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Johannes Ackva on Managing Climate Change
192 Plays1 year ago
Johannes Ackva joins the podcast to discuss the main drivers of climate change and our best technological and governmental options for managing it. You can read more about Johannes' work at http://founderspledge.com/climate
Timestamps:
00:00 Johannes's journey as an environmentalist
13:21 The drivers of climate change
23:00 Oil, coal, and gas
38:05 Solar, wind, and hydro
49:34 Nuclear energy
57:03 Geothermal energy
1:00:41 Most promising technologies
1:05:40 Government subsidies
1:13:28 Carbon taxation
1:17:10 Planting trees
1:21:53 Influencing government policy
1:26:39 Different climate scenarios
1:34:49 Economic growth and emissions
1:37:23 Social stability
References:
Emissions by sector: https://ourworldindata.org/emissions-by-sector
Energy density of different energy sources: https://www.nature.com/articles/s41598-022-25341-9
Emissions forecasts: https://www.lse.ac.uk/granthaminstitute/publication/the-unconditional-probability-distribution-of-future-emissions-and-temperatures/ and https://www.science.org/doi/10.1126/science.adg6248
Risk management: https://www.youtube.com/watch?v=6JJvIR1W-xI
Carbon pricing: https://www.cell.com/joule/pdf/S2542-4351(18)30567-1.pdf
Why not simply plant trees?: https://climate.mit.edu/ask-mit/how-many-new-trees-would-we-need-offset-our-carbon-emissions
Deforestation: https://www.science.org/doi/10.1126/science.ade3535
Decoupling of economic growth and emissions: https://www.globalcarbonproject.org/carbonbudget/22/highlights.htm
Premature deaths from air pollution: https://www.unep.org/interactives/air-pollution-note/
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Transcript
Introduction and Mission of Founders Pledge
00:00:00
Speaker
Welcome to the Future of Life Institute podcast. My name is Gus Stocker and I'm here with Johannes Akwa. Johannes is a researcher at Founders Pledge where he leads the Climate Change Fund. Johannes, welcome to the podcast. Thanks so much for having me, Gus. Great to be here. I'm a big fan of Future of Life Institute and happy to talk all things climate today. Perhaps we could start with your role at Founders Pledge. What is it that you do there? How do you see your role?
00:00:29
Speaker
Yeah, so I think the way I usually describe it is like my goal and the goal of my team is kind of to like find and fund kind of the highest impact opportunities in climate. And those are like philanthropic opportunities, right? So like things where we can wear a million dollars or something in the order of magnitude can kind of make a difference by supporting initiatives that are like extremely promising.
00:00:54
Speaker
And yeah, as you mentioned, kind of in
Philanthropy in Climate Solutions
00:00:56
Speaker
the beginning, right? So there's kind of the climate fund, which kind of puts this to life, the founders of climate fund, but also we're advising kind of high net worth individuals kind of beyond that and kind of trying to, yeah, trying to identify using research and using privatization research, kind of to identify where are the biggest blind spot, what are the blind spot generating mechanisms, if you will, and kind of what does that mean for what you should fund on a margin as an ex philanthropist.
00:01:23
Speaker
Yeah, and I think that word is the key. So thinking on the margin here, I see your job or I think that your job is about thinking about the marginal dollar, where is that dollar best spent? Would that be the correct frame? Yes, the next dollar or the next million dollar. And I think that's like really, really crucial frame, because I think a lot of the things that I am going to be saying is going to be like,
00:01:47
Speaker
controversial and might be wrong if one would interpret them as in this is all we should be doing and I'm not really talking about this is all we
Johannes Akwa's Journey and Philosophy
00:01:55
Speaker
should be doing. I'm talking about at the margin, this is what we should be doing relatively more of, yeah.
00:02:01
Speaker
We're going to get into a broad overview of the whole climate change issue. We're going to look at all the potential technologies or government options that might help us alleviate this problem. But I think we should start with your personal journey as an environmentalist. So how did you end up in this role? Where did you start? When did you first become interested in the climate?
00:02:24
Speaker
So, I mean, I grew up in the 90s in Germany, so it was very easy to kind of become an environmentalist, I think. So kind of in my, I remember like some of my first childhood memories kind of being very interested in saving the tiger. So it's like inventing a board game, save the Siberian tiger, kind of like
00:02:43
Speaker
I'm like, yeah, there was an animal documentary on like three times a week, and like the last five or 10 minutes of the documentary would always be like, okay, and now humans are just trying this beautiful nature, right? So that was kind of, I think, very big part of kind of, yeah, of this, I think, initial education, or becoming an environmentalist. And I guess I got more serious about this kind of, yeah, in my teenage years when I was like an environmental activist for,
00:03:12
Speaker
the German chapter of Friends of the Earth, kind of like protesting President Bush to sign the Kyoto Protocol when he was listening, this kind of stuff. So that's kind of where it started. And then I kind of when it came to university, I think the idea for me was, okay, let's kind of study social sciences with a focus on like understanding what's kind of what kind of makes climate policies successful. So that's kind of what I spent kind of my studies on. And then I was working afterwards
00:03:40
Speaker
for our think tank in Germany for five years kind of working on carbon pricing and that's kind of
00:03:45
Speaker
ultimately after this kind of joint founder's pledge kind of went into philanthropy.
Evolution of Climate Solution Beliefs
00:03:50
Speaker
So that's kind of the story. Yeah. And what's something you've changed your mind about? Where have you gotten new ideas or learned new facts that kind of changed your priorities? I mean, lots, lots and lots over the years, right? So that was kind of like a very short introduction to like a 20 year journey. I think the first big change probably in college kind of
00:04:13
Speaker
So at that point, I was very strongly influenced by the environmental movement, was kind of card-carrying environmentalist, if you will. And essentially, at that point, as I said, I was studying social science. We were focusing on political culture and understanding in a way that the things that I believed or the people like me would believe about how to solve the climate change.
00:04:37
Speaker
heavily focused on renewables, heavily focused on energy efficiency, heavily focused on lifestyle change, being anti-nuclear, being somewhat skeptical of technological innovation, right? That essentially all of those beliefs kind of fit together kind of in a very systematic fashion, right? And what unites them is not that they're kind of an adequate response to the climate challenge. What unites them is that they're kind of part of a specific ideology in this case, kind of like a kind of egalitarian green
00:05:05
Speaker
ideology which kind of is framing a large part of the climate conversation. So I think that was kind of the first really important realization that like all of the responses to the climate and to other problems are kind of heavily ideological shaped right and like if you have a situation like we have in climate which is kind of dominated by one kind of ideology this will kind of shape the results. So I think that was kind of one, I think another one a bit later
00:05:33
Speaker
when I was studying in the United States was like 2012, 2011, 2012. This was the time where essentially in the US kind of the big push, the big push under Obama to kind of push for climate policy. Waxman Markey was the name. So that kind of a cap and trade bill in the United States kind of had just failed, right? And this was like a once in a generation moment with regards to
00:05:58
Speaker
climate policy in the US, right? So the Democrats had won the presidency, had a huge majority in the House and the Senate as well, right? So it was kind of a situation of reckoning, like, what are we going to do now? Because even under such favorable conditions that we can expect every 15 or 20 years, we're not able to pass climate policy in the US. So I think in that time,
00:06:23
Speaker
discovered kind of, I think, what I would describe as kind of like the innovation hawk argument in climate, right? So like people that are like very heavily focused on innovation, which I think at that time was kind of not that big a part of the climate coalition. So I think that's kind of another thing that changed around that time. I don't think I'd go all the way, but it's kind of interesting. So
00:06:46
Speaker
because in a way what they did or what they were emphasizing kind of became a big part of climate policy that later passed or like that has just passed with President Biden is kind of essentially putting this lots of those ideas into practice.
Shifts in Global Climate Policy
00:06:58
Speaker
But so that's another one. And then I think another kind of big one, of course, for me growing up is the German environmentalist. I was heavily anti nuclear and being in the eyes also as the first time kind of exposed to pro nuclear environmentalists and
00:07:13
Speaker
for a time was kind of lukewarm about nuclear and at some point kind of realized, okay, even though it's very uncomfortable in the German context, because otherwise reasonable people become like very unreasonable and very emotionally aggressive. Like when you're talking about nuclear, I'm going to be keeping from nuclear, but that was kind of an important shift of mind as well. I think those are kind of three. And then two more recent ones, I would say 2015,
00:07:42
Speaker
essentially a success of the Paris Agreement. So up until 2015, I think international climate policy by and large had always failed. This was kind of like the expectations were very low. And then the fact that the Paris Agreement kind of succeeded, even though it's kind of a non-binding agreement, but it kind of has completely changed the conversations that we're having in different countries. So it kind of serves as this kind of
00:08:09
Speaker
North Star that kind of lots of national conversations are kind of focused on. So I think that kind of was another surprise in a way. In what sense did the Paris Agreement succeed? What would have been the results of it? I mean, the Paris Agreement has
00:08:23
Speaker
succeeded. I mean, not only the Paris Agreement, but like around that time, so like that was in late 2015 and then like 2016, 2017, the nature of the climate conversation has completely changed, right? Like around that time in Western countries anyway, in the sense that like before it was kind of
00:08:40
Speaker
relatively niche issue and it kind of became like a broad societal consensus that like meeting the goals of the Paris agreement matters. I mean it's maybe not political consensus across the political aisle in all countries but at least kind of for the left, the center-left kind of in all countries. So I think that kind of really changed and kind of the idea of net zero and that climate was kind of
00:09:03
Speaker
a top issue. So I think that's kind of what the Paris Agreement achieved. This is kind of very significant compared, it's a non-binding treaty ultimately.
