Volts

In this episode, Jigar Shah, the recently appointed head of the Department of Energy’s Loan Programs Office (LPO), discusses how he and his team have reformed the office and pulled into into the modern age, the kinds of help LPO is offering entrepreneurs, and the frontier technologies that have him most excited.Full transcript of Volts podcast featuring Jigar Shah, February 2, 2022(PDF version)David Roberts:Back in 2010, the Department of Energy’s Loan Programs Office (LPO) briefly became what kids these days call the main character, the focus of a storm of controversy and media attention, thanks to the bankruptcy of Solyndra, a solar company that received the very first loan guarantee under Obama’s Recovery Act and then promptly gone bankrupt. Despite that wildly overhyped controversy, the LPO did reasonably well under Obama. It ultimately turned a profit for the government and was arguably crucial to the explosive subsequent growth in markets for utility-scale solar and wind. Under Trump, the LPO basically went dormant, doing little beyond shoveling money into the ill-fated Vogtle nuclear plant in Georgia. Now the LPO is being revived, reformed, and reinvigorated by new director Jigar Shah. Shah has a long history on the business side of clean energy — he was the co-founder and president of Generate Capital and before that founded “no money down” solar pioneer SunEdison — but he’s perhaps best known to energy nerds as the co-host of the late, lamented podcast The Energy Gang. (The team behind The Energy Gang now has a new show: The Carbon Copy.)He wants to streamline the process of getting loan guarantees from LPO and rethink how the office approaches risk. And he’s got about $40 billion to work with, more if Build Back Better passes. (For the best account of Shah’s new approach, read these two Canary pieces — one, two — from Jeff St. John.) Under Shah’s leadership, the LPO has been doing due diligence on the hundreds of applications that have flooded in since the office reopened for business. In December, it issued its first new conditional commitment for a loan guarantee, to a plant in Nebraska that will transform methane into hydrogen and carbon black. Many more loan guarantees are in the pipeline.I’ve been looking forward to chatting with Shah about how the office is reforming under Biden, how to think about risk and communicate it to the public, and the kinds of clean-energy technologies that have him excited these days. Without further ado, Jigar Shah, welcome to Volts.Jigar Shah:  Thanks for having me.David Roberts:   I'm a longtime fan of your career and your many podcasts, so it's great to finally get you on here.Jigar Shah:  Well, the feeling's mutual.David Roberts:   Give us the elevator pitch: What is the Loan Programs Office, what does it do, and what is it meant to accomplish?Jigar Shah:  The Loan Programs Office was originally conceived of by Senator Pete Domenici in the 2005 Energy Act. It was first funded in 2009 during the Obama stimulus. The main rationale for its existence is that the Department of Energy does so much great work on basic fundamental research; it gets all these technologies to what they call Technology Readiness Level 7, which means that you can actually verify that the technology works; but then they leave them there waiting for the private sector to pick them up and take them the rest of the way. And the private sector is saying, “we're happy to do it, but we can't get any debt for these technologies because the commercial banks are saying, ‘we don't want to spend the effort to understand all the nuances of this and get all the expertise lined up for one project, so until there are 100 projects to do, we’re not in.’”David Roberts:   This is the famous “valley of death”?Jigar Shah:  That's right. In this case, it's a valley of death that focuses on debt. The vast majority of valley-of-death conversations focus on equity: raising venture capital or raising private equity. In this case, you're talking about debt. When you talk about solving climate change, you're generally talking about trillion-dollar scale, and trillion-dollar scale only exists in infrastructure. In venture capital, we had a banner year last year; it was about $60 billion. That's not trillion-dollar scale. What does it take for the trillion-dollar-scale people to get comfortable with a technology? That's a commercial debt conversation. How do we underwrite a deal for commercial debt? I talked to most of the money center Wall Street banks last year and they said, “Jigar, one thing we will confirm is that the due diligence that comes out of your office is of such high quality that we know that a technology is ready if it gets through your office.”David Roberts:   That's one thing that maybe average people don't understand: you're not just handing companies money. The whole process of assessing the company and its technology is a long and labor-intensive process. The bulk of the service you're providing the industry is not even so much the money as the due diligence itself, so they don't have to do it, right?Jigar Shah:  That's exactly right. The government process that we take companies through is a lot more efficient and a lot shorter than it used to be, so we've made a lot of strides there, but no one would subject themselves to it if they could walk through the front door of one of these big banks and just get a standard commercial loan. They're going through that process and subjecting themselves to the detailed diligence and the 10,000 expert scientists and engineers we have with the national labs because they know that this is the best way for them to get a loan. An average loan size for us is $500 million.David Roberts:   Backing up a little bit: the loan office has been, let's call it “dormant,” for the last four years.Jigar Shah:  That’s certainly what the Secretary of Energy called it during her confirmation hearing.David Roberts:   Dumping money down the giant Georgia nuclear plant was the only thing it did, I think. Before that there was the whole stupid Solyndra controversy. But as I understand it, the Loan Programs Office under Obama did well overall — ended up revenue-positive, spurred a lot of new industries. I’m curious what you take from that experience, and in what ways you're trying to improve. What needs to change to make it more modern and more suited to current circumstances?Jigar Shah:  There’s a series of questions implied there, so let me take them one by one.First, Solyndra was one of the first loans that we issued out of the office. The office was very young when we did that loan, and since then, the office has matured greatly. We're up to 170 people from probably 20 people at that time, and we have a lot of processes and procedures. Solyndra wouldn't pass the office in the same way that it did in the past. The office has improved its processes tremendously. Even with the Solyndra losses included, we did about $35 billion worth of deals; we've had roughly $1.02 billion of losses, inclusive of Solyndra. That track record is something you would put up against any commercial bank in the space, let alone one that focuses on hard-to-finance deals. There are a lot of people who suggest we're not taking enough risk. In terms of what we're doing differently now: in the Obama era, we had a financial crisis, so we actually had a lack of access to commercial debt. When you look at Elon’s famous story of Tesla, he also had a problem getting equity. The money wasn't flowing like it is today with SPACs and etc. Fast forward to today: if you have a rock-solid 20-year power purchase agreement with a utility company, you're generally not going to come to the Loan Programs Office, unless you've got some weird long-duration storage technology or something else that has never been commercialized. We have to do a lot of things differently. The type of deals we see are far more diverse than just electricity. We see deals in the industrial decarb space, in the broader transportation space. The markets are less formed. For instance, people sign power purchase agreements in the electricity space; remember a lot of that came from PURPA, which is what all the coal plants were based on. But when you look at transportation fuels, for instance, people don't generally sign a 20-year fixed-price contract for aviation fuel. We have to change the way that we underwrite deals to figure out how we support those kinds of projects as well as the merchant market. When you look at the Low Carbon Fuel Standard credit program in California, which is driving a lot of projects, the price that gets set for those credits changes every month. So we have to come up with a new way of evaluating those projects and figuring out how we support them. The Loan Programs Office has gotten far more sophisticated about how it underwrites risk than it was forced to be, frankly — not that they were not capable of it in 2010, they just didn't have to do it in 2010.David Roberts:   Is that reflective of changes in technology, or of a change in approach at the LPO to take a broader look at technology, or both?Jigar Shah:  All the above. In general, LPO could get away with doing standard, easy-to-finance deals in 2009-2010 because you had a historic credit crunch, and people needed our money. Today, those standard, easy-to-finance deals aren't coming in to the office, so we have to evolve to be relevant. But second of all, there were historic amounts of money invested during the Steven Chu era and Moniz era around new technologies, and a lot of those technologies are now mature enough to be able to come to our office. They made a lot of investments in industrial decarb. We had a lot of high-profile failures in carbon sequestration and storage in that era, but the new approaches are being built upon the success stories that we had. One of the success stories that came out of that era was the ADM Class VI wells, which continue to bury 1 million tons of carbon dioxide a year in Illinois.David Roberts:   The topic of risk is interesting, especially when it comes to an arm of government. The right-wing critique of the office was, “it's taking too many risks and it's losing money.” But the more educated energy-expert critique was, “it didn't lose enough money. The whole point is to take risks; that's why the thing exists, to take risks that private capital or banks won't take.” Talk a little bit about how you think about risk. Is there a percentage of losses that you're targeting? How do you target the right level of risk?Jigar Shah:  It's a great question. As a government appointee, your ability to take risk is defined by the amount of support that you're getting. The secretary mentioned the Loan Programs Office in her confirmation hearing and has been talking about it ever since, so we're clearly getting a lot of support. That means the world to all of us, and it gives us the freedom to make the decisions that we think are right for the country and not just right for the political moment. That's valuable. We don't view risk on a portfolio basis like that, although it does turn out that we check it that way. We view it on a deal-by-deal basis. Everybody in the office gets the same interest rate, which is Treasury’s plus three-eighths of a point, so that's 1.8 percent. Then we add a risk-based charge on top of it, based on the percentage chance that it loses money. The vast majority of our projects are not investment-grade. When you look at the other lending institutions within the government — whether it's the USDA programs, or TIFIA, or some of the other ones — they generally do investment-grade credits. These are people that have triple B or better credit ratings. Our average credit rating in the office for new projects is double B or single B, because it's by definition misunderstood; otherwise, it wouldn't be coming to our office. Those projects generally have a risk of failure of 15 to 20 percent, depending on all the variables. We then add an interest rate adder to the interest rate to be able to compensate the government for that risk of loss. Let's say we'll add another four percentage points to the interest rate, so now it's not 1.8 percent, it's 5.8 percent. That extra money goes into the US Treasury Department. Then we do view our performance on a portfolio-wide basis. Today, the program adds about $500 million of interest payments per year to the US Treasury — so we make money for the government. There's a separate component to that: on a portfolio basis, you charge interest rates above the US’s cost of borrowing, to figure out whether we're earning enough “excess” interest to be able to cover any losses we have. Then, separately, Congress sometimes appropriates loss capital to us; it's called a credit subsidy. For ATVM, the Advanced Technology Vehicle Manufacturing program, the Congress has determined that some of these projects are clearly going to be risky, because you’re taking an “if you build it they will come” risk; even if they make a great car, it could be that it's a terrible design and nobody wants to buy it. In that case, they actually allocate cash from the Congress to our program, and we pay that credit subsidy on behalf of those applicants. That basically forms a loan loss reserve in the US Treasury Department for those projects. To summarize all that, on balance, we’ve reserved almost $6 billion in loan loss reserves at the US Treasury, and have had a total of $1.02 billion in losses, and we don't expect very much more loss out of the existing $30 billion portfolio.David Roberts:   That's the operational way to view risk; the semi-separate question about how to communicate risk and loss and the chances you're taking is … maybe not your job, maybe that's the job of the secretary. But do you feel like the office itself, or the Democratic government culture in general, has learned anything about how to communicate risk? As we saw with Solyndra, it’s so easy to demagogue, and it takes some time to explain why risk is actually a good thing. Have you given that any thought?Jigar Shah:  On the political risk side of it, clearly sometimes political arguments move away from logic, and then you end up in a place that's — whatever it is. Sticking to the logic side of things, where I'm more comfortable, the way that we've talked about risk is we've talked about opportunity. Think about the sea change that has occurred in the thinking of automakers. Ford Motor Company stock has gone up tremendously in the last year, simply through the firm announcement that they're moving to electric vehicles. That all comes from the risk that we took in 2009 and the opportunities that it has created for millions of Americans as a result. The way that the president and the secretary have been talking about it is that this is the single largest wealth-creation opportunity America has in front of it. If we do it correctly, not only do we get to use our technology that we have ourselves invented through our dollars that we put in out of DOE, and we manufacture the products here, and we create the jobs here — but we also help hundreds of countries around the world decarbonize through the export markets for our technology companies. I mean, Tesla is the single largest exporter in California, which itself is the fifth-largest economy in the world.David Roberts:   Tesla serves so many contradictory symbolic roles at once. But one of them is definitely: you give Big Money (or Big Debt) permission to come into these markets and that spirals out globally. It's difficult to trace all the consequences from that. Jigar Shah:  Absolutely. The same thing is true for utility-scale solar and wind, which of course is a more boring story. At the time, Europe had a feed-in tariff, which meant it had a guaranteed payment from the government, although it used the utility to pay it. That was not the case in the United States. We had some power purchase agreements, but in general, the whole concept of a feed-in tariff really there. There was a tax equity portion with tax credits. When we offered our loan guarantees for solar to SunPower and others — who will tell you that they were essential to be able to build those plants — Bank of America and Citibank and all those banks had not yet gotten their arms around how to support solar and wind, even though Germany and Spain and everybody else had had these big years in 2007-2008. You were sitting in 2012 with $1.5 billion projects such that those companies were forced to sell those projects to Warren Buffett and MidAmerican. And Warren Buffett and MidAmerican always make money. It wasn't until 2014 that there was a modicum of a competitive market, that SunEdison had created with the REIT that they created with TerraForm. Then in 2016, you got a lot more liquidity in the market. It wasn't until 2019 that you had full acceptance by all institutional investors such that the interest rates went down to 2.5 percent.David Roberts:   There's a certain amount of money set aside in the LPO for fossil fuel technologies like carbon capture. There's a certain amount of money set aside for nuclear. Then everything else competes for the remainder, which is smaller than the amounts set aside for fossil fuel and nuclear. What is the logic of that setup?Jigar Shah:  Unfortunately, the truth is that we just used up the renewable energy money. All of our allocations were received in 2009; there was a little bit of reshuffling since then, but most of it's 2009. We had $20+ billion of renewable energy and efficiency money; that money was largely used. We never issued a fossil fuel loan, so that money is all unused. The nuclear part was bigger too — but then of course we had the Vogtle nuclear plant that’s used up a lot of the money — so that money is still there as well. What I would say without getting into trouble is that Congress is very supportive of what we're doing. They basically said, “there's a lot of support for the loan program on both sides of the aisle, so get the thing working again. Show us that it's actually working before we allocate more money to that bucket.”I don't think that's as controversial as it appears, and we are getting it working. We've got 170 hardworking men and women and they've done a great job of fixing the foundation of the program. It resulted in one conditional commitment in 2021, and we'll have a lot more this year. But that belies how much fixing that we did in 2021 so that the foundation was strong enough to have a big year in 2022.David Roberts:   Speaking of politics and money, what did the bipartisan infrastructure bill do for the LPO? Secondarily, what's in the as-yet-unpassed Build Back Better bill that relates to the LPO?Jigar Shah:  The bipartisan infrastructure legislation has a number of provisions in it that broaden our authority. It took the ATVM program and said, you now can do heavy trucks, light duty trucks, airplanes, battery chargers, locomotives. Somebody even included Hyperloop, which I thought was interesting, but it is what it is. I haven't seen any good Hyperloop applications coming in. We also got a broader level of authorities around carbon dioxide pipelines. A lot of the work that we're doing, for instance, is on these industrial hubs, where you're taking some of the places that have the most pollution in the United States, like the LA basin or the coast around Texas or Louisiana, and decarbonizing those. The hydrogen hubs, which are also in the bipartisan infrastructure legislation, marry with the carbon dioxide pipeline authority that we have to be able to help decarbonize all that heavy industry. There's also one other provision which was little noticed in the legislation that says that if a state entity supports the applicant, it actually moves away from the innovation requirements of our office. That's an interesting nugget that we're trying to figure out exactly what it means. Senator Murkowski had a big role in putting that in.David Roberts:   But no new money in the bipartisan bill.Jigar Shah:  Yeah, exactly. The new authorities were put into the bipartisan infrastructure legislation, and then the additional money comes into the House Build Back Better bill. Obviously the Senate's working on it. Because we make money for the federal government, the Congressional Budget Office has largely determined that new authority that goes into Title 17, in particular, only costs 1 percent in deficit spending of the loan amount we receive. So if we wanted to do an extra $100 billion of loans, it would cost $1 billion of deficit spending.David Roberts:   So it wouldn't take very much additional appropriation to vastly increase the amount of capital you have to work with.Jigar Shah:  That's right. Again, that's tied up in folks saying, “guys, prove to us that the office is working. Get some conditional commitments out the door and get some of the companies that are in our districts to tell us that you really are open for business. I understand that you're telling me you're open for business, and I see this big graphic that says you're open for business, but I'd like to hear confirmation from our constituents.”David Roberts:   Say Build Back Better passes or Congress got excited about this and dumps a bunch of money on you: are there capacity constraints for how much you can get out the door? How much could you possibly deploy before January 2025?Jigar Shah:  We've spent a lot of time on that in the office the last five months. The office initially was extraordinarily optimistic about what it thought it could accomplish, which frankly is amazing to see that level of risk-taking from the federal government staff that we have. It's really inspiring to see. But we've been a little more realistic about it in the delivery phase in January. We've got about 77 applications that have come in as of December 31, representing roughly $60 billion of requests. I do think that we can get a third of those applications through the system, mainly because the applicants are sophisticated and competent enough to go through all of our stage gates efficiently. Then half of the ones that can't do that quickly will also get through our office, it'll just take them an extra period of time to cure the defaults in their applications. We can actually move quite a bit of volume through the process. Note that if we obligated $30 billion of capital, which is a big number, that would make us the single largest provider of this kind of capital in the world. It's not like JPMorgan Chase or some of these other companies are chomping at the bit to do first-of-a-kind deployments; they're coming later in the process. It really is significant. When you think about the numbers in relation to each other, the venture capital community put $60 billion to work last year into companies; those companies need to put first-of-a-kind projects out the door. They would take $30 billion from us, they would match it with probably $30 billion of their venture capital as equity, and we put in let's say 50 percent debt. That would be $60 billion of first-of-a-kind projects. That would then cascade into second through fifth projects, EPC excellence, learning curve, the six cumulative doublings of experience. And a lot of that learning curve actually comes from a mixture of state and federal policy. The federal government generally likes to give them tax credits and maybe some demonstration dollars, which we have in the new Office of Clean Energy Demonstrations; then the state is the one that does more of the mandates. For instance, you're seeing California, New York, and New Jersey right now looking at green cement mandates, which then allows us to fund green cement manufacturing facilities.David Roberts:   Let's talk about some of the technology areas where you are focusing. When you are choosing technology areas, are you choosing purely based on an analysis of what you think is going to be needed? Or is it mostly, what among that set of technologies that will be needed are facing this first-mover problem and specifically need us? Big Solar and Big Wind, I presume, have now grown past the need for you. So what are the on-the-verge-but-not-quite-first-big-demonstration-yet technologies that you're looking around on? Jigar Shah:  For our process, we looked at all of the different sectors where we thought that the technology itself was actually mature and commercialization was the problem, so we needed to lean in. These are things like low-impact hydro; advanced geothermal; some of the battery chemistries that have been around for some time, you’ve seen them SPAC; hydrogen; carbon sequestration storage in some forms; sustainable aviation fuel; small modular reactors. All these sectors we tapped down, went across DOE and said, what's ready for primetime? Then I went to all the trade associations for those groups and said “get me all your CEOs on the phone, hold a meeting, invite me to speak, and let's talk about it.”Some of them were ready. We’ve gotten $10 billion worth of applications from the sustainable aviation fuel and biofuel space; roughly $10 billion of applications from the advanced nuclear space; $5 billion of applications in from the carbon sequestration side; several billion dollars of applications in from transmission, etc. There are some places where they weren't ready. I've gotten almost no applications in for geothermal or for hydro.David Roberts:   “Ready” means “have their s**t together enough to be able to go through the due diligence properly?”Jigar Shah:  No, they actually are prepared to go through the office, but they don't have projects ready to go. You can't come in and say, “I have this dream.” You have to say, “I have a utility, I've received the allocation from the Bureau of Land Management for this land, I've got this, I've got that.” Therefore you have something to evaluate. Some of the sectors we don't have projects in not because the technology is not mature, but the developer community has not yet developed the projects for us to evaluate. We haven't given up on those sectors; we continue to educate them and make sure that the trade associations and others know what services we offer.David Roberts:   Do you think geothermal will come along and be ready for you at some point? Do you have a capsule assessment of that?Jigar Shah:  The California RFP for 1,000 megawatts of geothermal is useful. Anyone who wins that RFP will probably come to our office. In general, the biggest problem with geothermal — and you see this across all the flexible-baseload technologies, it comes out of the UC Berkeley study or the Princeton study — is that in general, all of them need 7 cents a kilowatt hour. That 7 cents a kilowatt hour is completely justified. So when you look at the modeling, to build more solar and wind at 1.8 cents or whatever it is, you have to build more transmission to transport it from where it blows to where it's needed. That transmission is hard, and if you want to move hard to fast then you have to pay extra for it, so you pay double the cost of the transmission. The alternative is you pay for technologies that have more like a 60+ percent capacity factor on existing transmission, and then that's 7 cents. But when you look at the decarbonization strategies that are finally starting to emerge from these utilities who have determined that they're going to be net zero or whatever it is by X date, they have now determined that there is some mix of variable renewable energy and flexible baseload that they need, and that they actually can afford to pay 7 cents for part of their portfolio. That has led California to put out this RFP, and you're seeing Nevada and a few other places go “wait a second, we should actually be putting in some of these flexible baseload technologies, because the alternative is we put in natural gas, and then natural gas prices almost doubled, and we're stuck.”Part of this is not that the technology is not mature but the markets haven't been mature, and LPO does play a big role in that. We've hired people on our platform that have engaged with the utilities in their Integrated Resource Plan process and their other processes and said to them “hey, you should be looking at these types of resources, because otherwise, you're just not going to get there.”David Roberts:   Right, unless you build an absolute boatload of transmission, which is more politically and regulatorily difficult in some ways than any of these new technologies.Jigar Shah:  More expensive, not more difficult. I'll give you an example. When we came into office, the Department of Transportation announced that they were going to let federal highways be used for right-of-ways for transmission. I said, “huh, what would that cost?” And people are like, “I don't know.” So we hired NREL to figure that out. They'll come up with a paper or something on this, but they showed me their preliminary results. They mapped every single highway and they said, “these highways have very limited obstruction, so it may only be 1.2 times the cost of normal transmission” — which, of course, “normal” transmission doesn't exist, because it's hard to build — “and these highways have tons of four-leaf clovers and tons of issues so you have to underground under all those; you can't go over. That's going to cost more like 1.9 times normal.”Now I have a number, I actually know what it costs. Someone could say “that's too expensive, I don't want to pay for it.” But you can't say that it's impossible to build. You can just say “we can't afford to pay that.” Now you can actually do real trade-off analysis.David Roberts:   The model here is a big, capital-intensive project like the one that got your first loan guarantee: the Monolith pyrolysis carbon black / hydrogen project. But of course, one of the trends in energy these days is distributed energy; thousands and thousands of small-scale projects. Intuitively, it doesn't seem like that matches your mission or your capacity that well, but you are trying to figure out how to get some LPO money behind distributed energy. Say a little bit about conceptually how that works.Jigar Shah:  Let me give you a little history. In 2009, when we did the rulemaking, these distributed projects were not really contemplated. The rulemaking and the solicitation around this program didn’t cover these kinds of projects. Then in 2015 we had a substantial residential solar company come in and try to use the office, so a lot of thinking was done there on the legal side around how to shoehorn — it was very Apollo 13, “here's what we have, figure out a way to make this work,” which was great. There were other folks too, like there was a FIT RAM program in California, so one of the companies came in to do distributed CNI (commercial and industrial) solar. When I came in, I said, “we're going to get a lot of applications that look like this; let's start revving that back up and figuring it out.” The harsh reality of the situation is that the government doesn't do things in a vacuum very well, so we had to convince some people to apply to the office. We luckily got a couple of people to apply, and I warned them, “you are going to be a guinea pig here, so it's going to take a while to process your loan.” As a result of them applying, we were able to get the nitty-gritty details around what they needed and where they ran afoul of our existing rules. Then we were able to review those existing rules and see whether those were in the statute, meaning they came from Congress, or whether they were self-imposed restrictions. It turns out that the vast majority of them were self-imposed restrictions. We have gone through a long process to rewrite the solicitation and to broaden and update it for modern times. It hasn't been substantially updated since 2009. That then allows us to do a lot more of these. We still have an innovation mandate, so you can imagine I can't just do standard solar and wind projects that are distributed in nature, or whatever it is. It's the applicants’ responsibility to prove to us what innovation is; we can't make it up for them. But what they have pitched us, which has been very fascinating and very relevant, is DERs, DERMS – distributed energy resources, demand flexibility work.David Roberts:   The people applying presumably are aggregators of large numbers of small projects?Jigar Shah:  Sure. We've said to them that they have to be innovative, and the innovation that they pitched us is this participation in the FERC Order 2222 markets, which allows for demand flexibility to get equal standing in the wholesale power markets as natural gas peaker plants. Then a lot of utility companies have also offered these demand flexibility programs; California, New York has used them to save the grid multiple times. You see companies who’ve SPAC’d that specialize in this; EnerNOC in the old days, Voltus recently, and others. You're starting to see a lot of investor interest as well in these companies. So they've come into the office and said, “the underlying technology might be solar plus battery storage and a thermostat and water heater and bidirectional charging using wallbox — but if we're aggregating all these assets up and opting them into a DER framework, which then provides a huge amount of extra reliability to the grid at one-tenth the cost of today's natural gas peakers, does that qualify? And we’re like, “huh, I guess it does.”David Roberts:   None of those pieces are particularly innovative. All of those technologies exist now. It's the aggregation and playing in the market that's the innovation.Jigar Shah:  The underlying hardware is not innovative, but the software continues to innovate. I was one of the first investors in battery storage behind the meter in my previous role, and that software has dramatically changed every year, such that some owners of batteries have hired a new platform to operate their batteries every year, because the software is changing so quickly.David Roberts:   It seems like those markets for distributed energy aggregators depend so much on politics and regulation. This is not a free-market situation; you can do that where regulation has permitted you to do it. In a sense, the market is limited by things that you can't really affect. You can help them succeed under those circumstances, but you can't bust the market out of those circumstances. It requires regulatory changes.Jigar Shah:  You're right, and that's true for everything, right? The advanced geothermal market isn't going to work unless someone pays 7 cents a kilowatt hour with a dedicated RFP. But we do have the ability to nudge in ways that are quite influential. For instance, in this case, the vast majority of the repayment obligation comes from FICO score, not from markets. People are agreeing to pay a fixed price for their new water heater or bidirectional EV charger. Even though they are now registered to operate in these demand flexibility markets, they're agreeing to pay a fixed $20 a month in loan payments to pay us back. We can, on the one hand, get a reasonable prospect of repayment without the regulatory changes. On the other hand, the companies that borrow the money from us go to the regulator and say, “I'm adding 20 megawatts a week of load that I control now, you guys should put that into the regulation.” So there's some circularity to this, and someone's got to go first. Clearly, the DOE Loan Programs Office should be the one that goes first.David Roberts:   One of the big problems facing clean energy expansion is the availability of minerals. Their production is concentrated in certain countries, which are not necessarily great; processing is concentrated in China, which is not necessarily great. So there's a big focus on finding them, mining them better, refining them better, moving those domestic supply chains, and recycling. Are any of those on your radar?Jigar Shah:  They're all on our radar. The one big initiative that was added during the Trump administration was a focus on critical minerals. We have improved a lot of the legal justifications in others. We've mapped out every single opportunity in the country that we believe to be commercially ready. A lot of people have mapped out where the minerals are in the United States; we've overlaid that with people who are actively getting the permits and doing all the work to start it. I would say every one of those folks is in our pipeline, and we've already received about $3 or $4 billion worth of loan requests in the critical minerals and battery recycling space.David Roberts:   How excited should I be about battery recycling? Is there cool stuff going on in the recycling space, generally?Jigar Shah:  Recycling is a big deal, and it's one thing that the US has, frankly, done a terrible job of over the decades. Even in the steel market, or the copper market, we send gargantuan amounts of raw materials to China by accident because we don't want to recycle it here. We just stick it in a shipping container to Malaysia, Malaysia recycles it, and it happens to go to China. Why are we doing that? We should do that here. Steel, for instance: we have a huge amount of steel that we could actually melt using an electric arc furnace. For brand new steel, you need pig iron and you need the HYBRIT process and all that, but we could substantially increase the amount of recycled steel we use in this country. We just haven't invested in the infrastructure to do so. The same thing is true with battery recycling, copper, heavy metals, cell phone recycling — there's lots we can do here. And that's all eligible within the Loan Programs Office.David Roberts:   Looking back now on the performance of the LPO during the Obama years, we can trace pretty clearly that it played a big role in the explosion of a couple of key markets: utility-scale solar, onshore wind, arguably batteries. If I'm in 2032, looking back on the LPO’s performance under Biden, what two or three markets could you envision exploding in the same way due to your work?Jigar Shah:  It's a great question and one that I will partially answer and then leave you wanting more for our next podcast session. In general, what I have said to my colleagues at DOE is that we actually know how to do this. We have written a lot of white papers out of the Loan Programs Office that have been shared widely across government around what we think the formula is on how to do it. If we agree with the way in which we do it, that forms the new approach to American commercialization. Instead of being jealous of Canada or Germany or other countries, we should actually admit that we're really damn good at this, and we should stop self-hating and start owning what we do. It's a combination of tax credits, Loan Programs Office, state regulation; and we should do it in a way that's more methodical than what we perceive to be haphazard, but isn't haphazard.David Roberts:   This is uniquely American, I feel like, the way we think about industrial policy — which every country does, and always has, but we're vaguely embarrassed about it, so we don't look directly at it, do it behind our backs. I agree, that's silly.Jigar Shah:  Yeah, but not anymore. If you look at the big pots of money in the bipartisan infrastructure legislation: you've got hydrogen, we will make that work. Instead of hemming and hawing around green and blue and pink and whatever, what we should be focused on is that we use 10 million tons of hydrogen a year; all 10 million tons of that will be turned into low-carbon hydrogen. We have a pathway to do that, the secretary has laid it out, and with all the applications I've already received in the office, I'm fairly confident that we have a pretty clear pathway of doing it. The same thing is true in direct air capture and CCUS, even though a lot of people love to hate it. The Class VI wells that we have in Illinois, which are being replicated in Wyoming, North Dakota, and other places, do work for industrial emissions. I am not going to say that I know how to capture carbon dioxide from power plants and put them into Class VI wells, but from ethanol plants or chemical plants, we know how to do that really well. Direct air capture, too. It's like $500 a ton, but we know how to get that down to $200 a ton, and the secretary has announced the Carbon Negative Earthshot which gets it to $100, and there are several people who are telling me that they think they can get it done before 2030. So we're pretty on track there as well. One other area that I'm super proud of is the virtual power plant / DER / DERM area. There are millions of Americans who've been left out of this revolution and we are going to get them in, and it's going to be pretty damn cool to watch.David Roberts:   You mean lower-income people having access to DERs?Jigar Shah:  Lower-income people, people in multifamily housing; a lot of people control loads that they can contribute into these virtual power plants and get paid to do so. Ten percent of our entire electricity bill is used to pay for these reliability / resiliency balancing services. Why pay the natural gas peaker plants for this when you can pay people to have flexible demand for this?David Roberts:   You think that's going to overcome all of its many logistical, regulatory, financial obstacles? It's such a tangle.Jigar Shah:  It's 90 percent cheaper than what we're doing now, so it literally makes no sense for anyone to ignore it. Why would you not pay the money to individual ratepayers as opposed to paying it to the owners of natural gas peaker plants?David Roberts:   Well, Jigar, thank you for coming on, and thank you for taking the reins of this thing and whipping it into shape. I'm super excited to see what happens over the next few years.Jigar Shah:  My pleasure. I’m in the luxurious position to evaluate other people's work and not have to do it myself. I appreciate all the hard work that the entrepreneurs are actually doing. David Roberts:   Thanks again, Jigar. We'll talk again soon. Jigar Shah: Thanks, Dave.  