Is that fair?Sabeel RahmanI think that's fair. And I would say it's an effort to make the cost-benefit really the impact analysis because it's not just costs and benefits, right? There's other stuff that don't fit into those buckets. So it's really about a more holistic impact analysis and to make that sort of as strong and robust and cutting edge as it can be. And this was part of the President's Day One charge as well, because if you look at that original memo, that memo sort of reaffirmed the President's commitment to the enterprise of impact analysis, to the conventional sort of role that OIRA plays, but set this task that the role needs to be exercised in this more modern, cutting edge way.And that's what for me, reading it in context of the other sort of substantive Day One commitments was really important because that's the substance that the process has to be in sync with.David RobertsRight.Sabeel RahmanBecause we got big things that we're trying to do on climate, on equity, on all the crises that were swirling at that time. So I think you're exactly right about the broader philosophical debate. I should say this is so important because my own entrey into this, I'm a political theorist by training I spent before the administration I was President racial equity advocacy organization Demo.So we did a lot of work on these kinds of issues. And it's a very real debate that I imagine will continue and should continue about what is the right way to review and analyze public policy. But what I think is true, sort of regardless, is that we need something much more multifaceted holistic flexible than what we had before, even under previous Democratic administrations.David RobertsYeah, what we've got now clearly doesn't work. So let's talk about then specifically what's happening. So there are two documents guidances being updated here. The first one is called Circular A4, which is basically guidance on how OIRA assesses regulations. And then there's Circular A94, which has to do with how OIRA assesses public investment. And my understanding is that the issues and updates in A94 regarding public investment more or less track what's going on in A4. So I'm going to mostly focus on A4 we can touch on. If you have specific things to say about A94 later, we can get back to it.But I think if we cover A4, we'll more or less be hitting the big issues in A94 too. So A4 is a guidance for what OIRA is doing when it does this regulatory review. So maybe let's just start with what is this circular A4? Where did it come from? And how long has the sort of existing guidance been around? Like, who wrote the one we're using now?Sabeel RahmanYeah, absolutely. So there's a whole world of government documents that is not beyond the executive orders, and we're entering into it now. So Circular A4 has never been updated. It was first issued in 2003 during the Bush years and has stayed in place since then. So that, right off the bat, I think tells you a lot, right, about just kind of how important this update is. The fact that it's a circular that's really guidance not just for OMB and OIRA, but it's meant to be guidance for the agencies. The idea is that the agencies are using it as their sort of touchstone of here's what we should be striving towards.This is also the kind of stuff that OIRA, when your rule comes in to OIRA for final review, this is the stuff that OIRA is going to kick the tires on. And so it really kind of sets up those conversations. The other thing that's really important to know that it's a technical document. I mean, it's technical. If you read it, it's technical to read. But even its status is as a technical document, less as a political document because it actually goes through and the version that's released now is about to go through public comment and peer review.And so the idea is that it's supposed to represent a sort of expert state of the field that is not meant to be kind of changing every time the White House changes hands. It's really meant to be. This is what public policy and social science across the board, people agree that this is a kind of best practice. Right?David RobertsGot it.Sabeel RahmanAnd so the ambition here is to update that old document but really update it in a way that has that seal of approval from, you know, the evidence and the research and, and, and the field yeah. So that it can have some lasting, lasting staying power.David RobertsRight. So this is not something that was ever intended to be sort of updated administration to administration. It's supposed to be sort of a stable guiding document over time, but maybe like having it be 20 years old is maybe a little bit longer between ...20 years is probably too long. And I'm sure we'll get into the weeds of you can definitely see the drift that has happened right. As the world has moved on in the last 20 years.Yeah. So several changes to A4 substantive changes that I want to get into, but one just sort of kind of technical change right off the top that I kind of thought was interesting is because I've discussed it on Volts before, is what triggers OIRA review. And so currently the threshold was if the regulation has $100 million or more of impact, that triggers full OIRA review, which is a pretty exhaustive process. It's time consuming and staff consuming and that threshold has been raised to $200 million, as far as I can tell, just to sort of reflect inflation, et cetera.But the effect will be fewer regulation, like the number of regulations that needed OIRA review is sort of piling up and getting unwieldy and staffing shortages. So among other things, this will free up OIRA staff a little bit to focus a little bit more on the truly significant regulations. And I always like administrative capacity is one of my passions.Sabeel RahmanAbsolutely.David RobertsThis is sort of a way of freeing up some administrative capacities.Sabeel RahmanThat's exactly right. And the new executive order also puts a provision that that now $200 million dollar threshold will be updated automatically every three years indexed to GDP. Which is ...David RobertsMakes a lot of sense.Sabeel Rahman... technical and wonky, but just removes this problem of like a number that may or may not have made sense 20 years ago, definitely doesn't make sense now. Just like make it an automatic thing. And it is really a capacity management tool to your point. Like our civil service, I think is incredibly important. They're a crown jewel of our democracy as far as I'm concerned, and it takes staff time and attention and resources to make good policy in service of the public.You got to focus the efforts right on the most important stuff.David RobertsAlright. Okay. So let's talk about we're going to go through three big changes in A4. The first one is an update of discount rates. And discount rates are not something I think that are widely understood or widely discussed in the public. I once did a long piece on it. It was one of the first sort of super long wonky things I ever wrote. Just the wildly positive reaction sort of set me off on my career path. So I have a sort of fondness for discount rates, but let's just explain briefly, if that is even humanly possible, what do we mean by a discount rate and what is its significance?Sabeel RahmanSo the basic idea is how do we trade-off or weigh impacts that might happen today versus impacts that might happen a long time in the future? And in general, if you have a higher discount rate, you're really favoring impacts that happen right now because you're discounting impacts that might happen, say, 100 years, 200 years in the future for a lot of day-to-day stuff that doesn't really matter all that much. But anytime you're talking about policy, the obvious big one is climate crisis policy. But anything that is going to have a longer term multigenerational tale of impact.If you don't have the discount rate right, you're going to be systematically off. You're either going to be overweighting to the present and undercounting the future right in terms of costs or benefits. And we talked about how long it's been since A4 is updated. A4 has written into it a 3% discount rate that was written in in 2003. And so that's been the rate that agencies have been using for a long time. That's not the rate now. By all the best science out there.David RobertsThe way sometimes I try to explain it to people is like, what if I offered you I made you choose between I could give you $100 today or $105 in a year.Sabeel RahmanTotally.David RobertsOr how about $106 in a year, $107? How much would it take for you to delay getting your money? And if you would take $200 a year from now to compensate for $100 now, you have like 100% discount rate. Or conversely, if you're like $100 a year from now, $100 now, either one is exactly the same to me that's a 0% discount rate, like future benefits are worth exactly as much to me as present benefits. And it's just I think a good heuristic sort of indicates how much do we value future benefits. So a couple of things about this.One thing I want to ask about is the 3% discount rate that's in the previous A4, the unupdated A4 was developed via a procedure. And the new I saw Ricky give a presentation on this. The new discount rate, which is now 1.7%, was developed basically by using the same procedure, just updated numbers. So what is that procedure? How do you come to this number?Sabeel RahmanIt's super wonky. There's a model that OMB and a lot of folks in the field have been using to basically try to take into account all the different complicated factors that might weigh into the kinds of policy impacts that might happen over the long run. You're trying to factor in changes in human behavior, changes in market conditions, all the stuff like that. So what the proposal? The new A4 proposal has actually done is two things. One is it's done a straight, just keeping the old formula, but updating the data with the latest data that we have right up to 2022, or at least through 2021 as far as data was available, and running those numbers, that gets you on the same model, a much lower number because it's got more recent data baked into it of 1.7%.But the new version is also put out for peer review and public comment. And one of the questions that is being asked of expert reviewers is, are there variations to the model that should be considered now? That's a heavier lift, right? Because then you have to construct a new model. It has to be sort of something that meets field wide approval in terms of peer review and all of that. But the advantage of putting both of these out is say, okay, if we take a kind of small C conservative approach and keep the old model but just update the data, that already gets you a much more up to date number.David RobertsBut the old formula is drawing on it's sort of indexing on market interest rates, right? Mainly, is that the main sort of indicator that the discount rate is being derived from?Sabeel RahmanThere are a lot of inputs. That's one of the biggest ones. And in fact, one of the debates is basically in terms of the methodology, how much should one just sort of look to market interest rates full stop? And that's one of the modeling questions.David RobertsWe're calling it a modeling question, but really it's a philosophical it's a philosophical question because if you're looking at market rates, you're looking at sort of intra generational, like how much do individual investors care about their individual benefits in the future versus their individual benefits today? But when you're talking about something like climate change, you're talking intergenerational sort of how much do I value benefits for my children versus costs for me? Which might not be the same thing. Market rates might not be a good indicator of how much we value subsequent generations, right?Sabeel RahmanTotally. And it's also not clear how much are market rates, in fact pricing in the real catastrophic risks of climate or other types of existential threats. And in the new A4, there's some nice language sort of framing that the point of discounting is to really try to also take into account some of those kind of really hard to quantify really catastrophic dangers that might come down the line. So it is a broader kind of conceptual and as well as analytic question.David RobertsYeah, this was sort of the point of my piece that I wrote originally which is really like moral these are moral and philosophical debates sort of being waged undercover of math or undercover of models. So I wonder running the same formula gets you to a 1.7% discount rate, but then you also put the model out for comment, and I wonder, is there any sort of room in the guidance if an agency decides, well, the regulations we're developing have extraordinarily long time horizons and intergenerational effects, and so we would like to use a smaller discount rate? Like is there room for agencies to have sort of their own initiative here?Sabeel RahmanSo there is room for that. And arguably the old A4 had some room for this too, although you can imagine this was rarely took up on that offer because it's really hard to calculate this stuff, right. Agencies often don't have the bandwidth or the kind of person power to build their own model from scratch. So that's why the default number is really important. But the new version does include a discussion about or the new proposal anyway. It does include a discussion about there might be instance circumstances where the particular nature of the policy or the issue might have different dynamics and in those cases agencies can and should come up with variations and probably just as a best practice like run it with the 1.7 and then run it with the variation.So you kind of can show like have some an informed decision. But that's absolutely in there. And I think a general theme I would say of this new A4 is creating much more informed flexibility, right? That where things don't fit. Here's a good default, we've updated it, but where it doesn't fit, let's talk about how to make it work because the policy goal should be front and center and then you should build an analysis that can inform that rather than trying to shoehorn everything into a straitjacket.David RobertsOne other question about discount rates is one of the places where discount rates come into climate policy is the effort to determine a social cost of carbon. Which is another thing we've talked a lot about on this pod and another thing that I think Biden is updating. So just maybe talk a little bit about just even if you just change from 3% to 1.7% how that might sort of affect how highly you price carbon, right?Sabeel RahmanSo it is very big direct effect. Now we can talk in a minute about sort of the mechanics around the social cost of carbon update because that's happening in a different process. But basically this point about discounting future impacts has a big implication for how we might price the economic costs, the social costs of a ton of carbon pollution in the air. Basically, the higher the discount rate, the lower that social cost of carbon is going to be. Because many of those costs that might arise from too much carbon are long term costs, right? They're going to really manifest in the future.And so for discounting that then the cost can look really small. Now, this is important because you know this better than me, David, but in the social cost universe, one of the things that the Trump administration did, they put out their estimate of the social cost of carbon as extremely low. And part of how they got to that low number was to say, well, we're going to have a really high discount rate, among other things, right? And so if you do the math, then you get this really low number. Well, okay, but if that discount rate is not rooted in reality, then of course that number is kind of meaningless.David RobertsAnd also to get back to the intergenerational thing, you can derive some pretty absurd results from a high discount rate. All of humanity goes extinct in whatever 2100 under like a 7, 8, whatever, percent discount rate. We would hardly care today that's going to happen. So you can get absurdities on both ends with discount rates. Okay. So the sort of default 3% discount rate now has been lowered to a default 1.7% discount rate. And that is, all things being equal, going to make more regulations look cost justified as a rule of thumb. It's going to be easier to justify regulations that have long term benefits under this new discount rate.Sabeel RahmanYeah, and I would say that's just that it's more accurate, right? Because a lot of those regulations have those long term benefits. If we're talking climate, if you're talking lead poisoning, say, is another example inter-generational, not quite in the climate space, those benefits are there, we just weren't counting them. Right, and that's important to your point that regulations, people care as a policy matter, as a political matter, as a legal matter, how do the benefits stack up against the costs that we can put numbers to?David RobertsAnd I think it's intuitive too. I think if you just ask average people on the street like, do you care a lot about the welfare of your children? I think this is reflective, I think, of ordinary intuitions too. Okay, so discount rate is the first big thing that's updated in A4. But there are a couple of other really big and interesting changes too. The second one I want to talk about is distribution, basically. So I think tell me if this is accurate. I think traditionally OIRA cost-benefit analysis just looked at aggregate costs and aggregate benefits without distinguishing among who, what is the nature of the recipients of those costs and those benefits.And that has some pretty straightforwardly counterintuitive results. So, for instance, one regulation would prevent a disaster in a poor neighborhood. One regulation would prevent a disaster in a rich neighborhood. The latter clearly has higher benefits, right. Just because the property on the line is worth more. And I think it's intuitive to people that there's something wrong with that. Right? There's something wrong with that. So for the first time, this new A4 tries to introduce sort of distributional impact analysis. So maybe just tell us, what would that look like? What does that mean?Sabeel RahmanYeah, and this is another one of those things that I think under the old version there are a few sentences about, oh, you might consider a distributional impact it's not really dwelled upon. And there are definitely folks in OMB who had been pushing for this for a long time, just as pure analytic to your point. You can't really say you're doing a real analytic treatment of a policy if you're not thinking about those types of very real impacts. We would all say that, or I hope you would all say that, like $100 extra dollars for Jeff Bezos is not the same thing as $100 extra dollars for really anyone else, but in particular working class folks, right?So the new version has a much more expanded in depth discussion about distributional analysis. First, in terms of pressing agencies to really take it seriously. Second, in terms of giving just much more detail about how and when one might do that. So you should pay particular attention to distribution analysis to the new A4 talks about when you're choosing between different alternative policy designs. Suppose you have one version that might score a little better in terms of net benefits, but like, it's concentrating all the costs on people who are least able to bear those costs, and another version which is still scoring, you know, net beneficial, but is a much more even distribution of those benefits and of those costs.That's a relevant fact for decision makers before they decide on what the final policy should be. So that's something that the new A4 says agencies should look into.David RobertsDoes it provide a formula sort of telling you how much weight does income, or is it just sort of like pay attention?Sabeel RahmanIt does a little bit of both. I think the general charge, as I read it in the new document is saying that you should look into this. And here are some methods by which you might do that disaggregating the impacts by the relevant constituencies, whether that's by income or taking a racial breakdown or whatever the right bucketing is. But it also gives a discussion of what's called income weighting. And this is provided not as a requirement, but as a like, here's a tool that you could use as a way to sort of shorthand estimate how much should we weigh a dollar to a poor person versus a dollar to an ultra-rich person.The new document has put an estimate of 1.4 as an estimate for what's called the income elasticity of marginal utility. Meaning how much more is that marginal dollar worth to you, depending on where you are in the income level. And so that's a pretty new important thing to actually have that number crunched and they're available sort of on the table for agencies to use as a shorthand.David RobertsThis is a little bit of an aside, but it's a point that I think is worth making, which is, I think when people think about at least people in our world, when they think about federal agencies, I think, tend to think about like EPA, which has a sort of staff of dozens and all these sort of PhD economists on staff, armies of analysts. But most agencies are not that big and don't have that much administrative capacity and can't sort of sit down and develop their own models for these things. This is not like a heavy hand of central wonks here. The agencies need this.They need this guidance, they want help doing these things.Sabeel RahmanYeah, I think that's such an important point and I think this is also not a flipping of the switch, right? Like having the new guidance, you also then need to your point kind of to have some time for the agencies to get used to this, to build some muscle, to build some capacity. And so I think getting this out now with a couple of years still left in this first term, to actually then have some runway for agencies to start using these new approaches, see what's working, see what's most helpful. I think that's the kind of work that I would anticipate Ricky and Revesz and the team to be digging into going forward.David RobertsOne other question about this. When we're talking about distributional impacts, are we just thinking of income or are there other indicators?Sabeel RahmanRight, so absolutely income, but also could be broken down in different ways. And so you have to look at in the guidance itself, it actually has this whole section saying that the agency, depending on the policy, should really be thoughtful about what is the most informative and relevant set of breakdowns. And it might be more than one income, race, geography, sexual orientation, there are a bunch of different ways that one might break it down. You obviously can't do every category for every policy that would be multiply really fast. But I think the point of the guidance is to say think about what are the constituencies and communities who are most likely to be impacted differently by the policy.And then devise an approach, ideally quantitative, but if not even using qualitative assessment of what you can to think about rigorously, how are those different communities being impacted? And then having that inform the policy choice. Because at the end of the day, it's not a make work exercise. Right. The point of this is are we making good policy that serves the public and that is attuned to the very real disparities that we have in our country, right? That's the issue. So this gives a framework to do that, but it's really going to then be up to the agencies working with OMB and OIRA folks to make it real.David RobertsKind of already asked this once, but I want to return to it. So if I'm an agency reading this, do I read this as I have to convince OIRA that I thought about this? Or is this a gentle suggestion from OIRA that I can take or not take? Is this now going to be a sort of a requirement for new regs?Sabeel RahmanIt's a great question in part because I think different OIRAs have different styles depending on the administration, right? When I was there, we very much saw ourselves as working hand in glove in partnership with the agencies to make good policy, right? But that said, OMB's role is also to sort of kick the tires on whether it's the budget or the regs. And so I do think it's not a you must do this, but it is a very, very strong suggestion about the kinds of things that one should look into. And look even now, under the old A4, it's not like every regulation does every single thing that A4 talks about because there's so much in there.So in that sense, there's lots of tailoring, lots of flexibility on what's needed. But it is very much a like, this is the bar, this is what we're going to be looking for. And when OMB comes asking for stuff, the agencies know that they got to pay attention to that.David RobertsOkay. So first, updated discount rate, second, the strong suggestion that agencies do some distributional impact analysis. The third thing, which is also quite interesting, I think, for insiders, because this has been a point of contention for a long time, is the suggestion that agencies take the international impacts of regulations into effect. And it was, we mentioned earlier, the Trump administration's sort of ludicrously low social cost of carbon. Part of how they came to that ludicrously low number is very explicitly ostentatiously, even saying we don't give a damn about how our regulations impact other countries, that we just don't care.The only numbers that are feeding into our calculations are how does this benefit or cost Americans? I think just as sort of ostentatiously says, no, that's real dumb and also morally horrific. So what exactly does A4 say about international impacts? Is it similar to distributional in that this is a strong suggestion?Sabeel RahmanI think of it as opening up the aperture to allow first stuff that had been squeezed out before. Right? So not every rule is going to have massive global implications, but many of them will, and those ought to be taken into account. And so I read this section for those falling along at home. The geographic scope of analysis, there's a lot of great language in there about the different ways in which global effects might come into play. So it might be that there are non US citizens who are living abroad and face certain impacts that might have parallels in the US.So they're good proxies. There might be experiencing an externality of US decisions. Climate comes to mind there as well. So there are a lot of different kind of variations laid out in the guidance. The point is that the guidance says that you should think about the global effects and incorporate them into your analysis. It even talks about how, if it makes more sense, include that as a separate thing, right, that you have your traditional analysis, but then you could also sort of provide a separate analysis of the impacts abroad, if that's the more sort of feasible way to get at it.But you really should be thinking about it.David RobertsAnd is this similar in that you've provided a formula that agencies can use or not use? And if there is a formula, I'm wondering sort of like how much less do we value a foreign life relative to an American life? Is there a number there on how much