 Good afternoon, everyone. My name is Carol Werner. I'm the executive director of the Environmental and Energy Study Institute. We are glad to welcome you to this afternoon's briefing on the topic of can the United States achieve a low-carbon economy by 2050. As we know, there have been many discussions around carbon technologies, carbon pathways, carbon questions. What does this mean with regard to thinking about greenhouse, overall greenhouse emissions? What does it mean with regard to thinking about international climate negotiations? What does it mean for the US economy? What does it mean for business development? What does it mean with regard to domestic and also global competitiveness? So while on the one hand, there is much discussion in Washington and around the country around these all sorts of related topics with regard to looking at energy, with regard to looking at our kinds of energy and policy discussions and looking at what this means for the future direction of the country and indeed of the administration, at the same time there has been enormous work that has gone on across the country and across all sectors with regard to these important issues. There are also important trends that we are seeing domestically and ending globally as we look at what has been happening as a result of companies at the private sector becoming ever more efficient, ever more competitive as we look at the results of research development and deployment initiatives across this country, across the world as we look at the growing investments among a number of nations in terms of their commitments with regard to the need to address R&D and their feeling that it is a very important part of their future and all of these issues are things that are important for us to be thinking about, to be asking questions about and so this afternoon we are very fortunate that to have the principles behind are involved in a couple important studies that were released last fall to be here to discuss these particular studies. One was done through the private sector called from risk to return investing in a clean energy economy. The second one was done by the U.S. government and is called the United States mid-century strategy for deep decarbonization. So we are going to hear a discussion presentations on these two reports from Dr. Carl Hosker and Dr. Noah Kaufman as they discuss the pathways that are laid out the options, the alternatives that are looked at that are examined closely within these two reports the approaches made and the kinds of alternatives that there are available and of course I think we always are surprised at how new options and alternatives do keep evolving as well and I think you will find this to be a very provocative and helpful discussion as we look towards what are some of the ways pathways forward what can we kind of expect as we start to dig into what kinds of options really are available what are the trends that we are seeing and and it gives you an opportunity to ask questions about indeed what might make sense for this country and indeed our globe as our Global partners as we move forward. So I first want to introduce Dr. Carl Hosker who is a senior fellow with the World Resources Institute. Carl is a senior fellow in WRI's global climate program where he is working on all sorts of domestic climate mitigation scenarios and as well as looking at the social cost of carbon and also the very important issue of energy access. Carl brings decades of experience to his energy and climate work. He has been involved in both the legislative and executive branches. He's also been in the private sector in terms of research institutes as well as with NGOs. He previously had served as vice president at ICF International and the deputy director of the Center for Climate Strategies and a deputy assistant administrator in EPA's policy office and in the Clinton administration and of course I first ran across Carl when he was the chief economist for the Senate's Energy and Natural Resources Committee. Dr. Noah Kauffman is a climate economist also with WRI and he is in the Climate Initiative. He's an economist for the Climate Initiative in the Global Climate Program, working on the economic impacts of climate change where he too is focusing on carbon pricing, all sorts of other market-based solutions, how they might work together. And he previously was the deputy associate director of energy and climate change at the White House Council on Environmental Quality, CEQ, where he was intricately involved in the production of this report that we're going to hear about in terms of the US mid-century strategy for deep carbonization. So Carl and Noah, the podium is yours. Thank you Carol and thank you everyone for coming out today. The especially I'm glad we have this audience to pay attention to the long-run aspects of this issue. So the the 800-pound gorilla in the room is what's going to happen in the next four years. It's hard to say exactly what's going to happen, but I can say one thing, the science will not change. This problem is not going to go away no matter what happens over the next four years. So looking toward where the country needs to go in the long run, I'm going to cover this new report by the Risky Business Project called From Risk to Return. I'll touch on the goals of the project, the analytic approach we took, what's called the three pillars of long-run decarbonization, the four different pathways we looked at to get there. Summarize the key report findings and some implementation challenges and also touch on the policy recommendations both for government and for the private sector. I should mention I'm going to go very fast in my 20 minutes today before NOAA takes over and then we have some questions. We have the full 70-page report up on the web, but also a real wealth of other interactive web features that lets you do deep dives into the modeling and the analysis and the conclusions. So first, what is where did this report come from? Many of you probably know about the Risky Business Project, started, I believe, in 2013 by Tom Steyer, Michael Bloomberg, and Hank Paulson. They put out a report in 2014 called Risky Business, which was the most detailed, quantified look at the impacts of climate change that were going to be experienced by the United States if we keep on our present trajectory. They looked at the physical impacts. They did the most careful monetization of those impacts as well. Now, in late 2016, we completed a report looking at the mitigation side. What do we need to do to address these risks? How can we transition the U.S. economy to a low-carbon, deep-decarbonized economy? And very happy that they engage World Resources Institute to lead this project. And we were very happy to help disseminate the results. Now, as probably most of you know in this room, to seriously address climate change, you need to reduce greenhouse gas emissions worldwide by 80 percent or more. And so we looked at a