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This is it, folks! The home stretch. It’s time to pay attention, call your members of Congress, and mobilize your networks. Congress is working on what is likely to be its last big shot at climate change policy for a decade or more. If things go well, the legislation will include a clean energy standard (CES) and clean energy tax credits, which together would revolutionize the US electricity system. If things don’t go well, there will be no substantial climate legislation for many years to come.That’s the only question being decided: Will we get a CES and tax credits, or will we get nothing that will tackle fossil fuels this decade? That’s the binary. It’s time to focus.Looking around, it doesn’t seem like clean energy supporters, climate hawks, or the left more broadly really get that. So let’s talk about why this is such an important moment and what’s at stake. The reconciliation bill is likely the last chance for big federal climate legislationThe Democratic approach for a while now has been to proceed along dual tracks. On one track, there’s the bipartisan infrastructure bill, hammered out by a group of just over 20 senators from both parties. On the other track, there’s the budget reconciliation bill, which is meant to contain … everything else in Biden’s agenda. The former needs 60 votes; the latter can pass with 50 Democratic votes.This has always been a fraught and delicate strategy. It could crash and burn in any number of ways. But so far, at least, it is hanging together.The bipartisan group unveiled its bill this week; it is slowly inching toward a vote, though Senate Minority Leader Mitch McConnell (R-Ky.) is doing everything he can to slow it down and gum it up. It contains decent chunks of money for things that will indirectly help clean energy — transmission, demonstration projects, R&D — but it lacks anything that will directly confront fossil fuels in the coming decade, the sine qua non of adequate climate policy. As Robinson Meyer argues in The Atlantic, it is not a climate bill, not really. There’s no guarantee the bipartisan bill will pass, and there’s no way to know how the Senate’s bipartisanship fetishists, Sens. Joe Manchin (D-W.V.) and Kyrsten Sinema (D-Ariz.), will react if it doesn’t.But whether it passes or not, when it comes to decent climate policy, it’s all about the reconciliation bill. There won’t be another bill this big while Democrats control Congress, and they won’t control Congress for long. What Democrats are able to get through in the reconciliation bill is likely to be the last big federal climate legislation for a decade at least. This is the key thing to understand, so I’m going to repeat it: What Democrats are able to get through in the reconciliation bill is likely to be the last big federal climate legislation for a decade at least.(You may be thinking: can’t Democrats do another reconciliation bill next year? Yes, they can, but the midterms will be in full swing, moderates will be feeling even more cowardly than usual, political appetite for big spending will have dried up in the face of a recovering economy, and focus will have turned, hopefully, to voting reform. This one is it.)Absent substantial federal voting reform — which is looking less and less likely, certainly nothing anyone should bet on — all signs point toward Republicans taking back the House in 2022. It’s unclear what will happen in the Senate, but regardless, if the GOP controls either house, no climate legislation will pass (and no voting reform). Republican presidential candidates can win despite larger and larger losses in the popular vote. And the chances of Democrats controlling both houses of Congress again are only getting dimmer. The structural advantages that favor the GOP in the US system are only tilting further in its favor, while the party is actively extending those advantages with a wave of voter-suppression laws at the state level and an accompanying wave of gerrymandering, which alone could win the GOP the House in 2022, even absent any Dem seats being lost. The GOP is protected in this endeavor by a hyper-conservative Supreme Court (which, by the way, could get even more conservative if the disastrously vain Stephen Breyer hangs on until there’s a Republican president again).The conservative movement in the US is attempting to engineer one-party control of US government (along the lines of their new hero, Hungarian autocrat Viktor Orban). There’s no way to know how successful the endeavor will ultimately be, but it’s a pretty good bet, given current trends, that Democrats won’t control the presidency and both houses of Congress at the same time again for a long while. Last time they lost full control (just before a wave of gerrymandering in 2010), it was a decade until they got it back.That all begins in January 2023 — which makes this year’s reconciliation bill the Democrats’ last big shot at climate and clean energy policy. There are two key clean-energy policies on the tableClimate folk are prone to endless policy arguments; everyone has their favorites. But most of those arguments are immaterial right now. Democrats have lined up behind a menu of clean energy policies in line with Biden’s climate plan. What’s on that menu is what might get in the bill. Might. If it’s not on that menu, it’s not going to get in. There’s no carbon tax. There’s no cap-and-dividend. There’s no prohibition on new fossil fuel infrastructure. You may support any and all of those policies, but they are not live options in the reconciliation bill. Right now, political pressure is best aligned behind options that actually are on the menu. Two in particular are immensely important — together, they would be transformative. The first is a Clean Energy Standard that would reduce electricity sector greenhouse gas emissions 80 percent by 2030. (Biden’s plan calls for 100 percent by 2035, but a reconciliation bill can only extend 10 years out.)It’s not actually going to be a standard, per se, because you can’t pass regulatory standards through reconciliation. Instead, it’s going to be a system of fines and payments that will incentivize utilities to increase their proportion of renewable energy to meet the targets. It’s called a clean electricity payment program (CEPP). A CEPP actually has some advantages over the traditional CES’s and renewable portfolio standards (RPSs) commonly seen in states. For one thing, it’s more progressive: the money to drive the transition comes from federal coffers (via taxes on corporations and the wealthy) rather than from electricity rates, which are regressive. If you’re interested in the details of how a reconciliation-friendly CEPP will be structured, see this piece from Ben Storrow and Scott Waldman of E&E, or this thread from Princeton professor Jesse Jenkins:The end result will be the same as a conventional CES: the US electricity grid will reach 80 percent decarbonization by 2030, which is an achievable but still incredibly ambitious target. As I’ve said so many times, nothing is more important to deep decarbonization than cleaning up the electricity grid. It’s the core of the “electrify everything” strategy. The second is boosted and expanded clean energy tax credits. The investment tax credit (ITC) and production tax credit (PTC), for solar and wind respectively, would be renewed, but various forms of tax credits would also be extended to energy storage, hydrogen, carbon capture, and other key clean energy technologies. (The details are in flux; for a blueprint, see the Senate Finance Committee’s Clean Energy for America Act or the House Ways and Means’ GREEN Act.)Tax credits will provide the supply push; the CEPP will provide the demand pull. The result will be an enormous surge of clean energy projects and jobs. This is the core of good climate policy: pushing fossil fuels off the grid over the next decade and replacing them with zero-carbon energy. There are other good climate provisions on the Democrats’ menu for reconciliation as well. I would love to see a Civilian Climate Corps. I’d love to see more money for public transportation and an electrified postal service fleet. Lots of smaller climate provisions might make it through just by virtue of not drawing much notice, which would be great.But the CEPP and the tax credits are the one-two punch needed to make a real short-term difference in the energy system. And they are on the menu.Manchin is likely to be skeptical of the CEPP. Although carbon capture counts as clean energy under the program, every analyst understands that the practical effect is going to be to ramp up renewables and ramp down fossil fuels on the grid. Manchin doesn’t actually want that.I have no idea if public pressure will have any effect at all on Manchin, but it couldn’t hurt. Might as well try it.The perilous path ahead for reconciliationEveryone on the left is aware that the reconciliation bill is the last big legislative train leaving the station, and every interest group wants a seat on it. Climate policy will be competing with other Democratic priorities. Especially as Sinema and Manchin arbitrarily reduce the total size of the bill, as they surely will, the factions of the party will be fighting it out over a shrinking pie.It is far from a sure thing that the CEPP and tax credits will survive negotiations. It’s all being decided right now. Everyone who cares about US climate progress should put aside their personal projects and preferences for a few weeks and speak in a unified voice. Call your representatives. Push the groups you’re involved with to make noise about it. It’s going to be the CEPP and tax credits or nothing big for climate. If both those policies are put in place, it could set the US power system on a new course and strengthen American credibility at the upcoming COP26 international climate meeting. If they slip through the cracks, climate will have to settle for scraps and the US will surrender all hope of meeting its climate targets or influencing others to do the same.For the next few months, this is all that matters. If you’ve ever considered getting involved, now is the time.Bonus dog 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

(If you prefer listening to reading, just click Play above.)I’ve spent a lot of time on Volts discussing energy storage. As those who read my battery series know, lithium-ion batteries (LIB) currently dominate short-duration storage — in devices, cars, and buildings — and the durations they are able to economically provide are creeping up, from two to four to eight hours and beyond. However, as I explained in a separate post, the grid of the future, run primarily on renewable energy, will also need long-duration energy storage (LDES), capable of discharging energy for days or weeks. As that post covered, there are two basic challenges facing LDES. The first is technological: what sort of materials and processes can hold large amounts of energy for cheap?The second is economic: how can an LDES company make money? Currently, the role they propose to play on the grid (“firming” renewable energy) is being played by natural gas power plants. In a theoretical future clean-energy grid, those plants will be gone, or at least they will be saddled with the additional costs of carbon capture, but for now, they exist, and they are quite cheap. Consequently, there just isn’t much of a market for LDES, as battery industry veteran Cody Hill points out:A hot new startup called Form Energy believes it can overcome both challenges.Form Energy has the technology; now it needs customersI mentioned Form Energy in a previous post. The company — a kind of battery dream team, with Mateo Jaramillo (who built Tesla’s energy storage business), MIT’s Yet-Ming Chiang, and other veterans of previous battery companies — has finally revealed the battery it has been working on lo these many years. It uses iron as a cathode and air as an anode, in a process called “reversible rusting.” The best place to catch up on the news is Julian Spector’s piece. (Canary is doing amazing coverage of energy storage.) See also Russell Gold’s piece in the Wall Street Journal for deeper background on the company and its technology. Neither piece, however, gets deeply into the subject that most interests me, which is the second challenge: where to find markets. So I called Jaramillo to find out more. Not surprisingly, he sees a clear pathway to profitability. “We see a very compelling business environment for us over the next 10, 20, 30 years,” he says. “It's as much as we can go after, frankly.”Early markets for clean firmingIn terms of its function on the grid, the best way to think of Form’s battery is not as storage, but as the equivalent of a carbon-free natural gas plant. Rather than methane, it runs on renewable energy as fuel, but from the grid’s perspective, it provides basically the same service, which is reliable, dispatchable generation that can run for 100 hours or more when needed. The problem, as I said, is that natural gas is quite cheap. According to conventional wisdom, natural gas plants will dominate the firming game until policy begins driving them out of the system (or forcing them to install carbon capture). That’s what the models show: when decarbonization of the electricity grid (using mostly renewables and LIBs) goes past about 80 percent, costs begin to spike and more expensive clean firm options like LDES and nuclear become competitive. That conventional wisdom may be correct at the 30,000 foot level, but closer to the ground, things are much more complicated and varied. As Jaramillo notes, “there's no time at which the country will uniformly be at 80 percent renewables.” In fact, some nodes on the grid are close to that already. More to the point, Jaramillo says, there are a variety of situations in which grid operators need the services a natural gas plant provides but are leery about (or prohibited from) investing in gas.“Every single US coal plant in the system today has a retirement date on it,” he says, “and all of those dates are sooner than they were five years ago, and they will probably be sooner in two years than they are today.” That means lots of utilities around the country need to replace large chunks of power capacity.To date, they’ve been doing so with natural gas, but that may be changing. Remember, Form is not talking about entering the market in earnest until 2025. Between now and then, Jaramillo expects two macro trends to continue: first, renewables will keep getting cheaper and cheaper, and second, utilities will grow more wary of natural gas. “It's not full steam ahead to replace coal with natural gas,” he says. “Indiana [utility regulators] recently rejected a 850-megawatt combined-cycle gas plant and they specifically cited the risk of stranded assets.” Similar rejections of natural gas have taken place recently in Minnesota and Virginia. Great River Energy, a Minnesota-based electricity co-op, is hosting Form’s first demonstration project, a one-megawatt system capable of discharging for 150 hours continuously. Great River needs to replace lost coal capacity, but while they are under no statutory mandate to phase out natural gas, they “know how to read what direction the wind is blowing,” Jaramillo says. They don’t want to build a natural gas plant with a 30-year rated lifespan only to face a carbon price or a clean electricity standard (CES) forcing its retirement in 10 or 20. In the long term, gas is on the way out, and every natural gas plant built from here on out is a gamble that could very well come up stranded. That will only be more true in 2025.There are other reasons utilities might be trending away from natural gas. In California, of course, they are forced by laws mandating rapid decarbonization — and more states, like Washington, Colorado, and Oregon, are joining it in rapidly decarbonizing electricity. In the New England grid, they’re having trouble importing enough natural gas through the pipelines in times of peak demand; LDES could be the easiest way to ease grid congestion. In grids like Texas’s, natural gas has proven an extremely unreliable hedge against extreme cold snaps; LDES could help improve reliability margins for ERCOT, Texas’s grid operator.To achieve clean energy targets, many jurisdictions will have to overbuild renewables, increasing curtailment, or wasting of renewable energy. LDES could reduce or eliminate curtailment, allowing renewables to produce at full capacity whenever the weather is aligned. That would have the effect of further boosting the value of existing renewables — something else natural gas plants can’t do.Finally, there are commercial and industrial (C&I) entities who want to race down the decarbonization curve faster than the jurisdictions they are located in. Both Google and Microsoft have committed not just to running on 100 percent clean energy, but to running on 100 percent clean energy 24/7, throughout the year. Accomplishing that feat will require them to procure their own clean firm generation. C&I customers are the fastest growing segment of market demand for renewables and could prove a key early market for LDES. There’s no mass market for LDES yet — nothing like the hundreds of gigawatts we may eventually need — but there are several localized markets, adding up to several gigawatts of needed capacity, which is more than enough to keep Form busy from 2025 forward. Natural gas is as weak as people believe it to beSo that’s Form’s case that it can find a market foothold. It sounds plausible to me, but then, I’ve heard lots of plausible-sounding stories from startups over the years … only to read about dead startups a few years later. Time will tell, etc.Two things give me some hope that Form might make it. The first is that the capacity price point it now claims ($20/kWh) is extremely low, already close to the price range it will need to start cutting into firm generation. And that’s just the beginning. If it can find a market and start scaling up, it should be able to bring down costs substantially. (It is basically building its demonstration project by hand; standardization and scale will bring enormous savings.)“We see, in a reasonable timeframe, being able to get to $10/kWh, all in, at the system level,” says Jaramillo. If it can pull that off, Form can start substantially cutting into gas markets. And “we are far from being done thinking about how we might displace ourselves,” he adds. “One characteristic of the team we built is that it's phenomenally creative.”So Form will be getting cheaper alongside renewables. The second thing is the sociology of the transition away from gas. Up until fairly recently, gas was seen as a “clean fuel,” reducing coal pollution. Elite opinion is currently lurching in the other direction. None other than Democratic Senate Majority Leader Chuck Schumer has publicly acknowledged that natural gas does not qualify as clean energy. Gas is the dominant fuel on US energy grids, and still growing, which has given it an aura of inevitability. Adding to that aura is a belief among many utilities that renewables and LIBs can not provide a reliable alternative to gas. They believe they need lots of dispatchable power. Those fears are likely overblown, especially at this early stage in the energy transition, but they are real. So the turn away from natural gas is tentative and scattered for now. If, in the latter half of the 2020s, alternatives like Form emerge, which allow utilities to build more of the cheapest generation available (renewables), the turn against gas could become more precipitous. Just as fear is contagious, so is FOMO. It’s one of the most important questions in clean energy right now: whether the shift in US electricity away from natural gas will be slow and steady or whether it will happen the way Hemingway’s character famously went bankrupt: gradually, then suddenly. It depends, in part, on psychology. The weaker gas looks, the more utilities will shy away from it. If Form — or other LDES — proves viable, it will represent the last piece of the puzzle, the key to a reliable, fully decarbonized grid. That could push US utilities closer to the point of a decisive break with gas. 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

Fossil fuel subsidies are a vexed and peculiar topic. On one hand, everyone seems to agree they’re bad and should be eliminated (it’s in Biden’s jobs bill, for instance). On the other hand, they never go anywhere. In part, it’s because we lack a clear understanding of what constitutes a subsidy and what impact they have. Analysts are forever arguing over exactly what counts, trying to tally up the total subsidies fossil fuels receive, but there are very few bottom-up attempts to document the concrete effects of subsidies on the economics of oil and gas projects.That’s why I was interested in this new paper in Environmental Research Letters, by Ploy Achakulwisut and Peter Erickson of the Stockholm Environment Institute and Doug Koplow of Earth Track. It breaks down the effect of 16 specific, direct US fossil fuel subsidies on the profitability and emissions of US oil and gas production. As for those subsidies, there are three basic categories: “forgone government revenues through tax exemptions and preferences; transfer of financial liability to the public; and below-market provision of government goods or services.” (Note that this study does not get into unpriced environmental externalities like air pollution and greenhouse gases, which are themselves a kind of subsidy.)Subsidies either enrich oil & gas investors or spur new oil & gas projectsOne reason there aren’t many bottom-up analyses like this is that it’s devilishly difficult to pin down the economic effect of a subsidy. Doing so always involves a counterfactual baseline — what would have happened absent the subsidy. Anytime counterfactuals are involved, there lots of assumptions to make and variables to account for.To take just a couple of examples, the effect a subsidy will have on the decision whether to invest in a new oil and gas project will depend on oil and gas prices and the hurdle rate. (The hurdle rate is the rate of return investors require to fully cover risks; more aggressive decarbonization efforts will presumably mean more risk and thus a higher hurdle rate.) The study actually runs several different scenarios based on different values for those variables, producing a cost curve for each region of the US. It gets complicated.For clarity, they chose to highlight two scenarios: 2019’s higher oil and gas prices with a 10 percent hurdle rate and 2020’s lower prices with a 20 percent hurdle rate. Here are the results:We find that, at 2019 average market prices of oil and gas, the 16 subsidies could increase the average rates of return of yet-to-be-developed oil and gas fields by 55% and 68% over unsubsidized levels, respectively, with over 96% of subsidy value flowing to excess profits under a 10% hurdle rate. At lower 2020 prices, the subsidies could increase the average rates of return of new oil and gas fields by 63% and 78% over unsubsidized levels, respectively, with more than 60% of oil and gas resources being dependent on subsidies to be profitable under a 20% hurdle rate. The way to think about this is, subsidies can have one of two negative effects, depending on market circumstances. With higher prices and a lower hurdle rate, “only 4 percent of new oil and 22 percent of new gas resources would be subsidy-dependent, pushed into making profits,” Achakulwisut told me. That means most of the projects didn’t really need subsidies and the extra money is all going to bigger profit margins for oil and gas investors.With lower prices and a higher hurdle rate, “subsidies would matter a lot,” she says, “and 61 percent of new oil and 74 percent of new gas would be subsidy-dependent.” The subsidies would directly lead to more production. Achakulwisut summarizes: “In one case, it's going to profit, amplifying the incumbent status of the oil and gas industry. In another, under more aggressive decarbonization policy and low oil and gas prices, it's actively working against the climate goal by spurring additional production.”Either of those effects is bad. In 2021, we don’t want bigger profit margins for oil and gas companies and we don’t want more oil and gas production.One subsidy to rule them allWhat’s interesting is that the benefits to oil and gas are not spread evenly over different subsidies. In fact, one in particular dwarfs the others: the expensing of intangible exploration and development costs (“intangible drilling costs,” or IDC), a policy that’s been around for over a century.The chart below shows the “average effect of each subsidy on the internal rate of return (IRR) of new, not-yet-producing oil and gas fields, at average 2019 prices of USD2019 64/barrel of oil and USD2019 2.6/mmbtu of gas.”As you can see, in every region, the IDC deduction is the dominant subsidy. It “increases US-wide average IRR by 11 and 8 percentage points for oil and gas fields respectively.”The IDC deduction has been the subject of controversy for ages. The Committee for a Responsible Federal Budget (CRFB) has a good breakdown here. A definition: Intangible drilling costs are defined as costs related to drilling and necessary for the preparation of wells for production, but that have no salvageable value. These include costs for wages, fuel, supplies, repairs, survey work, and ground clearing. They compose roughly 60 to 80 percent of total drilling costs. Since the dawn of the federal income tax code in 1912, US law has allowed oil and gas companies to deduct all these costs up front, rather than as they are incurred. The idea is to defray the risk that an exploration project will come up dry; in practice, it’s a fat financial reward at the front end of every project. The industry and its defenders offer an array of arguments in favor of the deduction, which CRFB adeptly summarizes:Supporters of the deduction argue that oil and gas and exploration and development is a high-cost industry, and allowing expenses to be recovered immediately encourages companies to invest. They explain that altering the deduction could result in job losses, since wages are included in the deduction.More broadly, supporters point out that the oil and gas industry receives the same treatment that other manufacturing or extractive industries receive, and are merely a target because of the now-controversial nature of reliance on fossil fuels. Finally, supporters of energy independence often support the IDC deduction, as it promotes further exploration and development of wells within the United States.The thing is, all those arguments are true. But the subsidy is still bad.Yes, deducting IDCs encourages investment in new oil and gas projects and creates new jobs. That’s what subsidies do! It just happens that we no longer want to encourage investment in oil and gas. Yes, other manufacturing and extractive industries get similar deductions. The difference is that we want to encourage investment in those other industries and we no longer want to encourage investment in oil and gas. That’s the whole point.The issue is not whether the subsidy does what it’s designed to do. It does. The question is whether we still want to do the thing it does. We do not. People have been calling for removal of this subsidy for decades. It’s still a good idea.Oil and gas also benefits from offloading its environmental regulatory costs onto the publicThe other subsidies that substantially boost oil and gas profit margins are “regulatory exemptions that lower [oil and gas] production costs at the expense of the health and safety of workers and the public.” Two such exemptions shift financial liability for well closure and reclamation from companies to state governments, which saddles places with lots of abandoned wells — Texas, Pennsylvania, and Oklahoma, for example — with an average of $10 billion a piece in remediation costs, which well exceeds what those states have set aside in cleanup funds.Another allows oil and gas to treat solid wastes from extraction as non-hazardous, despite the fact that they frequently contain toxic chemicals or radioactive materials. This reduces per-well operational costs an average of $60,000.Keep in mind, this study didn’t try to tally up the public health benefits of removing these subsidies. Others have done so, like a recent study from Yale’s Matthew Kotchen that tried to tally up the “implicit subsidies” to US fossil fuel producers represented by “externalized environmental damages, public health effects, and transportation-related costs.” His conclusion:The producer benefits of the existing policy regime in the United States are estimated at $62 billion annually during normal economic conditions. This translates into large amounts for individual companies due to the relatively small number of fossil fuel producers. Those implicit subsidies are far larger than any direct subsidies. In 2017, the International Monetary Fund tried to tally up implicit subsidies across the globe and came up with an eye-popping $5.2 trillion. Like much climate policy, removing fossil fuel subsidies requires directly confronting fossil fuelsI take three things from this research. One, fossil fuel subsidies really do strengthen the economics of US oil and gas companies and accelerate investment and exploration. That’s what they’re designed to do, and they do it. Two, the oil and gas industry really does materially benefit from being allowed to offload its environmental risks onto the public. And three, the deduction for intangible drilling costs is the main fight. It is the big subsidy, the one that’s actually pushing new oil and gas projects over the line into profitability, and it is a much more specific target than “fossil fuel subsidies.” It seems like something some clever group ought to be able to build a campaign around. It’s worth noting that Joe Biden’s proposed 2021 budget would eliminate the IDC deduction, along with a host of other fossil fuel subsidies. Then again, Obama included the same kinds of provisions in virtually every one of his budgets, and Congress never complied. Like I said, fossil fuel subsidies just hang around.In this way, they represent the sad reality of federal climate policy in the US, which involves a lot of heady talk and future targets, but very little that would confront fossil fuel industries head-on over the next decade. (I wrote about this the other day.)The problem is that the benefits of fossil fuel exploration and production are concentrated in a few regions and communities and the members of Congress who represent those communities are hyper-motivated to preserve existing advantages. In contrast, the benefits of ramping down fossil fuel production are spread out, geographically and temporally, so few members of Congress will champion it with the same vigor. That’s how climate policy runs aground in the US — in the translation from high-flown rhetoric to policies that will materially affect the bottom lines of fossil fuel companies.This study offers us a marker of serious commitment: repealing the deduction for IDCs. When Congress actually gets around to addressing that age-old subsidy, we’ll know we’re finally getting somewhere. 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, Rep. Sean Casten (D-Il.), the House Democrats’ resident clean-energy expert, discusses the importance of the Federal Energy Regulatory Commission, the influence it has over US decarbonization, and the urgent need for Biden to appoint a new commissioner. We also get into our favorite FERC orders!Full transcript of Volts podcast featuring Rep. Sean Casten, July 28, 2021 (PDF version)David Roberts:Greetings. Welcome to the Volts Podcast. I am your host, David Roberts. As Volts subscribers are well aware, the fastest way to decarbonize the US economy is through clean electrification — decarbonizing the electricity sector and shifting energy use in other sectors like transportation and buildings over to electricity.How can the federal government help that process along? Most control over power utilities and markets lies at the state level. There's only one federal agency with real jurisdiction over electricity: the Federal Energy Regulatory Commission, or FERC.FERC is not an agency people many people follow, or even know about — in fact, in the Volts household, it has become a kind of jokey shorthand for "the boring stuff dad writes about."But it could play a key role in implementing Biden's climate agenda. And it has come to a crucial crossroads. FERC has five commissioners. Currently, three are Republicans, but one of them, Neil Chatterjee, came to the end of his term on June 30. He has agreed to stay on temporarily because Biden, somewhat inexplicably, has yet to formally nominate anyone to replace him. Until he does, and the Senate confirms, the commission will not have a Democratic majority and won’t be able to get anything big done. That’s unfortunate, because FERC has lots of big decisions to make — about transmission, electricity rates, and markets — with potentially transformative consequences. But the agency moves slowly, with rulemakings taking months or years, and it only has three and a half years to get everything done. Biden needs to get someone in that seat.Enter Rep. Sean Casten. The Democrat from Illinois' 6th District, which includes wide swaths of the western suburbs of Chicago, is trying to draw attention to FERC and the importance of a bold and climate-minded new commissioner. He’s leading a communications campaign called "Hot FERC Summer," a twist on Megan Thee Stallion's "Hot Girl Summer." (Hey, nobody said getting eyes on FERC was easy.) Casten, a member of the House Select Committee on the Climate Crisis, recently delivered a floor speech filled with Stallion-related puns of varying cheesiness, calling on Biden and Dems to nominate and approve a new commissioner quickly. He has also co-authored bills on transmission siting and ratemaking that clarify and reinforce FERC's obligation to take climate change into account in its decisions.I have known Sean since the 2010s, when he was the CEO of a waste heat recovery company called Recycled Energy Development. His long experience in the clean energy industry informed some sharp analysis, and he occasionally wrote guest posts for my blog at Grist, the environmental news site I worked for at the time. As you can imagine, it was a delight to see him win a seat in Congress in 2018, bringing his deep energy expertise to a body that has often lacked it. I was excited to geek out with him about FERC and the state of congressional energy politics.Rep. Sean Casten, welcome to Volts! Rep. Sean Casten: So happy to be here, David. David Roberts:Sean, I knew you back when you reached the pinnacle of your career: I'm talking, of course, about when you were writing guest blog posts for me at Grist. Rep. Sean Casten:Really, it's been downhill for both of us since we left Grist. David Roberts: Suffice to say, you know more about energy than the average bear; probably considerably more, I would say, than the average congressperson. So before we get to FERC: When you got to Congress, would you say that the average clean-energy literacy of your colleagues in Congress was higher or lower than you expected going in? Rep. Sean Casten:Oh, that's the kind of question that could get me in trouble for throwing people under the bus, but let me maybe offer one of the best pieces of wisdom I got on getting sworn in. Jamie Raskin, who of course everybody knows now because of his work on impeachment, is just a wonderfully kind and decent person. And he said to me, when I was just sworn in and trying to figure out the ropes of this place, he said, “This is a job that makes you very broad, but it's very hard to have the time to get deep. And if you want to know how to get things done, ask people why they first ran, because that's a really good shorthand way to find out where people are deep. If you really want to do something on healthcare policy or criminal justice, it'll help to know who those are.” So I've tried to follow that policy. I've asked around, and I will tell you that I have not met a lot of people who said, “I ran because I care about energy policy” — which is not a criticism, because they did run for other reasons, and they have depth in other areas. But historically, energy policy is not the kind of thing that pollsters say, “the voters demand somebody who really appreciates the nuances of obligation-to-serve and ratemaking proceedings,” right? So yes, it's lonely. It's just not a way that people typically get into Congress.David Roberts:Well, all of the sudden, these issues are on the front burner, and everybody in Congress is expected to know a bunch of stuff about them. Have you found that people are open to being educated? Is there a crash education process happening?Rep. Sean Casten:There is and there isn’t. It's interesting, I find that energy policy is a lot like foreign policy in the sense that most voters don't care, but we [Congressfolk] make decisions that are really impactful. So it becomes