 Okay, we're back. We're live. I'm Jay Fidel, 3 o'clock block here on ThinkTech. We're talking, of course, about energy in America with our regular informed guest, Lucien Pulirisi, who is the CEO of E-Princk in Washington, D.C. Welcome back to the show, Lucien. Hi, Jay. Great to hear you. And see you. And by the way, Lucien, I have a special surprise for you. Sure. Okay. For many years, Meena Morita was the chair of the energy committee in the state house here. 15 years, more, 20 years? Well, 13 years as chair. 13 years, okay. 15 years as a legislator. And she was done with that. She went to the PUC as a chair. She served a full term there as the PUC chair. Now she's a blogger and a consultant in energy, runs a blogging site called Energy Dynamics. You can look it up. And she is going to join us today, Lucien. Are you happy? Sure. Aloha, Lou. Nice to meet you. Nice to meet you. So I wanted to follow up on our early discussion and talk about the climate change accord out of Paris last year and the president's current machinations to use the word on whether he will pull out or not pull out of the Paris Accord. And first, a couple of days ago, it looked like he was considering that he may not pull out, but then the New York Times reported today that maybe he's going to pull out. And there might be something else in the last few hours on his inclinations in the matter. But let's talk about that. Let's talk about how that affects energy, Lou. What are your thoughts? So I think it's very important to understand. Well, I think we've talked about it. I brought a few slides. So I guess I'm in the category of what you would call luke warmer. Okay. I believe the climate is changing, but I think there is still considerable uncertainty on the scale and scope of that change. And I think there's considerable uncertainty on man versus natural contributions to long term climate. I mean, and I think that this is not necessarily really wrapped up in this decision, whether to go forward with Paris or not. I think that's a political issue having to do with a couple of issues. One is the president's kind of view to a lot of his constituencies who felt that these elites, you know, the international association of main droppers, the office of tending folks, all these people thought what was good for them was to sign on to this climate deal, when in fact the programs themselves being implemented do not seem to be based on cost effective strategies, but just sort of whatever the whims of the local elites. Now, I'm not saying that's exactly what's happening, but I do say that is a stream in the political consciousness that is affecting Trump right now. And I would say the Steve Bannon's and the more, you know, Trumpian folks are pushing him to pull out of the agreement. I would say Gary Cohen, the head of the National Economic Council, probably Jared Kushner and Ivanka, many major oil companies are also encouraging him to stay in the agreement. And one possible compromise would be to stay in the agreement and to, but to go forward with certain changes in U.S. policy, particularly maybe altering the clean power plan, maybe pulling away from some of the very costly alternatives and try to form a different kind of consensus. Well, can we, can we go to the question of what does the Paris Accord say about energy specifically? And how, why it becomes such a hotline? The Paris Accord has these indicative national, you know, basically all the companies that have gotten together, all the countries that have gotten together, 100 countries that have gotten together and made certain commitments to reduce their greenhouse gas emissions versus a certain, you know, base level. So the U.S. is going to bring its down from 2007 levels, I believe. And I think a lot of the criticism of the agreement is that, I mean, the two criticisms of these kinds of agreements. First, it's not binding in any traditional sense. It's not a treaty. It was not approved by the Senate. Second, the U.S. tends to follow these agreements and the other participants do not. I mean, this is generally the, and so we would have a lot of molestation with folks. I brought a few slides on what's going on in China and where some of the debate takes place. And it's clear to me that, you know, I think we spoke about this before, remember, the U.S. never signed up for the Kyoto Accord. Yet we exceeded the targets of the Kyoto Accord by some substantial volume, right? Largely through efficiency and market-based improvements and the general trend within the U.S. economy to move to lower carbon-based fuel systems. And also the function of our economy itself changed. We moved out a lot of heavy industry to lighter, high-tech things. Well, I mean, you have questions or comments about exactly how this should be treated? No, but it is interesting to hear from Lou and especially that perspective, the focus on cost-effectiveness. I don't think that we have any disagreement there. I think what concerns me is that, you know, this is getting the whole world to focus and work towards a common goal to address climate change. And I think that's what concerns me is, you know, the United States is a major world leader backing out rather than staying in to help the international community massage us towards this common goal. Yeah. And that is connected in many ways with the other positions that this administration is taking against the views of Europe, you know, the consensus in Europe, and for that matter in Asia. So we isolate ourselves as a political matter. So, you know, that does affect a decision. I mean, if you were advising, Lou, if you were advising the president, this is a hard one, huh? What would you tell him? But, you know, all things considered, Lou, what would you tell President Trump right now on his decision, his cliffhanger decision that everybody in the environmental community and the energy community are waiting to hear about? So I