scenario of where the U.S. would reduce emissions by 80 percent. Our report just looked at carbon dioxide emissions from the energy sector. It's obviously a broader task to tackle all greenhouse gases, and you're going to hear from Noah later how the U.S. government report looked across all gases. But the risky business report looked at just how do we reduce 80 percent of CO2 emissions from the energy sector. We asked, can we do this technologically? Is it economically feasible? Is it manageable to do that between now and 2050? And happy to say the answer was very positive that this is well within our grasp. Although, yes, there are implementation challenges to getting there, and we'll discuss those toward the end. The analytic approach we took was to use something called the Pathways Model, which is a very detailed stock accounting and technology adoption model developed by a company called E3 out in San Francisco. It was also used a couple years ago in what's called the Deep Decarbonization Pathways Project, a consortium of institutes that looked at about 15 different countries and the paths they could take to a low carbon economy. Our modeling used as a base case, the 2015 reference case from EIA's annual outlook, annual energy outlook. We put together a total of four different pathways that could get us to that 80 percent reduction, which was a very important point that there's no single path or single silver bullet that solves this problem. But there are multiple pathways we can take. And the model also has a deep richness, not only in technologies and end use, but can also look at nine different census regions in the U.S. to get a feel for how this could play out across different regions and their energy bases. Beyond the modeling using pathways, we also looked at a series of these in-depth discussion of implementation issues, which builds on previous studies in this area, we also explored in a case study the potential impact of the growth of autonomous vehicles, which seems to be really taking off. What are the implications for climate? What are the implications for the total cost of the transportation sector and delivering the mobility that Americans want? And finally, we added some case studies on some of the early steps toward the low energy economy. And again, you'll find these on the website. I think you'll find they are very rich in detail. So let me turn next to what we call the three pillars of decarbonizing an economy. These are true for our report. You'll see that they're true for NOAA's report and virtually all the studies in this area. What do you need to do to squeeze down carbon emissions? There is a laser point here. The first pillar is that you need to switch as many possible end uses from the combustion of fossil fuels to the use of electricity or to the use of fuels generated by electricity, such as hydrogen. You could produce hydrogen using electricity or synthetic nothing. The second pillar is if you're going to produce all that electricity and back out fossil fuels, of course, you have to decarbonize the generation of that electricity, turning to low or zero sources. And we have many to choose from. We have nuclear power. We have fossil power with carbon capture sequestration. And then we have a plethora of renewable energy technologies from wind to solar to solar thermal to geothermal and hydro, et cetera. The third pillar is whatever you do, you need to be as energy efficient across all of these applications as possible. And so when we ran our model and applied these three pillars, we were able to take the current like total energy use represented by electricity and take it from about 23% to more than doubling it to 51% of total end use energy delivered by electricity, reducing the fossil fuel combustion. By switching out of carbon intensive sources, we were able to dramatically drop the carbon intensity of generating electricity from over 500 kilograms per kilograms of CO2 per megawatt hour currently to down to about two kilograms. And finally, on the electricity, on the energy efficiency front, we could model pathways where we could go from using about 3.4 megajoules of energy per dollar of GDP and cut that by two thirds down to about one megajoule. So those are kind of some of the big metrics on what the model was able to show if we changed our technologies and our fuel mix. So what does that do to primary energy use when you make those kinds of changes? In this chart, we show where we are now in 2015 on fossil use, non-fossil use, and the use of hydrogen and synthetic gas. And then the second bars is where we could be in 2050 under one of our pathways called the mixed resources pathway. And not surprisingly right now, our total primary energy use is dominated by coal, natural gas, and oil. And then with some contributions from biofuels, this is the form of ethanol, largely nuclear, and we see some wind and solar coming in. Well, when we apply the three pillars and back out a lot of fossil fuel use from various end uses, we can shrink coal use down to a very tiny sliver of what it is currently. We shrink oil use down dramatically because of switching over to electricity or hydrogen in the transport sector. And then there's still a fairly big use of natural gas in the power sector with carbon capture and also in certain industrial sources that cannot be switched to electricity. Over on the non-fossil fuel energy side, we see increases in the use of nuclear. We see increases in the use of wind, solar, biomass. But here's switching out of ethanol into biodiesel, biogas, and more environmentally friendly sources that complete as little as possible with food production. And the other interesting to note here is that in 2015, we used a little bit over 90 quads, quadrillion BTU of energy. And by being energy efficient, we can shrink that to about 80 quads in 2050. Although the reference case had 90 quads and growing, we were able to dramatically bring the total primary energies down from where it would otherwise go in 2050, with population growth and economic growth, you know, assumed at 2%, roughly 2% per year. So that's kind of the big picture of what happens to your big primary energy sources. Let me turn now to description of the four pathways we modeled and some of the other assumptions. We, because there's a range of low-carbon, zero-carbon electricity sources and a range of transportation options, we played with a number of different pathways in the electricity sector, just starting below. We had one scenario in which we had relatively high use of CCS, both on some coal plants and gas plants. We had a relatively high nuclear pathway, a path that relied very heavily on renewables. And then what we called the mixed resources pathway, which was the sort of the most balanced blend of those. And the interesting thing is these weren't, you'll see in a moment when we look at the power sector, these weren't dramatically different mixes, but just mixing a little bit, there's