Interdisciplinary Climate Perspectives
00:09:15
Speaker
So there is a version, I think you could have had a cynical take on this agreement kind of before, and I certainly had this to a degree. It's not going to do much because it's like a non-binding
00:09:26
Speaker
very weak agreement, and on some level, that's true. So that's not what it's doing, what it's doing, it's kind of like transforming the conversation. And you mentioned a last thing that you changed your mind on? I think the last thing that I would mention is kind of that, I think that's kind of maybe like 2020 or so, essentially that the situation around climate has improved very, very significantly, which is kind of funny to say this, because I think most people have the opposite perception. But like,
00:09:57
Speaker
In general that like, so like in 2015, 2016, people were saying things like there's a 5% probability of some of more of six degrees or more warming. And I think right now, if you would make this forecast, the forecast right now would be something like, it's maybe like half a percent that we get to six degrees at all and not more than six degrees. So like an order of magnitude change. And so essentially that the forecast before were probably a bit pessimistic.
00:10:25
Speaker
but also that the situation kind of has changed very significantly, mostly through the success of renewables, the success of electric cars, that essentially the very high risk climate futures are essentially almost ruled out at this point. And that's a very significant change.
00:10:43
Speaker
I'm wondering when you're working with climate change, this is such a complex issue. It involves a lot of disciplines, not just climate science itself, but economics and law and physics and engineering and all of these disciplines. How do you form an all things considered view of the situation in light of all of these disciplines? I mean, you can't go get a PhD in all of them, I'm guessing.
00:11:10
Speaker
And so how do you approach this? I mean, in theory, you could, but by the time you have those PhDs, the problem was solved. Yeah, so I think the answer here, I mean, has to be to kind of, essentially, you're always in the state of like kind of being a reviewer and kind of like a reviewer of different pieces of evidence. So that's like one piece of the answer. Another piece of the answer is kind of obviously you do this on a team, right? So like, essentially, right now,
00:11:39
Speaker
In my team, we have a specialist for the technoeconomics, we have a specialist for carmlock and emerging economies, we have a specialist for philanthropy and how other philanthropists behave, so that's kind of another piece of the answer.
Focus on Emissions and Global Responsibility
00:11:52
Speaker
I think to answer it more substantively, I think there's kind of like
00:11:55
Speaker
three kinds of expertise that are like most significant when it comes to the question of like, that I'm trying to answer, which is like, what should we be doing philanthropically, right? So which is kind of like only one way to answer the question up there. I think it's kind of like one is kind of really the social science question of like political feasibility, like which kind of like carbon taxes can we get where, which kind of policies can we achieve in a given country?
00:12:21
Speaker
So that's kind of like, what does the option space actually look like? So that's kind of, I think, the one key expertise. The other one is kind of like, what do different policies or different kind of things in the world, what do they achieve, right? So that's, I guess, policy analysis on that kind of metrics and stuff like that. And then there's kind of because climate change is really a
00:12:42
Speaker
decadal challenge and the global challenge, and it's also a challenge about global technological transformation. So then there's this question of what do changes in countries, what are the long-term consequences of that, and changing the technology stack, if you will, globally, to the techno-economic question. And I think those three expertises
00:13:01
Speaker
I kind of the most, most relevant ones from a, from a solution oriented perspective. And then of course, if you're a philanthropist like myself, then also like what are other philanthropists doing, right? Because like doing the best thing on the margin is almost always about kind of finding blind spots and filling the blind spots.
00:13:22
Speaker
Okay, so let's get to this broad overview that I would like of climate change. On the broadest possible scale, what is it that's driving climate change? Is it mostly emissions? And if so, where are these emissions coming from? So it's like mostly emissions, right?
00:13:40
Speaker
So like all of the mean all of climate change is about emissions. And so if you kind of I mean there's a different ways to slice it but I guess let's first kind of slice it by sector. So if you kind of look at it by sector, then there's like 75% of emissions are related to kind of energy and energy here like
00:14:00
Speaker
One very important thing about climate, electricity is only a small part of energy. Electricity is about a third of energy. So when they say 75%, that's not only electricity, that's also transport fuels, that's heating fuels, and that's also stuff like industrial heat. Essentially, the burning of fossil fuels to produce energy. So that's about 75% of emissions.
00:14:22
Speaker
Then there's about 5% of emissions of kind of emissions from industrial processes. So stuff like producing cement or chemicals where you kind of have emissions that are not related to fossil fuels that are called process emissions, right? And that doesn't mean that industry is only 5%. This is about the kind of the non-energy share of industry. So that together gets you to like about 80%.
00:14:45
Speaker
And then there's about 15 or like 18% that's kind of related to agricultural emissions broadly. And then the last 5% or so is kind of a combination of on the one hand stuff like deforestation and on the other hand stuff like waste. So yeah, I think 80% of the challenge is kind of
00:15:05
Speaker
energy and energy industry. There's two important qualifications to this. This is kind of where the emissions are coming from right now, right? And like, that doesn't mean that this is exactly proportional to what the solution looks like. So like, it can definitely be the case of kind of land use change and kind of like restoring wilderness, et cetera. It's like a bigger part of the solution pie. So I think that's kind of one qualification.
00:15:31
Speaker
And another qualification is that these percentages are kind of heavily dependent on what warming metrics you use. So the numbers that I cited right now are kind of for what's called global warming potential 100. So like if we're kind of assuming over the course of 100 years.
00:15:48
Speaker
If you kind of take a shorter view, if you would say something like global warming potential for the next 20 years, then something like agriculture would have like a larger share because methane, which is a very potent greenhouse gas in the short term, has kind of a relatively larger share in agriculture than in other sectors.
Technological Contributions and Energy Sector
00:16:04
Speaker
So that's another important qualification here. Yeah. And in global terms, are emissions still increasing? Yes. And how long do we expect them to increase?
00:16:16
Speaker
Well, I mean, people have been talking about the end to emission increase for a long time, and then there's always something else coming up. So I think we will probably see...
00:16:28
Speaker
the end to increasing emissions this decade. So, I mean, it's mostly dependent on what China and India are doing at this point. And they're both kind of, yeah, have the goal to kind of peak their emissions rather soon. So it could happen, could happen this decade. Yeah, you mentioned China and India, we should talk about geographically where emissions are coming from, where have they come from in the past and where are they likely to come from in the future?
00:16:54
Speaker
Well, I think in the past, if you kind of take the long view, most of the emissions are certainly have been caused by Western countries. I think that's kind of clear and we do have being in Western countries a large historical responsibility.
00:17:11
Speaker
But if we kind of look at the situation right now, so like the US right now is something like 15% of emissions, the EU is something around like 10%. And like Asia has kind of something like close to two thirds of emissions and then kind of the rest. And if we kind of think this picture going forward, right? So like the share of the EU and the share of the US is kind of gonna further decrease. I mean, probably do something like for the US to something like
00:17:40
Speaker
5% for like the EU, maybe something like 3%. And then, yeah, China is going to be something like 25%, I think, over the course of the century, then other emerging Asia, kind of India, and then Southeast Asia. And then kind of at some point later in the century, Africa hopefully will grow strongly and like
00:18:01
Speaker
I mean, yeah, let's hope it's going to be low carbon. But I guess that's kind of also part of the long game. So the emissions are very clearly, the focus of emissions is very much changing. That's kind of what I sometimes call the central conundrum of climate policy, which is the people that are responsible for a lot of the historical emissions kind of have
00:18:24
Speaker
very little direct leverage and kind of how bad the problem is going to become. Because essentially in the EU, there's not a lot of emissions you can't reduce anymore. Already kind of reaching the goal of getting to carbon neutrality by 2050 is very ambitious. But at that point, there's no leverage left. Because you project that EU is only going to be 3% of emissions. And so reducing emissions by 3% would be great, but it's not going to tackle the problem in a big way.
00:18:55
Speaker
Essentially, most of the leverage that the EU has on emissions does not come from the own territorial emissions, right? So if we kind of look at the most significant things that EU countries have done, it's like things like Denmark making wind energy cheap, Germany kind of making solar cheap. These kind of things have like done way, way more to like transform the energy future than like emission changes within Europe.
00:19:22
Speaker
European countries have subsidized technologies that can then be exported to other countries where they can decrease emissions much more than they could in those European countries themselves. From what you're saying, the biggest problem or the biggest driver of emissions is energy production. I wonder if that category is too broad. I mean, a lot of things must be covered by energy production. What does that category cover?
00:19:47
Speaker
Yeah, so like, I think, yeah, I mean, it covers kind of electricity, it covers heating, it covers transport, and it also covers, I mean, starts also heating, but it's kind of very different than what we mean when we say heating, like stuff like industrial heat, right, which is like, steel and stuff like that. And like, on some level, it's kind of too broad a term, I still find it useful to think about as kind of one piece because
Challenges in Energy Transition
00:20:12
Speaker
especially if we're thinking about kind of the solution trajectory, right? So like what, like I guess the master plan, and so far as there is the master plan to kind of solve climate, right? As essentially electrify everything or like, I mean, electrify all energy consumption, right? So, and that sounds like historically those sectors have been very different, but like, or kind of also very different in terms of the fuels, but like,
00:20:36
Speaker
you want to get in a situation where the central problem is on the one hand getting electricity or energy production low or zero carbon.
00:20:47
Speaker
And on the other hand, kind of either directly with electric cars or indirectly through stuff like hydrogen, electrifying, kind of a lot of other stuff. So in that sense, it's a cross simplification to speak of like energy as one sector, but it's also, I think if we're kind of at the broad level, it's a useful one in terms of
00:21:06
Speaker
Yeah, in terms of the solution landscape. Yeah. So the category is kind of unified by the same solution. The same solution would solve all of the things that belong to that category. So electrification would be a solution for many of the things that belong to that category. Or is that too strong? I mean, it's just a little bit too strong, but I think it's kind of right in the
00:21:29
Speaker
Yeah, basically, right. I would say, right. So, so how far electrification goes kind of depends on like, like things are differentially easy to electrify. So, like, things that are hard to electrify stuff that kind of requires, I mean, either a long duration of storage or like lots of kind of concentrated energy.
00:21:47
Speaker
or so like stuff like heavy duty transport, right? Like electrifying trucks is much harder than electrifying passenger cars and like electrifying or like decarbonizing large ships is kind of much harder and airplanes much harder than cars. And for some of those, you might either use kind of indirect electrification, right? So kind of like hydrogen or using power to create hydrogen.
