 So, thank you for joining us for our first event of 2019 and it is, I think, a very important topic to put forward at the very start of this year and the start of this new Congress in terms of talking about the reframing of energy for the 21st century. How do we get greater energy productivity because it is an economic imperative? And as we are going to hear this afternoon, we are facing an issue of dealing with an imperative as far as looking at climate change, what this means in terms of the task before us to really reduce our greenhouse gas emissions. How do we best do that in an efficient manner and one in which we are able to truly achieve the benefits, the multiple benefits that that can provide in an optimal manner? We will hear this afternoon how really inefficient we are across our economy. And did we all know that? Probably not in terms of thinking about all of the myriad ways that we could actually improve things and actually achieve multiple benefits that could create a better society, better outcomes for individuals in our country and indeed around the world. But how do we make this difference? So this afternoon to sort of take us on this journey about what really is at stake, what do we know about our economy and the efficiencies and inefficiencies in it and what we can do about it is Skip Leitner who is an energy and resource economist with his own firm called Economic and Human Dimensions Research Associates. Skip is also a past president for the Association for Environmental Studies and Sciences. He has written an enormous number of articles and has spoken and done consulting work all over the world and is doing, has done work with Jeremy Rifkin as they have looked at governments and local communities, whether it's Luxembourg or France, he's also doing work in Russia. He's not part of any investigations that I know of. Not that I'm willing to admit to. And he has also done a huge amount of work at the state level as far as looking at economic analysis and what this means for jobs for economic development and the rate that we are achieving of efficiency, but the huge amount of efficiency gains that we are basically leaving on the table or on the floor wherever you choose to look for them. So with that introduction, I will turn it over to Skip and then after he speaks, we will have two discussants who will kind of tee up some issues and then we will open it up to the floor for your comments and questions. Skip. Thank you, Carol. And good afternoon, everybody. I'm to Terry and to Jim as well. I really look forward to, as much as anything else, a really good proactive dialogue because the issue is critical enough that sometimes we need to step back and think how to reposition our understanding of something like energy as it might relate to the economy. And as I was on my way over here, I was thinking how to introduce a context. And I thought, uh-huh, Adam Smith might be a good starting point. Adam Smith, 1776, he wrote a book many economists think was the starting point of what we now call economics as a system, as a way of thinking. I don't quite agree with that. It goes even before that. But his book, The Inquiry into the Causes and Nature of the Wealth of Nations, became a standard focus. And if you remember, he said, in a free market economy, self-interested individuals operate through a system of mutual interdependencies in a way that guides the larger social well-being of a community or a nation as if guided by an invisible hand, the theory of the invisible hand. And I thought to myself, well, actually, yes, there's some truth to that, absolutely. But there's enough evidence on the social-environmental side that maybe the invisible hand isn't working as well as we might think that we need to apply sometimes what I refer to as the theory of the invisible foot. The market needs a swift kick every now and then. And I say that in two ways to put this into context. One is that there needs to be better information, a better sharing, and a better collaboration, as you'll see in my slides. We need to step out of the silos that many of us are in each and our way, myself included, to do a better reaching out of people. On the other hand, remember, he wrote that in 1776. What people don't really realize in 1759, he wrote an interesting book called The Theory of Moral Sentiments, in which he postulated that self-interest was actually a social process as much as anything else and that we needed to integrate what we might today call moral social psychology than pure political economics, and that we might be guided that way. And that was actually a foundation to his book in 1776, but we forgot about that. Just as Blaise Pascal, the French mathematician, theologian, we don't know that mostly, suggested that we can know the truth, yes, through reason, and that was the age of reason those times, but also through the heart. And we've kind of forgotten about that heart bit. And I say all that to remind you that a lot of what we know about energy, so Pascal was in the 1600s, early to mid-1600s with Descartes and others, and then we had people like Samuel Smith coming along, Samuel Adams coming along, but we didn't really begin to dig into energy until Nicholas Carnot began publishing, he published his book in 1824 that began what we understand as the Carnot Cycle, and Woodoff Clausius didn't actually refine it in development until 1850, didn't even talk about entropy until 1865, I think something like that. So we didn't have the benefit of the roots of economic understanding of our better inquiry into the way energy works in our economic, our social process. So part of, yes, the theory of the invisible foot, but I would call it the need to reboot our understanding of the different linkages of the physical world with a sentimental world with a social world and, yes, with the economic structures, these mutual interdependencies and way to bring information forward. So with that I thought I would then, yes, talk about reframing energy for the 21st century because so many of our ideas on the economy and on energy are still rooted in centuries old, literally ideas of what actually happens in the work process and the social process. So understanding the imperative of greater resource productivity. And in these talks I'm increasingly pointing out and thinking how to bring home a really important piece of work by Nobel physicist, Caltech physicist Richard Feynman in 1959. Imagine that, 1959, even before we had some of the developments of things we call the internet, smartphones and things like that, even before we learned how to manipulate cesium atoms under a microscope in 1989, to spell it the words IBM, in 1959 he was talking about plenty of room at the bottom. He was imagining and in this talk, I'll give you the link there so you can see it, I recommend it, not a single equation, it's really quite readable, he was suggesting we could store the entire encyclopedia of Britannica on the head of a pen. So much more to work with ways to step back and reimagine what could be a possibility if we choose to take that step back to reboot our understanding as it might affect our social, economic, climate, environmental well-being. So with that I want to turn to one of my very favorite American philosophers, Gary Larson. And the idea is that sometimes small differences in assumption can lead to very big, very big differences in outcome. So we have a dog in the backseat of his master's car talking to a friend of his in the front yard and he's saying, ah ha ha, guess what? After we go to the drug store and to the post office, I'm going to the vets to get tutored. Small differences in assumption can have very big differences in outcome and we need to address those in some important ways. Now this talk actually, yes, over the last 10 years I've been focusing on this and Jim and I have worked on some of this together over the years, so a lot of bit of history but it more critically began with some coming together of people in Nara, Japan last September, a number of us with people out of Europe, people out of Japan, Asia got together and began talking through some of these ideas how to refocus. I want to acknowledge quite a number of people over the last six months I have been interviewing, talking, engaging lively, you'll see some names you recognize up there, Jim, you're on that list, but other colleagues from ACEE Tripoli, Carol's on the list, some deep dive discussions that I really need to thank and I remind you of this because there's both experts and non-experts. For example, I've talked to a woman who's a trainer, doesn't know diddle squad about climate but does know a lot about energy in the body. I've talked to a climate scientist who doesn't know about energy but knows a lot about climate or a NASA scientist who doesn't know about climate but certainly knows how to get things done out there in space. So many people. The interesting point here, 70 people I've got listed, this would not have been true 10 years ago but fully one half of them are women. That is an emerging, engaging new way of bringing people together and I think we need to build on that just as we need to reboot our understanding of energy and the economy so how to collaborate and how to bring people forward, experts and non-experts alike. And through these many engaging discussions we have an emerging what I call an energy roadmap or word map, excuse me. And the idea you'll see a number of words that pop up time after time after time no matter with whom I talk everywhere from the idea of a boot strap, investment, we see winners, losers, lone voices, we see distributed generation overshoot, many other words up there pop up but two words really come to mind in some important ways. The first word there you'll see on the screen is the idea of silos and I'm going to comment on that in just a minute both from a disciplinary standpoint but from a social economic well-being standpoint. But the other word is trust. So let's talk, yes, silos rooted in so many different contexts and part of what I'm suggesting is, yeah, there'll be some graphs and some numbers and some energy perspectives but what I really want to do is use this as a way to break out of silos to engage in much more collaborative discussion, to think through new ways of expressing, new ways of conveying critical ideas that greatly affect our social economic well-being as well as the climate problems confronting us. So silos by culture, by income, by locale, all of those affect how we see and how we do or do not talk to each other. By scale and institutional perspective, no question about that. By legal or regional jurisdictions, it matters if you're a neighborhood, if you're a community, if you're a county, if you're a special resource district, if you're a state, all of those affect how you see and how you engage. Also by discipline, whether as we are economists or whether you're a social psychologist, ecosystem, water ecologist, what have you, all of those affect the sense of how you see the world and how you communicate or perceive opportunity? Do we hunker down and minimize waste or do we figure out ways to create new businesses to move ahead? All understanding the need for better dialogue and interaction that stimulates imagination and that builds trust. Again, that key word with all a more appropriate common understanding of what Carol and I are alluding to as the energy resource imperative. And again, as I've referred to, with the beginnings of this discussion, I want to acknowledge my colleagues at IASA, the International Institute for Applied Systems Analysis, based in Vienna, Austria, but also my colleagues in Japan, Wright. Wright is research for innovative technologies for the earth. They've been a long time around. 