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, Panama Bartholomy, head of the Building Decarbonization Coalition, discusses the need to decarbonize buildings, the many challenges facing the effort, and the cities and states that are making progress. You better believe we get way into heat pumps and induction stoves. Full transcript of Volts podcast featuring Panama Bartholomy, January 28, 2022(PDF version)David Roberts:Fossil-fuel combustion in buildings — mostly natural gas for space and water heating — is responsible for around 10 percent of US greenhouse gas emissions. Getting to net-zero will require heating, cooling, and powering all those buildings with carbon-free energy.It’s an enormous challenge — or rather, a huge thicket of challenges. There are technical issues, political issues, public-opinion issues, and policy issues, all of which decompose into dozens of discrete issues of their own. To help me wrap my head around all of it, I’m eager to talk to Panama Bartholomy, who is, I promise, a real person and not a Dr. Seuss character. Bartholomy has been wrestling with building decarbonization for decades, at (in reverse chronological order): the Investor Confidence Project, the California legislature, the California Energy Commission, the California State Architect, and the California Conservation Corps. He’s served on a variety of boards, collaborated with various expert organizations, worked on climate issues in over 30 countries, and all kinds of other stuff, but if I tried to include it all I would never get to the conversation.Bartholomy is currently running the Building Decarbonization Coalition, a multi-sector alliance of companies, nonprofits, and government agencies working on buildings, so he’s up to date on where progress is being made (think New York and California), the biggest political impediments (think the natural gas industry), and whether heat pumps really work in cold climates (think yes, they do).Without further ado, Panama Bartholomy, welcome to Voltscast.Panama Bartholomy:  Thanks, Dave. Good to be here. Long-time listener, first-time caller.David Roberts:   Let's talk about buildings. There's so much to get into here, but I want to start with a few broad scene-setting questions. Just to orient us, tell us where buildings fall on the climate policy hierarchy of needs. What portion of the problem are our buildings?Panama Bartholomy:  Maslow's hierarchy of needs for buildings and climate, I love it. We — by which I mean the building sector — come in right about 25 to 30 percent of overall emissions nationally, and about the same globally. Depending on the state you're in and the grid mix of your electricity, it may be a little higher or lower, but we’re right about in that sweet spot of 20 to 30 percent. One of the challenges is that in this sector, unlike industry or the electricity sector or even the transportation sector, you have millions if not billions of little machines that have a lot of consumer choice. You can't just shut down a coal plant and all of a sudden get a lot of benefit. You have to involve a lot of players in this.David Roberts:   Yes, this seems like the decarbonization sector that involves the most logistics and the most high-touch human interaction. You have to think about sociology and psychology. It's a tangle.Panama Bartholomy:  It is, and that's why I appreciate you spending some time in our funny little corner of the climate world. We need a lot more attention to it. Every time somebody buys a new furnace or a gas water heater or stove, they're locking in 20 or 25 years of carbon emissions from there. So attention is one of the key things that we need on this issue.David Roberts:   In recent years there's been something of a consensus forming in carbon circles that electrification is the premier decarbonization strategy. When we look at buildings, is electrifying them the whole game? How far will electrification get us and how big is the remainder once you're done electrifying?Panama Bartholomy:  We haven't seen a lot of good alternatives at this point. When you think about electrifying buildings, you’re talking about space heating, water heating, cooking, and probably clothes drying. You do have some arguments with people about their gas fireplaces and their pool pumps, but that's a pretty small amount, all in all. When you look at the alternatives, are we going to pump incredibly expensive renewable natural gas through pipes to power those? Are we going to replace the entire gas system with a new hydrogen system to do that? I don't think so. These are pretty low-level technologies, when it comes down to it, in the use of energy, and using expensive fuels just doesn't make sense either from an economic perspective or a climate solutions perspective. So electricity is the path we need to go down on buildings. They're making cold-weather heat pumps that can operate well down to -15 degrees, so here in 2022, we have much if not all the technology we're going to need for electrification of buildings. It gets down to an issue of scale and deployment, and how are we going to do it fast enough to meet our climate goals.David Roberts:   Here’s a philosophical question: If we are going to electrify all the buildings and then we're going to supply that electricity with zero-carbon renewables or other clean energy, then why do we need efficiency? Why do we need to use less energy in buildings if the energy we're using is clean?Panama Bartholomy:  Because even if we're using clean electricity, we don't want to use a ton of it. I consistently look forward to a Star Trek future when we don't have to have conversations about appliances and energy and where it comes from. But the reality is that electricity does cost money here in our reality, and if you're running even a highly efficient heat pump off of a very clean grid in a very cold climate, you just want to use less energy to heat your house. In particular in the colder climates, it's to save money.David Roberts:   So we could imagine your Star Trek future where renewable energy has gotten so cheap that we no longer feel the need to ration it. In that theoretical future, will efficiency just fade out, or is there some intrinsic worth to efficiency beyond saving a scarce resource? Panama Bartholomy:  I was raised in California and then Hawaii, so I have a primal fear of being even slightly cold. My wife did her undergraduate work in Minnesota, so whenever I complain about being cold, she mocks me, and I say, just because you were colder at one point in your life doesn't invalidate my feelings and discomfort right now. The benefit is going to be one of comfort moving forward. When you talk to the leaders in the energy efficiency community that actually sell efficiencies successfully — and there's only two — they'll say that that's usually what sells efficiency: it’s comfort, it’s air quality, it's a better quality of life, rather than the marginal savings you get from it. In the colder and the hotter climes, efficiency is always going to have a role to play, but increasingly people are recognizing that it's less important in the timeframes that we're talking about for addressing climate change than getting off of fossil fuels. We can't just be using less fossil fuels, we need to stop using fossil fuels.David Roberts:   I want to talk about the impediments to building decarbonization in three different areas. First, putting aside politics and regulation, what is the biggest technical barrier to building decarbonization? Are there still practical and engineering and technological problems to solve? Or is this all about policy and investment?Panama Bartholomy:  What you have is a situation of the technology itself and then market awareness or market familiarity with the technology. When you look at low-rise commercial buildings, low-rise multifamily residential buildings, the technology is there. As I mentioned, we have incredibly performing cold-climate heat pumps, and a heat pump is just an air conditioner that runs in reverse, so anybody that installs an air conditioner knows how to install a heat pump. Heat-pump water heater — it's not crazy Vulcan technology. The technology is there for that, and there's enough familiarity with it that if we can put in place the right market signals and the right policies, it'll be an easy shift for the industry. For the high-rise, we have a few more challenges. You have the “starchitects” and the good engineering firms that are familiar with doing central hot water heating systems with heat pumps. But by and large, that's one technology where — even though it exists, it's being deployed in countries all over the world — particularly here in America, there's less awareness and history of designers doing central heat-pump water heaters. So that's one area where we still have to come up to speed. Then the biggest barrier on the technical side right now is just home wiring and home electrical panels.David Roberts:   Upgrading to prepare for electrification, that kind of thing? Panama Bartholomy:  Exactly: undersized electrical panels. If you're adding four new appliances and maybe an electric vehicle, you're going to have to upgrade your electrical panel. Which isn't bad in itself, and for a lot of homes there’s a safety benefit to it as well. The challenge is that in our world, what usually brings that about is a failed furnace or a failed water heater, so it’s an emergency.David Roberts:   So these decisions are made under duress, usually.Panama Bartholomy:Yeah, exactly. David Roberts:What about the biggest political impediment? Is it consumer ignorance or consumer sentiment? Or is it, as I tend to suspect, opposition from the natural gas industry? Panama Bartholomy:  The biggest political barrier right now is fear. It's the fear of politicians to set out agendas in line with their stated climate goals. Even leadership states like California and New York that have strong climate goals — you think of all the different sectors that are emitting, and well, pretty soon here, we’ve got to stop burning fossil fuels in buildings. Yet you see a hesitancy of leadership to set out that vision, and that results in market confusion. You have the manufacturers, the installers, the builders all saying, “well on one hand, it's pretty obvious what you're going to have to do to us through regulation if you're going to meet your climate goals, but on the other hand, you're still allowing new buildings to hook up to the gas system; you're still providing energy-efficiency incentives for gas appliances; you're still putting out billions of taxpayer dollars into affordable housing and school construction and you have no alignment of those policies with your climate policies.” So right now it's fear to step up and set bold policies for buildings that is holding it back. You mentioned where that fear may be coming from, and largely it is gas utilities, who don't see themselves in a low-carbon future; in particular, the unions that work within those companies and lay those pipes, or unions that lay pipe in buildings. What we are seeing in both New York and California right now is organized labor starting to come to the table. They use the same language every time we sit down at the table with them: they say, “we see the writing on the wall; we know where this is going, and so we're coming to the table to begin to negotiate what a just transition actually looks like beyond just a slogan.”David Roberts:   What is the biggest financial impediment? Is it just a lack of government money, or is there a lack of financing and funding models?Panama Bartholomy:  I've spent about 20 years in energy-efficiency policy; I'm a recovering bureaucrat, spent about 15 years in state government in California. Part of the beauty of working in our space is that we are working with technologies that are not a choice for consumers. A lot of people think about building electrification, they draw parallels with the solar industry or the electric vehicle industry or lessons learned from energy efficiency. And while there is stuff to learn from that, the reality is: you don't need to have solar panels in order to stay warm in your house. You don't need an electric vehicle in order to be able to provide hot water for your family. So we're dealing with technologies that people fundamentally have a lot of urgency around when they break. The beauty is, they break, and absent any of our electrification goals or our climate goals, that person was going to spend anywhere from $7,000 to $15,000 on a new furnace and air conditioning system. They were already going to have to spend money, think through what financing options are available to them, etc. So what we need to do in this space is figure out how to add just enough money and just enough access to financing to be able to shift that decision around to the technologies we want. We don't need to pay for the entire water heater; what we need to do is pay a few hundred to a thousand-and-a-half for that water heater in order to help consumers choose a heat-pump water heater rather than going back to another gas water heater. We need some incentives, particularly over the next decade, to be able to make it so that the electric choice is the cheaper choice. For low-income and moderate households, we need to be focused on accessible financing models for communities that have historically been left out of capital markets. We've done a big report about what that could look like: how to use tariffed on-bill financing in an effective way to both protect consumers but allow far more people, lower-income and renters, to be able to take advantage of financing to make these upgrades.David Roberts:   When I talk about building decarbonization, one of the first questions that always comes up is about renters: unless my landlord has good intentions and is excited about this, there's not much I can do. Is there agency for renters? What should they do? How do you get to landlords?Panama Bartholomy:  There's water heating and space heating, and then there's cooking. Water heating and space heating, landlords are generally looking for the cheapest option; something breaks, they need to replace it. What I mentioned in the last answer about making the electric choice the cheapest choice and having good financing for high-efficiency electric appliances: that's what's going to help landlords make the better choice, that they're able to save money up front on these technologies. The same incentive programs and financing that help homeowners are also going to help landlords help renters with that. Now, key to that is that we also have in place policies that protect renters so that landlords don't install this technology and then try to raise the rent on them. It’s a key conversation happening right now. But I wanted to pull apart cooking, because cooking may be an area where there is more agency than what we've historically expressed, because of the air-quality impacts of cooking with gas. There's now a good 40 years of research showing that there are potentially significant air-quality impacts of burning gas in your home and around your family, and there are laws in this country around habitability that landlords have to follow. They need to provide good environments. So if a landlord is providing an environment that does not have good venting over a stove and/or has a stove that you can test and show is emitting dangerous levels of pollution, we are now starting to work with a number of groups across the country about, how do you then turn that into policy? How can you empower local governments to include that in their habitability requirements, which would compel landlords to then make the shift to either a different kind of stove and/or venting?David Roberts:   Is that about passing new policies upgrading the habitability standards? Or is there some way to interpret or use existing habitability standards to get at stoves? Are the tools there already?Panama Bartholomy:  We believe that the tools are already there, that the habitability standards cover this, and it's a matter of somebody stepping up and testing it. We're engaged with a number of groups doing air-quality testing over a period of time, working with tenant groups, and working with local governments to be able to say, look, this is the data right here. We're potentially having higher pollution coming from stoves in people's homes than the highways or ports next to them; as much as we need to address those, we also need to be addressing this. We haven't yet had the first city go ahead and adopt it, but we're in conversation with a number of them and I hope in the near future to be able to talk to you about that.David Roberts:   When we talk about building decarb, minds go to the operational emissions: you're running your furnace, you're heating your house, etc. But the other half of the equation is what's called embodied emissions — the emissions represented by the manufacture and transport of the materials used in the building. This seems like something that consumers have very little control over. Who needs to understand embodied emissions, and where's the right lever to take action on that?Panama Bartholomy:  The Carbon Leadership Forum, out of your area of Washington, has been the leading voice on the issue of embodied emissions. They've done a ton of good work on this. It's a combination of factors, and it gets down to individual theories of change about how we're going to address climate change. For me, I think we need to be doing as much as we can in the 2020s to invest and incentivize and educate. Then we're looking at a series of regulations in the 2030s that bring along everybody that wasn't incentivized or didn't fall to our education. On embodied carbon, it's going to be the same thing. Right now, a lot of the focus on embodied carbon is on the design and construction community: how do we get the specifiers in all these firms, largely on the commercial and multifamily and institutional side, to start to specify different materials? You have leadership systems like LEED and the Living Building Challenge incorporating greater transparency to product design and product development.David Roberts:   If you're a big builder, I'm guessing your primary sentiment about this is that you just don't want to waste a bunch of time on it. You don't want to have to do the research on the materials yourself. Is there an easy way for a builder to say to suppliers, “you must meet X standard?” Is there a standard out there yet that they can pin their supply on?Panama Bartholomy:  Absolutely. LEED and the Institute for Living Futures have been the two leading groups on this, enforcing through their rating systems a system for manufacturers to be able to report on the environmental impacts of their products. We're getting beyond just recycled content or emissions, we're now getting into a lifecycle analysis of the product. They're providing the model right now for products to be measured against. The other place we're seeing it is at the local and state level, but they haven't been able to get much beyond cement, to be honest with you. David Roberts:   Well, that's a big one.Panama Bartholomy:  It is. But we need to be getting into steel. There are a number of different large systems. California a couple years ago passed a Buy Clean California bill that required state government to start to reduce the embodied carbon of steel, glass, and a couple other products that they purchase for their own buildings. At the local level, we're seeing local governments pass embodied carbon ordinances that are mostly focused on cement and using low-carbon cement in both public and private buildings. But it is nascent and we haven't seen anywhere near the attention on embodied carbon that we've seen on operational emissions of buildings. Folks like Ed Mazria out of Architecture 2030 make a compelling point that the bigger carbon problem is the embodied carbon than the operational.David Roberts:   Looking down the road at our imaginary future: if you reduce your operational greenhouse gases to nothing through clean electrification and sealing and all that, and then you secure low-carbon materials, you can imagine buildings not just zeroing out their emissions — you can imagine buildings becoming carbon sinks, carbon stores, negative carbon. Is that something people are thinking about, or is it a 2050 type of thing?Panama Bartholomy:  No, people are talking about it. It sounds like you are hanging out with some of those starchitects I mentioned earlier. It's not enough to be net-zero anymore, you need to be a carbon-positive community. The science is there. You sequester carbon in certain materials that you use in a project, and if you use enough of it, and you zero out your operational, you should be able to do it. Again, we need to get it beyond the starchitect buildings to the mainstream, and that's where I fundamentally feel that government has to play a role. The most important thing they can do in 2022 is say to the market, where are we going? How are we going to help create the market to allow the regulations to work when they come into effect?David Roberts:   The pandemic has brought a lot of attention to the fact that air quality and ventilation are fairly abysmal in many existing buildings. Now this is becoming a public health issue. Are good ventilation and filtering and air quality in tension with efficiency? Are those necessarily going to mean more energy? How do you see those fitting together?Panama Bartholomy:  They're necessary. For 40 years out here in California we've tightened up the building envelope; I say that the folks over at the California Energy Commission belong to the the church of the envelope because of their dedication to it. When you do that, you necessarily start to trap any emissions in your home: all your aerosols, all the furniture you bring into your house, and then microplastics — I think I'm probably one-quarter microplastic at this point because I have two young kids. For our world, it's really the pollution that comes from the stove, so potentially dangerous levels of nitrogen oxides, carbon monoxide, and formaldehyde coming out. If you don't have venting, and you have a tight envelope, and you're cooking in winterm and you don't want to open the windows, you have a potentially dangerous situation there for your lung health, and, with carbon monoxide, for your overall life. So it's a critical piece of energy efficiency, and we're starting to have a pretty brutal conversation in the energy-efficiency community particularly around some of our low-income weatherization programs. What is the morality behind tightening up some of these homes and providing comfort and saving money without addressing some of the pollutants inside those very homes?It's absolutely critical that we deal with ventilation and removing sources of pollution. We know that stoves are a critical source of pollution, and we know that we have much better technology that just blows the doors off of gas stoves to replace it with.David Roberts:   Does this just come down to building in ventilation and airflow standards into our regulations? Is that the long and short of it?Panama Bartholomy:  On new construction, yes. Last year, the Energy Commission in California adopted its new building code that'll go into effect in two years, and it's the first time in the world we've seen a building code that's differentiating the ventilation standard it requires based on the type of fuel you're using to cook food. They're saying if you have a gas stove and you’re new construction, under this code you're going to have to have a higher ventilation standard, and therefore a more expensive ventilation system, than an electric one. It's the first time we've recognized in a code the inherent health benefits of cooking without gas. For existing buildings, whether you're talking about waste or water treatment, source control is always your best bet, the most affordable way. You just want to find a way to get the gas stove out of the kitchen and get an electric one in there. You're still going to have some emissions from just cooking and, depending on how good a cook you are, from burning. So you do want some ventilation for that, but at least you don't have what are known criteria pollutants from the EPA being emitted into your kitchen in that case. I say that because in some situations, these homes are just built in a way that is going to make ventilation systems very hard to retrofit in, and landlords unwilling to do something about it.David Roberts:   So you create an incentive for builders or retrofitters: get rid of the gas stove and thereby save money on ventilation spending.Panama Bartholomy:  Exactly. The Energy Commission's done that small step; they didn't say “no more gas stoves,” but they said “we recognize gas stoves are dangerous, and therefore you're going to have to deal with it.” So yes, it is a regulatory incentive.David Roberts:   I think we can agree that nothing like the scale of action we'd like to see is happening, but there are places that are taking big steps. In New York, the governor laid out some big talk; I'm curious what she said and what authority it carries. What else needs to happen to make it move forward?Panama Bartholomy:  Yeah, very impressive first State of the State from Governor Hochul on the environment. I think Politico called her a political juggernaut. Unfortunately, her hometown bills couldn't quite get over the hump last weekend. But she put out some big goals for buildings, and it matches well with what's happening in the state right now, which is the beginning of a public process for their big climate scoping plan that's been under development for years, about how they're going to meet their climate leadership legislation. What the governor announced is a laundry list; I could take up the rest of the podcast to go through it, so I'll just be brief. She released a comprehensive package of proposals in the State of the State: some that can be carried out through her Public Service Commission, some that will need legislation, and some that will be addressed in the budget.David Roberts:   And she has a supportive legislature?Panama Bartholomy:  She does. She hasn't really had to test it yet. But what we've seen from the last governor, whose name shall not be spoken, is that he was able to “work well” or bully legislature into carrying out the agenda. We'll see if this governor has a similar success rate with the legislature. But it seems like it. There's been three great pieces of legislation immediately introduced around building electrification, so I think there's a lot of action on it. But to your original question, the governor proposed how to bring about 2 million climate-friendly homes by 2030, with at least 1 million of those being all-electric and 1 million being electric-ready, pre-wired so next time any of your gas appliances break, you're ready to go with electric appliances.David Roberts:   Does “climate-friendly” have a concrete definition?Panama Bartholomy:  I've never seen “climate-friendly” in law yet. I think it was a turn of phrase that her media folks developed for this one.David Roberts:   It can mean a lot of different things in practice. Panama Bartholomy:  Yes, indeed. I'm sure the gas companies have a lot to say about “climate-friendly.” She called for all new construction in the state to be zero emission no later than 2027, which is in line with what New York City just adopted for all buildings being built in New York City at the end of last year.David Roberts:   That's operational, not embodied, emissions?Panama Bartholomy:Correct, that's operational emissions. David Roberts:So does that mean the resulting building will not produce carbon on an ongoing basis, or the construction process itself is somehow zero carbon?Panama Bartholomy:  The resulting building. We'll see how it all gets played out. It's a lot of platitudes and speeches for the State of the State address. There's a piece of legislation currently working through the legislature that actually sets 2024 as a zero-emission date for construction. If that one passes, there's a series of definitions in there, but that is from operational emissions rather than embodied or construction emissions. She also put up a green electrification fund to electrify low-income homes, about $25 billion for a five-year plan, which is far more visionary than we've seen from anybody else. There's a certain law called “obligation to serve”: utilities that provide gas, usually monopolies, are obliged to provide that gas or electricity to ratepayers if requested. If you're far out in the country, you may need to pay for some of that infrastructure, but the utility is obliged to provide it to you. It's a real barrier when you're looking about starting to trim the gas network. So the governor in her address actually proposed to end the “obligation to serve” for existing customers.David Roberts:   Just to be clear about this, say you are trying to eliminate part of your gas network and electrify everything in that area; all it would take is one citizen to say to the natural gas company, “I would like to be served by gas” and then basically you can't get rid of it? Is that the legal situation right now?Panama Bartholomy:  Yeah. We're seeing it out here in California. Pacific Gas & Electric, largest utility in the country, fourth-largest distributor of natural gas, they are trying to go through figuring out how you can operationalize electrification. They've been doing some pilot programs around going to whole neighborhoods where they have old pipe that's coming up for replacement. It’s going to be millions of dollars in replacement, they've done the analysis, and they said, “okay, if instead we just electrify all the homes on this pipe extension, it's going to be cheaper for us and for ratepayers.” So they go to every single one of those homes and they ask each homeowner, “hey, would you like a free all-electric home?”We've seen two case studies they've done on this. One of them, it worked. They saved $400,000 on the project compared to the gas pipeline replacement, and it was great. On the other one, out of 150 homes, two people didn't want to give up their gas stoves. PG&E had to go ahead and spend millions to replace pipes that are going to have a 60- to 80-year lifespan, that if we're going to meet our climate goals, we're going to have to early retire, and who's going to pay for that? It's going to be ratepayers paying for that early retirement.David Roberts:   So this would be a law to get rid of that obligation.Panama Bartholomy:  This would be a law. A piece of legislation has now been introduced in New York legislature to remove that obligation to serve. She also has called on the PSC to take a look at the whole approach to pipeline maintenance in New York: how we grade it, how we decide whether or not to replace pipe or look for non-pipe alternatives to it, such as electrification — completely changing our approach to just assuming that we're going to replace old pipe with new pipe. I could go on and on. She has a bunch of stuff for training programs for New Yorkers to get a lot more people in. One of the two exciting areas I'll bring up is, she's talked about needing to convene private capital markets. No better place than New York to be doing some of that convening, to be able to bring them in to figure out how they can support this. Lastly, she's proposed 1,000 clean, green schools. This is an opportunity to clearly be able to get organized labor more to the table, to be supporting building electrification as well as providing better ventilation and air quality in schools.David Roberts:   I always thought that was political gold, just waiting for someone to pick it up. The respiratory health of kids, what's more on people's minds right now?Panama Bartholomy:  Exactly. I live in fire country out here in California — we used to call it wine country — and increasingly, our schools and our public facilities are being used as resilience centers in heat waves and firestorms. Getting these schools with solar, batteries, all electric, with great ventilation systems, is unfortunately going to be a critical need as we deal with and potentially adapt to climate change.David Roberts:   We could stay on New York forever; it's amazing what's going on there. But what about California? That's the other big state that's come up recently. California is going to just spend a bunch of money on it?Panama Bartholomy:  Yep, that's the proposal at this point. Sadly, probably nowhere near as much as we need to, but it's a good start. What I would say about the difference between what we're seeing in New York and in California is that in New York, you're seeing some high-level leadership coming directly out of the governor's office. In California, the leadership is bottom-up. We have 54 cities across the state that have adopted local gas bans or local building codes that discourage gas. We have agencies like the Air Board and the Energy Commission and the Public Utilities Commission adopting piecemeal policies that are all building toward the direction of requiring electrification and incentivizing it and building the market. But until January 10 of this year, we didn't see anything coming from the governor's office about, “we need to start electrifying, we need to start getting off of fossil fuels.”On January 10, the governor released his proposed budget for the year and he proposed just over a billion dollars for building electrification, with two-thirds of that going toward existing building low-income housing retrofits. We're starting to see some significant investment, more so than we've seen in the past. But at this point, I’ve got to say, I think if you put a UFC championship belt on any governor right now, it's Governor Hochul. David Roberts:   New York and California are the leaders on so much carbon and climate stuff. Are they the leaders in this respect too, on buildings? Or is there anyone else that's taking comparable action?Panama Bartholomy:  There are. I mentioned local governments, and that's a theme we've seen in addressing climate change for decades now: the locals are the ones that are the most exposed to voters, and yet across the world they have been taking the biggest swings on climate change. They see both the benefits and the risks of climate change more directly than state or federal levels. Other states, I would say that Massachusetts, Illinois, and Colorado are stepping up. I'll throw Washington in there as well. Massachusetts is just about to vote on the next three years of their energy-efficiency program, and they have nearly completely shifted the focus of the energy-efficiency program to make it much more electrification-focused.David Roberts:   This is a big thing, right? Because efficiency conventionally conceived is not necessarily aligned with electrification or cleaning up sources. Often in tension. I feel like this is something not a lot of people are aware of outside the space.Panama Bartholomy:  It very much is, and I think a lot of it is because the energy-efficiency mindset came out of the oil crisis of the 70s — it's just about saving more energy, it's not about ending emissions. The shift to climate-is-existential, I think it's been hard for folks that have been working in this space for 30 years or so. So that'll be great in Massachusetts. Colorado and Illinois both passed overall climate legislation last year that had buildings as a specific part of it, and in implementation they're going to be developing comprehensive roadmaps for how to deal with buildings. In Washington they're actually adopting a new building code, and for commercial and multifamily buildings they're proposing electrification mandates within that building code. So your home state up there is one of the leaders. The odd thing is, they're backing off on single-family homes, where it's the easiest to do it, and it's largely because of stoves.David Roberts:   It's easier to electrify residential. Big buildings and commercial buildings, industrial buildings, that's doable, it's just more expensive? Or the incentives are wrong? What's the status of bigger buildings? Is this something we know how to do?Panama Bartholomy:  It's very much doable, it's being done. I can point you to buildings in Seattle that are all-electric tall towers. One of the leading consulting firms, Ecotope, is out of the Seattle area. It is very possible and being done all over the world. The key thing there, though, is awareness. We haven't asked our bread-and-butter design and construction community to care this deeply about climate change before, so they've been focused on