00:22:09
Speaker
But it might also go another way, you can also kind of create the hydrogen kind of with natural gas and carbon capture and storage. Yeah, so that's kind of where there is more nuance there, where we can kind of dive deeper. Why is it more difficult to electrify an airplane than a car? Is it because the airplane will have a need for higher peak energy output or something like that?
00:22:33
Speaker
Well, it's essentially, I mean, batteries are very heavy. And so like an airplane becomes much more efficient because once you burn the fuel, it's kind of not, it has no weight anymore. And it's also, so like that's kind of one part. And like the other part is kind of like energy, energy density, right? So like in principle, like flying, like flying kind of requires a lot of
00:22:54
Speaker
it's kind of much harder than kind of moving a car around and so you kind of need higher energy density. Okay, so what I want to do is to walk through all of the potential technological options we have. Start with that. I'm going to start with talking about oil and coal, which is kind of a funny place to start maybe because in some sense, oil and coal is the whole reason for the problem. But I think it's interesting to discuss oil and coal just because
00:23:20
Speaker
If we know something about why they are hard to replace, we might know something about how to best go about the climate change problem. I've written down that oil and coal is cheap and it works in existing systems. Do you see other advantages beyond those I just mentioned? I think those are the two
00:23:44
Speaker
really big ones right and like work in existing systems I think another way to put this is like we've essentially built an entire world economy around them so they fit with existing systems because we build an entire economy around them and not only an economy right like the United States is kind of having aircraft carriers in the Persian Gulf because kind of protecting oil reserves is kind of part of the well it's like part of the overall kind of strategy right so it's like
Health and Environmental Concerns of Fossil Fuels
00:24:10
Speaker
Yeah, essentially we've been spending more than a century optimizing our energy and world economy for relying on oil, coal, natural gas. I think another kind of advantage that they do have, I mean, at least if we compare them to renewables, to most renewables is that they do have higher energy densities. So yeah, and then of course,
00:24:36
Speaker
I mean, in the case of oil, right, like oil is easy to transport, coal is also relatively easy to transport with gas, it's a bit harder. Yeah, so I think this is kind of like, broadly speaking, that seems like the right characterization. And of course, the enormous disadvantage here is that there's very high emissions associated with oil and coal.
00:24:57
Speaker
And I think additionally, there are quite large problems with air pollution, which provides us with an additional reason to replace oil and coal. Maybe you could talk about air pollution from oil and coal. How big of a problem is that? So air pollution at large kills about 7 million people every year. So it's like one of the leading causes of death.
00:25:20
Speaker
And not all of that is related to fossil fuels, right? So you also have the situation that some of that is actually related to renewables, especially in Africa, people burning wood for heating at home and for cooking. So that's actually a situation where using a fossil fuel, in this case natural gas, would actually be much better because it would
00:25:39
Speaker
But essentially, so in particular coal and oil, yeah, kill a lot of people. So gas is a lot cleaner. So gas is about 15 times cleaner than coal in terms of air pollution. But it's a very significant cause of death. And I think it's also really underappreciated. So like people usually talk about air pollution as kind of like a co-benefit of climate change.
00:26:04
Speaker
And like climate change has to get really bad to kill like 5 million people every year. Like, right? So like it's kind of quite possible that
00:26:13
Speaker
Resolving climate change and like the most significant effect of that is kind of a reduction in kind of air pollution casualties, right? Obviously, like this is not the highest risk case, right? Like there are cases with, there's no case with air pollution like killing 100 million people, right? And there's kind of cases, there's a risk cases around climate that kind of motivated caring about climate that are more extreme than killing 5 million people. But like, yeah, it's just, I guess it's not a co-benefit. It's kind of a problem on a similar order of magnitude.
00:26:42
Speaker
Yeah, makes sense. Air pollution is a huge deal. Why is it that oil and gas is hard to replace? And here we might talk about a carbon lock-in also, which is a term that's used. The primary reason that it's like energy transitions are, well, energy transitions are hard for a couple of reasons, right? But like, okay, let's kind of start with a lock-in reason to begin with.
00:27:06
Speaker
a lot of the assets, pipelines or coal power plants or highways, et cetera, those are very long-lived assets. They have natural lifetimes that are 40 or 60 years, the capital intensive assets. Even if you're in a situation where every new build is the low-carbon alternative,
00:27:30
Speaker
It will take you like 40 years to kind of turn around like an entire system. Right. And that's kind of an optimistic case. So like it's like there's a lot of kind of lock in and then there's so like this is kind of at the pure kind of technical or infrastructural level. Right. And then you also have stuff like.
00:27:47
Speaker
like pipelines and infrastructure, which are even longer lived than single assets. And then of course you have like a huge kind of political economy, like political special interest kind of groups and kind of the entire kind of fate of countries, essentially builder on that, right? I guess like when people say like Putin used to behave like the CEO of like a gas company, right? Like, I mean,
00:28:11
Speaker
kind of changed a little bit the way he's behaving but like right like it's kind of like like their entire countries or entire kind of regions of the world that are like heavily dependent on the fossil fuel economy so I think that's kind of another really big reason and another reason of like obviously it's also like energy transitions in general move towards denser forms of energy right so like what we're trying to do right now where we're essentially saying okay we want to move
00:28:41
Speaker
from a fossil fuel dominated energy economy to one that's kind of dominated by renewables. It's kind of not a natural direction for an energy transition to go. So like the more natural direction of energy transitions thus far has been like from less energy, dense fuel, stuff like from biomass to fossil fuels, right? And like going from fossil fuels to mostly renewable power systems, actually it's not a natural move of the energy system. It probably wouldn't happen
00:29:10
Speaker
like there are many other situations where it kind of wouldn't happen. Yeah, maybe here is a natural point to talk about energy density. Why is energy density important? So energy density, right? So like essentially how much land or how many resources do you need to kind of produce a given amount of energy? So the reason that's important I think is kind of like twofold. I mean from an environmental perspective,
00:29:37
Speaker
energy density is essentially a proxy for like how much impact do we have on the environment, right? So if you're using less land, if you're using less materials, then you're kind of like, in principle, like lower energy density means like lower environmental impact. So that's kind of one part of it. The other part, which is more about like what's useful for human civilization, right? So like having denser forms of energy
00:30:01
Speaker
Like, if you're talking about electricity, it means like you need less transmission, for example, right? So, like, that's kind of another use. And you're also kind of, if you want to power like an industrial center or like an urbanizing society, like having lots of energy and having relatively dense forms of energy,
00:30:20
Speaker
When shouldn't overdo this right it's like I'm not saying like on the limit kind of we would have like one big fusion plant and we all kind of just get from so that's clearly not the case I think we've seen this with nuclear fission that like having very large kind of energy sources also has its downside because demand isn't always there.
00:30:38
Speaker
not take it to the extreme limit, but on some level, energy density in principle is a useful metric. When you talk about energy density, you're talking about also the resources necessary to produce that energy, not only the energy density, say, for example, of a
00:30:55
Speaker
10 centimeter by 10 centimeter cube of
Role of Natural Gas in Transition
00:30:58
Speaker
coal or oil or fuel for a nuclear reactor. It's a broader term than that. That's energy density, where we have historically been moving towards forms of energy that are more dense, and now we're trying to move towards forms of energy that are less dense.
00:31:13
Speaker
I think before we get to renewables, we should talk about natural gas that you mentioned a couple of times. What are the advantages here and disadvantages? I'm guessing it's better than oil and coal. Just to add on the energy density, because we've talked about why it's important, but we didn't talk about what does it actually look like. If you look at the metrics, nuclear power would be something like seven terawatt.
00:31:40
Speaker
hours per square kilometers, natural gas, which we're going to talk about next, it's like about half that, and like solar is kind of about 100 or so roughly what nuclear is, right? So that's kind of why it matters. Like the differences are quite stark, both from renewables to fossil fuels and from fossil fuels to nuclear.
00:32:00
Speaker
like natural gas, if we talk about natural gas. So I mean, it's about half as polluting as coal in terms of CO2. And it's much, much less polluting about 15 times less polluting when we talk about air pollution. And essentially, if we look at the decarbonization successes of the last 20 years, like many of them have been coal to gas transitions. So like essentially the fact that the US was kind of able to reduce emissions even though
00:32:27
Speaker
until like 2021 didn't really have much in terms of climate policy. It's like mostly the story of the fracking revolution in the United States and kind of the replacement of coal and natural gas. A little bit similar in the UK. In the UK there's kind of natural gas. There's also like more of a renewable expansion than that. So like that's kind of another. So like that's kind of, it has been a big story. It's like an easy whim, right? It's not a transformational whim because you don't get to zero emissions.
00:32:54
Speaker
But it's kind of the easy win. So if you're imposing a moderate carbon price in a place with a lot of coal, that will usually mean you're going to substitute it with natural gas. In which cases does it make sense to switch to natural gas? I mean, that's kind of like right. That's kind of, I think, something where the climate community has like two different perspectives, right? I think there are people that are
00:33:13
Speaker
more incremental is that would say like yeah it's good if you're switching from coal to natural gas. There's also people that would say okay if you're switching from coal to natural gas, you're locking in another fossil fuel source right and it's kind of like better to maybe have coal run a bit longer and then fully replace it with a zero carbon source I think that's kind of
00:33:32
Speaker
the debate and I think different people have like different opinions and I think also the right answer might be different in different places. The best case scenario would be one for like natural gas replaces coal and then natural gas is kind of replaced with natural gas and gas and carbon capture. So where you're kind of capping the emissions or where you're using kind of part of the natural gas infrastructure with like zero carbon fuels, right? So like with natural gas kind of that's produced.
00:34:00
Speaker
for electrolysis and kind of like additional like adding CO2 there or yeah so it's a synthetic natural gas essentially. So that last point is there a way to produce natural gas that's more environmentally friendly? So I mean natural gas is CH4 so in principle you can you can get it from H2 like from hydrogen like which you can generate in a low-carb way and if you would kind of
00:34:24
Speaker
Then take CO2 out of the air, so you can essentially produce carbon neutral natural gas. Or you could use hydrogen. So essentially there's ideas about using some of the kind of natural gas infrastructure for zero carbon.