35 of us, including a number of IPCC chapter authors on the special report, but researchers all over got together with a three-day deep dive to begin what we thought was a badly needed collaboration and dialogue. The three big takeaways, rethinking energy demand in Japan, Nara Japan, the old capital of Japan, there's a strong need for new metrics and insights to really understand our social, our economic, and our environmental well-being other than pure GDP, the need for metrics, but also new data to support and help people understand the relationship of the so-called happiness index or the larger well-being that we might appreciate or enjoy. And given the above, as I've already alluded to, social, economic imperative of moving away from merely energy efficiency on its own thing, a nice thing to do if we have a few dollars and some time lying around, and renewable resources critical as well to building what I call the greater energy and resource productivity perspective. The social, cultural, behavioral elements must be among the key solutions we have discussed to a healthy climate and to a robust and maintaining that robustness in a sustainable way over a long period of time. So like any good mental athletes, we need to do a little bit of warming up. My thought, I might pose this question to you. Since the Rio summit, January 1992 is when the IPCC began and down in Rio de Janeiro is when we began thinking broadly as an international community on this, the U.S. has averaged about 1.9% of energy efficiency improvement per year since 1992. So I'm going to ask you what is the number, 4 trillion, 10 billion, 120,000, 735,147 dollars. What is that number? Well, I remember I told you that we've averaged 1.9% efficiency since 1992 as a nation. That is my working estimate of the cumulative lost energy bill savings in the economy since the Rio summit by not adopting energy policies averaging 3% productivity a year. Now, if we back out, yes, it takes investment, it takes program costs, I still come up with a healthy net of about 2.5 trillion dollars. In other words, we have lost huge opportunity by not rebooting our understanding all the way back to the Rio summit and even before. And that's true as about 3 p.m. today before we began here. I can give you an update later. Jumping to the end of the story, a quick perspective in the overview, I call it the quintessential sextet for a robust and sustainable social economic well-being, not just an economic but a social well-being as well. So six things I'm going to highlight. First, as I've already alluded, breaking out of our many silos with renewed trust and a shared vision. Number one. Number two, I'm afraid we're going to have to start going with negative emissions. We have waited so long that we've now got 12 years of 2030, we cannot get the job done with simply efficiency, resource, productivity and renewables because we don't have enough time to turn over the capital stock and move that into effective displacement of carbon. But given the negative emissions, I'm suggesting that we need greater resource and energy productivity but also renewable energy systems and technologies. So for every unit of negative emissions, if we want to maintain a robust, a healthy economy, we have to have at least three units of resource productivity of energy efficiency and renewable energies offsetting the negative emissions that we may have to turn to. So a three to one ratio. My colleague Will Burns out of Berkeley and I have come up what we call the Burns-Laitner rule of thumb. Three units of productive capacity, renewables, efficiency for every unit of negative emissions, but we may have to go down that route. And then we need, yes, storage. But not just storage of energy, smarter storage of information, energy and resources made available at the minimum level of need at the right time in the most efficient way. Storage is going to become critical, but perhaps not as big as we think if we move smartly in other ways. And then finally the information platform to manage those resources and optimize their many possible and different outcomes. Those are the six I think we're going to need to bring to the forefront. We can't afford to wait for Congress for two or three years to get ahead of us. We have to help them move ahead of that curve. So in that sense then we're going to be talking primarily about the greater resource energy productivity in my remaining few minutes with you, but all of them implied with these other elements critical to that larger choice that we need to make. And with another insight from Gary Larson, we've got a couple of polar bears up there in the north who just lost their food. And the one bear says to the others, is he holding on the igloo? I lift you grab. Was that concept just a little too complex, Carl? And so I'm asking the question, if these are the sustainability bears, is that the public running away from us? I think the answer may be yes. And we need to think through new ways of communicating and elevating the performance of this in some smart ways forward. So how might we explain the energy and resource complexities in ways that better connect with members of the public? That's the key task I think beforehand, how we can engage in a dialogue to carry forward a more productive, a more fun, if you will, a message that relates to the average person's life. And stepping back, the growth of the economy. We tend to look at the economy in very narrow terms. And it really depends on the way we look at the problem. So I'm going to show you a slide looking at the year 1950 out to the year 2050. And what we might imagine as annual growth of the economy in real terms over time. And we may have a lot of volatility, a lot of jumping up and down. After World War II, 1950s, 1960, we say, well, we're down now, but let's look forward to the things. After we settle out of the World War II, after we do the Marshall Plan, after we do all these things, we're going to go up in perspective. And then it jumps along here again. And we say, well, we have a little bit of trouble in the 70s, the oil embargo and things like that. But we've got the fundamentals are locked in. They're pretty solid. So we can imagine moving forward. And then we say, well, around the year 2000, we've got that bump of the information technology age. And then we've got more looking ahead as we move into the financial situation in the year 2007, 2008, 2009. Looking forward, always looking forward. And such short-term perspectives, we never step back and look that the economy is slowly eroding out from under us in some very important ways. Yes, it's affected by population. We're seeing less population in the U.S. But critically, a reduced and diminishing rate of per capita GDP, personal income. And I'll show you a slide in that in a minute. Critical point is this is by no means unique to the United States. There is a similar pattern within the OECD and the developing nations as well. But we always look to three or four years ahead and never take that strong step back and reboot, again, our understanding of what's really going on in the physical reality of this thing we call an economy. Looking at trends in real GDP per capita, and I'm going to look at what we call the inflection points of 73 in 2007. But if we look over time, GDP in real terms, constant dollar terms, 2012, we see a pretty strong positive movement forward. And we take some comfort in that. But then if we look from 1973, had we pursued the per capita growth rate from the 50s to 73, we might have had a higher per capita GDP by today than we did. And in a similar way, after 2007, eight, and nine, had we pursued the post-73 up to 2007, we might have had a more productive per capita GDP. But it is weakening over time. And I think we need to begin asking the question, what contributes to that weakness? There are many things. But one of the things I'm saying this chart suggests that, first of all, our social economic well-being is eroding. Even under the current administration, where we had the bump of 4% in a quarter, the average annual is still decreasing compared to the historic past. And more critically, how might the inefficient use of energy and other resources account for a lagging economic robustness, especially as we look to say 2030 and 2050 in the future? But let's talk about scale, because scale is something that is not really paid attention to. And if we think of real GDP as the volume of resources, the mountain of resources we consume to maintain our economic well-being, in real terms, this is what 1950 would look like if it were a dot on this particular picture, about $2.2, $2.3 trillion in 1950. By last year, we jumped to maybe the numbers aren't quite in, but maybe around $17 trillion, $17.5 trillion, about eight times bigger. So we can see the comparative size of that dot. But what's really critically interesting to me is the magnitude of resources over time. And here is the cumulative amount of resources, energy, water, chemicals, material, capital, all consumed to maintain our well-being. So the cumulative amount of those resources is 266 times the 1950 size of the economy. My biggest concern in this regard is much of it is humanly wasted. And so much of that waste contributes to a drag on the robustness and social, economic, environmental well-being. Moving forward to the year 2050, it will be over 600, 632 times the size of the 1950 economy. Energy alone is 240 times the size of energy we consumed in 1950. And most of that energy is wasted, probably on the order of well over 200 billion tons of coal equivalent. That's in form of greenhouse gases, air pollution, particulate matter, noise, heat, ash that's got to be stored someplace. Huge amount of waste, but by the time we add in water, labor, capital, other kinds of waste, you can see how it's beginning to burden and make less robust our economic well-being. So three intermediate questions or perspectives on waste. We're going to track through these very quickly, but first tracking the incredible way of wastes that I'm talking about, a very large part of our life, understanding energy as work, and then exploring key linkages to our total energy and the larger resource productivity and the well-being of our economy. If we want to imagine a more robust, a more sustainable economy, we absolutely need to find ways to help policymakers and business leaders step back, examine these perspectives in depth, and then help everyone and all three of those together at scale and with an accelerated transformation. It cannot wait. So let's talk about the scale of waste. And I want to introduce my colleague, Megan, while I saw her. I refer to her as my favorite anthropology research person. She and I did an essay together with Environmental Law Institute tracking this magnitude of waste in the US economy. If we only focus on municipal solid waste, we think we're doing pretty good, 4.4 pounds per person per day going into