a strong element of renewables in all cases, and there's either maintain or expanding the nuclear fleet across all cases as well. On the transportation side, we looked at a pathway where you'd use a lot of electric vehicles, recharged a lot by renewable sources. We also looked at a scenario that used very heavy use of hydrogen fuel cell vehicles, where the hydrogen was produced by nuclear plants, running pretty much 90, 90% capacity factor, and using the electricity that was not used during the day to produce hydrogen at non-peak times. So we combine those into four pathways. Under all these pathways, this transition requires some capital investment up front, some significant capital investment. And over time, that generates the carbon reductions, and of course, it also generates the fuel savings as you back out the combustion of fossil fuels. We also, in this model, we assumed a natural turnover of capital stock. We didn't retire capital stock early, and that helps on the cost front. We call this seize every opportunity to move to more efficient low carbon technology at the end of the useful life of, say, keep pushing the wrong button. Hot water heaters have a life of about 10 years. Those can turn over three or four times between now and 2050. Space heaters have a little longer life. Vehicles have a life of 15 to 20 years, typically. And so in the model, we didn't suddenly convert to all electric vehicles. We looked at that we did a natural turnover as existing vehicles reached the end of their useful life. Similar with boilers and power plants. Boilers have a life of maybe 25 years. A natural gas combined cycle plant has a life of maybe 30 years. Coal nuclear plants last even longer. We didn't retire any plants or boilers immediately. We waited for the natural end of their lives before the model then switched to the new technology. Residential buildings have a long lifetime, 50, 100 years. There, we didn't tear any building down in the simulation model exercise. Instead, we retrofitted electric water heaters. We retrofitted heat pump HVAC systems. We tightened up building shells, but we didn't replace buildings. What that means is you keep your costs down. Of course, the flip side of that is your emission reductions will come in more gradually than if you had accelerated stock turnover. That's just a pure tradeoff in this type of exercise. So now let me turn to what might this cost. The primary perspective we took at looking at costs is what are the investment needs of making this transition? What are the investment needs of doing a significant substitution of capital and labor for fossil fuel combustion? And this slide summarizes sort of a very top level number. Above the zero line here are billions of dollars, almost all investment in clean energy technologies. Also a little bit of use of biofuels and clean fuels. Mostly capital investment. Below the line are your fuel savings, backing out oil, coal, and in some years backing out natural gas. And then we present decadal averages. What does this cost largely in the 2020s? What are we looking at 2030s, 2040s? So the interesting point brought out in the modeling is that as we get going in the 2020s, it would cost about $215 billion of clean energy investments per year. And then we'd have gradual fuel savings start to accumulate along the line of about $65 billion a year. We move into the 2030s. We're up at about $400 billion a year, 2040s, maybe $360 billion a year in clean energy investments. And here the payoffs really start to come through. You get up to $370 billion of fuel savings on average in the 2030s and approaching $700 billion of fuel savings per year in the 2040s. So the question of course is, these investment numbers, are they big? Are they manageable? Do they tank the economy? An important criterion to apply to that is, how does this compare to the total investment in the economy? Right now we have about an $18 trillion economy, which we expect to gradually grow out to 2050. The portion of investment currently in our economy is about $3 trillion. And so when we think of a $200 billion increase in investment, when we're already spending nearly $3 trillion, it's a couple percent increase in the total investment. But even more importantly, let's look at the total economy. Investment in the total economy as a percentage of GDP has ranges from about 15 to 20 percent historically. It varies up and down years to years depending on economic conditions. So if you boost clean energy investment upwards by 200 billion, 300, 400 billion per year, you're boosting your percentage of the economy devoted to investment from 18 to 19, 19 to 20 percent. This should be manageable within an economy that's already $18 trillion and projected to grow under conservative assumptions to $40 trillion by 2050. Another perspective on investment is to think of the other surges that we've experienced in investment in different sectors. We've had a surge in investment in unconventional oil and gas production in recent years. It surged up well over $100 billion in individual years. We had a big surge of telecom investment in the late 90s, about $700 billion concentrated in five or six years. And even now, we average over $350 billion a year investing in computers, peripherals, software, etc. The whole IT component of the economy of investment is about $350 billion per year. So those are good yardsticks of comparison to think about can the economy absorb this. I'm not going to take you to a very complex chart that's sort of a granular version of those decadal averages that I just talked about. We have, again, billions of dollars spent on the Y-axis and individual years on the X-axis. And what we see, again, above the zero line is your various investments in renewable power plants, nuclear power plants, fossil plants with CCS, oil fuels, more efficient vehicles, synthetic fuels, growing up into the $300 billion, $400 billion range in the 2030s, 2040s. What we see below the zero axis is, of course, the fuel savings in the kind of brownish color, mostly petroleum products saved, some coal saved, and savings in a few conventional power plant capital costs. The black line is the net. Just on a simple dollars in, dollars out, no net present value, no annualization, levelization or any manipulation of those numbers, what will we spend in an individual year on capital costs? What do we save in fuel? As you can see, it peaks out around $200 billion, $250 billion in the early 2030s, and then we get a very positive cash flow in the out years. Another perspective on this, on these annual costs, is to take the capital costs and annualize them, to spread them out over the life of the asset using what's called a capital recovery factor. This mimics a little bit more how certainly the flow of investment funds back to bondholders and equity holders over time, rather than just the straight dollars out the door to build a wind turbine or to build a nuclear plant. When you annualize