00:34:43
Speaker
gases. And that's, I think, something like one way where carbon lock-in can be made a little bit less severe, right? Where you're like locking in like a gas infrastructure, for example, but that gas could at some point be carbon neutral. Yeah, if we build a new natural gas plant now, how much carbon are we logging in? For how many years would this natural gas plant have to run in order to be profitable or to make sense to build? If you're building new natural gas plants right now, I think the expectation, like most, like if you're in a Western country,
00:35:12
Speaker
I don't think the investor would have the expectation that they're going to run this for 40 years, because running this for 40 years would mean we're now 2023. So 13 years after most Western countries have committed to reaching net zero. That being said, even countries like Germany that are priding themselves to be climate leaders are building new natural gas capacity right now.
00:35:38
Speaker
in an energy crisis situation, right? So we're essentially, I guess, the way this becomes profitable is because we really do value energy security. So like, as countries, we're willing to kind of finance things that don't make sense in a long run perspective, if
Renewable Energy Integration Challenges
00:35:55
Speaker
you will.
00:35:55
Speaker
Maybe we could say a bit more about energy density and why it's important. Is it important because some forms of energy take up too much space and then crowd out other things we would like to do with that space like having natural habitats or using the land for agriculture or what's the problem with energy sources with low energy density?
00:36:17
Speaker
So like crowding out of like other land uses is definitely a factor, right? So especially for biofuels, I think it's a, it's a factor with like biofuels take up a lot of land and like kind of agricultural land that can compete with like food security concerns. Yeah. So I think that is kind of one concern. So like land use, right? So like I've looked at a paper where essentially that's kind of modeling.
00:36:42
Speaker
transition towards a lower carbon future and what they're essentially like, and like a renewable heavy future. What they're essentially modeling is like, okay, by 2050, there is a six fold increase in the land required for energy production compared to today. And like, to be fair, like it's not that it's six times less efficient, because also like electricity production is like assumed to triple over the timeframe, right? So that's kind of a half thing of like,
00:37:10
Speaker
efficiency in terms of like energy density, but it's like still a significant change. I think to me, the more fundamental challenge is really one of like, if you're having lots of decentralized energy sources, like kind of the requirements in terms of transmission and like infrastructure build out are kind of like much, much larger, right? So essentially when we're saying it is cheap and it is easy to build renewables, what we're talking about is kind of on the plant level where this is true.
00:37:38
Speaker
But when we're talking about the energy system level and say like we want to build an energy system that is primarily based on low energy density sources.
00:37:47
Speaker
I'm not saying this cannot work, but this is a risky proposition mostly for transmission and storage requirements that are related to low energy density and intermittency. Okay, so that's oil, coal, and natural gas. What about if we get into the renewables, so solar and wind? What are some advantages of solar and wind?
00:38:13
Speaker
At this point, solar and wind are pretty cheap. So at this point, I think in many places in the world will be the case that adding solar capacity to the grid is one of the cheapest.
00:38:24
Speaker
things you can do. It's very important to realize that this is not a fact of nature or technology itself. That's a result of very conscious social choices. I mean, it's essentially countries like Germany and jurisdictions like California and then later China essentially saying, okay, we really want to have cheap renewables and we're really heavily investing that. So in that sense, the fact that we have cheap renewables right now
00:38:50
Speaker
is much more a function of their popularity with constituencies than it is kind of like the principle underlying technology, right? So like, if like nuclear would be as popular as like renewables are, we probably also could have like cheap nuclear now, that's kind of what I'm saying, or geothermal for that matter.
00:39:08
Speaker
So I think that's kind of an important aspect here. So yeah, they can be quite cheap. And also there are use cases where decentralized and kind of smaller production is kind of good, right? So, I mean, you can kind of use, deploy them where they are needed, right? Like if you're a small town, you're not gonna build your own kind of big power plant, but you can build your solar on the rooftop, et cetera. So I think that's kind of the main advantage. Obviously it produces no carbon, no air pollution,
00:39:38
Speaker
And it can be built quickly. You mentioned that solar and wind have gotten cheaper because of basically policies by European countries and by California and so on. When solar has reached the price point that it's at now,
00:39:55
Speaker
Does it require continual subsidies to stay at that price point? Or have we developed solar to a point now that it's price competitive, even on an open market, let's say? So in energy, you generally don't have open markets. I think that's an important thing to realize. So solar is competitive in many cases. But it's not like with oil, where you have a global price of oil.
00:40:22
Speaker
Essentially, for solar, how cost-effective is solar compared to alternatives depends on how good is the solar resource, depends also on how much solar is already on the grid. Because you can be in a situation where installing the additional solar capacity is very cheap, but it's not going to produce a lot of additional value. Because essentially, the sun is shining at the time where you're already at 100% solar, then it's easy to add an additional solar power plant, but it doesn't add a lot
00:40:51
Speaker
unless you kind of have cheap storage or cheap transmission, super cheap storage, super cheap transmission. So that's what's called value deflation. So it's not really like, it doesn't really make sense to think about it as like one price point that is being undercut, right? So like we're in a situation where,
00:41:09
Speaker
There are places in the world where like adding solar kind of happens without subsidies and it's kind of like essentially the natural result of like market forces or like mediated market forces. And we have also places with quite high renewable penetration, right? Places like California or Germany where like places that made renewables so cheap, but that are now kind of struggling to add a lot more because stuff like system integration or like the value of an additional plant is kind of low.
00:41:37
Speaker
How much of our energy production could we replace by wind and solar alone? The problem with wind and solar, or one problem is that it's intermittent, so it requires the sun to shine or the wind to blow, unless you have really good storage technology, basically batteries. But how much of our energy production do you think we could replace by solar and wind? You don't only need batteries, right? So essentially you need to solve
00:42:06
Speaker
I think three or four problems. So like, one is kind of short-term storage. For this, you can use batteries. And right, that's kind of like, okay, you can run your washing machine during the night. That's kind of the use case.
00:42:21
Speaker
then you kind of need to solve, in most places in the world, you need to solve seasonal storage, right? So that there's kind of like parts of the year where like there's much less solar available. And like, that's like a much, much harder challenge. And I think that's kind of underappreciated because people talk about storage, they think about batteries, and they think the problem was solved, but like kind of essentially being able to have enough energy to like have a month or like more kind of work of like energy reserve requires a very different solution. That's not probably not going to happen with batteries. That's kind of where something like,
00:42:51
Speaker
what I've talked about before, like power to X, like producing hydrogen or kind of other forms of like low carbon energy, like gases or like liquid to store energy. So like that's kind of what you will need there. And then there's kind of the problem of transmission. And then there's the problem around essentially, do we have enough land in the jurisdictions? I think the last one will not be the decisive constraint. I think that will probably work, but essentially there's like
00:43:21
Speaker
three challenges, like storage in the short term, seasonal storage, transmission. I can't imagine the world, right? When I think about the future, I always try to think of a distribution. And like, there's like part of that distribution where like, okay, wind and solar are kind of really like 80 or 90% of the energy supply. And essentially, seasonal storage has been sold, transmission has been sold, and it's kind of, that's a large part of the solution.
00:43:51
Speaker
Those are not the futures I'm particularly worried about because I mean, those are really very best case futures. It's like an AI safety of like AGI is inherently safe. That's kind of the future. And then there are kind of the futures where like something has gone wrong, right? And like that's kind of like in our climate response and like a natural thing or things like one of the most likely failure modes right now that we can, like if we kind of, if we're kind of waking up in 2040 and like we're on a trajectory to like,
00:44:20
Speaker
than three degrees it's very likely that kind of we've been over bedding on intermittent renewables that essentially that it is much harder even though it's easy to get to like 20 to 30 percent in electricity like getting to like 100 percent in energy right again like and then like growing demand like something like 10x compared to now that this is kind of um really hard so this is an area where there's very significant
00:44:43
Speaker
uncertainty I would say we're kind of yeah on the top you can kind of do almost get almost 100% but also where it's kind of quite imaginable that you don't get over over 50% of energy which will still be like a huge huge role right I mean right now it's kind of something like three to four percent of like energy you mentioned the seasonal storage what are the most promising approaches there this is something where it's not primarily about batteries right so where it's primarily about kind of
00:45:10
Speaker
using more energy dense forms. So like, for example, using kind of excess capacity, excess power capacity to produce carbon neutral hydrogen and to store this as hydrogen or to kind of store this like synthetic natural gas. This to me seems right now the most
00:45:26
Speaker
plausible trajectory. There's lots of different technologies that are being tried out. That's solar and wind, which could turn out very well, but where there are challenges to be solved before they can be implemented and can constitute a large percent of our energy production. That sounds too pessimistic. It's more like
Hydropower and Nuclear Energy
00:45:49
Speaker
Solar and wind will definitely play a much larger role than there are playing now. The question is, will it take us to 100%? But yeah, that's a different framing, right? So yeah, the short-term story is definitely about the expansion of mature renewables.
00:46:05
Speaker
We should say something about, to my eyes, an insane decrease in the price of solar. Or at least it looks like a very, very steep decrease when I look at these graphs. Yeah, can you say something about how much cheaper solar is now compared to 20 years ago? Well, it's essentially at less than 10% of where it was 20 years ago. So that is an insane decrease. So I remember when I was kind of entering the climate conversation,
00:46:33
Speaker
And people were talking about renewables, they were always talking about solar, wind, geothermal, hydro, bio. At some point, people only started talking about solar and wind, right? Because essentially, those technologies could like radically cheaper and particular solar, wind also, but a bit less so. Yeah, so that's a very, very steep decline, right, which has been achieved
00:46:55
Speaker
There's a great book about this, How Solar Got Cheap by Gregory Namad, but essentially it's kind of primarily a result, kind of very aggressive policy. I mean, it kind of goes back to the 1970s and like the first oil crisis from like Jimmy Carter, but then kind of got really picked up in the early 2000s, right, of like Germany, kind of really strongly supporting it. Also like not only Germany, also like California, et cetera, and then like
00:47:19
Speaker
at some point, China essentially massively investing in production capacity. So yeah, and that's kind of a big part of the story as well. It's not a story of fundamental technological innovation. It's really more of a brute force approach to making things cheap. What about hydro? Could hydro ever constitute a large percent of our energy production? So hydro could, I think, I mean, it's like it's already, I think it's still
00:47:48
Speaker
If I'm not mistaken, it's still like the largest renewable energy resource, right? It's not really talked about because it's kind of like...