efficiency and not on these central heat-pump water heating systems. The HVAC systems — again, heat pumps are basically air conditioners that can run in reverse, so it's not complicated to design that, but there are some differences in a boiler-based water heating system versus a central heat-pump water heating system. It's nothing crazy; it's not Star Wars technology. It's just familiarity with it and being able to design around it. Unfortunately, I think we're going to do a ton of education and incentivizing in the 2020s and then have to require it in the 2030s. It's very doable. It's being done. For the folks that know how to do this, we're not seeing a price premium for building all-electric versus building with gas. In fact, Point Energy out of San Francisco did a big study for the University of California system, which has adopted a carbon neutrality by 2025 target, about what it costs to build and operate a building with gas and electric versus just electric. They looked at residential towers, office buildings, and labs, and found that the electric buildings cost the same or cheaper to build and operate than the gas buildings across all three of those building types.David Roberts:   Is this one of those things where it's more capital-intensive up front but then you save on operations over the long term? I used to be very taken by that story, but then I realized that, as nice as that thought is, it’s not really what motivates a lot of behavior in markets. People overweight those upfront capital costs. Is that still the situation?Panama Bartholomy:  Not in this space. You never want to make generalizations about construction. Every project is different; every time you interact with a supply chain is different than another time interacting with the supply chain. But by and large, our members, who are design and construction folks in this space, that know how to do this, say they don't see a cost premium for the construction of these projects for large, commercial, institutional.David Roberts:   There are a lot of states now that are, let's say, pushing the other direction. One of the ways they're doing that is by passing laws that preempt cities from passing gas bans; it's popped up in a lot of red states. Is there anything to say about that other than, “they should stop doing that, that's bad, we should elect somebody who won't do that”? If you're a city who's in one of those states, are there ways around it? Are there other things you can do? How should they deal with that?Panama Bartholomy:  That's a great question. What it fundamentally comes down to is taking away local governments’ choice about how to address climate change.David Roberts:   By the party that champions local government. Weird.Panama Bartholomy:  Yes, weird times, almost like it's disingenuous. When you look at what cities can do on climate change, usually transportation and buildings are the largest emissions; it just depends how much infrastructure or industry they have in their boundaries. Transportation emissions are tough; a lot of it is consumer choice. Your land-use choices take a long time to have a big impact. Public transportation is tough and expensive. So buildings are one of the key areas where local governments can actually do anything. When you take that tool away, you're really crippling local government's ability to do anything on climate change. What we're seeing right now is some creative ways to look around it. Some of the states that have adopted this have focused in on building codes, so you have some cities looking at planning law, health and safety law, instead of our building code law, which has now been preempted by state government. You are seeing some cities trying to look for creative ways around this. Ultimately, you know, I love all of our 50 states equally. But when you look at the top 10 states by gas demand, only Texas and Ohio have adopted these bans. The other eight states are climate leaders. They all have climate laws, they have climate targets, and they collectively represent over half the gas demand in the United States in buildings. I think what you're going to see is a coalition of those states changing the marketplace. Smaller states with smaller gas demand are just going to have to deal with the implications of those market changes.David Roberts:   A little bit like fuel economy, right? You get enough big states going in the right direction, they end up dragging the market with them. Panama Bartholomy:Very much so.David Roberts:I know Biden has done an executive order on federal buildings, and I know there's some money in the infrastructure bill. Are you excited by what's happened so far federally on buildings? Are there particular pieces we should be aware of?Panama Bartholomy:  There's more than we've ever seen. And that's great.David Roberts:   That's always such a low bar in these conversations.Panama Bartholomy:  When you work in climate, you have to be an optimist. Maybe not if you report on climate, but if you work in climate, you have to be an optimist. The numbers are just too stark. The fact that we appointed somebody in the White House, Mark Chambers, formerly from New York City, to be the lead on building emissions for the Council on Environmental Quality is amazing. The fact that you have Secretary Granholm going around giving big press events around cold-climate heat pumps and people yelling from behind her, “heat pump nation!” is absolutely incredible. DOE is moving forward on regulations that manufacturers of heating equipment say are going to be pushing the market to electrification. We're seeing a lot of what we need to see. It's our fundamental belief that you don't see significant federal action until you see a lot of state action. Federal is the bank, and then the caboose on regulations. We need significant investment from the federal government, and then that investment will help locals and states be able to adopt regulations that will transform the market enough that actors of all colors will come back to Washington and say, “listen, this is too haphazard and patchwork, we need some level of consistency across the country.”David Roberts:   If any of us need to feel additional anxiety about Build Back Better, is there anything big on buildings in Build Back Better that you are hoping makes it through this twisted process?Panama Bartholomy:  There is, much of it thanks to former guests on this podcast who have done great work in this area, particularly Saul and the folks over at Rewiring America. There's $17 billion in there for federal buildings, which I have a hard time getting too excited about when I think about taxpayers looking at it. “Great, so you're going to do a bunch of stuff that you should have been doing the whole time, and now we're supposed to get excited about this? What about the $17 billion to help me with my water heater?”But there's $12 billion for residential electrification, and that'll be split: about $6 billion coming out of the Department of Energy to provide direct rebates for the whole suite of electrification technologies (water heating, space heating, cooking, and clothes drying); then there's $6 billion that'll be implemented through state energy offices. That'll be focused on what is one of the biggest movements in energy efficiency right now: performance-based energy-efficiency measures.David Roberts:   Can you give the capsule summary of what that means?Panama Bartholomy:  Historically, we've had widget-based or “deemed” savings for energy efficiency.David Roberts:   You just incentivize them to buy the equipment. Panama Bartholomy:  Exactly. And even worse, we give installers money just because they installed the equipment — not necessarily the quality of the installation, the performance of it. How does it perform on the grid when we have grids that have very different greenhouse gas profiles depending on the time of day that the power is being drawn? A performance-based energy-efficiency program gives some money up front for an incentive, but the majority of the incentive is paid out based on the actual operations and performance of those systems. How efficient? How much energy did it save? How much carbon did it displace? How many emissions did it avoid? There's $6 billion currently in the Build Back Better bill that would go toward supporting states to set up those programs, and that would be run out of the state energy offices in each of the states.David Roberts:   And technologically we have what we need to be able to track performance in a way that you can bank on it?Panama Bartholomy:  We do. It's amazing some of the technologies out there. Leading firms like Recurve are providing fantastic tools for utilities to be able to pull apart the dynamics around a kilowatt hour saved, and why that kilowatt hour, normalizing for weather, normalizing for occupancy. It's incredible what computers can do nowadays. David Roberts:   I want to take a minute just to talk about heat pumps. They have gone from nowhere to people chanting, “heat pump nation!” It's a thrill. But when I bring them up and talk about them, immediately I hear, “I installed one 10 years ago and my house is always cold,” or “I can't afford to install one because I'd have to get fossil-fuel backup with it.” This actually happened to me. Seven or eight years ago, we were going to replace our original oil furnace in our house, which had been there since 1954: big, giant, peach-colored. We wanted to get rid of it. I would have loved to get a heat pump, but the contractors were baffled and resistant, and assured us, if you get a heat pump, you have to get a natural gas furnace to back up the heat pump, and all told it would have been an additional $8,000. So I ended up, to my great and ongoing regret, installing a natural gas furnace. I feel like that's a pretty representative experience in terms of a) people not knowing b) contractors not knowing what the hell they're doing, and c) this question of whether heat pumps can do the job, and in what climates. Can we get some clarity on that? How good are heat pumps these days?Panama Bartholomy:  Heat pumps are great these days! We have, through the leadership of the Northeast Energy Efficiency Partnership, or NEEP, a whole database of cold-climate heat pumps. They pioneered a cold-climate heat pump specification years ago and have been working with manufacturers since then to make sure there's a suite of different cold-climate heat pumps available. These are heat pumps where the heat pump part of the heat pump can operate down to 14 degrees below zero before electric resistance kicks in, or if you have a gas backup, before that gas backup kicks in. The technology is there. What you're talking about is your interaction with the contractor, and that's going to be one of the hardest things about this transition. Try to call up a plumber or an HVAC installer right now: people are just flat busy. They were flat busy before the pandemic, and now we're in the pandemic, everybody wants to renovate their home, which is now their home office, and they're busier than ever. There's no reason contractors should change what they're doing if they're selling and they're booked months out in advance. It's going to be up to us who are concerned about climate to give them a reason. It's not going to work to require it right now, because of the shock to the system that'll create for this workforce. It's going to have to be incentives, and then regulation.David Roberts:   Let me pause on the shock. Are there just not enough people trained to do it? Or is it about heat-pump manufacturers not being ready to ramp up quickly? Or logistics? What would be the shock if you tried to push it too fast right now?Panama Bartholomy:  It's a great question, because there's this fallacy out there that we don't have enough trained workers. The reality is, again, we're not installing crazy alien technology here. A heat pump is an air conditioner that can run in reverse. A heat-pump water heater is a tank of water with a heat pump on top. This is not complicated stuff. Electricians know how to electrician; they know how to run wires. It's not an issue of a lack of workforce, it's an issue of incentivizing the workforce in the right way. Right now, the major thing that installers want to avoid is callbacks. They want to be able to go in, put in something, and then not be called back out, which will prevent them from doing another job. If you historically have not cared about the performance of the HVAC system or water heating system that you're installing, it can be a change to all of a sudden now have to care about that performance. What we're seeing is a gradual transition of this workforce over to electric installations, but until we send some clear market signals, there's no reason for them to make that shift. You have all the myths that you ran into, like “they can't operate in even Seattle's mildly cold climate; you need gas backup; these things just don't work.” One of the other things is, we're just going to have to accept the difficulty of living in the first wave of addressing climate change, and that things are going to be better next decade. Things are going to have a lot of friction and be pretty hard this decade as we help to transition this industry.David Roberts:   When I hear pushback against electrification, this is the main thing I hear in terms of substantive objections: If you go to cold climates like the Upper Midwest, and you replace all their oil and natural gas furnaces with electric heat pumps, then in the winter you’re going to get enormous electricity demand that's brand new. You have these electricity systems built for summer peaks suddenly having enormous winter peaks, three times bigger than their historic peaks. Some people argue we're simply not going to be able to radically upgrade the entire electricity infrastructure in all these places fast enough; we're going to need, in some places, some alternative to electrification, which usually amounts to some zero-carbon liquid fuel, some hydrogen variant or biomethane, whatever it is. Basically, we are going to need to keep combustion in some areas because we just don't have the capacity to handle that much winter electricity demand. What do you make of that?Panama Bartholomy:  God, I wish that was a real problem. If we were installing so many electric appliances that we were actually causing grid disruption anywhere in the next decade — man, I could go home, that's it, retire, done, we succeeded. The reality is, we're not going to stop maintaining the distribution and transmission grids. We're not going to stop building generation in any part of this country. We're not going to have mass-scale electrification at the speed we need in the near-term. We're going to have some time to adjust. The people who think electrification is going to happen in a silo have not seen how electricity systems have worked for the whole history of electricity systems. It is an integrated planning effort, and demand is forecasted and then supplied. Now, at some point we can talk about rolling blackouts and weather events, but on the normal, this should be something that grid managers can absolutely handle with the rate of electrification that we could see, even if we had significantly more electrification.David Roberts:   Do you think it's fair to say, though, that if you're in one of those cold-weather climates and you see electrification on the horizon, you need to start bulking up your electricity system now? Those things are not fast to accomplish.Panama Bartholomy:  Yeah, if you are committing to electrification, you should be incorporating that into your demand models and looking at generation. And, getting back to the beginning of our conversation, you should be thinking about how to incorporate energy efficiency into those projects as well, to limit some of that new demand and ease building electrification into this high winter peak. To be honest with you, I think our bigger challenge is going to be electric vehicles — the doubling and tripling.David Roberts:   They're additive, right? You get a bunch of electric vehicles in a cold-weather climate alongside a bunch of electrification of heat and cooling, then you're talking about a lot of electricity.Panama Bartholomy:  It is. But with cars, average car ownership is about seven years, water heaters about 15 years, furnaces about 20 years. We're going to have quicker turnover of the vehicle fleet than we are of the water heater and furnace fleet.David Roberts:   Do you feel confident saying that, in the end, nowhere in the United States will need liquid fuels for heat? You think electrification is going to do it everywhere?Panama Bartholomy:  I'd say that for buildings, not necessarily for industrial, or transport. That is a hard decision that we need to make immediately: if you look at trash gas, or cow-crap gas, the rainbow of hydrogens — these are all precious, and they're all expensive. Is the highest and best use of that gas in my moderately efficient water heater in my basement? Or should we be spending it in those areas where it is going to be hard to electrify for the foreseeable future, such as industrial purposes, freight, aviation? That's just a better use for it.David Roberts:   So you wouldn't even be into some blending or mixing as an interim measure, to reduce emissions while we wait for electrification?Panama Bartholomy:  The challenge there is the expense to ratepayers. You're maintaining two infrastructure systems moving forward, and ratepayers are paying for it. Instead of making some of these decisions and clipping off the branches of the gas system and relieving ratepayers of that, you are just paying and upgrading it — and these upgrades to gas systems, as I said, 60- to 80-year lives for the materials that are used. These are long-term investments, and even if the whole neighborhood is only using gas for cooking, you still have to maintain that gas system to a high level of safety. David Roberts:   It’s interesting to think about the gas system as binary: you either have it or you don't. And if you have a single gas appliance, you have the whole gas infrastructure. It's a sticky dilemma. Speaking of that, let's talk for a minute about stoves. Where are we on education? I'm seeing it talked about more. I'm seeing a lot of concerted pushback — natural gas utilities and natural gas businesses out propagandizing all over the place, hiring advertising agencies and Instagram influencers to cook on gas stoves. Where do you see the battle for hearts and minds on stoves?Panama Bartholomy:  It's no accident that the gas company is choosing stoves. What's interesting is, it's probably their area of greatest vulnerability.David Roberts:   In the grand scheme of things, stoves are not a huge source of demand for natural gas, are they?Panama Bartholomy:  Nope — 3 to 5 percent of the average home’s natural gas demand. It's not big, but every mixed-fuel utility that provides both electricity and gas will tell us that their nightmare is that they have to run a gas system just because people aren't willing to give up their gas stove, and charge everybody $180 a month just to cook with gas. It's no accident that they're focusing on this. We've been part of a number of studies that have looked at people's attachment to different appliances, and unsurprisingly, those appliances that you interact with the most are the ones you have the greatest attachment to. Water heaters: pretty low level of emotional response. Stoves: really high. And people have had some bad experiences with electric resistance, the coil stoves of the past.Generally, the two things home or professional cooks care about the most are power and control, which are usually at the heart of all bad relationships. The good news is that we have an alternative that beats gas on both of those things. But we have this impression that gas is better, and you have these things coming from consumers, saying things like, “I deserve a gas stove. I finally saved up enough money, I can finally get a gas stove.”David Roberts:   It's definitely seen as a luxury, as an achievement, still.Panama Bartholomy:  Very much so. Part of this movement is going to have to be exposing some of the inherent dangers of gas stoves: the air-quality dangers, the safety dangers, whether you have a small child or older relatives in the house, and then just the dangers of piping gas around all of our communities. Like electric vehicles, the good news is that we have the high-powered electric vehicles of the kitchen as an alternative. It'd be a bummer if we were like, “no, come back to this coil stove.” That's not going to work. I can’t wait to see the marketing campaign around that.But gas stoves, because of the air-quality impacts, are also one of the gas company's greatest vulnerabilities. As you start to see more and more attention paid to that, more groups speak out about it, governments begin to address it, their last gasp from a marketing perspective could turn into the final dagger. With induction stoves, it's fantastic that we have a product that, once you test drive it, people's hair gets blown back. It's incredible. It's three times as powerful as the best-in-class gas stove, twice as good a control on it, incredibly easy to clean.David Roberts:   When I talk to people, that's the first thing I mention. I'm lazy, and I’m the person who cleans the kitchen. We were in a rental for a few months recently and it had a gas stove — god it was a pain in the ass. I was like, how do people live with this? There's so many nooks and crannies; it gets gross so quickly. Induction is this perfectly smooth surface. It really made me appreciate my stove.Panama Bartholomy:  Yeah, you just wipe it. We have all these pictures of my two-year-old cooking on the induction stove, putting his hand right next to the pan and cooking eggs. It's fantastic technology. So the good news is that we have a technology that's better. It's a matter of getting people out there to test drive these things, and getting it in the Home Depots and appliance stores, getting little pop-ups at farmers markets to begin this transition.David Roberts:   It doesn't quite carry the air of fanciness of a gas stove, though. We bought a commodity-level, relatively cheap induction stove; there's no fanciness to it. I don't know what you can do about that. You can't really make a high-end one, either, because magnets are magnets; they're all doing the same thing. Even the lowest-end induction stove basically has exactly the power and control. There's a lot of consumer psychology at work here that's difficult to puzzle through.Panama Bartholomy:  We need the Ford F-150 commercials for induction stoves. Big man turning big dials! Big power, lightning bolts shooting into the pan!David Roberts:   But you don't get any flame. Flame is so darn manly, magnets don't quite do it. Where's the industry on this? Do they have a preference what kind of stoves they make?Panama Bartholomy:  At this point, they don't. At this point, they have been happy to sell whatever stove a consumer wants to get. They are standing up and taking notice when you have 54 cities in California, most of the Bay Area, basically say, “you're not allowed to build with gas anymore.” Denver, Seattle, for certain building types in New York City now. That's making them take notice. It's been interesting to watch, because this is an appliance area that hasn't had to deal with efficiency and energy and environmental regulations a lot. The HVAC and water heater folks, this has been bread and butter for them for 40 years. But the stove folks, they're just like, “whoa, we're a target? Where did this come from?” Just out of nowhere.David Roberts:   One of the most outrageous things about this — and I don't know if a lot of people appreciate this — is that in a lot of cases, it is natural gas utilities running these propaganda campaigns, and they are paying for those propaganda campaigns with ratepayer money. In a lot of cases, if you have natural gas, you're paying for that anti-electrification propaganda. Are there legal remedies for that, or what's the right way to deal with that?Panama Bartholomy:  There are if your local PUC, PSC, BPU has a spine. The area where we've seen that be expressed the farthest is out here in California, where you've had groups like Earthjustice bring forward motions against companies like Southern California Gas Company around using ratepayer dollars to both lobby against electrification as well as run consumer campaigns against electrification. And you've had, after months and months of delay, mealy-mouthed responses from the Public Utilities Commission that at worst, slap them with a small “don't do it again” penalty, or at best say, “well, technically, under current law, there's nothing that we can do about this.” The good news is that you're starting to see a change in leadership at the gas companies. In October, Southern California Gas Company, the largest distributor of gas in the country, released a new report called their Clean Fuels report, and it said that widespread electrification of buildings is the future of California. It's the first time we've seen a gas utility anywhere make these sorts of statements. They think that by 2040, up to 90 percent of all of the space and water heating will be electric in California. Then, at the end of the year, they joined PG&E in a filing to the Public Utilities Commission that is on a proceeding that would take away incentives to extend gas lines from gas mains to buildings. They’re called line extension allowances; basically, we use ratepayer dollars to give money to builders to pay for some of the costs of extending gas from the gas main in the middle of the street to a house or a new commercial building. It's a perverse incentive from a climate perspective; we're using ratepayer dollars to put into place infrastructure that’ll make it harder for us to meet our climate goals. So the PUC in California has opened up a proceeding to recommend doing away with those, and PG&E and Southern California Gas Company came in and said, for residential buildings, we agree that we should stop incentivizing this. First time in the country.David Roberts:   I can understand how an electric and gas utility could come around to the light on this. But if you're a natural gas utility, it's pretty much existential, isn't it? If there's no natural gas, there's no reason for you to exist. Is there a big political difference on those kinds of utilities?Panama Bartholomy:  What is the answer to every question in energy right now, before it's asked? Hydrogen! If you read through the Clean Fuels report, and you read through most any clean fuels report from a gas company in America right now, they're betting big on hydrogen. It's very much a “don't look behind the curtain” type of scenario, because you don't want to talk about the fact that you're going to have to replace the entire gas system to be able to pipe hydrogen, or how expensive the hydrogen is going to be to produce and use. But what Southern California Gas Company has said is, we need to start refocusing on supplying industrial and commercial clients with cleaner gaseous fuels. David Roberts:  Interesting. That's not crazy.  Panama Bartholomy:  Not crazy. Residential makes up 30 percent of their revenue, so it'll be a big cut.David Roberts:They're inevitably going to be smaller, if they survive at all.Panama Bartholomy:  Yeah, but hydrogen is the hope. It’s the hopium of our time.David Roberts:   The most common question I hear about all this is: I'm a homeowner, I'm confused and overwhelmed, what's my priority list? If I'm making an electrification checklist, what do I do first? Panama Bartholomy:  It's going to depend on the age of your appliances. You're looking at your four major appliances: water heater, furnace, stove, and dryer. If you use gas, you want to look at how old those systems are, and you want to replace the oldest one first, if you're looking at it purely from a climate perspective. If you're looking at it from a health and safety perspective, you probably want to go with your stove first, because your stove is likely emitting levels of nitrogen oxides, formaldehyde, and carbon monoxide that would be considered illegal if they were found outdoors.David Roberts:   What if I'm weighing appliance replacement against efficiency upgrades on my envelope, or solar panels on my roof? Are the appliances job one?Panama Bartholomy:  It's going to depend a lot on your climate zone. If you're living up in Upper Minnesota, I highly recommend you do some envelope work along with your heat pump. But it's just going to depend on the life expectancy, how much longer you think that furnace or water heater is going to be kicking.This stuff can be confusing for people. The good news is that we've recognized that consumer education is a critical part of this, and with about 15 other sponsors, we’ve partnered on a campaign. It’s called The Switch Is On campaign. It's just in California as of now. It provides all the basic information you as a consumer need, like, what is a heat pump? What would it cost to put it in? It has all of the rebates available to you based on your zip code, utility, government, etc. We pre-screened hundreds of contractors that know what they're doing on electrification and won't talk the Daves of the world out of putting in a heat pump.There's about seven other states that are standing up campaigns like this. We also are talking to folks in British Columbia and Australia with similar campaigns. It's a recognized need, and we're trying to provide some of the early resources that consumers need. So yeah, visit the website if you want to see what version one of the electrification consumer education looks like.David Roberts:   If you're a city policymaker, mayor or town council, same thing. What's your priority list? What are you going after first? What's the big fish?Panama Bartholomy:  There's three things, and in order, but they're interrelated. Number one, we need to stop digging the hole. We should not be building any new buildings with gas connections. Every new one you're building is just creating a problem for your community down the road.We need to deal with existing buildings. So the second thing is, you need to set a date for when you're no longer going to allow gas appliances to be sold in your jurisdiction or in your state.David Roberts:   You're going after the supply side.Panama Bartholomy:  Exactly. And there are lots of arguments: is it building performance standards, is it time-of-sale requirement. We believe that with a set of complementary policies around it, to build the market and protect people, that appliance bans are the solution we need across the board. The key thing is the third thing: we need to build the market so that you can support a ban. We've built up enough of an educated workforce, we've switched electricity rates around, and we’ve brought the cost down so it's comparable or cheaper than gas, etc., to be able to make a mandate work when it goes into effect. Those are the three for us: stopping new construction with gas, setting a date for the phaseout of sales of appliances that use gas, and then building the marketplace for electrification. They're all interrelated to each other.David Roberts:   Awesome. Well, this is fascinating, I'm sure we could go on for another hour, but I don't want to test my listeners’ already legendary patience. Thanks so much for coming on, and thanks for all your work on this.Panama Bartholomy:  Absolutely. Thanks for coming to our funny little corner of the clean energy world, Dave. 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

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

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

Hey Volties! As you know, last week I interviewed Don’t Look Up director Adam McKay for the podcast. Then the talented folks at Canary Media’s Carbon Copy podcast (which you should subscribe to) interviewed me — about the movie, climate change in art, and McKay — and interweaved bits of that interview with bits of my interview with McKay.The result is the first-ever Volts/Carbon Copy crossover episode! They did an amazing job. Even if you’ve already listened to my interview with McKay, I think you’ll get something out of it. If you didn’t have time to listen to that 90-minute conversation and would prefer the 30-minute highlight reel … here it is!Let me know what you think and if you’d like to see more crossover episodes in the future. 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, international scholars Jason Bordoff and Meghan O’Sullivan discuss the geopolitical tensions that could be caused or exacerbated by the clean-energy transition, including supply constrictions in oil and gas and the geographical concentration of key clean-energy minerals. This episode is a great antidote to the notion that clean energy is going to make for smooth sailing in geopolitics.Full transcript of Volts podcast featuring Jason Bordoff and Meghan O’Sullivan, January 19, 2022(PDF version)David Roberts:When one contemplates the thorny geopolitics of oil and gas — with its century-long string of crises, conflicts, and moral compromises — it’s easy to think that the transition away from fossil fuels to clean energy will usher in a saner and more peaceful world. And that may happen, in the long term, once the transition is complete. But the road from here to there, over the course of the next few decades, is likely to be bumpy. Policymakers need to start planning for the predictable disruptions headed our way.That is the message of a recent essay in Foreign Affairs by Jason Bordoff, director of the Center on Global Energy Policy at Columbia University, and Meghan O’Sullivan, longtime foreign policy operative and professor of international affairs at the Harvard Kennedy School. Bordoff and O’Sullivan outline a number of risks the world faces in the short- to mid-term as it endeavors to ramp up clean energy and ramp down fossil fuels. Investment in fossil fuels could decline faster than demand, which would perversely strengthen the position of Gulf states sitting on the cheapest oil. Production of the minerals needed to build clean-energy technologies is highly concentrated, often in countries with unstable politics and poor or no labor standards, like the Democratic Republic of Congo. Processing of almost all clean-energy minerals is heavily concentrated in China, giving it enormous leverage and exposing world markets to economic or political upheavals there. Trade sanctions or tariffs could slow the spread of innovations. The US’s inability to get its act together could sour relations with the EU, which is moving ahead with ambitious, coordinated policy. And so on. Clean energy will eventually diminish the sway of fossil fuel geopolitics, but the transition will create its own geopolitics, its own tensions, disputes, and chokepoints. I’m eager to talk to Bordoff and O’Sullivan about some of those risks and what might be done to prepare for them. Jason Bordoff and Meghan O'Sullivan, welcome to Volts. Thanks for coming.Jason Bordoff:  Great to be with you. Thanks for inviting us.Meghan O'Sullivan:  Thank you, Dave.David Roberts:   I want to begin by quoting your great piece in Foreign Affairs. You say: “Talk of a smooth transition to clean energy is fanciful. There is no way that the world can avoid major upheavals as it remakes the entire energy system, which is the lifeblood of the global economy, and underpins the geopolitical order.” In a sense, the whole piece is addressed at a naive view of what the clean energy transition is going to involve. A lot of people think there's all this messy, nasty geopolitics around oil and gas, and if we just subtract that, then you have a world that's running smoothly and at peace. Can you, at a high level, describe why people have that naive view and why you think it's wrong?Jason Bordoff:  You describe the motivation for the piece very accurately. I recall sitting a few years ago at a round table at the Munich Security Conference, talking about Nord Stream 2, a pipeline very much in the news these days as the US and Russia try to see if we can prevent conflict in Europe. There was a comment that I remember: “Why are we spending so much time on this? It won't matter soon anyway, because the geopolitics of oil and gas is simply going to fade.”That struck me — and Meghan as well, because we've talked a huge amount about it — as simplistic. The geopolitics of energy since at least the Arab oil embargo in the early 1970s, probably much longer, has largely been about oil and gas, whether it's the concerns about OPEC’s control over oil markets, or Russia's gas supply into Europe, or anything else. So it's a hopeful vision to say, when we decarbonize and move away from oil and gas, those geopolitical risks will become a thing of the past. We were making two points in the piece. One is that, that end state of beyond oil and gas is pretty far away. There's a multi-decade period when you have the new geopolitics of clean energy layered on top of the old geopolitics of oil and gas — and even a net-zero world is not zero oil and gas, necessarily. But also, there will be new risks created by the emergence of clean energy, from critical minerals, to trade conflicts, to new zero-carbon fuels like hydrogen and ammonia that might move around by ship — a range of new issues that we want to make sure people are thinking about, because our concern is that those geopolitical and national security risks, if we're not addressing them, might actually undermine our ability to move as quickly as we need to to decarbonize.Meghan O'Sullivan:  Intellectually, in the foreign policy and climate communities, when we first started talking about geopolitics, there was this focus on “what does success look like” — imagining a world, say it's 2050, where the global economy is fully decarbonized. I was part of that effort, along with some of Jason's colleagues from Columbia, and focused on painting that picture. Jason and I both agree that it's feasible, when the world is fully decarbonized, that maybe the geopolitics of energy will be more copacetic. But what the piece does, and the focus of Jason’s and my work these days, is to say, that almost feels theoretical. What matters for the short and medium term — not discounting the long term — is what is going to happen in between. Here we're going to have, not the geopolitics of oil and gas gradually and incrementally giving way to the geopolitics of new energies, we're going to have them, as Jason said, layered on top of each other. November/December was a great example of this, where you have the COP, and all the enthusiasm and energy around faster decarbonization and how important it is for the world, at the same time where you had an energy crisis unfolding in Europe, where Russia was playing the same old cards in the old geopolitics of natural gas. This is going to be the screenplay of the next couple of decades, where both of these things happen simultaneously.David Roberts:   One of the risks you bring up is that, due to social pressure in the developed world and changing social mores, there's a lot of pressure to shut down [fossil fuel] production in some countries. There's a risk