those costs and spread them over the life of these capital assets, you get smoother curves, of course. Again, here's all your clean energy investments gradually rising as capital stock turns over, and then your fuel cost savings, looking very much like the previous chart, because these aren't capital costs, these are just pure savings flowing every year. When you look at the net of those, again, it peaks about $300 billion per year in the mid 2030s, and then actually decreases to pretty much zero net cost by 2050. Here again, as your economy grows from 18 trillion to 20, 30 trillion up to $40 trillion a year, can the economy absorb some added energy system costs of $200 or $300 billion a year as a way to address this externality? I think the answer is yes. The pathways model is not a macroeconomic model that specifically projects GDP. It just projects the change in the cost of the energy system. However, in the literature, there's an interesting study that also takes the pathways model output from similar scenarios and runs it through a macroeconomic model called the REMI model, and this study was done in late 2015, looking at a similar deep decarbonization study, and they found that on the employment front, not surprisingly, when you substitute capital and labor for fossil fuel, generate a lot of construction jobs with the model projecting up to 800,000 construction jobs by 2050. The flip side, of course, if you're going to phase out fossil fuels, yes, there are losses in the coal and oil and gas sector with projections for those losses to reach about 270,000 by 2050, and I should emphasize right now that this study, and almost anyone who looks in this area, has the policy recommendation of doing transition assistance to communities that are affected by the transition away from fossil fuels. Overall, looking across all sectors, this study by ICF projected an additional one million jobs by 2050 and a small bump up in overall GDP, which again makes intuitive sense. You're importing a lot less oil from abroad, you're keeping that money flowing inside the domestic economy, you're substituting capital, labor for those inputs. This makes intuitive sense. I'm going to take a quick look at details in the power and transportation sector, and what this graph shows is a reference projection for 2050, how we would have a mixture of oil and gas and coal, nuclear and renewables by then under the business as usual, and what our power generation mix could look like under the four scenarios of mixed, high renewables, high nuclear and high CCS. What you see here is that in the blue you have onshore and offshore wind expanding moderately here, expanding very aggressively in the high renewable scenario, also moderately in these others, distributed solar and utility scale solar in red and yellow, expanding across all, and then the role of nuclear plants expanding in the mixed resources scenario, keeping pretty much the same as reference case, expanding a lot here. All of this done in ways that meet load reliably, balance the system, retain some use of natural gas for load balancing, and the other interesting thing to note here is, of course, as you electrify the economy, you go from reference case up to higher levels of generation. That is the effect of electrifying as many end uses as possible. Taking a look at the transport sector with a similar kind of graphic display, we have reference case on the left and then the four pathways. The first thing we notice here is one of other pillars of low carbon economy. We can take transportation use from a reference case level of about 27 quads of energy down to a level below 15 by having much more efficient vehicles. And then with that lower transportation energy demand, we can use mixtures of hydrogen in the dark blue or electricity in red, renewable diesel, and some residual fossil fuel use, particularly in aviation. We haven't found out how to fly a plane with batteries yet. Also some residual use in heavy duty transport. But we explored different combinations of those three low carbon fuels or zero carbon fuels, electricity, hydrogen, and biomass derived fuels to deliver the same mobility as would otherwise be delivered in 2050 to a growing population. So the modeling shows that this is technologically feasible. It's economically feasible within our economy. But there are still implementation challenges that need to be overcome. The first one, not surprisingly, is that with the electrification of the economy and those higher levels of electric generation, you need to build power plants. You need to ramp up the rate of construction of power plants. In some cases, two to four times what we've seen historically. That's a challenge. Combined with that, you also have to expand the transportation and distribution system. And again, there's both for plants and for wires. Sometimes there's siting problems. There's NIMBY problems. There's cross-state jurisdictional issues. This needs political will to overcome, but it's doable. The other thing, if we shift in a major way to electric vehicles, we have to look at other physical infrastructure changes, how we build out, how we make the transition, and do we use fast chargers? Are they at home? Are they at the workplace? Do we do battery swapping? All that needs to be thought through in terms of ramping up the use of electric vehicles. Finally, we concluded that utility business models need to change, to be able to integrate higher levels of renewables, which does occur across all the pathways, and also reflecting the fact that the cost of those sources have dropped dramatically in the last five to eight years. And we already see the work on those new utility business models going on in various states. So very quickly, I just want to touch on the policy recommendations that came out in Risky Business. First of all, these are very general. This is basically a modeling exercise to sort of technical and economic feasibility. You won't find a cookbook of detailed policy recommendations here. But the co-chairs of the project did endorse the notion that a key policy is to put a price on carbon in some way or other, through taxation, through cap and trade. Somehow, the economy needs that signal that carbon emissions have a damaging effect on the globe. Second, almost a no-brainer, we need to eliminate subsidization of fossil fuels. We need good R&D policies to continue to bring out new technology from lab to demonstration to commercial deployment. And very importantly, we also need to help the workers in the communities that are negatively impacted by a phase down of fossil fuels. They also had specific recommendations to the business community. Even now, you can internalize a cost of carbon in your business planning investment. You need to look at climate risks as you look at infrastructure building, and you need to disclose the risks your company faces. Look forward to the questions and answers. All of this is available at RiskyBusiness.org, both