an area where members are very deferential to staff. I am as well; I don't claim to be an expert on, you know, the situation going on in Afghanistan right now. But I trust that there are staff on the Foreign Affairs Committee, and their job is to understand that.So yes, members are receptive. But what's hard on issues like energy policy is that the job of a congressional staff person is to figure out how to get done what is politically possible; the job of a staff person is not to move the Overton window. It’s hard to get members who are confident enough in their own skills to really try to push the envelope on energy policy.David Roberts:Let's talk about FERC, the Federal Energy Regulatory Commission. Whenever I tell people I'm writing about FERC, the eye glaze is almost instant. So maybe just tell us, why should ordinary people care about FERC?Rep. Sean Casten:The way you stop people's eyes from glazing over with FERC is you couple your conversation with a picture of Megan Thee Stallion and some hip-hop lyrics. I've found this week that is a very effective way to keep people engaged.We can get to that, but look, stipulate a couple things. Number one, we have to get to zero carbon way faster than anybody is even talking about in the most ambitious world right now. Number two, as you've so eloquently explained, it's really hard to see how we do that without “electrifying everything.” If that's going to happen … let's just talk about the transportation sector: the transportation sector uses about as much primary energy as the electric sector uses today. So if we were just going to electrify the entire transportation sector, we need to build about as much electricity generation as we already have, and then build a whole lot of wires to connect that new generation that's going to be in different places — because it's going to be where the sun and the wind and the renewable resources are, not where the coal seams are — up to loads in new places along highways and homes and apartment buildings. And that's just for the transportation sector. The Department of Energy has no meaningful jurisdiction over those questions of generator siting, generator installation, generator permitting, transmission siting, the markets that regulate and give people an incentive to deploy capital. The EPA doesn't really have a lot of jurisdiction over that; they have some on the environmental side. Department of Transportation doesn't really have much jurisdiction over that. FERC does. And so, if we are going to do what's necessary on climate, FERC is really the only agency that has the tools necessary to do what is environmentally necessary, even though it's not an environmental agency. That's why you should care.David Roberts:Yeah, it's the only piece of the federal government that gets directly at electrification. I'm not sure people really understand that. Before we jump into some of the substantive issues FERC is wrestling with, the big thing going on with FERC right now has to do with commissioners. There are five commissioners on FERC; by statute, two of them have to be from the minority party, and three can be from the majority party. It's been a long time since there were three Democrats, but it might happen soon. What's the state of play there?Rep. Sean Casten:Yeah, hugely important. McConnell largely stonewalled Obama's [FERC] appointments, so it's been not as effective as it could be for a long time (like most things McConnell touches). Chairman Chatterjee — well, I should say former Chairman Chatterjee, now Chairman Glick; he was the chairman before Glick was elevated — his term expired in June. So technically he's off; he is agreeing to stick around until the new nominee comes in. I actually get along pretty well with Chatterjee; he and I have spent a fair amount of time together, in spite of the fact that he started his career as an energy aide to Mr. McConnell and comes from the coal belt. I think he's been more forward-thinking than a lot of people thought he would. But he still is not, by his nature, going to lean in on some of the transformational issues in the power sector. So with him gone, the president has the opportunity to appoint someone; there are several names being thrown out that have been vetted. I'm very long on rumors of the status of that process. But what I can say factually is that the Biden administration, as we talk right now, has not affirmatively put one of those names forward. And therefore the Senate has not started confirmation hearings. That really needs to accelerate, because until they've got a 3-2 majority, they can't initiate the hearings; until they've initiated the hearings, they can't do the ANOPRs — the announcements of proposed rulemakings — for public comment; until they do those, they can't do the orders; and until they do the orders, the markets are not going to start responding to the ways that they might change these structures. We don't have a lot of time.David Roberts:Yes, those things take a lot of time.Rep. Sean Casten:Yeah. So it just needs to go right away. I'm quite certain that if the White House wanted to, they could twist arms and put some pressure to make that process move a little faster. I'm also quite aware that they have a lot of things on their plate, and they can't do all of them. So I'm hoping it'll come quick. But it's already not as quick as I'd like it to be.David Roberts:Well, speaking of rumors, do you have any theories about the lack of urgency here? Because presumably there are staffers up there who appreciate that FERC is the only route to a lot of President Biden’s goals. Do you think they're just not paying attention? Or do you think something else is going on? Rep. Sean Casten: I'd be purely speculating, but I think it’s probably not unreasonable to conclude that it's related to how this conversation started. It is not just your listeners whose eyes glaze over when we talk about the importance of the Federal Energy Regulatory Commission. So there's not been a tremendous amount of political pressure to expedite this, as much as there has with, say: we need to get new FTC staff appointed so that we can talk about what we're going to do with social media companies and antitrust; we need to get an attorney general to reconcile with the issues of the Trump administration and the horrible things going on with white supremacy in this country. Those are really important issues too. But those have tended to attract a bit more political attention than this particular agency.David Roberts:I have also heard rumors that there's some talk of the FERC nominee being used as a kind of bargaining chip to get centrist or moderate Senate votes for this reconciliation bill. Do you know anything about what's going on in the Senate behind the scenes on that?Rep. Sean Casten: I am not familiar with that specific rumor; that doesn't sound implausible. I think it is safe to say that anything meaningful we are going to do on climate is not going to be done in a bipartisan basis. I wish that wasn't true. It's tragic. But the way that our Democratic and Republican seats in Congress are distributed right now more or less tracks to the way that the energy-producing regions and energy-consuming regions of the country are distributed. And so anything that a functioning FERC would do to accelerate the deployment of lower-cost technologies — which also, by the way, is the deployment of cleaner technologies — implicitly is going to create a huge wealth transfer from energy producers to energy consumers, and therefore, from the empty, depopulated red parts of the country to the concentrated, populated blue parts of the country. I don't think it's intentional that the parties have aligned that way. But it means that it's very hard to … you know, I've said to some of my colleagues across the aisle that if your district loses $100, and mine gains $1,000, I can understand why we're both not going to yell, “Kumbaya, we've created $900 of value for the American people!” So yes, I think those who would prioritize bipartisanship in this moment — you can insert any name you would like into that box — do not overlap very well with those who prioritize the urgency of climate action.David Roberts:Well said. OK, speaking of the issues that FERC has its hands on, let's start with transmission. Transmission used to be a rather sleepy topic that not a lot of people cared about, but all of the sudden it's hot, it's in the news, everybody's talking about it. FERC has an open docket on transmission right now that they're getting ready to launch into, which everyone's very excited about … for some values of “everyone” …Rep: Sean Casten:Once a philosopher, always a philosopher. I can hear you describing those Venn diagrams. David Roberts:So what is wrong with transmission and what can FERC do to fix it? I know you have a bill specifically about FERC and transmission, but I'm also interested in what FERC can do on transmission without a clarifying bill, and what it really needs a bill from Congress for.Rep: Sean Casten:Let me take them in reverse order, because I think there's two problems with transmission. The first is that it is really, really hard to get a transmission project permitted in a timely fashion. And that is the result of the fact that there is no controlling agency for a transmission project. If you want to build a wire to connect the wind in Iowa to the electric loads in Chicago, every time that wire crosses a town line, a county line, a state line, you've got a different group of people who can object — as compared to natural gas, where you can have a single controlling agency, where everybody who might object can still weigh in, but they can only weigh in to one agency, and you adjudicate these all at once. That has made transmission virtually impossible to site in this country and is why for the last 20 years, the way that we've built power plants — pre the broad deployment of renewables — was to find where there was an existing interconnection and then run a gas pipe to that point to build a combined cycle plant at that node. Because it was easier to permit the gas. FERC can't really fix that; that needs to be fixed statutorily. The Biden White House and a number of us in Congress have been talking about creating a single Office of Transmission Planning that would have that authority. It’s really important, because then you would give certainty to people who want to build either generation projects that need transmission or the transmission to bring it to load. Like I said, FERC can’t solve that; we can and should, legislatively.David Roberts:Yeah, that's the Federal Power Act, I think it was? Back in the 20s, 1920 I think —Rep. Sean Casten:1935, I think, was the Federal Power Act.David Roberts:Specifically gave FERC that oversight of natural gas pipelines, and just through its silence, didn't give it control over transmission. So the idea here would just be an addition to the Federal Power Act saying FERC also has control over this, right? I mean, is it that simple?Rep. Sean Casten:I think so, although I'm just an engineer, so I'm not going to quote you on the legal ways to solve that. I'll defer to smart energy staff on that one. But yes, conceptually, you're exactly right. The second problem is one that I think FERC does have the authority to address. And it's the classic problem of regulatory capture. There's a huge governance problem at all the regional independent system operators [ISOs] and regional transmission organizations [RTOs], which is that their membership is a function of their market participants. So wherever you live, think of the big utilities in your state, the big transmission companies: they're the members of those organizations. And those entities, more often than not, make most of their money during a few hours of the year when there's a real congestion situation. Electric markets are actually extremely efficient most of the time, which means that it's really hard to make a profit most of the time. And when you get congestion on nodes, that's where the big money comes in. And so they have a very strong economic disinterest in market efficiency. So that has historically made it really hard to connect transmission that would have the practical effect of taking excess generation out of one part of the grid that's got too much load and moving it to a place that's congested on a little node down below. You look around the country, Maine has always had way too much generation, southeast Connecticut has always been way too constrained. No matter how long we try to fix that, it's like, why are we not getting that fixed? In California, you've got times … well, where you are David, up in the Northwest, BPA is dumping excess power, because they have more wind and hydro than they know what to do with, even while California is short, but you can't get a wire that's run down there. And those are solved by making sure that we bolster the interregional connections on the grid, which is what this bill — that's really Senator Heinrich, I should give all credit, has been really leading this, I'm carrying it in the House — but to make sure that we fix some of those interregional issues, and really direct FERC to do it, because the pressure from the RTOs and ISOs is going to be to resist that. I think they have that authority. I think there's some debate over whether they have enough authority to deal with some of the cost-allocation questions. If your utility was to build a transmission wire to bring power down to northern California, should you pay for that or should northern California pay for that or how should you divide that? Those are tricky issues. So some of the cost allocation comes in, but I think FERC has the ability to do that. But the problems derive from the governance issues, which is more an issue of, are you willing to flex the authority you have? If not, do you need authority that you haven't currently been provided?David Roberts:So what would that authority look like? If you have RTOs that are benefiting from congestion and you propose a line that's going to reduce congestion, the RTO is going to push back against you. What exactly does it mean for FERC to exercise authority there? Just to insist that someone build it? Rep. Sean Casten:Well, at the risk of having an overly naive view of politics, I don't see any problem with utilities advocating for their interests. And I don't see any problem with the regulator listening to those interests. The challenge is, what do you do when another set of interests is not in the room, or not as strong, and how do you make sure that their voice is heard? And that's just as true for, in our example, the beneficiaries in California vs. Seattle as it is for the beneficiaries who are not yet born and who are going to benefit in the future. I think a good, enlightened, public-prioritizing regulator is going to do that. And there are certainly plenty of examples of people who fit that description. I think of someone like Louis Brandeis on the Supreme Court. You can have the other kind of regulator as well. So I think some of what Congress can do is essentially mandate good behavior — which I wish, in some philosophical sense, we didn't have to do. But by mandating good behavior, we will ensure that good behavior happens. I do think, having said that, that if we get a good new commissioner to take this third spot, we will have a majority of well-behaving commissioners.David Roberts:One of the big problems is cost allocation. Right now, costs get allocated to the power generators who want to use the new line, despite benefits being spread out widely over the whole area that the transmission line covers. How do you see cutting that Gordian knot? Does your bill address cost allocation?Rep. Sean Casten:We do address some of it. Kathy Castor has a bill that more explicitly addresses cost allocation. Ours is more getting FERC to acknowledge that when they do those cost-allocation formulas, there's also a benefit allocation. There are benefits that go beyond things that are thought of in a very strict Milton Friedman “all that matters is the price of power in the next hour” kind of conversation. For example, we had a power plant in northern Indiana recently — it was a coal plant that was totally uneconomic, didn't make any sense to run as a source of energy, but was providing some really critical power-factor stabilization roles. That's one of these ancillary services that's not very well factored into retail markets, but the grid needs. So they came up with this really interesting approach of saying OK, we'll shut down the boiler, we'll turn the generator into a motor spinning backwards, and we'll use that motor just to do power-factor correction. And that will spread that benefit around the grid, so that we still get the benefit of this thing providing reactive power, even though it's not providing power. But that was a really interesting, creative solution that was done because the people involved were pretty smart and pretty innovative. But you wouldn't necessarily get there in a normal FERC proceeding, even if you had a transmission line that was providing some of those benefits.David Roberts:That's an extremely expensive way to provide spinning mass, isn’t it.Rep. Sean Casten:Well, actually, like in that particular case, the whole plant was already built. So it was actually kind of neat that you took this thing and said, instead of shutting down this coal plant and losing the jobs, we're still going to get the benefit from a pollution perspective of shutting down the coal plant, but we're gonna keep this existing asset running and keep some of the talent here. So it was probably a much cheaper way to provide that service than anybody else could. At any rate, I'm getting way down in the details now.David Roberts:FERC, by statute, is supposed to ensure just and reasonable electricity rates. So these big IOUs have to come to FERC and justify their rates. And one of the fights going back years now is whether climate damages should be taken into consideration when considering what counts as just and reasonable rates. You have a piece of legislation that explicitly tells FERC to do that. Can FERC do a little bit of that without legislation? And what exactly does your legislation specify that it do?Rep. Sean Casten:I would argue that FERC absolutely has this authority, and again, it's a question of, “let's make sure they also have an obligation to do it” stapled to it. There's two pieces of why this bill is necessary. The bill is the Energy PRICE Act. PRICE is an acronym that stands for something; I forget what it is [Prices Require Including Climate Externalities]. But what it does is remind FERC that, number one, the 1935 Federal Power Act said rates must be just and reasonable; number two, in FPC (the name of FERC at the time) vs. Sierra Pacific in 1956, the Supreme Court ruled that the commission must ensure the protection of public interests; and number three, in 2009, the EPA endangerment finding — that I know is one of your favorite rulings — said that rates must take into account current and future generations. So with those three decisions in tandem, you have an affirmative obligation on FERC to set rates that take into account the costs and consequences of climate change and effectively set up markets that for all practical purposes build in a carbon price in some fashion. Now, that's the negative reason, protecting from a cost. There is an even more urgent positive reason for this, which is that every clean electricity generator effectively eats its investment thesis. By that I mean, you build these generators — whether it's a nuclear plant, a solar plant, geothermal, whatever you want — because you think you are going to make money, because you operate at a lower cost than the grid currently sits. You then put a source of power into those markets that is lowering the cost in those markets, because you've knocked off whatever was the higher marginal cost generator that would have operated but for you being there. So over time, particularly in the markets that have really embraced deregulation, you've seen electric markets get cleaner and cheaper, to the point that you now have — and again, it's what I alluded to in the Pacific Northwest — a lot of hours where the power price is negative, because there's so much hydro and wind on the system, and they don't know how to turn it off. That then creates a circumstance where, as clean energy succeeds, you lose the incentive to build any generator, because the value of electricity gets to be too low. I mean, think about how awesome that is, right? The whole theory that it's too expensive to care about the environment is exactly wrong. It's too cheap. Now what happens with FERC, who is tasked with an obligation to maintain consistent, reliable power? What do you do in response to that? I think the legislative and judicial history is pretty clear. What you do is provide a differential incentive to bring on the generation that is cleaner. So you get there through the same means, but you get there because you have to prevent these technologies from eating their investment thesis. It’s a strange thing to talk about with the solar and wind industry that seems to be booming right now, but that's what the nuclear industry is already going through. Those plants were built, and now they're not making enough money to justify their five-year refueling cost. They're having to shut down because they can't make enough money.Now we're having a political conversation: Should the taxpayers provide a subsidy to these nuclear plants to keep running because FERC failed to fix a problem that, I would submit, you could see coming?David Roberts:There's been a lot written about this lately, the declining marginal value of new clean energy as it comes online. So your idea is, instead of taxpayers subsidizing clean generators, FERC should in some way penalize dirty generators with a price, by forcing them to pay for their carbon emissions?Rep. Sean Casten:Oh, I prefer to call it a carrot to the good guys than a stick to the bad guys. But yes, they should ensure that there are incentives to build new generation that are consistent with nondiscriminatory pricing that does not adversely affect current or future generations. Will that be bad for coal? You betcha.David Roberts:This might be getting slightly too much in the weeds, but this issue of declining marginal value: you're chasing a receding target, right? You can do differential rates, and that will punt the problem down the road a little bit, but doesn't it just come back unless you're constantly escalating?Rep. Sean Casten:I guess it's a question that's much bigger than the energy industry. We've regulated all of our markets in this country for 30, 40 years on the assumption that as long as consumer price is falling, everything else must be good. So we outsourced huge swaths of manufacturing, because if we could have a country that is cool with child labor manufacture our dishwasher, as long as the cost of the dishwasher is cheaper, we'll do it. We've hit the limits of that as an operating philosophy, I think. I don't mean to duck your question; I think it's a valid question. But there are a broader set of societal values that are not always encapsulated in consumer price, and it just so happens that in electricity markets, we're on the verge  of hitting the limit, where if we don't answer that right, we're gonna lose our access to power. But it's the same dynamic playing out in a lot of other sectors.David Roberts:So what you're delicately trying to say is that maybe pushing electricity rates lower and lower and lower and lower is not the north star here; there might even be good public reasons to raise rates to pay for those benefits.Rep. Sean Casten:I’d put it slightly differently: if I can build an asset that is going to clean the air and create wealth for society, let's make sure we have a regulatory structure that ensures that that wealth is equitably allocated between consumers, investors, and the public at large, and doesn't disproportionately accrue to one of those groups. We are making the pie bigger. We just have to make sure we divide the pie appropriately.David Roberts:A lot of people involved in clean energy have a lot of complaints about IOUs [investor owned utilities]: the way they make rates, the way they plan. Could FERC, under this “just and reasonable” banner, force IOUs to — instead of using planning models based on the last 10 years, which is standard practice — use forward-looking models, since things are changing very fast now? Or, second part of the question, could FERC force them to consider resilience — which is a big thing now, people are losing power because of wildfires, because of cold snaps — in rates? What's the limit of FERC being able to kind of kick IOUs in the butt and make them move into the 21st century?Rep. Sean Casten:I don't know that I have a precise answer, just because IOUs are so different in one part of the country than another. Some states have embraced deregulation, where the IOU is really just the last-mile distribution company; other states still have fully vertically integrated monopolies, that own everything from the power plant through the transmission to the wire. And in all cases, you have some very clear jurisdictional limits between what FERC can do and what the states can do. Generally speaking, the monopoly franchise is issued by the state. And so FERC can impact markets, can impact interstate transmission of power, which the courts have deemed a federally germane conversation. But a lot of the IOU regulation planning is really more at the state PUC level. My all-time favorite FERC order — I'm sure you have yours — is 888. 888 was the one that really started to deregulate the power sector back in the early 90s. The reason I like it so much is because for the first time in the history of our country, we told the electric sector that you could make money by building the lowest marginal cost asset, instead of saying you make money by building capital that will be built into rate base. Within 10 years, the nuclear fleet went from 60 percent to 90 percent capacity factor, because all of a sudden, every utility said, “I've got this asset that's really cheap to run, I should run that asset more often.” We built a ton of combined cycle generation, natural gas, that was almost twice as efficient as the generation it replaced, because utilities said, wait a minute, if I can make money by having an asset that burns less fuel per megawatt hour, let me build more of those. Within about 15 years, the grid went from emitting 1,300 pounds of CO2 per megawatt hour to 900. All while rates were falling. I tell that long story because that order was implemented very differently in different parts of the country, much like many issues of our day. If you live in the Southeast, you effectively operate under a very different set of federal rules than if you live in the Northeast. The question you're asking, about how they could enforce more holistic planning tools on the IOUs — wouldn't it be nice to have a FERC hearing that asks, what are the lessons learned now from this 25-year-old order? How can we take the best practices that were implemented in some parts of the country and accelerate their movement into other parts of the country that were resistant at the time because they feared something that didn't come to pass?David Roberts:This segues perfectly into one of my other questions. The Southeast famously did not deregulate its electricity markets, and is still very much run by vertically integrated monopoly utilities, which own the power plants and the power lines and deliver the power. Now there's what I would characterize as a half-assed movement proposing a regional quasi-market called SEEM. I forget what it stands for [Southeast Energy Exchange Market]. Do you think FERC can or should force the Southeast to deregulate, form a wholesale market, form a regional transmission organization, and follow the rest of the country in restructuring? Is that something it can do? And do you think it should do so?Rep. Sean Casten: As someone who cares deeply about climate change and thinks that a properly designed market is the single best tool to address it: absolutely, yes. I also think it's entirely possible and not uncommon to do an improperly designed market. So the details matter, but yes, directionally, I'd love to see them do it.David Roberts:Speaking of intransigent regions of the country, one hot topic of conversation lately is about Texas-based ERCOT: they famously have created an RTO, a regional transmission organization, that only applies to Texas, thereby escaping FERC jurisdiction, because they don't ship power over state lines. And they are not shy about saying that's why they did it. But they had this cold snap, a bunch of people died, a bunch of people lost power. And now we've just had a study a couple of days ago that said ERCOT could have, among other things, saved about a billion dollars during that cold snap if it had just been interconnected with surrounding states. Is there any way for the federal government to force ERCOT to interconnect? Or will Texas basically have to make that decision on its own?Rep. Sean Casten:It's worth pointing out: we use ERCOT and Texas as synonymous, but El Paso is a part of Texas, it just isn't a part of ERCOT. And El Paso had the same weather, they had the same utilities, they had the same generator maintenance — and they didn't lose power, because they were connected elsewhere. Oklahoma is also a lot like Texas: they had the same weather, they didn’t lose power. When I said to one of my colleagues, who shall remain nameless, from the allegedly great state of Texas, “will you be advocating to interconnect to the grid?” there was a pause and the response was, “Well, we still are Texas.” You've got the perennial discussion about state vs. federal rights, and as you and I have had many conversations about, how much of our frontier mythology is based on … I want you to build the railroad, build the electricity, build the broadband, and then get out of here, because I'm just an independent cowboy.David Roberts:“Thanks for all that, but don't try to tell me how to use it.” Rep. Sean Casten:Yes, exactly. David Roberts:Well, I try these days to think, what would Republicans do? And they don't seem to particularly care about these divisions of jurisdiction or whatever; they just care about their goals, and whatever tools they have to achieve their goals. So do you want FERC to try to browbeat Texas into this, or pass some rules that would penalize Texas for not doing it? Rep. Sean Casten:I guess I'm not smart enough to know exactly what those tools are and how sharp they are. I do think, and part of the reason why I'm so bullish on FERC, is that there's this huge tension between being pro-market and being pro-business. And FERC at its best, in setting up these markets, has been pro-market. In all that story I told you about FERC order 888, most of the companies that built those gas plants went bankrupt; the plants are still running, but they designed the market so efficiently that people actually didn't make the money they thought they were going to make because the benefit flowed to the consumers. That's a very pro-market approach. As long as FERC does that — subject to what I said before about, let's make sure that we allocate the wealth through the system so that people aren’t choosing between consumer prices and bankruptcy — we're going to have good outcomes. But your comment about where are the Republicans on this: the Republicans — this isn't every Republican, but by and large — are a pro-business but anti-market party.David Roberts:Yes. I love that way of putting it. I don't think that's widely appreciated, the distinction you're making.Rep. Sean Casten:And to be fair, a lot of Democrats are not really pro-market either, right?David Roberts:Not many entities or people in the world are pro-market when the rubber meets the roads. They are pro their own interests. And markets are devastating to business interests, quite often.Rep. Sean Casten:I've yet to meet the person who comes into my office and says, “Hey, Mr. Congressman, I've got this problem: it's too hard for my competitors to succeed.”David Roberts:“We need to open this playing field. I need more competitors.” Yes, exactly.Rep. Sean Casten:“What can I do to make more transparency of information and lower the barriers to entry and exit, consistent with the principles of Adam Smith?” You never hear that.David Roberts:Yeah, not a lot of lobbyists for that perspective. While we're still in the states-rights things — and this may also be slightly too nerdy for anyone to care about — this question of where FERC jurisdiction ends and where state jurisdiction begins has been a hot topic among FERC nerds lately. Because some of the things FERC did with its regional markets via the MOPR, which I'm not even going to attempt to explain here, basically had the effect of setting regional market prices such that they cancel out state climate policies. That obviously is outrageous to clean-energy advocates, and it also seems like a real imposition on states’ power of movement and jurisdiction. Do you have any general thoughts on where the right line is between FERC and the states? It seems a little arbitrary these days, with electricity markets being so regionalized and so national even.Rep. Sean Casten:At the risk of sounding like a cop-out: I think, at some level, the blessing and the curse of our form of government is that we're not very precise about that answer. And it moves around a bit from time to time. And there are times when we think to ourselves, boy, thank goodness we have these state laboratories of democracy to lean in where the federal government isn't: witness California emission standards. There are other times where it's hugely regrettable that we don't have the federal government with some authority to step in: witness voting rights. And, yes, there's a big issue. Because I've spoken to him, I know that Chairman Glick is thinking a lot about how to structure markets to not step on state renewable-energy standards and other incentives they may have had in place, and to factor those in. But those standards exist in no small part because the federal government failed to act and the states stepped up. This is moving into a totally different realm, but if we were by some magical event to come to agreement on a federal economy-wide carbon-pricing structure tomorrow, we'd have this huge problem that the states have already done it in a bunch of places. You've got AB32 in California, RGGI, and you have a bunch of private players that have entered into long-term contracts with an expectation that those contracts would be honored to the terms of those agreements. So for all practical purposes, it is impossible right now to write a federal carbon-pricing structure that doesn't have tons of carve outs around the country. Which means a disharmonious standard when you cross the border from, let's say, California into Nevada, where, by the way, trucks and cars and powerlines cross all the time. We’d have these inter-state border-adjustment agreements or something to figure out. It's a cop out on your answer, because I think, on balance, I like our federal system of government. But it's a very issue-by-issue answer.David Roberts:Much like you rarely meet people who advocate for markets as such, you rarely meet people with a strictly principled answer to this question. It very much depends on, well, what's the issue? I mostly care about my issue, not these abstract questions.Rep. Sean Casten:As an interesting aside, when we first put NAFTA together, Mexico was essentially forced to come into compliance with our electric regulatory structure. But Mexico doesn't have nearly as strong a culture of states rights. So in Mexico, you can do things that seem completely magical and dreamy, where you can build a power plant in one part of Mexico that's optimized to the local resource — maybe it's a waste heat recovery project, like I was doing in a prior life, or a solar plant — but if that power source exceeds the local load, you can just dump it onto the grid and then enter into a purely financial agreement with someone on the other side of the country, who would happily take your excess power, and just agree to financially settle with them as long as there's a transmission corridor that connects. That's actually fairly consistent with FERC-level rules, but inconsistent with the ways that different states and regions have interpreted those rules within the United States. So the degrees of freedom and flexibility you have to optimize the system — so that locally you're saying, how do I make the maximum amount of valuable energy from this resource at this location, and then just figure out how to deal with the financial matters separately — we have those tools, just our states’ rights get in the way. So we have a model to our south of what we might be with a stronger federal structure, but for the fact that they don't quite have as robust a legal system as we have.David Roberts:Here's another puzzler for you: Some recent studies have shown that in aggregate, distributed energy resources — generators or energy storage that's on the distribution system, not on the transmission system — have huge effects on the national economy and electricity system, but are sort of intrinsically local. So I wonder, is there anything FERC can do regarding distributed energy resources? It seems like an awkward interface.Rep. Sean Casten:Well, by recent studies, I assume you mean ones from 1992 or so, because this was true as long as I was … David Roberts:Right, you were in the business of distributed energy resources!Rep. Sean Casten:Yeah, and it drove me crazy. I've lost track of how many times we optimized a generator to a local load, knowing full well that that was not optimized to the region, but we couldn't get paid to optimize for the region. So we were leaving value on the table, and in some cases, working against value because of the way that the rules were wrong. As long as we're going with cool FERC orders, there’s FERC 2222. (FERC has this interesting thing where they always pick very memorable numbers for their most impactful rules.)David Roberts:Are they totally arbitrary? Are they just picking those numbers out of the air for funsies?Rep. Sean Casten:I actually don't know the process, but I have been told that they do reserve palindromic or interesting numbers for good orders. David Roberts:And people call them boring.Rep. Sean Casten:Bringin’ sexy back. But 2222 is a fairly recent order that says you can sell demand services [in wholesale energy markets]. In other words, if I'm a generator, I provide energy, which is the megawatt hours that you get out of your socket. And then I provide capacity, which is the ability to be there on a moment's notice if you need me, even if I'm not running. What 2222 said was, there's a whole lot of capacity value created by these local distributed resources. If you enter into an agreement that says, sure, I can tolerate an extra five degrees — if you pay me for it, I'll shut my air conditioner off; to, let me install more efficient light bulbs that will cut the load down; to, let me put a generator on my premises that will displace load. All those things in aggregate are not only as valuable as the generator that's sitting there, able to suddenly provide new load, but objectively more valuable, because the generator that's 100 miles out of town may lose 20-40 percent of its output on a hot peak day by the time it gets into your house. If you can curtail load at your house, a megawatt of load reduction might be worth 1.2, 1.4 megawatts of capacity on the system. So 2222 provides a way, not so much for you as a homeowner to participate, but for so-called “load aggregators” to say, let me put together a whole network of people, and I can now participate equally with the big generators in these markets, with these values that I can aggregate from this collection of distributed resources. It's really cool.I think we've barely scratched the potential of what we could do within those markets. It's not a complete set of all the values that distributed resources can create, but it's certainly a heck of a first step.David Roberts:I wonder, though: 2222 opened up demand-side aggregators to play in these wholesale markets. But I wonder, as DERs proliferate, if that's going to be computationally nightmarish. You're going to go from wholesale markets that have a dozen participants to wholesale markets that have thousands or tens of thousands. I wonder if that's the right level of administration, if we don't need something more like a distribution system operator [DSO], like they have in the UK, to manage that local complexity and simplify it before it moves up to the wholesale level. Rep. Sean Casten:You might be right. I haven't thought about that level. I mean, we do have distribution system managers in the sense that every region has a load-serving entity. When I ran a utility in Rochester, NY, I had load-serving entity responsibilities over that particular node, where I had to know all those things and manage it. And in your distribution utility, Seattle City Light, they are a load-serving entity that has those responsibilities. To some degree, the DERs are already there. The question is, do we know about them. There's so many people doing what I was doing a decade ago: building the systems out, but not optimizing them for the grid, optimizing them for the local load. Every factory that makes a decision to put in a more efficient motor is having a meaningful effect, in aggregate, on their grid, but the utility doesn't necessarily know they're there or know that they have the ability to dispatch in response to a variable price signal. They don't find that out until they institute a variable price signal.  