landfills, 2 kilograms per capita per day. But then we're saying that if we add to that waste, all the soil erosion, all the air pollution, all the carbon dioxide emissions, all the fecal matter from not only humans, but from our agricultural production, the cows and pigs, that waste grows up from 4.4 to 280 pounds, or about 127 kilograms of waste per person per day. There's a lot of defensive expenditures that have to be offset to correct for some of those. And even then, we don't correct for them. We still have premature fatalities from air pollution and the like. And it's likely bigger than that, because I do not include things like water losses, mining tailings, and many other forms of waste on our economy. It's very big. So the question we ask, are we living more by waste than ingenuity? More critically, can the productive use of those resources drive what we might call the multiple benefits? I think the answer is yes, if we bring it to the forefront and make it a priority ahead of so many other things. So second, different views on energy. Typical view is energy as a commodity, maybe a kilowatt hour that's sold in the market at some sense per kilowatt hour, a ton of coal, a barrel of oil. So a commodity sold at some price on the market with agencies tracking their production, their sale. But more vital, I might make the argument, is energy as the capacity to do useful work. That is to say, energy to transform the matter into the requisite goods and services for our local economy, and to distribute or make them available as required. And if we look at that without going to a lot of detail, working and building on some of the work of my colleague, Bob Ayers, Reiner Kumel, who's a physicist in Germany, taking some of the numbers, it turns out that both the US and the global economy may be no better off than about 16% energy efficient. That means we're wasting well over 80% of the energy that becomes the air pollution, the waste, the carbon dioxide, and so forth, a critical problem. So finally then, how these energy linkages come together to impact overall energy productivity. The cost-effective energy efficiency improvements, that's what we're most familiar with. At the end use, the more efficient air condition or lighting system to reduce the level of end use energy services necessary to deliver the goods and services that we desire, we think we need. Secondly, renewables and clean energy production. As we move increasingly renewables, instead of generating electricity, for example, with three units of primary energy to generate one unit, we're getting closer to one-to-one ratio, which reduces primary energy in very big ways. We're on the order of 25 quads or better in the US as we move to more renewables, a big productive use of generation of energy. And then shrinking, as I've already alluded to, the non-productive use of capital. If we have 50% capacity factor for power plants, we've got to build more power plants than we need. That capital sitting there takes energy, reducing the inefficient use of materials, water, food, all the other resources that further reduce the demand for energy even further. So all three categories of productive gains. End use efficiency, the more productive and more efficient use of renewable generation, and waste reduction, all three of those together add up to what I would call total energy productivity that benefits our social, our economic, and our environmental well-being. And with that now planted, the idea of energy productivity with these three key elements, let me show you an interesting chart. On the vertical axis, looking at per capita income, again in real dollars, over time, $10,000 all the way up to about $40,000, $45,000 income, on the horizontal or the x-axis is what I call that energy productivity, how all those three things are driving ahead GDP. So these are dollars in real terms per million units of energy, million BTs of energy. You can think of it roughly as about eight gallons of gasoline driving so much in the way of dollars of GDP, about 293 kilowatt hours electricity, roughly the same. What's really interesting to me in the 50s and 70s, we were sort of sorting out our economy, coming out of World War II, we had the oil embargo, but there is a very tight link between energy productivity both as a leading and a lagging metric to show how per capita GDP might be driven or supported through greater productivity at all levels, as we're saying here. I agree, correlation is not causation, but when we step back and think about all the different elements that feed into this, this absolutely makes sense, but even more critically, the declining rate of improvement is something that we should be concerned about. It's a flattening out and it may be a problem if we're not able to provide the kind of jobs that we think we need the income, we're gonna be even more fragmented socially than we are today. If we have good ideas, we'll be too busy fighting each other to implement them and that's part of what we're seeing today. How to bring that message forward. So given the full evidence, any thoughtful review would highlight the social and economic imperative of much, much greater energy and resource productivity. And then exploring the scale and speed of the effort required. Let's say that we have some idea of where we need to be at some level of resource productivity at scale. We might say it should be up here. So the minimum level of performance required to maintain both a robust and a sustainable economy. Business as usual, if we take a step back, it may get a 60% of the way there. And I have a declining curve there because it requires ongoing, not just a one-time goal, but ongoing rate of improvement. If we don't maintain that, it's gonna decline over time. And then we might introduce the idea of what I call the almost there economy using climate-based policies only. Climate policies alone, yes, critical, absolutely. I'm one of those that think we got to get to 300 parts per million, not 350. Critical. But if we focus only on climate and step aside and miss the larger opportunities, we're not gonna get to that minimum level we need. So what we really need to be thinking about is the energy resource productivity combined with climate policies working together to enhance our social economic well-being through what we might call innovation scenarios. A critical need. I used to call this at scale and in China time, but now I'm saying with a need to act at scale, yes. No longer in China time, but in climate time. We've got 10 years, not just to get going, but 10 years for significant reductions. And the presumption we need to overcome, this is from USA Day maybe 10 years ago, reflecting a climate summit. You've probably seen this cartoon. And we've got the idea of energy, independence, sustainability, renewables, clean water, healthy children, and so forth. And we've got the naysayer in the background saying, what if it's a big hoax and we create a better world for nothing? Well, the point is we can still create a better world whether we believe in climate or not, but how to elevate that message, how to elevate the concrete opportunities to make that a real outcome. And as my colleague Jeff Luke said in a book he wrote in 1998, unfortunately he's no longer with us, died of lung cancer about 10 years ago, but an important insight. Individuals, whether legislators, business leaders, community leaders, individuals have a natural tendency to choose from what he referred to as an impoverished option bag. Cognitive research shows that in problem-solving areas, individuals come up with maybe 30% of the total number of solutions available to us. Individuals miss 70, 80% of the potential high-quality alternatives. In other words, there's more available to us. There is both the imperative and the huge opportunity if we step back and begin asking better questions. And given that, yes. I want to talk about reinventing the wheel in a moment here. In 1970s, teenager Frank Nazworthy actually right here in Annandale, Virginia, did reinvent the wheel and it revolutionized skateboarding. His idea to put polyurethane in place of steel. And no doubt, it really revolutionized inline skating, skateboarding. He actually did reinvent the wheel. But that was yesterday. And today, good year is once again trying to reinvent the wheel. And if they're successful, it may eliminate the need for axles on all of our vehicles. What's the wheel? It's a 360-degree sphere held in place by magnets. Sometimes, as I'm suggesting here, we actually do need to reinvent the wheel. We do need to reboot our understanding of the critical resources as it affects our social economic well-being if we really want to move things ahead. And lastly, getting into the idea of the opportunity. Efficiency has been a larger resource than generally believed or understood. And looking at the US 1970 out to 2050 in terms of primary energy on the vertical axis, in 1970s and 80s, we're using about 68, 70 quads, maybe 75 quads of energy. And policy makers like myself and others were saying that by the year 2000, we need to go from 80 to 150 by the year 2000. And some were even saying 200 quads by the year 2000. But there's an interesting report came out of the Department of Energy in 1980, Scenarios for a Low Energy Future. They took a look at a number of different things that people were saying. And they came up with this, which we confirmed with our report that I did with AC Triple in 2012. We could imagine a much shallower use of energy if we implemented the right policies and perspectives. People were saying in 1980, that's beyond the pale. You gotta be kidding me. Not even close to reality. Physically and engineering, it couldn't be done. And yet, what's the actual historical consumption? Surprise. It took the pattern of what we then thought was a low energy future because we actually began doing something about it. People did actually begin thinking and working in collaborating ways. So our colleagues at the Energy Information Administration in 2005, their annual projection, then began to flatten the projection for energy efficiency out by the year 2025, something like 125 quads, began to flatten it out. And most recently, their most current projection, 2018, I'm waiting to see what next year, this year is gonna produce. They were saying by the year 2050, they could imagine less than 110 quads. So it's growing less and less as we adjust our expectations and really pay attention to the evidence and do that reboot I've been talking about. But enabled by information technologies, new materials, new designs, new technologies, and innovative, collaborative behaviors, all catalyzed by smart policies and productive investments, we actually think we could get down to about 40% less than we are today. That's an interesting perspective. And yet we're so hamstrung by this idea of our visual perception. We live more by waste than ingenuity, as I've suggested, 16% global inefficiency. Then when we talk about efficiency, we barely see what's above the surface. But if we take a step back, ask better questions, exploring the full efficiency potential, over 900 billion barrels of efficiency equivalent through the year 2050, enough to reduce world energy consumption by 40% compared to 2050, with the prospect for a more robust and a more sustainable resilient economy, dare I