that production could decline before demand declines, which will have the effect of empowering those countries that are still producing. Say a little bit about what that might look like in the short term.Jason Bordoff:  We're seeing it right now. There is a lot of concern that in the next several years we're going to go through a supercycle of commodity prices — in part because of underinvestment, not entirely because of the energy transition and social pressures, but that's certainly part of it. Also, the pandemic and how quickly you can ramp up investment and supply chains and all the rest. We had the IEA tell us very clearly in their landmark Net Zero report that if we were on a pathway for net zero by 2050 — which sadly, we're not, but if we were — we would not need investment in new oil and gas supply. Those broad messages, along with social pressures and divestment pressures and everything else, have some impact, along with the uncertainty over, what is the outlook for oil demand? When is it going to peak and start to decline? That pulls back capital, or maybe raises the cost of capital. But oil demand is still going up each and every year. Natural gas demand is still going up each and every year. If you look at the data, the last two years we have been investing as much in oil and gas as we should be if we were on track for net zero by 2050. The problem is, if we were on track for net zero by 2050, we should be investing more than three times as much in clean energy as we are. So we are not investing enough in energy to meet demand. Ideally, we would do that not by dramatically ramping up oil and gas spending, but by dramatically ramping up clean energy spending. But it's hard to scale it that quickly, especially if the policy support is not there. So there is a risk that underinvestment could lead to energy crunches and price spikes. Again, you see the political response in Europe where there's an energy crisis this winter, in high gasoline prices in the US and the need for the administration to feel it has to release the SPR in response to oil prices that weren't even that high, $80 a barrel. That kind of public concern about higher energy prices risks undermining support for stronger climate policy, I fear.David Roberts:   Not just passively undermining. We're seeing this today: every time there's one of these fluctuations or disruptions or price spikes, there are a lot of people out there who want to blame it on the clean energy transition.Meghan O'Sullivan:  I’ll add something to Jason's response about the real problem of underinvestment and how this could create some of these imbalances. Your question was about empowering old producers. The underinvestment story is the big story there, but there's also a wrinkle that doesn't get as much attention.When we look at the scenarios, including the IEA’s net-zero 2050 scenario, they all acknowledge that there will still be some role for oil and gas, even in a fully decarbonized global economy — those carbon emissions should be taken care of by carbon removal or some other technologies that still need to be developed. But that's generally part of the picture. So the reality is that there are going to still be some oil producers — a smaller number, collectively producing a smaller amount of oil — in the future. Who are those producers going to be? It's likely going to be those producers that have the lowest-cost production; the oil that has the lowest carbon footprint. Those tend to be the big producers in the Gulf: Saudi Arabia, the United Arab Emirates, maybe even Iraq. So even in a fully decarbonized world, those countries are still probably going to have some geopolitical influence, because they're going to be producing a larger share of a much smaller pie.Jason Bordoff:  You made an important point, Dave: you're right that often people do point to dislocations and energy crises and attribute everything to the clean energy transition, and that's not right. The Texas energy crisis was blamed on wind, and we know with post hoc analysis it was mostly about failed natural gas production and infrastructure. Some of that's true in Europe as well. But I do think there's a broader harbinger of risks that may be to come. A point we make in the piece is that it's hard to imagine why we think it should be smooth to take the global energy system, which is something at massive scale, and turn it on its head almost overnight. Vaclav Smil's work and everything else tells us a quarter century to get to a net-zero economy is really fast by standards and energy history. We're going to make missteps. We're going to get policy shifts — we go from Obama, to Trump, to Biden. We're going to get certain technologies wrong. There's not a master planner, so we have individual decisions by individual utilities, individual investors; we build parts of the grid, and then maybe we retire parts before the system's ready to handle it. We have to think about how to build more tools in to smooth volatility, because we're going to get some things wrong in this transition. To the extent we get them wrong and that leads to price spikes or geopolitical risks, again, that's going to undermine our climate ambition.Meghan O'Sullivan:  To underscore the point that Jason just made, one of our concerns is that the geopolitical impacts are not sufficiently understood and that there is risk that these geopolitical impacts end up being the greatest risk to a successful transition. People thinking that high oil prices are because of the clean energy transition haven’t been very accurate thus far, but the perceptions often shape the policy. We think about how trade became such an incredibly divisive political issue here in the United States. A lot of the job displacement was actually because of technology and automation — but that doesn't really matter. When we're looking at transition, that's going to be dominantly driven by policy. We want to try to make sure that doesn't happen.David Roberts:   Let's pause for a moment and talk about Russia. I can imagine the role the rest of the world plays in the clean energy transition and a happy ending for them at the end of that story. But with Russia, they're totally dependent on gas for their geopolitical power and influence. They're already actively involved in trying to undermine the Western democratic order. As this transition proceeds, it seems like it's going to get pretty existential for Russia. There's a lot of potential for bad things to come out of that: a new Cold War, or for Russia to redouble its efforts at undermining other countries. I can almost figure out how to handle any other country, but what do you do about Russia?Meghan O'Sullivan:  This is a good point, and it's particularly apropos today, when we have the US and Russia meeting about geopolitical tensions. If you ask anyone who is likely to be a loser in the energy transition, Russia is always at the top of that list, and there's good reasons for that. As you mentioned, the dominance of oil and gas in Russia's economy has only grown since Putin became president. It's been pretty stark, and there is very little indication that the Russian leadership, Putin and the oligarchs around him, have any aptitude for doing the tough reforms that would be required to accommodate Russia to the new energy reality. The power structure now has a lot to do with oil and gas, and that's likely to continue. But I'd say there are two important caveats. The first is, as we just discussed, that in the long run this looks pretty bad for Russia — there are a lot of things that we might want to plan for in terms of contingencies — but in the short-to-medium term, it's not necessarily looking so bad, because of the continued need for natural gas and because of Russia's ability to supply that gas at cheap prices. The second is that Russia is not like some other countries that we might talk about. It does have areas where it could become quite important and influential in the energy transition and have it be lucrative and also have it be geopolitically influential. The two that come to mind are, first, hydrogen. Russia could become a hydrogen power; it would require a lot of strategy and investment. The second is nuclear, where Russia already plays an outsized role in global development. Clearly, if the energy transition is going to be successful, there's going to have to be greater use of nuclear power around the world. Russia could find that to be economically useful, and also geopolitically useful. To answer “what do we do” directly: the base case that I would plan for if I were still a policymaker would be to game out and prepare for Russia being a spoiler of the energy transition going forward. We saw that when we were looking at the shale gas unconventional boom in the US and the interest in Europe in recreating it there — Russia deployed a lot of tools to undermine the chances of countries in the EU developing their own shale gas. I imagine that, seeing this as existential, Russia would go to even greater lengths.Jason Bordoff:  I agree with what Meghan said about nuclear power. I wrote a column in Foreign Policy just a few days ago about why nuclear may finally be having its moment. Part of that is we need all zero-carbon tools on deck, and even then, it's going to be incredibly hard to get where we need to get to. But also a foreign policy consideration, which is that if the US doesn't exert more leadership in nuclear power, China and Russia are building the world's nuclear power plants, and that is a national security risk. Meghan’s point that Russia stands to be a loser and therefore will perhaps try to stand in the way of the transition is borne out by history and how it's participated in international climate negotiations and COPs in the past. The only thing I'll add is oil. Russia gets more revenue from the sale of oil than it does from the sale of natural gas. We wrote in the piece about why the potential for underinvestment — if that underinvestment in supply gets ahead of demand, you could see more price volatility, more price spikes — could mean we may need OPEC more before we need it less, to manage the energy price spikes that are harmful economically and politically. One of the interesting developments in the last several years has been Russia's stepping into a leadership role, where Saudi Arabia and Russia are now positioned as the head of the so-called OPEC Plus alliance — OPEC and a bunch of new member countries. That means if we want OPEC to help at certain points put more oil in the market, which is what the Biden administration has called for in the last year when energy prices went high, you're not only calling Riyadh; what happens in Moscow matters too.David Roberts:   This is almost the scariest possible answer: that Russia will be empowered in the short-term and mid-term and fearful of the long-term. That's a recipe for trouble. That's a good segue to the next broad topic. One of the things you write about is that the transition to clean energy is going to create new energy powers on several metrics. The first one you mention is one that people maybe don't think about very often, which is the power to set standards for the clean energy economy. Say a little bit about what this means and why standard-setting is a form of power.Meghan O'Sullivan:  This is an area where the Chinese have been very forward-looking and active. The United States only recently came to appreciate the power that comes in setting the standards, which is somewhat ironic, because the US has set so many of the standards globally. Maybe it just took it for granted that it could stay in that position. Setting the standards in the clean energy revolution has to do with compatibility, safety, materials — there are all kinds of examples we could use. But if we think about electricity and transmission grids and connectivity: around the world, there are many places like the United States that are going to have to revamp their energy architecture, but there are many countries that are going to be building energy infrastructure for the first time. In doing so, depending on what country or what body is governing that infrastructure buildout, and who is most influential in the setting of those standards, you could see how one country may get a competitive leg up. This could be a commercial advantage, but it could end up having political advantages as well, if it puts a country — say China, being potentially the most obvious — in a position of denying that country certain inputs that it needs for its energy infrastructure. It could go so far as cyber connectivity and allowing one country to harvest the data of another country. When we think about the clean-energy transition, we obviously are thinking about societies that are even more electrified than the societies we live in today.Jason Bordoff:  We highlight one place where it's particularly important; it’s part of the reason we would be concerned about Russia and China building the world's nuclear power plants, setting the norms for nuclear nonproliferation, setting the operational and safety standards. So that matters a lot. We know that in the clean-energy transition we're going to have a much more digitalized economy, a range of digital tools that help optimize the electric grid; we're going to need more demand-response tools. There could be commercial advantages if certain firms develop the standards and others have to play catch-up. There's also, of course, a host of cybersecurity implications as we see a much more interconnected grid.David Roberts:   The second form of power in the clean-energy economy is minerals and materials supply chains. Right now, countries who happen to be sitting on a lot of oil and natural gas get a lot of geopolitical power out of that. But when we transition to clean energy, we're going to need a few key minerals and materials: lithium, cobalt, copper, etc. Currently, supply chains for those minerals are highly concentrated; I think 80 percent of cobalt comes out of the Congo. China dominates the supply chain for lots of minerals, but also dominates the early processing of minerals; 80-plus percent of processing of all those minerals takes place in China. What's the danger? What do we worry those countries could do with that power?Jason Bordoff:  It's not just clean energy, of course; those critical minerals are essential in lots of technology and electronics applications. We've seen this with semiconductors before. China's embargo on the export of critical minerals to Japan in 2010 tells us what could happen. Global trading of critical minerals is going to skyrocket. In IEA’s scenario of what net-zero 2050 looks like, global trade in critical minerals goes from about 10 percent of all energy-related trade to about 50 percent. We're going to need a lot more of all those minerals you just talked about, and they're much more concentrated, so that's important to keep in mind. As much as we worry about the role of Saudi Arabia or Russia in the oil market, the top three oil producers — the US, Saudi Arabia, and Russia — each produce about 10 percent of the world's supply. When it comes to lithium and cobalt and rare earths, the top producer in each of those produces more than 50 percent of the world's supply. And as you said, the refining and processing is even more concentrated, namely in China. So in that sense, you worry about what that kind of dominance of a necessary input to clean-energy technologies could do if there was a conflict. We’re worried about what China might do in Taiwan in the years to come — if there was a conflict of that sort, if they were to cut off that supply, what implications it would have for the global supply chain. It's a real worry. We acknowledge it. It is different from oil, however, in a few important respects. One is that these critical minerals are not the daily flow of fuel without which the heat in your house turns off and you freeze in the cold, or your car doesn't work; it's an input to a finished good. So if we didn't have a supply of lithium, it would cause the market for new electric car sales to slow, it would be bottlenecks in the supply chain and everything else; it wouldn't affect your ability to get around today. It's not the electricity your EV needs, it's something that building the next EV needs. So you don't derive the same geopolitical influence from that. Also, whereas oil is to be found in certain places, geologically, there are a lot of these critical minerals around the world. It does take time, it's not easy. It's a 10- or 15-year process to develop new mines. But over time, you can diversify the supply chains, build refining capacity elsewhere, the technology to do recycling is getting much better. My engineering school colleagues at Columbia and elsewhere are pretty optimistic that the technology is going to improve where you can use much more plentiful minerals to develop batteries. So maybe our dependence on these things will decline over time as well. But if we get on track for net zero or anything close to it, the amount of clean energy that we have to deploy is so massive that we're going to need a lot more of these minerals and materials to come.Meghan O'Sullivan:  What we've written about, and the answer that Jason just provided, should bring down people's blood pressure about this in the medium- to long-run. I would underscore in the short- to medium-term, China does have a pretty significant advantage in terms of its dominance of supply chains of these minerals. I do think that is something that is rightly getting the attention of policymakers; it’s going to be a tougher challenge before it becomes an easier challenge. The one thing I sometimes hear that we can probably discount a bit is this idea that there's going to be an OPEC, a cartel of these countries that have these kinds of resources. There may be market conditions which could allow for that, but a cartel is also underpinned by common political objectives. So if you think about lithium, what do Bolivia and Australia have in common in terms of, what are they going to bound together on and hold the global economy hostage? It's hard to imagine exactly. Secondly, it's interesting to think about countries like the Democratic Republic of the Congo, which produces more than 70 percent of the cobalt in the world today. I don’t imagine the Congo is going to challenge the United States directly, but it probably will be able to use that reality to shine a light on some of its needs and problems, to up its priority in terms of where resources from the rest of the world go when they go to Africa, the attention given to the conflict there. Those things are likely to happen. So they are going to influence foreign policy, but maybe not in the hostage-taking kind of way that our instinctive reflection back to 1973 makes us think about.David Roberts:   When you think about the history of oil and gas, the history of colonialism is highly related. We've seen poorer countries who discover oil or gas basically become resource colonies for the West — they get terrible governance and poverty and we get the resources. If you look at something like Democratic Republic of Congo with 70 percent of the cobalt … seems like a pretty good prediction that we're just going to create a new set of resource colonies. Are there ways in advance to head that off?Meghan O'Sullivan:  That is a legitimate concern. I don't have the numbers on the tip of my tongue, but I seem to recall that from what we can discern, the terms of the contracts of the Chinese investment in the Democratic Republic of the Congo for the cobalt there are really, really unfavorable to the people living in the DRC. So there's legitimate concern for that.There's another thing that warrants even more concern and it's directly related, and that is this whole idea of the resource curse. Some of the resource-curse material has to do with foreign powers coming in and taking advantage of countries that are less well positioned to negotiate on behalf of themselves. But it turned out that, over time, the resource curse experience and literature focused a lot more on the huge influx of foreign currency that comes suddenly to a country, and their inability to be able to absorb it. Just because of the nature of foreign exchange into many of these economies, which don't have very developed industrial sectors, it creates all kinds of havoc in the economy. A lot of it is exacerbated when the country has a large population working in agriculture, or there's a history of conflict, all of these things that many of these countries actually do have. This phenomenon is called the Dutch disease. It's possible that a lot of these countries will be unable to handle that. To answer your question about what we might be able to do about that, I would say in the last 20 or 30 years, there's a lot more awareness of the fact that it doesn't have to be a resource curse, that there are a whole series of policies that a government can adopt to mitigate these negative effects. The problem is that it comes back to governance, and a lot of these countries don't have sufficiently well-developed institutions, governments that are willing to create constraints on their own behavior. That's what is needed in order to ensure that these kinds of economic dislocations don't happen.David Roberts:   The influx of a bunch of money also reduces domestic pressure to build a more diversified and stable economic base.Jason Bordoff:  It's the risk a lot of petrostates face now, trying to think about what a world where they can rely less on petrodollars will look like. They're trying to diversify their economies and as we're seeing, that's hard to do — the resource curse issues, the human rights issues. You can hopefully develop global standards. Maybe the best example of this is the Kimberley Process for diamonds. If you have standards and some oversight — that's hard to do — we can avoid some of those issues. The other piece of critical minerals is not just the human rights and colonialism concerns, but also the environmental impacts. This is mining, and it does have environmental impacts, and we have to do it at such a larger scale. When you look at how much lithium we need, it is hard to do that level of extraction without environmental impacts.David Roberts:   Another source of possible concentration of power is the manufacturing of the components of the clean energy economy. You say in the piece that this is a less-firm sort of power, since manufacturing can and often does spread out, and lots of countries are pursuing their own domestic manufacturing right now. But it made me wonder whether we know any historical precedent about this. Is it going to be a natural process for the manufacturing of these clean energy components to spread out and become a diverse global market? Or do you think there will in the end be manufacturing superpowers that have some geopolitical power as a result of having a lock on manufacturing?Meghan O'Sullivan:  There are a couple of interesting and important aspects to this. If we thought of a world where it was just about competitive edge and what was going to advance the energy transition the most quickly, you probably would have countries that would emerge — I don't know if you would call them manufacturing superpowers, but I think the best example is solar panels and China's dominance of that market. Now, if we didn't care about politics and we didn't even care about economics, we just cared about the energy transition, that wouldn't necessarily be such a problem. But there are going to be — we're already starting to see them — political efforts to try to ensure that countries are not reliant on one producer or one manufacturer of particularly critical inputs or elements of the clean energy technologies. A pertinent example of that is India. Starting this year, India is putting high tariffs on anything solar that comes from China. The purpose of this is twofold. One, India is incredibly sensitive about its geopolitical relationship with China, particularly after the hot war that threatened to erupt on their border in the last year or so. Secondly, India also wants to build a manufacturing base. It wants the jobs that it perceives will go along with that. So what we'll have is maybe more manufacturers, but it'll be less efficient and more expensive and will likely make the energy transition slower than it would otherwise be. Again, it's balancing these two things.David Roberts:   The one other source of power you mention, which I thought was intriguing, is that everyone anticipates a huge explosion in the market for zero-carbon fuels derived from hydrogen. You anticipate the emergence of “electrostates” that dominate the production of hydrogen fuels. What everybody wants to see is a transition to green hydrogen, which is hydrogen derived from renewable energy. So you might look to states with copious renewable energy to get into that. But the easier and cheaper route into hydrogen is through so-called blue hydrogen, which is made from natural gas, with the emissions allegedly captured and buried. I worry about countries with copious natural gas getting into the blue hydrogen game, making plentiful, cheap, blue hydrogen, and then having both economic and political incentive to delay the transition to green hydrogen. How do you see all that playing out?Jason Bordoff:  I find this particular dynamic interesting, because you do have to bend your mind a little bit to think about the world, not today, but in the future. Hydrogen is a topic du jour; you couldn't walk five feet at the COP in Glasgow without tripping over a hydrogen display or a new hydrogen company. Because we know that we have to electrify a lot of things, but some things are going to be hard to electrify: steel and shipping, maybe some other things like heavy duty trucks, we'll see if batteries win there. Again, I'll just refer to the IEA net-zero scenario, which finds global energy-related trade in hydrogen ammonia going from almost zero today to about a third. We need a lot more. We need fuel — molecules as opposed to electrons — but then we need those fuels to be zero-carbon. That's where you talk about hydrogen and ammonia, both blue and green. A big part of what we were trying to do in this piece is deconstruct how an end state of net zero might look vs. the pathway to get there, and how it could be different and how it could be rocky. In zero-carbon fuels, it comes into play in at least two ways. One is, you're talking about the emergence and development of a fairly nascent market. The analogy we gave — and it's not perfect, it bears some resemblance — is the early days of the liquefied natural gas market in the 1960s and 70s. When it was just getting off the ground, you had a few dominant producers, a few dominant buyers, and there was a lot more leverage than you have today in a much more integrated and flexible market. There’s a lot of suppliers, a lot of buyers; if someone threatens to cut off your supply, you go buy it somewhere else. In the early days, Japan has said it's going to be a big buyer of green ammonia; well, what if Saudi Arabia or Chile or just one or two countries supply that? If your entire steel sector depends on shipments from that country, that's a lot of leverage, and we could see some geopolitical risk there. The second is the one you raise, which is the focus on blue hydrogen today. Of course, if we're going to do that — natural gas combined with carbon capture — you have to make sure the oversight is strict, the capture rates are high, the methane leaks are low. You have some states, Qatar and others, that we could see focus on gas as a way to create hydrogen and then either move that fuel around as the fuel, like ammonia, or maybe just build the production facilities to turn the gas into hydrogen ammonia — in which case you still might have a lot of global trade in gas, you're just doing different things with it, you're turning it into a fuel as opposed to putting it in your power sector. I do think over time green hydrogen is going to end up winning, just because the costs will come down dramatically. You're right that states may try to stand in the way. To make green hydrogen work, you need a lot of improvements in electrolyzer costs, improvements in efficiency, and then you need really, really cheap renewable energy, and you need a lot of it. You need a lot of electricity. There are only certain places in the world where you have that much cheap renewable electricity, and those could become some of the dominant states producing low-carbon fuels in the years to come.David Roberts:Those could be not your usual suspects, right? Like Chile or countries in Africa. They have a lot of sunlight down there.Meghan O'Sullivan:  We would be looking at different countries emerging as potentially big actors on this side. Chile is certainly one of them. You need the things that Jason mentioned in terms of having a lot of cheap, renewable energy, but you also need water. Not every place on the earth has those two things in great abundance.Jason Bordoff:  We talked about the resource curse. We do talk in the piece about tensions between developed and developing economies, which were on full display at the COP in Glasgow and I think will be next year at the one in Egypt. When you talk to African leaders, who are worried about the impacts of climate and about not getting the support from developed economies they need to transition — some would like to develop their own hydrocarbon resources and monetize them. So what are the sources of revenue that could come from zero carbon rather than oil and gas? You're identifying one, obviously: lots of good renewable energy resources to produce their own energy, which hopefully will grow as they become wealthier. But it's hard to export electricity as electrons; maybe you can export it as fuels. The other thing that's interesting is, we just saw this Climeworks project in Iceland, the carbon-removal project. Why Iceland? They have cheap, zero-carbon energy in geothermal, and they have good geologic storage capability. A lot of African countries have that too. I was wondering whether you could imagine a source of revenue for some of the developing economies in the world where they are basically building the manufacturing capacity to pull carbon dioxide out of the air. The largest emitters, who are responsible for this problem historically, are sending revenue to those countries — a wealth transfer from rich to poor countries, in part to remove carbon dioxide.David Roberts:   When most people think about the future, they imagine increasing globalization of trade in these resources. But there's also a section of your piece about trends and forces working against further globalization in the clean-energy space. One of them is, as you just mentioned, electricity.The energy game is going to turn to electricity, mostly; electrification is going to be the primary tool against climate change. Every country is going to be trying to electrify, and thereby using more electricity, and therefore electricity is going to be a bigger part of this energy picture. As you note, electricity is not really a globally traded commodity. Very little electricity crosses country lines. I've been thinking about that a lot: as more and more of your energy processes are internal to your country, does that reduce the prominence of geopolitics? How do you see that playing out? There are some other trends working against globalization too, if you want to mention them.Meghan O'Sullivan:  We can imagine the 2050 world, the fully decarbonized world, being one where a lot of forces favor globalization, because of the need for robust trade in energy technologies and clean energy inputs. But in the interim, and to some extent looking even beyond that, there are several factors that are going to pull away from globalization. Electrification, as you mentioned, is one of the greatest ones. We have two statistics in the piece that underscore the point you made. In 2018, less than 3 percent of global electricity was traded across borders. That's compared to two-thirds of oil supplies in 2014. So there's this huge discrepancy. The reasons are simply that it's hard to transport electricity; it's hard to store it and it's hard to ship it.Jason Bordoff:  And it’s a much greater security risk, too. You can store oil in salt caverns, you can buy oil from a different supplier. If you depend on your neighboring country to send you electricity to keep the lights on, that country has a lot of power over you.Meghan O'Sullivan:  Right. But on the question about to what extent this is going to change things, I think there is going to be an element that's going to be more inward-looking. So if a country is providing more of its own energy sources from within its own borders, it won't have to be accounting for those shipments of oil and gas coming from afar. However, it does create some other new concerns. Those have a lot to do with cyber security and the manipulation of electricity grids. Some of these electricity grids will be all contained within countries, but others will cross borders — not in a global sense, but in a sense that may foster more regionalization. So if you think about the Northeast of the United States, we get a lot of our electricity from hydro sources in Canada. You can imagine small countries — think about some countries in Latin America — that if they're going to build electricity grids that are reliant on renewable energy, it probably makes sense for these grids to be large enough to serve more than one country. So suddenly, the politics of your neighbors and your relationship with your neighbors are going to be potentially even more important than they were in a world where you were getting your energy sources from halfway around the world. There will be a lot of effects like that. The other factors that we mentioned have to do with the protectionism that we've started to see go hand-in-hand with some clean-energy technologies. I gave the Indian example, but there are others. David Roberts:   It's worth noting: lots of protectionism in the Build Back Better Act, right? The Biden administration is actively pursuing that.Meghan O'Sullivan:  Exactly. Jason Bordoff:  One other striking statistic, to the original question you framed: we were talking about some of the ways global energy-related trade shifts in the IEA net-zero scenario away from oil and gas to critical minerals or hydrogen. But the other finding is that total energy-related trade in a net-zero world is only 38 percent, a little more than a third, of what it would be if the world were to stay at its current trajectory.It's not surprising, but it is striking that you have much more localized energy. The geopolitics of energy will wane in the long term for some reasons. There'll be new risks created too, but part of that is just electricity is inherently more local and less globally traded across borders. That's just going to reduce the importance of energy as a factor in geopolitics.David Roberts:   Let's talk about China. So vexing. On the surface, one of the conclusions of your piece is that some countries are well-positioned to benefit from the clean energy transition and others are not, and two of the countries that are positioned to be winners are the US and China. You might think the US and China then have enormous incentive, being the two biggest economies in the world and the two potential winners here, to cooperate on accelerating this transition. There's a pot of gold at the end of the rainbow for both of them. Yet an outbreak of cooperation is not what we seem to be witnessing. China is such a black box to a lot of Americans, including me. What do you see as their posture on this? Why aren't they going faster? Why aren't they cooperating more? Why isn't it in their interest to go gangbusters after this?Jason Bordoff:I do think that China takes climate change seriously; there are not a lot of climate deniers in the Chinese government. At the same time, when climate ambition or environmental concerns generally — it's not just climate, it's local air pollution throughout China, which in some major cities has been getting better, partly because of less coal, partly because they've shifted coal to other parts of the country where there are fewer people, which doesn't help the climate — but when that comes into tension with economic growth, economic growth usually wins. So there is this dynamic playing out within China about how quickly they're going to move and what technologies they're going to use. Of course, they use half the world’s coal, so there's no solution without China to dealing with climate. It was encouraging to see their announcement about not financing coal plants overseas — hopefully that will prove to be true. One of the reasons for the difficulty in US-China cooperation on climate — even though there are many reasons; this is the ultimate tragedy-of-the-commons problem, it doesn't matter where a ton of carbon dioxide comes from; if one country does this, it's not going to matter if we don't work together — is whether you can segment the issue of climate from the rest of the US-China relationship, which is incredibly contentious and at its lowest point in many decades. That was the hope, and that was what John Kerry as climate envoy said the goal would be. It's unclear whether China wants to segment climate, whether it says, well, if we're going to act on climate, we have these other concerns with Taiwan, or human rights, or intellectual property, or anything else. It was encouraging to see at the 11th hour an agreement at the COP in Glasgow that the US and China would commit to work together. But the last year would have been better if they'd actually been working together and had something to show for it. Hopefully that will change moving forward. The other factor in this is, if some countries are not moving as quickly as one might hope — and by the way, the US may be in that category; we'll see what happens in Washington in the coming weeks and months — increasingly you are going to see certain countries or groups of countries like the European Union either encourage or try to compel other countries to do the same. The starting point for that, of course, is the European Union saying it's going to put carbon border adjustments in place. But it's easy to imagine those extending beyond a tool to level the playing field on imports of carbon-intensive products to your country, and turning into coercive measures not that dissimilar from sanctions. If you roll the clock forward and say where could this go, those could be applied against China or, if we don't get our act together, maybe against the US one day.Meghan O'Sullivan:  On the point about the bilateral relationship, I do think that the Biden administration, with the appointment of John Kerry, came to this issue thinking: it's so important, we're going to be able to deal with it separately. And the Chinese have resisted that pretty firmly — you're not going to be able to be aggressive on issues like Taiwan, the South China Seas, the Uyghurs, and then expect a kumbaya relationship on climate. That's been a disappointment to lots of us, in the sense we hoped that climate would be this island of cooperation in the