00:47:55
Speaker
static. It's not like the sexy, it's not where the action is, but like it's a very significant part. I think like with hydro, like large hydro has like large kind of environmental downsides. And I think another kind of constrained, like so there's a couple of other constraints, and one is like geopolitical. If you're kind of talking about them, hydro power is often like a very kind of contentious issue if you're thinking about denial or other other areas. So like, that's another
00:48:22
Speaker
big problem and it's also like very long term infrastructure. So I think like hydro, I think like from a technical perspective, like hydro could play a larger role, but it's kind of, I don't think there are many people that are kind of betting on like an abandoned future with lots of hydro, or at least I haven't come across them. I think I know exactly like one charity that's working on hydro power.
00:48:46
Speaker
That's mostly making that's clear path and they're kind of trying mostly to use hydropower, making existing hydropower or existing dams more efficient, like essentially using them more to produce electricity.
00:48:59
Speaker
Do we even have enough large rivers to generate enough electricity by hydro? That's a good question, but I actually don't know the answer because it's kind of so far out of the overturned window. One other thing I want to say on hydro is that essentially hydro is affected by climate change as well, right? So like essentially that hydro is becoming
00:49:19
Speaker
a less reliable energy resource essentially as kind of climate patterns, precipitation patterns become harder to predict and more extreme. So I think it's kind of another reason why it's not like, it's not a major bet that anyone I think is kind of really making at this point. Okay, let's move on to nuclear energy. What do you see as the advantages and disadvantages there? And like the biggest advantage is like related to energy density, right? I mean, it sounds like
00:49:46
Speaker
ironic and very counterintuitive to say this but like from an environmental perspective like nuclear is kind of the cleanest cleanest form of energy production because it's like of those that we have right now because it's so so energy dense it doesn't need a lot of materials it doesn't need a lot of land yeah so i think that's kind of the clear advantage produces zero carbon
00:50:06
Speaker
disadvantages, I think, are well known in the case of nuclear. So accident risk, nuclear waste. Yeah. And also, I guess, some dual use concerns around nuclear weapons. Yes, I think those are kind of the disadvantages. And also right now, but that's not a fundamental feature of the technology. That's kind of something of, I guess, it's a result of
00:50:28
Speaker
social choice right now. It's very expensive and slow to build. Yeah, that was actually my next question would be, when I look at some new nuclear power plant, it has often taken a decade or more to build and it's gone over budget. So why does it take so long and why does it cost so much to build nuclear power plants?
00:50:49
Speaker
I think right now, I mean, we were able to build nuclear power plants in France in something like four years, right? And right now, we're not able to do this in the West right now. It would probably more take something like 20 years. But so there's a lot of variance here that is like, it's not related to the features of the technology or like our fundamental technological ability, right? There's like a 5x kind of difference that's kind of
00:51:12
Speaker
related to regulation, economy, societal commitment, et cetera, right? That's kind of where the explanation ultimately has to be. So I think there's kind of lots of different reasons. I mean, one, like, I guess one most general one, which is not nuclear specific, it's like in general in the West, we're not able to build things, right? It's not only that we're not able to build nuclear plants, we're also not
00:51:34
Speaker
In Berlin, we're not even able to build airports. So I think that's kind of like the general class of like, there's lots of general stuff around like regulation and kind of interest groups. But then there's also like nuclear specific stuff, right? And I think it's essentially, I think the most significant part is that essentially the supply chain for building nuclear in the West has essentially fallen apart, right? So like, we're building things kind of in a first of a kind style.
00:52:02
Speaker
or kind of not first of a kind, but like first in a decade or first in a decade more, which is not the way to build like anything kind of at scale, anything efficiently. That's not how France kind of built the nuclear fleet, right? So like the most successful example of building out nuclear quickly is like France from the like late 70s to like,
00:52:22
Speaker
So that's I think most of the explanation. What did France do right? I mean, France was in a situation of emergency. So like the 1970s at the time of like the big oil price shocks and like France as a country without significant domestic energy supply. So they were extremely exposed to the oil price shocks.
00:52:47
Speaker
And at the same time, they were already in nuclear power, right? Like they kind of had like nuclear expertise, very centralized government. So yeah, they essentially decided, okay, we're gonna build nuclear as like a national project and that kind of standardized it, like one of like both the same kind of reactor, both in the workforce in a very centralized fashion. If you kind of compare this to the US, for example, where like utilities are kind of really spread out across the country and like, we're like, essentially,
00:53:18
Speaker
There's not someone who's buying 100 nuclear plants. There's utilities that they're buying.
00:53:24
Speaker
one reactor or maybe two reactors on one planet or something like that, right? So like the way that it's happened, so it's like fundamentally different. So these were very special circumstances. And like, just to be very clear, I'm not suggesting that those are transferable to today, right? Like it's not that the kind of shock or stress that France was under, it's not something that we can replicate and say, oh, we're all gonna build like to 80% nuclear in like 15 years because of climate change. Most countries are not able to do that.
00:53:54
Speaker
Technologically, they are, but politically speaking, it doesn't seem feasible. Do you think we need to develop new designs for nuclear reactors? Do we need to move to better designs? Do we need molten salt reactors or something like this? Are the reactor designs we have today enough? This is, I think, an active debate in the nuclear community.
00:54:20
Speaker
And I think it depends on how do we define need in this context. I think from a purely technical perspective, there's nothing wrong with existing nuclear power plants. So what's wrong is the fact that we're not able to build them is lack of societal commitment and lack of learning and stuff like that. So we can imagine a future where we build a lot of that.
00:54:45
Speaker
So the question is, can we actually get into that future?
Geothermal Energy Potential
00:54:49
Speaker
The most significant benefit of kind of advanced nuclear and like small, small modular reactors is essentially
00:54:56
Speaker
It seems more plausible that this is kind of like, there are countries where it seems more plausible that we're going to build lots of small modular reactors because you can produce them in factories, you can essentially exploit the same learning curve dynamics that made renewables and electric cars and all other kind of technologies that we were able to make cheap cheap.
00:55:16
Speaker
So that's kind of another aspect. And it's also kind of playing much better with like renewable dominated grid. So it's kind of more flexible and it's also like a smaller, smaller unit. So I think there, yeah, I think, I mean, we are like philanthropically speaking, we are, we are betting on advanced nuclear or small modular reactors, but I wouldn't say it's necessarily related to like technological problem with existing reactors. It's more like, yeah, the whole
00:55:43
Speaker
Yeah, I guess one of the themes here, it's not only about the technology, it's about the whole societal apparatus around the technology. And so the small modular reactors would be easier to innovate on because you would be able to develop one such reactor and deploy it and get feedback much, much more quickly than you can with a larger reactor where it might take 15 years for it to be built. And only then can you go back and think about what you could have done differently.
00:56:12
Speaker
Is it also a question of potentially you can mass produce these small modular reactors? What are the advantages here? It is the mass production. The mass production in a factory. It's not only the 15-year thing. Under ideal circumstances, you could also build a large plant in something like four or six years. You could also learn something from large plants and you could build the same plant design over and over again.
00:56:36
Speaker
But it's much easier to learn, and obviously it's a controlled production environment. So when most of the production happens in a factory, obviously some of the assembly has to happen on site, but that is where you can really expect a high learning rate. So that's essentially applying the same
00:56:56
Speaker
mechanism by which we make other kind of technology seep to the nuclear case. One last technology I want to run through is geothermal. This is something that's maybe like hydro. It's potentially a bit overlooked, but yeah.
00:57:13
Speaker
Well, how promising do you think geothermal energy is? So I would say much more promising than hydro, but I think also geothermal is definitely having a moment right now and it's becoming radically less overlooked. There's traditional geothermal, which is kind of great, but it's very location specific, right? So location dependent, you cannot do it, build it in lots of places because you kind of need
00:57:34
Speaker
Essentially, you need good conditions. You need to be close to volcano, et cetera. Essentially, you need to be closer to heat source near in the ground. And then there's different forms of advanced geothermal, and that's a little bit like
00:57:50
Speaker
There's like lots of different ones. It's like six or seven different ones. But I guess the one that we've been focusing on traditionally is what you would call ultra deep geothermal or like a super hot rock geothermal, where essentially you're going so deep that you can kind of make it much less location dependent and also kind of get much warmer, much hotter fuel. So you kind of get more energy density. So you get more favorable economics. And then that's kind of the idea of like,
00:58:19
Speaker
geothermal anywhere. So if you're kind of able to drill like five kilometers or five down, yeah, that could be very promising. And that's kind of like in general, this is not only true for super hot or ultra deep, but also kind of more generally for like innovation and geothermal.
00:58:35
Speaker
What this does is it's kind of leveraging the advances of the fracking of the Shale gas revolution, right? So like our ability to drill has been like strongly increased for the fracking revolution and essentially applying this to geothermal is kind of where a lot of the innovation is coming from. And that's kind of very attractive because
00:58:58
Speaker
Once you make it work, you need to solve a couple of material science challenges here. But once those are solved, you have a very mature labor force, and you have large economic interests, oil and gas, that would be quite interested in that.
Strategies for Energy Stability
00:59:13
Speaker
So in that sense, it's kind of an innovation that is kind of locked in, if you will. So it's kind of not locked out.
00:59:22
Speaker
Yeah, but if we're talking about drilling five kilometers down, this is not something you could do in a person's backyard. So this is not as decentralized as, for example, setting up solar panels on a roof in a residential neighborhood. No, it's solving the same problem that small modular reactors or like other kind of clean firm sources would solve, right? So this is not about everyone having a super hot rock thing in their backyard, but this is about
00:59:50
Speaker
solving the hard part of electricity decarbonization, which is kind of clean, firm resources, right? So like, not intermittent renewables, but something that can be dispatched and that can be used the entire time. I guess technically, this is not a renewable form of energy, but in a kind of practical sense, it will take billions of years for the Earth's heat to dissipate enough for this technology not to work. So in practical terms, it's renewable.