I haven't looked at the latest database, but last time I looked, there was something like 83,000 megawatts of cogeneration installed on the [US] grid. The median generator is two megawatts, and almost none of them are speaking in any kind of a data or dispatchability to the grid managers. They just turn on and off in response to local loads. What that looks like from the perspective of FERC at the highest level, or the distribution companies at the lowest level, is just normal variability — not much different from a bunch of people turning their lights on and off. But because they don't have the data, they also aren't going out and saying, this would be really valuable, could I pay them to dispatch according to some larger value?David Roberts:I guess when I envision that kind of detailed local management, where you're trying to coordinate things so they work at the local and regional level … I’m just trying to imagine RTOs doing that, for five different regions they're overseeing, with thousands of DERs in each of the regions. I'm inclined to think we need more robust management closer to the distribution level to keep track. Rep. Sean Casten:The AI robots will take care of it. We’re just going to teach them.David Roberts:I used to have such faith in that. And then I was researching this article about that, and everybody I talked to said, no, the robots are not going to do this. There's not going to be the robots. I was so psyched about the robots. We've mostly been talking about electricity, because of course it is the most important thing in the world and everybody should know more about it. But FERC also has jurisdiction over [natural gas] pipelines, and has been quite profligate in the past in approving pipelines. There's been this heated battle between Glick, the Democratic commissioner, and Chatterjee, the Republican commissioner, about whether FERC should take climate change into account when approving or not approving pipelines. Are you involved in any legislation regarding that, or do you have any opinions about what to do about FERC and pipelines?Rep. Sean Casten:I'm not hugely involved. Obviously, I feel strongly that FERC does have the authority and obligation to take climate change into account in what they approve. What gets a little bit harder about pipelines vs. electricity, at least to my small brain, are conversations around, “Should we provide incentives for the market to meet people's energy needs as cheaply as possible?” Those easy, black and white, absolutely yes-every-time questions. Conversations around, “Should we limit people's ability to access energy in exchange for considerations about other moral issues?” are a lot grayer. That's not to say categorically yes or no, but it's harder when you're saying, if we don't build this pipeline, will you still be able to keep your house warm in the next cold snap? That’s different from, when did we get the incentives right to provide you resources? A lot of times this conversation about pipelines is those two arguments sailing past each other.David Roberts:But if you talk to activists, they'll say these pipeline companies are not making very plausible cases that they're necessary, that a lot of these are fly-by-night, debt-heavy fracking companies that are profiting and not being held to very tight account. Rep. Sean Casten:I'm not saying those arguments are not sometimes true, I'm just saying they’re not always true. At some level, energy’s like sex and drugs: if you want to curtail supply, you've got to curtail demand. You can't curtail demand by limiting supply, that just criminalizes supply. So let's invest in efficiency, let's invest in conservation, let's make homes tighter. But if you say you can't build a pipeline across the Canadian border, you better be happy with a lot more port traffic and rail traffic, because as long as people still want that energy, they're going to find a way to get it. David Roberts:Enough about FERC. I've kept you a long time, and we probably talked about FERC more than any two people have a right to.Rep. Sean Casten:A fraction of what the planet deserves.David Roberts:A fraction of what the planet deserves. Oh, actually, you had a third bill about FERC; let's mention real quick what that was.Rep. Sean Casten:The third one is probably the least interesting. This was a right to timely rehearings. Frankly, this is what we were saying before, about how it is appropriate for the IOUs to argue their case before FERC, but it is not appropriate for the other side not to be heard. In every utility regulator, state and federal level, one of the ways you control the process is by limiting the other side's access to the process. So this is basically just making sure that when people have disputes, they have some sort of a cost-effective, time-effective way to make sure that their case is heard.David Roberts:So, to summarize the foregoing: it sounds like you think FERC already has a lot of the statutory power it needs to implement a lot of these things, and a lot of it just comes down to kicking them in the butt to do it — a lot of which sounds like it could be solved with a sufficiently committed commissioner. In some sense, that might solve a lot of these problems, just getting three commissioners on the board who are aimed in the right direction.Rep. Sean Casten:Sing it from the rooftops. David Roberts:Passing bills in Congress has basically become impossible because of the filibuster, so what do you anticipate happening to these bills? Do you want to sneak them into the reconciliation bill? Do you think there is real prospect of getting 10 Republican senators to care about FERC and vote for a FERC bill? Where do you see this legislation going?Rep. Sean Casten:I wish I had a clear answer. I was chatting with Secretary Granholm earlier this week and I told her that I feel like us members of the House spend most of our time peeking out the door, looking at the other side of the Capitol, waiting to see if the parliamentarian is going to issue a white or black puff of smoke.David Roberts:Just doing your chanting, sacrificing a goat. Rep. Sean Casten:Exactly. Let's be really clear: get rid of the damn filibuster, it gums up everything and it stops us from doing our job. It's not what the founders intended. It's just something you do if you think the best way to resolve debates is to defer to the will of the minority, because that's what the filibuster does. Having said all that, as long as it exists, the way that you pass things that are supported by bipartisan majorities of the American people, but are not supported by bipartisan majorities of the United States Senate, is by jamming them into huge bills in corners where people aren't paying attention.David Roberts:Yes, like the energy bill that passed at the very end of the previous congressional session, which miraculously had all kinds of good energy stuff tucked away in it, which survived, as far as I can tell, entirely because no one was paying attention.Rep. Sean Casten:And because it was jammed in with a bunch of other things that people did like, and said, I'll take a little bit of this with that. I don't remember that speech by our founders ...David Roberts:“Thou shalt jam everything together and hope no one’s paying attention.”Rep. Sean Casten:Exactly. Climate is hard to predict, but let's start with the positive: we have a White House that is absolutely committed to doing what's necessary. We have House and Senate leadership that is committed to doing what's necessary, and therefore is committed to saying until we have everything we have nothing. So we will get whatever we can into the bipartisan package, and then we will look at what's left and try to find a procedural way to get that into the reconciliation package, so we can generate them together. That process, at least in theory, has the potential to do a whole lot of good things. What's hard in practice is that, because of the arcane rules of parliamentarian and the reconciliation process and the Byrd rule, the things we can do that are subject to reconciliation are by and large limited to things that require the expenditure of federal money. And almost everything we're talking about at FERC is a policy change to unleash private markets. So we're in this bizarre case, where if we insist that Republicans must be at the table, then we are insisting we do not embrace capitalist free market principles — that we have to prioritize spending federal dollars to fix these problems.David Roberts:That's why all policy these days gets crammed through the tax code. It’s not because that's the best way to do things, it’s just the only way to pass things anymore.Rep. Sean Casten:I don’t know that I’d be quite that explicit, but that is certainly part of it. Secretary Granholm has said that if we're going to electrify everything, as we must, we need to build 1,100 gigawatts of new generation. I think she might be a little low. For context, we currently have 1,000 gigawatts of generation total installed in the country. Jesse Jenkins over at Princeton has said that once we build that out, we'll need to spend at least $350 billion in transmission to connect it up to the grid. If you figure that the generation is going to cost $1,500-$2,000 a kilowatt, and Jesse's right on the transmission side, that means we need something like $2-3 trillion just for the electric sector. We haven't gotten to roads and bridges and ports and EV charging stations and all the other stuff in the infrastructure package. That's not to say that we can't do it, just that, if we are going to do what's necessary, we should be working with the private sector. They have a lot of cash too! They’ve got more than we do, in fact. So the more we lean on reconciliation, the less we have the ability to lever private markets and all of that entrepreneurial zeal that we love in our country, which means we're not going to do as much as we should.David Roberts:Okay, final question, speaking of the reconciliation bill. Clean-energy wise, climate-wise, what do you think are the top two or three things that should be prioritized in that bill?Rep. Sean Casten:How do I pick my favorites? At core, making the clean-energy transition we need depends on building assets, not operating assets, because the assets we will build will run all the time, because they’re so much more competitive. The coal industry is dying because it can't compete economically — and no one ever woke up in the morning and said, “Given the price of power today, I'm gonna turn off my solar panel,” right? You just have to get them built. So I'm focused on those things that will accelerate the construction of those assets: a well-designed CES. David Roberts:A clean electricity standard, requiring utilities to boost their percentage of clean energy.Rep. Sean Casten:Yeah. Senator Smith has a great CES. Designing that well provides a huge carrot to clean generators — when you're sitting down saying, “Can I justify this investment?” it goes from “No” to “Holy smokes, I sure can, because I'm getting paid for this societal value that I'm creating.” It's going to be key to watch how that evolves, because it’s being tweaked right now to fit into a reconciliation process.David Roberts:Designing well means, one, to achieve your goals, and two, to please the parliamentarian wizard — which are not necessarily the same design constraints.Rep. Sean Casten:I'm not even sure they're in the same room. But a well-designed CES is really important. I'd love to see a proper market for carbon. But if I have to choose between carrots and sticks, give me a carrot, and a CES is a carrot. Also, for obvious reasons, we’re focused on anything we can do to accelerate the deployment of transmission. We've got a pretty strong infrastructure bill from the House, the Invest Act, that has a whole lot of money in it to build out EV charging, to make sure that EV charging is done equitably, so it's not only available to people who own their homes and have a garage that they can put a charger in. But if you go through and build all that out, we need to make sure that we've got the wires and generation to meet that expanded electric load. So transmission and CES would be my big two.David Roberts:I've heard transmission’s having a rough time of it in the Senate, that there's pushback from Republican senators about some of the language around transmission in the bill. Do you know anything about that? Rep. Sean Casten:The subtext behind all of that is energy producers vs. energy consumers. If you build out transmission, you will make it easier for more cost-effective sources of power to find a home for their product.David Roberts:Right. Oh, what a system we've built.Anyway, thank you so much for taking all this time. Rep. Sean Casten:Always a pleasure, David.  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, career environmental regulator Cynthia Giles discusses the rampant rule-breaking common in environmental rule and regulations and how to solve the problem — not with greater enforcement, but with smarter rule design.Full transcript of Volts podcast featuring Cynthia Giles, July 14, 2021(PDF Version)David Roberts:The US has hundreds of environmental rules and regulations on the books, meant to achieve various environmental goals — clean up coal plants, reduce toxins in consumer products, limit agricultural waste, and so on.Once these rules and regulations are put in place, most people don’t give them a lot of thought. To the extent they do, they tend to believe two things: one, that environmental rules are generally followed (maybe, what, 3-5 percent break the rules?), and two, that the answer to noncompliance is increased enforcement.According to Cynthia Giles, both those assumptions are dead wrong. Giles was head of EPA’s Office of Enforcement and Compliance Assurance for all eight years of Obama’s presidency — and had a long career in environmental enforcement before that — so she knows something about rules and enforcing them. Through the Harvard Environmental & Energy Law Program, where she is a guest fellow, Giles has been writing a series of pieces (which will be issued as a book in 2022) on “Next Generation Compliance: Environmental Regulation for the Modern Era.” In those pieces, she reveals that environmental rule-breaking is absolutely rampant — and that there’s surprisingly little increased enforcement can do about it. Instead, the key is to design rules better, such that compliance is the default choice.I’m a sucker for policy design, so I was eager to talk to Giles about what she’s learned, how to design rules well (or poorly), and most of all, the best way to design climate rules. With no further ado, welcome to Volts, Cynthia.I really enjoyed your articles. As I was saying on Twitter earlier, I love it when I discover an expert who's making a well-argued, well-cited argument in favor of something I believe already but didn't have the chops to defend myself. I feel vindication. There's a number of mind-blowing things in here, but one of the initial mind-blowing things that people don't understand very well is just how common violations and rule-breaking are. You spent eight years as head of EPA enforcement for Obama. I'm curious: before going into that position, did you know this about environmental rules? Cynthia Giles: This is certainly something I had strongly suspected for a long time. I've worked in the environmental enforcement arena for a long time and I persistently saw a mismatch between what I was seeing in the field and what I was hearing so many people say — that compliance with environmental rules was good. After I started in my position in the Obama administration, I asked folks to pull together everything we know about how compliance is with environmental rules. And I discovered that the evidence supported what I had suspected all along, which is that the rate of violations is substantially higher than most people think.David Roberts: What do we mean by substantially higher? Give us a sense of the scale here.Cynthia Giles: I'll give you the contrast between what's popularly believed and what the facts are. As I mentioned, I have spent most of my professional career in environmental and compliance-related work. During that time, including during the Obama administration, I've asked a lot of people what they think the rate of non-compliance with environmental law is. The most common answer I get, including from people who have also spent their entire professional careers working in this area, is 5 to 10 percent. That's what people think.It's nowhere near that. Not close. The rate of serious violations, the ones we care about the most, is 25 percent in most programs. And there are plenty of programs, I'm sorry to tell you, with rates substantially worse than that. It's not rare to find serious violation rates in the 70 percent and higher range. I want to make sure I'm clear: when I'm saying someone has serious violations, I'm not saying they're violating every single thing, every day, 24/7 — but they are having a lot of violations we care about, in terms of protecting people's health. So the rate is substantially worse than most people think. And that's just the ones we know about. There's plenty where the data is thin — indications are bad, but the data is not there to say anything definitive about it.   David Roberts: There are all sorts of bad things about common violations, but the central bad thing is that we're not achieving the goals of these rules and regulations. If violations are 50 percent, you're getting 50 percent of what you think you're getting out of the rule, right?Cynthia Giles: There's a lot of areas where we know there are environmental problems — over 130 million people in the United States live in areas that don't meet the health standards for air quality, and almost half of the waters in the United States are designated as poor quality. There's a lot of evidence about serious issues that affect people's health that are widespread, and certainly this incredibly high rate of violations is a significant contributor to that.David Roberts: You come into EPA in this enforcement position and inherit a bunch of rules that you have to enforce, but you didn’t have a hand in designing. The other intuitive belief people have about this is, insofar as there are violations, insofar as people are breaking the rules, the solution to that is better enforcement. From your experience at EPA, how much can you do with additional enforcement? Can you substantially increase compliance? What's the range of effect you can have?Cynthia Giles: That very much depends on the problem. For some of the most serious and high-rate violations — coal-fired power plants are one example; for many, many years, they were by far the highest-polluting sector and the rates of violation were stunning — EPA decided, correctly in my view, that the health risk was so substantial, and the violation rate was so serious and egregious, that EPA would just sue all the coal fired power plants. One at a time, they’d go after them. It was essential for public health that they be made to comply and install modern pollution controls — which by the way, reduce pollution by 95 percent. I mean, we're not talking about minor differences. It was really, really big. Some of these problems — coal-fired power was one, cities that were discharging raw sewage into surface waters around the country was another — were so serious from a public health perspective that EPA decided to go after them individually. That is not a strategy that can work for the vast array of programs that EPA administers. Some sectors have a million or more regulated entities, or it's hard to tell who's violating. For those kinds of problems, enforcement as your first line of defense is obviously not going to be able to do it. You don't have the resources to do it. But you couldn't do it even if you did nothing else but that one thing. So for many problems, enforcement can never be the principal way of solving noncompliance.David Roberts: And even in cases where enforcement can force broad compliance, it is raising the cost of the regulation. Every one of those lawsuits costs money and time.Cynthia Giles: Coal-fired power is a terrific example. The work to address air pollution from coal-fired power plants has been going on now for more than 20 years, and every one of those years has consumed a lot of people, millions of dollars of money for investigators, enforcement staff, etc. So that kind of approach is really expensive. Sometimes it's worth it, like it was for that sector, and like it was for cities and raw sewage, but most of the time, it's not a feasible strategy.David Roberts: It's hard not to look back at our history with coal-fired power plants and think that some heavy-handed, super-simple mandate back in the ‘70s, however economically inefficient it was, was definitely not going to be so inefficient that it costs as much as as suing every coal plant for for 20 years.Cynthia Giles: Yeah, I don't think anyone would sit down and say, here's our plan, we're gonna just do them all individually. Beyond the expense, you don't get the benefits until the cases are over and the company installs. You have a 5, 10, 15 year delay in the public health benefits. For both of those reasons, it is not a sensible strategy. Plus, if you take another example that's top-of-mind today, oil and gas wells and pollution, there's over a million wells in the United States. That kind of strategy is hopeless for that. David Roberts: The key insight at the heart of all your work is that the difference between a rule that is generally complied with and a rule that is generally not complied with does not come down to enforcement — the degree of enforcement, or the strength of enforcement. It's much more to do with the design of the regulation. So let's start with an example of a rule that is poorly designed, such that it renders non-compliance inevitable and fails to meet its goals. What's a good example of doing it badly?Cynthia Giles: The perfect storm of a bad-compliance design was a program called New Source Review that Congress started and EPA was charged with implementing, that had a goal of cleaning up the largest sources of air pollution as they modernize. They exempted existing sources from the tougher controls, but said, you'll have to install them as you modernize your plant. That was Congress's theory, that over time, the largest sources of air pollution, including but not limited to coal-fired power, would gradually clean up their act.David Roberts: And the presumption was that of course they're all going to modernize at some point. Cynthia Giles: And they did modernize. But they took advantage of — and manipulated, frankly — the rule to modernize but avoid having to install the pollution controls. The New Source Review program was set up so that every determination of when are you modernizing enough such that you trigger the obligation to install pollution controls was a very fact-intensive site-specific decision. There was no general rule; every inch of ground was fiercely fought over. Then there was almost no reporting required, so the companies held the information that was necessary to determine if they had crossed that threshold, and they weren't going to give it to EPA without a fight. It was quite expensive to install these modern controls. It was totally worth it, because of the huge public health gains — well worth it from a regulatory perspective; the benefits far outweigh the costs. But it gave the companies a lot of incentive to fight. So what happened after that rule was put in place was exactly what somebody who's looking at rules through the next-generation compliance lens would predict, which is they look for ways around, they obfuscate, they withhold evidence, they fight, and they litigate. Every case takes years and years and years to get done. They lose in the end, in almost all cases, but they've gained some time. All the economic incentives lined up behind not complying. So that's an example of a disastrous design.David Roberts: That's a rule where, inadvertently, you've created a massive financial incentive for cheating. It is in the rational self-interests of some of these coal plants to fight and delay. It makes absolute sense for them. You could even argue, insofar as they're beholden to shareholders, that it's their obligation to fight. Cynthia Giles: Their obligation is to comply with the law, and they weren’t complying. They knew it. So I wouldn't take it that far, but I would agree that it was not only predictable that this would happen, it was inevitable.David Roberts: Was it predicted? Were there voices at the time saying, “this grandfathering idea is a disaster in the making”?Cynthia Giles: I wasn't there when this was set up, so I couldn't speak to what the conversations were internally. I would say that it occurred at a time when no one was really challenging this fundamental belief structure, which I think is demonstrably wrong, that most will comply and enforcement will take care of the rest. That was certainly the dominant view about how this structure should work. David Roberts: That's an example of where the design of the rule makes rule violations inevitable. You point out in your work that you can design a rule such that breaking the rule is more of a hassle than it's worth, or more expensive than it's worth. What's a good example of a rule that pulled that off?Cynthia Giles: The best example of a completed rule is in the acid rain program, which is particularly interesting for proving the thesis of next-gen, because it covers the same sector. Coal-fired power was the regulated entity, and unlike the compliance catastrophe that happened with New Source Review, the acid rain program had 99 percent compliance. How did they do it? A couple key interlocking features. No one of these does it by itself, but together they make for a robust compliance structure. One was continuous emission monitoring — don't estimate, know in real time how much pollution you have. This program was designed to reduce sulfur dioxide pollution from power plants that was causing acidic rain in big parts of the country and devastating ecosystems. Continuous, real-time measurement of sulfur dioxide was coupled with an incentive to use the monitoring by saying, “if your monitor is not working, or you don't pass quality control, we're going to assume you had a lot of pollution.” You'd think that seems like a no-brainer, but there are still programs that don't have that today — electronic reporting to a central system, which allows monitoring in real time and data analytics, which are important for spotting anomalies and fixing problems. And then simplicity is an under-appreciated value for getting compliance. Even though it's a complicated program, and monitoring is complicated, there's hundreds of pages of guidance on how to run these monitors and what to do, it all boiled down to a very simple thing: a ton of emissions and one allowance. Do you have enough allowances to cover your tons, yes or no? It’s impossible to miss a violation. The coup de grâs at the end is automatic penalties. If you don't have enough allowances to cover your emissions at the end of the year, you will be penalized automatically. You don't have to wait to be sued, you owe it right now. And by the way, your penalty is more than it would cost you to go out and buy an allowance. So this combination of strategies together made it hard to violate. There was really no way to manipulate the situation; everyone was going to know what was going on. There was only one pathway forward, and that was to comply. It was more hassle, more expensive, to violate.David Roberts: Trying to cheat on that, you'd have to rig your monitor, or lie on your electronic reports, at risk of much greater expense. So it just becomes easy to comply?Cynthia Giles: Yeah. The whole idea is to try to make compliance the path of least resistance. If you're not paying attention, or you have people that make mistakes — if you make it so that those kinds of things are addressed within your rule, you're not waiting to catch people afterward. It's brought to their attention through the design of the rule itself. David Roberts: Was the acid rain program notably cheaper for EPA? Is there a way of measuring how expensive it is in terms of enforcement and monitoring and compliance for the agency itself?Cynthia Giles: There is no perfect way of doing that, and I would say here's part of the rub. We're not measuring what a next-gen strategy would cost versus getting to the same result through enforcement. Because that's not going to happen, there isn't the resources to get to the same result through enforcement. So what you're measuring is a next-gen strategy that gets to your public health endpoint at reasonable cost against not getting there. Those are really the choices. The enforcement work that was done for coal-fired power is really the exception that proves the rule. This was a one-off that you could do it that way, normally you can't.David Roberts: Right, you'd have to have a galactic-sized enforcement agency with unlimited funds, which we definitely do not have in the EPA. Insofar as ordinary people do think about rule design, the in-vogue opinion these days is that market-based is great, flexible is great, performance-based is great; you want to specify the end-goal, not the means, and leave it open to entities how they comply. Ty doing that, you will get the cheapest possible outcome. This is something close to religion these days in environmental circles, maybe even beyond environmental circles, along with endless bashing of so-called command-and-control regulations, which dare to specify things and dare to impose mandates. You have a great discussion of this sort of fight. One of the points you make is that these terms have become almost meaningless, they're more identity-based now than referring to any particular features of programs. Could you explain to your average listener who has been generally convinced by the argument that markets are great, they're flexible, and they use the acid rain program as an example of this. Your point is not that market programs are bad, just that the features that make a rule good or bad are orthogonal to this distinction between markets and command-and-control. Cynthia Giles: I totally agree that performance-based and markets have become their own orthodoxy, comparable in power and breadth to the beliefs that drive the problem, that gave rise to next gen, which is, everyone complies — performance-based and markets are a similar type of orthodoxy. Both of those strategies have potential in the right circumstance. Markets are primarily about saving money for compliance, not about driving compliance; they're about more efficiency, and they have power to do that. Two things I would say is that, first, markets happen because of command-and-control. The market doesn't just spring from the earth fully-formed, a market is created, because a regulatory agency decides to create a market, that's what happened with acid rain. By imposing a regulation that says you can only have so much pollution, and you have to report in this way, and you need to have monitors, etc. those are traditional command-and-control type things. But the mechanism for efficiency was a market mechanism. At the end of the day, the market mechanism has nothing to do with the compliance result. It saved some money, but it did not drive compliance. The thing that drove compliance was this design structure that I described to you, all of which were standard command-and-control things, how you report, how you monitor, what your obligations are, penalties, that kind of thing. I get that economists love markets, and they really do, because they look great on paper — this idea that you can have individual flexibility and that everyone is so efficient seems great. Next gen is focused on the practical, what’s actually going to happen in the real world, not how it seems in theory. What I discovered in researching the book is that there’s actually very little data and evidence that supports the idea that markets are more effective than command-and-control in achieving environmental results. The record is just stunningly thin, and it's more an ideology that drives it. Here's an illustration of some evidence about the market and flexible performance, as opposed to the one-size-fits-all that most people are thinking when they think of command-and-control. So at the beginning of the Clean Water Act, way back when there was a huge problem of water pollution around the country and Congress was like, “okay, that's got to stop. States, you're in charge, go out there and do your monitoring and impose permanent limits and fix this problem; go get them.” And it didn't happen. It did not happen. The reason is that the states were, as it turned out, unable to surmount the technical and political challenges of imposing the necessary obligations on the sources in the flexible- and ambient-monitoring based way that everybody talks about as being so desirable. So Congress came back years later and said, “okay, guess what, you blew it. It's not working, states, forget it. Nevermind, we're not doing that. What we are going to do now is, every sewage treatment plant in America is going to meet the following standard. EPA, you write the standard, everyone's gonna meet it. No exceptions.” That's it, period, the end, the classic command-and-control thing. And guess what, the rivers got cleaned up. So when we look at what the record shows, yes, markets can work when they are accompanied by thoughtful design that looks at all these questions, and there's adequate monitoring, and there's good structure around it, but just saying we're going to get out there and be flexible is a recipe for disaster.David Roberts: One of the points you make in this respect — which was a little bit of a mind blower for me, too, because I never thought about it in quite this way — is that flexibility for the regulated entities is the mirror image of increased costs for the regulator. All that flexibility for the regulated means that more work for the regulator. People don't take that into account when they're thinking about these market-based rules.Cynthia Giles: There's all different types. Markets are one way, but there's also plenty of rules that say, “well, people should try to do A, but if you can't do A, then you could consider B, C or D.” And by the way, maybe some people have E, and maybe you're exempt. By the time you get to the end of this regulatory structure, nobody can figure out who has to do what, and it is very tough from a compliance-driving perspective, nevermind enforcement. If you can't be sure exactly who's supposed to do what, if every determination is very fact-specific, and you have to actually get all the records from the company to figure out why they chose C and not A, to figure out if they're doing anything wrong, you've created a situation where government can't know who's complying and who isn't. That degree of fog and gray and ambiguity provides lots of places to hide for companies. Some companies are legitimately operating in that zone that they're allowed, and some are hiding there. From the government's perspective, it's almost impossible to tell the difference without a huge investment of resources.David Roberts: This is another thing you point out. It's easy for lawmakers to say, “oh, we're gonna give all this flexibility to the regulated entities. Sure, that will require more from the regulators, more enforcement, more monitoring, more time and money. But that's fine. We'll just spend the time and money.” But they do not then boost the EPA budget to accommodate that; you don't get the additional resources. And the result is just violations, as you say — just a whole lot of cheating.Cynthia Giles: That leads to a lot of violations, and just as concerning, it leads to the government being unable to even know how it is going. They don't know whether the facilities are meeting what's required or not. So if there's a lot of monitoring violations, a lot of reporting violations, a lot of ambiguity about the pollution obligations, the government can't really say whether we're achieving the objectives or not. This is a really bad place to be for the government, when you have obligations that are important for protecting public health and you don't know whether you're getting there or not.David Roberts: Also, they're in statute, so you're supposed to know.  