discounting we're doing geographically?Sabeel RahmanRight. So not in A4. The discussion A4 is more qualitative in terms of just guidance to the agencies. And I think, like with distributional analysis and discount rates, there'll be rules where there will be trade offs that have to be weighed, I think, compared to right now, where we don't have consistent analysis of what those trade offs might even be, it's hard to even make good judgments about them. Right? And so I think the idea here is let's take that on, do the analysis, do the work. And then there are all sorts of reasons why a policy might come down one way or another.It's hard for A4 to be prescriptive in that way, but A4 can say you need to take these issues seriously, right?David RobertsAt least think about it.Sabeel RahmanYeah.David RobertsSo those are the three big things. And like I said earlier, roughly those same issues are reflected in A94. When they're talking about public investment, I think maybe one thing worth picking out on A94 and talking about specifically is and this was a little bit of a mind blower to me A94 as it exists has a 7% discount rate for investments in public infrastructure. Which just seems to me crazy, because public investments in particular are designed for long term benefit. That's the whole point. Like infrastructure investments and stuff like that are like we have a whole history in our country of huge investments we made that paid off handsomely over the long term but wouldn't have penciled out under a 7% discount rate.So where the heck did that 7% discount rate come from in our public investment considerations. And how does A94 change that?Sabeel RahmanBig difference between A4 and A94 is that A94 is focused exactly on, as you said, David, the kind of government's expenditure on public investments. It's always been sort of related to A4, but a little bit different. The 7% number in A94 was aligned with A4 originally, and that A4 had a 3% number and then also had as an upper bound for those types of capital investment related rules, had that 7% in there. But that also is really in sore need of updating. And so that's what A94 does. I think what you'll see in the new version, without getting too deep into the weeds, is that the new version is more aligned with the new version of A4.The numbers are a little bit different to sort of take into consideration the particularities of what, say, the budget side of OMB has to take into account when they're dealing with federal investments in buildings and stuff like that. It's a little bit different from regulation. So that's where the divergence comes from. But that old 7% number, I think, is reflective of where we were with the thinking on this stuff in the early two thousands.David RobertsIs there a new number for discount rates for public investments or is it not that simple on this side?Sabeel RahmanYeah, it's a little bit more complicated for the investment side, but that's also going for the same kind of peer review and public comment. So I think we'll know more in the coming months about where A94 lands. Exactly. But what's exciting and important is that A94, the last revision was in, I think, 1992, not quite as old as A4, but still pretty old.David RobertsYeah, that's wild. And A94 also gets into distributional stuff and international stuff.Sabeel RahmanReally important, yeah, really important distributional and global effect language in there.David RobertsAnd part of this, I think part of the point of all this, one of the points of all this was to align A4 and A94 better, so we have some sort of coherent they had kind of drifted apart in a way that made no sense.Sabeel RahmanTotally. And full props to the OMB Chief Economist team who they sort of are the keepers of A94 in the sort of OMB ecology. I know they've been working really hard on all this.David RobertsSo those are the three big changes. Are there other changes in A4 that you think are worth calling out? Like there's something having to do with risk and risk tolerance and risk assessment that I don't even know how to create a coherent question about, but feel free to talk about it.Sabeel RahmanTotally. Yeah. No, I appreciate that. I think there are three other buckets of things that I'll just highlight briefly because they're important and also, I think really brings this up to 2023. So one is what you were just alluding to. There are a bunch of things that will mean a lot more to our economist and economic modeler friends who might be listening, but they really amount to kind of bringing A4 into line with sort of cutting edge of economic theory. So how do we take into account uncertainty and uncertain effects that we don't know with perfect certainty these estimates, right?Let's factor that in. Taking into account risk and risk aversion, right? People are willing to pay more to be protected from the risk that something might go haywire. It's kind of typical understandable human behavior, but that's not always baked into the models. So there's some technical stuff. That's bucket one. The second bucket is there's a lot of really interesting what I think of as like macroeconomic structure, things that are baked into this new version. So normally reg reviews, reg analysis would be you're looking at the new regulation almost at a micro level. Like, you're just looking at that regulation and you're kind of holding the rest of the world kind of constant.But the new A4, it talks about, for example, business cycles. There might be regulations that have different benefits and costs when we're in a recession versus when we're not. If you think about, for example, social insurance policies, if they're designed to be countercyclical, those benefits really only kick in under certain conditions that may not be around when the regulation is being written, right? So it incorporates that. It incorporates a lot of great new thinking about market concentration and competition that's been a big focus of this administration, being attuned to the ways in which concentrated ownership of industries can lead to higher prices, less stable production, kind of all the antitrust, anti-monopoly stuff that is happening.So that's baked into A4 much more. So these kind of like big macroeconomic conditions.David RobertsMacroeconomic context, which you would think is like totally like duh, of course.Sabeel RahmanRight. And then the last bucket is also another like you'd think, of course it's not rocket science, but it's a really important shift is that the new A4 has a lot more language and guidance about what to do with those impacts that you can't put numbers to because they're obviously real. And there and it even talks specifically about things like civil rights and civil liberties, democracy, equity. These are goals for good public policy. They may not have number values and in some cases ought not to have number values.David RobertsOr the welfare of other species. If I can just ...Sabeel RahmanYeah, there's a section there about ecosystems and ecological impacts as part of the hard to quantify discussion. So there's tons of really important implications of that that you could imagine for everything from ecology to equity that I think this new A4 is much, much better at.David RobertsAnd those, I think, are really sticky to deal with because there's no formula. I mean, even a candidate formula, right? There's just no way to come up with a formula for how, like, you know, how much should EPA weigh beauty or whatever. Or whatever. But as you say, those things exist and matter. So is this just basically OIRA saying to agencies, take note of think about these things, like, take these things into consideration. Is that all there is to it?Sabeel RahmanI think it's two things. One is that take into consideration and bring those considerations into your analysis. Because a lot of times agencies are thinking about that stuff, but they've struggled in the past at times to bring those very real considerations into an impact analysis, given how narrow the old A4 used to be. And so then you had this kind of weird, right? Like, we know that part of what we're trying to do is protect ecosystems or protect the dignity of disabled persons who a curb cutout is expensive to have on every sidewalk, but absolutely critical to just look at basic human dignity if you're a disabled person of a particular kind.Let's take that obvious real factors that are in any human decision about this kind of stuff and let's actually give it a proper pride of place in the analysis, and then it's up to the agency to sort of make the all things considered best decision. And that's something that would be worked out through the review process with DOT might come to a particular view about what the rules should be for lavatory access for disabled persons on an airline. That's going to have costs. It's going to have qualitative considerations about basic civil liberties, human life and safety and dignity.And then if we can get everyone on the same page through the review process that this makes sense, this is good, then that should be the way we go.David RobertsRight, so this is or saying we're going to give you wide-latitude to think about these things and incorporate these things.Sabeel RahmanYeah, absolutely. And a lot of times I think people who are more attuned to the hard sciences might feel like this stuff can be squishy and amorphous. I always found it very straightforward. Give us your reasons. Like any good like any good piece of writing. Give your reasons, give your evidence. And just because it's qualitative doesn't mean you don't have reasons and you don't have evidence. So talk about it.David RobertsAnd even if you think it's arbitrary to pick a particular number, it's quite clear that the number is not zero, right. The default has been zero, which is clearly against our common values.Sabeel RahmanAbsolutely.David RobertsOkay, so that's a lot of changes. A lot of changes to pack in this technical circular. One other thing I saw at one point the term cost-effectiveness analysis. Is there some effort to replace the whole sort of notion of cost-benefit analysis with something else? What's the deal there?Sabeel RahmanYeah, I would put in the theme of much more flexibilities right, to get the right kind of analysis for the policy at hand. So I think people are familiar with traditional benefit cost-benefit analysis where you kind of monetize everything on both sides of the ledger and then you sum it up and then you're done. But especially when you're talking about things that might not be quantified quite as well. Right. There are other variations that the new A4 talks through in more detail. So cost-effectiveness is one suppose you have a kind of easy to understand qualitative goal that may not have an exact number that you can measure, but you can measure the costs.Right. So we want to increase safety in the workplace. We can proxy that in different ways, but the proxies are all kind of imperfect and we know how much it would cost to increase the safety requirements or slow down production so that people aren't hurting themselves in a horrible way. Right. So then you can sort of do a cost effectiveness comparison of how much boost to your goal are you getting for some higher cost? And then the policymaker can say, yeah, that's justified because that goal is really important. We've done some work to know what the costs are, and we think this is the overall more cost effective way to get to that goal compared to some other variation.David RobertsRight. This is something that debates over cost-benefit analysis have been batting back and forth for a long time, which is the sort of premise of cost-benefit analysis is you let the cost-benefit analysis tell you what your goal is, whereas cost-effectiveness is, here's the goal. Now let's work backwards what is the most cost-effective way to reach that goal, which is a very different way of approaching.Sabeel RahmanYeah, absolutely. And I think if I could pin down sort of the ethos of this overall A4, I think you just put it really nicely, David. The analysis should be informing the policy, not the other way around. Right. And so there's another variation on this that's called breakeven analysis that's also talked about in the new A4. It's a similar kind of idea that let's say we can't actually put a hard number to the benefits, we can't monetize it for whatever reason, but can we figure out sort of like, what's the threshold that if we think the benefits are above that number, then we know we more than break even.So even if we can't put a hard number to the benefits, we know with good certainty that the benefits are above this level of what the cost might be. And so these are all imperfect, right. I think for folks who are wary of quantified and monetized cost-benefit analysis, I think these will not get you all the way there from that critique. But what it does do is give you a lot more options to say, let's stop shoehorning good policy judgment into an old straitjacket process.David RobertsRight. Another of the Biden administration's big priorities, big pushes, is to bring the public more fully into these deliberations.Sabeel RahmanYep.David RobertsAnd I just wonder, I have a couple of questions about that. One is just what does A4 say about that? In what way do you recommend that agencies do this?Sabeel RahmanI'm really glad you asked this because this is also something I feel super strongly about and I think they've done some good work on this. So alongside A4, the President also issued, when the new A4 came out, an Executive Order, which included some new requirements around public participation. So one, it's a much stronger emphasis for the agencies to do more proactive early engagements with impacted constituencies as they're designing their rules. So by the time a rule comes into OIRA review, a lot of it is I don't want to say cooked already, but a lot of work has already been done.And a lot of times it's much more impactful and meaningful to have robust public participation earlier in the process, especially if you're talking about underserved constituencies or impacted groups, right? Those are the voices that you need to hear early on. So there's a general charge under this administration in a number of different Executive orders actually, to press agencies to do more of that proactive early engagement. Then there is a switch to the OIRA review process itself to open up that process to more participation as well. So right now, an interested party could request a meeting with OIRA when they're reviewing a rule to give their views.It's kind of a wonky thing. Not that many people know about it.David RobertsHow is that different from public comment?Sabeel RahmanIt's very similar to public comment, but it basically takes place during the OIRA review process before the rule goes out for public comment. And the rationale is there might be nuances or details that if you're from an impacted community, you might have some additional information that might be worth making sure is emphasized or shared as an input. Those are not backs and forths. Right. They're basically listening sessions. But the new Executive Order continues that practice and charges OIRA with making that much more accommodating and inclusive, especially to historically marginalized communities, communities whose voices may not have sort of K-Street lobbyists, right. Easy for them to go.And then the last thing that it does, it also puts a lot more meat on this process that's called petition. So communities, civil society groups, individuals can petition agencies to push them to take action on an issue that maybe the agency hasn't thought about before or hasn't been as proactive on those petitions, then kind of sit there. The new process creates some more coordination so that when someone brings a petition, OIRA is also aware of that.OIRA can then also sort of check with the agency, like, hey, this petition, what's the response to this petition? How are we responding to the needs that folks are bringing to you? So these are a lot of little pieces here and there but the sum total of it is to try to improve that participatory and inclusive aspect of the rulemaking process.David RobertsWell, one other question about that, which is I'm sure you're aware of the sort of larger conversation going on around liberalism these days which is that it's become slow and that NIMBYs are stopping everything and it's hard to build anything and it's hard to move quickly. And basically we've become sclerotic. And sometimes that critique takes the form of saying basically like the public has too many ways of inserting itself and exercising a veto here and we need to streamline things and do things faster. And this seems intuitively on the surface at least, to tack against that.So how do you think about the kind of need for moving expeditiously relative to the need for public participation?Sabeel RahmanRight, it's such an important question. I'm glad you asked it. I think there are two things to bear in mind. One is just on these proposals here. These are all very much sort of inputs. These are not decisional or veto types of discussions. Right. So I think things still move along and the overall time frame of the regulation OIRA has a clock under the old Executive Order which has stayed in place for how long it ought to be taking on rules.David RobertsAlthough can we just say it has frequently exceeded that alleged clock. I remember all the complaining about OIRA that used to go on when Cass Sunstein was in charge under Obama. Like OIRA was frequently charged with slow walking these regulations.Sabeel RahmanI wasn't there during that time. But one of the things that I'll say is when there's a delay, usually it's because there's actually a dispute as opposed to someone's just kind of holding it up. But one thing I'm really proud of with this administration and this OIRA is that if you take ARP, for example, we set an OMB, a two week cap, a two week ceiling on any this is American Recovery Plan at the height of the economic freefall right in spring 2021. All that money had to get out the door because the economy was in such grave danger.People were hurting right during COVID, so we set and we kept to a two week turnaround. Every single piece of ARP policy came through OIRA, went through OIRA review and was done in two weeks or less because we had to, right? And I say that to say where there's will and focus and dedication, the process moves. And one thing I really like about this administration's approach is that it has tried to balance we got to get stuff done with. We got to also kind of have evidence and do things robustly. So to come back to participation then I think that the critiques are important and well founded.But to my mind it's not a choice between participation or effectiveness, it's a question about what kind of participation to make the policies effective. So you're not going to have good policy if you don't hear from the people you need to hear from. But b, there's a way to hear from them in a way that is efficient. Right. This is why that upstream early engagement is so valuable because you get everyone together, you get all the inputs you need and then you design the policy right the first time around and then you don't have to have 50,000 kind of nipping at your heels types of conversations downstream.People are going to disagree, that's fine, you can litigate disagreements at the next election or with the next regulation or whatever, but that doesn't mean we shouldn't be hearing from people.David RobertsYeah, and there is a value just to being heard. I think a lot of people, they might not say this explicitly, but I think a lot of these groups will feel like there's progress being made just if they are convinced that they are genuinely having a voice in this.Sabeel RahmanAnd that's something I saw a lot of in the time I was in government too, that it is really important the government serves the people and it's hard to convince people you're serving them if you're not actually hearing from them or seeing them. Right. And that doesn't mean that you have to do everything that everyone says because we have a big country. But I do think that's an important piece of this.David RobertsWhat's the process now? So this is A4 and A94 have been put out for both public comment and peer review, which are separate processes. So what happens next? What's the road?Sabeel RahmanSo over the next maybe couple of weeks, there's still some time left in the public comment period. So if you have listeners who might have views about either of these documents after listening to this, they should absolutely weigh in, particularly if they have expertise on some of these issues. So public comment is ongoing that will close in a couple of weeks ...David RobertsKind of pause there on public comment. I'm just curious if you have any sense or guesses about how public comment is going to unfold. My gut instinct is because most of these changes will have the effect of making it easier to pass big regulations in the public interest, that industry is just going to knee jerk, be against them and rail against them in public comment. Is that sort of how you expect public comment to shape up this sort of like public interest groups versus industry yet again? Or is there more nuance to it?Sabeel RahmanI hope it ends up being more nuance than that because there's a lot here. Obviously. I think that's anytime you're talking about regulation, we live in the world, we have to be attuned to that dynamic. But I think my hope would be that there's enough here that is evidence based, empirically, rigorous, and just like obvious updates, right? Like what you're talking about on discount rate and on distribution analysis and so on, that I hope we'll get a range of comments. It'll be particularly important, too, to sort of get comments from the field, as you were saying, from economists, but also anthropologists and sociologists and people who are working it in community on the grassroots level about what kind of distribution analysis will actually help, you know, make sure their voices are counted right.Like, I think we want to cast it open so it's not just the same, you know, conventional wonks as as much as we do want to hear from them too.David RobertsIndustry lawyers.Sabeel RahmanRight. I think a bigger set would be lovely because this is some of the source code of an executive branch that can honest to God serve the public interest and serve all of us. I really believe that. So I hope we hear from more people. So first there's comments. Once that comment period wraps up, the peer review should be happening. I'm not sure exactly when, but I assume they'll be doing it in parallel to that because peer review can take a long time.David RobertsAnd is this peer review just like the same that academics are familiar with?Sabeel RahmanYeah, exactly. It's meant to be a similar process. So the government actually has a pretty standard peer review process for technical documents that this review, I assume, will be following. And that's modeled on sort of scientific, academic peer review procedures. So that will go for a couple of months as well. And then these documents should be finalized. The timeline they gave was no longer than a year. Basically by play it forward a few more months, maybe it's a little sooner, maybe it's a little later, but I think it's going to move pretty quickly, especially once the comment period closes, just because this is way overdue and is important.David RobertsAnd you think these will be finalized in time to actually inform the writing of substantial regulations from the Biden administration?Sabeel RahmanI hope so. I think that certainly is the goal with this charge coming out on day one and then now the full proposal out here at the start of year three. So I really hope that's the case.David RobertsAnd once they're in place, I guess I'm wondering how resilient they are. Like, if there's a DeSantis administration in 2024, is there anything stopping them from just ripping these up and going back to something older? Do these have any resilience against political chicanery or an administration can do what it wants?Sabeel RahmanThat's a tricky question in a world where when you look at what's happening in places like Florida and elsewhere. I think what ... I'd say two things about that. One is that it is meant to have staying power. And part of the point of making sure this document goes through peer review and goes through public comment and goes through all the things that a long lasting, non political technical document ought to go through. This is that kind of enterprise. And so the old A4 lasted for 20 years, and this new version is very much an update to that.It's not junking the old enterprise at all. So I think the hope would be that that would continue. Now, that said, when you have people on the right continuing to organize around things like Schedule F, the Trump administration's plan to junk most civil service protections, for example, there's a lot of stuff that is brewing on the right. Just to say that is really aimed at destroying a well functioning, evidence based and transparent bureaucracy. But that's a broader question. That's not an A4 question. That's a broader question for all of us to say that, okay, yes, we're having a debate about policy and about all sorts of kind of horrifying other things that are happening too, on the far-right.But at some point, we got to say, if we got to have a government that serves the public understanding that the public doesn't always agree on a lot of policies, we can do that, right? We can do that with evidence and with transparency and with good procedures that allow for participation and evolution of ideas. There's a way we can do that. It's possible to have a government in this country that is effective and that deals with our complexity and our diversity, but not if you have bad actors who come in with a desire to bring a wrecking ball, right?David RobertsIf they want to come nuke the administrative state, A4 is not going to stop them.Sabeel RahmanRight. And I think it's sort of for all of us who care about these issues, I think it's important for us to care about wonky stuff like A4. But I also think it's important for us to care about those kinds of existential threats to the project of shared collective government in the first place.David RobertsYes. Alright, well, that seems like a great place to wrap up Sabeel Rahman, this has been so helpful, so clarifying, and I love getting into the wonky guts of stuff because, as you say, it's a source code. It's going to affect everything that comes out of the government after this. So it's really great to get a clear view of it. Thanks so much for coming on.Sabeel RahmanYeah, thanks, David, for having me. This was 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 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, Jennifer Garson of the Department of Energy’s Water Power Technologies Office discusses the state of hydropower in the US and where the industry is headed.