01:00:18
Speaker
Yeah, in practical terms, I think the distinction renewable and not doesn't matter because, well, I mean, renewables also require lots of non renewables, like resources to like, like, like in a way, so like the minerals that you need for solar and wind. So like, so yeah, it's not a practical thing to worry about. But nor nor should you kind of worry about uranium running out or stuff like that.
01:00:41
Speaker
We've done an overview of a lot of the technological options we have. If you were to rank these technologies and think about a plan for how we might solve climate change using a combination of them, where do you see most promise in the short term and in the long term? In the short term, it's very clear that intermittent renewables and natural gas
01:01:10
Speaker
will do most of the heavy lifting and decarbonization in the near future. So like, because they are quick to build and they're kind of quickly expanding, right? And like, okay, in some places also adding nuclear capacity and also in many other places, like not prematurely shutting down nuclear capacity, right? So those are, I think, kind of the short-term and then hydropower, the short-term options.
01:01:35
Speaker
In the medium run, something like advances in geothermal or advances in small modular reactors could kind of address what right now is kind of a little bit of the zeal of electricity decarbonization, which is kind of clean firm power. So that's kind of why those are still important and worth doing, even though renewables right now are cheap. And there's kind of this seduction of only relying on existing technologies.
01:02:02
Speaker
The reason to not do that is like the risk that we talked about before, but also kind of the energy system function of like clean firm, which right now is kind of not adequately solved. And when you say clean firm, what do you mean? Well, so clean, right? Means like zero emissions and like zero air pollution and like otherwise clean. So like that includes nuclear, that includes geothermal, that includes fusion, if it were to happen. And firm here means that it's essentially
01:02:33
Speaker
it is not an intermittent resource, right? It's kind of not like solar and wind that is kind of, so yeah, it can in principle be run 24 seven and you will not use it for electricity 24 seven, but you might use it for producing hydrogen at other times of the day. But like, yeah, essentially that you're reducing what storage kind of needs to do, right? Like it becomes a lot like building an energy system that has like clean firm resources in it, like it's a lot more
01:03:03
Speaker
realistic to get to like 100% kind of clean than if you're kind of entirely betting on intermittent resources. So you think thinking across the different climate scenarios, it's a it will be smart strategy for us to also invest in some of these clean firm technologies and not just traditional renewables like wind and solar. Okay, yeah, so I think it's kind of worth distinguishing to two separate strands of the argument here.
01:03:31
Speaker
Even on kind of a normal kind of trajectory where renewables are very successful, like clean firms kind of a useful compliment, right? And it makes the overall system more efficient. It kind of like reduces the load, like the necessity to like overbuilt intermittent renewables, reduces the necessity of storage, et cetera, right? So like the case for clean firm is not entirely like a hedging one, but then there's also kind of the hedging one, which is like, I think we talked about this before, right?
01:04:01
Speaker
If we wake up in 2040 and our situation looks much worse than we're thinking now, what has gone wrong?
Government Role in Energy Innovation
01:04:08
Speaker
Well, one of the main things that could have gone wrong is that expanding solar and wind was much hotter. In that sense, investments in clean firm are a hedge against that. There's a key fact of climate that makes the hedging quality important. That's essentially the shape of climate damage.
01:04:28
Speaker
that climate damage kind of like our expectation of like how climate damage looks like is that it's kind of like strongly non-linear. So like a world of six degrees is like much worse than twice as bad than a world of three degrees and a world of three degrees much worse than twice as bad than 1.5 degrees. So it's kind of particularly important, right? I mean, you need to control for how likely those are, but like it's like, even if you kind of control for how likely they are, it's kind of important to like favor solutions that work in situations where a lot of damage is.
01:04:58
Speaker
So those are kind of, right now I would say those are the world's kind of more of like 2.5 degrees, like 2.5 to 3.5, like those are reasonably likely and reasonably more damaging than the worst cases that kind of take a lot of the expected damage in the function. And under those, like if you're in those situations, right, you kind of, you know something, probabilistically speaking, you know something that is likely to have happened in those worlds. Like one thing that is likely to have happened is that
01:05:26
Speaker
renewables will have been more curtailed than we expect. And I think we'll discuss this more later, thinking about different climate scenarios and where we should spend our money to cover all scenarios. But before we get there, I want to talk about some governmental options. What could governments do in order to help this situation?
01:05:48
Speaker
You mentioned before how European governments and California was able to subsidize renewables to such an extent that they are now quite cheap. In general, what's your sense of how well subsidies work? Would you recommend that governments try to pick out which energy technologies they favor and then subsidize those?
01:06:11
Speaker
The broad answer to, which kind of relates to how good is the government at picking winners and how far should the government pick winners? I think the broad answer is here, the government was heavily involved in every kind of important technological success when it comes to energy and climate, and also heavily involved in lots of different failures. So on the success right, we have solar, we have electric cars, we have wind, we have nuclear, we have fracking.
01:06:40
Speaker
On the failure, we have stuff like cylinder, we have stuff like biofuels in the US, which are subsidized because they're kind of big in Iowa, and Iowa is important for presidential elections. So you have the good, the bad, and the ugly all together. So that's important. There's essentially no example of energy technology transformation where government has not played a huge role. So I think that that's something worth
01:07:11
Speaker
like we're remembering kind of to start. And it's also there's no, because there's no clear example.
01:07:18
Speaker
where essentially a technology has been an energy technology has been brought about primarily by market forces, right? So like there's demonstration projects, those are often public or like at least publicly, partially publicly funded, then there's kind of about this basic R&D where like government also plays a big role, demonstration projects and there's kind of like early procurement policies like across the entire chain of the environment of the innovation process government,
01:07:47
Speaker
plays a huge role and I think there isn't really an alternative to this or like we haven't really observed an alternative to this. So I think the
01:07:58
Speaker
The view that I would have as a general government is much better than its reputation. Because once electric cars get cheap, then we're all celebrating Elon Musk. But we're forgetting the fact that there's huge electric car subsidies that made Tesla possible. And there's a similar story, not to pick on Elon Musk. There's a similar story for most other technological successes. At the end, there's a private company that's doing the last mile that's getting a lot of the attention.
01:08:25
Speaker
but like before, or even at that last stage, there was huge, huge involvement by the government. So I think that's what I can say to start. So government will make mistakes, but I think the alternative is not to not let the government pick. Ideally, and I think that's what we're kind of seeing in the United States right now, you're essentially trying to support technology at the right level, right? So like you shouldn't choose all technologies,
01:08:55
Speaker
And you should also be humble in terms of you cannot pick all the winners. But right now, if you look at the Inflation Reduction Act and the Infrastructure Bill, the two major pieces of climate policy change in the United States right now, they're essentially very broad bets on lots of different technologies. And they're very, on the one hand, an infrastructure bill like R&D driven in the case of the Inflation Reduction Act, more like subsidy and later stage technology.
01:09:22
Speaker
I guess they're a very strong form of government involvement, but in a way they're...
01:09:29
Speaker
taking a lot of winners or like some of them will not be winners, right? So like they're kind of very, very broad in their approach to their credit. And do you think that's the right strategy to subsidize or to support from the government side across a wide range of technologies and across different stages of technological development? So if we're saying that history is informative, then I think that's kind of what history teaches us about like innovation and energy. Yes.
01:09:53
Speaker
Are there any research and development into one of the forms of energy technology we talked about that you think the government should spend more money on? Should the government be subsidizing at a later stage of development some of these technologies?
01:10:07
Speaker
So I guess to contextualize the moment that we're in, we're in mid to late 2023, and both in the United States and to a lesser degree, also in Europe, we've seen major climate policies over the last year. So in the United States, let's focus on that case. So the Inflation Reduction Act was passed essentially almost exactly a year ago, a year before the infrastructure bill was passed. Both of those are kind of like
01:10:37
Speaker
putting support for clean energy, essentially on a, on a whole order of magnitude kind of different levels. So we're now subsidizing or the inflation reduction equity kind of subsidized renewable, like on the renewables clean energy and other kinds of clean technologies on the order of like 300 billion, at least that could go, could go, uh, could go, could go higher than this. We are in a situation where like money is not the primary, uh, constraint right now for most, um, kind of energy.
01:11:05
Speaker
innovation or it's kind of like, it's much, much harder to make that case, right? Like that doesn't mean we're in a situation where everything is kind of going great, right? It's more that kind of the challenge was maybe more like stuff like permitting reform or kind of making those demonstration projects happening or like in the case of nuclear, reforming the nuclear regulatory commission. So it's not so much about money being the limiting constraint that, and like for the second part of the question, should they support at a later stage?
01:11:35
Speaker
Yes, absolutely. So I think the basic problem in the discourse, I think, is that there's relatively broad support for basic research and development. Support for that is very mainstream. Lots of conservatives will support investment and basic R&D, because there's a very clear market failure there. It's very well-recognized. So it's very bipartisan, or at least there's a broad
01:12:03
Speaker
set of people that will support that. But the area where most failure happens in the later stages is getting the $100 million for a demonstration project. So that's something that historically in the United States, for example, has been hard to get political buy-in to fund this work because it's also like when you fail, you fail very visibly. So Mitt Romney in 2012 started his campaign
01:12:28
Speaker
at the Cylindra plant, right? Like the Cylindra being like kind of the example of the failure of kind of the clean energy investments of the Obama administration. So yeah. Maybe explain what happened there. I'm not familiar with the, is it called Cylindra?
01:12:43
Speaker
Yeah, so like Solyndra was kind of like an advanced solar company that kind of was kind of heavily supported by the American Reinvestment Act, so kind of the small scale version of what Biden did now, like in large with the inflation reduction act kind of like so the recovery after 2018, the clean energy spending there. And Solyndra was kind of a very, very public failure of a company that was kind of heavily backed by the government.
01:13:09
Speaker
And yeah, essentially became the symbol of like, okay, the government is really bad at picking winners, right? And like, that kind of happened at the same time as kind of the shale gas revolution was playing out, right? Where like also the government had kind of played a big, big role in supporting that. So it's just like, we're very selective in like picking our examples. What do you think about carbon taxes? This is a solution to climate change that's often favored by economists.