the original 2014 report on impacts and the new report on low-carbon pathways. With that, I'll turn it over to Noah. Great. Thank you all for coming. Thank you to ESI and the Risky Business Project for organizing this. It's just an honor to be here talking to you. I am going to talk about national mid-century strategies with a specific focus on the United States mid-century strategy for deep decarbonization that I worked on last year. The parts of the Paris Climate Agreement that virtually everyone knows about are, number one, the emissions targets to 2025 and 2030, and number two, the long-term global temperature goals. We're going to keep global warming constrained to well below 2 degrees Celsius. A lesser known in the agreement is the bridge between these two elements, and that is the invitation to countries to develop mid-century, long-term, low-greenhouse gas emission strategies. Fortunately, countries have begun to take the Paris Agreement up on this invitation. Last year, we worked very closely alongside our neighbors in Canada and in Mexico, both in developing the strategies and then also releasing them together jointly at the COP in Marrakech in November. Germany and France have also released their mid-century strategies, and other countries, many other countries, have committed to do so as well. Importantly, China and India, both in joint statements with the United States last year, have announced their intention to move forward with mid-century strategies. So the U.S. strategy was kicked off by President Obama in March of last year. That started a true interagency effort that included input by EPA, by DOE, by USDA, also by our national labs, which ran a model called the GCAM model, which was the source of some of the figures I'm going to show you later on. It's sort of a comprehensive economy-wide model. Many of my colleagues at the White House worked on this project as well, just specifically Rick Duke, Emily McGlynn, Pete Hansel could all give this presentation better than I could. So as you can see here, the mid-century strategy involves emissions pathways. These are strategies looking at how to not only achieve deep decarbonization, but to do so while meeting all of the growing demands on the U.S. energy system and lands, while also ensuring a thriving economy for all Americans. We developed seven different pathways to 2050. In all of them, we looked at emissions, total greenhouse gas emissions by 2050 of 80 percent or more below 2005 levels. In our judgment, this is the range that the United States needs to be in to fulfill its commitment under Paris. So this was never intended to be a policy roadmap for the next administration, and it wasn't written that way. Of course, we do hope that as policymakers consider different policies in these sectors in the year to come, we hope the information we developed will be useful both at the national level and at the subnational level, and we hope it will have a long shelf life, given that we are taking a very long-term perspective here. So we got a lot of different press when our report was released in November. There was one thing that I saw virtually every article mentioned, and that is that our report is long. So I won't have time to go through the whole thing today or even give you a full overview of it. What I'll do instead is give you what I think are five important takeaways that you'll find in ours and other mid-century strategies, answer any questions you have, and then hopefully convince a few of you to dig into our lengthy report. So I've listed the takeaways up on the screen here. I'll go through them one by one in a little detail. So the takeaway, number one, is that our current global emissions trajectory is not sufficient to achieve the long-term goals of the Paris Agreement. We need quite a bit more ambition. I think this fact is well known. I'm not sure it's known just how true it is. So I'm going to show you a figure here. Many I'll show from the report itself. As you can see, these are global greenhouse gas emissions rising over time as we go through history. Here's where they may have been headed. This dashed line here is a successful outcome up to 2030 under the Paris Agreement. That is countries achieving their nationally determined contributions. And then these colorful lines heading toward zero. That's where we need to go in order to achieve the goal of well below 2 degrees Celsius. So this makes it, I think this shows fairly starkly that not only do we need more ambition in our policies and technologies, we really need it before 2030. So we don't have to confront this scary kink right here. Takeaway number 2. A lot of us, me included, like to focus on the energy sector. But when you're developing long-term strategies, it is important to have an economy-wide perspective and plan for integrated economy-wide action to reduce emissions. This figure will help me illustrate that point. These are emissions in the United States alone. Total greenhouse gas emissions, historical on the left here and 3 of our 7 pathways for 2050 show 3 different ways to get there, all achieving 80% reductions by 2050. The blue bars here, that's CO2 emissions. That's primarily energy. And that is the bulk of our emissions today. And it is the major transformation that you can see between today and 2050. We talk about very similar pillars in terms of the energy sector that Carl mentioned in his report. Number 1, energy efficiency. Number 2, decarbonizing the electricity sector. And number 3, switching to lower carbon sources in other energy sectors. But as you can see from this figure, CO2 is not the whole story. You also have in pink here other greenhouse gases that includes methane, that includes nitrous oxide, HFCs as well. And below zero here, you have our land carbon sink. So that's our forests and our soil that sequester carbon. So these are not an insignificant part of the story today. And if you look out towards 2050, you can see they become an increasingly important part of the GHG story at least percentage wise over time. It's also important to note that while we're showing them staying relatively constant here, both in terms of non-CO2 emissions and the sink. In fact, left to their own devices, non-CO2 emissions will rise quite a bit. The sink is likely to shrink quite a bit. So considerable action and technological advancement will be needed just to keep these as they are. Otherwise, what that means is we'll need quite a bit more action out of the energy sector to get to any given target. What's not shown on the screen here are the important interactions among the different sectors that you can only capture with comprehensive economy wide analysis. One important example is the role of biomass. So in the report, we talk about how to increase biomass production in our country about two to three times today's level. It's an important factor in terms of low carbon energy sources. However, at least two things have to be true for that