(a)(Active transcript)Text transcript:David RobertsFor decades, hydropower has been most common source of renewable electricity in the world. (In the US, it was passed by wind a few years ago.) Pumped hydro — large hydropower facilities in which water is pumped up and run down hill to store energy — remains the most common form of energy storage, both in the US and in the world.Even as the vast majority of media attention in the clean-energy world goes to wind and solar power, hydropower continues churning away in the background, generating and storing vast amounts of renewable energy.Hydro has a long and storied past, but does it have a future? What's going on with hydropower these days? Is there any prospect of building new dams or of finding more power in existing dams? What's going on with small hydropower, on rivers, streams, and reservoirs? And is ocean energy ever going to be a real thing?I've taken hydropower for granted for a long time, so I decided it was finally time to dig into these questions. To do so, I contacted Jennifer Garson, head of the Department of Energy’s Water Power Technologies Office (WPTO). The WPTO oversees a sprawling network of prizes and grants meant to encourage hydro and marine energy projects. I talked with Garson about the future of large dams in the US, the promise of small-scale hydro for local communities, and the uncertain future of marine energy.Alright, with no further ado, Jennifer Garson, welcome to Volts. Thank you so much for coming.Jennifer GarsonThank you so much for having me.David RobertsAlright, so we normally normally here on Volts, we do the sort of deep dive into one thing. But this here we're going to attempt something slightly different, which is a broad overview of a fairly large category, larger than I think I appreciated before I started digging around and just try to get a sort of global sense of where it's at. Because I know that from my experience in clean energy, I've sort of, like, had hydro in the back of my head as kind of this steady presence, a little bit like nuclear, like a steady presence in the background, but not something where anything kind of dynamic or new is happening. And I think you probably disagree with that.So let's get into it. So just to start with, what are the technologies encompassed by the terms "hydro" and "marine energy" that your office covers? What is the remit?Jennifer GarsonYeah, so glad you asked that. And it is, sort of, just by nature of our office as we're structured that, we have two very interesting, but two very different types of water power technologies. So the first that you mentioned is hydropower. Hydropower really has been delivering power for the last 100 plus years. It's both the conventional hydropower, so very large behind the reservoir, big dams that people usually envision when they're thinking about hydro. We also have smaller non-powered dams that we power with hydropower. We also have run-of-river systems that actually have diversions in addition to dams, where you actually have water flowing to the side of the river. And then we also are thinking about hydropower. Even in conduits and canals, how do you use existing water infrastructure to provide power, whether it's for water treatment or irrigation, a whole number of different ways that you could use existing infrastructure for water power.Jennifer GarsonOn the other side of the portfolio, we have marine renewable energy. So while hydropower is probably the oldest form of renewable power — although potentially, arguably wind is too — marine renewable energy is the most nascent form of renewable energy. And that's really looking out to the power of the ocean. Everything from how do we kinetically capture power, how do we use gradients to capture power. So everything from tidal power, wave power, ocean thermal energy conversion, even salinity gradients and even pressure gradients, really looking at a multitude of ways of when you look out at the ocean and see all the power that's contained in it, how do we use different power capture systems to harness multitude of ways that the ocean generates power?David RobertsGot it. So water on land and water at sea ...Jennifer GarsonWater everywhere.David RobertsWater everywhere. So let's start then with big dams, because I think this is when you say hydropower, this is what springs to people's minds as sort of the conventional form. I think conventional wisdom is that we've got a lot of big dams in the US creating a lot of power and it's steady and it's good, but that's more or less it. And so this is my first question. It's just do you think we're going to build any more large dams in the US or large, dam-wise, are we basically tapped out?Jennifer GarsonSo that's a really excellent question. I think there's a general agreement that we are not going to be building. Any large dams on existing waterways. I think in terms of large conventional hydropower, we are most likely tapped out. Particularly here, I should say, in the United States. That isn't necessarily true elsewhere across the world.David RobertsRight.Jennifer GarsonWe do think about building other big structures like pump storage, but those have been now leaning more towards what we call closed-loop systems, which are two bodies of water connected, but they're usually constructed and fabricated bodies of water. They're not connected to an existing large river. So I think for the United States, we're not going to see any large behind the reservoir, conventional hydropower, big dams built on any of our riverways anytime soon.David RobertsAlso on the subject, I've heard conflicting things about the carbon emissions of big dams. I feel like there's been some new research lately that shows that those emissions are higher than we thought. Because you're disrupting a bunch of soil, you're creating a pool where things rot and produce methane. So what's our latest state of thinking on the large dams that exist? Are there large dams that exist that we think are less of a carbon asset than we thought, that we think need to be closed down for environmental reasons?Jennifer GarsonSo I think those are actually two separate questions, one is what is the science behind say, methane or reservoir emissions, particularly given vegetation? We are conducting studies right now at the Department of Energy really trying to understand what types of sensors and measurements are needed to either validate or invalidate that as a theory. I think that there's still unsettled research on the magnitude of the impact, also the timing of the impact. So the other thing that we talk about when thinking about reservoir emissions is, if you're talking about vegetation rot at the bottom of a reservoir for a dam or a facility that's been around for a long time, does it still hold that you have emissions or methane challenges? And I think we still need to do more research on both the kind of temporal nature and the magnitude of the problem. It's not to say that we think there's no problem at all or there's a major problem.I really think it's a critical research question that we are fundamentally trying to address with kind of true scientific method. On the environmental piece, there's obviously been a lot of both discussions and controversy about dam removal. And I would say even ten years ago, it was not a conversation that the hydropower industry was really actively engaged in or even potentially willing to engage in.Jennifer GarsonBut over the last few years, there's been a really interesting kind of convening between the environmental and the hydropower community actually under ... it's called "The Uncommon Dialogue", it was run by Stanford University that was really trying to get together the environmental and hydropower community to have tough conversations like dam removal, but also dam repair, rehabilitation, and retrofits. And we actually just announced a few weeks ago, through funding that we received under the bipartisan infrastructure law, that DOE is actually going to fund more participation in that uncommon dialogue stakeholder strategy sessions, so that we can really understand where some of the opportunities at both environmental benefits like flood management, temperature control, but also the types of tools and research that we need to understand, "What are some of the environmental implications either of leaving power dams in existence?"Dam removal isn't necessarily something that we do within DOE, but we do support this kind of ongoing dialogue between the environmental and hydropower community, because ultimately the future of hydropower needs to be one that is sustainable and compatible with both from a climate perspective and from an environmental perspective.David RobertsRight. Well, on the flip side of that, my other question is not all large dams in the US are producing power, and the ones that are powered aren't necessarily producing the maximum amount of power they could produce. So how much sort of runway do we have in powering existing dams or upgrading existing hydropower facilities?Jennifer GarsonYeah, so there's kind of a couple of pieces in there. One is that there are 90,000 dams in the United States, and only 3% actually have power.David RobertsOh, no kidding.Jennifer GarsonYeah.David RobertsIs it mainly small versus big is, like, the biggest ones have power and a bunch of smaller ones don't? Or is that not the dividing line?Jennifer GarsonIt really varies. It's not necessarily the big ones do, I mean, you think about some big dams that do have power. I think predominantly you're looking at small to medium-sized dams that aren't currently powered, and many of them were built for other reasons, like flood control, recreation, irrigation, you name it. But still, it's always been incredible to me to kind of dig into those numbers where you think that every dam must have hydro associated with it, and it doesn't.We've been doing a lot of research, looking at what are the attributes of non-powered dams that we could potentially tap into for power purposes; how do we take advantage of this existing infrastructure and potentially provide power to it? And so, only about the top 600 dams that we have have more than 1 megawatt of potential, but they account for, actually 90% of the total non-powered dam potential. The top hundred largest dams represent about 8 gigawatts, and the top ten represent about 3 gigawatts.Jennifer GarsonSo there is quite a bit of power even within those non-powered dams. And actually, from 2000 to 2020, there were actually 36 non-powered dams that were retrofitted that added about a half a gigawatt of capacity. But then you also talk about, what do we think about for the expansion of the existing hydropower fleet?Jennifer GarsonWe all know that hydropower right now accounts for about six and a half percent of total load nationwide, but the capacity expansion, even at looking at what do we do with the existing hydropower fleet that we have, you could actually have a combined growth of about 13 gigawatts of new hydropower generation capacity through existing plants, adding power to non-powered dams and some new stream reach. We had initial estimates of about 36 gigawatts potential for new pump storage hydro capacity, too.David RobertsSo there are then potentially gigawatts of new power to be had with dams that are already built?Jennifer GarsonYup.David RobertsAnd so why is it that already happening? Is it the economics? What needs to happen to really ... because we need all the clean power we can get, so it seems like this is something we should be pursuing unless there's something stopping us. So what are the barriers to making that happen?Jennifer GarsonI mean, the answer is it's complicated because it's very dependent upon the site that we're talking about. So it could be that adding existing capacity requires additional capital and if the capital gets too high is there a customer willing to pay for that higher price of electricity? There's also complications, especially for the existing fleet for relicensing. The relicensing process for hydropower is incredibly difficult. It's surmountable, but it is difficult.It's actually more difficult. We did a study about a year ago looking at the licensing and relicensing process for hydropower, and the number of agencies even involved in hydropower licensing actually exceeds that for nuclear.David RobertsTake that, nuclear-whiners.Jennifer GarsonExactly. Hydro has got it worse. But even with the challenges for licensing and finding capital, we still think that there's enormous promise by tapping into this existing generation fleet, particularly given the firm flexible, baseload generation power of renewables through hydropower, specifically. We even looked at a study looking at what's the black start capabilities that hydropower currently provides. Right now it's 40% of the black start capabilities is actually provided by hydro.David RobertsInteresting.Jennifer GarsonAnd whether you're talking about spinning reserves, ancillary services, other grid services, I think we're going to need to both expand what we have in our existing fleet, but also maintain that existing fleet in order to provide the critical services that we need as more renewables come online.David RobertsOne of the big worries in nuclear is you've got these plants that are up and running and they're scheduled to close, basically. And so there's all this agita about we've got this clean power, we're about to take it off grid. It's crazy. Are any of our big dams scheduled to close or are they more or less like can run forever as long as you maintain them?Jennifer GarsonAgain, it depends. Some are subject to licensing and relicensing. Also half of the hydropower fleet is actually federal, so part of it will stay online as long as the federal government wants to maintain those dams. But the threat of licensing or the threat of not being able to get through the relicensing process for our existing fleet could leave up to about 50% of our fleet in the next ten years is up for relicensing. We don't get that through relicensing. That means we lose a substantial amount of our power if they can't get through the regulatory process. And so we're trying to focus on even things like how do we improve the environmental performance of existing dams? How do you really think creatively about some of the upgrades that could expand some of those grid capabilities? Because if you're going to take a facility that's been online and it's been load following, it's really for keeping the lights on.Jennifer GarsonHow do you change the operational nature of those plants to also provide those grid services without degrading the existing hardware at those facilities? It's a totally new operating environment, one that we can almost take advantage of the relicensing process and do these types of upgrades, but it does mean that we have to get that non federal fleet through the relicensing process in order to keep them online.David RobertsThis story of excess bureaucracy and paperwork slowing things down pops up ...Jennifer GarsonEverywhere!David RobertsEveryone I talk to.Jennifer GarsonYes, sadly, but I will say we've actually seen a lot of interest on the Hill, on Capitol Hill, over the last probably two years, I'd say through a bipartisan nature at thinking about some of the challenges and opportunities in particular on hydropower regulatory reform. Now we again at DOE really just take a sort of analytical approach to understanding what that regulatory process looks like and how it exists. But even last spring there was actually a Hill committee meeting specifically on the regulatory process. It was actually in a follow on a Hill committee staff meeting that was specifically on hydro last January. So I think there's both a recognition that something needs to change and I think potentially some momentum behind trying to really take a hard look at what the hydropower fleet has to go through from a regulatory perspective.David RobertsYeah, I guess it just strikes me it would be a little crazy for us when we're in this mad scramble for clean power and we have this infrastructure, a lot of which is already built, that we could just get a lot more clean power out of that we're not going for it, Gangbusters. final question about large dams, which is one of the things you hear about the future of hydropower is the threat of climate change itself and the threat of droughts and the threat basically of hydro output, which has typically been fairly reliable, becoming more sort of unpredictable and variable and a little bit less reliable. Is that something you think about a lot?Jennifer GarsonSo actually last year we conducted a really comprehensive look at the effects of drought on hydropower generation in the United States. So we did a couple of different analyses, but I'll touch on this one first. Drought obviously can and has impacted hydropower in the west, but if you actually look at it from a fleet wide perspective, the Western hydropower fleet still sustained 80% of its average generation during the worst drought this century. Now, that was a lot of times reliant on what you had as storage behind the reservoir and so we are doing a second order analysis to say what happens when you have less reservoir ability to really do an overall assessment. But there are so many smaller subregions in the west that still they don't typically always have drought super decentralized. It's usually essentialized in certain areas. So it is certainly a threat and we have a lot of work, I think, that we've been doing it. How do we look at from a forecasting perspective, not just looking at hind-cast models, don't use past as precedents, also look to the future for future climactic modeling and how do we begin to plan from both a climate resiliency perspective?Jennifer GarsonWhat are the localized impacts going to be on individual sites? But when you look at it from a fleetwide perspective thus far, we actually haven't seen that much of a decline in power production across the west. That's because sometimes where we have more acute drought in some regions, we might have an abundance of water in others. If you take a look at even California, whether it's through the impact of atmospheric rivers or a historic snow pack.David RobertsThe snowpack they've got now historic highs. Is there going to be an abundance of hydropower next year?Jennifer GarsonIt certainly could help make sure that there is a reliable amount of water to help sustain hydropower production. There's a lot of hydropower in California, but I think we still have more work to be done on both what's the forecasting and looking at snowpack melt and what it's going to mean for a next season's. Hydropower availability and how do we plan not just on a year to year basis, but over a longer period of time? So we're committing a lot of resources towards this hydrologic and climate science analysis. We also just did the most comprehensive assessment through Oak Ridge National Laboratory, it's called. And this is because of the Secure Water Act, the 9505 assessment, which really looked at an analysis of hydropower generation affected by long term climate change, specifically at the Power Marketing Administration.Jennifer GarsonAnd our most recent report, which we actually just published last year, is that long term average runoff and hydropower generation are actually projected to slightly increase across the continental US, but some summer runoff is projected to decrease by the mid 21st century. So you're talking about seasonal change and so that will require us to think about storage in different ways when we can rely on hydropower. Do you shift the kind of seasonal expectation of it really fitting summer loads and potentially more in spring or even winter loads? But maintaining that flexibility and operation is going to be a key challenge, whether it's because of projected seasonal availability or just water management strategies or just the fact that when you look at it from a purely sort of quantitative perspective, our ability to know where water goes is not nearly as sophisticated right now as where electricity goes.Like, our sensors and measurements are so far behind that which you see in the electricity sector that we feel like there's a lot of opportunity to increase sensors, monitoring and models to be incorporated into hydropower forecasting so that we have more predictability and a better understanding of just how climate change is going to impact hydropower availability. It's not to say that it's going to be easy, it's just it's more complicated than what you would imagine just looking at pictures of drought in the west.David RobertsSo let's talk about then smaller scale hydro on rivers, streams, canals, conduits, smaller forms of river. I've heard about these sort of in the background for many, many years. As far as I can tell, it hasn't really amounted to much. And just like intuitively, when I think about building like a little dam or a little generator just for the amount of power that's coming through a stream or a river, it sounds like a lot of infrastructure for a small amount of power. So I wonder about the economics. So maybe you just tell us what is the deal with small scale hydro?Is it a real thing? Is it growing or shrinking? Is there a lot of potential there? What do we know about it?Jennifer GarsonSure, I want to just set a little bit of context.Jennifer GarsonWhen we talk about small hydropower, we're talking about anything between as small as 100 kilowatts, all the way up to 10 megawatts.David RobertsGot it.Jennifer GarsonAnd, we do have this picture that large-scale hydropower is really the predominant form of power. But actually, 72% of our hydropower fleet — it's almost 1,700 plants out of the almost 2,300 total plants — produce less than 10 megawatts apiece. So even though it may be more obvious that we think about hydropower as large, it's actually almost 3.65 gigawatts of hydropower capacity is actually small.And I think that when you think about these small hydropower facilities, a lot of times they're in places that it's serving a local load or it's serving a direct facility. And so, to me, I think the value of these smaller facilities is how they're providing power to local customers. Many of them are owned even by what you would consider more like mom and pop hydropower operators. But also when we think about the potential for non-powered dam development — so we talked a little bit earlier about, "Are the big non-powered dams big or are they small?" — 71% of the potential for non-powered dam development is actually in small dams with small reservoirs. So it may not be a simple form of power capture, but there really is a lot of potential untapped through non-powered dams.And then you talked a little bit about run-of-river. The run-of-river potential is also there. We have been talking to different communities that are considering run-of-river systems for power. And a lot of times soon we're thinking about some of these small power dams. We get approached a lot by say, communities in Alaska where they're looking at what are their power potential in places where they're not going to be able to harness solar on a year-long perspective or be able to potentially get wind reliably. And so some of these small hydropower facilities in more kind of remote and isolated areas could provide really meaningful power to places that may not have another form of renewable energy accessible to decarbonize their systems. And to me, that's just as meaningful as adding big, huge gigawatts everywhere.Jennifer GarsonWe need to add big, huge gigawatts everywhere of renewables. But I think the potential for some of these smaller hydropower facilities could be incredibly meaningful. We also even just did an assessment last year, looking at underserved and distressed communities in the Appalachia region, where could you power non-power dams and add different forms of storage to provide almost essentially quality-base load power. And there were quite a few sites where you could provide reliable, relatively cheap power for these communities.Jennifer GarsonNow, when it comes to the economics, it is more expensive when you look at it from a per megawatt basis. But when I think about the critical value of having hydropower serve, essentially, around the clock, I think this is where we think about decarbonizing everything from the electricity sector. We're going to have to have a higher willingness to pay for firm, flexible power.I think, when we're thinking about the economics of small scale hydropower, we think about it in a couple of different ways. One is, what is that power going to provide at that small scale? When you're thinking about it as a firm baseload power, is it providing power to places that might not have otherwise access to renewable electricity or a clean grid? Is it in combination to with, say, a solar array and storage? We've seen a couple of small hydropower developers who are looking at it as almost like a mini micro-grid with hydro as the small baseload power. And so rather than it just being the project economics is just the hydropower facility itself, thinking about it from a project perspective: hydro with storage plus solar. And how do you think about it within that overall kind of portfolio context and not just the facility itself? That being said, funding these types of projects is not easy, whether it's because of the licensing or relicensing process or because of the high capital costs.David RobertsIs that a hassle for small run-of-river stuff too, the licensing stuff?Jennifer GarsonSure, you still need a license to operate. There are some exceptions, but you typically still need to get a license from FERC. But they have been trying especially for non-power dams and closed lip pump storage. FERC has been trying to have an accelerated permitting for these types of facilities. So the new stream reach, which is where there's no dam, that's a little bit more complicated, but for powering non-powered dams, FERC and other partners have recognized that there's already essentially been disruption to the local ecosystem. So you're not talking about a complete new build, you're talking about adding infrastructure to existing infrastructure.But it also depends on who the owner of the dam is. A lot of developers are actually looking at powering non-powered dams that are owned by the Army Corps or the Bureau of Reclamation, trying to take advantage of existing infrastructure that's already been built by the federal government and add power. And there are a number of developers that are trying to think about developing these non-power dams through a portfolio of different non-power dams. So rather than treating it as a kind of one off project, how do they do kind of feasibility analysis, looking at a number of different non-power dams of power and treating it more like a portfolio package of power.And that is different from the way that we've traditionally financed non-powered dams. I still think we have a way to go, and we're actually about to set out on a study with the National Renewable Energy Laboratory and Deloitte to really look at the investment landscape in hydropower. Because ever since I've been in this space, I've always heard that investment in hydropower is really hard. But when you start asking the second order question of why, you kind of get a jumbled answer of, "It's the licensing, it's the customers, it's the PPA."So we're really trying to put a lot of rigor behind, "How do we get more momentum into developing non-powered dams? How do we try to increase the investment appetite to looking at these types of facilities and