01:13:36
Speaker
where you simply price the negative externality of emissions, and then you let the market figure out how to implement or how to reduce emissions. Do you think carbon taxes could work? So I guess I've mentioned this in the beginning, but just just to recap, so before I joined Fondresledge, I spent five years working on carbon pricing, emission trading system, carbon taxes. So I'm very familiar with those debates. I mean, I think they can work, but I think they will not play
01:14:06
Speaker
like a major role in kind of the solution and just like to give a couple of arguments why. So if you're like thinking again about kind of the example of like solar and how solar got cheap. So the subsidies that kind of Germany was able to kind of that were politically feasible in the early 2000s in Germany.
01:14:27
Speaker
You could have achieved them with a carbon tax between 700 to 900, something in that range, dollars per ton. That's an insanely high carbon tax. So at that point, most of the world had no carbon taxes at all. Germany had no carbon tax at all. The only kind of countries having carbon taxes were like
01:14:46
Speaker
Scandinavian countries. And like even then, like the highest carbon tax would be something like $50 a ton, right? So like the really kind of transformative price signal that you need to like drive an immature technology, you will
01:15:04
Speaker
probably never get with a carbon tax that's politically feasible, right? Like you could not, it's not that you could have had the carbon tax at that level at that time. So I think that's kind of one reason, right? And now we're essentially like, now we're essentially in a situation where like solar, where kind of the difference to the fossil fuel alternative was kind of zero in many cases, right? You wouldn't need a carbon tax. Essentially, to solve climate change, you need fundamental technological transformation.
01:15:31
Speaker
And for that, you need like very, very strong push and you cannot get this kind of push with a politically feasible price.
Nature-Based Solutions and International Efforts
01:15:41
Speaker
So that's kind of one constraint. And the other constraint is kind of the international situation. So if you were in a situation where you would have a global carbon tax, right, like maybe, or a global kind of carbon price,
01:15:55
Speaker
Maybe that would be enough to kind of induce some innovation, etc. But it's very far from getting there. So I think right now we're in a situation where it's very clear that the most significant things that individual countries can do, like in a situation where international coordination is relatively weak,
01:16:18
Speaker
are not about kind of introducing a carbon tax like had Germany introduced the carbon tax in 2005 this would have or sorry in 2005 we got the emission trading system so let's say if we had like introduced like reasonably high carbon prices early in the 2000s
01:16:34
Speaker
would have kind of accelerated transition from German coal to Russian gas, that would have been the main effect, would not have had transformative effects, globally speaking, right? So that's, I think, the really big constraint there. So essentially, yeah, carbon taxes might play a role
01:16:57
Speaker
once all technologies are reasonably close to competitiveness and then it can kind of iron out a little bit on the margin. But I guess that's kind of like not the point where it really matters anymore. Yeah. And just to check with you, what do you think about planting trees? Would that work at all? Would that have a large enough effect to matter? You sometimes hear claims about
01:17:26
Speaker
The importance of the Amazon rainforest, for example, as a way of decreasing CO2 in the atmosphere, could the government initiate a large kind of project of planting more forests? Would that work? In principle, the easier thing should always be avoiding deforestation, because planting trees like to have a carbon effect, right? It takes 20 years.
01:17:54
Speaker
It's not instantaneously useful. I mean, I guess to start with again, now we kind of need to refocus on, we're talking here on the margin. And when we talk about trees, everyone loves trees. Like the person I meet the most, like the superficial kind of climate person I meet the most, right? Like the first, like they wanna plant trees. Like that's the first thing that essentially everyone kind of coming into this conversation jumps to.
01:18:18
Speaker
Yeah, this is exactly why I brought it up because I'm guessing that this proposal would be extremely popular with a kind of broad public and maybe that itself, even though planting trees may not be the most effective thing, just the fact that it's so popular might mean that it's easier to implement and that could be an argument for it. Yeah, I mean, I think, I mean, you know, we need to do a certain
01:18:42
Speaker
insane scale, but so if we're thinking about the kind of the existing solution and the space, which is actually about like rainforest protection, right? And like there we have kind of an international carbon market around protecting rainforest is like called red plus. And the basic idea there is like, you're rewarding countries for avoiding deforestation. So, and like the most
01:19:09
Speaker
significant example of this is like between Norway and Brazil, where like Norway kind of try to like pay Brazil lots of money to kind of like, yeah, save kind of like, deforest less. And the problem with that is I think fundamentally that you're rewarding something you can't observe, like you're rewarding counterfactual, like you're rewarding, additionally avoided deforestation, which is not something
01:19:36
Speaker
you can observe, right? So like you're, and so like that is kind of hard and the best case as like essentially impossible when you have like sovereign nation states that all can kind of have their own estimates.
Philanthropy's Influence on Climate Policy
01:19:49
Speaker
So that's one of the problems. And the other problem of course, it's kind of, it's not like the main benefit of like avoiding deforestation comes from the long-term again, right? So like, but you can't really have like credible commitments over like decades in terms of protecting
01:20:06
Speaker
So it's a solution that looks seductively simple, but in practice doesn't work. So that's the case for avoiding deforestation and for planting trees. You need to do those on an extremely massive scale, and it's not going to have large effects in the short term.
01:20:27
Speaker
Yeah, are there any other non-technological options that you like or that you find promising? There's lots of other things we can do, right? So like I think one thing that we should talk about briefly would be climate finance. So which is essentially the idea of like incentivizing lower income countries for like building or like paying, essentially paying more clean energy infrastructure. Yeah, in principle, that's one of the things that you would expect if we had a global carbon market, right? Because like
01:20:57
Speaker
abating emissions should be cheaper in a lower income country. So that's another approach that kind of has suffered from many of the problems I've now talked about with regards to rainforest protection. So that's another approach that I think we should mention. And then there's kind of when you're kind of in a situation where you have a lot of growth happening, right? So if you're kind of an emerging Asian right now,
01:21:23
Speaker
There is a lot of variance in like how emission intensive that growth can be. So like we've just hired a carbon lock-in specialist who will like, she will kind of look at what are the interventions we can do there. But like, if you kind of look at the literature, you can kind of see like clear differences related to, yeah, like how our city is being built and these kinds of things, like kind of essentially shaping long run behavioral patterns by like different forms of infrastructure investments.
01:21:53
Speaker
Yeah, and you mentioned supporting innovation or innovation policy. I mean, that's kind of ties to what we've talked about before, right, which is like, the government is essential for technological transformation, what the government
01:22:08
Speaker
those can be affected by advocacy you can kind of fund for like where you can fund a charity to do this kind of work and it is it locks it kind of solves for this like what I described is like the central conundrum of climate policy right that kind of essentially the US the EU have like way more leverage through innovation on like global emission outcomes than like through their territorial emissions so you have this
01:22:36
Speaker
potential for trajectory changing dynamics, right? That we've kind of been discussing with the example of solar electric cars, et cetera, that relatively small changes in the world, like in the grand scheme of things, right?
01:22:51
Speaker
California aggressively supporting electric cars or Denmark aggressively supporting wind power. These are like small changes in the world, but like huge long-term consequences. So I think that's kind of the thing. And like the other things that I would mention, uh, so like kind of on the, on the carbon, carbon lock inside would be stuff like, yeah, essentially regulatory, um, reform, right. And the.
01:23:15
Speaker
You asked this would be something like permitting reform, which will become like a hot issue or it's already becoming a hot issue because the financing for clean energy is there, but the permits and the regulation is not there. And there's similar issues in like emerging economies. So it's not all about
01:23:35
Speaker
technological innovation, not at all, right? It's also about shaping the regulatory frameworks, etc. And here you're using some amount of money in order to influence a much bigger amount of money. Basically, you're using philanthropic dollars to influence the money spent by governments. Yeah, so for everything that we're kind of funding, and this is always kind of
01:24:02
Speaker
advocacy, and the broader sense of the term so I'm kind of saying essentially using philanthropy to influence much larger budgets right and like like that reasoning comes from the fact that like
01:24:13
Speaker
government budgets are like several orders of magnitude, like two to three orders of magnitude larger than philanthropy. And also I think what we already touched on, right? Like there's things that kind of essentially need the government, even if it's like changing regulations, et cetera, right? So like most impact focused philanthropy and climate is ultimately about kind of shaping actions of the government or other large actors.
01:24:39
Speaker
Yeah, that makes a lot of sense. I do wonder though, aren't there a lot of kind of interest groups trying to get the government to spend money on various things? And so there might be a lot of competition for influence over the government's resources. When I just talked about like the different sizes of the changes in the world, that kind of relates to this.
01:25:05
Speaker
I think that the best case or like the kind of the highest impact case for like philanthropy to have like a larger impact on government policy is kind of in situations where there's like relatively little attention, right? So like if we're kind of thinking about the counter example of like the carbon tax, like needs national
01:25:26
Speaker
attention needs like bipartisan support to be passed definitely needs a national conversation. Like that's probably a situation where like an additional philanthropic dollar will not make a large difference because kind of like lots of other money is involved. But when you're kind of in a situation where like, you know, okay, we're gonna pass this big climate bill, and like, there's a big national conversation about we want to do this, the climate bill, but ultimately,
01:25:52
Speaker
Like how exactly does this climate bill look like? Which technologies does it support? And how that is kind of a thing, the sweet spot for kind of philanthropy, right? Because where essentially there's like lots of political science literature for like how this kind of works. It's what's called legislative subsidy. So there's kind of special charities that kind of specialize in like knowing which legislation would be needed to kind of promote a given technology or a given approach. And
01:26:19
Speaker
yeah, essentially providing that knowledge to policymakers. So I think that's kind of a way in which, in which charities can have a large influence and kind of policy fields that are less politicized and that are kind of like under, yeah, that are kind of not super crowded, yeah.
Climate Change Scenarios and Risks
01:26:40
Speaker
Let's give an overview of the different climate scenarios. So what's most likely to happen with the climate? And specifically, I think we should talk about the worst cases and how likely those are. If you kind of look at the forecast, there's something like one third probability that we will kind of meet global climate targets. So that would be like limiting warming to two degrees.