Are there generalizations you can make about when markets and flexibility are promising solutions, when they're a good fit, and when they're not? Cynthia Giles: I would say the most important and essential thing for a market to work is a good measurement strategy. If you cannot measure reliably and have a lot of confidence in the thing being traded being actually worth what it claims to be worth, then your market program will not work. There's going to be a lot of mess and confusion, and you will have zero idea whether you're actually getting there. I would say that’s essential, and all the experts say this too. Deep in the papers of economists favoring markets, they have throwaway lines saying, “of course this only works if you have good monitoring.” Well, okay, yeah. But that's a pretty big point, because there isn't good monitoring.David Roberts: I just want to emphasize this, because this is a point you made that has also stuck in my head: insofar as you’re specifically mandating facility-level reductions, and measuring performance at the end, that really raises the importance of being able to measure. If you’re not doing these facility-specific measurements, you really need to be able to measure the end-goal precisely, because that’s all you’re doing. Cynthia Giles: Imagine the acid rain program with no monitoring. “Okay, just get out there and trade your sulfur dioxide emissions. How much did you have? Well, you tell us how much you had and we'll see how it goes.” We would not have achieved the actual reduction to sulfur dioxide and acid rain with a system like that; it’s impossible.David Roberts: You'd still have all the market features and all the flexibility, but without the measurement, the whole thing falls apart.Cynthia Giles: You'd have no compliance, and you wouldn't really know how you're doing. You could measure the rain and see, well, we're not getting there. But you wouldn't know why. So yes, you absolutely have to have measurement. The other thing you need is a group of fairly sophisticated participants. they need to be able to report electronically with a high degree of precision and consistency, and you can't have a huge amount of variability across source types. Certain types of problems will be good for that, and some problems are impossible for that. It's important that the people who are designing policy recognize that. I would prefer if the ideologues who push markets for every problem would live by what their own colleagues say: you can't do it without monitoring. So don't even talk to me about your market until you show me your monitoring strategy.David Roberts: Measuring sulfur dioxide is fairly straightforward and possible. There's a limited number of coal plants there, they tend to be owned by big businesses that are relatively sophisticated and have this relationship with EPA already with reporting and monitoring of stuff. So it's a perfect area. What's an example of a problem where you look at it and say, “a market will never work there?” Where do you need a heavier hand? Cynthia Giles: We have an example in front of us in the Renewable Fuel Standard, also sometimes known as Low-Carbon Fuel Standard. It's a program designed to reduce greenhouse gas emissions and reduce dependence on foreign oil — from plants, essentially, is the part we're concerned about here. Carbon is recycled by plants. You create carbon when you burn the fuel in your tank in your car, but in theory, carbon is taken up by the plants when they grow. So the great theoretical construct here is that you would have recycling of carbon, so you would reduce the climate impact.David Roberts: This was about ethanol back in the day; it came about a long time ago and it predated a lot of other climate programs.Cynthia Giles: So the market-like situation in the Renewable Fuel Standard — the renewable energy credit that’s created was separated from the actual fuel itself. So companies were buying these credits, but they weren't necessarily buying the actual fuel that was made. It’s a market-like system, because it's trading pieces of paper, essentially, that people are trusting, hoping, believing, actually reflect a gallon of actual fuel. What we've discovered is that they don’t. There was a huge amount of fraud in that program. I shouldn't use the past tense: there is a huge amount of fraud in that program. So substantial that you can't know when you buy one of these credits on paper if it actually reflects either renewable fuel gallon. It is impossible to know. RFS has a ton of other big problems, which I could talk about, but this market-based element was doomed to failure, because there was no mechanism to be sure that a credit was actually worth what it claimed to be worth. That's why the market can't achieve the endpoint.David Roberts: And there are ambiguities in the chain here. You have to have the land, and if you plant biofuel crops in the land, maybe you're displacing the farming crops, which will then use fresh land. Maybe the fresh land use gets attributed to the biofuels, maybe not.Cynthia Giles: You're pointing out the reason why conventional biofuels are not climate enhancers, which is itself an interesting topic, and also has a significant compliance dimension. The narrower point I was raising was just about fraud in the market, because no one could be sure that there was actually a gallon of fuel produced; it was possible for companies to go in and just manipulate a bunch of paperwork and computer stuff, and voilà, they produced credits without fuel. There wasn't really a mechanism to prevent that from happening. One thing we've observed and learned from real-life experiences is that, if you create a market where people can make a lot of money and you have no controls, there's going to be a lot of fraud. That's just the reality of life. Rather than bemoan that reality and say, “oh no, there's fraud” — yeah, there's fraudsters, of course — you need to design a program that prevents that. Don’t complain about it and whine about it afterwards. Don't allow it to happen!David Roberts: Let's use our remaining time to think about how these principles of good regulatory design might apply to climate rules, which are very much in the news now. A lot of the discussion takes the form of, “let's use markets and flexibility, let's not be heavy handed, let's not use command-and-control.” That argument is replicating itself all over the place, to my frustration, and I assume yours. Let’s look at some specific examples. Your example from electricity was very gratifying to me, as a huge fan of renewable portfolio standards — state-based rules on utilities that say you have to increase the percentage of your total power provided by renewables over time. You say that these things can work, with one big caveat, so tell us about that. Cynthia Giles: It is not simple, but you can design something that looks like a renewable portfolio standard, where utilities have to buy some percentage of their power from solar, wind, and other forms of renewable energy. That's easy to measure, we know how to do that, we're already measuring that now. That system can be designed to function very well — you know you're getting the carbon reductions you're expecting to get. That's very possible to do. One that is talked about a lot, that doesn't fit into that structure, is energy efficiency. That goes directly back to the point we were talking about earlier, about measurement. Energy efficiency is how much energy you use to do something versus what you would have used for the counterfactual. You can already see it's not measurable; there's no way to go out in the world and take a sample that measures what would have happened if you did not do your energy efficiency program. That's one of the first weaknesses. Another significant weakness is that, because it's not possible to do a big giant modeling that figures out what the impacts of your energy efficiency project are, people have to have a shortcut. Administratively, you can't expect people to do this gigantic measuring thing every time you do a project, so people have developed this shorthand for what energy efficiency usually saves. If I have insulation in my ceiling, I can assume I save X amount of energy, and you can take that to the bank and have it considered as a credit.The robust research that's been done about those says that they greatly overstate the savings. What we've all been assuming we get in energy savings is not really what we get. One of my favorite illustrations of how the real world interjects into your theoretical construct is that the least effective energy efficiency is energy efficiency installed on a Friday. Somebody did a study showing that if your energy efficiency is installed on a Friday, it probably doesn't work as well as if it's installed on a Thursday. David Roberts: I'm just gonna pause for a minute and contemplate why. Everybody should take a moment to guess why that might be, before we get the answer.Cynthia Giles: On Fridays, people are incentivized to cut corners. You got to get that job done today, because you're not coming back tomorrow, and you don't want to come back on Monday. This is just one of many studies that have been done saying that the assumptions that we've all been making about what energy savings, and thus carbon reductions, we get from energy efficiency are not right. The last thing, which is common to every time, every rule, every structure, is: how did the incentives line up? All the incentives [in existing energy-efficiency programs] line up for people to overstate savings — the people who install it, the regulators, the public. Everyone wants to believe this is working well. Whenever you have a system where everybody benefits if you overstate something, then guess what? They're going to overstate it. And that's what the studies show. There have been some robust studies — including in California, which is one of the most rigorous programs anywhere — showing that because of these incentive structures, people overstate savings. This is relevant to carbon, and whether a clean electricity standard can achieve carbon reductions. If you include energy efficiency, you have the inherent uncertainty, the inaccuracy of the deemed savings, the incentive structure, all those things aligned to say, when you are trying to sell your energy efficiency credit, you don't know what you have there.Why is that a big problem? First, we can't solve that through enforcement — that should probably be self-evident. The reason it's a big problem is that if the utility buys energy efficiency credits instead of solar or wind credits, they are going to be emitting more carbon. If you include this hard-to-measure element in your market, you're going to reduce the chances that you achieve your carbon reduction goal. Which is not to say that energy efficiency isn't good. We gotta have it as much as you can, as fast as you can, everywhere. That's absolutely essential. What I argue is that you need to do that through something like an energy efficiency research standard. You have to mandate energy efficiency as fast as you can. What you shouldn't do is combine it with the utility’s obligation to achieve a clean electricity standard, because that will undercut your carbon reduction goals.David Roberts: You keep those separate, basically.Cynthia Giles: Yes, don't put it into the market, put it into a command-and-control program mandating that people do energy efficiency.David Roberts: On the energy efficiency side, rather than trying to measure and make the rewards based on reduction in energy use — which is difficult, if not impossible to closely track — you just tell people to insulate buildings. You just require it. Cynthia Giles: There's ways to design programs of that type that provide incentives and efficiency. The whole idea of an energy efficiency resource standard is not as simple-minded as just telling everybody exactly what to do. But it decouples it from the market. What you can't do is put something that's not measurable, essentially, into a market setting, because you're going to distort that whole market. You will undercut the ability of the market to do what it's supposed to be doing. You need to do it a different way. And there are other ways to get energy efficiency.David Roberts: As I was reading this section of your paper, it occurred to me that there's an analogous situation in terms of cap-and-trade systems and offsets, which are legendarily entirely based on counterfactuals — what would have happened if X had not happened. You're taking those counterfactual-based credits and sticking them directly into a market where they are doing just what your theory would predict. Cynthia Giles: Totally. Carbon offset programs have all the same problems we just talked about with energy efficiency, plus some more. All the studies that I've seen have said that offset programs are not delivering anywhere close, not in the same solar system, as what's being claimed. You've got all these incentives for people to over-claim, and of course that's what they're going to do. It's impossible to check up on that. There's been a huge amount of fraud and other significant problems with carbon offsets.David Roberts: What about cap-and-trade generally? Say you could take offsets off the table, what are your thoughts on trying to marketize carbon dioxide emissions?Cynthia Giles: From a compliance lens it is totally doable if you have a measurement strategy for every participant. But you have to have something that you can take to the bank, and say, “yep, that's a ton of carbon, I'm sure about it.” If you have that, then a market strategy is a feasible way to drive innovation and reduce costs. It has potential, but where it runs aground is by allowing in things that are not measurable. The more unmeasurable they are, the more the market will seek those out, because those are going to be cheaper, because they're not real! That's where you invite disaster, is by allowing the unmeasurable things into your market. David Roberts: On transportation, one of your other three climate-related examples, we talked about the RFS, the biofuels program, and what a disaster it is. You're a little bit kinder to low-carbon fuel standards of the kind that are now in place all along the West Coast, California and Oregon and Washington, and you're also pretty friendly toward fuel economy standards, i.e., old school CAFE standards. Explain why those work, in contrast to the RFS.Cynthia Giles: Fuel economy standards, or emission standards for vehicles, are possible to design for strong compliance, Volkswagen notwithstanding. And by the way, Volkswagen’s not the only one. I think the EPA’s eyes were opened to the possibility of cheating and fraud at scale. I felt like saying, “see, see this what I've been telling you.” People's eyes were opened to that and the adjustments have been made in the vehicles program at EPA to address that. That has now become very, very tough to get away with — and you know, eventually, passenger vehicles are going to shift to electric. That's just a whole different animal in terms of compliance strategy; that seems very doable.David Roberts: Let me ask you about that, because, from a regulatory point of view, this has always struck me as a little bit of a dilemma. It's one thing to regulate internal combustion engine vehicles, such that they become more efficient and emit less over time. But when you're trying to engineer a mode-switch to a different kind of engine, it seems like just ratcheting up fuel economy standards is a bank-shot approach. Cynthia Giles: The near-term thing, of course, is to make the vehicles as efficient as they can be and reduce pollution as much as possible — carbon is not the only thing we care about from the roads, there's a lot of health problems associated with vehicles, and huge environmental justice issues, too. So yes, you can do better than where we are now on efficiency and pollution from vehicles. But on the shift to electric vehicles, that's very manageable, to ensure that people are doing what they claim to be doing — that's a manageable thing in terms of the manufacture of those vehicles.I just want to be clear, I am not saying that low-carbon fuel programs don't have the same problems that the Renewable Fuel Standard has, in terms of climate impacts. It's a little bit better of a design, because it doesn't have a cliff-like drop off in the obligations like the RFS has. It's a more gradual and market-type system, so it has those benefits. They both depend on trying to figure out how much carbon comes from land use changes. They have the identical problem for that.David Roberts: Anything that involves biofuels is gonna run into that problem.Cynthia Giles: If I could throw in another topic on climate: a late breaker that I think is particularly encouraging and interesting is EPA’s proposed rule for hydrofluorocarbons, HFCs, which are massively intensive climate-forcing, I mean, hundreds to 1000s of times more climate-forcing than carbon.David Roberts: Typically in refrigerants.Cynthia Giles: Usually, yes. This is a next-gen type story in Europe, where they first started regulating HFCs, as they are called. There's been a huge amount of fraud and illegal activity and illegal smuggling, and they got problems out the wazoo over there — they’re more than 30 percent over the standard, already, and that's before they've even gotten into where it's tight. They're in a bad way over there. And the same thing could have happened in the US. Congress passed the law, in December 2020, telling EPA to regulate HFCs and telling them in general how to do that. In May, EPA put out a proposed rule which is the most forward-thinking next-gen type proposal since acid rain.David Roberts: Oh, really? Can we pause and ask why? Is it just good people at the EPA or what?Cynthia Giles: I think it is good people who are open to innovation and who looked at the situation in Europe and thought, “oh, my God.” It's a situation where non-compliance will sink you. It's not around the edges, it could be better — no, you will never get there. You're gonna have mostly illegal activity.David Roberts: So necessity is the mother of invention.Cynthia Giles: And they're a great bunch of people over there in the air office at EPA, innovators and thoughtful and very open to trying new things. The rule they proposed in May has a whole bunch of terrific ideas to try to prevent that kind of disastrous thing from happening in the United States. Let me just give you a couple examples of things that they've included, that Europe doesn't have. In Europe, the products just come in and the countries hope to track them down if they were unlawful later. Good luck with that, okay; that that's not gonna happen. So what they're proposing is that there'll be a real-time check at the border. You cannot bring a product, customs will not allow it in, unless they connect to the data system and show that A), you’re legitimate, and B), you have enough credits to cover this import. If you don't, then sorry, you can’t come in. David Roberts: Isn't that expensive? Cynthia Giles: No, it's not hugely expensive. Customs has, over the years, developed electronic programs to enable it to take advantage of today's IT. EPA can develop its side of that and plug it into the Customs system. Real-time monitoring at the border is a very doable thing in today's IT environment, and it makes total sense that you would try to stop things at the border. Another thing they included in here is a QR code, like the barcode that you have on just about every product you buy now, on every container, which also links to EPA’s data system. It is possible for anyone with a phone to determine, is this company that's trying to sell me this product legitimate? It is possible to do that today. There's lots of other things, but those two things illustrate that EPA has designed a very tight system to block things at the border and then to reduce the demand for those unlawful products by making it possible to know in real time if every single container is legal or not.David Roberts: And thereby make it a huge pain in the ass to try to smuggle stuff in — to try to cheat.Cynthia Giles: A huge, huge pain. Your chances of getting caught are very high, the consequences are severe, and your market is substantially reduced, because EPA is working on the demand side too. It's a structure that is thoughtfully designed to prevent illegal activity. This is one of the toughest kinds of compliance problems: how to keep illegal products from coming in across the border. Very hard. But this is a thoughtful and quite groundbreaking proposal from the EPA.David Roberts: This raises a side question. When people talk about carbon taxes, there's a lot of discussion of border adjustments, which would amount to trying to do roughly the same thing — make public the amount of carbon embedded in every product that comes in over the border. That strikes me intuitively as much trickier than measuring HFC content. Have you given some thought to that?Cynthia Giles: That gets to the heart of the measurement issue we've been talking about: what is the embedded carbon in your product? There's a jillion judgments that go into that question. The Renewable Fuel Standard is one illustration of that, where the recent science is showing that actually, when you produce the conventional renewable fuel, you end up disturbing a lot of land, and you're arguably making the climate situation worse, not better. Every product that you attempt to put a carbon stamp on is a gigantic measurement question, and very, very challenging. Imposing a tax once you have a carbon measurement is comparatively quite simple. The tax is not the point. The point is, who puts the carbon label on there, and how confident are you that that reflects real life?David Roberts: I'm just imagining that every link in the supply chain has the incentive to downplay the amount of carbon involved — literally every entity involved in all of this wants to cheat. And there you are, the regulator with thousands and thousands of these products in front of you.Cynthia Giles: Whenever you have an incentive system that's lined up to push in one direction — where it's obvious what the regulated parties would prefer the outcome to be, and you have essentially no real way to check — that's where you get these kinds of compliance disasters.David Roberts: As a final subject, let's talk about oil and gas production. That's your third example — specifically, you're talking about methane. Notoriously, the oil and gas production process leaks methane at more or less every stage, and methane is a very active short-term greenhouse gas, which is a problem. There's been arguments going on for years now about measuring and enforcing this. Industry has been claiming they're doing it on their own, and asking to report their own measurements of what they do. How do you tackle methane, which is manifestly difficult from a monitoring perspective?Cynthia Giles: On the one hand, the methane problem, at least from a technical perspective, is fairly straightforward. People know what to do, how to reduce the methane that comes from the wells. People know how to do that. They're not doing it, but they know how to do it. The technical answers are well understood. The compliance problem is more complicated, because of this point that you've put your finger on, measuring what's going on is so difficult. It's even more difficult than it may appear, because the amount of methane released is intermittent. It could be a huge amount and then it drops off. It's intermittent and unpredictable as to which wells are going to be the so-called super emitters. Some of them are quite stunningly high numbers for at least some period of time. Until a monitoring solution is figured out — and a lot of people are working on that. Satellites might be part of the answer, there's aerial monitoring strategies, there's some ground-based ones, there's a lot of people applying themselves to this problem. Having a monitoring strategy would be a game-changer for this industry, figuring this problem out and getting it fixed. But in the meantime, there are things that can be done. I can give you two small examples, but it shows the mind shift that's needed in thinking about these problems. One is automating what you can. One of the problems is, people leave the hatches open on the tanks at the well pad. Sometimes that happens accidentally, but you got a million well pads, those numbers add up. If you had an automatic closing … that's just an illustration of thinking about your problem differently. See if there's a technical fix. The other one is a more conceptual fix, which is shifting the burden of proof. There's no way the government can bind your wells; that's not gonna happen. Maybe someday, through satellite imagery, it is possible to get closer, but we're nowhere near that right now. Shifting the burden of proof says, if there's credible evidence that you have a pollution problem, it's on you, the company, to prove it isn't, and to fix it. The data shows that if you're doing everything right, you shouldn't have that kind of a problem at your site. If you're seeing a huge amount of emissions, something is up — you own it, you control it, you have access to it, it should be on you to go figure that out. You shouldn't be counting on a handful of government inspectors to get out to these million sites around the country to try to figure that out. You own the equipment, you have the inspection records, you have access to the people, you are in the best position to solve this problem. And you should, because not only does methane have climate change impacts, but along with that are VOCs and other pollutants that neighbors are being exposed to. You have to take care of that problem. David Roberts: If we know what steps reduce that problem, if the technical problem is solved, why not just go full command-and-control say: all operators of all wells have to take steps one, two, and three, and prove to us that you did it.Cynthia Giles: That's certainly a sensible way of going. What I'm talking about is, how do you handle the compliance problem of, did you do it? Let's say you were required to do it, but you didn't do it. EPA finds in the field lots of companies that are at oil and gas wells that are not doing what's required today. It's a big compliance problem, because there's more than a million wells, and methane is intermittent, it's not visible to the naked eye, you gotta have specialized equipment to see the leaks, it's unpredictable. If you got a lot of companies out there that are, accidentally or on purpose, not doing what they're supposed to be doing, how are you going to find them and get that fixed? Shifting the burden of proof is one illustration of how you could change the framework under which everybody's operating. You might even be able to, by doing that, bring in the possibility of citizen science. If there are citizens who can meet the threshold for credible evidence, that provides some additional incentive and pressure for companies to do what they're supposed to be doing.David Roberts: Oh, interesting. Well, I've kept you too long, but you have now anticipated my final question a couple of times, so clearly you've been thinking about it. One of the trends I've been following is new ways of measuring these things, specifically, satellites that claim to track real-time methane emissions down to the square mile. They're saying the same thing about CO2, with satellites that pinpoint real-time CO2 emissions down to the square mile, all over the Earth. Then there are these other programs where you measure pollutants at the ground level, on a block-by-block basis. You can now get sensors that you can plug into your phone. Anybody can do this. My point being, insofar as the difficulty of measurement is a huge impediment to good regulation, this trend towards more and more different ways of measuring, which don't rely on regulated entities, do you see that opening up new avenues for regulation? Do you think regulation could get better on the back of monitoring getting better?Cynthia Giles:I absolutely do. The technological innovation that's going on in monitoring is a huge, huge potential gamechanger for many pollution problems. There's no silver bullet, though. For example, satellite imagery is great for some types of pollutants, but the resolution isn't that terrific, and it's not so good when it's cloudy. Every type of monitoring system has its own issues. But also, lots of important environmental problems are not just straight ahead pollution-monitoring type problems. Lead paint is an example. Industrial agriculture. Renewable Fuels Standard. Energy efficiency. There's a lot of important things that are not subject to just being monitored. Having said that, I do think that the revolution in monitoring, where it's getting cheaper, smaller, more mobile, better, provides a huge amount of opportunity, and is terrific news. If I could just add one thing. Sometimes, when I talk about next gen, people misunderstand me, and I just want to make sure that I'm leaving no ambiguity. Sometimes people think I'm saying we don't need enforcement. No, no, no, no, I am not saying that. Enforcement is essential, required, and must-have. You cannot have an effective compliance program without it. My point is that enforcement alone cannot fix the big compliance holes created by bad regulatory compliance design. I just want to make sure no one's confused. Enforcement is essential, but stronger regulations are going to get much farther down the road than relying on enforcement alone.David Roberts: You're pushing back against trends in thinking around environmental regulation that have been building for decades now — this obsession with markets and flexibility, this ignoring of enforcement, or this assumption that if you throw more enforcement at it, you can get any rule enforced. How lonely are you in this fight? In terms of the people running EPA now, how are your ideas catching on? What's the state of thinking in the field?Cynthia Giles: The assumption that compliance is pretty good and enforcement will take care of the rest is still the entrenched thinking. But there is some traction for these ideas, maybe in part because I've been such a giant pain in the neck. Compliance is not usually talked about as part of the policy discussion, but it should be, because compliance is about what's going to happen in the real world. That's the place that matters; that's what counts. The people involved in policy discussions do care about what happens in the real world. I'm out there raising a ruckus, and I'm hoping that we will get compliance at the table at these policy discussions, so that people do not continue blindly along, adopting rules that will not achieve what they're intended to achieve. And nowhere is that more important than climate. There's no time. We cannot make mistakes and hope to fix them later. It's got to be right. It's got to happen the first time out of the gate. It's essential these ideas get baked in.David Roberts: Awesome. Well thank you for fighting the good fight, and for taking all this time to talk.  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