don't think the president is prepared. I mean, I think the president would listen to anything I would have to say. And, you know, we generally do not like to take positions. We try to lay out the numbers and let the people above our pay grade decide these things. But I do think if I were the president, and if I were doing advice in him, I'm saying, look, there's a lot of nonsense in this deal, but you want to stay at the table and say you're willing to go back to the table, but you want to really change the whole dynamic and the whole emphasis should be, okay, let's proceed with the low cost abatement strategies first. And those are in China and India. Why is some guy in East LA working two jobs, so some Hollywood producer can drive a Tesla? Meanwhile, for a hundred of that price, I can get the same emissions reduction by merely getting the Chinese to maybe operate their co-plants more efficiently. I can take the particulates out of the atmosphere, they just turn the scrutters on. So, you know, I think there is a real issue here that, you know, lots of a lot of things government do, sometimes they don't care so much about what they cost, right? And so we have a kind of whack-a-mole approach. And I would, you know, I would sort of take the Bill and Lambert place, okay, let's reorient this to basic research and fundamental technologies. We've spoken about this before, Jay. We have to solve the intermentancy problems with wind and solar. So let's ramp up the investment on batteries. Let's accept that carbon capture and storage probably is too expensive and not going to work. And he can really go there and sort of knock some heads and make people confront the inconsistencies and the contradictions in what they've signed up for. Because like a lot of these international agreements, people love to go to Paris, the food's good, you know, you have a nice time. And but people in the countries are unwilling to make the kind of hard-headed commitments they really want to do. We're going to do that. We're actually doing quite a bit. The U.S. has emissions. In fact, if you look here, U.S. emissions have are on the decline now. And even under disagreement, our commitment is to cut our emissions by 17% by 2020 and 28% by 2025. There is no reduction in Chinese emissions until they peak in 2030. Okay. So now the Chinese have a lot of stories about that. They can say, well, you know, you've been loading into the environment a long time. We're still growing. Your per capita emissions are different than ours. But the point is, is that there's a lot of bad environmental practices taking place in China. Well, let me ask this before we move to our break. And that is, with all of these considerations and all this advice flying around with all the press coverage, which may or may not be helpful, what do you think he's going to do, Lou? If I had to guess, and I'm not really good at political forecasting, I thought Hillary was going to win the election. Okay. So I would say he will probably try to find some modified way to stay in. But the pressure he is getting from a lot of the central constituencies that feel he made a commitment to them is enormous. And you can look at the work coming out of Texas and Texas Public Policy Foundation, Manhattan Institute, and very substantive work or, you know, reviewing a lot of the contradictions in the agreement and a lot of the imbalance in it. And this feeds into the narrative of America first, right? It's how the US got taken to the cleaners on this deal. Yeah, interesting. Yeah. Comments, Mia? No, I think there are a lot of opportunities for the United States if we stay in and basically in research, development, technology development in showing cost-effective ways to move forward. I mean, even though you have that trajectory for China and India, I mean, there are cases to be made for these developing countries leapfrogging to cleaner technologies much faster and hopefully using technologies that we developed and we're selling to them. So would you accept the accord? Would you accept the Paris Agreement or would you want to modify it? I mean, I'm really interested in Lou's thought that the president may very well elect to modify it given all the factors and influences involved. I think the only way that you could modify it and have your cake and eat it too is staying at the table, you know. Gotta stay at the table. There's so many reasons to stay at the table as the president of the United States, the greatest power on earth, right? Isn't that right? It still is right, right? I hope so. You should stay at the table. Okay, we take a short break. That's Lou Pugirisi. He's the CEO of EPRINC in Washington and Meena Morita, a former chair of the Energy Committee in the House, the chair of the PUC and now an energy consultant. We'll be right back. You'll see. You're watching Think Tech on ThinkTechHawaii.com which broadcasts five live talk shows from noon to 5 p.m. every weekday and then streams our earlier shows all night long. Great content for Hawaii from Think Tech. Hi, I'm Carol Cox. I'm the new host of Eyes on Hawaii. Make sure you stay in the know on Hawaii. Join us on Tuesdays at 12 noon. We will see you then. Aloha. Let's imagine the possibilities in their lives. I'm the whisper, Mike. No. Okay, we're back. We're live. I'm Jay Fidel and I'm here talking with Lucien Pugirisi, Lou Pugirisi in Washington by Skype and Meena Morita here in the studio with me. I'm talking about the Paris Accord which has been in the news for the last few days. That's a real cliffhanger, I must say. So let's go to the question of the two differential or possibly the three differential possibilities. One, and I'd like to explore what you think will happen. Okay, if the president says, I am bound out of this thing, I'm going to terminate U.S. involvement in the Paris Accord, what happens? What happens to the energy community? If you don't mind me asking, what