to be the case. Number one, you have to ensure that is actually a low carbon energy source in terms of carbon accounting. And number two, you have to develop the biomass in ways that don't disrupt the supply of food or markets for food in our country. So you can do that if you do it smartly, but it certainly won't happen by itself. Okay, number 3, I'm almost halfway there. We don't do these strategies with the idea that 30 or 40 years from now, we're still going to be following the same template. I think that would be a little delusional. Things change all the time. We do them because there are fundamental differences between actions in the near term. If we have a 2050 target in mind versus actions in the near term, if we're looking to the short term, so 2025 and climate change, of course, is a long-term problem. So I could give examples in almost any sector. I'll just mention 2. First of all, light duty vehicles, cars. This slide shows you distance traveled for light duty vehicles. And it shows that in 2005, virtually all of those of the distance traveled was in gasoline or diesel vehicles. And it shows 2 pathways out to 2050. In both of these pathways, although they differ quite a bit, we have considerable penetration of alternative fuel vehicles somewhere between one-third and two-thirds of the vehicles of the vehicle miles travel. Now to get to our targets in 2025, you really don't have to do too much in terms of electric vehicle penetration. In fact, even if you did, it wouldn't lead to that many admissions reductions because we haven't decarbonized the electricity system yet. However, if you're going to get here in 2050, you sure as heck better start now, because as Carl mentioned, you have slow turnover in terms of the stock of cars, you have infrastructure you need to build, and we need the cost reductions that only come with action over time. The second example I'll give is the electricity sector. This chart here shows electric capacity additions over time. So this isn't electricity use. It's basically like the amount of power plants that we have to build every year. And sorry in the back, if you probably can't read the key, but I'll explain what's important about this. On the left, you have historical capacity additions. This brown blob here is all of the natural gas that we've built in the last couple decades. To get to our 2025 target, we could do more of the same. We could keep building natural gas plants, replace coal electricity use, and reduce our emissions quite a bit. What this shows and what all of our scenarios show is that if you have a 2050 outlook, you still build maybe a little bit of natural gas, this brown on the bottom. But what you do a lot more of is build wind and solar, which are these white bars and the blue bar here. We're already building a lot of wind and solar. Actually, it's pretty remarkable. If you look at 2015 or 2016 combined, they're already outpacing new natural gas. But you can see the pace needs to ramp up even further to get on the pace we need to be. It also shows that we need to start building advanced nuclear technologies and other technologies like fossil fuel with carbon capture and storage, and potentially even biomass with carbon capture and storage for electricity as well. If those technologies are going to be available by mid-century, again, we really need to start now to bring costs down, improve social acceptance, and so on. I think that's actually a good segue into my fourth takeaway. I haven't told you so far that I am an economist. I try to hide that from people, so maybe they'll like me in the beginning. But as an economist, I am professionally obligated to make this next point about economic outcomes of a low-carbon pathway, and that is the centerpiece of our efforts to get there. If we want a cost-effective trajectory, should be outcome-based policies and broad support for different technologies, different low-carbon technologies. So outcome-based policies, by that, I mean something like a price on carbon that does not dictate where and when particular low-carbon technologies should be deployed. I'll give you one example of this that again is in the electricity sector. This is electricity generation, so actually the electricity that is used in 2050 for four different pathways in the report, and again, I apologize if you can't read the key, but what's important about this picture, first of all, notice the electricity system is increasing quite a bit because we're electrifying a lot of energy uses. Secondly, very little fossil fuels are left in the system in 2050, just a little bit of natural gas, but virtually the whole electricity system is carbon-free at that point. And then the last thing, even though we show four very different pathways here, all of them you'll see are very colorful. We are using geothermal, solar, wind, nuclear, hydro, biomass, and coal and gas with CCS. Some more in some scenarios and some less in some scenarios. Two, we don't know exactly which ones which of these technologies are going to be available 20 or 30 years from now. We don't know how much they're going to cost, but if we have something like a carbon price and if we support the emergence of these technologies into the market over time, we don't need to know which are going to be available and how much they're going to cost to attain a cost effective outcome. On the other hand, if we move forward only with a subset of technologies, we risk locking ourselves into higher cost pathways over time. Last point I was going to make here is about the virtuous cycle of ambition and innovation. All of the other figures that I've shown you today are just straight out of the report itself. This figure here I made specifically for this occasion, so you can hold your applause until the end. But the point that I'm trying to make here is that the more we act on climate, the more we're going to drive down the costs of low carbon solutions. And that in itself will enable more action in the years to come. So that's what we mean by the virtuous cycle. Perhaps the best example of this in recent years is the progress in solar energy. So this chart shows on the bars here the cost of building solar plants in the last 6 or 7 years. Remarkable progress costs have come down something like 10 to 15 percent every year. And then you can see a line here is the increase in capacity over time, which is shot up in recent years. These go together. The more we build, the more costs come down. You could show the same thing for something like electric vehicle batteries. The point is that between now and 5 and 6 years ago, a totally different degree of decarbonization is achievable and cost-effective. And if we keep pushing forward, we should fully expect this to continue to be true 5 and 10 years from now. So I don't think we should confuse what it is we can model with what is achievable over time. In our judgment, we expect that if we do keep pushing forward, more ambition and more rapid pace