Last week, I wrote that there is no “moderate” position on climate change. Either we act rapidly and at massive scale to avoid the worst consequences … or we suffer the worst consequences. Either outcome involves radical change. There’s no avoiding radicalism. Lots of activists, politicians, and ordinary citizens understand this need for ambitious action — they are convinced by the scale and severity of the problem — but there is less clarity about what qualifies as ambitious. In an atmosphere of legislative scarcity, when tough decisions are being made and policies are being prioritized, what exactly should climate advocates be pushing for? What’s a simple way to distinguish between climate policy and good climate policy? In the great climate policy feast, what is the entrée and what are the side dishes?We lack a common framework for judging climate policy, which creates a fog in which dedicated advocates can lose focus and malefactors can get up to shenanigans. Within the fog, people tend to pick their favorite markers of climate commitment based on instinct and affective affiliation (shut down pipelines! ramp up nuclear power! impose a carbon tax!). What counts as good policy becomes a matter of identity rather than what would most effectively ratchet down carbon emissions. The fog allows weak and marginal policies to be branded as moderate, or, other times, to masquerade as radical. It leads activists to diffuse their energy, while core policies often don’t receive the coordinated support they need.We need to clear away the fog, fast. Policy decisions are being made over the next few weeks that will reverberate for decades. This is crunch time on climate policy and everyone who wants serious action needs to be (at least roughly) aligned.So I want to spend a few minutes laying out a simple framework to help people think about how to prioritize climate policies. It doesn’t cover everything, but it’s a pretty good rough-and-ready guide.Clean electrification is the entrée. Everything else is a side.How can the US hit net-zero emissions by or before 2050, a goal shared by almost every Democrat and, at least rhetorically, by some Republicans?The key is to immediately begin reducing emissions and maintain a rapid pace of reduction for the coming three decades. That is the only way we have a shot. If we wait another decade to start rapid reductions, the curve will simply be too steep. It has to start now. So we can think of the work in two parts. Job One is to rapidly push fossil fuels out of the system using technologies and strategies that we have on hand, such that we reduce carbon emissions by around 50 percent by 2030. Job Two is to research and develop the technologies and strategies we will need to continue rapidly reducing emissions from 2030 onward, such that we hit net-zero on or before 2050. Job Two is important. But Job One is the main thing. Job One is the entrée. Without it, you don’t have a meal. What does Job One consist of? This is important: while different climate models disagree about which policies and technologies will be needed to clean up remaining emissions after 2030, virtually all of them agree on what’s needed over the next decade. It’s clean electrification: * clean up the electricity grid by replacing fossil fuel power plants with renewable energy, batteries, and other zero-carbon resources;* clean up transportation by replacing gasoline and diesel vehicles — passenger vehicles, delivery trucks and vans, semi-trucks, small planes, agricultural and mining equipment, etc. — with electric vehicles; and* clean up buildings by replacing furnaces and other appliances that run on fossil fuels with electric equivalents.Or as I summarize it: electrify everything!Clean electrification is the entrée. If you decarbonize electricity, transportation, and buildings, you’ve taken out the three biggest sources of emissions in virtually every country. The technologies and policies we need to do it exist today, ready to deploy. Exactly how much of the US economy can be decarbonized through clean electrification is an open question. Saul Griffith of Rewiring America is an optimist. He thinks electrification can reduce between 70 and 80 percent of US emissions by 2035, and probably in the 90s eventually. (Listen to my podcast with Griffith.)We’ll see. Today, there are all sorts of edge cases that are difficult to electrify — bigger trucks, airplanes, trains, ships, steel, concrete, a variety of high-heat industrial applications — that might be easier with cheaper zero-carbon electricity and a decade of innovation. There’s no way to know in advance how far electrification can get, though it’s worth noting that critics have underestimated it at every stage thus far. Regardless, whether it can ultimately get at 60 or 90 percent, clean electrification will do the bulk of the work reducing emissions over the next decade. It is the entrée.None of this is to diminish the scale and difficulty of Job Two — all the side dishes. We need those too. We’ll need lots of zero-carbon liquid fuels for industry, ships, and airplanes, so we need to work on developing clean hydrogen. We’ll need to figure out some sustainable biomass options, along with a variety of ways to capture and store carbon dioxide. We’ll need focused innovation in geothermal energy, long-term energy storage, energy management software, and all sorts of other things. Much work remains to be done.Nonetheless, clean electrification — done in a way that honors and protects frontline and vulnerable communities — needs to be the top item on every list of climate demands. It would be fatal for climate activists to take it for granted or assume it’s taking care of itself. It is not.Climate policy that’s all side dishes is not “moderate”As I wrote last week, the danger is that weak and insufficient climate policy gains a reputation as moderate. But the danger is more specific than that: it’s that moderate policy will be all side dishes and no entrée. It will be all policies that prepare to phase out fossil fuels a decade hence … and none of the policies that phase them out today. This type of approach is on particularly clear display these days from Republicans and their nascent “climate caucus.” Republicans in the House recently introduced a package of climate policies centered around carbon capture (helpful to fossil fuels), nuclear power (no threat to fossil fuels in the coming decade), and tree planting (irrelevant to fossil fuels). But it’s also what’s passing for “bipartisan” climate policy. A particularly on-the-nose example is the Clean Energy Future through Innovation Act of 2020, introduced in the House by Reps. David McKinley (R-WV) and Kurt Schrader (D-OR). It would establish a clean energy standard to decarbonize the electricity sector … in 2030. Until then, we’ll have a “decade of innovation,” whee!Needless to say, “start reducing emissions in 2030” is the very definition of a climate policy meal with no entrée.Our beloved West Virginia Sen. Joe Manchin (D) recently produced an even more elaborate version of an all-side-dishes climate package, in the form of a 423-page bill he released, somewhat out of the blue, earlier this month. It was unclear if the bill was meant to be part of the bipartisan infrastructure package or something else. Mainly it reads like a Manchin wish list.It’s a fascinating document. It’s got a lot of policies in it. Here’s one page of the bill’s 3.5-page table of contents:And not just policies, but good policies. There’s virtually nothing in it I would disagree with on the merits. Clean electricity will need new grid infrastructure and more robust supply chains and better cybersecurity. Energy efficiency is great; so is keeping existing nuclear power plants open. I’m even down with carbon capture and utilization research. But it’s all side dishes and no entrée. It’s all preparation for pushing fossil fuels out with none of the actual pushing. It’s all kinds of stuff that will supplement clean electrification without the clean electrification itself.This is the kind of climate policy that is in danger of being branded “moderate” — the kind that does everything but rapidly push fossil fuels out of the energy system in the coming decade. Progressives need to demand an entréeClean electrification is the core of any ambitious climate policy. Without it, we’re still spinning our wheels, innovating without deploying what we’ve already innovated.There is very little for clean electrification in the bipartisan infrastructure package recently unveiled by Manchin’s gang of ten in the Senate, save some money for transmission lines and electric buses.So far, progressive Democrats aren’t making a fuss about the bipartisan package because they have assurances from both Senate Majority Leader Chuck Schumer (D-NY) and House Speaker Nancy Pelosi (D-CA) that alongside the bipartisan bill there will be a reconciliation bill, which can get through the Senate with only Democratic votes. Pelosi is under no illusions that anything that directly challenges fossil fuels will get any Republican votes. "I don't think there's any question that the more bipartisan a bill is, the less green it is," she said last month, because Republicans "are in the pocket of the fossil fuel industry."So progressives are looking to reconciliation to pass the rest of President Biden’s climate agenda. The climate plan Biden campaigned on, the infrastructure plan he released as president, and the plans released by Democrats in Congress all contain extensive clean-electrification measures, including a clean energy standard to decarbonize the grid by 2035, tax and point-of-purchase incentives for electric vehicles, and programs to electrify buildings. Those — implemented with a strong focus on environmental justice — are the key climate pieces that need to be included in the reconciliation bill. They are the entrée.The question around reconciliation will not be Republican support, but support from Manchin and his crew of self-styled moderates. They will push for compromises that go easy on fossil fuels. Progressives need to hold the line: only by pushing fossil fuels out the system, beginning immediately, can Democrats meet the challenge of the moment.That means clean electrification: the policy that makes climate legislation a meal. 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, longtime activist Tzeporah Berman discusses the need to track and reduce fossil fuel production (not just consumption) and the Fossil Fuel Non-Proliferation Treaty that she and other activists created to help coordinate those efforts. Full transcript of Volts podcast featuring Tzeporah Berman, July 7, 2021(PDF version)David Roberts:For as long as I've been covering climate change, it's been conventional wisdom among economists — and the kind of people who aspire to please economists — that the proper focus of climate policy is on demand. We must reduce demand for fossil fuels, the argument goes, otherwise any supply we shut down will just pop up somewhere else.Activists have always disagreed with this logic. For many of them, the fight against climate change is a fight for places — specific places, with histories, peoples, and ecosystems — and every fossil fuel project is, in some way or another, an assault on a place. Over the last decade, more economists and policy wonks have come around to their way of thinking, questioning both the economics and the sociology of the demand-focused conventional wisdom. As things stand now, wealthy fossil fuel–producing countries are making grand emission reduction commitments while continuing to ramp up production. All that fossil fuel has to go somewhere. It creates its own set of commitments and investments, its own momentum.My guest today, Canadian activist Tzeporah Berman, has been fighting for places since grunge and flannel were big. There is no way to do her resume justice in a short intro, or else I would never get to the podcast, but here are some highlights.In the 1990s, she fought clear-cutting projects with blockades and civil disobedience. In 2000, she co-founded ForestEthics, which uses clever communications campaigns to shame companies into using less old-growth wood. In 2004, she turned to climate change, founding her own nonprofit advocacy group, PowerUp, to defend BC’s carbon tax; in 2010 she became co-director of Greenpeace International's 40-country climate and energy program, where she led its storied Arctic and Volkswagen campaigns; in 2015, she was appointed to the BC government’s Climate Leadership Team to advise on climate policy; in 2016, she was appointed as co-chair of the Alberta government’s Oil Sands Advisory Group. She also led the effort to secure the Great Bear Rainforest agreement, which protects more than 40 million hectares of old growth forest. Her activism continues today — she was just arrested in May defending old growth forests on unceded Pacheedaht and Ditidaht Territories on Vancouver Island, BC.Anyway! In 2019, Berman received the Climate Breakthrough Project Award from a coalition of foundations, which came with $2 million to create “breakthrough global strategies” on climate change. She used the money on a project she’s been thinking about for a while: the Fossil Fuel Non-Proliferation Treaty. The IPCC is clear: there are already enough fossil fuels in known reserves to blow the world past its 1.5°C temperature limit. Yet fossil fuel production continues to increase.Fossil fuels have become a threat to all of humanity, as nuclear weapons are, and just as with nuclear weapons, Berman believes we need a global agreement to cap their growth and ramp them down. The Fossil Fuel Non-Proliferation Treaty is meant to be a template for such an agreement.Though the treaty is relatively new, it has already been signed by nine cities and subnational governments, more than 480 organizations, and over 12,000 individuals, including a wide array of academics, researchers, and scientists.I called Berman to hear more about the need to address fossil fuel supply, the motivations behind the treaty, and where it might go in the future. Tzeporah, welcome to Volts.Tzeporah Berman:Thank you. David Roberts:I'm so happy to have you here. It seems like the last time we talked was either a few years ago or 100 years ago.Tzeporah Berman:  It definitely feels like a very long time ago, but so does last week. Time is fungible right now.David Roberts:Time is meaningless. OK, so I want to talk to you about many things, including the Fossil Fuel Non-Proliferation Treaty. But before that, I'd like to just hear a little bit about what pulled you into all of this. You were born into a middle class Jewish family in London, Ontario, and went to school originally for fashion design, yes? Tzeporah Berman:  You’ve been digging far back!David Roberts:And you were even lauded, even won some fashion-y awards -- then took a sharp left turn. So what in your youth pulled you toward environmental activism?Tzeporah Berman:  Like a lot of my privileged generation, I took a trip to Europe, with a Let’s Go Europe in my hand and a train ticket, in my first year of university, in the summer, and at the time my dream was to go to the Acropolis. I was studying Art and Art History and Fashion Arts Design because I had to have a career and all I wanted to do was art. That year, in the late ‘80s, pollution was so bad — in a lot of cities in Europe, but in Athens in particular — that the Acropolis was melting. I can remember hiking up to the top, and this is before all the restoration, and you could just see the pollution on it. It was all crumbling. I looked down on the city, and it was just covered in this yellow haze. I got back to my youth hostel and I remember rubbing my face and leaving a white streak across it and coughing up black goo. And I was like, I have got to get out of here. I mean, I'm Canadian, I'm used to a lot of space, a lot of air. And my sister and I, who I was traveling with, we were like, we’ve got to go to nature. We just picked a spot on the map and went to Germany: we're going to hike in the Harz Mountains and drink beer! And we went to the Harz Mountains. I didn't know that most of the Harz Mountains is dead, left standing as a testimony to acid rain. So we get off this train and start hiking through a standing dead forest, not a bird sound, not anything. Those two days rocked my world. I remember coming back to Canada and thinking, we are so lucky. And being really scared. I think environmental consciousness is one of those things where there's a new lens and then you can't see anything else. I, at least, went through that phase, and I seem to have never gotten out of it. So I started working on environmental issues, I dropped out of Fashion Arts Design, and I enrolled in Political Science and Environmental Theory and Environmental Studies at university. That was the beginning for me.David Roberts: And it's been a long road since. You spend a lot of your time organizing and fighting against forest exploitation, clear cutting, and fossil fuel exploitation. In the climate wonk community, it’s conventional wisdom that the only way to really solve the fossil fuel problem is to go after demand.If people want fossil fuels, they're going to find them and burn them; if you shut down demand, it doesn't matter if people are supplying fossil fuels, they won't get bought. But if you shut down a supply project, and there still is demand, supply will just pop up elsewhere. I'm sure you've heard variations on this a kajillion times. Why do you think that's wrong?Tzeporah Berman: I think the theory for a long time, now almost 30 years, has been that we're going to constrain demand -- which is happening, obviously: more electric cars, zero emission buildings, zero emission vehicles, etc. -- demand is going to go down, price is going to go up, a higher price on carbon, and the markets are going to constrain supply. That's what I often get from the Canadian government: “We're not responsible for who produces or how much fossil fuels are produced, we're just responsible for emissions.” And the thing about that market theory around demand is that it's not working. I mean, it's not working fast enough to keep us safe, that much is clear. I still actually kind of like it as a theory, but the fact is that there are two big problems with it. One is that the markets are completely distorted by fossil fuel subsidies and now by governments out-and-out buying projects that the industry runs away from. So renewables are cheap, cheaper than fossil fuels in a lot of places now; oil and gas companies are operating at the bottom of the SMP, more bankruptcies in that sector than any other; but these projects are still surviving. Like the Trans Mountain Pipeline in Canada: it's surviving because investors ran away from it and the government bought it for $12 billion. That's because of the political influence of the fossil fuel industry, and because governments are only just starting to really grapple with the fact that they're going to actually need to deal with supply as well as demand. The fact is, there are very few issues, if any — intransigent issues, where governments have had to step in — that we haven't had to deal with both the supply and the demand side of the equation.David Roberts:  Another thing that I think is germane, especially to your case, is: “demand” is abstract. But fossil fuel supply fights take place on the ground, in particular places, and pull people in for a wider variety of reasons. So tell me about a supply fight that you won. What brings people into it?Tzeporah Berman: I will, but I want to say one thing about places and policies. As a forest activist, when I first started working in the climate movement and on climate issues, the thing that I really noticed is: in the forest and conservation movement, we fight for places. We campaign about places. The climate movement — especially 15, 20 years ago, when I really started engaging — talks about not places, but policies.I'll never forget, at a briefing with this great, brilliant pollster, Angus McAllister, he said to me, “Why is it that the climate movement is always trying to sell the airplane ride to the vacation? Sell the beach! Sell where you're trying to get to! Not the complicated, annoying journey to get to it.” I think that's relevant here. I have three university degrees, and I spent years trying to figure out, what am I for on climate change? It's like, “no cap-and-trade, no cap-and-trade and auction, and then is it carbon tax, but from this benchmark date, and not this.” And we wonder why millions of people are not getting involved. Then when the pipeline, and the coal plant, or even the Heathrow Airport — when these tangible fights start arising, people can see them in their backyard, they can see that they're bad. The problem with climate change for years has been that carbon emissions are invisible. Oil spills are not. This pipeline, right now, they're starting to drill under Burnaby Mountain and under the Fraser River to put this pipeline in. Well, that's very tangible to people. I've been working on pipelines and oil sands issues for a little more than 10 years, and in that time, I would say we've won almost every fight. We've either stopped or delayed every single pipeline that the industry has proposed, other than the existing pipeline fights, which are Trans Mountain and Line 3. Enbridge Northern Gateway: dead. Keystone: dead. Energy East: dead. These pipelines have been stopped because of citizen action, which delays the project, raises the concerns, and draws both investor action and government policy action.David Roberts:People’s involvement and passion for a particular place, protecting a particular landscape, is hard to generate for “the atmosphere,” which is everywhere and nowhere. Do people build momentum from these fights to go on to bigger things?Tzeporah Berman:Oh, entirely. Yes. The momentum builds. But also, what I've noticed and witnessed is, people go through a personal journey. The climate movement is growing and diversifying because of these fights. David Roberts:You think they pull in young people, specifically?Tzeporah Berman: They definitely pull in young people. But what I was thinking of in the back of my head was indigenous leaders that I have worked with in Canada, on Northern Gateway for example, who started these fights because this is a human rights issue. It's issues to do with their trap lines, their concern for water. As we work together, as we're having discussions, as they're learning, it's a journey. Now many of those same leaders are giving some of the most passionate climate speeches I've ever heard. Nebraska farmers that I worked with on Keystone, they started this because of eminent-domain issues. I watched some of those individuals become passionate about working on climate change. Because it's a journey — they start to be introduced to the other aspects of the issues. It's a mistake that we make in all of our communications work: we keep talking about the message box and the narratives. Well, we need a narrative that brings people with us, and that's what's happened through the site fights.David Roberts: This might sound like a weird parallel, but when people talk about music, lyrics that are very specific — ”Jane broke my heart at the high school dance” — can resonate in a universal way, even more universal than if you try to write something more generic and broad. The specificity of it is a gateway to the universal. I think of land fights and exploitation fights the same way. Like the Nebraska farmers: “Oh, this fight is happening all over the place.” Tzeporah Berman: Right, and they motivate people, because they're not about information and data and statistics. Of course there has to be a foundation of knowledge, but what resonates with people are the values: this isn't fair, this isn't right that this is happening to this local community, that they face the dangers or the cleanup from the oil development, or the toxins. Then there's a journey around to, “Well, wait a minute, why do these oil and gas companies get to profit off this when we know that it's killing us?” — not just at the local site level, but because of the contribution to climate change. What we know from decades of social movement theory and psychological research is that what motivates people is triggering values, but also an opportunity to do something. Education doesn't motivate; opportunity motivates.David Roberts:Agency. Having some sense of control. So what happens when the indigenous people of northern Canada meet the Nebraska farmers, meet people in the Congo fighting oil projects — unlike demand fights, which tend to be fought by wonks and wonky NGOs, these supply fights bring in a really wide diversity of people. What does it look like when those people hook up with one another? What’s it like to watch them try to work things out?Tzeporah Berman:It's fascinating. It's joyful. It is also painful. One of the things I did when I was working predominantly on tar sands and pipelines is start to bring people together. I realized, whether you're in Nebraska or northern British Columbia, you're often fighting the same oil companies, the same pipeline companies — same strategy, same messaging, struggling with the same or similar regulatory issues. But they weren’t talking to each other; the movement wasn't learning from each other. It was very disparate. So I started convening these gatherings, 100 people at a time; first domestically in the US and Canada, and then eventually internationally through a network I helped create called the Global Gas and Oil Network. I have memories of sitting at a retreat center, watching an indigenous chief from a remote community engage with a Nebraska farmer, and a union leader, and then a climate policy wonk from NRDC, and then we've just finished dinner and they're all getting into the hot tub. I'm like, “Oh my god, what's gonna happen?”David Roberts: You’re over there chewing your fingernails.Tzeporah Berman:Some great and fascinating collaborations happened because of that. We all learned from each other. And there were huge blowouts!David Roberts:The Nebraska farmer is about private property rights; that's their lens. The indigenous leader is coming at it from a completely different viewpoint. What is the Venn diagram overlap where they can work together? It’s so fraught.Tzeporah Berman: Oh yeah. In some ways it was a microcosm of all the debates. We were fiercely debating which issues are most important, how do you talk about this issue, who talks about the issue, what are we asking for, what if the government says yes to this but says no to this indigenous rights issue? As a movement, we are grappling with all those questions.It's almost like we were testing it out before we went public. We were learning from each other and, quite frankly, unlearning our own biases, doing the deep work of decolonization and understanding our own privilege and trying to figure that out. In the process of doing all of that, we reached some pretty important agreements, which you see in the campaigns over the last many years: a commitment to step back for a lot of white folks and help raise indigenous voices and indigenous perspectives. A commitment to try and find resources for grassroots groups on the ground, instead of it just being “the big group” saying what the issues were. All of those things.I think the movement has strengthened and diversified as a result of the site fights.David Roberts:Do you think there is something like a global movement against fossil fuel exploitation forming, or possible? As you say, every site fight is different, every place is different, in many senses the values that people bring to these things are very different. What is the connecting thread that might make a global movement? What would it look like?Tzeporah Berman: It’s, what does it look like? Because we are creating it. A whole bunch of us have been, for the past five or six years, consciously trying to connect the threads and figure out how to have global conversations that bring people together; to bring indigenous groups in the heart of the Amazon into a strategy conversation around what should we be doing at the United Nations relative to fossil fuels? What about the subsidies campaigns? How do we do finance strategies? It used to be there were just some environmental groups, maybe grassroots groups, having these conversations. Now you see more and more voices coming in, people from different countries connecting to it through the Global Gas and Oil Network, but also now through the Fossil Fuel Non-Proliferation Treaty initiative and campaign that we've been developing. We realized we had to stop playing whack-a-mole — this pipeline, this project in Argentina, this offshore drilling in Norway — and we had to say, “No.” We had to say, “the science is really clear, we have to stop fossil fuel expansion.” This was hard. This was a fight inside the climate movement, especially with climate policy wonks and philanthropic foundations. During the Keystone campaign, we had philanthropic foundations and other NGOs coming to us and saying, you have to stop this campaign, because it's not a climate campaign. It's diverting attention from the important climate issues.David Roberts:I heard many, many wonks make similar arguments.Tzeporah Berman: That was happening all over the world. What we did is, we found our peers. A number of us — Steve Kretzmann and Hannah McKinnon from Oil Change International, myself, a bunch of others — made a list of the 100 people we knew who are at the forefront of oil and gas fights around the world, then added to that list a bunch of academics that we knew were thinking about supply-side policy, and indigenous leaders. At the time, there was a huge battle going on around the Lofoten offshore drilling in Norway. So we cast about and said, who wants to host this big strategy retreat? And the groups in Norway did. So we facilitated a five-day retreat for 100 people in Lofoten, Norway. That was the beginning of this international network. That's where we released the Lofoten Declaration, which is the first global declaration calling for an end to fossil fuel expansion everywhere, and a global just transition. In my mind, that's the moment when things changed — when we started really looking at supply-side pathways and the need for international cooperation and more work on constraining fossil fuels.David Roberts:That's a great segue into the treaty. It blew my mind a little bit, when you were first thinking about this and putting it together — I assumed people were keeping track of fossil fuels in the world, where they're being dug up, how much, and who's doing it. But it turns out, not! Can you tell us about the registry idea, and the state of knowledge about global fossil fuel production?Tzeporah Berman:  We started thinking, OK, so if the scientists and even Mark Carney [Governor of the Bank of England] is out there saying we have to keep two-thirds of fossil fuels in the ground, how much are we currently planning on producing? I also thought it would be an easy question to answer. What we now know is, countries are responsible for submitting emissions data into the UN, and domestically. That's all easy to find. But if you want to count up today who's producing what [fossil fuels] and how much, you have to buy the data from Rystad and Wood Mackenzie. That’s exactly what Oil Change International has been doing for years, producing its Sky's Limit reports. That's what Stockholm Environment Institute is doing in producing the Production Gap report. Most governments themselves don't even know, or don't have anywhere that they count up, what's being produced and how much.David Roberts: So these private databases are the only places where that information exists.Tzeporah Berman: If you dig deep at a national government level, you can find it. There are great experts out there, like Pete Erickson from Stockholm Environment Institute and others, who can do this. If you're an average person — or even, as I've discussed in several countries, a minister — you can't find it and you don't know what's being produced. Intransigent global issues like this — nuclear weapons, landmines, etc. — the first piece in a global reckoning is accountability and transparency. In fact, that would be the first piece at a national level as well. And we don't have transparency or accountability. We don't even have a comprehensive database of how much coal, oil, and gas reserves, resources, and production is happening globally at any given time. It's not even accessible to decision-makers, let alone publicly accessible. That’s the basis of this idea which we're now producing a prototype for, called the Global Registry of Fossil Fuel Production: that we can't count up the carbon budget, we can't assess the potential lock-in of fossil fuel infrastructure and fossil fuels, if we don't know how much is being produced or who's producing it. We can't hold anyone accountable on that side of the ledger.So the first critical piece in this puzzle was the Production Gap report that the Stockholm Environment Institute produced with the United Nation Environment Program, ISD, and others. It's that report that started crunching the global numbers and said for the first time that we're currently on track to produce 120 percent more fossil fuels than the world can ever safely burn under a 1.5 degrees scenario. In fact, we already have enough oil, gas, and coal, either above ground or under production, to take us past 2 degrees. So the majority of the world's financial, political, and intellectual capital at this moment in history is going to produce three products — oil, gas, and coal — which are responsible for 80 percent of the emissions trapped in our atmosphere. Three products which we can't use if we want to have a stable climate.David Roberts: So you put out this request for proposals on the registry, because I imagine there's quite a few logistical and technical issues to work out. What's the state of the registry now? Did somebody win that? Is somebody out there working on it?Tzeporah Berman:  Yeah, they did. What was really exciting is, we had a lot of submissions from some of the biggest energy agencies and analysts from around the world. None of them alone could really do it properly, because it's really hard to do. So what we ended up doing is starting negotiations between Global Energy Monitor and Carbon Tracker Initiative, because they both harvest data in totally different ways. This needs to be tested: what you need to do is to scrape data from industry, scrape data from governments. Originally we thought, oh, it's OK, Rystad and Wood McKenzie already do this. But we can't use their data — you have to be very careful, because they’re a company. I actually think they're probably not very happy with us, because we're really having a go at their business model here.David Roberts:If you succeed in this, it's gonna take a whack off some big revenue streams for some big companies.Tzeporah Berman:Yes. When we launch it, which will be the prototype at COP 26, it will be the first open-source, comprehensive, detailed database of coal, oil, and gas reserves, resources, and production globally, that is both publicly accessible and is starting to have some buy-in from governments and other major institutions. It will be quite a sophisticated, but interactive and publicly accessible, database. And it's on its way, currently being produced.David Roberts: With some of the poorer fossil fuel producing countries that maybe don't have governments interested in transparency, is there any way to enforce this? Is there any data that are off limits, that you have to fight to get, or is all the data out there somewhere and this is mostly about gathering it? Like if Congo, for instance, wanted to hide how much fossil fuel it's producing or obscure it in some way, could they? Tzeporah Berman:  Considering the majority of oil, for example, is from national companies: maybe. Honestly, I would have to talk to Carbon Tracker and Global Energy Monitor and see how they're doing on that front. But they were pretty confident that with what industry releases, combined with the data scrapes they're doing from government, they could provide a pretty significant picture. And we'll know, with the prototype. It's the first time that anyone has ever tried to build it and to make it available to the public. What we're finding with both the registry and the fossil fuel treaty is that governments in the global south are pretty interested in this type of transparency, once we show them the data that shows that the majority, well over 70 percent, of the expansion planned for fossil fuels in the next five years is in the global north. It's in wealthy countries. David Roberts: The very countries that are most vocal about climate change, right? Tzeporah Berman:  That’s right. In fact, the majority of what is planned globally on oil and gas is in the US and Canada.David Roberts: Let's talk then about the Fossil Fuel Non-Proliferation Treaty. Conceptually, where did this idea come from and what's it based on? What's the necessity for it? What do you want it to do or say?Tzeporah Berman:  The idea emerged from some of those conversations we were having in Norway and other places. What we realized is that every country was responding in the same way to this question of, how do we keep two-thirds of fossil fuels in the ground? Pretty much every nation-state, whether it was Norway, the UK, Canada, or Argentina, they were all saying: It’s not our problem. We don't deal with production, and obviously we couldn't, because then we wouldn't be competitive, and there would be leakage. If we don't produce it, someone else will. So these are all the answers of why they couldn't. Yet everyone's saying: we know we have to. Meanwhile, we are locking in all of this production. And all of this money and time is going to either fighting these projects or producing these projects that we can't use. The clock is ticking on electrification and the infrastructure that we actually need to be spending money on. So we started looking at what we could learn from other big, intransigent problems like this: the Montreal Protocol, the landmine treaty, the nuclear non-proliferation treaty, nuclear weapons agreements. The idea started emerging, well, if one country can't do it alone, if it really is this kind of dilemma that no one will do it without the other countries, then that's the point where you need international agreements. That's what treaties are for. It’s a great analogy, the nuclear weapons treaty. Some academics started studying it. I think the first peer-reviewed paper to come out proposing a Fossil Fuel Non-Proliferation Treaty was from Peter Newell