facility buildouts, whether it's expanding existing capacity at hydropower facilities or small hydropower through non-powered dams, to really fill that gap that we see 10-20 years down the line of the need for firm, flexible power resources." So I think we're in the midst of a changing investment landscape, too, about how do you value firm power?David RobertsRight. So it's fair to say then, when it comes to the smaller hydro on rivers and such, it's not so much the raw sort of like dollar per megawatt where you find the value. It's more in the firmness, right, which we don't fully value yet, but will, I think, soon. And the local benefits, local resilience and stuff like that.Jennifer GarsonYeah. And even so, we just did a demonstration last year in Idaho Falls, the Idaho Falls Power, and they were looking at how do they optimize their smaller run of river hydropower systems and tried to see whether or not adding some sort of storage medium. Ultimately, it was super capacitors. But if they add a storage medium to those smaller facilities, can they actually provide black start capabilities for their local community, recognizing that they're tied into a larger grid? And if the larger grid goes down, they don't want to lose access to the electricity they need for critical services.Jennifer GarsonAnd so it's thinking about, too, in the context of some of these smaller projects, can you use them to help jumpstart the grid or provide more consistent power or provide a more predictable load for electricity consumption? But I still think it is still higher on a project economics of $70 a megawatt, roughly. But what we're trying to really dig into is what is the value inherent between, say, the $20 per megawatt you would see for solar and the 70 for hydro? Are there enough services and economics behind that higher threshold to really kind of catalyze investment into that space?How do you provide that investment theory that shows why it's really important that some power you're going to have to pay more for?David RobertsThere's probably a ton more to talk about there, but we have other things to hit, one of which is storage. I think Volts listeners are probably savvy enough at this point to know that the vast, vast bulk of existing energy storage is in the form of what's called pumped hydro storage, which is basically just you pump water uphill when you have power, and then when you need power, you run the water downhill through generators. Pretty simple. This is how we do most of our energy storage today. So one of the things that people say about pumped hydro is that it is geography dependent.You have to find the right body of water in the right place with the right whatevers. So I'm curious, have we built out the sort of traditional pumped hydro that is possible or is there more room sort of same question about the large dams. Is there more room to build new pumped hydro and is there more room to get more capacity out of existing pumped hydro facilities? I know we have this new technology that's closed-loop pump hydro, which we'll talk about in a second. But just in terms of the traditional kind, is that tapped out or is there more to be had there?Jennifer GarsonYeah, put it in order of magnitude. About 93% of the long duration storage or even just storage capabilities. Right now on the grid is pump storage. And that's actually just from 43 pump storage plants.David RobertsThey're very big.Jennifer GarsonThey're very big. They were actually originally built to complement nuclear.David RobertsInteresting.Jennifer GarsonYeah. So now we're thinking about what's going to complement next or continue to complement nuclear. But when you think about even the potential in our existing fleet, between 2010 and 2019, we added 1.3 gigawatts of PSH capacity just at the existing facilities that we already have online.David RobertsInteresting. That's a lot.Jennifer GarsonIt's almost the same amount as all other energy storage types combined that were added at that period of time. Yeah. So just making these capacity upgrades is huge.David RobertsHow do you add capacity? Is it bigger pipes, bigger pumps? Is there any magic to that?Jennifer GarsonBigger pumps, different turbines, different upgrades to better not impede flow, even management practices utilizing it more. So even some of our storage facilities aren't necessarily utilized to their full capacity. And so you usually either need better control systems or kind of control strategies or equipment upgrades or environmental upgrades. There's a multitude of different upgrades that can happen to add capacity at our pump storage facilities.David RobertsAnd that's ongoing. There's still more. There's more to be had there.Jennifer GarsonThere definitely is more to be had. But I actually also want to point out we have typically thought of pump storage as these big open-loop systems. So you mentioned closed-loop. All of our facilities right now are open-loop, which means they're connected to existing waterways and rivers. So if you looked at where are we going to have big diversions from big existing waterways to other storage medium to other reservoirs, that's probably more limited. But we actually just did a whole assessment on pump storage resource characterization and resource assessment here in the US and found there's actually 15,000 additional sites for pump storage development.David RobertsOh, good grief. And that's the open-loop kind you're talking about.Jennifer GarsonThat's closed-loop, actually, specifically. Closed-loop, there are more than 15,000 sites that you could actually have for additional facilities to be brought online. And there are some major closed-loop facilities that are getting pretty close in the regulatory process, and we've actually been working with some of those sites through our pump storage valuation project where we were looking at what's the cost benefit analysis and return for these different types of closed-loop systems.David RobertsExplain what a closed-loop system is just so people get it.Jennifer GarsonIt's basically very simple mechanical energy. You have an upper reservoir, so basically an upper ground tank, for lack of a better term. It could be at the top of a mountain, it could be at the top of a hill, but you need some sort of head so it can run down. But you have a top reservoir and a bottom reservoir and basically pipes that connect between the two. And when you have excess electricity, electricity pumps the water from the lower reservoir up to the upper reservoir. And when you need that power, you run that water right back through the turbines to go back down to the lower reservoir. So it's just basically mechanical movement of water between two bodies of water.David RobertsAnd so if you can create your own reservoirs, then all you really need, geographically, is a hill.Jennifer GarsonCorrect.David RobertsAnd there are lots of hills.Jennifer GarsonWe got a lot of hills.David RobertsWhat about underground? I feel like I've seen this bandied about where you just dig a hole and sort of use the surface of the earth as your upper reservoir and the hole as your lower reservoir. Is that a thing?Jennifer GarsonYeah. We've been working with a couple of different companies that are looking at underground reservoirs. There are ideas, everything from utilizing old mines, which there's some worry about from a geotechnical perspective. Will you actually have enough stability to have an upper reservoir and then the lower reservoir in the mine? But there is potential. But then there are companies like Quidnet who is essentially injecting water underground and using it to come back up and spin through a turbine for more modular underground pump storage. So I think there's definitely opportunity both above and below the ground. It just all really depends on sort of the geotechnical feasibility, site availability and just what are you going to get from round trip efficiency for different types of power?David RobertsWell, this closed-loop pump storage seems like a huge opportunity. Do we know, I mean, if there isn't any built yet, do we know what its economics are going to be relative to other storage possibilities?Jennifer GarsonYes, we know the economics pretty well. I mean, obviously the economics has changed as with every other storage technology out there with the inflation reduction act passage. But we have done a lot on sort of valuation from a per megawatt perspective. How much would you pay for these newer closed-loop pump storage facilities? The biggest challenge with anything pump storage-related is the high capital cost at the beginning of a project. And so where some of the project economics get a little more complicated is: are you looking at a ten-year payback period for storage or are you looking at it from ... some of these assets can last 100 years.Like what's the appetite when thinking about entering into a PPA or building out a project? And there's also the complication — and this is similar to other forms of storage: Are you generation or are you transmission? Are you deferral or are you providing that power? How does your power count essentially within a PPA? The other challenge is too is oftentimes when we're looking at some of these bigger closed-loop pump storage systems, you're building them to complement renewables that haven't come online yet. So how do you also enter into types of contracts?You're like, "Hey, we want to build this facility because there's going to be a ton of wind and solar." And if there isn't a ton of wind and solar, it's like, well, we actually need that storage. So you run into this chicken and egg scenario. What do you build first? A big closed-loop pump storage facility that's going to take seven to ten years to commission? Do you wait for the intermittent renewables to come online to a point where you need the storage? Or do you really start to look now at thinking about what does your grid look like in ten years and take a more long-term capital risk to build out some of these larger things?David RobertsWeird planning for the future. What a thought. When we think about the potential, if there are 15, what did you say ... ?Jennifer Garson15,000.David Roberts... sites where closed-loop pumped hydro could work, then do we know what sort of capacity that represents? I mean, that's a lot of storage.Jennifer GarsonIt's a lot, a lot, a lot, a lot of gigawatts. Now that's the site feasibility. The practical feasibility of how much could we actually develop is something that we're analyzing right now because it was only just last year that we decided to kind of reopen the book on, okay, let's not just thinking about it from where we see site developers coming in and applying FERC permits, FERC licenses, where others are really trying to determine where the best sites are suited. Let's use an analytical perspective to say, where, from a geographical perspective, could you feasibly build closed-loop pump storage?But we're working on a second order analysis to kind of scrub, what does it look like from a total, not just technical feasibility, but practical feasibility of how much pump storage we could add? Because we don't want to say that it's going to be thousands of gigawatts without really having some analysis behind it. But we are really looking at this through both a hydrofuture study and a pump storage study that we'll have going pretty soon to look at that total, feasible storage that we can actually capture through closed-loop pump storage.David RobertsBecause you hear all these talks about long duration storage, all this buzz, people are banding about all kinds of wacky technologies and possibilities, but you just don't hear pumped-hydro mentioned a lot in those discussions.Jennifer GarsonI think ...David RobertsNeed better PR.Jennifer GarsonWe do need better PR. We need better PR and all forms of water power technologies — no offense to the technologies I care about a whole lot. But no, you're right. A lot of times we're talking about long-duration storage technologies that are still kind of bench-scale prototypes. And it's things that I fundamentally believe in. But I actually, before I was in the waterpower office, spent a majority of my career in DOE on commercialization, and I've seen how long it takes for products to get from a lab prototype to bench scale to first of a pilot to actual commercializable technologies.And my concern is if we bank all of our long-duration storage needs on technologies that are still at that pilot or commercial demo scale, we may run into kind of a tipping point on the grid where we really need what works now. But I do think that there has been more momentum both here and abroad looking at pump storage as a practical solution. And even Secretary Granholm has expressed interest in pump storage. The Loan Guarantee office is also looking at pump storage. So I do think they're slowly but surely gaining more momentum at the potential feasibility for pump storage.We're even working now with the Tennessee Valley Authority actually looking at pump storage. Duke is looking at pump storage. I just talked to someone in Pennsylvania, in the governor's office, that's also looking at pump storage. So I think as people are looking at the practicalities of the grid, 10 to 15 years out, if we really are going to scale wind and solar, we need to start planning for storage facilities now. And the reality is that closed-loop pump storage can work. You do have high capital costs. There are geotechnical concerns, but we know that it works because it's a water battery.You're pushing water up the hill to let it come back down. We know how to do that.David RobertsVery simple.Jennifer GarsonWe've been doing that a long time.David RobertsFinal question about water as storage, which is just, and this might be kind of a naive or a silly question, but it just seems like in the future, one of the things you're constantly hearing about is water is going to become more scarce. Basically, there's a lot of competing demands for water, and climate change is messing up a lot of our sort of seasonal water provision and just there's going to be water wars, et cetera, et cetera, et cetera. So I'm just wondering, is that something you worry about, using water for this versus using water for other things? Do you think water itself is going to become sort of contested and difficult to get your hands on?Jennifer GarsonI mean, I think clean potable water is a challenge that we are definitely going to face as a country and as a world. I mean, as a country, we're actually pretty privileged to have pretty abundant freshwater resources. Now, whether or not those would be clean enough to drink I think is a key outstanding question. But in places like the Pacific Northwest and New England and even the Midwest, water availability isn't necessarily the top concern.Is it in the West? Yes. We actually wonder sometimes, or have been analyzing the potential for almost water abundance in areas where we don't want to have too much water because of flooding concerns or extreme events. So there's the kind of flip side of that, is it's not just about lack of water availability. Are we also building out infrastructure that can withstand higher forces of water, particularly through rivers and streams and waterways? But if you're looking at things like closed-loop pump storage, you're not going to have a ton of evaporative loss. So when you have these storage facilities, you're not really competing for fresh water availability.You're just trying to keep the reservoirs filled. And that is very different than trying to have the water needs for, say, fossil fuel plants or even nuclear, which have pretty high intensity water needs. But on fresh water availability, that's something that on the marine side of our portfolio that we think about as a potential for wave power to actually address, is the delivery of potable water. Because I do worry a lot about our ability to provide continuous fresh potable water for not just here in the United States, but abroad.David RobertsRight. Well, you've set up my segue perfectly then. So let's talk about the other side of your portfolio, which is energy in the ocean and how to get it out of the ocean. This is another area where I feel like it gives me like cellulosic biofuels vibes in that there's like super exciting ten years out and then was like super exciting ten years out 20 years ago and still super exciting ten years out. Is there —Jennifer GarsonIt's like fusion! No.David RobertsNot that bad. Come on now. Not that bad. I'm wondering, is there reason to think that any of these ocean technologies are any closer than they were ten years ago? Is this a real thing? And maybe just also, while you're at it, tell us, what are those technologies? I know there's tidal. I know there's something with buoys going up and down. There are probably others. What are we talking about in the ocean? And is it real? Is it really going to happen?Jennifer GarsonI think I wouldn't be directing a program for marine renewable energy. If I didn't think it was real, I'd probably try to find myself another job. No, the second question you actually asked is what are we talking about in terms of marine energy? And so the biggest sort of marine energy capture that we concentrate on are waves, tides, and then river and ocean currents. So the big buoys that falls into sort of the wave category, you can have everything from bottom mounted flaps that are trying to capture wave power to surface riding systems to systems that are within the water column.So the complication with waves, there really hasn't been a kind of convergence on the right structure or even where in the water column is most optimal for a power capture system. But I would say unlike even ten years ago where wave energy, you had a couple of projects that were out in Europe, we now are seeing an increasing number of in water deployments of wave energy systems, and it's working. So I would say here in the United States, we just had the longest wave energy demonstration project off of the Scripps Pier in California with Calwave, where they were producing electricity using the power of waves. And they even were able to sustain through a pretty powerful storm surge because that's always really complicated matter for waves, is being able to withstand a range of different forces.David RobertsRight. Well, this is what comes to mind. Intuitively, out in the ocean is just a brutal place. You got the wind and the tides and the storms, but also just saltwater corrosion and I don't know, fish. There's so many things to deal with. Are they being dealt with?Jennifer GarsonI think this isn't the first time we've dealt with infrastructure in the ocean either.David RobertsRight.Jennifer GarsonIt's hard, but it's not insurmountable. We're talking about materials for corrosion. We're doing research and even looking at can you use different methods to reduce corrosion impacts? Everything from coatings and materials to even the use of lasers for different etchings into materials to reduce corrosion? Biofouling is an issue. I mean, there's a lot of stuff that grows on infrastructure that's in the ocean, but we're trying to work on a multitude of ways for us to address or even potentially embrace biofouling from an environmental perspective. We do a lot in environmental monitoring around these devices. We put a substantial amount of funding on trying to understand the interaction of mammals, fish species, both from an acoustics perspective to any sort of entanglement perspective.And thus far, with our in water deployments, we're actually seeing compatibility instead of conflict. From an environmental perspective, that's because we're trying to design these systems with the environment in mind. But it is a hard environment. But the thing is, waves, tides, they're more predictable than other forms of electricity. So if we're really trying to hit our 100% decarbonization goals in 2050 or beyond, we're going to need solutions like marine energy in order to actually hit those targets.David RobertsTides come in every day.Jennifer GarsonTides come in every day. And actually on the West Coast, waves are predictable because you're talking about predicting waves that are coming basically from Asia. We have waves. I'm serious. It's why actually wave energy is almost easier on the west coast of Europe as it is sort of the West Coast or here for the United States because we have pretty complex models that actually can give us forecast for what our wave conditions are going to be like. So it gives us some good sense of predictability. Tides definitely 100% predictable. Unless the moon changes, which who knows?David RobertsWho knows? What does tidal energy look like? What do those machines look like?Jennifer GarsonSo there are a couple of different types of device designs right now in tidal energy. You're seeing more of a convergence on what tidal energy systems might or could look like, particularly looking both in the US and out in the EU. Some of them, like Verdant Power, which we supported a demonstration in New York, would look familiar to any of your listeners. It looks almost like tiny wind turbines on a triblade that goes underneath the water. So it's using the same kind of findings from wind of running a turbine, generating electricity, providing it to shore. There are other systems that are surface riding.So there are some European companies and Canadian companies that essentially have the operations and maintenance basically on the surface and then have turbines that go and submerge underneath the water, but they're still running either two or three blade turbines to capture power. So it's taking a lot of the lessons that were already learned in the wind industry and applying it for tidal power. And tidal power, I mean, we believe it a lot for here in the United States. Is it the largest resource to capture? No, that's wave. But there's a lot of tidal energy in New England, in the Pacific Northwest, and in particular in Alaska, where the potential resource is pretty massive.So actually we are in the next coming weeks, we have a notice of intent out already on this, but we're going to be funding a $45 million solicitation focused on tidal energy here in the United States. So both a commercial site with about $35 million and also for remote and islanded communities, and isolated communities another 10 million. So I think the the maturity of the tidal industry is definitely more mature right now than wave, but I think wave is starting to catch up. But if you look over at Europe again, they've had gigawatt hours of power provided by tidal energy at some of these sites that have already been delivered to the grid.So it may not always be as visible. Maybe it's because it's underneath the ocean or just on top of the ocean, but there's a lot of technological progress that we see in tidal and I see in the very near term for wave.David RobertsAnd this is in financial terms the same challenge basically you're facing with all these other technologies we're talking about, which is high upfront capital costs and then that pay off over a very long period of time, which is just always a difficulty when you're talking about financing.Jennifer GarsonIt is. And one of the challenges, too, for marine energy, and it's similar, I would say, to newer geothermal energy or long-duration storage, is in order to prove that it works, you have to be willing to fund some pretty serious demonstrations. And that takes a lot of capital that oftentimes, say, venture or even philanthropic capital isn't necessarily willing to take a risk on. Because to prove that the marine energy works, you have to get it in the ocean. And putting things in the ocean is a non-insubstantial cost. And so we're really trying to think about how do we demonstrate these systems take a lot of the risk and ownership on the US federal government in a way that we think will ultimately pay off. But that willingness to pay for demos or demonstrations of arrays is still going to be pretty high until you get to economies at scale.And so we either have to bet big, which I really hope we do here in the US, or we leave potentially this enormous 57% of all US power generation potential in the US stranded because you don't have that willingness to pay for these really expensive demos. But those demos are the only way we learn.David RobertsDidn't we just pass a bunch of legislation that is basically fire hosing money at all these things? Is some of that money going to do what you're just talking about going to kind of kickstart marine and tidal?Jennifer GarsonSo in the bipartisan infrastructure law, we did receive about $110 billion for marine renewable energy, $40 of that is for our national marine energy centers and the other $70.4 was actually for marine energy. But if you look at that in comparison to say, the funding that we're putting into direct air capture or hydrogen, it's nowhere near the level of investment that we've received from the federal government. And it's not just ... for us, I think we've seen the same thing for sustainable aviation fuel demonstrations or geothermal demonstrations, like, I think there are still a number of technologies that's going to take a lot of capital in order to really demonstrate the feasibility and get to economies at scale that weren't necessarily funded with the enormous lug of funding that we got now. There's a lot of money going around, and it's very exciting for me as someone who's been at DOE for 13 years, but it's not going to be sufficient, I think, for really driving down the cost of the whole portfolio of solutions that we're going to need to decarbonize everything by 2050.David RobertsWell, and the loan office plays some role there and there's supposedly going to be a green bank did that end up making it in? I forget what ... I think the Green Bank made it in. So maybe there'll be some ongoing sources for some of this funding.Jennifer GarsonTotally agree. And we work with our Loan Guarantee Office partners to understand what are those pathways into kind of commercial viability that. And we are also working with the Office of Clean Energy Demonstrations to understand what's the role of the Water Power Office at Derisking. Some of these pilot technologies moving into an office like the demonstration office and eventually being well primed for the Loan Guarantee Program office, because LPO really wants to see that these technologies have been successful at a pre-commercial scale. But even that gap between pilot and pre-commercial scale for some of these energy systems is more complex than just one off projects.But we're thinking about it critically at having kind of an all of DOE approach to derisking and investing in these technologies and ultimately helping them scale.David RobertsThe one marine technology we didn't mention is ocean thermal something something.Jennifer GarsonOTEC is the acronym. It's Ocean Thermal Energy Conversion.Jennifer GarsonYes.David RobertsRight. I feel like I've been hearing that about that also for years and years and years and it never seems to amount to much. Is that going to, well, first of all, tell listeners what the heck we're talking about, but is that going to be a thing?Jennifer GarsonSo OTEC, for anybody who isn't as familiar with all forms of marine energy, is basically using the thermal differentiation between the warmer surface