otherwise contentious relationship, and also because many of us struggle to imagine how the world is going to successfully transition to a zero-carbon economy if there isn't cooperation between the US and China. David Roberts:   Do you interpret that posture of China’s as a rational way for them to balance climate against their other interests? Or do you think that the rational course for China would be to cooperate on climate where there's cooperation available and segment these other issues? In other words, are they angry and that anger is extending to climate? Or are they, do you think, being rational on a bigger scale? Meghan O'Sullivan:  I think it’s twofold. First, China's looking at this relationship and thinking, “where do we have leverage in this relationship?” One of the areas is in climate. The US is really, really keen for China to decarbonize, and even moreso in a Biden administration, because we all know if China doesn't do it, it doesn't really matter who else does it. So it would seem to def realist strategic thinking to say, “we're going to separate this area where we know we have a lot of leverage from all these other issues which we see as more existential.” They see Taiwan and other things as more existential to the survival of the Communist Party; climate is important, but not the same as Taiwan. So that is probably what has been going on.I'm sure there are people within the Chinese government arguing that they need this cooperation as a strategic leveling point in the relationship. This has always been one of the reasons I've thought cooperation is important, even apart from what it means for the climate. If there's one area where two rivals can work together, it is helpful for all kinds of reasons for the rest of their relationship. Now we're all faced with the reality that we need to envision a successful global transition and not assume that US-China cooperation is going to underpin it. That doesn't mean there can't be some areas of cooperation — the efforts that produced what was produced in Glasgow were are all worth it — but the reality is, this is going to be an area of intense competition, like many other areas of competition between the US and China. Trying to figure out how we can compete our way to success rather than compete our way to stalemate is the challenge going forward. That competition is going to be in technology and talent, inputs and markets and standards, it's going to be across the board. Maybe it can be a force for a quicker transition. I certainly hope so.David Roberts:   With a lot of these dynamics you're talking about, we're framing the long-term promise of a clean energy-based global energy economy vs. the short- to mid-term bumps and difficulties and frictions getting there. On that note, I have been thinking a lot about what it's going to look like if Trump and the Republicans take power again in 2024. We know enough now to have a pretty good sense of what their global posture is going to be. Trump loves Russia, loves autocrats, loves fossil fuels, and has a view of the energy transition which basically says those of us who still have oil and gas should exploit the hell out of it. It seems to me, in terms of solving the climate problem and the clean energy transition, Trump and Republicans taking power would result in the US basically being a rogue nation, an impediment on almost every front. I wonder if either of you have had the stomach to think about what that might look like and how to avoid the worst of it.Jason Bordoff:  I'm sure we've all thought about what the consequences of that would be. The overall future of the republic and our democratic institutions is perhaps even more concerning to me than what it would mean for climate change. But you're right, it would certainly be a massive setback for the United States on the global stage and put us in the category of countries that would be the target of these sorts of coercive measures. Others would reap many of the economic benefits of leading in clean-energy technology, trying to do the right thing by climate change. I don't want to sound Pollyanna-ish or naive, but I'm hopeful that increasingly you do see more on the Republican side of the aisle — and I wouldn't put Trump in this category, but others — who recognize this is a real problem, or recognize that climate change is real and are trying to talk about what the solutions might be, even if those solutions are certainly not at the scale of what they should be.I guess I'll put it this way. Even in that scenario you talk about, the impacts of climate are going to continue to play out in years to come. I work with students every day on a campus, so does Meghan; I know how passionate they are about these issues, I know how much higher it is on their priority list in terms of what they care about when they go to the ballot box — even if elected leaders for periods of time don't demonstrate that. We have this huge gap now between ambition and reality when it comes to climate change. The ambition is getting stronger, not weaker — 2 degrees, well below 2, 1.5, driven by the science — but the reality is not changing: emissions are going up each and every year, pandemic aside. So that gap between ambition and reality has to reach a breaking point. One of the two has to give. Either we're going to wake up one day and say, “this was just too hard, we thought we could do it, but guess we'll just be fine with 3 degrees” or whatever it happens to be — I find that hard to believe, given what we are seeing every day and what we know we're going to see in the years to come, and that sense of urgency that particularly the younger generation has. Then the reality has to change. The longer you wait to get started, the more disruptive it has to be. That's why we try to talk about some of the economic and geopolitical implications of that disruption — we have to manage them, or you're going to lose support for moving as quickly as we need to.David Roberts:   Is there a power out there that could realistically step in if the US basically gives up its leadership role entirely? Does the EU have the geopolitical clout to be the center of leadership on the transition in the way that you would hope the US would be?Jason Bordoff:  The EU has been leading in many respects, and it's a pretty sizable amount of global emissions. So if it works collectively, it can do that. I think other countries, like perhaps China or others, might step in as well. I do want to say that even in the scenario you describe — which is in many respects a worst-case scenario, from my standpoint at least, for US politics and climate ambition — even if that does not happen, we're still pretty far behind the ball. If we pass Build Back Better in DC, which is uncertain right now, that will help a lot; it certainly doesn't get us all the way to being on a pathway to meet our NDCs. We saw just in the last couple of days, the Rhodium Group analysis and some others, emissions and how much they went up last year. So even if it’s not a Trump 2024 scenario, but a Republican more in a traditional model or a Democrat were to win, we're still not doing what we need to do. That has to be addressed too. That's going to catch up to us as well.David Roberts:   This is extraordinarily difficult to answer, but: in the long term, if you are viewing the clean energy transition from a purely foreign policy realist perspective — that is to say, you don’t care at all about global welfare, the interests of the US are your top concern — do you think the US is going to benefit from the clean-energy transition? It's pretty well-positioned in a fossil fuel world: it's a giant producer, it's got a giant military, it's got long-term relationships in the Middle East. If you're just trying to talk to a foreign policy realist, do you think the US will be better or worse off in the world in a clean-energy future?Meghan O'Sullivan:  As you said, it's a very hard question to answer, because it depends how many things we're going to set aside. But my impulse is that the US is better in a clean-energy future. I'm assuming, but you can tell me otherwise, that the counterfactual to your counterfactual would be a world where there is extreme climate change, and that in itself, as we already know, is going to produce all kinds of national security ramifications. One estimate by the World Bank, which is actually a couple of years old so I imagine the estimate has only gotten larger, is that in 2050, there'll be 143 million climate refugees. That is compared to the world today, where there's something like 25 million refugees. So we're talking about this exponential increase in just that one area, which is obviously consequential, but that would have huge implications for the US, its security, its borders, its well-being, its global relationships, all of those things. So I definitely think a world where America has been a leader in climate change is good in terms of peace and security if we're talking about imagining 2050 or beyond. But I also think, domestically, that it can be good for the United States. There is a piece which we started with, which maybe some people find an inconvenient truth, but in a clean-energy future, there's still some role for oil and gas. So position it in a way that this isn't necessarily a fossil fuel world vs. a clean energy world, that it's a world against carbon emissions. When we frame it like that, there's a lot more scope for people to be contributors to a solution rather than detractors. So there are lots of good reasons why this is in the interest of the United States.David Roberts:   I can definitely see why it's in our absolute interest; solving climate change alone is enough. I guess my question was more about our position and power relative to the rest of the world.Jason Bordoff:  Meghan made the most important point; it's hard to disconnect your question from a world that suffers the worst impacts of climate change. Would there be people who lose more than the US in the Global South? Yes, but it's going to be pretty painful for everyone, including the US. To the extent there's been discussion of national security and climate, it has to date often been about the national security impacts of not doing something about climate change, suffering the impacts of climate change, and then the view is, “if we get our act together and have a successful clean energy transition, geopolitics of energy will be a thing of the past.” That's what we were trying to address: actually, it could be rockier than you think. But certainly the consequences of inaction would be much worse. You're right, the US is one of the largest oil and gas producers in the world, it derives a lot of economic benefits from that in states like Texas and others. But it has good resources to lead in a clean-energy economy too. There's no reason the Gulf Coast can't be a leader in global supply of hydrogen and ammonia. We have some of the best capabilities for innovation and new technologies here in the US; there are going to be lots more companies at the scale of Tesla and much bigger. We talked about nuclear as another technology. I think the US is well-positioned in many.Again, in our piece, we talked about the fact that part of dominance in clean energy is not going to come from the geologic trove you happen to have in the ground like oil and gas, but what you can manufacture cheaply, like a solar panel. There are countries that can manufacture things more cheaply than the US, but nonetheless, the US has a lot of assets, a lot of attributes, with good renewable energy resources, manufacturing resources, ports, geologic storage capability for carbon dioxide capture, that could position it to lead in a clean-energy economy too.David Roberts:   It might also be nice for the US to resume a pro-social leadership role in the world; that might also redound to our benefit in terms of gratitude and better relationships. Jason Bordoff:  I wrote a piece on that in Foreign Policy a year or so ago, about the case for green industrial policy. Part of that was some of the economic benefits you could derive at home by leading early in these technologies, like bringing down the cost of green steel, things that have a high green premium today. But it is also a form of climate leadership, because it's just not reasonable to expect some of the poorer parts of the world that are growing their emissions at the fastest rate, like Southeast Asia, eventually Latin America, Africa, to pay three times as much for the concrete and steel they need to build cities. If we can build those industries here and we can help drive the cost down because we're investing early, then that also makes that technology more affordable to others. I do want to say, though, that again, we shouldn't be Pollyanna-ish about this. We should recognize that there are losers to the transition: not just nation-states, but workers and states and certain industries. We do need a just transition. That phrase means a lot of things, but included in that is, we do need to think about people who work in the oil and gas sector in the US, not to mention countries that are dependent on these revenues, making sure that there are public policies in place to help those communities transition and capture some of the benefits of the kind of economy we could grow in the future. That's really important. We don't take that seriously enough sometimes.David Roberts:   Well, thank you two so much for taking all this time. I really appreciate it. I have a feeling this topic will only get more and more prominent and of interest in coming years, so maybe we'll talk again in a few years and see how things are shaping up.Meghan O'Sullivan:  Excellent. Thank you very much, Dave. It's great to be on your show.Jason Bordoff:  Yes, I love listening to it, so it's great to be on. Thank you. This is a public episode. 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In this episode, writer and director Adam McKay reflects on the critical and audience reaction to his movie Don’t Look Up. We also talk about making an emotional connection to climate change, some of the other climate-related projects he’s working on (or at least thinking about), and why he ended the movie the way he did.Full transcript of Volts podcast featuring Adam McKay, January 12, 2022(PDF version)David Roberts:The film Don’t Look Up, available on Netflix as of late last month, has become something of a phenomenon. It has drawn wildly varying, often quite personal and intense, critical responses. Its critics’ score on Rotten Tomatoes is just 55 percent.But climate scientists loved it. I loved it. And the public loved it. Its audience score is 78 percent. In the week of December 27, it broke a Netflix record, with more than 152 million hours of streaming. As of this week, it the second biggest movie ever on the streaming service (just behind Red Notice, just ahead of Bird Box).Audiences have ignored critics and embraced the film, which is not something you’d necessarily predict for a thinly veiled climate change allegory about the difficulty of grappling with bad news in today’s information environment, especially one with such a (spoiler alert) bleak ending. It’s not the first successful curveball thrown by its writer and director, Adam McKay. McKay first made a name for himself as head writer on Saturday Night Live. In the early 2000s, he formed a production company with partner Will Ferrell and wrote and directed a string of beloved comedies, from 2004’s Anchorman through 2010’s The Other Guys. But in 2015, he took a turn, writing and directing an adaptation of Michael Lewis’s book The Big Short, about the 2008 subprime mortgage crisis. It, too, was an unexpected hit, scoring McKay an Academy Award for adapted screenplay. His 2018 film Vice, about Dick Cheney, scored Oscar nominations for picture, director, and original screenplay.He has demonstrated that, despite what the chattering class often seems to believe, audiences are hungry to confront real issues. All along, he has wanted to find a way to make a movie about climate change. With Don’t Look Up, he finally figured out how. I’m delighted to get a chance to talk to him, to hear about what he makes of the movie’s critical reception, what his other ideas for climate movies are, and how he navigates the politics of speaking out on serious issues from inside Hollywood. Welcome, Adam McKay, to Volts.Adam McKay:  Thank you, Mr. Roberts, for having me. I've been an admirer of your work for a long time, an avid reader of your writing, and it is a pleasure to be here.David Roberts:   Thanks, I'm an avid watcher of your movies. So we have a mutual fan club here.[Don’t Look Up] has been out on Netflix for a couple of weeks, so we've had enough time now for you to gather some feedback. Let's start with the fact that this movie has gotten more streams than anything in Netflix history. Did I read that right? Adam McKay:  It's a bit crazy. I was shocked by the response from audiences. Netflix uses viewing hours now as their metric — they used to use accounts that signed on, but viewing hours is a more accurate number — and we had the most amount of viewing hours in any single week of any release Netflix has ever put out. I understand we're about to pass Bird Box as the number two all-time movie [on Netflix], and we've got a chance to be number one, who knows. David Roberts:Who's number one?Adam McKay:It's a movie called Red Notice that just came out. It stars The Rock, Ryan Reynolds, and Gal Gadot. If you had told me that our ridiculous-slash-dark climate satire would be contending with Ryan Reynolds, The Rock, and Gal Gadot in an action film, I would have said, “you're nuts.” So it's pretty fantastic. More importantly, the moment-to-moment online responses have been incredible — just seeing people excited by it, laughing, a lot of people moved by the ending of the movie, talking about crying, having emotional moments with it. So that's the thing that's been really exciting is seeing this worldwide response to this movie, and a lot of people having the response of, “oh my god, I'm not crazy.” Really cool.David Roberts:   Or at least, “we're crazy together.”On the other hand, there's the critical response, which has been … all over the place. I don't know what I expected, but it's been such a bizarre range. What do you make so far of the critical response?Adam McKay:  I've never experienced anything like it. We test these movies, we screen them for audiences, and the last three screenings we had played great — people were laughing the whole way through, at the end there was great discussion. Then I saw those critical responses … and in fairness to the critics, I don't expect them to mirror a test audience. They look at it with different eyes. So with all due respect, but some of the reviews were so extreme and angry, and I was like, “whoa, what's going on here?” But once again, they're critics; they’ve got to do what they’ve got to do. But it really took me back. I just didn't see it coming. You make movies, you get hit with bad reviews, so we were just like, “all right, I guess that's that.” Then when the movie came out, the responses were more like what we had experienced. We were like, “oh, good, we're not crazy.” So it was strange. I've never experienced that kind of disconnect from the screening, watching the movie with people, to the critical response. It definitely was the most surprising I've seen. Once again, nothing but respect for critics. But yeah, it was very surprising and unusual, no question about it.David Roberts:   I'm sure you're a self-aware, neurotic guy; you probably have some self-criticisms about the movie. Did any of the criticisms strike home? Adam McKay:  When you make a comedy, right away you subtract 20 points. It's just the way it goes with comedy. So I wasn't expecting us to be lifted on the critics’ shoulders and ticker tape to come down, because I've made plenty of comedies and that's just the way it goes. Which was fine, because we made a direct choice to have this be a comedy. I think the ones that surprised me — there weren't a lot, but there were about a dozen that were really angry, and accused the movie of being smug, and said, definitively, “this movie will not relate to people.” “It's too smug, it's too liberal.” “It's not liberal enough.” “It's playing to a small crowd.” Those were odd, because we hadn't experienced that at all with this movie, in any of the screenings we had done — that was never the slightest response we ever had. With something like our previous movie, Vice, we knew that was tricky. We knew that was not a fun story. So you know, I read reviews, and some of them were like, “yeah, you're not wrong.” But in this case, I was surprised by the timbre of the reviews, the anger of some of them — once again: not all, some. I have to say that over and over again. David Roberts:   Some of them seemed like, “you think you're so smart. You're not so smart.” A lot of critical reviews struck me as, “here are the ways that I am smarter than this guy who tried to make this movie.” It was a weird critical response.Adam McKay:  It was strange, but I think what it points to, now that I've had some time to digest it, is a couple of basic things. Regardless if someone didn't like the movie or liked the movie, there's no question we're living in an incredibly strange time right now. We're looking at a straight shot to American democracy collapsing. The Democrats have face-planted and I don't see much standing in the way of a takeover from the extreme right. So that's going on, while this absolutely catastrophic, giant story of the collapse of the livable atmosphere, that is so mammoth it’s hard for even some scientists to fully get their head around, is happening at exactly the same time. It doesn't surprise me that people would be …David Roberts:   Don't forget the global pandemic. Toss that in there too.Adam McKay:  Oh my god. And by the way, towering, epic income inequality mixed right in. So we have all this stuff going on, and the idea that people would have passionate responses to “how do you tell these stories?” makes sense. The idea that a lot of people would be on different wavelengths of awareness, or no awareness, or somewhat awareness on those stories we're talking about makes sense. By the way, once again, I respect that. I'm not saying that if someone didn't like the movie, it means they don't believe in climate change. Somehow, through the social media lens, it became that I somehow had said that, whereas I never said that. People were piling on — which by the way seems like something directly out of the movie, of course. So I think it makes sense. The reason we made the movie is there are varying degrees of relationships with the idea of the climate crisis, and that's one of the problems we're confronting. So now that I have a little distance from it, part of me is like, “why did I think our movie would be any different?” David Roberts:   I could have told you what would happen. From my perspective, as somebody who's been in this game for a long time: you have this huge problem on your mind, you’re yelling and yelling, and no one else is paying attention but other climate people. So you just end up talking to other climate people. You end up arguing with other climate people, and forming teams and factions within the climate movement, because no one else is paying attention. I think that's become part of the culture of the climate movement: your number one priority is to shoot down this new climate advocate who thinks he's smart. I don't fully get it.Adam McKay:  When you see Chuck Schumer or some politician talk about the climate crisis, you can just tell from the way they're talking about it: oh, they don't get it. They don't really feel it in their bones. Someone hasn't communicated to them the depth and the urgency of this. Even when something happens like those crazy fires in Colorado, where there weren't even trees nearby, the wind blew the embers into the neighborhoods, and the videos are so upsetting; or Kentucky, where it looked like the devil had landed on earth with that massive tornado; Alaska breaking a heat record by 20 degrees; and on and on and on. You see these stories, and then you hear certain people in charge, or even in the media, talk about it, and you're like, “you're not feeling that in your bones.” But when you have a movie, you can't say that, because it sounds like you're saying, “you don't get the movie, so you don't care enough about the cause.” I'm like, “hey, I don't f*****g care about the movie. Hate the movie. I don't give a s**t.” We're not posturing like, “Oh, look how important we are.” We actually think this is a giant thing! All these actors came together — there are easier projects we could have done. You think when we're saying this is a big deal we're positioning ourselves for awards season? David Roberts:   If you're pulling a money grab, maybe climate change is not your go-to. Adam McKay:  I think that's me splitting hairs, though, because the bigger picture here is the crazy appetite of literally hundreds of millions of people, having this very visceral response, and it's fantastic. The other joy of the movie was seeing a lot of climate scientists say, “oh my god, I feel seen.” Peter Kalmus wrote a great piece where he's like, “oh, that's it. That's what I've been going through.” George Monbiot wrote a beautiful piece about the emotions he's been carrying. So the overwhelming story here is, we're overjoyed with the response. We're overjoyed with the release. At the same time … I already had sympathy for people like yourself, but now I think I get it in a much more personal way.David Roberts:   Also, sympathy for politicians trying to broach this. You get all these weird, intense, super-specific responses, I'm sure any politician who says these words publicly gets that same weird range of blowback. So I have some sympathy for them, too … though less.Adam McKay:  A little bit less. We did it in the movie. For years I've been like, “why isn't a senator or congressman going to a podium and crying or yelling?” George Monbiot did that, he cried on a show — there's clips all over the place of climate people getting emotional on shows. It's funny, because we wrote that in the movie, you’d think I would know that, but the response taught me how deep it is. The challenge of the communication of this is so titanic. How you break through the people framing it as self-interest. “Well, of course, Dave, you have a podcast you do, and you have your own news source, Volts, so of course you think it's a big deal.” It's like, no.David Roberts:   Let's go back in time a little bit. You've said in previous interviews that it was an IPCC report that originally grabbed you and shook you by the lapels and got you freaked out about this. That was 2015 or 2016? Adam McKay:  It's a longer road than that. The Al Gore documentary An Inconvenient Truth was the first time where I was like, “oh, wait a minute, that's no joke.” The famous moment where he shows the graph skyrocketing definitely hit me. I started talking about it, wondering what was going on. But, in those polling categories they use, where I went from the “somewhat concerned” range to the “very, very concerned” range was the IPCC report and several other reports that came out, culminating in me eventually not being able to sleep and my wife being like, “what's going on?” I'm like, ”this is bad. This is really, really, really bad.” I went through a little period where people around me were like, “hey, relax.” I was like, “no, it's really, really bad.” I was late to this incredibly un-fun party. I think you showed up with some onion dip around 2004, but I came in around there, and then every year since it's just been escalating. Reading David Wallace-Wells’ The Uninhabitable Earth — that's definitely what led me to the onramp of, “I’ve got to do a movie about this.”David Roberts:   One of the things I'm fascinated by, and one of the things I wrote about in my review, is the difficulty of making art about climate change, the difficulty of telling compelling stories about it in a way that will appeal to a mass audience. Presumably, once you got freaked out about it, you being a movie maker, you started thinking, “how can I get this into a movie?” You've talked about this a little bit, that you had a few ideas or premises come and go. I'm curious what some of your early thoughts were for how you could cram climate into a movie. Did you have other ideas that were developed at all? Adam McKay:  Well, some of them I'm still going to do. I'm actually working on a show with HBO Max called Uninhabitable Earth. It's a Black Mirror-style show, anthology, hour-long episodes, dealing with the climate crisis.David Roberts:   But fictional, like Black Mirror? Adam McKay:  A hundred percent, yeah. Each one will be an hour long, we'll have different directors and writers come in. I already have the first episode outlined. I'm behind — I was supposed to have the script written a month ago. So we're doing that. But I can tell you a couple of the ideas. The first idea I had — and who knows, I may still do it — was inspired by the movie Greystoke: The Legend of Tarzan, Lord of the Apes that came out in the 80s. I had read that Robert Towne’s initial draft of that script didn't have one single word spoken in it; it was all Tarzan with the apes. Then, of course, the studio made him add all this stuff where he went to England. I actually met Robert Towne about four years ago and I brought that up right away, because I found it really intriguing. The idea I had was that it’s 300, 400 years from now, and it's an area on Earth where the climate crisis has fully blossomed — we've gone to 3.5 to 4, sea increase, most of civilization is gone, but there are little outcroppings of people that have hung on. We focus on one group that lives between a storm and a desert zone. They're in between an area where there's constant tornadoes and hurricanes and another area that's completely arid — let's say it used to be Arizona, New Mexico, Nevada. They're on a runoff area from the storm zone where water flows, and it's created a deep crevasse, and they live in little Anasazi-style cliff dwellings on the side of the crevasse. Because of the water, they have a little civilization of 600 or 700 people. You see the detritus from the former civilization: pieces, scraps of our old civilization that they've used in different ways. Then one day the water stops. We don't say it, but you see from the drawings and the songs that this happens occasionally. They’ve discovered that the person who can handle going through the river of water to find what clogged it, it's best if it's a 17-year-old boy, because they're a little more fearless, they're at peak physical health. So they pick their 17-year-old boy, but there’s a girl who’s in love with him. He leaves to go on the mission, they give him a couple of tools, and she secrets away and follows him. We basically follow these two teenagers as they go through the storm zone, and we have different encounters with different pieces of our old civilization. One scene was where they have to get across this massive lake, and in the middle of the lake — I thought it was a cool image — you see a giant white pole sticking out. The boy goes under the water and you just see the city of Chicago there. It's the Sears Tower antenna sticking up. And they have to swim across this lake. So it's a lot of different episodic encounters. I don't want to give them away in case I ever do this … which, now that I'm telling you, it was pretty cool actually. It was a big 2 hour 40 minute, no-spoken-dialogue, epic film. That was the one I was going to go after. Then I started doing the thing, which I know you probably think about a lot, where I'm like, “well, how is this going to play? How are people going to relate to this?” I kept thinking, “it's a little bit like a lot of dystopic sci-fi movies; there have been a lot of those made. Is it too easy to categorize it as that? Is the impact of it lost because it doesn't relate to our world now?”David Roberts:   In all those movies, the apocalypse has already happened, so you frequently don't learn much about it. They're rarely about the apocalypse itself.Adam McKay:  I had another idea that was about the carbon wars. Twenty years from now, most of the planet knows we have to shut down the carbon release, but there are holdouts. There are rogue nations, and corporations that are basically like nations, that are like, no. So there's a full-on war going on. I had a bunch of cool stuff for that. Then I had another idea that was more like a Twilight Zone episode about submarines from different nations fighting over claiming new land underneath the Arctic Circle that they can drill for oil in. One of the subs gets sunk and then frozen in the deep bottom underneath the Arctic. We go to 200 years later, and it's rescued, and some of the people are able to be defrosted using advanced tech. It's about them living in the future utopia that has solved these problems, which I thought was kind of cool. Yeah, I may still do that. These are all ideas that are still on the table. I don't think I'm giving away too much. But with each one, I just felt like, man, I don't know. When I talked to David Sirota, and he made the joke about how it's like a movie where an asteroid’s going to hit, like an Armageddon, except no one gives a s**t, I just laughed, and I like that. I thought: laughter, it’s the best. It does a couple of things. It lets people have a common experience. In order to get a crowd laughing, you have to have a shared, agreed-upon reality. You can't really get 300, 400 people laughing without that agreed-upon reality. So I just thought, even my family members who are very right wing and friends of mine who are very progressive, everyone can agree we are living in absolutely unhinged times right now. I thought, maybe that's a good purchase point with this idea. So I ended up doing Don’t Look Up.David Roberts:   Did you just hear this joke, or this idea, of Sirota’s and go off completely on that? How much was he involved in the story writing? Or was he just the political consultant guy?Adam McKay:  With any idea, you like the idea to not leave you alone. So he said that, I was like, “oh my god, that's perfect, that's exactly what's going on,” and we laughed, and we kicked it around for a second and then I just moved on. I wasn't going to write it. It was a couple weeks later that I was like, wow, that idea keeps coming back to me – why? So I called Sirota and I was like, “Sirota, I think that's the idea.” I liked that it was simple. I liked that it wasn't too-clever clever, that it was a big enough entryway for a lot of people to get into it. I've described it as a Clark Kent-level disguise for climate; it's not really trying that hard, and I like that about it. It was big, and I'm a big fan of execution-based ideas. I don't always love big, clever premises. I like where they're kind of simple. So then I started banging it out, and I would check in with David. He was involved. I would run it by him, what the outline was. He came up with the idea for the movie within the movie, Total Devastation. He and I kicked around the idea of profitizing the comet and aborting the mission; that's when I knew we had a movie. I would show him each draft. David's a very funny, creative guy. He's a firebrand, but he also has a good pop sense, and he's written some scripts in the past. So he was pretty involved, actually, from the get-go.David Roberts:   Is it obvious it’s about climate change? Have you gotten a sense from the viewing public? Because I genuinely don't know. I'm so immersed in climate that of course I see everything through that lens. But if you just walk in as a normie with no background information on the movie, are people thinking “climate change” from this? Do you have any way of knowing?Adam McKay:  One thing I love to do is go on Twitter when the movie opens. You see the second-by-second tweeting. Granted, that's a skewed lens, because it's Twitter, it’s social media. But that, coupled with the testing process we do, the screening process, gives me a pretty good idea of how people are seeing it. What I'm seeing, and what we learned in the screening process, is about 60 to 65 percent right away think climate crisis. Another 25, 35 percent — there's crossover between the two — think Covid, even though the script was written before Covid. But the great news is, everyone gets the idea of a society that's broken, corrupted, careerist, distracted, self-interested, all the different layers. I always say it’s David Simon's The Wire grab bag of societal dysfunctions. We tried to touch all those bases. Everyone gets that. The way we did the movie was, we tried to find the universal dysfunctions across the political spectrum and not dial into the red vs. blue too much, although you can't avoid it. When you talk about the comet denial in the movie, clearly that's hitting the right wing. Overall, the people responding to it as a climate crisis allegory, I've been very happy. Someone tweeted the other day that she started watching it with her kids and within 10 minutes the kids were, “oh, this is like the climate.” I have a 20-year-old and a 16-year-old daughter, all of their friends — none of those people read interviews with me, none of those people read the reviews, and they all immediately were like, oh, climate, Covid, science being run over by capitalism and power. I've been very, very happy with the way that's translated.David Roberts:   I think that’s part of the power of it: if you don't watch it through the climate lens, it works broadly as well. I was thinking yesterday that someone looking back 20 years from now at this movie might think, oh, this was about the coup. This was about the authoritarian takeover of America, which people were yelling about, and other people were ignoring them. It works eerily well for that as well. Adam McKay:  To me, there are three giant, hard-to-emotionally-comprehend realities. (Intellectually, we get it.) The climate crisis is the big one. Then you have the coup, the impending collapse of American democracy. Then the third one, for me, is income inequality at a scale we just never talk about, that is breathtaking, worldwide. As far as size goes, income inequality is like Venus and the impending collapse of American democracy is like Mars. Then the climate crisis is like Jupiter plus Saturn plus maybe the Sun. There are five or six other ones too. There's the opioid epidemic, which we do nothing about. There's the gun death epidemic, which we do nothing about. Someone had said, “hey, relax on calling it a climate crisis, it's really just a snapshot of this time.” I thought, that's a fair point, because the movie is about our reaction to these very fixable crises. As complicated as the climate crisis is, we could deal with it if we wanted to. That's what's so incredibly frustrating. What makes the climate crisis so horrifying is that we do have technologies, we do have strategies that could seriously curb the horror show we're headed toward. So I think it's fair to say that the movie is more about this particular screwed-up moment that we're living in.David Roberts:   I've seen