say. But how do we get there? The questions we ask, smart programs and policies might drive a global energy savings at this scale. So for my colleagues with IPIC, IPIC is International Partnership for Energy Efficiency Cooperation. Megan and I, I know there's did a report for them just last year saying, what could we do? And the answer was to drive much more in the way of investment programs and policies that encourage the optimal scale of efficiency. So what you see here is, see if I got the laser here. Let me draw that here. So by today, we're about 6 trillion euros of energy expenditures globally worldwide that might rise to about 12 trillion euros by the year 2050, one projection of it. But by the investment and policies programs and paying for investment, we actually bring that total energy build down under the area we call the blue here and we have a huge savings. So critical is the smart use of programs and policies to drive investment. We got to pay the money up front, put people to work, bring in new education, new tools, new techniques and what have you. But that's one scenario. My colleagues, Arnold Grubler and Charlie Wilson at EOS of the International Institute for Applied Systems Analysis, one, one better. I said 40% reduction by 2050. They say 40% reduction compared to today if we really step back and ask better questions. A different picture, a very interesting picture. Minimal energy is compared to what I suggested but a bigger program investment effort is required. So we're about the same place in terms of net savings but we've greatly reduced total quantity of energy that allows renewables to step in, that allow us to reduce greenhouse gas emissions by a very large margin, perhaps even close to near zero. So I've given you the reference so you can look up that information for yourself. But finally, what is the ultimate energy efficiency resource that we might attribute and talk among our colleagues? While recalling the comment of early 20th century essayist Lionel Strake, UK essayist, he remarked, he said Americans but I'd substitute a little bit more of a step back. Too many people, not Americans, but too many people, guests because they're in too great a hurry to think and we need to do some serious thinking to do some rebooting of our understanding. Jerry Hirschberg who is founder and former CEO of Nissan Design noted, creativity is not an escape from disciplined thinking, it is an escape with disciplined thinking. Again, the need to reboot. And finally, Henry Ford, not a favorite guy but he did say some smart things and he said thinking is the hardest work there is which is the probable reason why so few of us engage in it. I think it's a good point. So how to reboot the thinking, how to engage and how to build out a dialogue to bring forward this possible future. Or as Gary Larson might have said, as we've got a couple of spiders on the playground that have woven a web across the bottom of the slide. If we pull this off, we'll eat like kings with apologies to parents of which I'm one. Or more formally, as Maynard Keynes said in the forward of his book, The General Theory, the difficulty lies not so much with the new ideas but in escaping the old ones if we allow ourselves to step back and ask better questions with that. Thank you, I appreciate your indulging and hope we can move the dialogue forward. Thank you, Scott. So that was a race through this whole picture and thank you for developing this whole topic and giving us this opportunity to really think about what are some of the questions that we should be asking ourselves so that we can be smarter. You make race sound like a four letter word. There you go. And indeed, right? And because we do have all of these challenges that you are raising to all of us. And so to kick off our discussion, we have two special people with us today. And so I want to just take a minute or so to introduce both of them. Terry Dynan, he is a senior advisor with the Congressional Budget Office and she has been there for many years now. We won't go there, it's just that I've known Terry there for many, many years where she has written about a whole lot of different energy and economics topics. And everything from the National Flood Insurance Program to looking at the budgetary impacts of different kinds of climate and energy policies and energy subsidies and issues like carbon pricing, for example. And she also has served on the Board of the Association of Environmental and Resource Economists. And like Skip, she also spent several years working at the EPA at the Environmental Protection Agency. And then we're also going to hear from Jim Barrett who also like Skip has spent time with ACEEAAAA, the American Council for Energy Efficient Economy. And in fact, Jim is a visiting fellow with ACEEAAAA, but he's the executive director of the National Energy and Water Trust. And I always think this is also so interesting because of all of the connections that exist between energy and water. That's really, really important to understand. And this is a nonprofit that helps local governments design and implement clean energy and water projects. And he has done a lot of research over the years looking at the nexus of climate change, energy efficiency and economics and has written extensively in those areas. So what I want to do is to turn first to Terry to ask her for sort of some questions that she would raise or comments that she would raise about that. And then we'll move to Jim and then we'll open it up for your questions and comments. So Terry. Okay, thank you Carol. And thank you Skip. I thought your talk was really interesting and thought-provoking. I think I'm maybe a little bit more of a conventional thinker or whatever. But my, so my comments, I'm mostly focusing, I'm focusing on energy efficiency, recognizing that you're thinking more broadly about waste and renewable energy as well. But I thought it'd be interesting to move the discussion, I guess, to a little bit more concrete-ness by thinking about three questions about energy efficiency. The first is why do we care about it? The second is how do we determine what's the right amount of energy efficiency to have in society in our country? And the third is what types of policies should we be thinking about to get us to that level? So this might sound controversial, I don't mean it that way, but there's really nothing inherently good about energy efficiency. What we really care about is energy services. We care about having energy provide us with the means of heating our house and getting where we want to go. And we'd like to obtain those services in a cost-effective way so that we want to balance the value that we obtain from those services against the cost of getting those services, including the cost of producing the energy, transmitting the energy, consuming it, the scarcity value of the energy, the cost of the environment, so the costs that it might impose on humans that were involved, people that were involved with the production of the energy. So energy efficiency, and so what does energy, what does energy efficiency really do for us? Energy efficiency allows us to reduce the consumption of energy. It allows us to, that allows us to be able to extend energy supplies longer. It allows us to consume the services that energy provide with having less pollution. As Skip pointed out, the less energy we consume either by getting the service out of it or just wasting it. The more CO2, for example, we have. So energy efficiency allows us to do that, but energy efficiency itself is not costless. It requires capital, labor. We have to invest in energy efficiency. So how do we decide how much energy efficiency is right? Where does it fit in the mix? So I thought about it in the context of like building my ideal dream house. So like if energy was abundant, cheap, and didn't have any harmful effects, I would have cathedral ceilings and glass everywhere. I wouldn't spend hardly any money on insulation and energy efficient windows and doors, but that's not the case. And so I want to make sure that I and everybody else, all the other firms and households in the economy have the right signals to make good choices about how much energy efficiency to invest in, as well as the types of energies to consume. But as I said, I'm focusing on energy efficiency. And I think that the ideal amount, of course, is the amount that, as I said, weighs the cost associated with having more energy efficient production and structures against the value associated with reducing all the negative things that go along with energy. And I think that the ideal for the society is somewhere it's in between that zero amount of concern and that kind of a theoretical, I think of what Skip's presenting as more of a theoretical ideal. When you think about our economy only being 16% efficient, that 84%, what does that mean? Would we really invest enough in energy efficiency to be at what we would consider 100%? How many, that would take up a lot of our capital and our labor and our other scarce resources and in fact, we wanna use other scarce resources to achieve other goods. We want to be reducing poverty and providing clean drinking water and investing in our future. So as an economist, the story is always it's all about trade-offs. I wholeheartedly agree with Skip that we can't rely on just the private market to give us the right outcome because we have all these other externalities associated with energy consumption. We do have these environmental and human health harms. So I guess then how do we think about how would we get to the right amount of energy efficiency? How would we figure out what's the right amount? I think kind of the way to think about that is to think about all the conditions that would have to be in place for us to get there. So for example, our energy efficiency of the economy is really the result of millions of decisions made by individuals in households and firms all over the country all the time. And so we want to make sure that they're always facing incentives to make good choices about that. So the first thing to think about is do the prices that we pay for various sources of energy, coal, natural gas, oil, wind, solar, reflect their scarcity value and do they reflect the environmental harm that they cause? And that's not an easy question to figure out because the provision of energy in our country is really complicated. The markets, I don't pretend to understand the markets for electricity, but I know enough to know that they're very complicated. We have regulated utilities and we have competitive markets. We've had subsidies that have affected. We have subsidy in place now. We've had subsidies that have in place for years. We have lots of things that interfere with the market in ways that might mean these signals don't really adequately convey the scarcity value, kind of the private cost of the energy itself. And then you layer on top of that that we don't fully build into those prices the environmental harms, the human health and environmental harms throughout the whole production and consumption process. And then we have problems with information. We don't have, when another question to ask is, do we have enough information to make smart choices? So one of the things, like when you buy a house, do you know how much energy efficiency is actually embedded