of reductions would become available as the years go by. So that's it. Those are my 5 takeaways. The last thing I wanted to mention is that so Carl and I are both at the World Resources Institute now. We are continuing to do work on this topic of long-term strategies. We'll be developing our own WRI guidance for countries as they develop long-term strategies prior to 2020. It would be great to talk to any of you about that work or our reports. And I look forward to answering your questions. Thanks a lot. So thank you both, Noah and Carl, for walking us through these reports. And I must say with regard to your point about the virtuous cycle and what we've seen, for example, with regard to solar and also wind, just in terms of furthering that point of context, I would refer you back to a briefing that we did last month where Bloomberg New Energy Finance provided information just about looking at the investment that had gone into clean energy in the course of the last year and looking at those trends. And they are very robust, pretty startling in terms of how dynamic this whole universe is in terms of looking at investment, how quickly things can be absorbed, as Carl was also talking about the size of investment needed, but also what could be absorbed quite readily into the economy. So let's open it up for your discussion, your comments, your questions while we have Noah and Carl with us. Any questions, any comments? Go ahead. Okay, up here. Great, thank you. Yes, we did not significantly vary the levels of energy efficiency investments in buildings and cars and industry very much. It was really, as I described, the variation in electricity generation mix and then transportation fuels mix, but we were fairly aggressive on energy efficiency investments across the economy. But one could construct even more aggressive styles as possible. And actually, Noah, could you talk about what was the role of energy efficiency in terms of how you looked, how your study looked at this? Sure. Well, like Carl's, all of our scenarios involved pushing on energy efficiency quite a bit because it is such a cost effective option across sectors. We did have one scenario that we call our smart growth scenario that looked at not only energy efficiency, but started to dive into how can we actually turn economic development or how can we make economic development more energy efficiency by smarter urban planning, you know, smarter building practices, et cetera. And that scenario, I think, had about 10% lower energy use in 2050 than the others. But I think the shorter answer to your question is we really have no idea how far we can push it because we're looking at technologies that are available today. Okay, great. Other questions, comments? Okay, here first and then at the back. Thanks so much. My name is Mike Italiano, I'm with the Capital Partnership. This is a very important program, so thanks, Carol, for putting it on. There's three key factors that support your important assessment. One, there's investors with over $70 trillion in assets that want to buy clean financial products, clean energy financial products, which cause the green bond market to grow to about $93 billion in just four years. The bonds are selling out, we're getting cheaper capital, more proceeds, higher-valued bonds that are also less risky. The second is Fitch Ratings in Bloomberg recently announced a pending near-term oil, they call that oil death spiral, whereby oil will start a permanent devaluation and reduce revenue generation if clean vehicle sales keep accelerating. And then the third is there was an estimated $100 trillion in U.S. climate resilience costs that were reported to S&P, the world's largest credit rating agency, in June 30th meeting a couple years ago, 2014, before investment banks and rating agencies. And the costs for Pennsylvania and Massachusetts were calculated at $5.3 trillion and $1.6 trillion, respectively. New York State's estimated about $10 trillion, which is driving climate litigation. My question is, has WorldWatch or any of its partners focused or have any thoughts on how to more rapidly access the $70 trillion that's available? In terms of the capital markets where there's a lot of capital waiting on the sidelines. I could take one crack at that. Certainly in this risky business report we did not study methods for unlocking finance. However, that is a field that has been analyzed by various people and there are financial innovations that can tap into greater investment. Sure. There are the legal form of master limited partnerships could be expanded beyond its current uses in a number of ways. I'm not an expert in finance, so I can't say much more than that. The other thing I'm not sure if the numbers on economic damages that you cited, I'm not sure if they're consistent with the first risky business report assessment or not, but certainly the damages to the U.S. are going to be huge if we stay on our present course and they will be much higher than the costs of moving to a clean energy economy. The final thing I'll say about fossil fuel prices, which you touched on, is it's actually very intriguing to think if the globe as a whole moves to the 80% or more reductions in greenhouse gases, that will be a backing out of fossil fuels worldwide and demand will go down. This will probably lead to a softening of fossil fuel prices globally and in the U.S. It's an interesting policy challenge ahead. What is the policy framework that keeps us on that track even as fossil fuel prices soften as the more we succeed? It's an interesting dilemma. Okay, let's go back. Take the gentleman in the back. Oscar? Oscar. I think you identified the difficulty of permitting what you're talking about. I think you, at least in this conversation, you underestimated it. You could have spent your whole talk on that, because I think this stuff will never be interpreted. And the second to my friend in the business of science there, the thing that was so distressing about this presentation is that the gentleman brings up on markets is that you have technological innovation driven by policy and not by markets. And I think that anytime you go at that approach, you're sacrificing the greatest driver and at the same time you're bringing in policy as a solution to market problems, maybe problems in other areas, but policy versus everything else is a really unfortunate place to land. Go ahead, Noah. Thanks for the question. Yeah, I would disagree with the characterization you made. We certainly think policy. No, no, that one's right. The characterization of the report as relying on policy alone, I think policy certainly has a role to play in supporting innovation, but concerted efforts to invest in innovation both from the public and private sector have just as important, if not more important roles to play. We see innovation all the time in the world around us, and we see a lot of energy innovation because governments like the United States and others have