a lot of climate change documentaries and shows and art, and they're generally pretty bad. I went into this with very low expectations, terrified that you were going to get into albedo effect and biodiversity. I was braced. But it's much more about trying to communicate than it is about the details of the crisis itself. I thought the best part of the movie is the way it shows how the newsertainment blob has this capacity to digest everything and let nothing change it. No matter how loud you yell, it just absorbs it. You see it absorb Dr. Mindy, as he becomes unwittingly caught up in it. It just rejects Kate entirely. It has this ability to adapt and absorb and neuter everything. That's to me the most maddening, not just about the climate crisis, but about everything these days: everything is at the same pitch; everything is at the same volume. Everything is the same blur. It's impossible to make anything stick out, to stop or pause on anything or think about anything.Adam McKay:  The moment where DiCaprio as Dr. Mindy says on the TV show, “why does everything have to be so clever or likable? Sometimes we just need to be able to say things to each other.” That's it. It's an emotional movie. It's not a narratively complex movie, it's just the emotion of that. That's exactly it: these formats, these shows, will not let you just say things. It always gets twisted and given a certain color or shading. David Roberts:   It's sitting right there alongside the celebrity love affair — the same tone and same visuals — and the two blur together. I thought another clever part of the movie was that, it's not like Dr. Mindy or any of the protagonists are innocent of this. One of my favorite moments is when Oglethorpe, the head of NASA — who, by the way, Rob Morgan is amazing; he's such an ace up your sleeve in this movie — is talking about Sting. It had nothing to do with the rest of the movie, but I loved that moment so much.But at one point, the head of NASA sitting there watching and getting caught up in this celebrity relationship. He finds himself really hoping they'll stay together. He's not immune to it either. It absorbs you no matter what disposition you come to it with.Adam McKay:  It's impossible to resist. This is the one thing I've been saying throughout a lot of the press: the movie is not over anyone. I'm in the movie. I eat Taco Bell. I was way into Kyrie Irving returning to the Nets the other day. I'm rooting for Jennifer Lopez and Ben Affleck to an unhealthy level. I mean, this stuff is all focus-grouped. It's algorithmically structured. It's like they took the science of slot machines and they've applied it to social media, advertising, the way we consume information. It's irresistible, and we're all part of it. But I think it's important to give ourselves a break to some degree on it. It’s going to get us. Life doesn't operate like an action movie where every waking second you're pointed toward the climate crisis, or gun violence, or income inequality, or the collapse of American democracy. There are moments where you're going to obsess about, why did the general charge you for snacks? That's why we have it in there.David Roberts:   I loved that bit too, by the way. It spoke to me.Adam McKay:  I love the reaction to it. People are trying to figure out why he did charge for the snacks. There are these theories that he represents the military industrial complex, he represents government. So people ask me, and I'm like, “I don't know.” They’re like, “yeah, but you wrote it.” I'm like, “no, I wrote it as that thing that sticks in your head that distracts you.” Comedy — the idea that we can laugh, we can be a little silly — took a lot of the edge off of it and opened it up. It's been cool. Once again, not everyone's going to laugh at the same thing. The funny thing with comedy is, everyone thinks their sense of humor is the gold standard. Which, by the way, I wouldn't change that. That's what's incredible about comedy. But it's funny when, some people love the comedy, some people are like “it's dumb,” and they're definitive about it. That's fine. That's how comedy goes. But it's been really cool: at Netflix, they do crazy amounts of data — pretty sure they know, statistically, within 96 percent, how I'm going to die — and they said that they've never seen a comedy play across this many countries. I think the movie was number one in 87 countries and top 10 in 90. For people that care about the climate and care about the state of the world, I think that's a very hopeful thing, that this current moment in the world is that universal. I've never experienced that before.David Roberts:   Some of the stuff in the movie seems pretty US-specific. The media stuff, at least; I guess I don't really know what media is like in Turkey or whatever, but it felt very America-specific. Adam McKay:  Turns out, it's a lot like it is here. We're doing an adaptation of Bong Joon Ho’s movie Parasite as a miniseries, and he was saying that to me. He said, “I think you're going to be surprised by how well this plays around the world.” I was like, “really? You think so?” and he was like, “oh, yeah. The problems you have in the movie are everywhere.” And he was right. It's landed in a global way that I'd never anticipated.David Roberts:   For me as a moviegoer, this is the first time I've seen these particular dysfunctions put to fiction. They're very specific to our present moment and I've never seen anybody else take them on. I think that's why you're getting these moments of people saying, “oh my god, I feel seen,” because a lot of people are experiencing this. I just haven't seen it portrayed in another movie in quite the same way. Adam McKay:  The models I used for this movie tend to be pretty small. One of my favorite movies of the last 20 years is The Death of Stalin, which I've seen seven times, but that played to a very particular crowd. It's brilliant. We weren't trying to emulate that; our movie is made for a much bigger audience, very consciously. But there's that. There's Thank You for Smoking, which once again, very small audience, brilliant movie, love it. Then you have to really go back to the 60s and 70s, back when movies like this would play big.David Roberts:   Network is the obvious predecessor, right? Network is all over this movie.Adam McKay:  That's probably my all-time favorite movie. There's movies to die for: the Buck Henry movie, which I love; Wag the Dog; Ace in the Hole; Dr. Strangelove is another obvious one. For anyone who wants to jump all over me, I'm not saying our movie’s as good as Dr. Strangelove, but as far as the style and sensibility of it, people forget how slapstick-y Dr. Strangelove was. So I think that's one to look at. But we haven't lived in a time where … I guess Mike Judge would be the guy: Office Space I worship, Idiocracy is brilliant. But neither one of those movies were even remotely commercially successful. They were found after they bombed in their release. So it was definitely something we were going for on this larger scale. With all these actors, we were hoping to bring in a larger audience. It's been very cool seeing Ariana Grande fans watch this movie and respond to it.David Roberts:   I want to ask about the casting and about the crew. It’s A-listers all over the screen, constantly. To what extent did you present this to people as “hey, we want to make a socially conscious climate movie?” Was that part of the motivation of the actors joining up? Adam McKay:  I never framed it like that. I always described the world we're living in right now — it's fun, every time I say it I try and use a different analogy, so what I've been saying lately is, “it's like a bouncy castle full of hyenas and long stem wine glasses.” That's what it's like to be alive right now. So my pitch to all the actors was, “we're going to try and make a movie that's about this time that's never existed, that's crazy, and we want to try and make it funny, but we also want to make it emotionally moving as well. And yeah, it's about the climate crisis” — everyone knew that, they got that — “but hopefully it's going to have a big feeling to it for people.”With our casting director, Francine Maisler, we hit a point where we had a bunch of big-name actors, and I remember Francine and I talked about it and she said, “isn't the point of this movie that you kind of go all the way? That the movie is a comment on what's going on, and the movie should have a breadth?” I said, “Yeah, I totally agree.” So usually we would have stopped, because you don't want the movie to be overwhelmed with stars and be distracting, but in this case, we felt like oh, no, that's kind of the point of the movie. That's when we got Timothée Chalamet to play the part of Yule, and Ariana Grande came in, and, I'm trying to remember the order, Cate Blanchett, Kid Cudi came on at that point. Normally we wouldn't have filled those roles with recognizable actors, but in this case we just said, let's drive straight through the locked gates.David Roberts:   The density of A-listers is so high that it does feel almost like a comment in and of itself. It feels like you're making a point. Adam McKay:  We were joking in the edit, with my editor Hank Corwin, I was saying, “this movie is like a combination of It's a Mad Mad Mad Mad World and Lars von Trier's Melancholia.” That was another part of the movie, too, was the style of how we cut it and put it together. We wanted it to feel kind of jumpy and assaultive, keeping you off balance — sort of like the world feels now, too. David Roberts:   I love the editing. To me, most of the big laughs were from the editing. Adam McKay:  Hank Corwin is one of the great editors of all time. He edited on JFK, he's edited Terrence Malick movies. The guy is a legend. It came from Big Short and Vice: even though those movies had funny things in them, they weren't full-on comedies. I kept telling Hank, “I think your style would work. I think this cut-in-the-middle-of-the-line, this breaking the rhythm of traditional editing, would work really well for comedy.” He's a funny, kind of sheepish, neurotic guy, and he's like, “I don't know. I've never cut a comedy,” and I'm like, “no, Hank, I think it's going to work.” But it's another element of the movie. For some people, they are thrown off by the style. I've seen people complain about it. Some people think it's sloppy unintentionally. David Roberts:   No, every one of them is absolutely perfectly timed. It really gets at the feeling too — you get swept up in these super-intense, crazy moments and then it cuts to this quiet moment where they're trying to digest it afterwards, and you feel the same thing. You're like, “whoa, what was that? Why was I just so worked up?” It's that same whipsaw feeling of modern media.Adam McKay:  That was what we were going for, those montages and slices and images. Hank had the brilliant idea to play the natural world as a character in the movie. It's funny how in the process of making a movie you can actually learn things about the climate. That was something; like, oh, yeah, the natural world is a character in the story of the climate right now. It was amazing how well it fit with the movie, and that was all credit to Hank Corwin. That was his breakthrough idea.David Roberts:   There are these cuts of nature scenes, but they're not the conventional climate-documentary nature scenes of pastoral beauty; some of them are just weird. It's not necessarily natural beauty, it's “look at this weird fucked-up natural world.”Adam McKay:  The one that got me — he just cut this in, I didn't have it in the script — was the shot toward the end of the movie of the bee. Every time we would screen the movie, I would see that bee, I would get teary-eyed. It was like a punch in the gut to me, because the bee is so beautiful-looking, and perfectly constructed, and delicate. Frickin Hank, man, you got me with that bee shot.David Roberts:   Let's talk about the ending because this, I'm sure, is controversial. I guess we're doing spoilers. Adam McKay:  Yeah, we should warn people, if you haven't seen it. Part of the impact of the movie is, most people do not know that ending is coming. Some people do, but most people don't imagine that we would ever end that way. So yep, big spoiler alert.SPOILER ALERTDavid Roberts:   You watch a Hollywood movie, especially a big Hollywood movie with a bunch of stars, you are trained by a lifetime of movie viewing to expect the white horse at the end, to expect the good guys to pull it off. It inches right up to the ending and you're like, oh, well, I guess not! This might be perverse, but I was delighted when I finally realized, “oh, he's not going to do it. Sweet. He's just going to let it play out.” How much did you think about that ending? How early did that come in? What do you think is the larger significance of the ending? What are you trying to say?Adam McKay:  I was just kicking around this idea — and part of it came from reading Sapiens by Yuval Harari — I thought the big idea of that book was when he posed that our ability to create myths and story is what separated Homo sapiens from Neanderthals and Cro-Magnons. It’s a legitimately big idea. I know some people knock Yuval Harari, but that is a heavyweight idea. That got me thinking about what that means, that stories are that important. Obviously, we've talked about stories, and what they mean, and narratives, for years and years and years. The idea was, we've watched 10,000 movies — whether it's Marvel, James Bond, an action movie, Fast and The Furious, the comedies, the stuff I've done — and it's always a happy ending. You just know it's coming. You know Hollywood's going to give it to you. In some ways I started wondering, are we sitting back and watching the climate and expecting a happy ending? David Roberts:   I really think that’s part of it. “Someone, somewhere, has got this. That's how things work, right?”Adam McKay:  DiCaprio told me a story where Elon Musk was at some conference and DiCaprio implored him, “dude, come on, you've got news sources” and Elon Musk is like, “the technology will solve it.” That is terrifying. I hear this from a lot of people: “They're going to figure it out. Don’t worry. They'll get it.” No, we're not. We're now at the point where we're definitively not. So I thought, there's a simple power to going straight down the chute with this ending and not having the white horse ride over the horizon line. I have never been more nervous for a screening in my entire life than the first time I screened this movie. There was a break in the pandemic, it was after the vaccine, and they said if everyone's vaccinated and they wear masks, we safely could do a screening. You have to remember, this is a big movie. It's Netflix, they're a big company, you have these big stars in the movie, and we're going to go to Orange County and we're going to test screen this movie that ends with — once again, spoiler alert — the entire planet dying. I was telling my wife and Hank, my editor, who during the period of putting the movie together I spent equal amounts of time with: “I've never been this nervous for a screening. This feels like we may have screwed up in a profound way.” They test it from zero to 100. The test is not a sciencep you use it as a loose guide rail. But in general, if you get like a 35, that's really bad. You want to be in the zone of high 50s to low 80s. Mike Judge actually told me that Idiocracy, the first time he screened it, he got a 20. A 20! I've never heard of that in my life. He told me how then the studio felt like they were protecting Judge and that's why they buried the movie. I was like, “oh really, that's what happened.” Maybe Spielberg and Scorsese are two people that could score a 20 on a movie and say, “I don't care, put it in 3,000 theaters anyway.” No one else on the planet has the clout to tell a studio, “I know we got a 20 but go with it.” There's just no one. So I'm driving to the screening and I'm like, “oh, s**t, oh, s**t.” But I love the ending. We've been watching it, we've screened it for ourselves, I think it's beautiful. We screen it … and it's the audience's favorite part of the movie. Universally. Unequivocally.David Roberts:   How does the whole test screening thing work? Do people write responses? Adam McKay:  Everyone fills out a card. There's the 1-10 stuff, but then there's handwritten stuff. You do a focus group with 20 people afterward, they ask in-depth questions. Universally, no question about it, favorite part of the movie: the ending.David Roberts:   Did people say why it was so satisfying to them? Could they articulate it?Adam McKay:  Oh, yeah. The person who leads the focus group is an incredible woman who ran the focus group in Vice. (True story: they ran focus groups on the Iraq War.) She actually runs our focus groups, and she asked them, and they were very clear about it. They said, “we're sick of the b******t endings.” It was an incredible moment where you realize, oh, of course, the audience is way smarter than we give them credit for. They're totally tuned in to what's going on in the world. They all expressed it. They talked about the climate crisis, about Covid, about all the s**t going on in the world. They're fully in line with it. They're sick of constantly getting served fake happy endings.Even though I've done silly comedies, I'm a big fan of never underestimating your audience. The Simpsons is an example of how you can be brilliantly stupid. Even when you're doing silly stuff, try and be top-of-your-intelligence silly. So I've always believed audiences (and voting blocs, and the population at large) can go way further than people think. They're way smarter than they get credit from the media, from the savvy crowd, the gatekeepers. But this even surprised me. Number one part of the movie, unequivocally, no doubt about it.David Roberts:   The whole movie is about us b**********g each other. It would have been a unique sort of betrayal to have a happy ending to this particular movie.Adam McKay:  There was never one moment where I was going to do it. I just wanted to make sure to balance at the end — that it is a comedy, even though it's this very emotional ending — so I did shoot the joke that we have in the movie that's in the middle of the credits, and then we have a joke at the very end of the credits. I did think that was important too, because some people were really in tears. We had some very emotional responses to the ending. My wife went into her car and cried for 10 minutes after she saw it. Another agent saw the movie when we were first screening it and she was so emotional, she backed her car into a pole when she was leaving the screening. We've seen it in the online responses, a lot of people moved to serious tears. So I did think it was important that you don't want to be traumatized. You want to still be able to laugh, yet have those feelings. That was more the alchemy of the ending, how we were going to balance that. But there was never any chance that was ending any other way.David Roberts:   It’s sad in the context of the movie itself, but I also think part of what's hitting people is that it gives them permission to imagine that in the real world, there's no white horse. Sad endings are perfectly possible in the real world, and once you really start to think about that in the climate context … it's big. It's overwhelming. Adam McKay:  I think it's essential to understanding the climate right now. I think you have to realize this could end poorly and in fact is on track right now to end poorly. That's hard for some people, and that's okay. I'm not saying they're wrong or their reaction to the movie is wrong. But I do think it's hard, and I think you have to realize that what we're seeing right now, it's not going well. It’s not going well at all.David Roberts:   Can you talk about the other ending, the mid-credits scene? Since we're spoiling things: the rich people escape the disaster on a spaceship, find another planet, and then are immediately consumed by the planet's denizens. I couldn't fully tell whether that was just a gag to prevent people from going home and hanging themselves, or if there was more significance, a point freighted in there. What's your take on that? Adam McKay:  It started as the rich people just get away. The original scripted ending was that they land on that planet, and it's beautiful, and they're like, this is going to work out great. And I just ended it.David Roberts:   That's kind of what I hoped it would be. That's what I was rooting for, to be honest. Adam McKay:  Well, we ended up improvising this beat. Meryl’s a great improviser, and she kept saying, “I want to know how I'm going to die.” So she put it in the scene. Then Mark Rylance and I said, well, maybe she gets eaten by a creature on a planet, and he's like, “oh, yeah, we don't know what it means.” We did it, and then it started making us laugh, that maybe we do see her get eaten by a Brontaroc, which was just a name we made up on the day. I was hoping it did both, because you see the pods of the rich people, and they're from oil companies and lobbying firms, and it's got this sting. They walk out and there's this beautiful planet, and then we have this joke, which some people are going to like, some people aren't. Judd Apatow was like, “oh my god, that's my favorite joke ever.” DiCaprio was a little bit like, “I don't know if I love that joke.” So once again, it's comedy. My wife was like, “can’t you just end with the world ending?” and I was like, “we actually tried it one time, and it was tough.” I like the idea of, you get the ending of the world ending, you get that beautiful Bon Iver song, you get to see the Earth undone, and that's an ending. Then we go for a little while longer and there's another little thing that happens, where the rich people get away with it, but then there's the big joke. I actually am a big fan of, you can have an ending and then have another ending, and whichever one you need, you can choose to lean into. Apatow was telling me he leaned in heavily to the president being eaten by the Brontaroc, he needed that. You didn't as much. My wife didn't, DiCaprio didn't.David Roberts:   The whole world ending has one sort of emotional tone; the world ending but all the rich f*****s who made it happen escaping untouched has a very different emotional complexion. I just thought that was an interesting move. If you find out the rich people die, then …Adam McKay:  … it’s a little happy. Yeah. There was another ending I had where the rich people then started saying, “let's get my house built,” and someone's like, “no, the pod with all the workers in it crashed, they're all dead,” and then the rich people started going, “I'll pay anyone a billion dollars who’ll build me a house,” and then another guy went, “I'll pay 5 billion,” someone else goes, “10 billion,” and we just pulled out on that. My friend Tom Scharpling liked that ending. As I'm talking to you I realize, you know what we could have done on Netflix, we could have done three different endings. Some cuts could have had the rich people with no one to work for them, another one could have had the Brontaroc, another one could have just had the rich people get away with it and that’s it. I wish I had thought of this: we could have told Netflix, “every third screening has this ending.” That would have been really cool, actually.David Roberts:   It makes a difference in the context of the movie, but it also makes a big difference in how you think climate change is going to play out, if rich people can survive it.Adam McKay:  They're not going to get away. No way. This idea that they're going to go in bunkers or go to another planet, it’s ludicrous. You saw it when we had the fires here in LA, I think one of Murdoch's homes partially burnt down. They aren’t getting away from this. If we imagine the climate crisis going to its worst degree, maybe you could see some people clinging to the poles to survive. It's debatable if it's an extinction-level event, but it is possible that it’s an extinction-level event. But if people do survive, it's going to be grim. I think the money can help for the first couple of waves.This is me, by the way, just completely theorizing. There's no basis to what I'm saying, let me be very clear about that. I don’t know. But we can kind of guess, right? We know that the whole center of the earth becomes totally uninhabitable from extreme heat and wet bulb events. We know that there'll probably be perpetual giant fires where hundreds of thousands of people die from smoke inhalation, drought, famine, mass migrations, wars, even the poles are going to be nasty. They'll just have to come up with different categories for hurricanes. There'll be Category 10 hurricanes. I was talking to someone online who was saying it is possible we could have a perpetual storm on Earth if this thing really does hit 3-4 degrees Celsius increase.David Roberts:   My even more dystopic possibility is that we half solve it, so it gets bad but not apocalyptic, and bad-but-not-apocalyptic will probably just mean exacerbating existing inequalities. It'll mean an exaggerated, even more grim version of global oligarchy.Adam McKay:  Oh, that's bad. You might be right. We talk about this nonstop, my group of friends who are equally as freaked out as I am and that can talk about it, and one of the things I always say is, the saving grace may be that our civilization collapses, meaning we don't produce more carbon dioxide; that actually, civilization collapsing stops a lot of the emissions. That's a hellish proposition, because that's closer to what you're talking about; we’re at 1.5 to 2 degrees Celsius increase, and we start to see systemic collapse around the planet, wars, refugees, fire, all that kind of stuff, but a billion people have survived and the inequality is more like The Road Warrior. I'm not being flip with that comparison. Literally, that could happen.David Roberts:   Related to this point, one of the critical responses to the movie has been that it’s not an accurate analogy for climate change. Climate’s not a succeed or fail, one or the other proposition: there are all these degrees in between, we're going to land somewhere in the middle. There's an emotional satisfaction to a comet, that either hits or doesn't, that we're never going to get out of climate change. A) Do you agree with that, and b) do you think that's relevant to the quality of the movie? Did you feel like you were trying to do an exact analogy to climate change? Adam McKay:  God, no. Allegories are a sleight of hand. The prodigal son coming back doesn't exactly match the massive emotional bandwidth of loving forgiveness. “Well, the brother was kind of a dick, whereas loving forgiveness knows no bounds and judgment, so I don't know if the prodigal son was the exact allegory.” No allegory is a perfect fit. So yeah, there's a little cheat that we did: we took away the hyper-object of global warming, which is so vast and timeless and slow-moving, and we put in a very concrete event, a comet. So no, it's not a precise match at all. The real story of the movie is that the hyper-object, the hard-to-categorize force, is our reaction to the comet. I would say that's the important story when it comes to the climate crisis. It's about our reaction to the climate crisis, which is pretty horrific to this point, and kind of a disaster.David Roberts:   You’ve said in previous interviews that lately you've gotten a little bit more optimistic about the science and tech side of this, and I think that's for good reason. I feel the same way. The leaps and bounds being made now in clean technologies are amazing; if clean energy just keeps getting cheaper as fast as it's going now, it's going to be dirt cheap in five to 10 years, and utopia awaits. But then you look at this other track of American democracy falling apart, income inequality, etc. … you could tell completely different narratives about where we are in history and where we're going. How do you reconcile the two: the positive tech story about climate change and the total flaming-bag-of-s**t-dysfunction political story? If you wanted to make a movie about 10 or 15 or 20 years from now, what does it look like? Do you have the slightest f*****g clue?Adam McKay:  Stuff can change so fast. The example I always use, and it's a common one, is that I remember being with my kids when they were young, in the car, and they were like, “Dad, why is gay marriage illegal?” because they had friends at school who had same-sex parents. I was like, “you know, it's weird. Some people are hung up on it. I don't know why they care.” “Is it ever going to be legal?” “You know, it doesn't look great politically.” Then three months later, it was legal, and my kids were like, “you said!” and I was like, “I'm as shocked as you. I don't know what happened. Joe Biden misspoke and then … Obama couldn’t back off? I think that's what just made gay marriage. And it turns out, people were way cooler with it than most people thought.” So I mean, that was a crazy rate of change. I'm working with a group out of UCLA that's got some pretty serious breakthroughs on removing carbon dioxide from the ocean, and it's exciting stuff. They're nowhere near the scale to do it, they'll need like a trillion dollars to really make a dent. But is it possible? Technology doesn't advance in a linear way, and a lot of times happens in spurts. So it's very possible you and I could be talking in a year or two and we could be like, “holy s**t, those guys from Carnegie Mellon, what do you know, they had that breakthrough, and there was someone in the Pentagon who was smart enough to go, ‘hey, let's move $100 billion from this B-52 bomber thing and do this,’ and we're actually rolling back some carbon dioxide.” That could happen. But if I had to bet, the will and action and awareness part of it is such a train wreck right now.David Roberts:   Sure. What if that happens and Donald Trump is president and Republicans are in charge of both houses of Congress? Would it even make a difference if there was a tech breakthrough in the woods and no one heard?Adam McKay:  One hundred percent. The US just suddenly becomes not a player in solving the climate crisis. All eyes go to Europe and China, and the US is just out of the picture; we're the bad guys. I'm happy with what's happening down in Brazil and with Chile, that we're starting to see some progressive leaders step in down there, so hopefully, they could be a part of it, too. And is it okay if some other countries get on the stick? The Chinese are not dumb. They know what's coming. Europe clearly knows what's coming. But you're right, if the Republicans take over, which it looks like they're going to, because the Democrats have just completely face-planted — in three years, if the Democrats haven't done anything and the Republicans stroll in, they're not giving power back. We know what they're doing, and that may be all she wrote for the US.But then you may see some private industry. So that's the part that I'm optimistic about. I also am just a big believer in pain. Pain got me to lose 40 pounds. I had a very minor heart attack. Pain got me to stop smoking regularly; I have to confess I still cheat and have one or two on occasion. But that was pain, and I do think there's some pain coming our way with this stuff. There are fires we can't even imagine, storms we can't even imagine. That could shock us into waking up very quickly, in like a three-week period of time. So I guess I just, in a really long-winded way, told you I have no idea.David Roberts:   It's never been easy to predict the future, but it feels so incredibly opaque now. I don't even know the basic valence. Dystopia or utopia or somewhere in between, I couldn’t begin.Adam McKay:  I like your guess of somewhere in between. Man, if we solve some of this and it becomes just crazy robber baron 3.0, like an 1880s Gilded Age, I'm going to be frickin’ pissed. That's just the grossest outcome, and you're probably right, they're going to try and swing it that way. I don't think you're wrong. David Roberts:   I feel like this is the history of America: when things get so bad that the working class is about to revolt or go communist, they'll give a little; they'll do a New Deal or whatever, just enough to keep the basic system in place. That's what I could envision happening on a large scale here.Adam McKay:  I think that's a good guess. Do you remember the Arab Spring, when those revolutions were spreading? There's a story as part of that that not enough people talk about, that Saudi Arabia just cut checks for 25 grand for everyone in their country and handed them out, and people were like, cool, and they didn't have a revolution.David Roberts:   Is it that far off from what we did with the Covid relief bill?Adam McKay:  No. I just wish goddamn Biden would do it with student debt. It's the only button he's got left to push, and they just won't do it. They will not do it.David Roberts:   I want them to get the comet’s-hitting-in-2024 mindset. We need to spend all the money we can, as fast as possible. Adam McKay:  All of DC is designed not to let that mindset happen. Every restaurant hallway, every bit of muzak playing is like, “don't let anyone have that mindset.” But we'll see.David Roberts:   Let me ask you about Hollywood. I'm sure poor Leo DiCaprio probably has answered this question 4 zillion times — it's obligatory, you're asked every time you are interviewed at this point — but there will be some people who say, “the last thing I want is a bunch of rich, Hollywood, carbon-intensive-lifestyle, private-plane-flying, etc. trying to act like they care about climate change. If they cared, they would sell their yacht or whatever.” How do you process all of that? How do you think about that general critique?Adam McKay:  People think of Hollywood as some bizarre foreign country. I wake up every morning, I swim in my pool with my three dolphins, I get in my helicopter, I fly to my solid glass pyramid office. No. I would say this: if it's a good faith argument, yeah, give us s**t. I know Leo doesn't fly private anymore. We all are as green as we can possibly be, making as much noise as we can. I'm trying to do a bunch of different things; I'm not going to list them because that just sounds pathetic. If someone's saying that to just avoid the subject, then f**k that. That's b******t. But if someone's really saying, “hey, you hypocrites, what about this? What about this?” I'm here for it. Give us s**t. Is there something we can be doing better? Is there something we can be more aware of? I think we have to get used to that being a part of how we talk to each other, without being defensive. If you told me right now, “hey, you guys never have done this with your movie shoots, but you could do X, Y, and Z,” I think I've got to be like, “oh, s**t, I never thought of that. You're totally right.” So I think it's good when it's done in good faith. When it's done in bad faith as a way to just shuck off the whole discussion, then I roll my eyes at it.David Roberts:   I think it's the latter most of the time, but who knows? Adam McKay:  I'm playing a little bit dumb because I do go on social media and 90 percent of the time, it's the latter. No question about it.David Roberts:   In terms of climate’s presence in your own life, do you talk to your kids about it? I have an 18-year-old and a 16-year-old. All my life I've been talking about 2030, 2040, 2050, this or that has to happen. They're going to be alive during those years, in the prime of their friggin’ lives. I have gone back and forth about how to think about that a million times. How do you think about that? Do you talk to your daughters about it? How do they process it?Adam McKay:  Yeah, we do. They saw the movie, obviously. My older daughter was very emotional about it. Younger daughter loved it. It was emotional. David Roberts:   If I made a work of art that my 18-year-old showed open emotion in response to, I’d be parading around the f*****g streets like a king.Adam McKay:  I don't think they've ever had a reaction to anything I've done like this. Going through the years, they’ve mostly tolerated what I've done. Though they discovered the early comedies, their friends like the early comedies, so they love Stepbrothers and Anchorman and stuff.But the way I talk to them is mostly the way we're talking right now. What I say is, “this is very, very serious. It's the biggest issue of our lifetime. It's huge. It's no joke. It's not like a normal issue, it's a 1,000-times issue. However, we have technology and science, and people can do amazing stuff when they have the will and the direction. So don't get hopeless about it.” During the pandemic, we couldn't go in our backyard because it was filled with smoke from the Pasadena fires. Their aunt lived up in Oregon, she had to evacuate her house because the AQI was around 550. So they've already encountered this stuff. It's already part of their life. I just tell them, “you don't have to solve it all by yourself. Just find a couple little things you can do. Make sure to talk about it, make sure to feel it in your bones, and you'll find your way you can pitch in, and we're going to do what we can do.” I think the trick is not to freak out. Even though many times I am fully freaking out, my mantra is just, we can only do what we can do. So if I ever get too freaked out, I remind them, or remind myself, we can only do what we can do. That instantly calms me down. I make movies, so we made a movie. We have probably more money than we should, because our society is broken and screwed up, so I'm going to try and use some of that money to do some other stuff. We'll make little personal choices. We'll talk about it. That's what we can do. A lot of it's about emotional tone and providing the right perspective and sense of the moment. But it's tricky, no question about it.David Roberts:   When you pivoted and did The Big Short, you out of nowhere went from comedies that are dumb in a smart way to something that's smart in a smart way and about an issue of substance. I think you baffled people; a lot of people thought that was going to fall on its face, and it didn't, and you've kept at it, and you've kept succeeding at it. So I'm just wondering, what's the temperature among your peers in Hollywood about making more of an effort to engage with social issues? It's so fraught, for all the reasons we've discussed, but you're making a go of it and succeeding. Is anybody going to follow along? Have you talked to other filmmakers about this?Adam McKay:  One of the coolest things I heard as a reaction to this was that a couple of other filmmakers were like, “hey, can I talk to you about an idea that I have?” I actually did get some of that. I think they saw, if I can take the right crosses that came with those reviews and the savaging I took online and then in the end have the movie find an audience like it did, I think they're like, “s**t, if he can do that, we can do that.” Vice, when all is said and done, will probably break even, but Big Short made a nice chunk of change. Succession — obviously very different, because Jesse Armstrong writes that, but still a show I direct the pilot, produce on — that's a very different tone. We did Q: Into the Storm, the docuseries which was very successful, got very high ratings for HBO. So I think what people are starting to see is, you can make money doing this. It's not some altruistic thing. Audiences want to hear what's going on, and it's a good thing — you can talk to people about the real stuff that's happening and they're excited by it. So it doesn't have to be altruistic, it doesn't have to be pure business, there is this nice middle ground. Yeah, for the first time, three people actively reached out to me that want to talk about ideas. I think it's bound to happen. You can't live in the world we're living in right now and pretend it's not going on. I think you're going to see more and more people going for it, whether it's in a subtle way, an overt way, a funny way, a horror movie. There are a thousand different ways to tell the story of right now, and I think we're going to see more of it.David Roberts:   I hope we don't end up in five years thinking, “oh, man, I wish we hadn't told all those filmmakers to talk about the social issues. What were we thinking?” I often think that when people start talking about climate change: “oh, man, I miss when people weren't talking about climate change.”Adam McKay:  Weren’t those good days? The year I always say is 1997. Do you remember 1997? It just felt like no one gave a s**t about anything. I know Clinton kind of sucked, there was stuff on the horizon, the Republicans were starting to get a little crazy, there was bad s**t, but oh my god, it felt like my seventh birthday party, 1997. Oh, I miss it.David Roberts:   Final question, and I'm 75 percent serious about this: Have you thought about making a movie about a reactionary movement that takes hold in a democracy and grows and exploits weaknesses in media and institutions to eventually take over and institute a one-party autocratic state? Just spitballing here.Adam McKay:  I have my idea for my next movie, and it's not that, but it's a close neighbor of what you just said. It's about two blocks up and one block over. I will tell you this: from doing this movie and from doing Vice, The Big Short, Succession, and Q: Into the Storm, it does seem to always come back to big loads of dirty money clogging up our system. If Don't Look Up, Vice, and The Big Short were about heart attacks, dirty money is the plaque. It's what's blocking the arteries. I think I have an idea that's kind of funny and interesting; I haven't started writing yet, but I'm interested in it. As far as the autocratic rule, we have a bunch of projects at our company that are in development that circle around and get near that. We're constantly looking for ways to play with that.David Roberts:   My other topic I want somebody to take on, that I have also been thinking is un-fictionalize-able: A lot of the problems in our country now are because the electoral college is fucked up, and Senate representation is skewed, and gerrymandering; all these very boring, procedural, structural, institutional issues are playing a huge role in this minority being able to basically control the country. How on earth do you get the American movie public excited about filibusters? Adam McKay:  We're doing a movie called Rat Fucked, starring Paul Dano, that's about how they gerrymandered America — the story of who came up with the idea. We've sold that, that's happening at Hulu. Another idea I'm thinking of gets into a lot of that procedural stuff, and I think I’ve found a way to wrap it in a fun bow. That stuff is wildly interesting. I think it's just how it’s told to the public; it's presented as boring. David Roberts:   What you need is Margot Robbie in a bath talking about filibusters.Adam McKay:  We need the “Margot Robbie in a bubble bath” channel where all the news is read. But yeah, we are working on one about gerrymandering that's actually already sold and set up, and then this other one gets into a lot of that procedural stuff. That's exactly why we started this company, Hyperobject Industries. I believe that stuff is interesting, and that there is a way to do it. We have a lot of projects circling around exactly what you're talking about.David Roberts:   Awesome. Well, I will look forward to those. It’s a good time for geeks in the movie world.Adam McKay:  Absolutely. We've always been pretty comfortable in the movie world. Movie world’s always been kind to geeks.David Roberts:   Yes, but usually geeks trying to appeal to the vaguely imagined jocks of their youth. Now they're just straightforwardly appealing to one another.Adam McKay:  I do have to tell you, full disclosure, I've been lifting weights this entire interview. David Roberts:Are you getting swole?Adam McKay:I'm so swole. I'm all swoled up, bro.David Roberts:   It's time to go in front of the camera.Adam McKay:  Well, man, thanks for having me on. This was a pleasure. I can't believe this is the first time. Like I said, I've been reading your stuff and following you for a long time. Thank you for everything you do.David Roberts:   Well, likewise, thanks for making this movie. Wow, did it stir things up. You achieved that.Adam McKay:  It did. I hope it continues to. Honest to god, that was maybe the most enjoyable conversation I've had during the entire press run of this. I'm not kidding. I needed that badly. My soul needed that.David Roberts:   I'm sure you've been going through it. Good luck enduring the rest of it.Adam McKay:  Absolutely, man. Be well. This is a public episode. 