happens to the U.S. diplomatic relations with Europe and for that matter with Asia? And what happens in this country in terms of the development of clean energy? Okay, what do you think, Lou? What's going to happen if he says no? Let's just say he pulls out completely. Yeah. And after all the elites and stuff have heart attacks and jump off buildings, we'll go back to a certain kind of world. And that world is one in which natural gas, which continues to expand at a very rapid rate pushes out coal, a world in which the states through renewable portfolio standards for local efficiencies for the much-vaunted 100% renewables that the Hawaiians seem to think is the answer, those will continue. Okay, so the U.S. action utility sector with and without the clean power plan, it will have not a substantial effect. So the question is, and I think a lot of people, a lot of, you know, even major companies believe, well, that's why they want to stay at the table, because really we can kind of be part of an international agreement in which we don't get excluded. I'm unconvinced that the huge amount of money, however, that DOES spent on the advanced research is projects energy agency have actually resulted in much good. I mean, I really think they have, they've had spread themselves across a dozen different technologies. They didn't have a fundamental strategic vision of where the high payoff is. And it's not clear to me that Trump has the instruments and the staff to actually fix this kind of stuff, but I do think it would be good to have a debate on it and see what we can do. I think if we dropped out of the agreement and it's going to cause problems, particularly international trade and there's going to be a lot of animosity, I'm not sure it's going to make a fundamental difference given the nature of the way lower carbon fuels are emerging in the US. A difference in energy, but you know, I'm sort of comparing this with Trump's engagement with Angela Merkel a few days ago, where she said, it looks like we're going to have to go on our own. I mean, this was really not a good meeting at all. Electricity now is a luxury good in Germany. They've sort of followed the Hawaiian path, you know, and it's turning out to be very expensive. There's plenty of room for policy reform on both sides of the Atlantic. I mean, I'm not a big fan of the way of sort of Trump's interaction. His way he deals with people, I think, is about half of his problems. At least. Well, I think Germany is dealing with stranded assets. At least we don't have that problem here yet. You know, right now, we're the right places to make our future investments. So that's the difference between Germany and Hawaii. You know my opinion on the rejection of the gas alternative for Hawaii. Go through that. I really think that was a poor decision. I agree with you. I've written about that, and I think it's a real poor decision. You found somebody on the same page, Lou. It doesn't happen too often. So let me extend that question, though. And I suppose he rejects this, which I think is a fair chance of that. What effect on Hawaii? What's special effect on Hawaii? Now, Lou suggested that maybe there was no effect on Hawaii. What do you think? Yeah, I don't think there's any effect on Hawaii. You know, you, again, you have the RPS in statute. We're on our own trajectory. You know, coal is just not cost competitive with, you know, other fossil or renewable resources right now. Does that mean that if Trump, you know, accepted the Paris Accord, simply said, okay, all right, we'll just status quo and the Paris Accord, whatever Obama did, I'll go along with that. I don't think that's likely. But let's assume he says that. What effect on Hawaii there? No effect. Same thing. No effect. Yeah. What about that? Suppose he says, I think you talked about this more than once. The real issue for Hawaii is, in terms of climate, where should they put their resources? Is the real return in these renewable strategies, which are going to be expensive and have absolutely no measurable effect on the Hawaiian or the world climate? Or should those resources be better put into adaption strategies and to preserve the beaches and the beauty and the tourist attractiveness of Hawaii? I think, actually, it's a tragedy that Hawaiians did not have that debate. I'm not saying, and I want to preclude what the answer should be. But it's a big mistake that the political leadership in Hawaii didn't say, okay, let's talk about this and let's figure out what's the most effective strategy for us to deal with climate. Yeah. And that is undone. I realize lots of people who I believe that the renewable approach is cheaper. I realize, but I am very suspicious that that will occur. But 100% renewable will be cheaper. I disagree with you on that, Lou. That has already occurred. Not only is it comparable or less pricing, but there's less volatility in the system. You look at the new solar storage contracts that were negotiated by the Quiet Island Utility Cooperative. That sort of set the standard for the nation when you're getting that at far below avoided oil prices. So I think what we have in our statute, and sometimes it's been overlooked, is that the RPS has to be cost-effective, and I forget how it's worked. But anyway, it has to be cost-effective. It wasn't this free-for-all for renewables, where I think Hawaii has made a mistake is on the subsidization of renewables. Again, rooftop photovoltaics, which is one of your least-efficient cost-effective strategies, is being subsidized through tax credits. But this is the common practice in all these government-renewable programs. The most effective biofuel program in the world is the American program to mandate volumes of ethanol into the gasoline supply. And I don't know any objective analyst who doesn't think that has become a disaster for both the environment and for the fuel supply. So these things are all