and Andrew Simms out of the UK. They are now on the steering committee of our initiative. I read their paper and I thought, yes, this is what we've been talking about for ages. So I just called them up. I didn't know them yet. We’d been to some of the same conferences. And I said, Look, let's create an initiative and a working group and start talking about whether this is really real, and what we need to learn? What do we need to study? And we pulled together a group of former diplomats and academics and activists from around the world and started talking about it. Then that summer, out of the blue pretty much, I won the Climate Breakthrough award, where they give you $2 million to form global climate solutions that no one has ever tried before.David Roberts:Well that was helpful.Tzeporah Berman:  Yeah, good timing — and, you know, no pressure, just solve climate change. This is the first time in well over a decade that I've worked on anything which is commensurate with the scale of the problem. Sure, it's bold, audacious; and you know what, we need bold, audacious right now. We're racing against the clock and we keep not meeting our targets. Every COP, every UN negotiation I've ever been to or heard about, at the end of every one, there's a press release that comes out that says, well, we've done this, but we've failed to address climate change and the world is still burning. I just thought, let's try this. And then it took off. I mean, it's been a little bit over two years since that. It's just taken off. It's grown so fast. Now with the IEA coming out last month with the 1.5 net zero scenario, acknowledging that if we are trying to meet net zero we have to stop fossil fuel expansion, we're actually the kid on the block that for years has been studying how to stop fossil fuel expansion. We all know that we need to do it now. There's evidence showing that we need to do it, but I think everyone is now going to start looking for a pathway to how. Part of it is finance, the divestment campaigns; a huge part of it is finance. But again, we can't leave it up to the markets, not just because the markets are distorted, but because the markets aren't going to address equity and justice.The basis of the Fossil Fuel Non-Proliferation Treaty initiative is that we are going to need international cooperation in order to stop fossil fuel expansion everywhere. And that if we're going to do it in a way that is equitable, that addresses injustice, we have to have the hard conversations like debt forgiveness. I do a lot of work with Ecuadorian indigenous nations in the Amazon. They're facing new oil drilling entirely to feed Ecuador's debt. A lot of it is debt-for-oil swaps with China. There's a number of countries like that: Argentina, Ecuador, many countries that are starting new fossil fuel expansion not because they're going to use the products; they're just doing it to feed their debt. So equity and justice is a huge part of this. I think one of the reasons we need a Fossil Fuel Non-Proliferation Treaty is that some countries, especially wealthy countries, can put in place policies at a national or subnational level to constrain fossil fuel expansion. But if we are going to constrain fossil fuel expansion fast enough, in the time that we have to support actually moving to zero and beyond, we're going to need international cooperation. Right now, the Paris agreement does not provide the mechanisms for the conversations that we need.David Roberts: There are estimates that for some, for example, African countries, a successful green energy transition would devastate their oil and gas revenues and hurt their economies. That's a large chunk of their national income in some cases. So we can be conscious of equity, and conscious of the disparate effects, but what would an international treaty or organization do about that, exactly? It's the same dilemma Canada or the US has internally: there are some parts of the US where the economy is extremely dependent on fossil fuels and would demonstrably be hurt if they went away. Internationally, it seems like that's even trickier. So what do you do? What's the solution to that?Tzeporah Berman:  Part of what we're doing right now is starting to pull apart, what are the barriers in the global south, and really starting to do deep dives and understand the situations in particular countries. The treaty initiative is made up of organizations from around the world and we have core partners in each region. So Power Shift Africa, Third World Network, Asian People Movement on Debt and Development: these are groups that are now doing deep analysis and case studies of, for example, in Malaysia, PETRONAS and its influence. We're also working with Sivan Kartha and Greg Muttitt, who have written a seminal paper on equity and fossil fuel production. They basically look at a whole bunch of countries: What is their GDP? What are their jobs? What is their dependency right now, and so what are their barriers going to be? So we're doing the analysis, pulling apart the barriers. But what a treaty would do is, first of all, if countries agreed to the end of expansion, it provides a roadmap. So right now — it's really strange and in fact, when I first started looking at this stuff, I thought I was kind of crazy, because we're all talking about phasing out fossil fuels and everyone's talking about 100 percent renewable, and so I started doing the research to find out, what is my country's own plan for production? We don't have one. We don't actually plan for the production of fossil fuels to go down.David Roberts: Canada you mean, specifically, or anyone?Tzeporah Berman: Canada specifically, but pretty much any country other than Denmark, who has now announced no new expansion and planning for managed ramp-down and phaseout of production. So if you go and look at the NDCs of what countries file in the Paris agreement and look at any major producing country — US, UK, Canada — they are saying we're going to go 100 percent renewable, and they're saying, we commit to these emissions targets. But they're not actually saying that their fossil fuel production will go down. And that's because the fossil fuel industry has been working for decades to try and convince governments that they're going to separate production from emissions, that we are going to eventually have the technology competitive at scale (CCS, CCUS etc.) so that we can keep producing and reduce emissions. I mean, the evidence doesn't show that, and we've run out of time for that in a lot of ways. But we don't actually plan right now to end expansion. So the Fossil Fuel Non-Proliferation Treaty is designed on the pillars of the nuclear non-proliferation treaty. First of all, end the expansion. Second of all, manage a global phaseout of fossil fuel production. The third pillar is, ensure peaceful and just and equitable transition. Right now we have research, diplomatic efforts, and discussions going on under each of those three pillars, and our vision is for a world where vulnerable communities are offered an alternative pathway. That we actually planned for this, instead of just leaving it up to the markets. Poor countries will have to be supported by wealthier countries to transition away from fossil fuels. And right now, in all of those countries, they're under heavy pressure with capital coming in still from fossil fuel companies to do more fossil fuel expansion. And they're under heavy pressure, many of them, to continue feeding their debt. So it's this really strange disconnect we have right now in the climate debate, with energy and infrastructure and fossil fuel discussions are over here, and climate targets over here.David Roberts: I wanted to ask about that last point. Even if you take supply out of the picture and just look at the traditional discussion around climate change and traditional treaties, Paris and everything else: even through that lens, it's clear that if we don't want them to emit so much that we shoot past our targets, wealthy countries are going to have to send money to poorer countries. It's been part of the COP talks forever, always super contentious. We allegedly set up this Green Climate Fund, but if you've been following the reporting on that, we're not doing it. The rich countries are not putting money into that fund. That’s the part where I look around in vain for signs of optimism. Because if we're trying to pay them to emit less and to produce less fossil fuels, that's just a lot of money. It would be a huge wealth transfer to get that going. Tzeporah Berman: It is a lot of money. But there's a cascading series of impacts at the point that a country acknowledges that it's going to stop fossil fuel expansion. If you are going to stop the production of fossil fuels, then that also means that the tax breaks and the subsidies that are going to the fossil fuel industry don't make sense. The reason they need them right now is their margins are so small; it costs so much to produce those fossil fuels and to expand those productions. But for Canada, for example, a fracking project that has a declining field, it doesn't need a lot of money in support. It's the infrastructure that is the issue. So that's billions, if not over a trillion dollars. In Canada alone, it's at least $2.7 billion a year just in direct and indirect subsidies, and that doesn't even include doing things like buying a $12 billion pipeline that will likely become a stranded asset. So there is money. There is quite a lot of money. And that's just on subsidies, let alone what we're spending in cleanup — cleanup of both spills, billions of dollars, and cleanup of liability and dead wells and leaking wells and methane, and billions of dollars that governments are spending right now into CCS research and pilot projects around the world. And we haven't even started talking about health costs. We know from the data that's coming out that fossil fuel development, especially in the global south, is costing millions, if not billions in health costs. Because it's toxic. We've always known that. Sure, we've benefited from this industry, lots of nice people work in this industry. Now we know, like nuclear weapons, that the expansion of it is killing us. That's the parallel, and that's the beauty of the treaty that we haven't really talked about, is that the climate movement hasn't had a global demand to government since well before Paris — except for increased ambition and complicated things that actually don't mean anything to the average person. David Roberts:  Higher targets! It's always targets.Tzeporah Berman: What does that even mean? And what the Fossil Fuel Non-Proliferation Treaty does is start to shift the norm around fossil fuels, because we've all grown up with the idea that fossil fuels are prosperity. They were keeping the lights on. And in places like Texas or Alberta, where we see production, it's also what keeps your hospitals open and your roads paved. In fact, that's not true anymore, because in both jurisdictions — and this is a trend in most wealthy countries — they’re spending more money for fossil fuel production than fossil fuel production provides to a subnational or to a nation state. Because of the liability costs, because of the royalties going down, subsidies going up, etc. We're paying them to extract and pollute now, that's what's happening. David Roberts:So are people and NGOs and academic organizations endorsing this or signing on to it? I guess the idea, eventually, is that countries sign, right?Tzeporah Berman: We decided to start at cities. And the reason we decided to start at cities is because cities are not as influenced politically by the fossil fuel industry. Also, historically, that's where treaties start. Look at nuclear. I'm old enough to remember driving into a city, there'd be a sign: nuclear-free city. That was part of the campaign for a nuclear weapons ban.David Roberts:And cities are where the left is, where progressive-minded people live.Tzeporah Berman: It’s taken off like wildfire. We launched the idea of the fossil fuel treaty at Climate Week, last year in September, and by October, November, Vancouver became the first city in the world to unanimously pass a motion to endorse the Fossil Fuel Non-Proliferation Treaty. And the council and the mayor sent a letter to Prime Minister Trudeau, asking him to start to work on the treaty and international cooperation on stopping all fossil fuel expansion. Vancouver was followed, less than a month later I think, by Barcelona. It just goes on and on. There were three cities in Australia this week, there were two cities in the UK last week, now LA and Hayward, California; there's a motion already tabled in New York. So the cities work is really taking off, and I keep hearing about new campaigns that have started. We created a campaign hub that has all the information that we could produce around what the treaty is, and now groups around the world are starting to make it theirs. So I know that Friends of the Earth Sweden is campaigning in Swedish on the fossil fuel treaty in 17 cities. Youth groups around the world are taking it up. We now have COICA, the association of all indigenous nations in the Amazon, who have endorsed and who are starting to work on the fossil fuel treaty. It's really starting to become a movement — 400+ organizations now endorsing and starting to campaign on the fossil fuel treaty. It brings together those issues we were talking about at the beginning; it's tangible. People can say, yeah, I don't want Line 3, but I also don't want drilling in the heart of the Amazon, so enough already. Let's start focusing on the good stuff, instead of always focusing on the bad stuff.David Roberts:  So who will be the first country? And when?Tzeporah Berman:  It's hard to know. I do think it will likely be more vulnerable nations, because the meetings that I've been in, when you talk to countries in the global south and show them the data —that the majority of the new expansion of oil, gas, and coal is in wealthy countries, and the science of the Production Gap report, and how we're producing 120 percent more than we can burn — they're angry. Some people say it could take 10 years to get a treaty; we may never get a treaty. I think the journey matters here. If you look at other treaties — nuclear waste, nuclear weapons, etc. — the journey mattered. We're creating a new conversation. Imagine the point when some vulnerable country stands up on the UN floor and says, “What do you mean, Norway? I saw it here in this global registry that you’re about to produce this.” I think what we're going to start to see is bilateral negotiations on fossil fuel production, some multilateral agreements on pieces of it, debt forgiveness, etc., working its way up towards a treaty. It's already started.David Roberts:It's slightly disheartening that so much of the production is in the US. The US has traditionally not been super jazzed about international treaties, especially lately.Tzeporah Berman:  But that's OK. The TPNW was a nuclear weapons treaty that was led by non-nuclear-armed states, and it stigmatized and banned nuclear weapons. It changed the narrative about nuclear weapons, and every country started being held accountable to what they were stockpiling and how they were going to reduce it. It's likely that's how the treaty will emerge here as well, by marking out a legal pathway, by identifying the barriers, starting to create political will. Let's not forget that it was Kamala Harris on the campaign trail that talked about an inverse OPEC; that's essentially what a Fossil Fuel Non-Proliferation Treaty would be. It was Biden that talked publicly during the debates about needing to phase out oil. There are tipping point moments in history when the technology, the finance, the political ideas come together, being pushed by social movements, and I think on fossil fuels, we're living that tipping point now.David Roberts:The future is so opaque to me these days, but it's not hard to envision the US becoming a pariah on this, if enough momentum builds and enough countries sign on. I can't envision the US signing on, but I can envision it becoming isolated. I'm trying to imagine, how would we here in the US respond to that? With grace and generosity? Hmm.Tzeporah Berman: California just became the first subnational in the world with major fossil fuel development to announce an end date to fracking and new oil development. That's huge. That's the beginning of recognizing that constraining and managing how much fossil fuels we produce, and for how long, is part of the climate debate. We have to start creating policy roadmaps for both supply and demand. That's the seed for the conversation in the US. Given the immense opposition in Texas and New Mexico to what's happening in the Permian Basin, and how bad the financial outlook is in the long term … I don't know.David Roberts:  These unpaid-for cleanups are popping up more and more often. It’s brutal out there on those Texas natural gas fields. That's going to be billions of dollars. And of course it's not fracking companies who are going to pay that.Tzeporah Berman:  No, it's taxpayers. People are also waking up to the fact that there are alternatives. I'm starting to see them right here. Look, there's an electric car, I can see it now. Maybe we don't have to be using all these fossil fuels. It'd be cheaper if my house was using better efficiency, and then I didn't need to buy so much.David Roberts:  Maybe I wouldn't have to burn my back fence to stay warm during a cold snap if we had more renewables.Tzeporah Berman:  The solutions clearly are more reliable, even at the moment when we need them to be more reliable, because they're distributed and safer and healthier. Again, new data came out this year from the Harvard study that fossil fuels are killing millions of people every year because they're toxic. There's a lot of good reasons to start thinking about fossil fuels in a different way, and to address that anxiety that we have: are we going to freeze in the dark? We're not going to freeze in the dark. We have enough fossil fuels already above ground or under production to meet the world's needs while we transition to a cleaner future. That’s the part we're just starting to understand. That’s the point where people start getting excited about what that beach looks like.David Roberts: Let's talk briefly about the beach. You've said before: the fossil fuel model, in terms of social and economic organization, is very centralized. It lends itself to concentrations of power, which of course then lend themselves to graft and bribery and all the rest, and the little people getting screwed, getting the ass end of all these cleanups, and not benefiting. I can't tell you how many stories I've read now about, this North Dakota town thought they were going to be rich forever … and then fracking left and now they’re all super poor.Tzeporah Berman: Turns out now their water is poisoned, they have higher cancer rates, and, yeah, they don't have any more money. David Roberts:  None of the wealth stayed behind. So what's your vision of what comes next after that, and why is it better? Obviously there’s not dying of inhaling poison — that's a bonus. But how else do you see clean energy reshaping some of those social and economic structures? Tzeporah Berman:  Reducing our dependence on fossil fuels, not just the use of them, but the production of them, changes everything. It changes the daily lives of millions of people. We're no longer fighting asthma. We're no longer fighting what should be rare cancers, which are now massive in downstream communities, especially communities of color, near refineries, and indigenous communities who are in the heart of the production in remote areas, from the Amazon to Canada. Having spent a bunch of time in some of those incredibly visionary communities in the heart of Amazon, and in northern Alberta, in Canada, where they are saying no to the oil extraction that is killing their communities — they show me the fish with lesions, I get introduced to people in their communities who are dying of cancer. And then they show me the renewable energy facilities that they're building, and they're so excited about them. The whole community is working on them, and they're plugging in their cell phones to their solar panels. They're doing traditional dances, circling the solar panels in the Beaver Lake Cree community. In the heart of the Amazon, I watched a shaman fire up his laptop after he plugged it into his new solar panel, and the beaming look on his face.People get to control the power that fuels their daily lives. They know that it's not going to have the direct health impacts on them. It's safer, it's cleaner. That’s the thing about a solar spill: it’s just a sunny day. That's the best image I can leave you with about what the future looks like. The work we're doing now on the fossil fuel treaty is, we're not going to get there just by the local efforts. We're not going to get there in time to have a planet stable enough where we're not just dealing with constant disasters. If we're going to do that, we need international cooperation. That's why we have to call on our governments to do this.David Roberts:Thanks so much for taking the time. Tzeporah Berman: This has been really fun. 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

Perhaps the most politically difficult aspect of climate change is that, after decades of denial and delay, there is no longer any coherent “moderate” position to be had. To allow temperatures to rise past 1.5° or 2°C this century is to accept unthinkable disruption to agriculture, trade, immigration, public health, and basic social cohesion. To hold temperature rise to less than 1.5° or 2°C this century will require enormous, heroic decarbonization efforts on the part of every wealthy country. Either of those outcomes is, in its own way, radical. There is no non-radical future available for the US in decades to come. Our only choice is the proportions of the mix: action vs. impacts. The less action we and other countries take to address the threat, the more impacts we will all suffer. Politicians who hamper the effort to decarbonize and increase resilience are not moderates. They are effectively choosing a mix of low action and high impacts — ever-worsening heat waves, droughts, floods, and hurricanes. There is nothing moderate about that, certainly nothing conservative. For years, climate scientists, advocates, and activists have been trying to get politicians to understand this about climate change: that indifference and inaction are not neutral. Every day that goes by, more damages are baked in and getting the problem under control is more difficult. The cost of preventing future impacts is tiny relative to the cost, in lives and money, of adapting to them. The only way to conserve what Americans love in this country is to act aggressively to limit carbon emissions, commercialize clean-energy technologies, and wind down fossil fuel production — and help other countries to do the same. To do less means to conserve less, to accept more loss. Has the Democratic Party taken this message to heart? We’re going to find out in coming weeks. I’m going to describe some political forces that threaten to limit or constrain Democrats’ climate ambitions in favor of “moderation” and then take a closer look at the political drama going on in DC these days around infrastructure. We’re about to get an unusually clear test case of Democrats’ commitment to climate policy.The right is creating a new “other side” in the climate debatePretty much every demographic outside of hard-core conservatives is concerned about climate change and wants to address it — most notably young people, who aren’t exactly flocking to the GOP these days. A few people on the right are belatedly and begrudgingly recognizing this fact and its electoral implications.Lisa Friedman of The New York Times brings news of a budding Republican climate caucus. The story is hilarious and sad and worth reading, but here is the nut of it:“There is a recognition within the G.O.P. that if the party is going to be competitive in national elections, in purple states and purple districts, there needs to be some type of credible position on climate change,” said George David Banks, a former adviser to President Trump …So, at least some Republicans think science denialism is no longer working and the party needs “some type of credible position on climate change.” The question is, what is the minimum viable position? What’s the least they can do while appearing to do something?Here is the party’s opening gambit:A package of bills [House Minority Leader Kevin] McCarthy [R-CA] introduced on Earth Day championed carbon capture, a nascent and expensive technology that catches carbon emissions generated by power plants or factories and stores them before they escape into the atmosphere. It also promoted tree planting and expansion of nuclear energy, a carbon-free power source that many Republicans prefer over wind or solar energy.Friedman rightly notes that these policies would do very little to reduce emissions. But she also calls them “limited government, free-market policies,” which is a bit of right-wing spin we ought to reject. Carbon capture is entirely dependent on government subsidies and regulatory support. So is nuclear power. So is large-scale reforestation. These are all the very opposite of limited government.What unites these proposals is that they can plausibly be said to address climate change in some way or another, but they do nothing to limit or otherwise inconvenience GOP donors, especially fossil fuel companies. In fact, carbon capture can be viewed — and likely is viewed by Republicans — explicitly as a bid to protect fossil fuels from climate policy.Remember, the problem for which Republicans are solving is not climate change but the need to be seen as having “some type of credible position” on climate change, enough for suburban voters to reassure themselves that the GOP is not unreasonable on the issue — that there are once again two legitimate sides. Science denial looks ugly and extreme. But rhetoric about “small-government solutions” that are more sensible than the “tax and spend” Democratic alternatives? Well, that’s as soothing and familiar as warm milk. It might be possible for Democrats, if they were united in their message, to properly expose this Republican climate PR as the fraud it is … but they are not united in their message. Manchin is helping position fossil-friendly policy as “the center”The majority of the Democratic Party, both voters and legislators, is on board with an ambitious (if still insufficient) climate plan. But on this issue, as on all others, Democrats need total unanimity — it’s all 50 senators voting together, or nothing passes. So attention tends to focus on the most conservative Dems, the swing votes, and their words carry added weight. Republicans want to pretend that climate change is just another pollution problem and the solution is for fossil fuels to clean up a little bit. They want to pretend that “innovation” can keep fossil fuels going forever.Democrats need to expose that as nonsense, but they can’t, because Sen. Joe Manchin (D-WV) is out there saying, “You cannot eliminate your way to a cleaner environment. You can innovate your way.”Republicans want to pretend that coal can be saved, that it can somehow find a way to compete in a decarbonizing world. Democrats need to expose that as nonsense, but they’ve got Manchin out there whining that his fellow Democrats are “unfairly targeting” coal.Republicans want to pretend that decarbonizing the electricity sector by 2035 (Biden’s timeline) is impossible. Democrats need to expose that as nonsense, but they’ve got Manchin out there “concerned” about Biden’s “aggressive” timeline. Republicans want to pretend that climate isn’t a threat to the financial system. Democrats need to expose that as nonsense, but they’ve got Manchin out there scolding big banks for adopting zero-carbon goals. Democratic leadership has to tiptoe around all this stuff, because everyone needs to keep Prince Manchin happy. The result, though, is that in the eyes of the media, the majority Democratic Party consensus on climate change (as reflected in Biden’s climate plan!) becomes “the left” in a debate with Manchin in “the center.” Are Democrats going to allow that to happen? The dynamic is going to come to a head around the infrastructure bill. Let’s take a look at the maneuvering taking place right now.The bipartisan infrastructure plan is not a climate strategyFor weeks, Senate Majority Leader Chuck Schumer (D-NY) has been open about the fact that Democrats are pursuing a two-track strategy on infrastructure legislation. A bipartisan Senate “gang of ten,” including Manchin, is working on a bipartisan bill; whatever doesn’t make it into that bill will go into a bill meant to pass through budget reconciliation (which only requires 50 votes). This has always been a tenuous strategy, but it was apparently unavoidable, because Manchin and his crew of centrists refused to proceed straight to reconciliation. They were determined to do the bipartisan dance that has eaten up the past few weeks. Last week, the bipartisan group presented an outline of a plan. It would involve $1.2 trillion total spending — about half of the $2.25 trillion in Biden’s infrastructure plan — and just $579 billion in new spending. Democrats fought off Republican efforts to impose a special fee on electric vehicles and raise the gas tax to pay for the bill. Republicans fought off Democratic efforts to pay for it by rolling back Trump tax cuts. They’re still not sure how they’re going to pay for it. As for climate, the plan has … some stuff. There’s $73 billion for power system infrastructure (HVDC lines!), which is, the White House claims, “the single largest investment in clean energy transmission in American history.” There’s $49 billion for public transit, $66 billion for rail, $7.5 billion for electric vehicle chargers, and another $7.5 billion for electric buses. It’s better than nothing, and more than a Republican Congress would offer. It’s a small down payment on the investments in clean energy infrastructure that will be needed in the future. But it’s not a climate plan. Not even in the ballpark. A real climate plan will include a reconciliation-friendly clean energy standard (CES), clean energy tax credits, a civilian climate corps, investments in frontline communities, and the rest of the climate commitments in Biden’s jobs plan. That’s where the reconciliation bill comes in. Of course, climate isn’t the only issue competing for inclusion in that bill. At this point, every Democratic interest group is lining up to have its priorities included. Sen. Bernie Sanders (I-VT) has put together a $6 trillion bill as an opening gambit. Politico captures the conventional wisdom: “The dollar amount … is likely to shrink as moderates weigh in. At the moment, it appears impossible that all 50 Democrats would get on board with such a large figure.”Manchin and Sen. Kyrsten Sinema (D-AZ) are typically seen as the ones with leverage, since their votes will be needed for any reconciliation bill. And they are already making noise that the Democratic plan is too big. Something blah blah deficit something. But there’s a twist. Progressives throw their weight aroundProgressives have been trying to exercise a little leverage of their own. They are insisting that the bipartisan bill not be passed on its own, without being linked to the reconciliation bill. Sen. Elizabeth Warren (D-MA) said, “It has to be one deal and not two deals.” Sanders said, “It's going to be either both or nothing.”They want an “ironclad” pledge from Schumer that both bills will get a vote before they commit to the first. And so far, Schumer has said he is committed to doing both. "One can't be done without the other,” he said.House Speaker Nancy Pelosi (D-CA) has been similarly categorical:No, really.This message extended all the way to the top. Even as he introduced the bipartisan package, Biden said:I expect that in the coming months this summer, before the fiscal year is over, that we will have voted on this bill, the infrastructure bill, as well as voted on the budget resolution. But if only one comes to me, [if] this is the only one that comes to me, I’m not signing it. It’s in tandem.Republicans immediately pretended to be surprised and outraged by Biden’s commitment to pass both bills. Some of them threatened to bail on the bipartisan package. In response to the faux outrage, Biden clarified that he was not threatening a veto or linking the bills. It is entirely possible — some might even say thuddingly predictable — that Republicans were never negotiating in good faith and that the whole point of the exercise was to waste time and foster division among Democrats. Senate Minority Leader Mitch McConnell (R-KY) wants to prevent a reconciliation bill. The bipartisan process was a way to blunt Democrats’ momentum and slow things down. I expect he will be perfectly willing to blow up the deal if it no longer serves that purpose. The question is what Manchin and Sinema will do if their bipartisan deal falls apart. At that point, both they and the progressives on the other side of the coalition will face the same stark choice: find a reconciliation bill that can get 50 votes … or get nothing, and be known forever as the people who tanked Biden’s presidency and denied Democrats their only chance for structural change in a decade. The stakes are incredibly high. Schumer is promising a “unity budget” that will bring Democrats together, but strains are showing already. Exactly what and how much climate policy will be in the reconciliation bill will be hashed out in coming weeks. A campaign (from the Sunrise Movement and Evergreen Action) called “No Climate, No Deal” has been endorsed by a dozen Democratic senators and 38 reps. But it’s not clear what minimum threshold counts as enough climate to get their vote. This is where the battle between climate “moderation” and climate realism is going to be fought. Manchin will be angling to blunt the parts of Biden’s climate plan that directly displace fossil fuels. But those are the most important parts.It will be up to progressives to walk a tightrope, rejecting false moderation and insisting on an appropriately ambitious climate plan without tanking the deal entirely. Finding unity and holding it together against what is certain to be a full-on right-wing assault is a fraught undertaking, to say the least.The pressure in DC to do less, to compromise and scale back, is insidious and inexorable. But this is the moment of truth for climate change in US politics. If big stuff doesn’t happen now, it’s not going to happen for a long, long time. No climate, no deal. 