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My last substantial post of last year was a summary of where things stand with Congress and climate. I ended by reiterating my confidence that Sen. Joe Manchin (D-WV), who has been such an impediment throughout the process, would find his way to supporting some form of the Build Back Better Act, the Democrats’ last and only hope of taking substantial action on climate change. Mere days later, Manchin threw up his hands and said, “I can’t get there — this is a No on this legislation.” So much for that prediction. However! As we head into 2022, there are signs that Manchin’s tantrum was less apocalyptic than it appeared. His objection to BBB — which, to be fair, was his objection for months; the Democrats just thought they could eventually get through to him — is that the bill contains a bunch of new programs that are only funded for a year, or a few years, and since they will inevitably be renewed (according to Manchin), the bill’s price tag is deceptive. He wants to include only programs that are funded for the full 10-year term of the bill, under the artificial budget cap he himself imposed. That would mean stripping a number of popular programs out of the bill. The process blew up because the other Democrats refused to believe that he was serious about doing so much damage to the legislation. However, as Eric Levitz writes in New York magazine, as anachronistic, stupid, and cruel as Manchin’s views are, he’s not willing to move on them. For any bill to pass, it will have to conform. Insofar as there’s any good news in this young year, it is that Manchin seems positively disposed toward the climate portions of the bill. “The climate thing is one that we probably can come to an agreement much easier than anything else,” he told reporters on Tuesday. Other Democrats have expressed confidence that the climate portion of the bill will survive in some form. This is in part because Manchin already stripped the bill of any sticks, anything that might penalize fossil fuels (most notably the Clean Electricity Performance Program). What’s left are $555 billion worth of carrots: grants, tax breaks, and other money showered on every form of clean energy, from R&D through demonstration projects through commercialization — very much including carbon capture at fossil fuel power plants, a Manchin fave. “There’s a lot of good things in there,” he said.Somewhat oddly, Manchin also supports some of the reforms to federal oil and gas leasing that are in the House version of the BBB. All of this seems to at least imply that he’s still open to some kind of bill. What he appears to want is a version of the BBB that, at a minimum, strips out the Child Tax Credit — which can not possibly fit under his cap on spending ($1.75 trillion), at least not when funded for 10 years, at least not if the bill is to contain anything else. The Child Tax Credit kept millions of children out of poverty last year and could potentially cut child poverty by almost half. It ran out at the end of the year, and now at least 50,000 children in West Virginia stand to slip back into poverty. Manchin is choosing to allow millions of children to suffer a little more based on vague and ill-founded worries about inflation. It’s ghoulish and unforgivable.Nonetheless, it is what it is, so Democrats will need to put together a diminished form of the BBB that protects the climate provisions. They still need to try; the stakes are too high not to. “If they can’t pull this off, then we failed,” John Podesta told The New York Times. “The country has failed the climate test.”There are no signs of any such efforts thus far. “There is no negotiation going on at this time,” Manchin said on Tuesday, the same day Senate Majority Leader Chuck Schumer (D-NY) said, “I've talked to Sen. Manchin numerous times during the break.” Oof. Still, also on Tuesday, a group of senators expressed renewed determination to get the climate portions of the bill over the finish line. "We're going to get this done, come hell or high water,” said Sen. Brian Schatz (D-HI), “and right now, we have both hell and high water.""Frustration isn't a strategy,” said Sen. Tina Smith (D-MN), in what I can only interpret as a direct attack on yours truly. “We have to get it done." Volts is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.The senators even made a point of noting that Sen. Kyrsten Sinema (D-AZ), who has been such a problem on other parts of the bill, is “nothing but supportive of the climate provisions here," as Schatz put it. Schumer, as usual, seems determined to press on. He said, “I intend to hold a vote in the Senate on BBB, and we’ll keep voting until we get a bill passed.” Good, I guess?Meanwhile, what Senate Dems are actually moving forward on is some kind of filibuster reform or exemption intended to enable them to pass a voting rights bill without Republicans. In a letter to colleagues, Schumer said:Over the coming weeks, the Senate will once again consider how to perfect this union and confront the historic challenges facing our democracy. We hope our Republican colleagues change course and work with us. But if they do not, the Senate will debate and consider changes to Senate rules on or before January 17, Martin Luther King Jr. Day.Here, again, Schumer seems confident he can move Manchin and Sinema, despite no sign from either that they are willing to budge. "Anytime there's a carve out, you eat the whole turkey,” said Manchin. He said he would rather exhaust his ability to negotiate with Republicans, and from all indications, his capacity to negotiate with Republicans is infinite. Meanwhile, there’s been no word about any of this from Sinema, who was last on record opposing any changes to the filibuster. At least for now, there’s no reason to think that this isn’t just wheel-spinning symbolism, which is going to delay moving forward on BBB. On the other hand, the fate of the republic is at stake, so maybe a little symbolism is warranted. If Manchin and Sinema think the filibuster is more important than the right of every American to vote, let them say so affirmatively and publicly, on the record. On the other other hand, the fate of the atmosphere is also at stake, and if Democrats dump all over Manchin for blocking filibuster reform, it might piss him off and make him even more recalcitrant on BBB. In the coming weeks and months, there will be votes on both these bills and we will have a much better sense of where things stand. The path to (some measure of) success, on climate or much of anything else, is narrow and getting narrower, but it isn’t closed off yet.In the meantime, we begin the year where we ended the last one: in deep uncertainty and anxiety, as matters of unfathomable significance are decided by a small handful of vain old white guys. So much fun.Anyway, I apologize to the political obsessives on the list — I suspect there are quite a few of you — if you knew all this stuff already. I thought it would be worth getting everyone on the same page, with a clear view of the stakes. I’ll be back next week with some wonkery and a very fun podcast guest. 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, messaging expert Anat Shenker-Osorio — a researcher, campaigner, author, and speaker — discusses the elements of an effective message, what’s required to spread messages, and the right way to test whether they’re working. We also get into the best way to craft climate messages and the current debate over “popularism.”Full transcript of Volts podcast featuring Anat Shenker-Osorio, December 20, 2021(PDF version)David Roberts:People involved with politics are obsessed with messaging: what to say, and how to say it, to sway voters or politicians to their side. Everyone has strong opinions about messaging, but almost everyone’s opinions are drawn from their personal experiences, preferences, and priors, which are rarely reliable guides to what works in practice. There are, however, people down in the trenches doing real message testing in the field, as part of real grassroots campaigns, like Anat Shenker-Osorio, head of ASO Communications and author of the book Don't Buy It: The Trouble with Talking Nonsense about the Economy. She helps campaigns communicate for a living, and she discusses the lessons learned from successful campaigns on her podcast Words to Win By. Shenker-Osorio is a co-founder of the Race-Class Narrative project, which is developing a coherent response to America’s familiar racial dog-whistle politics. She has advised several environmental campaigns and done a lot of thinking about the right way to message around climate change, as well as its place in the race-class narrative. As long-time readers know, I have a love-hate relationship with the subject of messaging, so I’m happy to dig in with Anat to figure out what we really know about good and bad message testing, the elements of a good message, how to actually get messages to voters, and how to talk about climate change in a compelling way. Without further ado, welcome, Anat, to Volts. Thanks for coming on.Anat Shenker-Osorio:  Thanks for having me.David Roberts:   I'm excited to talk about messaging. I want to start with a distinction. The side of messaging that people think about most often is word selection: choosing your words, slogans, catchphrases, and verbiage for your ads. But the other side of messaging is about the infrastructure that allows you to get the messages you've developed to voters: the spokespeople, institutions, media outlets, social media pages, civic groups, all the mechanisms that allow those messages to reach their intended audience. It's always seemed to me that it is on this latter side of messaging where the left is really getting its ass kicked. It seems like the right has a robust ecosystem that's very coordinated and capable. If they have a new message — you know, “Critical race theory is taking over schools” — they can get that to the ears and eyes of every single conservative in the country basically at will. The left, it seems to me, lacks that ability. What does it need to do to build that kind of infrastructure? Anat Shenker-Osorio:  There are so many ways into this question. First, of course, I agree with you. That's something that I have remarked upon myself, frequently: A message nobody hears is, by definition, not persuasive. It doesn't matter how fancy your survey or RCT or field test, everything that you did to create that thing: If nobody hears it, it didn't persuade them. I think it is too simple a distinction to put those things in two buckets, and here's why. Part of the problem we have is, if your base won't carry the message, then the middle isn't going to hear it. Yes, it would be amazing to have an actual functional media that would properly do its job. Yes, it would be amazing to have a left-wing specialized media infrastructure of the size and capability of Fox News and OAN and conservative talk radio and all the rest of it. Yes, those would all be great things to have, and we would be much, much better off. But we do have the knowledge that a message is like a baton that needs to be passed from person to person to person, and if it gets dropped anywhere along the way, it is, by definition, not persuasive. Why was it possible for the left to spread the message “love is love” and “love makes a family” and with it shift culture, shift perception of gay and lesbian unions (what used to be called gay marriage and is now properly called marriage equality)? Why was it possible in city after city and then state after state to spread a message of Fight for $15? Why was it possible in the post-election for us to create content, with a crackerjack team of designers and artists, that said Count Every Vote? Those memes were viewed more than a billion times, and that's just a domestic US audience. There are times when we have broken a signal through the noise, despite all of the disadvantages that you point to — and those have been the times when we have properly attended to that wording question. So again, I don't disagree with your diagnosis, I just think that the way that we resolve this issue actually has to do with the messages that we're putting out, at least partially.David Roberts:   Let's talk about how we figure those messages out, then. Another one of my longstanding beefs with the endless messaging talk that I hear — and I'm mostly coming from a climate perspective — is: I frequently read studies and survey groups telling me how people react to messages when they see them in isolation, one at a time, in the calm of a focus group, or assembled by an academic. Then they take the different ways that people react to these messages in that context and vastly over-interpret them regarding what kind of messages work out in the world. It's pointing out the obvious, but the way people encounter messages in the wild bears no resemblance to that whatsoever. When people encounter messages in the wild, it's in the midst of the noise and chaos of our modern information system. They get partial messages, and the messages are surrounded, often, by counter-messages from the other side. So the way people encounter and absorb messages in the real world seems to me so distant and different from the way these focus groups are done that there's just not a lot to learn from the latter about the former. So how do you messaging experts, or testers, figure out how a message will perform not just in isolation, but in the scrum of an actual political fight in the actual world?Anat Shenker-Osorio:  I feel like you are an audience plant for me, raising up all of my core beefs and things I yell and scream and write and tweet and bang my head against the wall about. Yes, you're absolutely right. In-channel testing is any kind of empirical test where you are providing stimuli to the respondents and asking for their feedback about that stimuli in the same moment at which they are receiving it. So that's a telephone survey, that’s an online dial test; even more sophisticated processes like using a randomized control trial (RCT) and not a sequential survey is still in-channel testing. Same with focus groups. First of all, you are literally paying them for their attention. That is what you are doing: providing them a financial incentive to listen to your thing, watch your thing, and tell you about your thing. You have their undivided attention — or at least you have their somewhat undivided attention, because remember, a lot of this testing is happening digitally, which means that, like in the way when people are on Zoom calls, they also have seven tabs open. So you're still getting some level of distraction, because people are not just listening to you. The same goes for when they're taking a phone survey; they're also making dinner and yelling at the kids or whatever's going on. But yes, it is what you say. So how do we deal with that? We understand that each tool is useful for its purpose and not for another. Things like in-channel testing — qualitative and, more importantly, quantitative — can be used in order to understand whether one frame is more effective than another, or whether one frame is more comprehensible, logical, clear than another. What it can't be used to do is determine effect size. You can't see an effect size in an in-channel test, say, “This moved people 8 percentage points,” and believe that that's actually what's going to happen in the field. That's not true, for the reasons that you say.Number two, you can design those tests to be closer to the real world by making them legitimate combat tests, having people in the survey exposed to more opposition messaging than our own — which, of course, is what is happening in the real world — and testing our messages against what the other side is saying. This is one of my 5,700 beefs with a lot of academic research, that they do this test-tube experiment where they don't expose folks to opposition messages. Next thing you can do, you can be a lot smarter about what you are rating the message to do. That's when we're doing message testing, which, by the way, is not what's happening most of the time. What's happening most of the time is that people are doing polling; they are doing research to take the temperature, not doing research to change the temperature (metaphorically speaking). That, of course, is the way that the right wing approaches all of this testing. They don't say, “let's figure out where people already are on our issue.” Something that I say frequently is that it's not the job of a good message to say what is popular, it is the job of a good message to make popular what we need said. So apropos the example that you offered, they started their critical race theory attack, and even today, most people don't know what critical race theory is. They have no idea about it.David Roberts:   They certainly didn't start by polling and finding out that Virginia parents were natively concerned about critical race theory. Anat Shenker-Osorio:  Because they weren't. They were like, what is that? Is that the name of a coffee shop? A new kind of NASCAR race? What is that? They decide where it is they want to take people, and then they use message testing to figure out the articulation that is going to be most effective of the path that they have already decided to walk. They do message testing to try to change the temperature; they don't do testing to take it. When we're doing message testing, it means not asking for facile self-reported ratings like, “did you like this message? Did you find it convincing?” That is asking people to have a conscious response about something that is happening unconsciously.David Roberts:   Right. This is one of my beefs about polls and surveys too: People are not necessarily the best judges of what's going on inside their own heads. Anat Shenker-Osorio:  They are definitively not. People only tell you what they think that they think. Because most of thought is unconscious, so we don't actually know why it is that something moves us or doesn't. So what does it mean to structure a better test? It means, for example, to structure a test in which you ask people a pre-question like, “would this make you want to convert the entire electricity grid to solar, even if it meant you had to pay this much more in taxes?” Why do we ask that that way? Because we don't want it to be a unicorns and rainbows question where people are like, sure, whatever.David Roberts:   Do you like good things? So many poll questions are like that: Do you like positive things? People say yes, and then they send out the press release: People love this thing!Anat Shenker-Osorio:  Right. So you ask a higher-bar-ask kind of question, and then you expose people in different treatment groups, relative to a control that doesn't get any message, to a single message, and then you ask them a post-question. Or, you don't ask, you do a control, and you just ask the hard question after, so that you can attribute a difference between the control group that got no ad or message or slogan to the treatment group. Then you can say, “the people in treatment group C, who got message C, they had this however-many-point shift.” You can just do better research. Then finally, the gold star is to do in-field testing, to use in-channel testing to get the lay of the land, understand what is probably best, and then do much better research — if you can afford it, because in-field testing is expensive. Instead of asking for people's self-reporting, you do something like send 100,000 postcard A to voters in this block, and send 100,000 postcard B, and then you actually measure the voter file. You're not asking people, you're checking.David Roberts:   That seems much more likely to give you good information.Anat Shenker-Osorio:  Yeah. People who know what they're doing do a combination of all of those things.David Roberts:   Good segue to my next question, and I guess we can use the critical race theory example to get at this question too. It seems to me one of the reasons that they were able to start from nothing — parents having no idea what critical race theory is — to parents freaked out about critical race theory in an incredibly short period of time is that they were not starting from nothing. The background presumptions of the critical race theory message — Blacks are getting unfair advantage, whites are constantly criticized, whites are the most discriminated-against group in America today, they're trying to program your kids to be socialists at school — that foundation has already been laid through 40 to 50 years of repetition, of having institutions and politicians and media outlets say that over and over and over again. So when you come along with this new example, most of the persuasion job is already done. The parents who have been hearing your stuff all those years are primed to believe this new example. Similarly, I think back to the cap-and-trade debate in 2009-2010: All the right had to do was say, “oh, this is a tax,” and that got them 95 percent of the way they needed to go, because the foundation was already in place. Everybody's been told for 50 years now: taxes are bad, they're unfair, government’s incompetent. All of that’s already in place, so it's pretty easy to just apply it to the next thing. In contrast, the left has not spent the last several decades laying that kind of foundation. There are, as far as I know, no left think tanks or organizations devoted exclusively to telling Americans that government works, government is good, lots of the things we have in our society are traceable to government. So because that foundation isn't laid, they're just starting from scratch every time, with every new messaging battle. In the cap-and-trade example, the other side is saying “tax!” and then the left is saying, “well, no, you see, we set the emissions at x level, and then you divide it up into permits, and you can trade the permits, but over time the cap on the permits … blah, blah, blah …” People tuned out a long time ago. Total asymmetry there. The right has been doing messaging about its foundational worldview, repetitively, over and over again, through multiple channels, over decades, and the left just isn't doing that. It approaches every new issue or every new piece of legislation or every new fight from scratch, and it's constantly on the back foot. So my question is a) do you agree with that diagnosis, and b) if so, how can that be remedied? Whose job is it to be laying that basic foundation, the basic left worldview, beneath all the more specific points?Anat Shenker-Osorio:  I definitely agree that that is an exact characterization of what the right has done successfully — that they basically have one message, or very, very few messages. What you're describing is essentially the oldest political trick in the book: divide in order to conquer. The right-wing use of dog whistles, of racially coded speech … not just in this country. I just came home from Brazil: it's Bolsonaro; it’s Duterte; it's Orban in Hungary; it's Brexit, Boris Johnson; I lived in Australia, it's the discourse of the right wing there. There's nothing new under the sun. Basically, there is one storyline they have, and it is to pick some Other to vilify and tell aggrieved white people, white men in particular: this is the source of your pain and problem, and here, we are going to alleviate it for you. We are going to deliver to you this wonderful vision of a world in which we “Make America Great Again.” We will take you back to a time when you were on top of the pecking order: women knew their place, and Black people did too, and so on and so forth. They accomplish all this magically, through the use of this racially coded speech, without actually explicitly naming race, thereby maintaining some measure of plausible deniability, and acting affronted that we dare to say that they've somehow made racist remarks. They say, “I never mentioned race. I just talked about illegals,” when, of course, when they talk about “illegal immigrants,” what comes to mind is not the Swedish backpacker who has overstayed their visa. This is exactly what they've done. It's why critical race theory fits so seamlessly; they just keep remixing the exact same story. That is why it is so effective. And it is absolutely true the rest of what you say, that the left: we are very smart, and we're very creative, and we like to make a brand new thing for each thing. David Roberts:   We are so clever — way too independent-minded to ever just go around repeating what other people say, goodness no.Anat Shenker-Osorio:  There is an entire thing I call “not-invented-here syndrome,” and partly, that is structural. Look at anything that used to be a mass movement — the labor movement, the women's movement, civil rights — that has gone through the maturation process all of these things go through and become professional organizations. I don't want to use any one example, because it sounds like I'm impugning that sector, when this is just part and parcel of the architecture. If you're going to be a Sierra Club, a World Wildlife Foundation, a National Resources Defense Council; if you're going to be a Planned Parenthood, a NARAL, a National Women’s Law Center: you need to have your own message, your own branding, your own campaign. Otherwise, what are you showing to your funders to say, “look what we did! This is what we did this year” or “this is what we did this quarter. This is why you should give us more money.” Responsible nonprofit executives want to pay their employees’ salaries. That is not a bad thing to want to do; you should want to be able to pay the people that work at your institution. So the incentive is against having an echo chamber. There is a financial incentive on the left toward this cacophony of differentiated messaging, which is completely and totally anathema to persuasion and mobilization. It is a visible contrast to how things used to be when we didn't have professionalized organizations: we had a women's movement in which undifferentiated people were in the streets all chanting a similar thing, just to take one for instance.David Roberts:   The right has professional organizations, but does not seem to have this problem. What is the difference between our billionaires and their billionaires?Anat Shenker-Osorio:  Their billionaires cut checks for general operating. The end. It is a nested set of ironies that they believe in this highly competitive, highly individualistic, highly unconnected worldview, and yet the way that they operate in political space is through an incredibly clustered, pro-social, collective endeavor. The way that organizations, think tanks, spokespeople, etc., are funded on the right is that they are given money to just do their thing and are not required to produce justifications. I have 7 billion critiques, and one of them is of progressive philanthropy. Philanthropy is, at its core: If you're giving people money, that is supposed to be about the redistribution of power; otherwise, it is meaningless. If you give people money and you are still saying to them, “well, how did you spend my money? What did you do? What was the outcome? What was the output? What were you planning? What was this accounted for?” That's no different than me giving you a sweater for your birthday and every time I see you, being like, “why aren't you wearing my sweater? My sweater is so much better than what you're wearing! Why are you wearing that thing?” That's not a gift, if I am asking you endless questions. You're either giving away your money and therefore your power, or you are simply pretending and still wanting to retain your power by asking endless questions and not allowing the work to get done. So that is my giant diatribe. To your actual question — who is doing this on the left, who is responsible for this — obviously, I am not objective, but there are examples. There are campaigns where we have successfully done this. Let me just start with one. In 2018, after having done a giant body of research that we call the Race-Class Narrative (RCN) — which was created in part and in partnership with a legal scholar named Ian Haney López, who wrote the book Dog Whistle Politics and is one of the originators of this idea — we did this giant messaging project, which we have since implemented in many places, starting most robustly with Minnesota in 2018, with a campaign that we named Greater Than Fear. As part of Greater Than Fear, we had scripts about taxes, public education, driver's licenses for undocumented immigrants, solar panels, etc. What that meant was that not only did we have Greater Than Fear posters and memes and social media channels and ads, organizers who were going door-to-door during that midterm campaign were echoing each other. It was successful enough that the politicians in the state — Tim Walz, who was running for governor and now is governor, the two senators who were running, folks at the state level — they adopted that messaging. Several of them had a closing get-out-the-vote tour which they named their Greater Than Fear Get Out the Vote. So there are times we've done that. We've done that with Fight for $15. We've done that with “love is love” and “love makes a family.” We've done it with Red for Ed, the educator strikes that swept in a wave in 2018. There are times we have done this; it's not that we never have. When we have done it, it has been because organizations — unions, civil society, candidates, parties (to the extent that it is legally permissible, obviously not across the firewall) — have pre-agreed that the most important thing is that we need to be able to break a signal through the noise. They have suspended ego. They have gotten funders to recognize that this is incredibly important. We did the same thing in the post-election. The message was “count every vote, count every vote, count every vote, count every vote” — instead of saying “let's call it a coup” or “let's talk about Trump” or “let's talk about authoritarianism.” Then the message shifted to “voters decided.” That seems like an facile and simple thing; it was actually incredibly well-structured, well-coordinated, and well-executed, and that message got across.David Roberts:   It seems like a sane movement, or let's say a sane billionaire, would be seeking such successes and then trying to fund the organizations behind them so that they can build on those successes in the future and repeat those same narratives in other contexts to the point that those basic narratives become very familiar. That just doesn't seem to be happening.Anat Shenker-Osorio:  I agree with you, although you might want to rethink the phrase “sane billionaire,” because I don't know if that's a thing. David Roberts:   Ours have a different kind of insanity than theirs, I guess. Ours are the wrong kind of insane. Anat Shenker-Osorio:  But also, how does one become a billionaire, which is an entire separate conversation. There is no innocence in capitalism. That aside, I only know what I know, and what I've done, and what I'm fighting to do more of, and it's the reason why I emphasize campaigns we have won and how we have won them. It is doing exactly what you have described: having a simple, coherent message that recognizes that politics isn't solitaire and that messages don't land in a vacuum. People are hearing relentlessly from the opposition. If we're not attending to what they're saying, then our message isn't going to work. The message has to be engaging to the base. But the answer, at least from my vantage point, about why people aren’t doing this, is because there is still a live debate, unfortunately, going on in left and left-of-center parties — again, not just in the US, but I also work abroad — around what it is that works. There is a level of fear, people clinging with their fingernails to what little we have, what little gains we've made. When people are acting from a place of fear, their behavior is never that great. People are terrified to try new things. The truth of the matter is that a lot of what passes for polling and message testing on the left is the world's most expensive form of copy editing. People are essentially testing ecru against offwhite against eggshell. They're testing a series of messages which are largely the same argument but with tiny wordsmithing details. Then it's a garbage in, garbage out problem; message D or message E or message whatever is marginally better, but it's not that distinct from the other ones, because people are not considering the range of ways we could make that argument. The reason for that, which you already know, is because the kinds of solutions that you advocate, that I advocate — the kind of world that we know that we need — is not the kind of world that a lot of people who are in charge presently actually want. So it is challenging to do projects, to do testing, to develop messaging that makes an impassioned, interesting, engaging, humorous, base-mobilizing case for true economic prosperity, for a livable planet, for an end to poisoning ourselves voluntarily in order to make a handful of billionaires richer. People don't want to do that. The basic truth of the left is that we have to beg the master for money to buy tools to take down his house.David Roberts:   That is very well put. In the spirit of thinking through these foundational left messages that can undergird more specific case-by-case messages, you refer to the race-class narrative. That's become a big thing in recent years. Can you explain what the basic building blocks of the race-class narrative are and talk a little bit about how it can be applied to climate change?Anat Shenker-Osorio:  The race-class narrative is a messaging architecture. It is a way of talking that has a very deliberate order and structure, and that order and structure is built off of