into that house? Do you know how much that will save you over time? When you buy appliances, do you know that? When you rent an apartment, do you know that? Do we have, so how are prices and information interacting? And then finally, do we have the right choices for energy efficiency possibilities? And having the right choices means we have the right incentives in place to have research and development on these technologies. One of the things that CBO has always maintained and that I think is very true, that's why we maintain it, but is that having the right prices is really a great signal for R&D. So by having prices that reflect the value of conserving energy, you're putting in place incentives for firms to invest in R&D on energy efficiency technologies. But then those incentives often tend to fall short for very basic research in that case. You get lots of these spillover benefits that people don't really capture when they do the research. So maybe we need to think about more about how to encourage very basic research on materials that could lead to improvements on energy efficiency. So I think I've taken up my time, but in summary, I guess I'd just like to say that I thought your talk was very interesting. I think, like I stepped back at it and think of it from kind of the, how do we measure these trade-offs and how do we think about policies in kind of a practical way? Thanks, Teri. And after we hear from Jim, I will ask Skip whether he's got some comments back too, as well, because I think that could be very interesting. Jim? Thanks. Skip, as always, your talks are very provocative and interesting. And fun. Fun, you know. They can always count on Skip for, like, a Gary Larson cartoon or two. Normally, if you get three economists at a table, you're guaranteed to have at least four opinions. And I feel like we're kind of short changing you on this a little bit, because I think we probably have it best one and a half, I don't know. And that always makes it difficult to respond. I could just say, Skip, I agree with everything you had to say. Let's go have a drink. That might be better. But I don't think it's sufficient. And it's always also tough talking to Skip and about his work, because he takes such a broad view that it's sometimes hard to get your mind around the whole issue. And so I think my natural response is to narrow it down into some things that I can speak better about and sort of the two, which are a large part of what you talked about, for me, our energy efficiency and climate change, right? And two things that I think about on a daily basis. But to state at the big picture level for just a minute, the problem that you point out is sort of the perennial economic problem, which is how do we align narrowly defined economic interests with broadly defined economic wellbeing? So it's easy for all of us to decide, well, I'm gonna go drive my car to EESI or whatever it is, because that's what's best for me right now. Gasoline's not exactly cheap, but I can afford it. I'm gonna go, it's gonna be a great talk. Whereas obviously globally, that might not be the best thing to do. If we all started doing that, it creates a problem. And the narrow view, if we talk about something more serious, like the electricity system, the narrow view is utilities doing their best to maximize their profits, to earn a return for their shareholders. That's their job, and through their business and their interactions with policy makers and those who regulate them, their objective is to get the largest slice of the pie that they can. Whereas, you talk to someone like Skip, the objective is more how do we guarantee that the pie is as large as it can be? And in some cases, that means most people get a bigger slice, but in some cases, people get a smaller slice. We're gonna use less fossil fuels, certainly people who own, produce, and sell fossil fuels. It's a hard sell, and I've tried it, to talk to coal miners and tell them that we need to leave that stuff in the ground, right? So it's a problem, not just of economics, but also of politics and of communication. And putting a heart in it is not something that economists are well known for doing, but putting a heart in it is important. It would be irresponsible, I think, if we put a price on carbon that was high enough to bend the curve to where it needs to be, and then walk away. Putting a price on carbon is probably the single most important thing you can do. We used to have these fights 20 years ago. What's better? Is it a carbon tax? Is it a cap and trade? Is it cap and dividend? And we could argue ourselves around and around and around for hours on end. And at the end, we would all agree that the first thing we wanted to have was a price on carbon, one way or another. And we'd worry about the rest of labor. That was maybe 80% of the problem. And what we do with the money is maybe the last 20% or how we issue the permits or how do we recycle the remnants or whatever it is. So yes, step one, putting a price on carbon is the number one solution that we could have for climate change. But doing just that and walking away is almost criminally insufficient because you talk about Adam Smith and people making invisible hand choices. Years ago, I was the executive director of a group called Renew Fighting Progress, which before I got there was well known for creating and popularizing the concept of the ecological footprint. And just before I got there, they had gone through this exercise of making an online footprint calculator. This was sort of the early days of the internet. It was a little bit rudimentary in how it worked. Websites are much nicer now, but you could log in from anywhere around the world and put in your information. It would tell you what is your, how many square feet of the earth are you consuming? And if you dug into the spreadsheet, I don't think I'm hurting anyone's feelings or giving away trade secrets. It'll tell you that if you lived in America and if you lived in Australia and put in the exact same information, you would get two different numbers because living in America guarantees almost, on average, that you have a larger ecological footprint than an Australian. And we had people fiddle around with it and put this in there and say, well, why is this the case? And we say, well, listen, I'm sorry to say there are factors, there are institutions, economics, we call them institutions, that limit what your possibilities are, right? And these are laws, they're regulations, the way we do our electricity system. So, putting a price on carbon may be necessary, but I think it's certainly insufficient to get us where we need to go. And worse than that, as Terry mentioned, for a long time we've been sort of going in the wrong direction. Not only we've not been putting a price on carbon, in many ways we've been subsidizing carbon emissions. You know, one example we know from work done by my colleagues at ACEEE is that electricity utilities can deliver, can deliver energy efficiency at a lower cost, in many cases, than they can deliver electricity. But the most simplistic, the straightforward view of the electricity utility is that their job is to sell you electricity. They don't, unless you do something to change the institutions, to change the regulations, the contracts, and the basic utility business model, they don't get paid to help you save money, or at least they did. And so it requires a lot of work and a lot of effort to create a new business model, and we have a lot of talk about utility business model, version 2.0 or 3.0 or wherever we are, on how do we do this? But we still face the problem that these electricity utilities own and operate large facilities that represent a huge, from the national, you know, nationwide context, a huge investment in machines that were meant to burn coal and gas and generate electricity. So, you know, part of what you also brought up, Skip, is an issue of framing, moving energy efficiency away from that terminology more towards resource productivity, which I think is incredibly useful. I think it's also very useful to change this frame a little bit, away from the abstract of carbon emissions, or whatever, to a problem of waste disposal, right? If you drive your car for a mile, you've admitted, you know, roughly depending on your car, a pound of CO2. And if you had to carry with you, imagine a bag of sand, a one pound bag of sand for every mile you drove, and when you got to where you were going, it was your responsibility to get rid of that, right? That would be a much different perception of this problem than invisible, mostly, gas coming out of your tailpipe. And along the issue of framing, again sticking to climate change, if you wish to mine coal in the U.S., most likely you're gonna go dig it out of Wyoming. And to do that, you have to pay a royalty to the federal government and to the state because for the right to mine that coal, because most of that is on federal land, and, or a lot of it is anyway, and the Bureau of Land Management has a responsibility in law to make sure that their lands are put to the best of you. So they are required to sell their right to mine this coal to people who want it, but they are required to get a fair price for it. Once you've dug up the coal, and by the way, they have to pay for the most part before they start digging, which sometimes takes 10 years. So they have to pay well in advance for their right to mine that coal. So you can't just say, I might do this at some point and I'll pay you someday. You know, they have to pay it up front. Perhaps there's a way of reframing this issue as another one of ownership. We own those lands in common and the federal government manages it for us. Well, what about this sand? Who owns the place that you're gonna put all this sand, this waste disposal problem? Maybe we need to sell the royalties of the air that we own in common and its ability to absorb all that sand that's coming out of our tailpipes, that invisible sand. So, you know, those are sort of my thoughts and reactions to your stuff, Skip. I will say finally, although, obviously we are not advancing as quickly as we might like in terms of energy efficiency. I did some calculations six months ago or a year ago. So trying to figure out what was the economic value of energy efficiency over the long term and since 1980, for whatever reason you may attribute it to, our advances in energy efficiency from policy and just from technological progress have probably saved the economy something along the magnitude of the cost of the Great Recession in 2008, 2009. So roughly once a generation, energy efficiency can help us avoid the cost of a Great Recession. That's a pretty good bang for the buck. And I don't think we have exploited anything like all of the cost-effective energy efficiency possibilities that there are out there. And so, once again, going back to institutions, how do we drive that, I think, is the next question. Another great analogy. Do you want a response? Yeah, a couple of thoughts. I would say if we're dealing to use Jim's analogy we maybe have 1.5, I'd say at the level of efficiency, pure end-use efficiency. We're probably closer to 1.1, but it's when we break out into the larger, as you're suggesting, my larger perspective that where I think we might go to two or 2.1 or something like that in terms of