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, Saul Griffith (co-founder of Rewiring America) and Arch Rao (founder and CEO of Span, which makes smart electrical panels) discuss the need to electrify US homes, the challenges standing in the way, the kinds of solutions that will ease the process, and much more.Full transcript of Volts podcast featuring Saul Griffith and Arch Rao, June 28, 2021 (PDF version)David Roberts:Those of you who have been reading or listening to Volts for a while know that I am fairly obsessed with clean electrification, which involves shifting all the things we do now with fossil fuels over to electric equivalents (while cleaning up electricity supply).One important nexus of electrification is the residential sector. US homeowners are in a position to electrify their power supply (with solar panels), their heating and cooling (with heat pumps), and their transportation (with electric vehicles). How can we induce millions of them to make the decision to electrify, starting today? How can we make it cheaper and easier for them? To discuss that and related issues, I was excited to connect with two of the smartest people working in this space. The first is analyst, inventor, tinkerer, and entrepreneur Saul Griffith, who will be familiar to longtime readers — I've cited his work numerous times, especially his most recent work with Rewiring America, which advocates for rapid electrification. There is probably no one on earth with a better understanding of the US energy system. (He’s got a book on electrification coming out in October.)Griffith is a backer of and investor in a startup called Span, which makes smart electrical panels that offer homeowners fine-grained control over all their individual appliances, lights, and devices (via an app on their phones, of course). The founder and CEO of Span, my other guest, is Arch Rao. Rao was the project lead for Tesla's Powerwall home battery before leaving to start Span, so it goes without saying that he is intimately familiar with the technical and economic challenges of home electrification.Welcome to Volts, Saul and Arch! Saul, I want to start with you. We're going to talk about home electrification today, and just by way of setting context — it's pretty easy to make the case that home electrification is fun, it's cool. But what is the case that it is necessary, and not only necessary, but necessary quickly? Set the bigger picture for us.Saul Griffith: There's a few components to that. Let's start with the climate component: the urgency. There's a concept called committed emissions — that is the emissions that a machine that exists today will emit while it lives out its lifetime. So if you bought a petrol or gasoline car last year, it'll keep burning gasoline for another 20 years; if you bought a natural gas furnace last year, it'll keep burning natural gas for 25 years; a hot water heater, 15 years; an oven burning natural gas, another 12 years. So those are committed emissions, the same as a new coal plant opening last year would go on operating for another 50 years. We now know that if all of the machines that exist on the planet today live out their natural life, the committed emissions of those machines take us to about 1.8 degrees Celsius, over three degrees Fahrenheit of warming. So the practical reality is every time any of our machines fails or needs to be replaced, we need to upgrade it with a zero-carbon option. And the only real zero-carbon option that has emerged is electrification, and that's electrification of our heat with heat pumps, of our vehicles with electric vehicles, and then tying that all together and balancing the grid.David Roberts: Right. And what chunk of emissions comes from residential? Saul Griffith: Historically, we put emissions into sectors: residential, commercial, industrial, and transportation. The residential sector is responsible for 10 or 15 percent of total emissions, by that measure, but it's actually much higher than that because in reality, you make the decision about your car and your home. And when we electrify our cars, they're going to be charged at home. And then today, as it stands, a huge amount of our economy in the U.S. — close to 10% — is used to find, mine and refine fossil fuels, so that's the pipelines and the trains moving coal. And that's all filed under industrial emissions. So if you wrap up your pro rata share of that in your household, you wrap up the electrification of your vehicles, the decisions you make around your kitchen table are actually about 40 or 42 percent of our total emissions. In our small businesses and offices, what's traditionally known as the commercial sector, it's about another 20 percent. As I like to say now, there's two types of emissions. There's a small number of big machines, and there's a large number of small machines. The small number of big machines is a few hundred coal plants and a few hundred LNG terminals and a few hundred oil tankers, but the real game in town is the 200 million vehicles, the 128 million households, the 70 million natural gas furnaces, etc. That's the large number of small machines, which is what we need to electrify when we electrify the household.David Roberts: And it’s individuals in charge of those decisions. One objection I hear to home electrification is that, from an household point of view, the boring stuff like insulation and weather-sealing is a better value. What's your general response to that? Saul Griffith: I don't think that's true. It’s empirically wrong. Retrofits like the envelope and ceiling can be very, very expensive, because you have to remove walls, you have to stuff new insulation in those walls. I just got a quote on doing that for my house, which is in a mild climate but is nevertheless freezing. It was about $28,000. That would give me a small efficiency win in this house, of maybe 20 percent less energy use, whereas buying the heat pumps to heat the house is about a $2,500 project. They will lower my energy for heating the house by two-thirds compared to how it's currently heated. So the big efficiency win in this house is the heat pump.  Arch Rao: Just to expand on that, we have to be looking at technologies that change the outlook for us, not just looking back, but looking ahead. Things like fundamentally changing how we heat our homes or how we think about cooking and heating our water supply are the big game changer here.David Roberts: Following up on that: Span makes these smart electrical panels. What's the pitch that intelligence is important, or a necessary component of this, versus just dumb-appliance replacement?Arch Rao: That's a very good question. Often people have to be walked through the second-order effects that a solution like the Span panel can have for your home and your carbon footprint. A very useful analog, perhaps, is: in order to enable faster adoption of electric vehicles, we have to think about building charging networks, where we are working to deploy a large number of charges around the country and around the world. It's kind of similar. The electrical panel has a critical place in the electrical grid infrastructure, especially for your home. Without thinking about data controls and intelligence flowing in and out of it, it is very hard to envision a future state where switching over to electric appliances is practical or inexpensive. Anecdotally, when you think about replacing your water heater or your home heating system, it doesn't happen outside of an event. You have equipment failing, then you think about upgrading it, and when that decision point arrives, the cost and the timeline for upgrading your electrical system is often not compelling. It’s too much for any homeowner to take on, so they end up adopting the easiest solution, which is often calling somebody on Yelp and saying, “Hey, please replace the water heater with another natural gas water heater.” They're then locked into those committed emissions, like Saul said, for the next decade or more. So that's one part of the problem. The other part of the problem is, when you think about the continued adoption of electric appliances — be it electric vehicles, electric induction cooktops, or self-generation storage solutions like solar and batteries — the electrical panel, which is what everything connects into, is insufficient from a capacity standpoint. What we're allowing for is a smarter electrical panel that gives you controls and visibility down to every appliance and makes it easier to lock in these electric appliances and also potentially avoid the cost of upgrading your incoming service.David Roberts: The idea is that Span will juggle the loads and the timing, to smooth out the demand curve so you don't have these spikes where you might need bigger hardware.Saul Griffith: So the average US household today has two cars in the garage that burn petrol or gasoline or diesel, and it has natural gas heating, and it uses about 25 kilowatt-hours per day of electrical energy. If you electrify both of the vehicles in that household, you'll add about another 25 kilowatt-hours per day to the load of that house. And if you electrify the heat, you'll add about another 20 kilowatt-hours. For the majority of U.S. homes — and this is true around the world, when we electrify for purposes of decarbonizing, or for purposes of having a quieter, cleaner car, or because you're trying to improve the respiratory health of your children, because you don't want to burn fossil fuels inside your house — you're going to double or triple the loads in that house. The other phenomenon that is happening — and where I'm dialing in from today, in Australia, is an incredible example of this — rooftop solar is now providing 5 cent per kilowatt-hour electricity in Australia. Australia got the right mix of regulatory environment, politics, financing, that there is no way the grid will ever provide electricity to you as cheaply as solar. That will be true in the US — it is starting to be true, but it's going to be very, very true by 2022 or 2023. And then you're going to want to run your hot tub when the sun is shining, and you're going to want to charge your car battery when the sun is shining. That needs coordination, and it needs a computer, and a brain. What we're trying to avoid is having both cars on a type-two charger running at the same time as your oven, at the same time as your stove, at the same time as your hot tub. And with a small amount of intelligence coordinating those loads, there's actually quite a big economic win — it means that the total retrofit that we need to do is much smaller.Arch Rao: Thinking about it from the bottom up as well, the home electrical grid is built very much like traditional electrical infrastructure. You think about the worst case scenario, you try to build out capacity to support a very low likelihood scenario of these EV chargers, the heat pumps, your induction cooktop, and all of the different appliances in your home being powered on at the same time. That rarely ever happens, or in fact never happens, right? To be able to manage these, you need a solution that sits at the nerve center of your electrical system. That's really what Span does.David Roberts: It’s quite analogous on the household level to the larger grid: you're just peak shaving. You're installing some intelligence to avoid big peaks and valleys, right?Arch Rao: There’s an elegant comparison to be made here with fractals. We're moving into systems where your edge of grid looks more and more like the grid — you have generation, storage, you have different types of loads. So all these things we talked about, in terms of energy efficiency — reducing your consumption, which is a concept that's existed for decades now — is just not going to buck the curve quickly enough. If people want to continue to have the conveniences they have today, the solution is to electrify, to power it with known, available, increasingly lower-cost renewables.David Roberts: A lot of the promise of intelligence or software in buildings is that grid managers will be able to interface with the grid edge and coordinate and co-optimize it with central generation, so that everything works well together. A lot of what Span offers is: here's what you the owner can do; you can set this, or if this happens, you can turn this down, and turn this up. Over the years, I have picked up a real skepticism about how much we can expect people to do. Even if it's directly in their self-interest and super easy, people generally, as a behavioral matter, will not do things. In thinking about Span, what's the balance of user control versus what’s automated? Do you think about that a lot? Arch Rao: We do think about that a lot, actually. At the homeowner level, what we've zeroed in on is, monitoring without controls is not valuable. We're not just offering customers information and hoping that they'll change. Alongside that, controls without intelligence is not scalable. Ao we have to work toward solutions that take the human out of the loop, which means doing nuanced but subtle things within a home that don't impact your everyday life, but at the same time, are the right thing to do in terms of power flow management. So the solution is at the home level, but you want to take the homeowner out of the everyday decision-making process. The second part of it is, as we deploy more and more of our systems, we are seeing the benefit of the fleet level. In fact, we've already signed on a few utility partners that are looking to give this away to their customers or significantly rebate it, because the panel, given where it sits, is the natural intersection point between the grid operator and the home. Everything that you source power from, sink power into and store power in, all naturally connects, which means you can have a single gateway, so to speak, that can monitor and control everything at a fleet level as well. Whether it's an EV charger, from any brand, make, model, or company, or whether it's a smart thermostat, all of these can be monitored and controlled to a single gateway.David Roberts: To what extent are grid managers controlling things through Span now? Or does that need some sort of extra signoff from the homeowner?Arch Rao: Te're thinking about this as an opt-out model. We recently announced a program with Green Mountain Power, and another one with Silicon Valley Clean Energy here in California, where the customers are by design enrolled into some form of load monitoring and demand management. This doesn't preclude them from overriding those requests, but now the utility is given access to a piece of technology that allows them to control water heaters and EV chargers and space heaters, etc.David Roberts: Is Green Mountain giving them away? Arch Rao: That's right, the first part of their program is, they're offering 100 systems to customers in their territory — some that have batteries, some that have EV chargers, some that are just getting a panel up because they're getting an electric appliance — to understand what the benefit will be. The plan is, as we demonstrate successfully that this has value to both the homeowner and the grid operator, to scale this up. They have around 200,000 homeowners. There's another interesting benefit to this, which is that there are still a number of utilities in the US that are filing for rate cases to adopt smart meters — but frankly, smart meters are not really that smart. They’re communication radios. Our panel gives the energy company or the utility a lot more visibility at the whole home level and at the circuit level. So imagine by design being able to monitor the consumption of EVs, the production of solar, the major appliances, etc. and the controls. There's a very strong case for how this can be offered nationally through existing utility companies and potentially even being rebated by the government to enable electrification. David Roberts: So just slotting these in where smart meters are now? It sounds like a better technology, but for the same general purposes.Arch Rao: That's right, this takes the place of an existing smart meter. Our product is revenue-grade metering at the home level and at the circuit level.David Roberts: There’s another complaint I often hear about home electrification, and I'm curious what both of you have to say about this. Whenever I bring it up online, one thing I hear is that electrification would raise homeowners’ costs quite a bit. And it's true, probably, in places where electricity is more expensive than natural gas per therm — which is, I think, a lot of places. So I'm curious what percentage of homeowners can save money by doing this now, by virtue of existing economics, versus those who need some sort of incentive?Saul Griffith: I’ve spent my whole year answering this question, with Rewiring America, which is an organization founded not only to answer that question, but to make the economics better and better and better. One thing we looked at was, at what point in the future the household economics will be positive for everyone. That point is when the US achieves Australia's cost of solar installation, at $1 per watt on the roof, when we've electrified our heat, when we get batteries installed for under $200 per kilowatt-hour at the household, and when we get EVs to cost parity with gasoline. That moment is about 2024. At that point, every American household saves more than $2,000 per year on their energy bills. We're actually getting closer and closer on EVs — a lot of the savings are driven by EVs. Just for perspective: 10 cent per kilowatt-hour electric vehicle versus $3 gallon gasoline; three or four cents a mile for the electric versus 20-plus cents per mile for the gasoline. Carrier, an American heating and cooling company, just created a variable-speed heat pump that's got a COP of 4. So the technology is there. If you can install these things in the household without too much headache, then households will realize savings. I admit we're not quite there today. One of the reasons is that we haven't trained enough HVAC technicians, we don't have enough electricians, there's a lot of excess permitting that needs to be done, there's just challenges to the practical reality on the ground. But they're falling day by day, and there's more and more contractors that will do a heat pump and not recommend a natural gas heater. The economics are flipping right now. But I do agree that the challenge is, we've got to design and build for the future that's going to happen in 2024, and have to sell it in 2021. That means there are ZIP codes where it works. We just did a study trying to help the White House on how many low- and middle-income households would already save by flipping off natural gas, and it's tens of millions of homes. You can pick the ZIP codes in the country where it's most favorable, where it's a reality already.David Roberts: What's the differentiating feature of those areas?Saul Griffith: For heating specifically, it's either because there's high natural gas prices or because there's low retail electricity prices in that location, or because the climate is mild. So across the South and Southeast, there's a lot of homes in the money, across the Southwest and the West Coast there's a lot of homes in the money. It gets a little bit harder in the middle and up at the top of the country, but honestly, every year we're gaining 5 degrees of latitude in heat pump performance. David Roberts: Arch, you must have to deal with the question of upfront costs.Arch Rao: Saul provides a really useful macro perspective, through the longer-term horizon, for us to enable this for every home. Expanding on one of the points he made: how do you get to that dollar-per-watt solar? How do you get to the sub-$200-a-kilowatt-hour storage? I think we're coming at it from an inside-out perspective of affordability. That's what's driving our product design and innovation. When you think about the cost of delivered, behind-the-meter solar today, to homeowners here in the US, a lot of the cost is operational costs, installation cost that stem from design complexity and customization on site. That's part of what we're trying to solve here: there is too much design complexity, and there's too much design customization, for this to get to a low enough cost to become affordable for every household. If you don't have to worry about relocating nodes, if you don't have to worry about changing the ideal size of the solar that goes on your roof, because you're not as constrained by how much capacity the service has, it makes it that much easier for us to reach more customers at a lower dollar per watt. That's what we're solving. When we think about storage — and this is actually a very debated topic for us internally — resiliency is arguably more of a need for low- and medium-income households than it is for larger, more affluent households. But in order to get your whole home backed up, or your essential loads backed up, most folks cannot afford to have two or three batteries. Part of what we can offer is to combine a single small battery with the Span panel, and effectively you can manage everything in your home.Again, it goes back to the same point of affordability: lower capex, lower opex. That's how we're going to move closer to a smaller carbon footprint, but also closer to enabling these customers to take that next step towards electrifying their appliances. David Roberts: Spell that out a little bit, why a Span panel plus a small battery can do the same work as two or three big batteries. What exactly is the magic there?Arch Rao: There's two pieces to it. One is, when you think about backing up an entire home, you're having to place a large bank of batteries to meet what your maximum load could be. And you have to wire it up such that you're placing this bank of batteries upstream of all of your circuits, or all of your loads. In some places, like California, that requires quite a bit of installation labor, because you're having to disconnect the meter, move all your circuits and loads into a separate critical-loads panel, etc. With the Span panel, we are a one-for-one replacement for your panel — or it can also serve as a sub-panel or critical-loads panel. And it takes in all the circuits that you already have in your home, with all of the existing breakers, so there is no on-site customization required. Once installed, we are able to see and manage your load such that you can get more outage protection with a single battery than you can with two batteries, because you're aware of what's consuming power during an outage. One surprisingly common piece of feedback we got from customers when installing home batteries for Tesla was that they inadvertently discharged their home battery into their car during an outage, because they didn't know any better. They didn't know they were experiencing an outage. We can solve the problem for some people by giving them more batteries, but I think we can solve the problem for all people by giving them a more controllable and dynamically managed load-control panel. David Roberts: So in the event of a brownout or a blackout, your Span panel can turn off or turn down inessential loads. It can prioritize.Arch Rao: Yeah. Today, the interface is very simple. It is designed for anybody to use, where it says, here are my must-have loads, here are my nice-to-have loads, and here my non-essential loads. It all goes to the Span app. Depending on the state of charge of your battery, or more importantly, how many hours and minutes of backup you have left, based on your load profile, we will shed those non-essential loads first. When you approach, let's say, half of the capacity of the battery, it will shed those low-priority or nice-to-have loads and send you a notification saying, “Hey, David, so you know you have another five hours of battery remaining, would you like to share anything else?” That's what we can do today. Where we are headed, because of the massive amount of compute and communication we have built into our panel, is the ability to talk to your appliances. We will change the set-point of your thermostat; we will change the frequency of your compressor turning on or off inside your refrigerator. We can get a lot more out of the same number of kilowatt-hours than you would if you were just blindly discharging it into your home.David Roberts: Explain that a little bit. Today, it can basically turn up or down the amount of power going to the appliance. You're saying it'll have more fine-grained control over appliances in the future?Arch Rao: That's right. Today we turn off circuits — which is a harsh sort of customer experience. Very soon, we will have the ability to interfere, to change, let's say, the rate of charge of your EV, or change the set-point of your thermostat. And in the future, we're working towards capabilities where we can control most if not all the devices in your home. David Roberts: Is that going to require any change in the devices, or is it more intelligence on the Span side?Arch Rao: It’s just more over-the-air software updates that we can release. And as long as your device is “smart,” meaning it has WiFi, we should be able to talk to it. David Roberts: Is this also true of fossil fuel appliances, like if my Span is connected to my natural gas furnace? Or is this an all-electric type of thing?Arch Rao: It works with any appliance that has a digital interface. So if you had a fossil-based heating system for your home, but if it was controlled through a Nest thermostat, then we will soon be able to talk to the Nest thermostat and ask it to turn off or go to a higher setpoint. So that's possible today, but directionally, where we of course want to get to is a place where the heating device itself is electric, and we're talking directly to it.  David Roberts: Let's turn to another big topic, which I know Saul has burned a lot of brain cycles on. We need to do all of this home electrification quickly, and the main thing we need to do to make that happen is to fund it. That's always the choke point — funding and financing by the customer. There are the appliances, there's the smart management software, there's the rewiring of the home electrical system to be ready for 220-volt appliances, and all of that costs money. With customers, we know it's legendarily true that even if the lifetime cost of ownership of something is much lower, the upfront costs scare people off. Basically, people don't like upfront costs. So what are the right new mechanisms or tools to fund these things such that we can get them going, quickly, at scale?Saul Griffith: It's a great question. It matters a lot which part of the market you're in. The good news is, we have historically low global interest rates. So the set of goodies that we're describing are things that people buy every decade, and there's a lot of evidence to show that most likely, you're doing any one of these things either because you just moved house, or you're refinancing your house, or you've just bought a car, or, the new entrant in this game is, you've just put solar on your roof. At any one of these interventions in your life, most households typically will do a couple of things at the same time, and at those points we need mechanisms that tie the financing of these things to the refinancing of your mortgage, and do it at the lowest possible interest rate. Certainly if you could apply mortgage-level interest rates to all of these items, that helps enormously with the financing of it. There are about eight things we're talking about — the heat-pump water heater, the heat-pump space heater, the two electric vehicles in the garage, the two vehicle chargers in your garage, the Span load center that connects all of them and has the brain, and the induction stove and induction oven in your kitchen. There is a good argument that we should declare this national infrastructure, because there will be a date in the future where my solar panel is running your cooktop, because I'm out of the house, and there'll be a time where your home battery is supplying my car with some electrons, because that's the nature of electricity — how this is all going to get connected together and balanced. There's actually precedent for financing the suburbs and homes as infrastructure. FDR created Fannie Mae in 1936 under the Federal Housing Authority, and the government stepped in and provided guaranteed infrastructure-quality financing to build out the American suburbs. We will make this project collectively cheaper for the nation if we do something similar for this bag of goodies. And if we recognize that if you install any two of these things at the same time, it's cheaper than installing two of them individually. So there's a discount if we're smart about how we do it. That's a pretty good story for people who are homeowners, in the top 50 percent of homes. The other thing we really need to recognize is that half of American homes are struggling to find $800 and have credit rating problems. This was before COVID, in the economic disaster that was 2020. So I think we've got to be more honest with ourselves, providing tax write-offs for building these things is not enough — we need point-of-purchase rebates. We know that when people buy hot water heaters or air conditioners, more than half of the time it's under financial duress — your wife is pregnant, your partner is ill, if the water heater fails, you need a hot shower tomorrow, right? You go to the store and they say, well, the natural gas one will cost you $100 less, and I've got a contractor ready to go. That's why people make that decision. So we need to think about this, not as tax incentives for the top households, but point-of-purchase rebates for all households to do it? How do we do clever on-bill financing? How does the utility play a role in building out this infrastructure? Quite frankly, given the time frame required, every single possible mechanism that lowers the cost and lowers the brain damage of doing it at that point of purchase is what we have to do.Arch Rao: Mechanisms like the investment tax credit already exist and products like Span already qualify for it, because when you install a solar system or a battery system, the new measure allows for standalone storage to also take incentives with the 26 percent tax credit. They are good and they are in place now. But I agree with Saul 100 percent that moving toward a model where we think about products like Span, home-electrification products, EV charging, as part of your home infrastructure and potentially part of the grid infrastructure, allows us to go a lot farther in terms of what types of financing we offer. Even before we brought Saul on board as an advisor to Span, he and I were independently thinking about the idea of mortgage-based financing for improvements to your home. We see a path towards offering solutions like this to every home through mortgage lenders and insurance providers.David Roberts: And is there anything interesting to say about renters and landlords? This is another thing I hear whenever I talk about this online: “I'm a renter, I have such limited control.” What kind of problems does that raise?Saul Griffith: I don't think any of us, if we're honest, have a satisfying answer to that question yet. Somebody will figure out the business model innovation or the piece of policy that will help. I think what we can do is describe the world we'd like to get to. That $2,000 or $3,000 per household in savings is $300 billion a year in the US, and there's a lot of options of where that money could go. Those savings could go to the bank that wants to finance you and make it in the interest rate, it could go to a company like Tesla or Sunrun who'd like to somehow benefit from selling the grid services, it could go to the utility. I think we should go with a guiding principle that we should always choose regulations where we return as much of that money as possible to the household, then try to figure out how to make that happen. In this case, you'd like to figure out the mechanisms and the regulatory environment that would motivate the renter or the landlord to both do these things and to pass some portion of those savings along to the household.Arch Rao: There's a combination of thinking about this problem from a technology standpoint, which is primarily what we're doing, and thinking about the regulatory policy standpoint, which is a big part of what Saul and his team are doing. The alignment with the economic incentives, be it the landlord, the homeowner, the bank, the solar installer, etc. — I think there isn't one form that fits all here. Going back to your original question, David, about funding, there's one piece I think deserves just as much attention as the rest, which is building out the workforce that can scale this up, by offering vocational training to a larger number of Americans so that we can actually get these deployed at a scale and pace that will have an impact. There's about 60,000 licensed electricians in the US now, and that's woefully inadequate if you want to electrify every home in the next decade.David Roberts: Right. I was gonna return to that in just a sec. One more thing about the barriers for homeowners: it's pretty well known at this point that, the closer you get to home and hearth, the less you're talking about economics, the less rational interest maximizing you have, and the more time constraints and psychological constraints come in — which is to say that electrifying a whole home today is, aside from the cost, a huge pain in the ass. So even in places like California, which you’d think would be cutting edge on this, I hear, “I had to talk to six different contractors and their permitting boards, and there's different vendors, trying to coordinate, trying to figure out which piece to do first, and how to finance one piece with another piece…” So the transaction costs seem enormous right now. And I can say from my own point of view, I would pay a lot of money to have to think about this s**t less. So how do you reduce those transaction costs? Is there a future where I can just call somebody and say, here's my check, please do all my stuff, and then that's the last I have to think about it? Saul Griffith: I think you've led yourself to the correct answer here. That's already emerging, and it is one business model innovation away from being able to do it. There's a company in Australia called Brighte that has similarities to a company in the US called Mosaic. They offer the financing; they have contractor networks. There's a whole lot of companies starting to do that. They’ll be able to afford to pay full-time lobbyists to help change the laws and the regulations. Rewiring America is focused on this, because we've got to fix the rooftop-solar regulations in America. In Australia, there’s suburbs with greater than 50 percent solar on their roof, all enjoying electricity that's a third the price that the grid can offer. Yet in America, we still have less than 2 percent of homes with solar on their roof, because it's still too expensive. And we have a prevailing wage of $35 an hour in Australia, so it's not because of minimum wage. This is red tape. We've red-taped the future out of existence. There's been 120 years for fossil fuels to build regulations and nurture workforces that work for it. So I think it will need some combination of regulatory change and organizations lobbying for those changes, with some business-model innovation. This is going to be true not just in one affluent ZIP code, but every ZIP code. We're really at the inflection point. There's a famous photograph of New York City with 200 horse-drawn carriages in the foreground and one car, in like 1908, and then they show you a photograph taken from the same point 10 years later and there's 199 cars and one horse. We’re at that 1908 moment, with one electric house and 200 non-electric houses, and it's all going to change this decade. It will take a lot of contributions, like what Span is doing, to enable that. No one exactly knows the answer, we're all feeling our way forward here, but we're doing that with a fair amount of intelligence about what needs to happen. Arch Rao: I recently wrote a blog about this being our decade to decarbonize. If you think about the growth in the adoption of solar over the last decade and a half, if you look at just the rate at which EV adoption has grown in the last half a decade, I'm strongly a believer and a proponent of the fact that this decade is going to be about electrifying many things in your home. To your question about home electrification companies, I don't think there's going to be one — there's going to be many companies offering a combination of products that allow you to choose electric over gas, to the point where it truly does become as easy to adopt these as it is to get a home appliance. If you compare the shopping experience between getting a washer/dryer installed in your home versus getting an EV charger or a battery system installed, the latter is an order of magnitude more complex, because of all the red tape we just talked about. The path to simplifying that is from the top down — improving regulation, simplifying standards, moving toward policies like we have in California, where we have solar mandates and EV mandates and soon hopefully an electrification mandate — but also from the bottom up, which is how do you build pieces of technology that become the new standard for every home, that truly make it as easy to adopt a home battery or an electric appliance as it is to get a refrigerator delivered to your home from Home Depot. Saul Griffith: Just think about the events of the last month: Joe Biden driving an electric F-150, which in and of itself is amazing. The F-150 is the most produced car in the history of mankind — 42 million F-150s have been built so far, double second place, which was the ubiquitous Volkswagen Beetle. So this really matters. What was not nearly as much in the headline, but I thought was fascinating and really interesting, is that Sunrun is partnering with Ford. So they might say, “You can make the installation easier, while you're financing your car, let us just suggest that it might be a great time to finance the solar installation and this battery and this upgrade as well.” These things are happening and they are about to happen at lightning speed and enormous scale.David Roberts:I did a podcast with Lynn Jurich, the CEO of Sunrun, a couple of weeks ago in which she discussed that, among other things. Arch Rao: Sunrun is a good example of a company that grows up to become a home electrification company — much like I think many other companies will. Tthey have to, because just being a solar installer or a solar financier is not going to cut it.David Roberts: Are you thinking a lot about, not just the technology of the Span box and how to make it better, but business models and partnerships? How to package things and ease the transaction costs?Arch Rao: Absolutely. We're thinking about three pieces. We're thinking about how we generate demand through channels that haven't been the primary focus. So today, I think most green energy solutions start with a conversation around the coffee table about solar. That's a missed opportunity, because you can be thinking about a panel upgrade along with adopting an electric heater or an EV charger, or even just a battery without a solar system for your home. That's what we're seeing happen more and more often. These are all technologies that can be installed with any electrical contractor, so we're seeing electrical contractors as a key channel. We're working with mortgage lenders and financiers to make it as easy as giving away a Span solution as part of your refi, because that now makes your home that much closer to being a clean energy home, and an entry point to offering better products or more products in the future.The second pillar for us is the fulfillment side, how do we build a network of qualified service providers like electricians that can install the system for us, but at the same time, provide ongoing service to the customers. The third is technology partners — thinking about any product that we're going to build ourselves or we're going to partner with OEMs. That's where we're headed.David Roberts: On the regulatory front, Lynn said this as well, about Sunrun, that her mantra now is soft costs, dumb regulations, red tape. It's close to being conventional wisdom now in the US, at least in energy circles, that this is the big barrier at this point. So is Span getting involved at all in lobbying for specific regulatory changes or laws? What's your top priority there?Arch Rao: Well, there are a couple of things. There are big-picture opportunities, like the work that we're doing around Rewiring [America], asking for or setting up programs that can rebate the adoption of upgraded electrical panels. Then there are more nuanced but specific things like helping define standards with NFC or UL, that really help us rethink our arcane model of distributed electricity grids. We think about building electric conductors and circuit panels with oversized capacity for that larger load to come on. So it's across that whole gamut, but I think the biggest levers for us are going to be better financing and, like Saul talked about, upfront rebates. David Roberts: Saul, do you have any particular regulatory targets that are top of your list?Saul Griffith: This is how extraordinary the soft-cost problem is for solar: your cost of solar modules now is 25 cents per watt, yet the cost of installed solar on an American rooftop is $3 a watt. So let's just dispense with the belief that this has anything to do with the cost of the solar [panels]. Of that $3 in the US, about 75 cents is the cost of the sale. Because American rooftop solar is slightly more expensive than the grid, you gotta spend a lot of money to sell it — it's as much for the cost of the sale as the cost of the hardware. It’s crazy. There's another 50 cents to $1 in the costs of permitting inspection and those regulatory soft costs. So we’ve just got to get to the binary flip where you get over that, getting rid of that sale cost because you lower the cost of electricity. That's huge. Pretty much in every ZIP code, when it gets to $2 a watt installed, it's cheaper than the grid. That's the rule of thumb. Just making bigger systems, so that the people that are putting it on your roof can install eight kilowatts instead of four kilowatts, is enough to pretty much get you to $2. We're really on the cusp of a very exciting moment. A wonderful guy called Andrew Birch has done a lot of work to do a solar app, which is an online portal that's going to make the application for the permits much more streamlined and easy. That's important. Every utility in every state has a slightly dysfunctional relationship with time-of-use billing and reverse metering. We need a future of what I would call grid neutrality, meaning any generation resource is treated equally, any storage resource is treated equally, any opportunity for demand response is treated equally — so that homeowners are motivated to put the maximum amount of solar and the maximum amount of [electric] vehicles in their garage, and benefit from participating in all of these transactions to balance the grid. The utilities traditionally resist this because they also sell natural gas, but the reality is, we're going to double or triple the load in every household and rooftops aren't big enough to meet all of that so the electric utilities are going to see load growth. They win no matter how they play here, and we just have to kill off the protection of the natural gas part of the business component and move towards grid neutrality, which will be hard-fought regulatory changes.  