01:27:06
Speaker
Then there's kind of about another third for something like between two and three degrees. And then there's kind of another third for everything kind of above three degrees from up to like five degrees. So this is kind of from a, we can link this on the show notes, but like that's kind of from an LSE paper that kind of tried to try to estimate those last year.
01:27:27
Speaker
And, but like there's different ways to estimate this, but it's kind of like broadly, probably consistent. So like we're probably not, my current trajectory is not gonna meet the global climate targets. We're gonna overshoot them by a degree or so at the same time, right? Kind of the really extreme scenarios like six degrees or something like that has have become like very, very significantly less likely compared to what we believed like five or six years ago.
01:27:54
Speaker
Yeah, maybe you could describe some of the effects of these different degrees of heating. It's a bit abstract when we're talking in terms of degrees. Could you describe some of the effects of different degrees of heating?
01:28:06
Speaker
I mean, again, this is, of course, an area where there's always huge uncertainties. So if you look at the bars, when do certain phenomena start? It's always like, OK, this could start at 2 degrees, this could start at 4.5 degrees. I mean, the thing that we're kind of like right now, we're kind of in a situation where we can essentially see climate change in our daily lives, where the temperature extremes
01:28:27
Speaker
have clearly changed, also like where like many, not all, but like kind of many kind of natural disasters have a climate change signal in there, right? So they kind of become more likely or more intense related to climate change. So that's kind of where we are right now.
01:28:44
Speaker
It's probably kind of, I guess, probably think these things have become more intense than if you're kind of, I guess, if you're hitting two degrees or more than like tipping point, tipping points become somewhat more likely. So there are elements in the climate system that either would kind of have like local environment effects or like die back on the Amazon, for example, or kind of have like global climate effects, like shifting global temperature up by half a degree or something of that sort.
01:29:12
Speaker
So those kind of things become, yeah, kind of.
01:29:16
Speaker
become happening more as we're moving higher up. Yeah, I think that's kind of the main thing. So I would say this is pretty abstract. The reason for that is I'm not really spending a lot of time on that. Given what I'm doing day-to-day, I'm mostly interested in understanding the shape of the curve and how likely the different futures are, because that's kind of what's relevant for me to prioritize. And so are you prioritizing the worst case scenarios? No.
01:29:44
Speaker
And I'm really happy that you asked this, because this is a very typical misunderstanding. So what I'm essentially arguing for, and I will talk about this, which we can also link on the structure of climate risk and its implications for high impact philanthropy, what I'm essentially arguing for is we treat this the same that we would treat other problems. So we're essentially looking at expected damage. So an expected damage is
01:30:11
Speaker
the product of two different things. It's like the probability of different features and how bad those features would be. And right now, most of the probability mass of when we put these things together based on the current estimates would be, as I said, I think like above, like most of the damage would be above 2.5 to 3.5. But crucially, it would not be in like six degrees or more.
01:30:36
Speaker
because that's like, even though those worlds will be extremely damaging, they've become so much less likely that they're, so that kind of the degree, like the low likelihood kind of dominates the strength of the signal. So it's not about just focusing on the worst world is kind of taking an expected damage. And the alternative to this that I'm criticizing is essentially much of the focus of the climate community where it's like black and white, like either we meet the goal of the Paris agreement or we don't,
01:31:06
Speaker
Like there's all of this massive complexity that you talked about. And we're just reducing it to, okay, on a two degree trajectory, we will need this and this and this. And like, that's kind of, I guess, in a way, the wrong question. Where do you see the most expected damage then? Yeah. So, and the last time we ran these numbers and we should run them again.
01:31:23
Speaker
This year, but like, it's kind of a thing in those worlds that are both reasonably likely and also much more like significantly more damaging than kind of the best case worlds right so they will be like worlds of like 2.5 to 3.5 degrees, roughly, that's kind of where the bulk of the damages so those are worlds where.
01:31:44
Speaker
The Paris Agreement has not succeeded because the Paris Agreement goes to limit temperature to two degrees. There are also worlds where some things must clearly have gone wrong. There are also not worlds. Those worlds are not consistent with super cheap, renewable, easy seasonal storage, et cetera.
01:32:05
Speaker
In those worlds, what are the most promising interventions to alleviate the expected damage? The method here is, let's think about, because we're in this situation of extreme uncertainty, about lots of different things, like how much our economy is going to grow, how carbon-tensors grow, how will different technologies play out, how strong will the climate react.
01:32:29
Speaker
And all of these things are highly uncertain, but we're trying to understand what do we know about the structure here? Like, what do we know? What is more likely to be true in the worst world, essentially? So like on the technological level, where we already talked about this, right? So like, okay, a typical, like there's kind of two typical or two, I think, failure modes that people would expect. Like one is kind of like renewables do not scale as much, another would kind of be that.
01:32:58
Speaker
electrification doesn't scale as much, right? So that's kind of related. So if renewables don't scale as much, then like the clean firm power sources that we talked about, right, those are kind of, we're gonna play a relatively larger role. So like the significant part of the motivation of like investing in geothermal, investing in advanced nuclear kind of comes, not all of it, but like comes from that.
01:33:22
Speaker
There's of course also like other aspects of this, right? It's not only about the choice of energy technology, it's also about like different kinds of solutions. So if you're kind of thinking about those futures, like those are not futures where, as I said, like international cooperation on climate, like being in a great shape is not consistent with being in the 3.5 world.
01:33:48
Speaker
So that means that things that kind of maybe look very good in the best case, right? Like if the best case is kind of like the case that we're in right now or probably even better, let's say saving trees on the Amazon, like if we could kind of get this to work, right? Like even if that were very cheap and the best case where we solve this regulatory problem that so far we were not able to solve, now that's not gonna work in this kind of world, right? So that's something that's kind of
01:34:18
Speaker
Contra indicated on this case, right? So it's kind of like this will look worse. And similarly, if you kind of think about the structure of the world economy, like, and kind of like the future predictions, you probably have like more of the higher warming worlds are like in situations where like emerging economies have been growing.
01:34:38
Speaker
very strongly, right? So like, yeah, we're against like, let's say Africa is kind of growing and growing very strong. So it also tells us something about like regional prioritization at some level.
01:34:49
Speaker
I think actually that's a great segue to where I would like to end this conversation by talking about interactions between climate and other areas, we
Linking Energy Use with Development and Stability
01:35:02
Speaker
could call them. What are the trade-offs between economic development and emissions? Yeah, so that depends on where you are with regards to economic development.
01:35:14
Speaker
So there's a very strong relationship between economic development or human development more generally and use of energy. And that's not a one-direction causation. So we shouldn't say more energy causes more development, but we should say that it would be very surprising that the world gets a lot richer without losing a lot more energy. So I think that's very clear. And there's papers on that that show this very clearly, and that's a really, really strong kind of relationship.
01:35:44
Speaker
And the relationship is much, much stronger in the earlier part of the ladder, right? So like high income countries right now are able to grow without growing their emissions, right? So there's like about 20, 25 countries or so that have been able to grow over the last decade, grow their GDP without growing their emissions. What would be kind of like the
01:36:07
Speaker
the weak kind of condition of decoupling, right? It's kind of not, doesn't mean they will meet their climate goals, but it kind of means that kind of growth is kind of possible without increasing emissions. But that is not true on the lower end, right? And like broadly for three reasons. If you're kind of very energy poor, then like,
01:36:29
Speaker
So if you can kind of save more energy like energy efficiency gains etc will just use like probably translate into into more energy use. I think that's kind of one reason there's two other ones. So one is kind of like earlier economic development is kind of more more carbon intensive right so it requires stuff like that requires little steel and cement the kind of stuff that's kind of
01:36:50
Speaker
hard to decarbonize right now or which we actually have not decarbonized to this point at like reasonable cost. So that's kind of another aspect of this. Yeah, so that essentially you're doing lots of infrastructure investments that are very early. And of course also like the willingness to pay for climate policy is like very low and rightly so very low if you're in a very energy poor context, right? If you're in India and have like
01:37:16
Speaker
400 million people without access to electricity than the first thing that you're thinking about is not implementing a carbon tax. And so we mentioned one very large benefit of using less oil and coal, which is a decrease in air pollution. Do you think there are other additional benefits? Here I'm thinking in terms of greater food stability or less conflict or something like that.
01:37:44
Speaker
I would call it the more sophisticated case about caring about climate change. It's probably less about extreme weather events and the dire impacts of extreme weather events, but more like political instability and conflict, especially in places that are heavily dependent on environmental conditions. So if you're in sub-Saharan Africa and you have rain-fed agriculture, that is probably the most likely case where you can get
01:38:10
Speaker
social destabilization because of climate change, because the vulnerability is very high. So yeah, I think that's kind of an important effect. This seems very important, like, ethically speaking, from a perspective of, okay, climate change is hurting the global poor the most, and it's kind of the most destabilizing probably in those areas.
01:38:36
Speaker
So I think that's a very important effect and something that I think effective altruists, it's easy for effective altruists to forget that because in a way if you kind of think about climate as a civilizational risk, I think I would agree that the civilizational risk aspect of climate is kind of low because it's kind of hard to imagine a great power war because of climate change.
01:38:58
Speaker
And I guess if you're caring about the long-term future, great power wars are just extraordinarily important. But from the more near-term suffering perspective, I think that's a very significant effect. And another one that comes more from essentially making clean energy cheap, reducing energy poverty. So I just mentioned, I guess, 400 million people in India not having access to electricity.
01:39:27
Speaker
We're living in a world where what we are thinking about first when we're reducing emissions, we can all use a lot less energy without sacrificing a lot of our living standards. But we're not living in a globally representative part of the world, both of us, and I think most listeners. So it's a very different situation. The average human on this planet is very energy, poor, and we're
01:39:53
Speaker
The human development benefits of access to more energy are very significant. And ideally, if it's quite clean and cheap energy, that's the ideal case. Yeah, that's a great point. Johannes, thanks for coming on the podcast. It's been a real pleasure. Thanks for sharing your knowledge with us. Yeah, thank you so much. Great to be here.