water and the deep sea cool water to, essentially, use that to harness power, without getting into more technical details.OTEC is also really hard. The round-trip efficiencies that we've seen for OTEC have been not awesome, but there are a number of sites that are looking at both. How do we potentially use seawater air cooling, so more like ambient temperatures instead of for power generation. There are some OTEC facilities too, particularly in the Pacific Islands. It is so geographically specific for OTEC feasibility. You really need to have a pretty quick drop off of the continental shelf in order to actually have that really cold deep water and warm surface water. So it's geographically constrained. The round-trip efficiency right now still needs a lot of work and similar to the story of other types of marine energy in order to do demos, it takes a lot of capital.But I know that there are developers looking in like Puerto Rico and Hawaii looking at the feasibility of OTEC. So I wouldn't discount it. It's just it faces some of the same challenges. But we've also been looking at even, can you lessen the amount of gradients that you need to think about Ocean Thermal Energy Capture? So we're actually working with a startup that is trying to use smaller gradients to power ocean observing systems. So if it can power it by essentially dropping the system down not that far, and using the same principle of warm to low generating power, maybe we can think about gradients in a different way, to not just be the really big, really deep pipes that are trying to run from the surface down to the deep ocean.David RobertsOne more thing about marine energy. Tell us what is the connection between marine energy and desalination? Or what is the, let's say, the hoped for connection between marine energy and desalination? Because I often hear them kind of discussed in the same breath.Jennifer GarsonSo over the last few years, we've really been looking at the potential for how would wave energy provide potable water. It started actually with analysis that we did at the National Renewable Energy Lab, looking at the feasibility from a power perspective. Does the power performance potential for waves, is it potentially compatible with reverse osmosis or for desalination processes? And interestingly enough, we found that it could actually be a good power source. So we actually developed a prize competition called waves to water prize, where we basically opened the aperture to say, there's only a limited number of ideas here.Can you bring us some really good ideas for wave power desalination, but starting small for things like disaster relief and recovery scenarios? Ultimately, over the course of three years, we developed systems that were both hydraulic, so kind of mechanically driven, and production of electricity to run RO systems. And what we saw through that prize, and now a subsequent $10 million solicitation that we're running right now, is there are a number of really promising solutions that, particularly on the hydraulic side, although some of the electricity, but using essentially the power of waves to run through membranes to desalinate water.David RobertsI have a super dumb question here, which is I'm picturing these wave machines out in the middle of the ocean. Are they producing clean water like on-site? Do you have to go harvest the water from the machine? How does the delivery of the water from the machine to where it's needed work?Jennifer GarsonGreat question. The answer right now is maybe both. I think it's more feasible to imagine that essentially the reverse osmosis system is running. You're basically pumping water back to an onshore reverse osmosis system in a high pressure pump. And so you're getting the fresh water at a tank act, actually at a pier or on the shore. So you're essentially just using piping systems so that the water delivery is onshore. There are some companies that are thinking about almost like bladders to be filled out for production in the more near shore. You're not looking at right now, like, really deep offshore, but could you collect water through these bladders, have some sort of collection methodology, and bring it back to shore?So I think we're both looking at kind of on device production and essentially the system just being a conduit for either that power mechanical force to run a reverse osmosis system onshore. We're hopefully going to see over the next couple of years we're going to be funding a number of demos and we're seeing a number of demos also pop up in Europe in particular at looking at wave power decal. But I think we're going to need solutions for desalination that doesn't just require either really big, large energy systems or only diesel generators because we're going to need fresh water everywhere.And we're trying to think about the simplicity of design of some of these systems so that you can essentially just throw them out in the water with an anchor and be able to provide potable fresh water.David RobertsThat would be nice.Jennifer GarsonIt'd be awesome. Yeah, use the water to make water. What could be more simple but elegant if we can make it work?David RobertsSo on marine energy, then, as you said at the beginning, this is unlike hydro. Marine is in a sense among the newest or nascent or sort of cutting edge versions of renewable energy. So I guess before we leave this subject, I'm just curious, the next decade in marine energy, do you expect it to reach meaningful scale in that decade or is the next decade mainly going to be about figuring it out? Sort of like where do you expect marine energy to be in ten years?Jennifer GarsonIt's a complex answer I think when you're talking about grid scale marine energy devices. I think it'll take us the next ten years to really figure it out, get these systems in and out of the water and really producing larger volumes of electricity. But what I think the next decade really holds, it's really interesting, is the possibility of marine energy powering. What maybe from an energy perspective seems less meaningful, but from an end use perspective is incredibly meaningful. And what do I mean by that? I think we're seeing a lot of interesting solutions for powering, things like ocean observing.We know more about the surface of Mars than we do about the surface of our ocean floor and part of that is because of power limitations. And so we're working on a number of different companies that are either using kind of fixed platforms or floating platforms to provide power where we need it and that's to both understand and observe our ocean.David RobertsInteresting.Jennifer GarsonAnd I think over the next ten years you're going to see a lot of different devices that are harnessing power for ocean observing. There's also been a lot of meaningful progress at sort of the micro-grid scale for marine energy, whether it's tidal or it's wave energy, where we actually have a device up in a community of only 75 people in Alaska and Igiugig that's producing power to their grid right now. And I think we're going to see more of these small scale devices in places where power is incredibly meaningful. Even if it doesn't sound like a lot from a megawatt or gigawatt perspective.David RobertsThere's sort of bulk energy. Like we just need a lot of energy. But then there's also these, as you say, these local sort of resilience benefits and these benefits specifically to a lot of vulnerable communities. Maybe just say a little bit more about that sort of how you envision hydro working. Maybe not at a large energy scale, but in some of these, but like in this community in Alaska, that's quite significant for them to have steady power. So talk about that a little bit.Jennifer GarsonI think it's a story for both hydropower and marine renewable energy that there are parts of our United States and parts of the world that they need to look to their waters in order to actually provide power, whether that's because of the seasonality or available resources. And we've been working with a number of communities, actually through a program called our Energy Transitions Initiative Partnership Project, where rather than say, here's a solution that you should have, maybe it's marine or hydro, but working with these communities to say what are your power and energy needs? And what are the types of systems that can get you to 100% renewables and off diesel dependency? And many communities that we're working with in Maine, the Pacific Northwest and Alaska in particular are looking at marine energy and small hydro as their pathways to releasing dependency from diesel generators or from really high cost other forms of energy.And even though these are kilowatts or megawatts, it's huge.David RobertsYeah, just to sort of put an exclamation point on that, you're talking about the sort of economics overall. But if you look at the economics specifically in these local situations, like diesel is gross, it's very expensive, it pollutes like crazy.Jennifer GarsonNot only that, it's the cost, right? And right now, the last couple of years, the price vulnerability of some of our more vulnerable communities in the United States are so impacted by diesel going up to prices that are literally unprecedented. And if you're a small community, how do you absorb that?David RobertsYeah, getting steady, predictable, just the predictableness of it, the predictable price of it. It's hard to put a value on that. That's very valuable in these local contexts.Jennifer GarsonIt is. And because if you are already paying a dollar, $52 a kilowatt hour, even if we're developing solutions that come in at say, 50-60 cents a kilowatt hour, that's still a substantial price savings, more predictable power and we have better health outcomes, better localized impacts. And so we take that really seriously and view it as a kind of core objective for our program, is that we really want to think about ways that we derust these technologies to give better pathways to getting off of diesel and providing more predictable power. And so when I think about the impacts in the near term, particularly on marine energy, this is one area where I think we do have the potential to make a real material impact on people's lives if we can really do wit these technologies and design them with the communities as partners and with them in mind.David RobertsRight, okay, well, I've kept you too long. This is all fascinating. I'm sure we could do an hour long pod on any one of these issues or topics or technologies. So by way of wrapping up, final question then. When you look ahead, you're sitting in sort of a unique place where you have a view of all these water related energy technologies over the next decade, let's say through 2030 or 2035, which is a very crucial, as you well know, a very crucial period for decarbonization. What do you think are going to be the big water power stories? Like, some of these are nascent, they're going to be developing. What do you think are going to be sort of the breakout significant stories in water power? If you had to pick a favorite one of your babies?Jennifer GarsonOh, you can't make me pick a favorite one. I'm going to give you a couple and break your rule. I think it's going to be the increasing importance of the role of the existing hydropower fleet in an overall grid context at really maintaining grid stability. I think we're going to see a first pump storage project, at least one break ground and start serving the grid in a way that we really need it to. And I think we are going to see a number of communities with small marine energy systems that are providing incredible, meaningful power. That's going to demonstrate the criticality of us thinking about this decarbonization at literally all scales that we need to solve everything from watts all the way through gigawatts.But I think the backbone of the existing fleet pump storage and the criticality of small microgrid systems for places that may not have other options, where this is really well suited, are the things that I'm really excited about in the next decade.David RobertsAwesome. Well, Jen Garson of DOE, thank you so much for coming on. This has been hugely educational. I really appreciate it.Jennifer GarsonOf course. Well, thank you for having me on.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

Various options are at play in the EPA’s planned greenhouse gas standards for new and existing power plants. In this episode, Lissa Lynch of NRDC discusses the implications.(PDF transcript)(Active transcript)Text transcript:David RobertsA couple of weeks ago, the policy analysts at the Rhodium Group put out a new report showing that the Biden administration's legislative achievements are not quite enough to get it to its Paris climate goals. But those goals could be reached if the legislation is supplemented with smart executive action.Some of the most important upcoming executive actions are EPA's greenhouse gas standards for new and existing power plants. The Supreme Court famously struck down Obama's Clean Power Plan — his attempt to address existing power plants — judging it impermissibly expansive. So now EPA has to figure out what to ask of individual plants.The agency's decisions will help shape the future of the US power sector and determine whether the Biden administration gets on track for its climate goals. To talk through those decisions in more detail, I contacted Lissa Lynch, who runs the Federal Legal Group at the NRDC’s Climate & Clean Energy Program. We discussed the options before the EPA, the viability of carbon capture and hydrogen as systems of pollution reduction, and whether Biden will have time to complete all the regulatory work that remains.Alright. With no further ado, Lissa Lynch from NRDC. Welcome to Volts. Thank you so much for coming.Lissa LynchThank you for having me.David RobertsThis is a subject that I used to spend a lot of time thinking about back in the day, and it's sort of receded for a while, and now it's back. So it's very exciting for a nerd like me. So I want to just quickly walk through some history with this and then sort of hand it off to you so you can tell us where things stand now, because I don't want to assume that listeners have been obsessively following this now nearly two decade long saga. So let me just run through some history really briefly. So listeners will recall in 2007, there's a big Supreme Court case, Massachusetts vs. EPA, in which the Supreme Court ruled that CO2 is eligible to be listed as a pollutant under the Clean Air Act if EPA determines it is a threat to human health.And then shortly thereafter, Obama's EPA officially determined that it is a threat to human health via the endangerment finding. So this is one thing I'm not sure everybody understands, and I just want to get it on the table up front. So for context, the combination of those two things, Mass vs. EPA, plus the endangerment finding, means that EPA is lawfully obliged to regulate greenhouse gases. This is not a choice. This is not something it can do or not do, depending on how it feels or who's president. They have to do it. So then that triggers the obligation, three separate obligations.You have to regulate mobile sources, which Obama did with his new fuel economy regulations, which are still in place, as far as I know. Then you have to regulate new stationary sources of greenhouse gases, which Obama did. And as far as I know, we can come back to this in a second, but as far as I know, those new power plant regulations that Obama passed are still in effect. And then thirdly, you have to regulate existing stationary sources of greenhouse gases, which mainly means power plants. And so Obama's effort to regulate existing power plants is called the Clean Power Plan.People may remember the fuss and ado about the Clean Power Plan as it was under development. Lawsuits were immediately launched. Of course, the Supreme Court took the extremely unusual step of putting the law on hold, basically not letting it go into implementation until it had heard this case. And then it heard the case, rejected the Clean Power Plan on the basis of the newly dreamed up, rectally, extracted Major Questions Doctrine. So that's where we stand now is we've got the mobile regs in place, although Biden is updating those too. I think we've got the new power plant regs in place, although Biden is also updating those.But as for existing power plant regulations, there are basically none. It's been a legal mire and so Biden's got to do those too. So let's talk about what Supreme Court said about the Clean Power Plan in their ruling and how that constrains the sort of solution space that we're looking at now.Lissa LynchSo in West Virginia vs. EPA, that was the Supreme Court decision from last summer. The Supreme Court held that this section of the Clean Air Act that we're talking about here, section 111, does not clearly provide authority for the approach that EPA took in the Clean Power Plan. And what they did there we sort of refer to as generation shifting. In the Clean Power Plan, EPA looked at the power sector as a whole and they concluded that the best system for reducing fossil-fuel-fired power plant emissions was a combination of measures including shifting generation away from dirtier fossil power toward cleaner power.So essentially retiring dirtier power plants and replacing them with renewables.David RobertsRight. So the unit of analysis here was a state's whole power fleet, not the power plant individual, but the whole power fleet.Lissa LynchRight. And the reasoning for that in the Clean Power Plan context was supported by the companies themselves, the power companies themselves and the states who said, yes, this is the way that we are dealing with decarbonizing our fleets. We are looking out across our whole fleets, retiring the dirtiest sources and replacing them with cleaner generation. That's how the existing RGGI program in California cap-and-trade programs work. That's how many of the power companies that have emission reduction or clean energy targets are doing that.David RobertsAnd let's just say Republicans have been saying for decades that regulations are too restrictive and they're not flexible enough and states and power companies need flexibility. And this was perfectly flexible. This is absolutely as flexible as you could make a system. It just said to the state, do whatever you want to do to lower the average emissions of your power plant fleet. And then conservatives got what they wanted and hated it for other reasons.Lissa LynchOne of the things that's important about what is left on the table after this decision is there is still a considerable amount of flexibility on the compliance side. So what the Supreme Court was really dealing with was the method EPA uses for setting the level of the standard, basically setting the target that industry has to meet. So the Supreme Court explicitly took that generation shifting approach off the table for purposes of setting the level of the standard itself. And so after this decision, EPA can still set standards, in John Roberts words, "Based on the application of measures that would reduce pollution by causing the regulated source to operate more cleanly."David RobertsRight? So the idea here is EPA, by interpreting the Clean Air Act in such a way as to apply to the power plant fleet overall, and sort of telling states how they have to shape their overall power plant fleets. EPA was assuming too much authority, basically. Like doing something major, despite too major for the words in the Clean Air Act, which I don't want to dwell on this too long, but let's just pause here to acknowledge that. No one then in the ruling, now in the subsequent ruling, since then in all scholarship knows what the hell "major" means or when it is that an agency has crossed the line from proper regulatory interpretation into "Oops, too major."It really just kind of sounds like and seems that major means anything bigger than John Roberts is comfortable with.Lissa LynchRight? I mean, this is one of the really concerning things about the Major Questions Doctrine, just generally is that it is murky and it does have this sort of paralyzing effect on ...David RobertsYes, intentionally.Lissa LynchExactly. It is explicitly anti-regulatory and explicitly sort of intended to stop agencies in their tracks and make them question, oh, is this too major?David RobertsAnd there's no answer. Right. So naturally you're going to be cautious because there's no definition of major. It's just whatever irritates John Roberts when he wakes up one day. So this was the opening salvo, I think, in a longer Supreme Court effort basically to brow-beat agencies into being timid. So anyway, point being EPA can't use the overall power fleet as a sort of benchmark through which to set this standard. So what does that leave? What's the sort of range of motion that we think we still can act in here when we're talking about these new standards?Lissa LynchSo now that we have this Supreme Court decision in place. EPA's got some guidelines, and they can base the next round of standards on, as Justice Roberts put it, measures that make the plants operate more cleanly. So what they're looking for now is a rule that looks more like what traditional pollution regulations of the past looked like based on scrubbers, bag houses, the stuff that you can physically attach onto the plant or do at the plant itself to reduce that plant's emissions. When it comes to reducing CO2 emissions, the options are limited.David RobertsWell, let me pause there. Before we get into that, I just want to say one thing that I learned from your writing that I had not known, and I don't know that it's widely known. So there's been talk ever since Mass vs. EPA that bugged conservatives, and they would love to undo that, right? Because they would just love to moot this whole thing by undoing that ruling and saying that CO2 is outside the context of the Clean Air Act and have been muttering about doing that. So the Inflation Reduction Act statutorily locks into place that ruling.Right. It says explicitly CO2 qualifies under the Clean Air Act, and it instructs EPA to develop new standards. So there's no ambiguity about that. And it says EPA needs to set standards that are going to reduce emissions relative to baseline, where the new baseline is taking the Inflation Reduction Act itself and all its subsidies into account. So it's telling EPA calculate what all these subsidies are going to do, what the new sort of business as usual trajectory of emissions would be, and then develop regulations that reduce it further. I didn't know any of that.Lissa LynchYeah, no, this is huge. And I mean, obviously the Inflation Reduction Act is enormous. It is going to accelerate the clean energy progress that we've seen in the last decade or so by many fold. It is a huge, huge deal. And one of the provisions in this quite large law essentially reaffirms EPA's not only statutory authority, but its obligation to go ahead and set CO2 emission standards for fossil-fuel-fired power plants. And so that's a clear statement from Congress last year.David RobertsClear enough even for John Roberts.Lissa LynchRight. So we have always thought that that authority and obligation under the statute was quite clear, but now it's crystal clear, and they need to move.David RobertsAnd I think it's also important to absorb this new baseline idea, because the IRA itself and all the historical progress since the last round of these regs, the new expected baseline for power plant emissions is much lower now than it was when Oobama's EPA was calculating these things. Which commensurately means you're going to need tighter standards if you want to reduce further than that new baseline.Lissa LynchYeah. And it is kind of wild to look back on ten years ago. So it was ten years ago, 2013, that President Obama announced in his big climate change speech that he was directing his EPA to go ahead and set carbon pollution reduction standards under Section 111 for fossil-fuel-fired power plants. The first time that was being done. So much has changed in ten years in the power sector. And I think anyone listening to this podcast knows we are smack in the midst of a clean energy transition in the power industry. Industry itself says so.The Edison Electric Institute says we are, quote, "In the middle of a profound long term transformation in how energy is generated, transmitted and used." Lazard, the investment firm, estimates that wind costs have fallen by 46%, solar has fallen by 77% over the past decade. So we're just in a totally different world now than we were ten years ago. And so we passed the Clean Power Plan's 2030 emission reduction targets in 2019 without the Clean Power Plan ever having gone into effect.David RobertsWhich in retrospect makes all the Republican arguments about how this is an economy killing regulation and it's too strong and it's unrealistic and there's no way we can move that fast look utterly ludicrous, which we all said at the time, but we had to pretend that it was a real live argument. So they're saying it's too stringent, it's going to destroy the economy. And here we rocketed past it in 2019 without any regs.Lissa LynchRight? And that is part and parcel with each time. There are new ambitious pollution standards set ...David RobertsEvery time.Lissa LynchUnder the Clean Air Act, industry claims the sky is going to fall. This happened with the acid rain program back in the American Electric Power predicted that it was going to destroy the economy of the Midwest. Like the lights are going to go out, the sky is going to fall.Every time and we never learn. We never learn from those previous examples. It's crazy, right?And so the actual costs of complying with the acid rain program and reducing sulfur dioxide ended up being, I think, around a 10th of what industry had estimated. Sulfur scrubbers are now widely used. The program has been a great success. It is this great example of how we can set pollution standards and then innovate to meet them cost effectively and quicker than anyone expects. We do it over and over again.David RobertsOver and over again.Lissa LynchAnd we can do it in this context.David RobertsRight? One more thing. Before we get to what's available for the new standards, we should mention I should mention that when the clean power plant got shut down, the legal obligation to pass regulations on existing power plants then passed to the Trump administration, which did that sort of passed a ... what was it called? The clean America ...Lissa LynchThe Affordable, Clean Energy Plan.David RobertsYes, Affordable Clean Energy, the ACE Plan, which several analyses showed would on net have raised emissions in the power plant sector. So those got shut down in court, too. They were just completely a joke. Ludicrous so that's all the history. So here we are Biden's EPA has got to regulate existing power plants and new power plants. And it can't take this so called outside the fence line holistic approach that the clean power plant took. So it's got to set standards based on what you can do at the individual power plant level inside the fence line, as they say.So what are the options? Actually, I'm talking way too much, but let me get one more thing out of the way and then I'll let you talk. But one of the things that faced the reason I just want