The Federal Energy Regulatory Commission is debating a bunch of issues right now that are super important, that will determine the future. We know where the North Star is, it is grid neutrality, where everyone gets to play and benefit from the resources that they install, and that is also going to bring down the cost and maximize the savings.David Roberts: What country is farthest along the pathway toward grid neutrality?Arch Rao:The countries that I've seen as the most forward-leaning when it comes to understanding the need for and supporting the adoption of distributed energy and grid neutrality are Germany, the Netherlands, and Australia. Now, this is a blanket statement, they each have their own deficiencies in terms of how these programs are implemented, but I think they're certainly farther along than the U.S. right now, where red tape is really delivering a crushing blow to the rate at which we can and should be adopting rooftop solar, batteries, electric vehicles, etc.Saul Griffith: I’m going to give you two different answers, both of which might be funny. I think the unregulated markets in Africa and Malaysia and smaller countries in Southeast Asia are being very innovative precisely because they have so little infrastructure, they can write new rules as they go. I wouldn't look to any Western nation to be perfect here.Australia is having to face up to this reality first, and that is because they got to very cheap rooftop solar first, they go to very high penetrations — 50-plus percent — first, but Australia is dysfunctional in its own unique way. What you really want is a country that has Australian rooftop solar policy, Californian or Norwegian electric vehicle policy, and South Korean or German heat-pump adoption. That's the country where the economics are very positive for the household. So we know how to do this, we just don't know how to do it in one place.David Roberts: Are there, in the US or in the world, places that are too hot or too cold to fully electrify a home?Saul Griffith: Very cold places are difficult, although heat pumps are getting better and better. But places that are cold enough generally are also quite wooded so there is a good opportunity for wood pellets or just traditional wood stoves. So there are places in the world where a wood stove is still going to be the cheapest way to heat your house, and it can be renewable. In Australia, there are states like Tasmania, where that wood-fired heat supplements the electrification of the rest of the house. They're already a 100 percent renewable grid with hydro. There are other places in the world, such as Arizona, or Queensland in Australia, where the biggest mismatch between electricity generation and load is the peak summertime air-conditioning hours. So the solar peak is at two o'clock in the afternoon and the afternoon peak is at 6 pm, and we've got to match that. The ones where that is the case for heat, you know, small amounts of storage, whether it's thermal storage or electrical storage, can bridge that four-hour gap and you're in good stead. There are technologies that we're working on, thermal storage technology that can bridge the 16-hour gap between the solid generation periods and when you want heat at 4 am. So that's the heating problem. There will always be a few small ZIP codes where there are exceptions, but I think now everyone can squint and see that we have answers for nearly all of these cases.David Roberts: Arch, you're selling all over the country?Arch Rao: We are selling nationally,, across the US. We've now deployed, I want to say, in over 18 states across the country, and the efficiency of heating or cooling hasn't been a barrier to adoption of Span panels or adjacent technologies for an electric home.David Roberts: And are Span customers saving money now? Are you tracking usage or trying to get data on usage and finding out what actual results on the ground are?Arch Rao: We certainly are. The metrics we are most closely tracking are, are they getting empirically this benefit of going with fewer batteries? We're seeing that with a Span panel you get roughly 1.65 to 1.7x value per kilowatt-hour available, because of how we can manage the loads. That's quantifiable value. The other metric that we often look for is, what is the reduced time to install and cost of installation labor? That then directly translates into a lower dollar per watt or dollar per kilowatt-hour to customer, and we're seeing that play out more and more significantly, especially right now, for a couple of reasons. The electric panel as we have it designed is a Ul 67 box. What that means is, it's an over-the-counter permit, so the permitting for a product like Span is, by design, a lot shorter than the permitting for a rooftop solar system or battery system. We're able to help our installation partners get projects going very quickly. Right now, because of global supply-chain constraints, we're seeing that there's a significant supply shortage of lithium-ion batteries. especially in those cases, as we approach summer here in the Northern Hemisphere, we have installers that are able to go back to their customers and offer them a Span panel plus, say, one battery, as opposed to the previously designed two- or three-battery solution, and help them move to a more self-sustainable lifestyle.David Roberts: Air-source heat pumps versus ground-source — how far do you think ground-source is going to get? Or do you think air-source heat pumps are going to get good enough to do everything?  Saul Griffith: So ground-source heat pumps, for everyone's benefit, are where you use the temperature of the ground as the input to your heat pump. The ground about four feet down, around the country, is about 55 degrees Fahrenheit all year round. An air-source heat pump just takes the outside air. Ground-source heat pumps require something like an enema for your front yard or your back yard. It's a lot of drilling equipment; it's a very high capital item. If you're doing a new-build home in New England, or you have large acreage in New England, it's a no-brainer to go with ground-source. For any milder climate, the ease of installation of air-source looks like it will be the answer. As with nearly everything on climate, electrification, and energy, these are giant markets where there's room for both players, and the details will be around local regulations, local geography, local climate, so the answer is yes and/or both. If I was picking the market share in 2036, I'd say 80 percent air-source, 20 percent ground-source is ambitious for ground-source. Unless we get robots that can drill holes really well and take all the headache out. But you still need the physical space to drill the hole, and most people don't have enough land under their house to sink the heat.David Roberts: Especially if you're building new developments — if you're doing a common ground-source heat pump for multiple buildings, that's probably the most efficient way.Saul Griffith: This is the decade for change, so don't rule out unexpected solutions. We've got to do something with the 4.4 million miles of natural gas pipelines in the country. Why don't we use that as a collective ground source? It's not impossible to think there might be a solution in lane three that helps solve this, but I think ease of installation and low cost of capital certainly favors air.David Roberts: I recently found out that the battery in the new Ford pickup is bigger than a Powerwall, bigger than a home battery. So in terms of home power backup, what percentage, in 10 years, will come from home batteries versus connected EV batteries?Saul Griffith: Overwhelmingly electric vehicles. Any electric vehicle is going to do 250-plus miles, which is basically where real range anxiety just goes away. The battery in a sedan that does that is going to be 60-plus kilowatt-hours and for a truck it's going to be 100-plus kilowatt-hours. So that's four days of your current electrical load in your house. There's 1.88 cars in every driveway in America, so that's like a week's backup. The Powerwalls and LG batteries that people bring in the side of the house, they're like five to ten kilowatt hours. That's a very, very small fraction. I'm working on thermal storage technology, as are other people — being able to turn your space heating, your water heat, and your vehicles into storage is a big opportunity. Those two batteries dwarf any other battery that will be on the grid 10 years from now.  David Roberts: So what's the case for home batteries then? Saul Griffith: Well occasionally, both cars are out of the house and you still want to play your Xbox.David Roberts: So, backup for the backup.Arch Rao: Actually, I quite disagree. I think that the vehicle-to-home concept is a powerful one. The size of the battery in your car is roughly 10x or at least 5x the size of a home stationary storage battery, but the emotional choice for a homeowner to say, I'm going to take the energy available in my car's battery to power my home, I think it's a difficult one. It's kind of analogous to saying I have a large power generator in my car with my petrol engine, and I'm going to use that as a genset for my home, right? David Roberts: But if you're in the middle of a blackout?Saul Griffith: Honestly, we're not even disagreeing. It's just that this is a huge battery. There are so few time periods in the year where you're gonna want these things. This is not even an argument. There's a huge number of reasons to have a small battery in the home. But you really just need to understand that our car batteries are enormous. Even if we put those batteries in 200 million cars, the whole grid for the whole U.S. can run off our cars for days at a time. But that never happens, because you still have solar, you still have wind, you still have all of these things happening. But the anxiety we have about storage goes away as we deploy batteries in vehicles, batteries in homes and batteries in our thermal systems.Arch Rao: And the cost of stationary batteries comes down as we continue to adopt more electric vehicles and batteries in your home as well, which makes room for not just thinking about storage as being a backup to a backup type of solution, but instead a device that can provide you with energy management — being able to charge when you have excess solar, etc., benefits to it that aren't provided by vehicles, where the primary use is actually to get around. The second part of it that I think has spun up a lot of conversation since the F-150 announcement is, how does it actually power your loads, because it's a giant battery, but you still need a whole host of electronics and grid-connect and grid-disconnect devices.David Roberts: That's what Sunrun is trying to sell alongside the pickup truck; that’s the piece they're trying to provide.Arch Rao: Yes, they're going to be installing those solutions. But to generalize the problem statement, there are going to be millions of electric vehicles, not just F-150s, so what is the ideal solution for being able to “island” your home and power it off of your vehicle battery? I think those are the kinds of products and solutions that we're thinking about here at Span — within our panel, we already have a grid-disconnect built in. David Roberts: So you can island if you have a Span panel?Arch Rao: That's right. Our main breaker has its own control system built into it, where it's monitoring the health of the grid, and if it determines the grid is sagging, or it's out of spec from a frequency or voltage standpoint, we automatically, safely disconnect and bring up your battery as the main power source for the home. It can then orchestrate your solar and your loads as needed, to then manage that “off-grid” home. And then when it's safe, it rejoins the grid, making sure it doesn't cause issues on the grid — you want to be careful about frequency when you rejoin the grid, you want to be careful about how much power you push back into the grid, etc. That's all built into our current generation product. But as we think about future products, the types of things we spend a lot of time thinking about are exactly the question that you're asking, David, which is: can cars provide power, not just when off-grid, but even when your on power from the grid? Does it make sense for us to use vehicles as a day-to-day thing? And what are the types of technologies you need built into the nerve center of your home, i.e., a load panel or an EV charger, that allow you to do this in a seamless way, without having to go through a complex design process and having a smorgasbord of stuff on your garage wall just to be able to use that expensive battery in your car?  David Roberts: If you could create this theoretical country with all the best distributed energy policies together, do you guys seriously think that we can decarbonize 100 percent of US homes by 2035, which is the 100 percent clean grid target year? I think people get daunted because it's so distributed, the work itself is so distributed, the use cases are so distributed and so various, and there are so many different kinds of homes and owners. It just seems so daunting. Arch Rao: Yes. The alternative scenario is a bleak one. We have to align products and policies and people to move toward at least decarbonized homes (decarbonizing industry is a whole other can of worms). I would say, yes, it's possible, and we need to be working toward doing that. Saul Griffith: We need to make it possible. It is physically and technically possible, and the more things you electrify, the easier you make it to electrify everything. We will electrify steel making, we will electrify the manufacturing of aluminum, we will electrify a huge amount of industry. Then you dial industry up and down, there’s huge inertia in those machines, and so they will be a great asset, just like your car batteries and just like our home heating systems, they will be critical to balancing the grid. People really don't appreciate that. It'll be about the same amount of wire that's distributing electricity to the grid, but three times as much electricity will go over it. More than half of your utility bill cost is the cost of that distribution network. So if we're putting two or three times as much electricity over it, the price of that distribution cost is going to come down. The more we electrify, the cheaper it gets to electrify everything, the easier it gets to electrify everything. So this is possible. Yes, it is heroic. Yes, the timeline is now. A good climate outcome is, we do this in 15 to 20 years, a terrible climate outcome is, we drag our feet and we take 40 or 50. David Roberts: Well, there's an appropriate call to arms to end with. Thanks, guys, for taking all this time. Appreciate 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

Here at Volts, I recently spent a week … OK, a month writing about batteries, which store energy for electronic devices, electric vehicles, and, at least for short periods of time (four to six hours), the power grid.Lithium-ion batteries are extremely good at those tasks — and they’re getting better, and cheaper, all the time.But here’s the thing: a net-zero-carbon grid is going to need storage that lasts a lot longer than six hours. It’s going to need durations of up to 100, 300, 500 hours or more, and it’s going to need them cheap. Lithium-ion batteries just aren’t going to work for that. What will work? Good question! No one really knows yet. Whatever it is will require substantial research, development, and scaling, and possibly some good geographical luck. We can’t know yet what technology or technologies might win that race, but we do have a good sense of what they need to accomplish, thanks to some new research in Nature Energy from a team at MIT (along with Jesse Jenkins, who used to be at MIT but is now at Princeton). Their findings on long-duration energy storage (LDES) are daunting and somewhat deflationary. In a nutshell: LDES needs to get extremely cheap before it will play a substantial role in a clean grid — cheaper than almost any candidate technology today, and cheaper than any geographically unconstrained technology is likely to get any time soon. Let’s start with some background on the need for LDES.Renewables on the grid need firmingThe cheapest large-scale renewable energy sources are wind and solar, but wind and solar are variable. They come and go with the sun and the wind, and as you may have heard, the sun is not always shining and the wind is not always blowing. We cannot turn them on or off, up or down.The supply of wind and solar energy will not always match the “demand curve,” i.e., the level of electricity demand throughout the day. As more and more wind and solar are added to the grid, there’s more and more need for flexible resources that can fill the gaps when supply doesn’t match demand.Today, those gaps are overwhelmingly filled by natural gas power plants, which are 100 percent “firm” in that they can be turned on at will and run as long as necessary. As the grid is decarbonized, however, fossil fuel plants (at least those without carbon capture) will be phased out of the electricity system and wind and solar penetration will increase. As that happens, other resources will be needed to firm the system. There are four basic options.* Transmission: connecting larger geographical areas raises the chances that sun or wind will be available somewhere within them.* Low-carbon (“clean”) firm generation: the MIT team’s paper lists “nuclear, fossil fuels with carbon capture and storage (CCS), bioenergy, geothermal, or hydrogen and other fuels produced from low-carbon processes.” (The first three items are anathema to some climate activists, but they may end up being necessary.)* Negative emissions technologies (NETs): technologies that permanently bury carbon dioxide can offset emissions from firm fossil fuel plants. * Long-duration energy storage (LDES): technologies that can store enough energy, for long enough, to displace firm generation. (Note: natural gas power plants are much cheaper than any of these options, save perhaps some transmission. There will be no market or pressure for any of them unless there are policies that require reduced greenhouse gases.)NETs are likely to stay expensive and transmission can only do so much, so the real fight is likely to be between clean firm generation and LDES. The new research is an extremely detailed modeling look at the role LDES might play in a decarbonized energy grid — how much clean firm generation it might displace and how much it might reduce energy system costs.The LDES “design space”The researchers took an interesting and (to me at least) somewhat novel approach. The problem with trying to study LDES is that a bunch of incredibly heterogenous technologies are claiming that mantle, with different mechanisms and different performance characteristics, at different levels of development and commercialization, competing for different market niches. It can be difficult to compare them or to say anything meaningful about them as a class. So instead of focusing on particular technologies, the researchers modeled different combinations of performance characteristics. Specifically, they used a high-resolution model to represent five separate LDES technology parameters:1) energy storage capacity cost (using a bathtub as an analogy, think of the cost of increasing the size of the tub); 2) charge power capacity cost (cost of enlarging the faucet); 3) discharge power capacity cost (cost of enlarging the drain); 4) charge efficiency (how much water is lost when filling the tub), and 5) discharge efficiency (how much water is lost when draining the tub).Here’s how they went about it:We modelled a total of 1,280 discrete combinations of these cost and efficiency parameters encompassing performance levels that are consistent with projections for existing LDES technologies found in academic peer-reviewed studies as well as domains that are currently infeasible but that could be the focus of technology development efforts in the future. Furthermore, we evaluated the technology design space for LDES in multiple power system contexts encompassing different wind, solar and demand characteristics and different assumptions regarding the availability of firm low-carbon technologies.They present the results in two basic contexts: a Northern Grid representing average New England conditions and a Southern Grid representing Texas. The methodology was complex but the goal was simple: to determine which LDES performance characteristics would do the most to displace clean firm generation and reduce system costs for a net-zero-carbon grid. First we’ll look at which parameters made the biggest difference and the aggregate impact they could have. Then we’ll take a quick tour through current LDES techs to see which might make the cut.What LDES needs to be able to doThe basic question is how much clean firm generation LDES can displace in a model optimizing for total system costs. Here are a few basic findings:1. Of the five modeled technology parameters, the two that enable LDES to have the biggest impact are energy storage capacity costs (the cost of increasing the size of the tub) and discharge efficiency (how much water is lost draining the tub). The other three parameters don’t matter nearly as much. A good benchmark for energy storage capacity costs are lithium-ion batteries (LIBs). Last year, BNEF’s annual battery price report had the average capacity costs of LIB battery packs at $137 per kilowatt-hour (down 89 percent from 2010), projected to hit $100 by 2023. Dan Steingart, a materials scientist and co-director of Columbia University’s Electrochemical Energy Center, told me he thinks LIBs are eventually going to get down “somewhere between $45 and $60 per kilowatt-hour.” (To be clear: that’s extremely aggressive and optimistic.)2. That gives some context to the next finding: not until it hits $50/kWh will LDES even begin to see meaningful deployment or declining costs. Not until $20/kWh will they reduce system costs by 10 percent. And “to deliver more significant savings in electricity costs (>10%), storage technologies must exhibit costs in the $1-10/kWh range and discharge efficiencies greater than 60%.”That pretty much rules out LIBs. It also, as we’ll see later, rules out quite a few of the technologies currently claiming the mantle of LDES.3. What’s more, across the full design space modeled, the very best LDES could hope for is to reduce system costs 50 percent; the best existing LDES techs could do is 40 percent. And in a system with more clean firm options available, the max is 20 to 30 percent.4. What’s even more, not until LDES capacity costs get down to $10/kWh could it displace all firm generation — if firm generation includes only nuclear. If it includes other clean firm generation with lower capital costs and higher operating costs (like natural gas with CCS or hydrogen combustion turbines), then LDES would have to get down to $1/kWh to displace it all. 5. What’s even more more, the modeled cases where LDES displaces the most clean firm generation involve storage durations of 100 hours or more, up as high as 650 hours (concentrated in 100 to 400 hours). 6. As No. 4 suggests, aside from energy capacity costs, the single factor that most influences LDES’ ultimate deployment has nothing to do with LDES tech at all — it’s the cost and availability of other clean firm options. If only or mainly nuclear is available, LDES has a much better shot. If other forms mature and get cheaper and more widely available, LDES will have a harder time. 7. LDES has a harder time on the Northern Grid, and an even harder time on the Northern Grid under scenarios of high electrification. (Electrification in the cold northern winters means a huge winter demand peak, which renewables struggle to meet.)So, what have we learned? LDES needs to store huge amounts of energy for cheap. Though it will run only intermittently, it needs to discharge energy efficiently. And it needs to be capable of durations of well over 100 hours. Even if it meets those requirements, it will likely displace less than half the clean firm generation required to run a clean grid. That said, reducing systems costs by even 10 percent represents billions of dollars in savings, so it’s nothing to sniff at.Let’s take a quick tour through the technologies competing in the LDES space.The varieties of LDES and their chances of successEnergy wonks are aware of the need for more and better options in the LDES space. ARPA-E has a DAYS (Duration Addition to electricitY Storage) program intended to spur development of energy storage technologies capable of anywhere from 10 to approximately 100 hours duration. But this new research reveals that LDES will need to run much longer than that, and for dirt cheap. Can any of today’s technologies measure up? Let’s run through the four broad categories of competitors. Electrochemical storageThere are two big electrochemical contenders. The first is flow batteries, which I wrote about in a previous post. They have the advantage of being able to scale energy storage and power capacity separately, which theoretically opens the door to very high energy capacity for fairly cheap. Unfortunately, the most common varieties of flow batteries (vanadium redox and zinc bromine) have energy storage capacity costs in the hundreds of dollars per kWh, which means they probably won’t cut it as LDES. (As I wrote, flow batteries are aiming for that awkward mid-duration storage space and getting squeezed on both sides.)Another electrochemical option (an alternative flow battery tech) is liquid metal batteries, which I also wrote about previously. A company called Ambri is building a 250 MWh demonstration project with liquid metal batteries in Reno, Nevada. In this paper, researchers demonstrated an “air-breathing aqueous sulfur flow battery” with $10-$20/kWh energy capacity costs at 100+ hours duration. That wouldn’t entirely displace firm generation, but it could theoretically get to 10 or 20 percent system cost reductions, which is no small thing. Chemical storageChemical candidates mainly include hydrogen and hydrogen-derived fuels like ammonia and syngas (e.g., synthetic methane). This is something of an odd category, since the result of all these processes is a fuel, which operates just like natural gas, as firm generation. You can see chemical storage as a direct substitute for, or a form of, clean firm generation.The cheapest forms of chemical storage rely on specific geological features for storage, like compressed hydrogen in caverns and porous rock formations. Energy capacity costs range from $1 to $5/kWh for hard rock caverns all the way down to around $0.5/kWh for some depleted gas or oil fields. The problem with chemical storage is that, while energy capacity costs are low, there’s lots of infrastructure and conversion processes involved in making hydrogen, storing it, capturing CO2, combining hydrogen and CO2, and then burning the resulting fuel in combustion turbines. This gives chemical storage high power capacity costs and low round-trip efficiency. Lots of work needs to be done to bring down costs, particularly of electrolysis and fuel cells, for making and burning hydrogen respectively. Mechanical storageThe oldest and still most common form of large-scale energy storage is pumped hydroelectric energy storage (PHES), whereby water is pumped from a lower reservoir to a higher one and then run back down through turbines to recapture the energy. (PHES accounts for about 99 percent of the US grid energy storage market.)Most PHES installations today are built for diurnal cycling (every six to 24 hours) and have energy capacity costs in the hundreds of dollars per kWh, which makes them unsuitable for LDES.Some PHES projects with particularly large reservoirs can get over 100 hours of duration at energy capacity costs in the $20 to $30/kWh range, which combined with their relatively high round-trip efficiency means they can probably eat into some clean firm generation at the margins. But those sites are even more geographically limited than PHES generally.The other viable mechanical LDES technology is compressed air energy storage (CAES), which is just what it sounds like — use energy to compress air, then use the pressure of the compressed air to run a turbine and generate electricity. In the best locations, with access to large saline aquifers, CAES can get down in the $1/kWh range with hundreds of hours of capacity; costs rise in less ideal sites (e.g. salt caverns). Like PHES, CAES is geographically limited (and might compete in some sites with compressed hydrogen storage).There are many other forms of mechanical energy storage out there, everything from pushing rocks uphill on a train to lifting rocks with a crane to spinning a flywheel, but none of them yet have energy capacity costs low enough to make them eligible as true LDES.Thermal storageThere are numerous ways to store electricity as heat. The most familiar is concentrated solar power using molten salt, but capacity costs for that technology remain prohibitively high and round-trip efficiency prohibitively low for it to serve as LDES.There are also (less developed) proposals to store heat in ceramic “firebricks” for electricity or heat applications, with energy capacity costs potentially as low as $5 to $10/kWh and round-trip efficiency over 50 percent. A process called pumped thermal energy storage using reciprocating heat pumps also shows great promise. Thermal storage remains an intriguing area of study, in part due to its usefulness as both direct heat and electricity.Here’s a roundup from the MIT team’s paper of all the LDES technologies and their projected future costs:The ultimate potential of LDESAs I said, the research is not explicitly framed this way, but the results strike me as fairly deflationary toward LDES. The low costs and long durations required rule out several existing technologies and set incredibly ambitious targets for others. And even if LDES meets those targets, it won’t erase the need for clean firm generation — at best it will take a good chunk out of it and reduce overall system costs a few dozen percent. That’s not nothing, but it’s not a silver bullet either. Here’s a visual from a seminar Jenkins gave at Stanford:Just a few things to note about this graph. The colored boxes are different LDES technologies — the solid lines indicate geographically unconstrained options and dotted lines indicate those that are geographically constrained. You’ll notice that all the options in the $1/kWh box have dotted lines, and aside from CAES, they’re all chemical. There are currently no geographically unconstrained LDES technologies that have even the potential to knock out clean firm generation.Labels identify a few of the technologies. CAES and hydrogen have huge potential; some thermal technologies and metal-air batteries are intriguing; PHES and reciprocating heat pumps can trim a little off the top. In reality, there will likely be a mix of LDES technologies in the market, targeting various performance or geographical niches. If I were a betting man — which I emphatically am not — my money would be on hydrogen over the mid- to long-term. It has an advantage similar to LIBs’ advantage in the short-duration market: it can draft off of other, bigger markets. LIBs for energy storage can draft off of the much larger electric-vehicle market, which is driving their costs down. Similarly, hydrogen and hydrogen-derived fuels for energy storage can draft off of much larger hydrogen markets: industrial applications, possibly airplane or shipping fuel, possibly mixing with natural gas in existing pipelines. Relative to those markets, the market for hydrogen as LDES is likely to be marginal, but it will benefit from the cost reductions driven by scale in those other markets. Thermal storage might also benefit from being of use in both heat or electricity applications. As I’ve written before, there’s a huge potential market for clean heat. The practical implication of this modeling is that research and development in LDES needs to focus primarily on driving energy capacity costs as low as possible, while targeting durations of 100 hours or more (beyond the 10 to 100 hours the DAYS program targets) and discharge efficiencies of at least 60 percent. It’s a tough set of aspirations and there’s no guarantee any technology will get there any time soon, so another practical implication of the research is that we need to start thinking hard about where to find lots of clean firm generation. We probably can’t store enough energy to get around it. This is a public episode. 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