difference. But I'm reminded of a couple of things. I've had the pleasure of working in France. In Northern France there's a town of Lusongouel about 45 minutes from Lille. Lille is the capital of our region there now called Haut de France. About six million people, about an hour by train to Brussels kind of on the northern border. The town is like 6,000, 7,000 people. Used to be a coal mining town. They quit mining coal in the 80s. And where the miners used to assemble for their shift now sits a world-class educational facility that teaches people how to upgrade buildings and industry with much greater efficiency and using renewables both in design, installing, maintaining over time. Where they used to assemble a world-class educational facility teaching something entirely different. Where the miners used to go in the hole in the ground. Now sits a world-class art museum. It is such a good museum I've physically been in. I've seen the art. It is such a high quality museum. No longer where they go in the hole but you go into the art museum and the Louvre thinks so highly of it that they use it to store their overflow art because they're worried about if you've been to the Louvre a lot of it's underground and affected by the river sin and they're worried about flooding. So use it as an overflow storage area. That is such a complete difference that they tackle because they begin asking different questions. And I think we're still stuck on some of yesterday's perspective on energy efficiency. We've got to break out to the larger opportunity. But that gets to the question I think of what you alluded to which is the need for new institutional arrangements, new business models. Part of that has got to be the rebooting of a real understanding. This is not just a nice thing to do if you have a few dollars lying around or some time or some staff you want to train to do something fun. This is a critical social economic imperative because there is clear evidence that returns are diminishing. And if we want to provide jobs, we want to provide income. We need to think about the long term perspective and bring forward this whole idea of a robust social economic wellbeing that's sustainable over time. That means we have to do a reboot but then accompanying that. So part of the question is to get people begin asking questions like that so loose on the well, art museum or coal mining? We can start asking questions like that if we choose to do that and understanding the opportunity is hugely there if we choose to step back and explore that. But we need new institutions, we need new business models. So the utilities, let's use that as an example. Totally agreed with you. Right now we have what I call a commodity based business model. The sale of electricity in exchange for some sensor dollars are on a monthly basis, commodity based. We need to move away from a commodity based to a value added service that generates revenues as a result of the service provided. Sometimes it may be a sale of electricity but more often it may be the opportunity to provide wellbeing in other ways. We can use utility infrastructure, for example, to hang sensors off of their wires so they can read traffic real time and then we can adjust traffic flows dynamically so that we don't have people sitting idle at intersections wasting five or six or 10% of our gasoline by sitting at intersections or logged in with vehicles jammed up against one another but using their equipment to have sensors that we can dynamically program street lights that make these adjustments and make the traffic flow better which saves on energy. Or sometimes we can use their infrastructure to hang sensors, we call them shot spotters where the police uses the sound off of these to within seconds identify where a gunshot came from. That requires stepping back and asking new questions and new ways to generate revenues and then to have this larger social wellbeing implanted whether through legislation, absolutely or whether through a better understanding. I talked to the mayor of Rockford, Illinois, gave a talk there not too long ago and we went out and discussed and he says, you know, skip the sad part of it is really good ideas, but people don't even know where sidewalks come from. And if they don't really understand the fundamentals of basic infrastructure in an economy, how the heck are they going to understand things like energy efficiency and climate and, you know, new business models? So we have to integrate, we think we may need to introduce things like home economics not just for women. I actually one of the few men took economics as a junior in high school but to reintroduce not just the fundamentals of cooking and maintaining a home but budgeting, checkbooks, community involvement, connection and how you are tied to the wellbeing of your neighborhood or your larger city or a county, what have you. So there needs to be an educational process that brings it forward. And the sad part of it is we don't have a next generation, we've got 12 years, we've got to 23, we've got 11 years now. So the question is how to elevate that dialogue and how to open up the thinking and the imagination in ways that really can bring forward solutions that get the job done. So you're right, I'm hugely broadly based but that's because I see in the evidence diminishing returns, whether OECD countries, whether developing nations, that we are gonna be hitting a wall of hurt unless we begin doing things differently and we're gonna have even more people disaffected and our social fabric will become frayed and fragmented and we're gonna be too busy fighting each other across these solutions and working together. So how to take what both you and Terry have said, which I agree with on the small scale, absolutely critical issues, but how to bring it forward so that we are aware of the imperative of doing this at scale and in climate time. Thank you and it just seems to me that again, how important it is to really think broadly because all of these things really are interconnected and if we think broadly, we enhance our chances of finding multiple benefits, which therefore really improves the overall economic and social well-being even in a greater way. So let's open it up for your questions, comments. Let's get a good discussion going. Okay, Tina, do you wanna start? Yeah, how do you talk about irreversibility, which is one of the problems with climate change is that we might pass a threshold from which we cannot return, and that would seem to have some quantitative economic impacts or ways to bring it to heart. I guess I'd have to ask you skip this and all of you, how would you get on in many ways bring the irreversibility of some of the problems we're facing? That's a damn good question. If I could use- Do you wanna repeat that a little bit because then, yeah, wait for the mic. The next time around, but Tina's question was about irreversibility. How do you quantify that and how do you frame the debate so people realize that we have an irreversible problem? At some point, we're gonna not be able to recover and that has a cost and there must be a way to monetize that and develop strategies accordingly at all different scales. I've got a two-part answer to that. Real good question, very important question. We need to move away from purely mitigation strategies, design strategies to mitigation and adaptation together. In other words, we need to be thinking how to build the new infrastructure in ways that are more adaptive and can confront what we might think of as irreversible outcomes. So design and adaptation together with mitigation is the way we have to move that forward even as we step back and reimagine our existing infrastructure. We're a $20 trillion economy, the U.S., and we probably have, I don't remember quite the number, but $65 trillion of assets and infrastructure or something on that scale. So we not only have to pay attention to the new but then how to move back to the existing, refurbish and move towards adaptation as well as mitigation strategies that embrace not only energy but materials and resource consumption broadly speaking. The second part of that answer is we've got to wherewithal and I wanna talk about, no, I don't wanna talk about Bitcoin but I wanna talk about blockchain and give you an example because those are tools we could put to work to answer your question, Tina. Blockchain is an electronic ledger, many of you know. It's a way of tracking different accounts, different transactions and what the agreements of those transactions are and whether they've been fulfilled or not. People have access to that information in a real time sort of a way and know what's going on in that fashion. So if we have, and give you this example, I've talked with colleagues in Chicago, Cook County, Illinois. If Cook County were to say to a private landowner if you manage your property in this way, whatever that is, you might save us Cook County $10,000 a year. I will give you, Cook County will give you $6,000 a year as incentive to begin managing your property that way and that could be everything from reduced water requirements, reducing the need for reclaimed water, reduce erosion or air pollution, could be in any number of ways that would save $10,000 a year and then we track that. So we give them $6,000 to incentivize that behavior and then we take $2,000 of that 10, give it back to taxpayers as a benefit to everybody and then take $2,000 to reinvest in new opportunities from there and that becomes the dynamic transaction that we can begin to track and in various ways we can monetize, not only from a dollar standpoint, but there are other ways that we might have some form of cryptocurrency that we can trade off one business to the other, not necessarily Bitcoin, but if you do this, you can buy a good, you can buy our groceries over here and with this on your credit system. That's not the be all end all, but it is clearly the suggestion that we have more in the way of opportunity than we imagine, but we have to sit down and begin talking about it. We have to elevate the vision that it is not just a nice thing to do, but it is a real imperative if we value my daughter's future and she's just starting her career, got maybe 30, 40, 50 years ahead of her and I'm thinking that way. So it's that scale. So adaptation and design, refurbishing existing infrastructure as we then also begin to imagine resource, utilization in more productive ways and then figuring out through things like the blockchain and other techniques to make those returns immediately available so people see it real time. A follow up on that. I'm Brian Eiler from the Stimson Center Southeast Asia program and I work with developing countries on promoting the renewable energy revolution and transition in those countries. So countries, for example, Southeast Asia can transition away from both coal and large hydro, which is ecologically damaging in certain river basins in Southeast Asia like the Mekong River Basin. And we often talk about lock-in, which gets to your point of irreversibility, but choosing now today to bring forward six coal-fired power plants where seven years from now, we're looking at a horizon where storage is just over the horizon that can bring non-hydro-power renewables really into parity in a very competitive sense with everything else that's out there. Just