people to understand this too, the reason Obama took this approach, the reason Obama's EPA took this outside the fence line holistic approach, is that if you're just restricting yourself to the individual power plant, you're stuck with either marginal improvements, right? You get the boiler to work more efficiently, you tighten up efficiency, and you can sort of marginally 3% to 5%, reduce emissions.Or on the other side, there's carbon capture and sequestration, which especially ten years ago when Obama's EPA was contemplating it, was not very well tested, not very well proven, super expensive. So you either had sort of like a fly swatter or a nuke when it comes to the individual power plant, which is why they went with the holistic approach. So now the holistic approach is off the table. We're back to the fly swatter or nuke problem. So just tell us sort of like, what are the available options here?Lissa LynchYeah, so you kind of covered the two ends of the range, right? On one end, the very low ambition end, you can make minor improvements to the operating efficiency of the plant, the way the plant operates. That was the basis for the standards that the Trump administration issued. And as you noted, improving the efficiency of the plant makes it run better and it can be called upon to run more and therefore can end up increasing its overall emissions. That sort of rebound effect. That's a possibility. You can still reduce emissions through operating efficiency improvements. And I think there's more options that could achieve greater reductions than the ones that the Trump administration included in their rule.But still, we're talking the very low-end, single percentage reductions in the middle, there's this option of cofiring with a lower carbon fuel. So if you're talking about coal plants, you can co-fire that coal plant partially with gas. In a gas plant, you could co-fire partially with hydrogen and you're going to bring the emissions rate of the plant down somewhat. In some of our analysis, we've estimated that a 40% cofiring coal with gas. So cofiring a coal plant with 40% gas gets you about a 20% emission reduction. So it's not nothing, but it also involves additional fossil infrastructure to get gas to a coal plant or additional infrastructure to get hydrogen to a gas plant.And on top of several other issues with hydrogen that we can talk about a little later.David RobertsWell, a legal question, I guess all of this in some respect is arbitrary, but where is the line between forcing fuel-switching, which I think Supreme Court said was out of bounds, and too far, versus a rule that requires cofiring, which is like kind of like halfway to fuel switching? Is there a legal distinction there between those two?Lissa LynchThere's absolutely precedent for requiring cleaner fuels or fuel processes. What the Supreme Court mentioned, at least in dicta, was we don't want to see standards that would force a plant to stop existing. And so essentially, if EPA were to base the standard on total conversion from coal to gas, which some coal plants have undertaken with cheap gas prices, that I think, based on our reading of the decision anyway, would probably be too far. So full conversion probably off the table along with generation shifting. But partial cofiring is actually one of the technologies that the Obama administration considered for their Clean Power Plan, as was carbon capture.And as you noted, the approach that they took in the Clean Power Plan, they selected because it was the most cost effective. So they ruled out carbon capture and cofiring, not because they weren't adequately demonstrated or available, they were just more expensive than the approach that EPA ended up going with.David RobertsBut now we're forced back basically to that more expensive approach.Lissa LynchRight, as I mentioned before, but want to keep reiterating, this is all about setting the level of the standard, finding it's a math problem. EPA looks at the options, and so the options as we see them are efficiency improvements, getting very little cofiring, getting somewhere in the middle, or carbon capture and storage, getting the most amount of emission reductions. They look out at that and they select the best system. Then they apply it to the plant and essentially do a math problem and come out with a number, a numerical limit for the amount of CO2 emission reductions that the plants need to achieve.Then they hand the baton off to the states for existing sources and to the companies for new sources. So this is not a requirement to install that specific technology. It's a way to derive the level of the standard and then pass that off to the states and the companies to comply with.David RobertsRight. EPA sets the standard and then says to states and companies, do what you want.Lissa LynchRight, as long as you can meet this number. Be creative, innovate.David RobertsThe central question is what upon what technology is the number going to be based on exactly? This low-end, this something in the middle, and this high-end, which is carbon capture and sequestration. So here I want to talk about what the sort of arguments are around this. It says in the text of the Clean Air Act that EPA should set the standard based on the best available system. That has to be adequately demonstrated so I just want to dig in a little bit on the technical legal language here. Like what exactly or what have courts interpreted that language to mean exactly?What is required to be adequately demonstrated? A single demonstration plant somewhere? like some good charts and graphs in a lab? Or do you have to be commercial, or does price and, you know, financial viability come into that? Like, what is EPA thinking about when it thinks about what is adequately demonstrated or best?Lissa LynchYes. Okay, so I'm a Clean Air Act lawyer. This is my favorite part. I love the Clean Air Act, and I love to talk about the language of the statute because that's actually what we're really fighting over here. EPA is tasked with establishing the standard of performance, and so that definition is in the statute. They have to determine the degree of emission limitation that can be achieved through the application of the best system of emission reduction that is adequately demonstrated considering cost, energy factors and essentially other factors. And so there's this really defined set of criteria that EPA needs to go through as they're determining what's the best system of emission reduction.So we've been talking about adequately demonstrated that it can't be a made up technology, but it also doesn't have to be widely used by everyone. Already, the Clean Air Act is technology forcing it's forward looking.David RobertsRight.Lissa LynchIt requires the regulated source to reduce its emissions commensurate with the best control systems that are available, not the ones that are already sort of out there in use, that plants are choosing to use of their own accord. So again, in a lot of ways, this is analogous to so SO2 scrubbers which were not in widely used, they were not widely produced in the 90s, and there were all these doom and gloom predictions of how much it's going to cost.We're not going to be able to do this. So right now, there's no limit at all on CO2 emissions from power plants. There's been no reason to innovate on carbon capture for power plants, and there is not a ton of projects out there in the world, but there are plenty to serve as an adequate demonstration for purposes of the Clean Air Act. There's essentially three parts here of carbon capture. There's capture, there's transport, and there's storage. And each part of that process is well established and has been in use for decades, especially the capture part. We've been capturing carbon for decades.And so there's plenty of demonstration in both pilot projects and at commercial scale to be applied in the power sector. It doesn't have to be something that's already widely out there.David RobertsSo it's sort of a holistic consideration. And EPA is sort of attempting to apply something like wisdom here. There's a balance of considerations. And I assume, and tell me if I'm wrong, that the usual suspects are arguing to EPA that that would be too strict, that a standard based on CCS would be too strict. And presumably the way they're making that argument is by saying CCS is not the best or adequately demonstrated. So what is their argument? Have you read, like, their briefs, or do they have a specific argument here?Lissa LynchThey do, and they're familiar. It's the same set of arguments that we've seen over and over. It's too costly, we can't do it yet. We're getting there. Just let us do this at our own pace. One of the concerning things is the argument that we need gas now, and we're okay with standards that are based on something we might do in the future. So set the standards only at a level that were ready for CCS, that were ready for hydrogen sometime in the future.David RobertsCCS ready.Lissa LynchCCS ready. Hydrogen ready.David RobertsI love that phrase.Lissa LynchIt's just kicking the can down the road.David RobertsLike your own David Hawkins once said, it's like saying, my driveway is Ferrari ready.Lissa LynchExactly. And I think what's at the heart of this industry estimates that CCS can achieve 90% capture and emissions data from the projects that have been built back that up. That is not to say that EPA needs to go ahead and require a 90% emission reduction from every single coal and gas plant in the country. Right. We think it makes the most sense for EPA to draw some distinctions based on the role that the plants perform on the grid. Right. So there's a big difference between ...David RobertsOh, really?Lissa LynchYes, there's a big difference between plants that are used for baseload power that are running constantly all the time, and those that are used intermittently for reliability as backup power during times of high demand.There does not need to be the exact identical standards on those two types of plants. So plants that are running full time are emitting the most, and they should be required to reduce their emissions to the greatest degree. So we think it makes sense to have a 90% capture based standard for plants that are going to serve as baseload, that are going to run all the time. And it's the most cost effective for those types of plants to install CCS, especially when you consider the tax credit. Plants that are operating intermittently as backup are already emitting less pollution simply by running less.And those plants can face a less stringent standard, stay on the grid as backup, and serve that really important reliability function without being required to install CCS, they can meet a lesser standard.David RobertsIs there a distinction between those two kinds of plants that is clean enough and clear enough to set legal limits around them because there are some fuzzy edge cases? And then, number two, are we sure that EPA like that's within EPA? Sort of. That's not major for EPA to be thinking to be sort of specifying which standards applied based on function based on operations.Lissa LynchYes. So this is the kind of detailed analytical and technical decision making that is well within the expert agency's wheelhouse. This is exactly the type of thing that the experts at the agency are normally tasked by the statute to do. They're the ones who run the numbers and figure out what's most appropriate for the specific type of plant that they're regulating. And in fact, the existing standards for new sources do include these sorts of subcategorization based on the use type of the plant. So this is not something complex and mysterious. This is based on true and visible distinctions between types of plants based on the way that they're used.And I think it really is yet another layer of the sort of flexibility that EPA can and should build into this program. Again, none of this is a particular mandate. And so the states and the companies then have that additional choice. Well, they can run a plant full steam and install controls, or they can run intermittently, keep that plant online and face a lesser limit, or they can retire it and make their own choices about what to replace it with. This is providing more and more levels of choices to the regulated industry to comply in the way that makes sense for them.David RobertsYeah. And something you mentioned in passing, I want to just highlight and put a pin in here, which is that a big argument here on your side is CCS is now being showered with subsidies. Like there are huge subsidies coming down from the Inflation Reduction Act for captured hydrogen, enough to make them economic in some cases or certainly a lot closer. So these are synergistic. I'm saying like the Biden administration's legislation is bolstering the case for these tighter standards because CCS is not just on its own now. Now it's explicitly being helped and shaped and stood up by government grants.Lissa LynchThat's right. And at the same time, the Inflation Reduction Act also contains a ton of money for renewables. And so that level of investment across these types of technologies really changes the overall cost of the regulations. And that's one of the things that EPA has to consider, is the overall cost of compliance to the system. And so again, when these standards are in place and states and companies are looking out across their fleet and saying, oh, what should we do? All of those incentives are going to come into that consideration for them. And it makes renewables really cheap to replace your older dirtier generation with.David RobertsI got one more question about the standard setting before I want to get into the politics a little bit, but some energy heads out there may be familiar with a company called NET Power, which has come up with a new, I guess it's a couple of years old now. They've built one demonstration plan, a new technology that without getting into the technological details, it's really fascinating. I might do a whole pod on it, but basically it burns natural gas. Emits no particulate pollution at all and captures 100% of the CO2 emissions as a purified stream of CO2.So you have in NET Power a natural gas power plant with zero particulate emissions and 100% carbon capture. They've built one, it's running and working. So has there been any talk about using that as a standard? Because that would be 100% carbon reduction. Has NET Power's tech come up in these discussions?Lissa LynchYeah, for sure. I mean, it's very cool, right? It was included, the EPA put out a white paper last year asking for input, sort of preregulatory input on the technologies that are available to reduce emissions, specifically from gas plants. And they took comment on the NET Power approach, which I cannot remember the name of. Allam something.David RobertsAllam Cycle, I think is right. I was trying to think of that.Lissa LynchAnd it is really cool and innovative and I hope that that is a direction that we're going to see any remaining fossil generation go in. And I think we may see that in the proposal. Again, all of what I'm talking about here is we have not seen a proposal from EPA. This is sort of NRDC's perspective on what is possible, justifiable achievable and legally defensible in court. And this is what we've been advocating for before the agency, and then we'll have to see what they come up with. We're expecting a proposal relatively soon, probably within a month or so.David RobertsWhat's really interesting to me about this, just from a political perspective, is it's a sort of weird inversion here of the typical roles. So you've got the power sector, which has been touting CCS for years, to sort of like defend the ongoing existence of fossil power plants. They sort of wave their hands at CCS and say, no, we can go clean too. So they've got Joe Manchin out up there saying, I want to go clean, but I want to do it with fossil. I literally think they've convinced him that they can eliminate their carbon emissions. And traditionally you've had sort of greens and climate people saying that's big and overly complicated and overly expensive and stupid and nobody's ever really going to do it and it's just going to make more sense to switch to clean generation.And so now we've got this odd political inversion where the power companies are saying, whoa, whoa, whoa, CCS is not really ready. We didn't mean "ready ready," we meant just over the horizon is what we meant. That's where they like it. They like CCS just over the horizon. And all of a sudden this is like calling their bluff. Like, oh, you've been talking about this for decades. Well, how about you use it? And then on the green side, on the climate side, you have a similar inversion where now greens and green groups like yours are arguing like CCS.Oh, it's great. Yeah, it's right there, it's ready to go, absolutely ready to serve. As the basis for a standard. It's just odd and funny and I just wonder if you have any comment on the politics of trying to herd the cats in the climate community around this message of like CCS is ready and viable, which I don't think comes naturally to a lot of factions, let's say, within the climate community.Lissa LynchWell, that's well phrased. We're walking a fine line. I think our vision for the power sector and the power industry is one of net zero. And in order to get to net zero, that means a heck of a lot of renewables and a heck of a lot less fossil.David RobertsRight.Lissa LynchFor the purposes of setting pollution limits, we need a technological basis and by far and away CCS is the most effective of the options that we've got.David RobertsThat the Supreme Court left us.Lissa LynchExactly. And I think it is very important to have limits on the CO2 emissions from power plants. I think that is sort of the baseline, most important thing from our point of view.David RobertsRight, well, lots of, I mean, reports, we should just say lots of reports have been done saying the legislative progress is great, but it's not enough to reach Biden's stated goal. And to reach Biden's stated goal, you need a whole of administration approach, including these standards.Lissa LynchExactly. And just to put some actual numbers on that, if we want to meet our international and domestic greenhouse gas emission reduction targets for 2030, we need to get our power sector emissions down by 80% from the 2005 sort of peak emissions. We're already about a third of a reduction, 33% -ish reduction since 2005. Our analysis and RDCs of the Inflation Reduction Act puts us now on track to cut our power sector emissions by about 65% by 2030. So that is massive and also not enough.David RobertsRight.Lissa LynchAnd our estimate there is somewhere in the middle there's a really wide range of modeling of the Inflation Reduction Act and a lot of work is going to need to be done in order to get those emission reductions that we're sort of showing in that modeling. It's not a foregone conclusion.David RobertsYeah, one of the wildest things going on right now is just the incredible range of projections about what the IRA will do. Right. Like the sort of government came up with, oh, that it's going to spend $370 on these tax credits and then Credit Suisse is like, actually it's more like a trillion. And then I think there was another one last week, it was like actually it's more like a trillion five. So the range of amounts of money that could come out of this bill are just huge. It's so opaque.Lissa LynchIt is. And a lot still remains to be written in all the guidance for these tax credits. But that sort of uncertainty aside, I think the Inflation Reduction Act is going to accelerate a bunch of clean energy and it's going to get us a bunch of emission reductions in the power sector. And at least based on our analysis, that's not quite enough. And we absolutely are going to need limits on the CO2 emissions in addition to investments in clean energy.David RobertsSo maybe the way to summarize is just to say endorsing CCS as the basis of a performance standard is different than endorsing CCS, full stop.Lissa LynchYeah, well put. And I think what we see in the modeling reflects what I've been saying about the decision making that comes once EPA sets the standard. So when we model standards that are based on CCS and we've included the Inflation Reduction Act in the baseline, we overall get to around between 70% and 77% CO2 emission reduction by 2030. And what we're seeing in the actual generation results, there is some CCS deployment and also a ton of clean energy.David RobertsThis is my next question, actually, and you're here answering it before I even ask it, but I just wanted to ask, as a matter of curiosity, has someone modeled what would happen if EPA sets the standards where you are endorsing and what does the modeling say about the decisions power companies are going to make? Like how many fossil fuel plants will shut down versus installing CCS? I don't know if there's like an easy answer to that.Lissa LynchWell, so we have done lots of modeling and we've been doing it for quite a while because even before this Supreme Court decision last summer, we were anticipating that EPA was going to be constrained and in this sort of inside the fence line way. And so we've really been looking for ways to get the most ambition and the most emission reductions out of these sort of source specific basis for the standards. That range that I gave you is based on CCS and partial CCS runs. So 70% to 77% overall emission reductions depending how much you crank the dial on the ambition.But still with some of those sort of flexibilities that I talked about in terms of the type of use of the plant and what we see in those runs is renewables and energy storage capacity tripling from now to 2030 and quadrupling by 2035. And I think that is in large part based on these new Inflation Reduction Act tax credits being just so much more cost effective. And we still do see some retrofits with carbon capture and storage and some new builds of gas with carbon capture, but not a massive amount. And so there is some uptake of the technology and there's also some reinvestment in clean energy and that kind of tracks with what you would expect, right?And that kind of goes back to that was essentially what EPA was counting on and basing their standards off of in the Clean Power Plan and that's why they did it that way. I think we can do it this way. And that carbon capture and storage based best system of emission reduction can be shown to be available to the plants that could use it. And not all plants are going to make that choice. It's going to be up to the states and the companies to look at their options and choose whether they want to keep that plant online, and that should work.David RobertsSo NRDC is recommending a CCS based standard for both existing-source regs and new-source regs. Is there any difference between those two that's worth sort of pulling out here?Lissa LynchYeah, so I think industry estimates that CCS can achieve 90% capture. And so given that that technology exists, we think it should be used to set the standard for at least the plants that are operating at full bore, both new and existing. When you're building a new plant, you have much greater options in terms of where you're sighting it, how you're building it. You should be required to use the latest and greatest technology on a brand new plant. So that's pretty straightforward for existing plants because they're all over the place. We rely on them already for power.There needs to be more flexibility, there needs to be more of a phase-in sort of glide path to compliance and some flexibility for how you're going to comply and some exemptions for those plants that are going to commit to retire. You don't want to make them retrofit right before they're expected to retire, you want to just let them plan to retire at the natural end-of-life of the plant. And so giving that flexibility on the existing source side is going to be really important and has long been part of the way that the section 111 standard setting has worked to differentiate between new and existing plants.David RobertsSo, CCS based standard in both cases, but maybe more flexibility and implementation for the existing plants.Lissa LynchExactly.David RobertsIf EPA does use CCS or hydrogen, something like that, as the basis for its performance standard, does it have any say at all in the details of sort of how CCS or hydrogen are used or measured? Because Volts listeners just got an hour and a half earful of discussion of the clean Hydrogen Tax Credits last week, and the details are many, and they make a big gifference in how clean hydrogen is used, how it's measured sort of how its carbon intensity is assessed, how much end users are allowed to claim reductions from using it, et cetera, et cetera. Does EPA get into any of that? Or is this purely just, we're using this tech as a way to set the numerical standard, but the details of how a power plant might implement this is somebody else's problem.Lissa LynchSo they absolutely have some authority over how it gets used to comply with this standard. So for purposes of standard setting, they're looking kind of broadly at what the technology is capable of achieving, how it's been used in the past, how it could apply to power plants that exist now in terms of compliance, though, they've got the authority over CO2 essentially in this rulemaking. And so if a plant is going to demonstrate compliance using carbon capture and storage or hydrogen, they can absolutely include the types of rigorous monitoring and verification requirements they would need to see in order for a plant to be demonstrating compliance using one of these technologies.David RobertsRight? So they can get into saying, here's what does and doesn't qualify as full CCS like measured every so often, or this kind of geographical storage. They can't get into that?Lissa LynchI absolutely think so. I think they have authority to say you need to have rigorous monitoring and verification from the point of capture to the point of sequestration. And that needs to be part of your demonstration of compliance for using carbon capture. For hydrogen ... It's a little trickier.David RobertsI'm very aware at the moment.Lissa LynchTo the extent that there is going to be a pathway for hydrogen to be used for compliance, it's got to take into account where that hydrogen comes from, how it's made in order to avoid net emissions increases. And I think they absolutely have that authority. Given that the purpose of this is for the best system of emission reduction, they've got to ensure that it is truly reducing emissions.David RobertsMaybe they can just borrow whatever treasury comes up with for the hydrogen.Lissa LynchAssuming it's good.David RobertsYes, true. If EPA doesn't go with CCS, doesn't go with the high end here, what do you think it will do? Will it fall back to something medium, something in the fuel blending sort of range? And just more broadly, do we have any sense at all of what EPA is thinking or which direction it's going or what to expect?Lissa LynchI think in terms of publicly facing tea leaves, what we've got to look at really is that white paper from last year where they had laid out the options and said, hey, give us some comments on what you think of these options for reducing CO2 emissions