years of testing what is more and less persuasive. So first, let me talk through the structure, and then I’ll give you an illustration of what it sounds like in language. You begin the first sentence with a shared value that explicitly names race, or explicitly names any kind of difference that the right wing has been exploiting in order to divide us and impede our progress. So you start off with: say what you're for, say what you're for, say what you're for — in contrast to a standard leftist message, which is almost always either, “boy, have I got a problem for you,” “this is the Titanic,” or “we’re the losing team, we lost recently, so you should join us.” So far we have not seen a lot of efficacy out of those three hellos that the left is keen on. So it begins with a shared value. It then moves from value to villain. It names the problem that we're confronting second, not first, and it does so identifying a clear cause, as opposed to saying things like “homes were lost,” “the gap between rich and poor is growing,” “children of color are experiencing the least qualified teachers,” or, to get into your area, climate change has now in our language become personified to a degree that, “climate change is raising sea levels. Climate change is making the weather weird. Climate change is creating these deadly storms. Climate change is this and climate change is that.” The issue with that sentence structure is that you can't actually pass a law on climate change any more than you can pass a law to make it be high tide at 10:30 a.m. You can pass laws about human behavior. So what we find is that climate change itself has become this frozen phrase which is unhelpfully meaningless and seems to be a causal agent, instead of talking about what actually matters to people, which is air you can breathe, water you can drink, and a statement that at least implies causation, like “damage to the climate.” Damage to the climate suggests that someone is actually doing the damaging, as opposed to “this thing is occurring.” As opposed to, it is some sort of self-inflicted wound, or climate change itself is an agent. It's a little bit like talking about “systems and structures.” There's no f*****g “system and structure,” there are people making decisions, and those people have addresses. Unless you talk about it in those terms, you don't have an organizing model. Are people supposed to mass mobilize at systems and structures’ house? Are they supposed to do a Twitter storm at systemic inequality? There's no organizing to be done around that kind of problem definition. So step two is that it names the problem with a clear villain. Then step three, it resolves the cognitive dissonance intentionally created in that contrast between the shared value opening and the villain problem statement second, and that closing vision statement is one of cross-racial solidarity toward the kinds of outcomes that almost every single one of us desires. What does that actually sound like? For example: “No matter what we look like, or where we come from, most of us want to care for our air, land, and water and leave things better off for those to come.” Second sentence: “But today, a handful of politicians and the fossil fuel CEOs that fund them are trying to divide us from each other, hoping that if they can distract us from the fact that they are profiting off of poisoning, our families will look the other way, while they put the clean energy solutions we know work out of our reach. By rejecting their lies and joining together across race, across origin, across ZIP code, we can make this a place that we're proud to leave our kids for generations to come.” Something like that. I mean, I would wordsmith it and make it shorter, but that's basically it in a nutshell. In the middle, you have to call out what the other side is doing and ascribe motivation to it. Otherwise, you are not guarding against the efficacy of their lies.David Roberts:   And what they're doing is always some version of dividing us so that they can screw us.Anat Shenker-Osorio:  Pretty much. If they can convince you that Juan is taking your job, when Juan is in fact sitting in front of Home Depot trying to get some day labor — and, by the way, does not possess the means to make public policy, because he's denied even the ability to vote in the country in which he lives and works and contributes — if they can convince you that Juan is taking your job, then you will not notice that, in fact, Jeff Bezos took your job. There's nothing new under the sun. If they can freak you out about “law and order” or crime, or if they can make you believe that the problem is “those people who just don't want to work” or “those people who just don't come in the right way” or “those people who just won't teach their children the right thing,” then you can be made to hate and resent government and to be against collective solutions, because your understanding of government is as an evil force that takes away from “hardworking people,” who are coded as white, and gives it away to “profligate people,” who are coded as black and brown. Then you resent them, and you don't like the government, and you're willing to vote against it. Everything is some big government socialist program that is evil and taking away your freedom.David Roberts:   It's sort of hilarious that they've been at this anti-government thing for so long now that government spending is self-evidently bad in their world, government regulation is self-evidently bad in their world – and that's what governments do. That pretty much covers the waterfront. So governments doing what governments do now is self-evident evidence that something nefarious is afoot, on the right.Anat Shenker-Osorio:  Completely, and that government acting, having collective action, is somehow an abrogation of your freedom. In point of fact, I don't know about you, but when I go to a restaurant, I'm not really keen to be on the hook for deciding whether or not the kitchen is full of salmonella. I don't know much about that. I would like when I enter a building for the roof to be load-bearing; I know absolutely nothing about how you check that, I just like to have it happen. When I flush the toilet, I'd like the stuff to go away. So partly, it's been on us. One of the other messaging mistakes I point out frequently is that we like to sell the recipe instead of the brownie. We like to have our policies be our message, and that is a very bad idea. People like paid family leave, don't mistake me, but you know what they like even better? When we say, “you're there the first time your newborn smiles.” They like clean energy, but you know what they like even better? “You can feel great about the water you drink and the air you breathe.” We have to sell things in terms of the payoff, in language that gets at the lived experience of being inside that better policy.David Roberts:   Let's talk a little bit more about some of your work you've done on climate messaging. One of the things I found interesting is what you found out about the Green New Deal. Tell us what results popped up when you tested that.Anat Shenker-Osorio:  I say this gingerly because of the point that I made earlier, which is, again: it's not the job of a good message to say what's popular, it's the job of a good message to make popular what we need said. So to the extent that the left could make the Green New Deal a thing, it's important to have an undergirding, galvanizing slogan that is central and so on. That said, what we have seen in the research is that, at least the last time we tested it, “Green New Deal” is not a particularly effective thing to say. Just the name of it, without knowing other details — which most people do not and never will because most people do not have the bandwidth to be paying attention to that degree — it signals not that ambitious, not that much. A deal is a bargain. It doesn't tell people “your life is going to be better,” as a phrase.David Roberts:   It's hard not to draw the comparison here to critical race theory again. “Critical race theory,” to most people, was an empty phrase, and they introduced it with the explicit goal of filling in that phrase with everything that made parents nervous or anxious. The emptiness of it at the beginning was almost part of the point, because they could just paint whatever they wanted into it. You could imagine the same thing happening with Green New Deal: We introduce this empty phrase, and then the entire left mobilizes to fill it in with everything good that people associate with clean water and all the rest of it. But instead, we introduced this phrase, and instead of filling it in, the right filled it in, and the left poll-tested it and found that it was already filled in, so they retreated from it. So the right did the “critical race theory” thing to it, too. I always thought the Green New Deal was incredibly powerful because it was mostly empty at the beginning and it could have been associated with all the positive things we want to put in this new world — but we just didn't have the wherewithal, the institutions, the mentality. It's such a telling contrast, those two cases.Anat Shenker-Osorio:  You were just making a more succinct articulation of what I was trying to say, which is that if you have a vessel and there's some utility to that vessel, then yes, it should be your job to fill in that vessel for people. I was simply reporting to you people’s present evaluation of the vessel. That was not, “do this, don't do that.” I was delivering information.David Roberts:   Yes. It's not filled in yet. Or filled in mostly negative. Anat Shenker-Osorio:  So the choices are: Do you say, this is enough of a vessel, there is enough agreement among organizations, institutions, politicians, etc. on the left that this is our boat and we're in it, so we better make it the nicest possible boat? In which case, yeah, let's do it, and let's be very clear and good about instead of selling the recipe, selling the brownie; instead of selling the names of policies, actually selling the outcomes, which is a big part of the problem in the way that the Green New Deal has been described. It's been very much taking your policy out in public, which is unseemly, should not be done. Or you can say, no, we need a vessel that is more clearly positive, which — just to give you a shot in the dark, out there illustration — would be something like the Freedom to Thrive Act, which at least suggests to people, oh, that sounds like a thing I want. I like thriving, I like freedom. Freedom is a value that's closely associated with the US. That is true across demographic groups. When you ask respondents, “what value do you most closely associate with the US?” across the board, without exception, the number one thing named is freedom. That is a value that the right wing has claimed as their own for a long time, when in point of fact, it is a deeply contested concept. Core to marriage equality, the freedom to marry; core to the civil rights movement; core to the women's movement. There's a lot in freedom that is very much a progressive idea. And not for nothing: the renamed bill is Freedom to Vote. That was a very deliberate choice.David Roberts:   Getting back to these core narratives, one of the elements of the right’s core narrative is negative liberty: freedom means people will leave you alone. Freedom means fewer rules, fewer restraints. There’s this other way of looking at freedom, which is by taking collective action and structuring markets or societies in certain ways, we enable people to have things they otherwise wouldn't have been able to have. So they have the freedom to get a good education; a good education provides you a certain kind of freedom, but it's a positive freedom. It's a freedom of new opportunities, not just people leaving you alone.Anat Shenker-Osorio:  In fact, in this project that we just wrapped up, looking at how to make a full-throated positive case for public education, soup to nuts, in the era of this anti-CRT nonsense, the name of our messaging guide is Freedom to Learn. Because one of the things that popped up as most potent and effective, besides saying most of us believe that our children should be taught the truth of our history, the good and bad, so they can reckon with the mistakes of our past and understand our present …David Roberts:Do most of us believe that? Anat Shenker-Osorio:  Yeah, in fact around 80 percent of people do. David Roberts:   I guess the other percent are loud. Anat Shenker-Osorio:  That's exactly what's going on. But what I was going to say is that Freedom to Learn, this idea that our kids deserve the freedom to learn who they are, where they're going, where they've come from, is very powerful, and an effective rejoinder to this CRT thing. What the right does so incredibly well is avail themselves of one of arguably the most persuasive things that anyone has in their arsenal, which is social proof. So it looks to the average person who is not paying attention to political details when they turn on their local news and see a bunch of parents yelling and screaming at a school board: “Huh, I guess people who look like me, who have kids that are like mine, think this way.” When in point of fact, both in our polling and in all of the publicly released polling, 80 percent, 83 percent, 85 percent of parents (it depends which poll), when you ask them, want kids to be taught the truth, the good and bad of history. They don't want books censored. They don't support these things. It is not a popular position. But the right doesn’t care what is popular. They understand that the job of the message is to keep their base engaged and enraged. Because as long as that base — even if it is only 15 percent, 12 percent, 20 percent, depends on the issue — is yelling and screaming, that is what is persuasive to the middle. The middle is reading social cues to understand what is common sense and how the world works. Meanwhile, parents on the left, the vast majority of whom actually do support a clear, honest, race-forward, inclusive public education curriculum, they're not out there saying anything.David Roberts:   Yes, this is such an important point. I feel like the left, especially Democratic leadership, doesn't get this. A lot of people don't know that if you look at polls from the early 1960s, you find that most people were fine with equality, most people thought racism was bad, most people were ready for the Civil Rights Act. In terms of mass opinion, it was in the right place. But everybody thought that everybody else was still racist. Everybody thought that they were the exception or the minority. So how do they find out that they're not? How do they find out that they actually have the majority? It requires someone standing up and yelling. So this will on the right to suppress the people who actually are in the majority from standing up and yelling and signaling to one another, they can keep minority opinions in place. You can see that happening now, too. I bet it's the same on climate change. If you get people in isolation and ask them, “Should we go for it? Should we clean everything up?” most people will say yes, but that's just not who they see yelling when they turn on their TV. I think that's so important. Anat Shenker-Osorio:  It’s absolutely the case that we are not just creatures driven by emotion, we are creatures driven deeply in our political beliefs by our identity, and our desire to preserve, protect, and maintain identity. So we are constantly reading in our environment social cues that tell us, what does my kind of person think? Take a very specific case. It is common and frequent for folks on the left to do a lot of hand wringing and to verbalize, “oh, XYZ demographic group aren’t voting: young people aren't voting, Latinos aren't voting, African-American turnout is down.” We can see through experimentation — this is not self-reporting — that when you send the message to demographic groups, “your demographic group isn't voting,” it lowers voting. Similarly, talking about vaccine refusal increases vaccine refusal.David Roberts:   That's like the thumb trap: the harder you try to get out of the trap, the more you're in it. If you watch what consumes political dialogue on a day-to-day level, it's constantly the right acting, accusing, establishing things, and constantly the left talking about what the right is saying: fact checking it, refuting it, but talking about it, constantly. So it's what gets talked about.Anat Shenker-Osorio:  My standard joke is that if the left had written the story of David, it would be a biography of Goliath. We talk about our opposition all f*****g day and then we're like, “oh, why don't people want to be motivated?” Because the truth of the matter is, the thing that we see in test after test, is that believe it or not, our opposition is actually not the opposition. It's cynicism. It's not that people don't think our ideas are right, it's that they don't think our ideas are possible. So why bother even trying, when we speak relentlessly about our opposition? Talking about Trump in 2016 is how we got Trump.David Roberts:   What a nightmarish thought that is. We conjured him into the presidency through our fear.Anat Shenker-Osorio:  When you take your kid to a pool and your kid is running, a competent lifeguard will yell, “walk!” because if you yell “don't run!” at a kid, they will run, either out of defiance or because you literally just yelled “run” at them. The core messaging lesson when I do presentations is, “forget everything else that happened today, I just want you to remember one thing: Say what you're for. Say what you're for. Say what you’re for.” You have to tell people what we want them to do, and stop telling them what we don't want them to do. We have to yell “walk!” not yell “don't run!” In the climate space, I know, for example, from my work in Australia, the percentage of jobs in the coal industry is something like 0.1 percent. But when the average Australian is asked to take a guess what proportion of jobs are in coal, people guess anywhere from 5 to 20 percent. I would guess if you asked Americans, it would be the same. They wildly overestimate how many jobs in our economy are in the coal industry. Why is that? It's because we talk about coal all the f*****g time. We talk about coal every goddamn day. So it is no wonder that people routinely overestimate its centrality, importance, size, contribution, and number of jobs.David Roberts:   One of the big things that lefties in the climate space who view themselves as virtuous talk about a lot is a just transition for coal workers. They think, by making that a common point of discussion, they are signaling their good intentions and their virtue, that it's safe for coal workers to embrace this, blah, blah, blah. But I worry that we're having the effect you're describing, which is vastly overstating the significance and number of coal workers in the world and making the transition more difficult. Now you’ve got everybody thinking about this beleaguered group that's going to get ground up by the transition and overestimating their size, etc. How do you navigate that?Anat Shenker-Osorio:  The way you navigate that is by having more of an overarching message. I'm wordsmithing it on the fly, so forgive me, it's not going to be copy edited, but it would be something like: “Whether we're Black or white, rural or urban, young or old, we all want to be able to care for our families and do work that we're proud of that leaves things better for those to come. But today, a handful of politicians and the fossil fuel CEOs that fund them want to keep people tied to a wage they can't live on and a job that is hurting their families, our air, and our water. By joining together to demand both clean, reliable energy that's homegrown, made from the wind and the sun, and jobs for people coming from any industry, we can make this a place …” You just do it like that, more broad strokes, instead of zeroing in on, “we're going to specifically rescue you from the coal mine,” which does reinforce this idea that we're talking about several million people, and we're not.David Roberts:   I want to get to popularism before we're done. The idea behind popularism is that the commanding heights of the Democratic Party have been overtaken by young, educated, urban liberals, but the majority of Democratic voters are still non-college-educated white men. The idea is that all these effete urban liberals are pushing organizations to message and talk in a way that flatters their worldviews and their sensibilities. They cite “defund the police” and all these policies that only resonate among that crowd, but do not resonate among the non-college-educated white men that Dems still need to win. The idea, I think, is Dems need to readjust their messaging to appeal to the great, not particularly progressive, non-college-educated white masses, the way that used to be very en vogue. That was Bill Clinton's whole thing. Obama, to some extent — this is an argument popularists make that has some merit — really did go overboard in almost every case to at least rhetorically check that box, to acknowledge the worldview and fears and sensibilities of non-college-educated white people, even as he was pushing for liberal progress. All the messaging organs have been taken over by these educated liberals, and they're out of touch with the masses, and that's why the masses are turning to Trump or tuning out. So we're going to end up with an entirely urban, educated demographic, which, because of the various distortions of the American constitution and governmental system, are clustered in cities and cannot form majorities. Basically: the left is screwing itself. You want to be tuning your message to the sensibilities of the bulk of your audience, and we're not doing that right now, and we should do that, say the popularists. What's your take on all that?Anat Shenker-Osorio:  Oh, boy. First of all, have you ever taken The New York Times “guess my political ideology” quiz?David Roberts:   No, not yet. Anat Shenker-Osorio:  You take that quiz. The first question it asks you is your race, and if you tell the quiz that you're white, the second question that it asks you — do you want to guess what it is? It's trying to figure out political ideology. It's taking you through essentially a decision tree; what's the second question you think it asks?David Roberts:   I would think it would be about education.Anat Shenker-Osorio:  But you'd be wrong. Because in point of fact, education is not the strongest predictor of political ideology. David Roberts:   Wait, second guess: the population density where you live. Do you live in a city or a suburb or rural area?Anat Shenker-Osorio:  Good guess, but it’s religion. It’s religiosity.If we want to operate in a simplified world where we only look at people as two variables, or we only look at white people as one variable — which is a silly thing to do — the most determinative single variable is not education level, it's religion. So first of all, this idea of education polarization as the most meaningful data point is demonstrably false. There's some veracity to it, obviously, we're talking about tendencies, etc. But if you're trying to reduce a massive population, which is white men, then the way to cut through it, if you're only making one cut, is whether or not they're evangelical. That's the first thing. The second thing is that, what the popularists fail to understand is what we spoke about earlier: that politics is not solitaire. If we choose to be silent about race, about police, about immigration, about all of these things that are purportedly anathema for us to talk about, that doesn't mean those conversations go away. It means that the only thing our voters hear is the unrelenting race-baiting of the other side, which means our economic promises cannot cut through. We've seen this over and over again, when we go to our voters and say, “I'm going to increase your wages, you're going to have better working conditions,” the voter has just been canvassed two hours earlier by some right wingers saying, “Juan is taking your job” or “you can't even drive into the city because it's too dangerous and you're going to be murdered and there's crime.” Our economic promises have no ability to break through and penetrate because the right wing is engaged in this unrelenting scapegoating and fearmongering, and if our messages are not attending to that, they don't work. Number three: Let's take Obama as an example. Let's take, more specifically, his attempts to appease frightened, anxious white people, these non-college white people, by deporting more people than any previous president and using the discourse of getting tough on the border and cracking down and deporting and deporting and deporting. I'm just stating facts. That is what occurred. It’s not a message, that is what happened. Republicans still said he was for open borders, still said he was creating this entire ethos and era. Obama himself said that he had to be tough on the border, he had to crack down, he had to deport. Same with Clinton cracking down on welfare — this idea that you have to genuflect at the altar of the terms the right puts on you.David Roberts:   And worse, that policy is the right way to respond. As though policy will change the rhetoric, as though policy will change the discussion. One of the first political posts I ever wrote in my entire life was yelling at Obama about this. You can change policy all you want, but people's political opinions are only tenuously connected to policy realities, if at all. That's just not the lever. If you want to change politics, you don't pull the policy lever, you pull the politics lever. You do politics.Anat Shenker-Osorio:  How else do you explain that the former senator from MasterCard, who is now our president, is a “socialist?” How do you explain that Chuck Schumer reportedly wants to defund the police? The point is that regardless of what Democrats actually say and do, people's opinion of Democrats is not made out of what Democrats say; it is made largely out of what Republicans pillory them with. How would it possibly be the case that public opinion about what someone stands for and does would actually just be made out of what they said? That would be great, but that is not the reality. So the entire idea is a house of cards. It exists only inside of the rarefied environment, like you said earlier, of a survey; it doesn't stand up to the real world. I forgot what point I'm on because I could make 67 other points. This is just so deeply absurd. It really is as facile as your financial advisor saying to you, “you know, you should make more money and spend less money.” How is this a theory? “You should do popular things.” That is very “Deep Thoughts with Jack Handey.” David Roberts:   It seems to me it involves the implicit admission that Democrats are powerless to change what is popular.Anat Shenker-Osorio:  And that somehow people's opinion of Democrats is made out of what Democrats say and do, which, again, it isn't. And then number … whatever number I'm on: again, going back to our earlier conversation, if your words don't spread, they don't work. The fact of the matter is that the Democratic base is largely people of color, and if we are not attending to issues of racial justice, climate, women's rights, immigrant rights, etc., we have a mobilization problem. We have people not turning out. Something people do not realize is that Biden won 2016 voters by around a 1.5 to 2 percent margin; he won 2020 first-time voters by 12 points. It matters to turn out new people. Those voters that turned out in 2018 and 2020, in those unprecedented turnout elections, I call them vital voters.That’s it. If we are going to hold on in ‘22, our only hope is to engage in what I call “re-turnout” — get those people back. The way that we get those people back is speaking authentically and full-throatedly to the things that they care about in their daily life. For a Democratic base, that means that they should be able to wander through their neighborhood and make it home without worrying whether or not the police are going to kill them. If we are not standing for people's basic human rights, why would they turn out to vote for us?David Roberts:   I am trying to imagine the paradigmatic non-college-educated, white, exurban man who was going to vote against Democrats, but then Joe Biden says something implicitly racist, and the white guy says, “hey, well, he seems like a guy like me, I'm gonna vote for him instead.” I am having trouble envisioning this swingable group of voters in the middle that are going to respond to signals like this relative to how they respond to economic conditions or other big forces. I have trouble seeing these messaging tweaks having the large-scale effects that the popularists seem to think they will.Anat Shenker-Osorio:  Completely. Again, they're testing these things inside of this fake environment where you're paying people for their attention. They're not actually attending to the fact that you have to get your base to carry that message. Let's take a concrete example. For years and years, there was this advice that we should talk about raising wages in terms of, “we should raise wages because we have a consumer-driven economy and people need money so they can be customers in our stores.” Or, “hard work should be rewarded; we can't survive on $7.25.” The issue with both of those narratives is that they eclipse from view the fact that the money to pay people comes from their work. It doesn't come from the magical money pants of the “job creators,” which is a term that was deliberately selected in order to mirror that biblical creator who may or may not reside in the sky. So this language that “we should pay people more so they can be customers in our stores,” which is language that was created in order to make us seem like the reasonable people in the room, the adults in the room who get things done and are practical and are not asking for outlandish things — I don't know about you, but I don't wake up in the morning like, “I'm going to check on the GDP, I'm just really passionate about economic growth. I'm super excited to go take to the streets to march for the GDP.” People aren't going to go and act on behalf of that. Instead, in the Fight for $15, the message swapped to, “people who work for a living ought to earn a living,” which is a fairness frame. It's a moral high ground. People would go strike and march on behalf of that. They would not march and strike on behalf of, “this will increase GDP growth.”David Roberts:   This better approach to messaging, with better research and a more proactive, aggressive mindset: Is that catching on with young activists? Because if there's one thing we've learned over the last few years, it’s that existing Democratic leadership, whose average age is 137, seem completely at sea in the modern information environment. Is there a young vanguard coming up that's better at this?Anat Shenker-Osorio:  Yes, absolutely. You see them on your TV; they're called the Squad. There are definitely folks who are much better and who are making an impassioned, full-throated case for legitimate multiracial democracy, a livable future, everything else, the whole list. But I self-identify as pathologically optimistic. I can not do my job unless I'm optimistic; I have no choice, I have to believe that something else is possible.I am also in a dark place, mostly because what the GOP learned from 2020 was that it was far too easy for people of color to vote and far too hard for them to cheat, so they've set about fixing both of those “problems,” and Democrats seem to be pearl-clutching and finger-wagging in response.David Roberts:   Can you be a deer in headlights for four solid years? Apparently, yes.Anat Shenker-Osorio:  Unless we can still have elections in which everyone could potentially vote and all of those votes could potentially be counted, I'm not really sure how we do everything else. That said, yes, there are people who are doing much better. There is greater sophistication. There are people who are being more thoughtful and deliberate about engaging the base, understanding that that is, in fact, the way that you persuade the middle. Even if your only aim was to get white people in Midwestern diners to flip, still the way that you would do it would be to engage the base, because in point of fact, social proof is real. We know that what moves white people in Midwestern diners is seeing other white people out marching, for example, during the summer of protests after George Floyd's death. David Roberts:   The Women's March was so powerful in that respect. Anat Shenker-Osorio:  People's minds change when they're like, “oh, people who look like me think this. Okay, I guess I think this. Cool.” But the main thing is these vital voters of the surge in ‘18 and ‘20. That is what distinguishes 2022 from every previous time that we've been in a midterm, in which (spoiler alert) the incumbent pretty much without exception gets a shellacking. But this time around, what is different is that we have just come off of two cycles in which we mobilized an enormous number of new people and got them to the polls. So it is an arguably easier lift, because it is not turnout, it is re-turnout. We have a lot of hard evidence of what did it, so we simply need to recreate it.David Roberts:   You see a debate now in Democratic circles. One side is saying, “our election messaging in 2022 and beyond needs to be about the concrete changes that Democrats have made to make your life better — our ‘kitchen table’ issues.” (I'm so sick of hearing about the kitchen table.) “What we do for you,” not, “why they’re bad.”The other side says, “the fact that the other side is explicitly, right out in the open, planning to steal the f*****g election seems relevant. That is something we ought to convey to voters, because for the vast majority of them, they don't know, even though it's happening right out in the open.” It's social proof again. I can understand the average voter looking out and saying, “they seem to be openly talking about putting election officials in place that are willing to steal the thing for Trump; it seems bad, but I don't see other people freaking out, so I guess I'm not supposed to freak out.” So the other side of the messaging fight would be: people need the social proof that yes, this is a freaky, bad, apocalyptic thing coming down on us. They need to see that it's okay to freak out about it. This is the quintessential messaging debate of ‘22, and ‘24, I expect. Where do you come down on that?Anat Shenker-Osorio:  It definitely is. First of all, I think it's just — real talk — going to be very, very hard to sell a topline message which is, “Democrats delivered for you. Aren't Democrats lovely?”David Roberts:   Reality does constrain your message somewhat. Anat Shenker-Osorio:  That's tough. Unless we come back in ‘22 and we're in a completely different reality, which, hey, I would take. I would love that. Maybe they have some deep thoughts and reflection over the new year and they come back and actually pass things. That'd be cool. Yes, I'm aware of the filibuster, and yes, I'm aware of the 60 vote threshold. I know all of the things, so I'm preemptively striking against that. Whatever. People view Democrats as being in the majority, and that is the level of detail that they understand, the end. So first, it's very hard to sell the “Democrats delivered for you” message. Right now what we are seeing in nightly focus groups — like weekly testing, we're testing stuff all the time — is basically “a plague on both your houses.” “All of them are useless.”  “There's no good here.” Or, “politics, I’m just going to look away from it.” David Roberts:And guess who that serves? Anat Shenker-Osorio: Yeah. So the message is a little bit of both, and this is the distinction that I want to draw: first of all, it can't make Democrats the protagonist. It has to make voters the protagonists. Always, you want to talk to people about what you want them to do, not about the candidate or the party or whatever. So, “in ‘18 and ‘20, you turned out as vital voters to defend our democracy and move us forward together.” And yeah, you can do a shout-out: “And that means we lifted blah-blah-blah kids out of poverty, and we delivered these stimulus acts, and we did blah-blah-blah” — whatever you can lift up — but make it the accomplishment of the voter, the audience that you're targeting, and say, “now you are going to do it again.” The message that they used, for example, in the Georgia runoff — hot off the heels of Georgia swinging in 2020, they had a runoff in January — they said, “Our work is not done yet.” That is what they said to their voters. “Our work is not done yet. You did this historic thing. You're the reason. You delivered, and you're going to do it again.” Obviously, it was also about Warnock, and Ossoff, and “Mitch better have my money,” but even “Mitch better have my money” is a voter agency message. It's saying, “you have the power here, and you're going to make this happen.” So first of all, voter as the protagonist. Then, with respect to the shitty, terrible things that we say about these shitty, terrible people, is inspiring defiance instead of fear. That's the distinction I want to draw on the negative side: It's really, really important that we not give in to fear-based messaging, but rather have the negative emotion that we evoke be anger and defiance. Fear is an inhibiting emotion in most people. It evokes fight or freeze, but for the majority of people, it's freeze, not fight, and it only evokes fight in people who are already activists, not in people who need to engage. So what is the difference between fear and defiance? That's the difference between saying, “if Republicans are in power, it's going to unleash a new wave of Covid, you're going to get sick, you're going to die. F**k. Holy s**t.” Or, “Republicans are going to create these armed insurrections and they're going to come with militias.” Fear, fear, fear. Instead, a message that says, “if Republicans think they're going to silence our voices and block our votes, they’ve got another think coming.” “We showed up and we showed out in 2020, and we're going to do it again.” “Not on our watch, not in our state, not in our country, back the f**k up.” That's the distinction.David Roberts:   Well, your lips to their ears, let's hope. Thank you so much for coming on and taking all this time. This is so incredibly relevant right now. Communicating well is always important in politics, but we are at a juncture where it's so vital and being done so poorly in so many places. So thank you, and good luck with your work, and we will probably chat again sometime; maybe we'll reconnect in a year or two and see how we can message about the wreckage. Anat Shenker-Osorio: Wow.David Roberts:I mean, the surprise victory.Anat Shenker-Osorio:  Exactly. You have to manifest.David Roberts:   Positive thinking. All right. Thanks so much, Anat.Anat Shenker-Osorio:  Thank you. Have a wonderful holiday. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.volts.wtf/subscribe

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