some coaching or techniques to use for these policy discussions or with utilities on how to avoid lock-in, how to move forward gradually with power expansion capacity, when that brighter future is just around the corner. That's a darn good question. I would answer by reminding we are gonna need to go in negative emissions, first of all. We're gonna need to incorporate that. We don't have a lot of choice. If we gotta be, according to my colleagues with the IPCC 1.5 degrees C report, 2050 we gotta be reduced by half. We don't have the institutional wherewithal to move on efficiency renewables and resources alone. So we're gonna have to go negative. So that's part one. And that may be part of a glide path that we have to establish a longer term haul over time which we integrate these strategies in ways that meet immediate new demands but then slowly replace current infrastructure, current demands. So that's item one. But then we need to be thinking about what I would call modular and multi-purpose in whatever we design. So a functional thing we call a building could quickly be rearranged to do something entirely different. When we think about this building sits idle more than it does not. How we could use this building more vitally by quickly adapting it to new needs within an hour, within 15 minutes even if we wanna do. So modular and multifunctional so that devices can do three or four things at once. We have the wherewithal, we have the engineering whether from electronics or through materials design. That begins to bias flexibility and leverage as we then reduce the resource input because of those two things. At the same time, I think I don't know what the Asian countries do but in the US with depreciation we need to be thinking about depreciation not over 30 or 50 years but over 10 or 15 years. So that as we depreciate something we're more likely willing to invest in the new thing that comes along when it's available to us rather than try to write it out for 30 years and worry about what we're missing kind of a thing. So those are some of the things. That's not a quick solution but it is a forward-looking framing of the solution that we need immediate engagement. I talked to the House Natural Resources Committee earlier this week, the new staff as the majority staff is going over there and I just kind of hung my head. It was pretty optimistic and pretty enthusiastic in talking with them but they were telling me they've got two years of stuff of backlog of stuff to think through before they can even think about climate or even think about alternative things other than supply from public lands. We don't have two years. How is it we can elevate the discussion more quickly and then bring people in with sufficient salary and income to help us think through and move on this to begin putting these things in place piece by piece. The Japanese have a thing called little by little. You can't do it all at once but by golly you can begin putting pieces of it together in a way that build up new opportunities. I thinking of the PV systems back in the 80s everybody was saying PV won't pay for itself for 20 or 30 years so we're not gonna invest in it real fast. The Japanese did a very smart thing. They said well PV won't pay for itself for 20 or 30 years but we can start making devices like calculators that integrate PV into the calculator that we can sell. Hats and other toys. They begin making money off of that that funneled back in to the design of the smarter more productive PV systems. It's that functional capacity stepping back and asking the bigger questions that come up with these bit by bit changes over time that add up. So it's a combination I'd say rapid depreciation using multifunctional and modular design that allows us to move out ahead and slowly we can begin to piece it together I think. But we gotta ask the questions first. Can I? Sure. Can I get a question or interrupt something here? I mean I think those are all interesting ideas but what's the motivator to get people to think about those things? I mean if we had to pick one thing it seems to me that what Jim has indicated is a thing to put a price on carbon. I mean to me it does kind of, if you don't have sufficient economic incentives to think about those things what motivates these changes? Institutional or otherwise? Good question. I've talked with people, I've been in France, talked with the Gilles Jean, the Yellow Vest movement. And the thing that triggered that whole thing was the price on petrol. Triggered that whole thing. Which is my point. So part of the motivation but I'll also talk with them and I've translated their demands and their demands are much along the lines we're talking about. Better income, better connectivity, better appreciation for the work they're doing, better community facilities, better transit things like that. And even yes they're totally in support of climate type targets but they need to see all of those things happening first. So the motivator I think in my way of thinking about it is the need to understand this is not just a climate thing, it's not just efficiency gain here, it is the well-being and the robustness of our economy over the long term and how to get that because we're seeing the slow erosion now and we want to avoid that. That's step one. Yeah, Jim? To try to answer your question more explicitly and I don't know how it works in Asia. It's hard enough to understand how it works in America, how we sell electricity. But basically under the traditional model utility would look at its needs for the future and say okay we want to build a big coal-fired power plant or dam and they have to ask permission basically so that they can get the money and they're going to put all this money up front and they're going to borrow it and they're going to have to get paid back through utilities. And what you're seeing increasingly in the US is regulators saying no. You build a coal-fired power plant and the nameplate life on that is maybe 30 years. Last time I looked and it's been a while there were coal-fired power plants that were over 60 years old that were still running and they just extend the life. So the regulators and everyone else have sort of caught on to the fact that these are generational, multi-generational assets that if you say yes now you're basically promising these people that they're going to be able to continue to run them for 30 to 60 years. So if we're talking about a timeframe of a dozen years a coal-fired power plant doesn't make sense if you're only going to run it for 12 years and then after shut it it's just, you can't economically, you'd have to charge so much for the power it wouldn't work out. So to a certain extent regulators are seeing that and they're saying no, there's a cheaper way to get where your customers want you to go. It may not be the one that makes you the utility of the most money but it is the one that's better overall. So I think short of a price on carbon which I think we're well short of right now managing the other institutions like that I think are critical but the relationship between how we create power and who creates it and who buys it. Okay there are several questions will go clear to the back first and then we'll come up to Bill and then over here and while that's getting there I was just going to say and there are bills being introduced on both sides of the hill with regard to thinking about carbon and pricing and what I think is also really interesting is how there has been a lot of demand for cleaner energy that we are seeing so that we are seeing the whole power sector really turned on its head in terms of what's been happening both in terms of the prices of technology really coming down and people wanting cleaner energy which also creates another interesting dynamic in terms of this fast changing world. Okay back here. Thank you my name is Noah I'm from the Singapore Embassy here in DC. I just wanted to ask about the Green New Deal and this proposal that's making its rounds in the media as well as Congress. Just what is could you just explain what this means and is it even feasible both politically and technically is it like something is realistic and can be achieved within the next few years actually decarbonize the US economy. Thanks. Yeah I can't say I'm an expert in the Green New Deal but I have read in the Washington Post they published something like 11 different suggestions of how to implement that. I think it's done good start that's what I said if we could do a carbon based set of policies or green set of policies only we may get 80% of the way where we need to be but we need to elevate performance well beyond and it is A largely a supply side focus very little on energy efficiency, energy productivity, resource productivity that sort of thing. And B other than setting a carbon targets and perhaps a carbon price signal there's not much in the way of institutional transformation to really enable. C we've got 12 years 11 years to really go big that means we're gonna need to integrate more like negative emissions capacity to begin buying us a little bit of time and a little bit of solution even as we then pick up speed for these other things. But finally I'm a little bit worried. Yes I'm an economist and yes I believe the price signal is important but I don't think we can use carbon charge to raise the kind of capital or provide the kind of signal we need when we got a $65 trillion infrastructure to turn over in a short period of time. It may be part of the solution but here's part of the problem. We need price as a signal, no question about it I buy that but if we haven't conditioned the market or changed the institutional arrangements or brought in a better awareness among communities and businesses that price signal will become a punishment because the market won't be able to help you respond to that price signal quickly enough and it's gonna be a lot of pain that is what triggered the Gilets jaunes because they couldn't respond in ways with even a very modest increase on the cost of petrol in France. And we've seen the same thing in Mexico earlier and not too long ago, the same kind of thing. So we need to condition the market, we need to condition the expectations and the understanding in some new ways, convey the message, doing things that allow some immediate actions and then maybe begin slowly introducing a signal over time, not immediately but as part of an ongoing dialogue where things and people begin to see things are happening and they might sit up and say oh maybe we do need to do something like this because if they raise this price over here I can make changes that improve my community, my household, my quality of life. Okay, and I wanted to ask, Terry did you wanna add anything? Okay, because I would, I'm curious also whether CBO is starting to hear things about the Green Deal, New Green Deal. Okay, let's go here first and then we'll go to you, okay. Yeah, this is Bill Brandon. I'm gonna kind of ask a question about technology, not so much about policy and that sort of thing. Of the energy inefficiency that we have, have you tried to quantify anything in relationship to what I would call material modifications? Now as an example, let's say we were sitting here a hundred or 150 years ago. We would be sitting on some sort of a wooden chair with a horse hide cover on