from combustion turbines. From everything that we have seen from this administration, we are hoping that they're going to be ambitious. They know that this is a critical moment. They know that this is an important wedge of emissions, that the power sector is still a really significant percentage of our emissions, roughly a quarter, and that we need standards on those CO2 emissions and they need to be strong.And it's not going to be worth all this work, honestly, if they don't make them strong. And so that has been our message to the administration, is, look, if you're going to go through the trouble of doing this all over again, let's make it worth it.David RobertsIs Manchin he's like the monster under my bed at this point. Is there some way Manchin could burst out of the closet and screw this up somehow? Or is he ...Lissa LynchI hesitate to even speculate.David RobertsCan I just not think about him in this respect, or does he have some way that he could theoretically muck this up, or is this something that's finally just sort of beyond his reach?Lissa LynchI think for now, the ball is in EPA's court to come out with a proposal and to take public comments and to consider them. And so for right now, this is an EPA project. Once it's finalized, it will presumably be subject to a Congressional Review Act resolution, and it will depend on who is in charge as to what happens there. And so that's when Congress gets to have its veto opportunity over regulations, which is unfortunate, but it is the world we're living in.David RobertsAnd does that just require a majority or a supermajority?Lissa LynchI believe it's just a majority, but it can be blocked by the President.David RobertsRight. And by the time there's a new president, it'll be too late. We're coming in under the deadline that the Congressional Review Act, if it's going to happen at all, would happen under Biden and thus would be vetoed. So that's not really ...Lissa LynchAnd so that takes place at the final rule. So we're only at the proposal stage. We've got a long way to go.David RobertsIs it going to get done under the Congressional Review Act just to just explain to listeners? Congressional Review Act says basically Congress can undo or veto a regulation basically within a certain window of it being finalized which is 60 ...Lissa Lynch60 working days, which does not equal the calendar days.David RobertsRight. So what you want to do is get your regulations on the books more than 60 working days prior to the next presidential election.Lissa LynchExactly.David RobertsJust so you're sure your guys in charge, if it happens.Lissa LynchThe date that we are looking at is next April, roughly a year from now, for all of these regulations. Right. Like it's not just ...David RobertsThere's a lot these are not the only ones. There's a lot of there's a big backlog.Lissa LynchIt is. And we are seeing the use of the Congressional Review Act right now as we speak in this Congress with attempts to invalidate the rules that the administration has recently finalized. It is a terrible tool. It is not a good thing.David RobertsIt's a Newt Gingrich special, isn't it? Am I right about the history? Of course, like so many malignant things in our government treat.Lissa LynchBut it is the world we're living in, and I think the administration is aware of the timeline that's facing them next year.David RobertsInteresting. So you think a proposed rule is going to show up in the next month or two?Lissa LynchYeah, we're expecting a proposed rule maybe by the end of April. And then when ... you know what happens, that gets published in the Federal Register. There's an opportunity for public comment. There's public hearings. And so there will be sort of a flurry of activity as everybody gets their comments in, and then the agency has to review those comments and address them in the final rule. That's part of the sort of Administrative Law 101. And then they have to issue the final rule and demonstrate yeah, we heard all your comments, and this is why we made the decisions that we made.David RobertsAnd that's when the lawsuits kick off.Lissa LynchAnd that's when the lawsuits start. Exactly. We do it all over again. It's the circle of life.David RobertsYes. And what do you think of the chances that this Supreme Court ends up hearing a case on this again? Do you think the conservatives can mount a legal case plausible enough to get it back into the Supreme Court?Lissa LynchI would never speculate about what this Supreme Court will do, because who knows, right? Our job is to make this thing as airtight as possible. And Chief Justice Roberts gave us some guidelines and a roadmap in the West Virginia decision. He told us what he's looking for, and it's this sort of traditional looking approach to pollution control. And so that's what we're operating under. And we are urging EPA to follow those guidelines and do the most that they can within those constraints, and we'll be there to defend it with them if it comes down to that.David RobertsAll right, awesome. Lissa Lynch of NRDC, thank you for coming and forecasting and explaining all this with us. Maybe we'll talk again in that distant future day when these things are actually on the books and the lawsuits have started. We'll talk again.Lissa LynchThank you so much for having me.David RobertsThank you for listening to the Volts podcast. It is ad-free, powered entirely by listeners like you. If you value conversations like this, please consider becoming a paid Volts subscriber at volts.wtf. Yes, that's volts.wtf so that I can continue doing this work. Thank you so much, and I'll see you next time. 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

A few years ago, Melissa and Chris Bruntlett and their two children moved from Vancouver, Canada, to Delft, a small city in the Netherlands where 80% of journeys are taken by foot, bicycle, or public transit. Their new book, Curbing Traffic: The Human Case for Fewer Cars in Our Lives, is about what it's like to live in a truly low-car city, and how other cities can capture some of the same benefits.Reading the book was a joy for me -- it reinforced so many of my priors! -- so I was excited to talk to Melissa and Chris about how to design streets for people, the connection between urban infrastructure and social trust, the flourishing that Dutch children enjoy, and the myriad evils of cars. 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, Dan Lashof of the World Resources Institute discusses the trajectory of biofuels since the early 2000s and the implications of new biofuel standards recently proposed by the US EPA.(PDF transcript)(Active transcript)Text transcript:David RobertsMy fellow olds will recall that, back in the 2000s, biofuels were an extremely big deal in the clean-energy world, one of a tiny handful of decarbonization solutions that seemed viable. Biofuels — and the many advanced versions thereof allegedly on the horizon — dominated discussions of climate change policy.Much has changed since then. Principally, it has become clear that electrification is the cheapest path to decarbonization for most sectors, including the transportation sector. The Biden administration has explicitly put electrification at the center of its transportation decarbonization strategy.Biofuels, in the meantime, have gone exactly nowhere. Advanced biofuels remain almost entirely notional, old-fashioned corn ethanol remains as wasteful as ever, and new scientific evidence suggests that the carbon costs of biofuels are much larger than previously appreciated.It's not clear if anyone has told the EPA. For the first time in 15 years, the agency is on the verge of updating biofuels production mandates first established by the Energy Independence and Security Act of 2007, and its proposed standards do not appear cognizant of these recent developments, or of the administration's larger transportation strategy.To discuss the latest developments in biofuels and the EPA's puzzling blind spot, I talked to Dan Lashof, director of the World Resources Institute. We discussed how biofuels have developed since the early 2000s, the lack of progress in advanced biofuels, and the stakes of EPA's coming decisions.Alright then. Dan Lashof. Welcome to Volts. Thank you so much for coming.Dan LashofReally happy to be here.David RobertsI've been wanting to do an episode on biofuels forever because I often just pause to think, whatever happened to biofuels? Because old people like you and I will recall way back in the day, in the early times, biofuels used to be a very big deal. They used to be the top line item, the sort of the hot subject of conversation, and it's really flipped since then. So maybe just to start, let's use our little time machine squiggly squiggly fingers, time machine, go back to say 2005 to 2010, the early 2000s, and just sort of tell us what was the state of the decarbonization conversation then and what role did biofuels play in it?Dan LashofRight, well, back then, Tesla hadn't built its first car. Photovoltaics cost ten times or more what they do today. And the big fight was to prevent hundreds of new coal plants from being built. So the idea that we would replace gasoline with electricity seemed far-fetched at best. And a lot of environmental advocates were focused on fighting coal. There was some discussion of alternative fuels, but when you looked at the transportation sector, biofuels seemed like one of the best options out there. And then there was this idea, there was a debate about corn ethanol from the beginning, right?David RobertsCorn ethanol goes back. I mean, I kind of want to distinguish between corn ethanol and kind of biofuels. The larger category, like corn ethanol, goes back farther than the rest of this stuff. Right?Dan LashofRight, but back then we weren't making much of it, right? So in 2007, there was about 6 billion gallons of corn ethanol being produced, which is about 4% of gasoline consumption back then. And there was a debate about it. A lot of that debate was like about net energy balance. Remember that one?Does it take more energy and fertilizer and tractor fuel and trucking than is in the fuel? I think that debate sort of missed the point, and it was gradually shifting to, well, we don't really care about BTUs, we care about carbon and what's its net carbon impact.David RobertsAnd I feel like the limitations of corn ethanol were around even then, which is why I remember so much buzz around cellulosic biofuels.Dan LashofYeah, right. At that time, there was new research that seemed very exciting. I was convinced that that was the future of biofuels. Right. We were going to make ethanol not from grain, not from the corn kernels, but from corn stalks, maybe from some perennial grasses like ...David RobertsSwitchgrass.Dan LashofYeah, right. And that was going to be awesome because you wouldn't be competing with food as much, and it was supposed to be cheaper because you weren't ... as waste material or the yields were higher. So that was going to take over.David RobertsYeah. Wow. We were so young then. And so then this is the sort of political atmosphere in which came the Energy Independence and Security Act of 2007, which, among its other sort of puzzling features in retrospect, was a big bipartisan energy bill passed in part to address emissions and I guess just wasn't the poison that it is now, I guess. But so part of that bill was about biofuels and setting those standards. So just tell us kind of what we did about biofuels in that bill.Dan LashofTo set the stage. The big political driver really was concerned about imported oil, which was peaking. It actually peaked in 2005, but it was about the same level through 2005, '06, '07.David RobertsRight. Because this was before the fracking revolution changed all that.Dan LashofRight. And fuel economy standards for automobiles had been stagnant for a long time. So the bill had three main components. One was reform of the fuel economy standards, actually setting them on a size basis, which allowed the auto companies to kind of accept it, and then setting a target to increase them to 35 miles per gallon.David RobertsIs that when the light truck loophole made its way into ...Dan LashofNo, that was already there. This was actually designed to help address that by saying it did leave trucks and cars separate, but it said, we're going to base the fuel economy for a manufacturer based on the mix of sizes of vehicles they make. So if they make bigger cars, they don't have to hit the same level, but it reduced the sort of clip effect between a truck and a car. So it actually allowed more of these crossovers, but it also allowed unlocking an increase in the standards which had been stuck. So that was a big component. And one of the things that environmentalists were most excited about in that bill, there was also a set of energy efficiency provisions, appliance standards and other things.And then the third big piece was the Renewable Fuel Standard.David RobertsAnd did the Renewable Fuel Standard exist prior to this or was it developed for this bill.Dan LashofIt did exist. I think it was first passed in 2005, but it was relatively modest. And then in the 2007 bill, well, there was this buzz about cellulosic ethanol. The thought was set a long term trajectory of increasing uses of biofuels and make sure that by 2022, most of that was supposed to be cellulosic ethanol.David RobertsRight.Dan LashofSo the standard ramped up to 36 billion gallons of total biofuels by 2022. That was the target of that 21 billion gallons was supposed to be advanced biofuels, either cellulosic ethanol or other biofuels made from something other than corn.David RobertsRight. And this suffice to say did not happen. It did not play out that way. So maybe sort of take us forward from 2007 to what happened to actual production of actual biofuels. Like how has the industry developed in the 15 years since then?Dan LashofWell, so the corn ethanol industry grew as expected up to about 15 billion gallons which was sort of what it was supposed to be capped at subtracting 36 - 21 is 15. So that was what corn ethanol was supposed to provide. Right, they did that. Cellulosic ethanol not so much. The actual gallons of cellulosic ethanol produced in 2022 were zero. Literally zero.David RobertsWait, say that, say again.Dan LashofThere was no cellulosic ethanol produced in 2022. There had been a couple of demonstration plants, none of them were actually operating in 2022. There was a little bit of what was considered cellulosic biofuel, about less than a billion gallons of biofuel equivalent. That mostly came from landfill gas, which was considered cellulosic. Because ...David RobertsWeird,Dan LashofMost of what's in a landfill is woody stuff that's decaying and making methane. So if you capture that and use it in a CNG vehicle, that's considered part of this.David RobertsBut the whole infrastructure of wild hopes about switchgrass and waste products and all of this, it came to literally nothing.Dan LashofIt came to literally nothing so far. Now, there's still some true believers, it's still right around the corner, kind of like. But the thing that did happen and there's about 5.6 billion gallons of the total biofuel produced in 2022 is something other than corn ethanol.David RobertsWhat is that stuff?Dan LashofMost of that is bio-based diesel and that's a couple of different things. So some of that is from waste oils. So like used cooking oil.David RobertsYes. I remember so much talk about used cooking oil.Dan LashofSo there's a little bit of that, but a lot of it is biodiesel or so called renewable diesel made from oil crops like soybeans or palm oil, which is imported and a huge problem or other oil crops.David RobertsNow, are those in the renewable fuel standard like or do those have a category of their own in the, in the standards?Dan LashofThere is a category of bio-based diesel. It's required to produce a billion gallons in 2022, and it exceeded that. But it also counts as part of this larger advanced biofuel category.David RobertsYeah. You mentioned before the call that in terms of land use, that biodiesel is now rivaling corn ethanol.Dan LashofYeah, this actually shocked me when I looked into it. So we use about 30 million acres of land to produce corn that goes into making ethanol. We use another 30 million acres of prime US farmland producing soybeans that goes into biodiesel wild. And we hear much less about that, partly because it actually produces much less fuel. It's overall much less efficient.David RobertsOh, the diesel process.Dan LashofYeah, it takes a lot more land per gallon of diesel than you get per gallon of ethanol because corn is not that great. No, corn is not great, but the biodiesel is even worse. And when you think about the global market for oil crops so palm oil, for example, is a major driver of deforestation around the world.David RobertsRight.Dan LashofAnd that's totally fungible with soybeans and canola and other oil crops. So if we're diverting soybeans to make biodiesel in the US. That means somebody else is probably producing palm oil and may well be deforesting the rainforest to do it.David RobertsSo the amount that was set for advanced biofuels in 2007 for 2022 just isn't being met. It's not as much biofuel as that legislation anticipated.Dan LashofYeah, so the law allowed EPA to waive the requirement if it determined that the supply just couldn't meet the number and set a level that they concluded could be met by the industry. And so that's what they've been doing consistently every year for the advanced biofuels requirements.David RobertsI guess I knew on some level that things had not panned out the way we hoped in 2007. But the notion that the whole hype about advanced biofuel came to literally nothing and all we basically did is just keep growing corn ethanol and biodiesel like we were before, with all the flaws. I mean, we already knew about the flaws, some of the flaws then. Speaking of the flaws, tell us about what we — insofar as you can I'm sure there's a lot, and it's difficult to summarize — but tell us what we've learned about the environmental and carbon impacts of biofuels that we didn't know when we passed this law in 2007.Dan LashofWell, I'd say there's two main things. First, we know that there's a much better way to eliminate emissions from passenger vehicles. So, like I said, we didn't really believe, at least I didn't really believe, electric cars were going to be a thing back then. Now, that's clearly the way we get rid of emissions from the road. And if you do the calculation, it takes 300 acres devoted to corn ethanol powering an internal combustion engine car to move it as far as one acre of land dedicated to solar photovoltaics, to power an EV 300 to 1. And we can put solar farms in the desert and not just on actual farms.So it's just like a completely different landscape in terms of what are the pathways.David RobertsYes. And as I point out to people, solar has only gone in one direction and cellulosic biofuel has also only gone in one direction, which is nowhere. At a certain point, you got to learn from trajectories.Dan LashofSo that's the first thing. There's a much better way. The second thing is, I think the key conceptual shift is really, and it hasn't been incorporated into policy yet, is that land is scarce. We need to focus on the overall use of land and not just land use change. So the way I think about this is if we want to achieve net zero emissions globally by 2050 and feed 10 billion people and protect biodiversity, how do we optimize the way we use land to do all of that?David RobertsRight.Dan LashofAnd if we dedicate an acre to producing biofuels, we can't use that same acre to have an old growth forest that is storing carbon in the trees and providing biodiversity.David RobertsRight. So for any given acre of land, if you use it for one thing, part of the cost is the opportunity cost of not using it for something else that would have absorbed more carbon.Dan LashofYeah, exactly. And of course, the opportunity cost is a pretty familiar concept in other contexts. Right. We know that if we spend $1,000 on a vacation this summer, we can't invest that money to pay for travel when we retire.David RobertsRight.Dan LashofBut for some reason, that it hasn't really been built into the way people think about land. I think there's still this notion that there's going to be a lot of spare land out there, we can reclaim land, but when you do the math, it just doesn't add up.David RobertsWell, about the math, though, how confident are we that we know and understand all the ins and outs? Do we have a ranking of land uses by carbon absorption? Do we have a clear sense of that ranking?Dan LashofI mean, I think that's a good question. So if you've got a old forest, the best thing to do from both a carbon point of view and a biodiversity point of view is protect it.David RobertsRight.Dan LashofKeep the carbon in the trees, keep the birds and bees flying around. And anytime you use land for something other than feeding people, it's going to put more pressure on those remaining old forests. So that's one way to think about it.David RobertsRight. Because I'm thinking all these land use arguments, as you well know, are frequently deployed against renewables as well. There's an opportunity cost for food production. There's even some people who say there's an opportunity cost, like whatever, put a nuclear plant, get more power for less area. There are opportunity cost for putting mirrors. So this question of the highest, best use of land from a purely carbon perspective cuts a lot of ways.Dan LashofYeah, that's true. And we have not really done a full kind of optimization of land use for achieving decarbonization. That's something I'm actually hoping to work on over the next couple of years. I think it's badly needed. There's some work that's been done that points in that direction, but not a fully integrated analysis. But to give one example, yes, there are issues around land use for renewables and certainly legitimate conflicts over how people want to see their community or their landscape look. But NREL did a study of what it would take in terms of land to get to 100% clean electricity grid by 2035, which is the Biden administration goal.And they looked at the total amount of land that you had to dedicate to wind/solar transmission lines. That amount is smaller than the amount of land we're using for biofuels today. And those biofuels are supplying less than 10% of our transportation energy. So there's no comparison in scale.David RobertsYes. Got it. So even if we don't have perfectly tuned, fine-grained distinctions here, there are plenty of crude distinctions we can make. Some of the cases are obvious, more obvious than others. And so given this new way of seeing biofuels, this sort of opportunity cost of lands carbon opportunity cost, and I assume we probably learned more stuff about biofuels in the interim in terms of the amount of energy in versus out and all this. So how do biofuels look now relative to how we thought about them then? I'm going to guess that based on our new knowledge, they look worse.But how much worse? Like corn ethanol, for instance.Dan LashofYeah so ...David RobertsNot good. Not good.Dan LashofNo, I mean in terms of energy in versus energy out, actually, the ethanol industry has gotten more efficient. If you're ignoring the land problem, it's starting to look, you know, it looks okay. I mean, it doesn't get you to zero by anybody's calculation. But if you ignore the land issue, 30-40% reduction relative to gasoline is plausible. But once you take the carbon opportunity cost of land into account, then anytime you're dedicating an acre to grow fuel rather than either food or forests, you're going to lose. And you're going to lose it's not close it's by factors two, three or more.David RobertsThat's true of any crop, any kind of fuel across the board.Dan LashofYeah, just because that opportunity cost is so large.David RobertsInteresting. So let's take this knowledge then and gallop here into 2022, I guess we're in 2023 now.So tell us first of all, why is EPA revisiting these standards? I guess they decided in 2007 that they could see exactly 15 years into the future of biofuel demand, but no further. Was it always built into the law that 15 years, and then we'll start revisiting it.Dan LashofExactly. So Congress specified exact volume targets for every year through 2022. And again, it gave EPA the ability to adjust those if it concluded it wasn't feasible, which is what they had to do on the advanced biofuel side. But starting in 2023 ...David RobertsWait, can I pause? Before we get into the change in the line, I want to ask one question about the volume thing, because it also strikes me as kind of crazy, like how gasoline performs with ethanol in it. Depends on the level of ethanol in it, right. The percentage of ethanol. And there's been a lot of arguing about how much ethanol you can blend into gasoline. But if you're specifying volumes of biofuel, you can't specify volumes of total gasoline demand that's going to fluctuate out of your control. So if demand goes way up, then the same volume looks like a smaller percentage, and if gasoline demand goes down, then the same volume looks like a larger percentage.David RobertsIt just seems like specifying volumes is a bizarre way to approach this question, especially 15 years in advance, when you have no idea what total demand for gasoline is going to be. So you really have no idea what percentage of the total these volumes are going to be. Am I crazy, or is that just a weird way to approach this issue?Dan LashofThat's correct. What EPA actually does under the law when they set the targets, is they look at the volume target. They project how much gasoline will be consumed, and then the actual requirement on refineries is a percentage. So they convert the volumes into percentage when they implement it. But they've only been doing that sort of one or two years in advance. Or actually, sometimes they get to the end of the year, and then they do it looking backwards, which is a little weird, too. So then in a year like 2021, when the Pandemic shrunk demand for gasoline, it was actually the percentage requirement that was binding, and the volume was much less than what EPA had originally projected.So that's how they implemented. But it's still a strange way to write the law. I totally agree with that.David RobertsThe reason I ask is, it seems to me, sitting here in 2023, that the next 15 years of gasoline demand are even more difficult to forecast than they were in 2007. There's more going on. There's more forces converging from different directions. There's a lot of it's a really open question. So if you're specifying a volume, that just seems crazy. Are they doing that again? Are they going the volume direction again?Dan LashofThey are, but again, they convert it to percentage, and they're only looking three years. Their current proposal looks three years in advance, not 15 years in advance.David RobertsGot it. Okay, well, let's back up. Just tell us what's going to happen. What is EPA doing in 2023 about this? Now that these original volume standards are over, the time period is over, what's EPA going to do?Dan LashofRight. So EPA has this broad discretion now, and so they proposed a rule to set the volume