about it. It's really hard when the governments really think they know best, and they hate these kind of consumers to decide. They want to pick winners and losers, and it's not working out that great in all cases. I actually am a big fan of renewables, and I really think that if we can figure out the intermentancy part of it, they're going to be fantastic. But we haven't got the intermentancy solved yet. Well, let's talk about the third scenario that you mentioned, the one that may be the best thing that the president can do with all the influences and interests that are upon him, is to negotiate the agreement. First of all, does he have the clout to do that with the parties who signed up on the accord in the first place? Is there a legal opening or diplomatic opening for him to say, wait a minute, boys, new president in town, and there's a few things I want to change, and if you don't change them, I'm going to leave. Is there an opportunity for him to actually get in there and start renegotiating what was decided in the convention, the conference? I think that there's a lot of interesting legal issues, how the US would extract itself from this, whether it would take four years or we pull out entirely from the UN program, and that's probably not worth our time. I do think if he came back with an underlying theme, which said, look, let's think this through in terms of working collectively to fix the problem in a more cost-effective way. People would come to the table on that. I think there's a lot of frustration out there in Europe especially, which has seen soaring electricity prices and a lot of low economic growth, and I think there would be some interest in that. Yeah, and they might want to curry favor with him because he's hard to curry favor with. They may want to spend a little time mending fences in the hopes of a better relationship on other issues in the future. But let me ask this though, if we do renegotiate, if he wants to renegotiate, can you suggest a couple of points that he should focus on to renegotiate? So we're not going to like what I would say, but the reason to do that would be probably to allocate more resources to China and India and less to the developed countries, which are already moving forward with programs that are kind of going to continue whether he stays in the agreement or not. The real way is to sort of cut back on the wasteful stuff and then look at the low-cost abatement strategies that are available in India and China. That's where the payoff is. But nobody wants to talk about that because we don't want to help foreigners or whatever. It's a difficult problem. Yeah, there are ripple effects. Whatever you do, whatever you get into, you have a bunch of nations and everybody is self-interested and they all have their strategies and what have you. But let's also go back to one last thing. And that is, I'm reminded that with the help of an architect from Brooklyn, Mayor Blumberg in New York started on a program to deal with sea level rise in Manhattan, where sea level rise could be very damaging to the nation's financial center. And he's actually, or the city, rather, he's done, but the city is actually moving forward on a plan to do infrastructure to protect Manhattan against sea level rise. I'm not sure what the engineering is, but they have the political will necessary to take steps. Hawaii has not yet found that political will. Wait, wait. I mean, he's looking at me. No, I think we should. Especially after this past weekend, you know, with the king tides and a high surf, and you look at our industrial center, Mapuna Puna area, getting flooded. It's right at sea level. You look at our billion dollar coastline, Waikiki getting inundated by high tide and surf affecting the hotel and the beachfront. Geez. You know, like Lou mentioned earlier, you know, there needs to be a focus on adaptive strategies in planning. Adaptive strategies. Everybody has to do that. They have to do that whatever Trump does on the Paris Accord. And so the only thing that I'm left with to ask you, Lou, I have other questions, too, but the only thing at this point I'm left to ask you with is this has an effect on the conversation. You mentioned we ought to have a conversation and to visit the question of whether to accept or reject Paris Accord at this time raises the possibility, if not the desirability, of continuing in a robust conversation to see if we can settle down in this country on what we really want to do vis-à-vis the environment and energy. Do you see that as a positive or do you see it as a question? Of course with Trump, that's how likely is it for us to get a common influence. But I mean, I have always felt that when climate is discussed as a religious issue, the traction is really poor with us. We don't, you know, we can. If you talk about as a technocratic problem and you confront this whole issue of what are the cost-effective strategies and what are the losing strategies and how do we get a robust approach where we try the kinds of things that might make a difference. Yeah, that would be an interesting conversation. That is not the conversation we're having in Washington. There is no climate issue, which is not worth a gazillion dollars in Washington. I don't care how bizarre it sounds, you cannot. I mean, we don't do climate, but if you go to the think tanks that do climate, they have a, you know, they have a guy to take your coat, they have fancy cafeterias, you cannot imagine how much money is poured into them. It's just unbelievable. We'll have to leave it there. Oupu Yorishi, the CEO of Eprink here on Energy in America and Meena Morita, former chair of the State Energy Committee and the PUC. Thank you so much, both of you, for this very important and timely discussion. Let's see how it unfolds. We'll be thinking of you guys as we find out tomorrow or the day after. What the President decides to do in any event. Aloha, both.