it. That's about three years old back then. But today we're sitting on something that has the material has been transformed using a lot of energy. And there are technologies, I would point out something like biomasin, where there's a biological process to make essentially concrete. And when you're, like I am involved in the biological material area or follow it anyway, there seems to be a lot of opportunity there. But when you start talking about a short timeframe, are you precluding the lead time necessary to roll out new technologies? Yes, the use of a coal-fired power plant that needs to be magnetized over 60 years doesn't work. But how are you able to incorporate emerging technologies that are not that quickly developing? Real good question. And I'll go back to my comment about the need for a glide path. Informed by a better understanding of the imperative that this is not just something to do because we're gonna respond to climate, but because there is a large social economic wellbeing at stake and we need to start acting at scale and in climate time. So we need a glide path where today we may do things we know how to do. We've got LED lighting. There's no reason why we can't move out very aggressively in that front. That would begin saving a lot of electricity almost immediately. We can begin ramping up fuel economy standards again. We can begin improving industrial processes in new ways that are available to us, but we haven't seen the signal, seen the mandate, seen the awareness and the need for that to happen. So a combination of a glide path that begins to integrate negative emissions now to start buying us a little bit more time, start bringing down the concentrations, begin doing those things that are easy to do that we already know and are available that by themselves can achieve fairly significant results over a short period of time, that then funding the kind of things that you're talking about that lead to better materialization, more productive use of materials resources, but maybe 15 years from now, not today, but because we're taking actions in a step sequence that makes sense as part of a glide path and investing in the strategies, investing in the businesses, investing in the startups that bring forward the kinds of things you're talking about, we've got the capacity to do that. So it needs a glide path, step by step function, do things today we can, enable those things tomorrow to build on the successes as they begin to unfold. And hopefully each thing will help catalyze other actions as well. Good comment. Okay, back here first, and then we'll go to Terry. Okay, thank you. Stephen Han from China Chamber of International Commerce for the rep office here in DC. And I think this panel is really inspiring for me and I learned a lot, especially from the PBT, Mr. Legendary presented to us. And I come from China, I have a question concerning the China's economic reforms. To me, I think the global economy is just like a circle. The economic development and then pollution and economic development and then management. So I don't know whether, you have mentioned a lot about France, Mexico and the US, but you touched a little about China. So China is now undergoing the economic reform, especially in the year 2019, many economists predict that China may suffer a lot compared to the former years. So, but I think weeks ago I looked to, from the national media, I saw that the national media interviewed at the local county in China, they doing kind of research or survey into the county steel factory because the central government in China is now trying to cut down the over capacity of steel. But the local level, in the provincial or county level, there are still many steel factories, steel factory manufacturing disobeyed the central government's policy. When the reporter come to the steel factory interviewing the manager there, the manager said, we cannot do that, we cannot cut down the capacity because it means jobs. How can we change the local economy if we shut down the steel factory? As you mentioned about the France, how the people can really think out of the box, how to, you mentioned a word I think is very important to change the business model. So I think China nowadays really have to learn from the US how to change the business model, not only for the local level but the whole country how to change the business level for itself. So from your perspective, have you doing some research on China's economy or you have any suggestion that China can learn from America? You know, in town people think that the US is trying to contain China, but I strongly believe it's not the purpose for the US, how we can learn from each other, and especially what China can learn from the US from your perspective, thank you very much. No, that's an important question. In fact, I admire some of the steps China has been undertaking with regard to its transition to a more efficient economy at all levels, not just energy but in other materials as well. And in fact, I think you put your finger on it, how we can learn from each other. And that is the critical issue, not how you can learn from us or how we can learn from you but how we can interact in a way that we learn from each other, but that requires a common agreement. We could call it the Paris Agreement as step one, for example, and when the Obama administration was in place, China and the US were together on climate to try to get to the 1.5 degree target, very productive discussion. So I think setting up, and this is what we've been doing with our colleagues in Japan is quite an interactive discussion, stepping back, asking the hard questions, but there has to be a buildup of trust on the one hand, an agreement that this is something that affects the global economy, not any one individual economy, whether Mexico, France or China, and then how we can begin much more co-operatively moving to benefit and learn from each other. And then as I suggested and answered the other question before, what kind of agreed upon glide path might we reach so that we can take steps, China on its own, the US on its own, but the US and China together through trade agreements and other kind of agreements, what steps we can take today that we know are there that buy us a little bit more time to give us the luxury of learning and introducing new innovations and I think you put your key on it, management. That is what is going to really make all of this possible, how well we manage in this collaborative, this cooperative way of thinking is going to be the key to success. So some hard work ahead, you're asking good questions and we can hardly answer all of them today, but I think it's in the spirit of US, China cooperation, global cooperation because this is not something just fun to do or nice to do, but we really do depend on the success of this kind of thinking. Great, we'll take one last question and then, so Terry, go ahead. Thanks Carol, I'm Terry Hill, I'm with the Passive House Institute and the Emerge Alliance. One is energy efficient buildings, the other is bringing back direct current. When you put those two together, solar, battery, direct current appliances, you got a very energy efficient building. Tie them together in a city block with a direct current micro grid and you got the basis for a total redesign of the grid. One thing that I keep looking at is there are four billion people out there without adequate electricity, access to reliable electricity, still cooking with fossil fuels and then the other thing is still not access to the internet. So four billion, it's a huge market and building out a traditional utility grid is not gonna cut it. So it's gonna come with direct current micro grids and but the cost of that today is too high for the developing world to afford. So the US has the technology and the capability to drive that cost down and to supply that market. China's looking at it, Europe's looking at it, but I don't see anybody in this country looking at it, frankly, they wanna put in AC systems but we need to drive the direct current systems down. So it's a huge market, there's 325 million people in this country, four billion out there that are waiting for some sort of service and it's a huge potential market. So by the way, Carol, thank you for this, the most exciting presentation ESI from my point of view has ever put on. Oh my God. But it's just from my point of view. It's just from my point of view. That's totally, and sign me up. So I just also wanted to mention with regard to thinking about direct current, I just wanna mention that John Topping is here who is the president of the Climate Institute because Climate Institute has been doing a lot of work in terms of thinking about the whole role of direct current in terms of like a super grid as a way to really, as we think about more and more electrification of the economy to really both decarbonize but also to improve its efficiency across sectors is a really important thing. So you might wanna follow up with John who's right over here afterwards. But do you wanna make a final comment? And then we've got some light refreshments over here so that we can all kind of really talk to and socialize a bit too. Because that's all part of rebooting. What I'm hopeful is that the discussion we've had here, the three of us and Carol's comments as well and the questions from you, I would rather see not so much immediate focus on specific chunks or items or technical details but how this discussion here today might inspire a higher level of discussion whether we bring in things like music, drama, art, as well as new ways of communicating through videos and other things like that, new images, infographics that begin helping people understand the importance of this so that we really pull together more of a groundswell understanding this need. And from that discussion very quickly then we begin putting in some of the comments we've all built on here today. So I just wanna leave you with one thought. I'm not a singer, you don't know this but I put myself through college building sets for operas, believe it or not. I love opera but I also like country and western and one of my favorite singers, Merle Haggard died about two years ago and he wrote a song in 1979, 1980 called Rainbow Stew. I'm trying to suggest this as a theme song for a lot of what we're talking about and the one verse is when they learn how to burn water and the gasoline car is gone and airplane flies without any fuel and the sunlight heats our home one of these days when the air clears up and the sun comes shining through we'll all be drinking that free bubble up and eating that rainbow stew. That's the kind of messaging I think we need to begin imparting in many, many different ways not just on graphs and numbers. So with that, how about a drink? And I say here, here, absolutely. Thank you. So thank you all so much for being here. Do stick around and we can all learn to sing this together. And it's a chance for everybody to share comments, thoughts because obviously we're looking at enormous challenges but there are also enormous opportunities that can result in just making so many things better all the way around. So here's to a happy new year maybe all be super productive, get lots done and thank you for kicking us off in this rebooting way. Thanks a whole lot. So over here folks. Thank you.