targets for three years, 2023 through 2025. But they basically ignored all these changes that we've just been talking about and sort of blithely went forward as if nothing has changed. And they've proposed to increase the amount of biofuel required each year, not by a huge amount, but by some. And they've said, okay, the amount of conventional corn ethanol that would be implied by these requirements is going to stay constant at about 15 billion gallons. But because of what you said, that's a huge problem.Right. So if we're actually on a trajectory to meet our climate goals, we've got to electrify the fleet. And that means gasoline consumption over the next 20 years should go down by about 80%, according to at least some scenarios. So the current standard gasoline is blended 10% ethanol, and 15 billion gallons is already more than you can absorb at 10% of current gasoline demand.David RobertsIs that true? What happens if there's too much if there's too much corn ethanol and you can't blend it all in? What do they do with it?Dan LashofSo some states allow up to 15% ethanol.David RobertsRight.Dan LashofAnd the original theory was we were going to have flex fueled vehicles that would use 85% ethanol.David RobertsYou still see those around sometimes.Dan LashofYeah. The auto companies got credit towards meeting their CAFE standards.David RobertsRight.Dan LashofProducing those even if they never saw a drop of E85, right. So there are a few of those vehicles around, but they're just using 10% ethanol or maybe 15% ethanol, depending on where they're fueling up. So you can maybe absorb a little bit more than 10%. But basically, by setting the requirement at a level that is more than 10% of gasoline demand, what EPA effectively has done is forced more biodiesel, because that you can substitute for diesel in the freight sector. And as we discussed, that's even worse than corn ethanol.David RobertsWell, you mean because they're holding corn ethanol steady and increasing the overall amount of biofuels, and we now know that cellulosic is going to be 0% of that, then all the remainder has to be biodiesel, doesn't it?Dan LashofMost of it will be. I mean, again, there's some what's called renewable natural gas. So if you harvest landfill gas or dairy digesters, you can produce some fuel that way.David RobertsBut most of the increase will come from biodiesel.Dan LashofMost of the increase is biodiesel. And again, the way the law is written, it doesn't actually specify corn ethanol. It specifies conventional biofuels. So you could use biodiesel to satisfy part of that. Right. Now, this is the so called 10% "blend wall", ethanol "blend wall". That's about 14 billion gallons.David RobertsGot it.Dan LashofAnd it's going down every year.David RobertsWait. why?Dan LashofWell, because gasoline consumption is going down.David RobertsRight?Dan LashofAnd it's already going down because cars are getting more efficient under the fuel economy standards, particularly the ones that the Obama administration promulgated. And as we get more and more electric vehicles on the road, it's going to go down faster.David RobertsGiven what we've learned about biofuels and given how they performed since 2007, what on earth is EPA doing? I guess I'm just wondering, what are the political forces, as you see them, that are pushing to keep this Frankenstein alive when it basically looks like we should just we'll talk about future uses for biofuels later and there might be something to that. But in terms of shoving corn ethanol into gas tanks, it just seems like the whole enterprise is kind of silly. So what's keeping it alive? What's propping it up? Because EPA looks like they're just, like, going forward, like you said, as if they've learned nothing.And yet we know they have learned stuff. So what is going on? I guess I'm asking.Dan LashofWell, I think there are a couple of things. Obviously, politically, you have this now incumbent ethanol industry. Companies like ADM that make a lot of money making ethanol, and they're in Midwest states that don't necessarily have a lot of people, but have two senators each.David RobertsBut are no longer going first in the Democratic primary lineup. I wonder if that's going to change anything.Dan LashofIt may make a little bit of difference, but Iowa is not the only state. It's not the only state where ethanol is produced, so they still have a lot of sway. Also, I think that this idea of the carbon opportunity cost of land really has not been absorbed by policymakers at this point. So there's still, in their minds, an active debate about, oh, maybe it's 20% better than gasoline, maybe it's 40% better than gasoline. There's some studies which say that it's a little worse than gasoline, but there hasn't been an acceptance yet of this view of land as fundamentally scarce and something that you really have to be much more intentional about how you use it.David RobertsWell, the ethanol lobby is obviously one thing, and of course, corn state senators are, of course, one thing. I think you and I will recall when John McCain was running, what was it like the first time he ran? He was very bravely standing up against ethanol and then just got pilloried and caved on it later, as I recall. Am I making all that up? It's had such a grip on politics.Dan LashofYeah, that sounds right. And certainly I think both Obama and Clinton who were running in the primaries during the time the 2007 bill was written, were staunch supporters of ethanol. So, yeah, there's been this bipartisan support for it across the board. One notable exception has been Senator Diane Feinstein of California has always rallied against ethanol.David RobertsInteresting.Dan LashofBut to no effect.David RobertsAnd what about fossil fuel companies? Like, where are they on this whole thing? Where are they throwing their influence?Dan LashofHistorically, they opposed ethanol mandate. They were kind of outmaneuvered when the RFS was first done because you had both environmentalists who supported the overall law, whether they focus on the RFS or not because of the fuel economy standards and kind of the farm state senators and representatives supporting it because of the ethanol piece. So that's actually a fight they lost. Now it's a little challenging because both the fossil fuel lobby and the ethanol industry feel threatened by electric vehicles. And so there are cases where they're actually teaming up to fight electrification, which is definitely a toxic mix.David RobertsAnd isn't there some overlap of plastics and biofuels now that the fossil fuel industry might be? Because I know fossil fuel industry has big hopes for plastic to help them survive in a post fuel world. Isn't there some sort of like biofuels made out of plastics? Or am I groping here? What am I talking about?Dan LashofWell, there are ways to make plastic substitutes from biomass. So you see some compostable forks that are made from cornstarch, for example. I don't think a big market compared to the ethanol market. So I don't know that that's a big player. I think from the fossil fuel industry point of view, they definitely are looking at plastics as their get out of jail free card. As oil demand for automobiles goes down, they're looking to divert both natural gas and petroleum into a huge number of new petrochemical plants to produce plastics and other things. So yeah, that's a real issue.David RobertsBut returning to here to Biden so there was never, I guess, really a road through biofuels to zero carbon. I mean, maybe people waved their hands at it like super-future cellulosic, whatever, but in the 15 years since, we have not progressed down that road, hardly even a single step. And yet here the EPA is sort of acting like, yeah, that's still our thing on transportation. We're still going to labor away at biofuels and try to sort of marginally reduce the impact of gas. Meanwhile, you have over on the other side of the Biden administration, Biden himself the bills he's passed, his own transportation secretary on and on, being very explicit that their transportation strategy is electrification. So why isn't the right hand talking to the left hand here? What is this Janus-faced transportation strategy?Dan LashofYeah, it's a huge disconnect. I mean, right as EPA was proposing this renewable fuel standard continuation, the administration published a transportation decarbonization strategy which, as you said, absolutely focused on electrifying certainly all the passenger cars for freight. It's some combination of battery trucks and hydrogen fuel cell trucks. The one place they point to biofuels and we can talk about this more is with respect to aviation fuel.David RobertsYeah, I want to get to that. In a second because that seems like a big piece of this. But just in terms of, well, a. why? I guess no one really knows why. I mean, maybe it's just path dependence, maybe it's just lobbying, maybe like EPA is not meeting with Pete Buttigieg enough. But what would you recommend, what would WRI recommend that EPA do in this situation if it had read its own administration's transportation plan? What would renewable fuel standard setting look like in light of sort of sane response to Biden's electrification push?Dan LashofRight. So it's important to point out that right now we have a proposal from EPA. It's not a final rule. And so part of what we're trying to do is point out this disconnect between this proposed rule and the rest of the administration's climate strategy and transportation strategy. So hopefully it'll have an impact. We'll see. So what we recommended is setting much lower volume targets for renewable fuels going forward that are based on the amount of fuel that you can produce from biomass waste. So this is the key distinction that we're trying to make. It's one thing, the carbon opportunity cost, if you're dedicating an acre of land to produce biofuels, is high.But there are some genuine waste resources and a lot more work needs to be done to figure out how substantial they really are. But they're not 36 billion gallons. But there are certainly significant amounts of things like corn stover, which is what's left over after you harvest the corn. You've got wheat hulls, in orchards you trim them every year, so there's woody biomass there, there's waste in the pulp and paper industry that they currently burn to make electricity, which there's much better ways to make zero carbon electricity. So there's those resources and then there's this huge amount of biomass which is starting to be pulled out of the Western Forest to reduce the risk of catastrophic wildfires.And what happens to that now is mostly it's either left to decay at the edge of the forest or it's actually burned in a pile.David RobertsEither of those produce greenhouse gases, don't they?Dan LashofRight, exactly. Well, you're taking carbon that was in the forest, but that had the risk of going up in flames at any point and turning into CO2. You're kind of speeding up the conversion to CO2, but hopefully reducing the risk of catastrophic fires. You look at what would happen to the biomass if you didn't use it for biofuels. And if the answer is that carbon was going to go back into the atmosphere quickly, that's a biomass resource that it makes sense to use.David RobertsSo WRI's recommendation is that basically standards be required or volumes be required only for waste biofuels?Only for volumes that could be produced with waste biofuels. And that essentially the conventional corn ethanol should not be viewed as achieving any greenhouse gas reductions. Now, it's important to say that doesn't mean that the ethanol market is going to disappear overnight.Yeah. I was going to ask, are you here proposing that we basically abandon both the corn ethanol and the soybean-biodiesel markets? Because I would be all for that, but those are big, powerful players. It's not a small thing to propose abandoning them.Dan LashofYeah, well, this is definitely not going to be an easy push right. To the administration, for sure. But I think it's really important to lift up farmers in this transition. So if we eliminated the Renewable Fuel Standard overnight, the gasoline suppliers would still probably and according to EPA's analysis, they would still blend 10% ethanol into gasoline because ...David RobertsReally? Why?Dan LashofWell, they need it to provide oxygen and octane. So one of the other factors that we haven't talked about that was going on during the early 2000s is gasoline used to contain this thing called MTBE.David RobertsRight, I remember.Dan LashofWhich was the way in which they got octane, and that created a lot of groundwater contamination. California banned it in 2002, new York banned it in 2004, and other states were moving to ban it. And so the sort of chemical function that MTBE was playing in gasoline got replaced by ethanol.David RobertsGot it. So they do need some kind of additive?Dan LashofYeah, there may be other things out there, but I think for now the expectation is they would still blend 10%, which would mean as we phase down gasoline consumption, as we electrify vehicles, a gradual phase down of ethanol demand.David RobertsOf course.Dan LashofBut not an overnight elimination. So I think that's the first thing to note. The second thing to note is US farmers in particular are really good at growing food. And we need that food. The world needs it more than ever.David RobertsRight. Isn't global food demand supposed to double? That's the statistic I always see by 2040 or 50 or whatever.Dan LashofYeah, I mean, you got a population that's going to go from about 8 billion to about 10 billion. But then also as people get richer, they eat more meat, for better or for worse. Often for worse. But in low-income countries, actually increasing protein consumption is important from a health perspective. And that means you need more animal feed. So the total amount of grain that's needed goes up by much more than the population.David RobertsSo the contention here is that farmers would be okay if we abandoned or started ramping down our current biofuel production. Farmers would not simply be cast out onto the street.Dan LashofI mean, I think this needs more work to look at what that transition is like. But like I said, corn prices right now are very high. The renewable fuels mandate probably contributed some to that, but corn prices have also been very volatile and that volatility didn't go away with the Renewable Fuel Standard. So being a farmer is still really tough and we need to recognize that. I think we have to look at a whole range of alternative or complementary income sources that we need to boost the rural economy. And that can include wind and solar revenue, right.And it can include using biomass waste like corn stover to produce hydrogen or other carbon benefits, which we can talk about more. And then there's an opportunity to increase fertilizer production more locally using clean hydrogen. Right now, all the fertilizer that's being used, almost all of it in the US. Is being produced from natural gas, and then this CO2 just goes into the atmosphere. So if you've got sources of clean hydrogen, whether it's from electrolysis using renewable electricity, or if it's from biomass waste with carbon capture, one thing you can do with that hydrogen is make fertilizer that could be more distributed than the big fossil fuel based fertilizer plants that we currently have.David RobertsInteresting. And so when you say EPA should set volumes based on what can be met with waste, what does that mean numerically? Like, right now? It was 36 billion in 2022. Is that right?Dan LashofThat was the original law.David RobertsRight. And they're proposing for 2025.Dan LashofLess than that, let's see, because, yeah, we never got to 36, we got to 21. And they're proposing a modest increase from that. And we're talking about the waste being more on the order of less than 10 billion gallons.David RobertsSo, ballpark, you're recommending that they cut the volume requirements for biofuels roughly in half, or a little bit more than in half, down to what could be met through waste?Dan LashofRight.David RobertsAnd aren't you also encouraging them to use a shorter time period, shorter than three years?Dan LashofRight. Well, in general, I think having a little bit of a runway setting a standard for several years out makes sense. But in this case, what we said was, look, things have changed since 2007. You really need to rethink this policy and how it fits into the administration strategy. So to give yourself some time to do that rather than setting a target.David RobertsThey had 15 years. This is what's bizarre about this. It's like they woke up yesterday morning, they're like, oh, we have to do this thing again. None of this stuff is a secret. What we're talking about, the biofuels performance, is not a secret. It's weird to me that they seem to be kind of sleepwalking into this.Dan LashofThat's a fair point. I don't have an explanation for that. But given where we are, we thought one of the things that we could suggest to give the administration a little more time to rethink this would be to start with only one year standard, and then hopefully the next phase, they would more fully account for the changes, particularly in electric vehicles going forward.David RobertsIs it in law that they have to set standards every so often, or is this going to be like setting new standards every year or two years or three years forever? Or how does it work going forward?Dan LashofThey have to set standards for each year, but they can choose to set it for one year at a time, or three years at a time, or five years at a time? That's up to the EPA at this point.David RobertsA slight side question, but I would like a little bit of international context here. Like, are other countries that have been sort of doggedly pursuing biofuels all this time, despite all the trends heading in the other direction, are they a big dominant industry? And question in other countries, what's the international take on biofuels right now?Dan LashofWell, the one country that has probably the most significant ethanol industry other than the US is Brazil.David RobertsRight.Dan LashofAnd they make ethanol from sugar cane, which is more efficient than corn. But I think it's still subject to similar carbon opportunity cost problems.David RobertsDo you think it still fails the land test?Dan LashofI think so. I haven't actually done that calculation, but I think it's a similar issue. And then the other issue where biofuels are used not for transportation, but there actually have been a significant part of the European renewable mandate.David RobertsYeah, biomass for electricity, right?Dan LashofWell, yeah, electricity and co generation plants. So they're using wood pellets, some of which come from the US southeastern forest. A bunch of them come from Romania. Scientists have been raising concerns about this for a long time.David RobertsThat's very controversial, too, right? Biomass in Europe's standard.Dan LashofRight. And they've been supposedly tightening their requirements so that it's supposed to be like waste. So if you talk to the wood pellet industry, they'll say, oh, no, we're not harvesting trees, we're using these biomass waste. But there was an investigative report a few months ago that looked at Romania where it's very clear that biomass pellets that were labeled as coming from waste were actually big trees that had been harvested and chopped up. So there's a huge problem there.David RobertsInteresting.Dan LashofThis all comes back to this unfortunate notion that biomass is inherently carbon neutral, because after all the carbon in the biomass that came from the air through photosynthesis so putting it back to the air, that shouldn't be a problem.Right. But the problem is, of course, that's true of fossil fuels also, right?David RobertsTrue.Dan LashofThere's a time issue that you have to take into account. And so this notion of the carbon-debt, if you harvest forest to produce energy, has not been factored into a lot of these standards.David RobertsIt sounds like over there, it's probably more of a forestry-industry shenanigans thing than a farming industry shenanigans thing.Dan LashofYeah, it is. But then I think around the world, there's also various places where biodiesel is being used and promoted through policy, where you've got a palm oil industry in Indonesia, for example, and other places where that's been promoted. So there is a global aspect to this that also needs a lot of attention. And I think what the US does sets a precedent that other countries look to. So it's another reason why we really have to get this right, but nobody.David RobertsElse is dumping corn into gas tanks specifically.Dan LashofNot at these volumes, no.David RobertsAnd really, why would you? Okay, I wanted to leave a little bit more time for this, but just sort of by way of wrapping up. I think we can agree, for reasons we've discussed, that biofuels in personal transportation are silly. We're electrifying, we're on the way, there's just no point anymore in — I guess you could make an argument for gas. Cars are going to be around a while longer and at least you can marginally reduce the impact of gas. But given what we know about the carbon opportunity costs and all that, it's not even clear that's helpful.So in personal transportation, biofuels are silly, I think, but there are, as people are constantly saying, areas we don't know how to decarbonize yet. And so I wonder if you were sort of canvassing, what are the plausible positive uses of biofuels in the world? We're heading toward a decarbonized world. What are they still good for?Dan LashofRight, so I think there's a couple of use cases that could make sense, but again, really depending on taking the carbon opportunity cost into account and really focusing on waste feedstock. So one is aviation. Of all the sectors that people have said are hard to abate, aviation really is hard to abate. And I don't think we know what the long term answer is there, but certainly whatever biomass resources we have that are truly beneficial to use for fuel, replacing jet fuel with so called sustainable aviation fuel, that's one possibility that could make a lot of sense.David RobertsPausing on that, I mean, I saw a calculation on Twitter, so take this for what it's worth, but if you're comparing the volumes necessary to, say, replace 10% to 15% of gasoline volume and the volumes necessary to replace total aviation fuel volume, they're not way off from one another. So in other words, if biofuels really, if we're really setting out to replace all bunker fuel, not just jets use, but has other uses too, with biofuels, that's going to be a lot of biofuels still.Dan LashofThat's right. And I don't think there's enough waste to supply the whole aviation sector, but it can supply a meaningful part of it. So that's one use. What we do with the rest of the aviation ...David RobertsFly less, Dan.Dan LashofFly less. That could be a thing. I don't know that that's very likely, but it would be good. They're short haul aviation. There's electric planes, which ...David RobertsTrains!Dan Lashof... really cool. Trains would be a lot easier for short haul. And people are talking about hydrogen. I don't know if that's going to be a thing for aviation. The solution there, quite frankly, might be that's the one place left where you would actually burn petroleum and then compensate for those emissions with direct air capture.David RobertsRight.Dan LashofI don't love that solution, but right now I don't have a better answer for aviation. So that's a tough one. The other thing for biofuels, and this figures prominently in a lot of decarbonization scenarios, such as the Princeton Net-Zero study is making hydrogen by gasifying biomass and then capturing the CO2. And if you put the CO2 underground, the net effect could actually being a negative emission fuel.David RobertsRight. It's similar to BECCs. Right. Similar to burning biomass.Dan LashofRight. It's a form of BECCs. But instead of making electricity, where we have lots of options of better ways to make electricity, if you make hydrogen, you're competing with electrolytic hydrogen, which in the long run is probably cheaper. But if you account for the benefit of actually removing carbon from the atmosphere this way so if you're using, for example, corn stover, there's several hundred million tons of corn stover produced every year in the US. Given how much corn we're producing now, now a third of that corn is currently being produced for ethanol. So maybe that declines somewhat, but there's still going to be a lot of corn stover.David RobertsSo you take the corn stover, you gasify it and you get CO2 and hydrogen, you bury the CO2, you use the hydrogen to make fuels. Is that the idea?Dan LashofRight. Use hydrogen to make fuels, or use it to make fertilizer or use it to make steel, whatever you're going to use hydrogen for. That makes sense.David RobertsThat is such a long chain of conversions. It's just like you're losing so much along the way there. It's hard for me to believe that that's going to end up being the best we can do. But I don't have any other ideas either.Dan LashofYeah, I mean, there are a few companies that are trying to commercialize it. Like I say, it's not a large source of the total hydrogen. So if you look at Net-Zero study or others and say, what does the energy system look like in 2050? We're using a bunch of hydrogen. Most of that comes from electrolysis, some of it in these studies comes from this biomass pathway. But it's actually a significant share of the net carbon removal because every ton of corn stover that you convert to hydrogen plus CO2 is actually producing 1.8 tons of CO2. And so a couple hundred million tons of carbon removal potentially from doing this.And if you value both the hydrogen and the carbon removal, it starts to look like a sensible thing to do.David RobertsRight. But aviation and maybe hydrogen, those are sort of like the biofuels of the future. That's more or less what we can think of to do with them.Dan LashofAnd then I think the other thing is to substitute for plastics made from petroleum. That could be another ...David RobertsIs that ever going to I mean, I feel like that's been right around the corner almost as long as cellulosic biofuels. Is that a thing that's really going to happen?Dan LashofNot as long as natural gas is super cheap and they keep producing more of it. Right. So, I mean, it's hard to compete, but if you're trying to squeeze the last ton of fossil carbon emissions out of the system, then it starts to look like a plausible thing to do.David RobertsInteresting. Okay, well, this is substantially more than I've thought about biofuels in many, many years. Thank you for coming on it and catching us up. And I guess if we're just sort of taking away the main takeaway here, it's just that EPA should, like, read Biden's Transportation Decarbonization Strategy.Dan LashofThat would be a good start.David RobertsAll right. Dan Lashof, World Resources Institute. Thank you for coming on and catching us all up.Dan LashofAlright. Thanks.David RobertsThank you for listening to the Volts podcast. It is ad-free, powered entirely by listeners like you. If you value conversations like this, please consider becoming a paid 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