made concerted efforts to invest in, for example, solar energy in recent years. So if I gave the impression that it was policy drivers alone that were going to lead to this advancement, then I apologize. That's not what I meant. And I guess I would just add that I think in most every kind of analysis that I've seen domestically and also in terms of looking globally that businesses as well as governments have talked about the need for a mix of policy and business that it's a combination of actions. Other questions over here? Just could you wait for the microphone? The other one is about mobilization of the idea of having communication with the whole populace in terms of like dashboard, so that we effectively watch football games and get very excited about this winning and sort of get kind of about this, you know, what makes it like harvest and you answer the head of China or the goal where we're kind of trying to make sure you're right. On the first question, we did not specifically explore reducing the nuclear contribution to the total generation mix and see what we would need in terms of load balancing, rather the four pathways kept nuclear even either at a sort of current level of output or increased it in some ways. It's certainly true that if nuclear plants are retired and not replaced, the burden is going to go elsewhere and you need to actually build a lot more capacity of renewables to replace every megawatt of nuclear because nuclear runs at 90, 95% capacity factor and renewables typically operate 25, 30%. So it becomes a more daunting challenge. There are analysts who, you know, certainly there are NREL studies that say we can go 80% renewable and not run into reliability problems. There are some analysts that say we can go even higher, but I haven't personally done modeling that has given me a strong opinion on exactly how far you can go. But certainly across both of these studies, you saw that nuclear remained in the mix. As far as sort of consumer citizen motivation, I would certainly welcome creative ways to get more people thinking about their own carbon footprint and what they do as consumers, what they do as buyers to help because we certainly, this is a big challenge. We need to engage both consumer citizens as well as the business community. And I just add just from the perspective of our study, I'd say I agree with Carl that it is probably feasible to go a lot more renewable, perhaps even 100% renewable in the energy system. If you're cutting off the nuclear option, then you probably will have a more costly pathway. That doesn't mean as a society, we might not decide to go down that direction, but that is what our models tell us. On your second point, I would watch that show. I don't know what the ratings would be, but I think injuries would be lower than football, at least. And it would be concussion-free? Okay, a question right here. Thank you. I have no questions, but under the political sentiment right now, the administration apparently had no interest in clean energy, and you mentioned about how to increase investment. Can you be more specific about who should we talk to, private sector, public sectors? And a second question is how the low carbon future might require a change of mindsets even compared to the Obama administration? Sure, yeah. Thanks for the question. So I think it could certainly require a change of mindsets might be helpful for sure. What our studies are useful in showing, I think, is that we can do this without any radical changes. We do have the technologies available or nearly available today. It might be easier and it might be more cost effective if we sort of move in a different direction and we could push on different levers and we could try to reduce people's, you know, people may decide to reduce their energy use in ways we didn't contemplate, but really we are showing sort of the practicality of getting to deep decarbonization even with current technologies and mindset. Could you remind me what the first question was? Right. I mean, I think that's where I think the government and the private sector have sort of a synergistic role to play. There's a very strong case for action by businesses and an economic case in general as long as the world is moving forward, right? I think IEA predicted that there would be $7 trillion in investments and renewables in the next couple of decades given the Paris commitments. But of course that requires that businesses are of the mindset that this is the way the world is going. So that's why I think it's important that we're not complacent about this and we sort of keep our foot on the accelerator. Yeah, I'd just like to add to that by saying that there is going to continue to be momentum to make these investments in the business community, particularly multinational companies that need to move ahead on clean energy across their supply chains, spanning national borders. Certainly there's momentum in the electric utility industry. They need to plan long term. They can't just plan four years ahead for this administration. And there are signs that they are going to continue the path toward decarbonization. It's just the market forces of low natural gas prices and the tremendous decreases in wind and solar prices that we've seen over the last couple of years. And then finally there's state and local governments that are committed to stay the course. So all those forces are in play. And you know, one classic example is our new energy secretary, Rick Perry. He was governor of Texas I think for 14 years, 12 or 14 years. And he put in place a series of policies that allowed the phenomenal growth of wind power in Texas. And that is going to continue and states like Texas see the economic benefits. So we're going to see more of that. And Texas actually has greatly expanded on the solar side as well. So was there, did you have a question up here? Okay, just back there. Okay. I'm with USDA, but I was with O&E up until January 6th or in detail working on standards and finance for community resilience. And I wanted to talk about before in terms of where we are today and sort of think about the idea that resilience is sort of a broad categorization of this as well. Because even what Mike was saying about assets, I mean, if you start to look at financial risk of different types of energy sources, and then that being applied to various investment companies that are net zero, for example, having a lower risk, that kind of thing, as well as the health and safety factors of various forms of energy that particular companies relying on for their production globally, or in the US, etc. I feel like we could be moving in that direction with your report sort of combining the focus on carbon reduction and sort of that would be a result of the market, as Mike was describing. And also that there are a number of programs in government already that provide funding for these sorts of activities at USDA Rural Development, for example, and there are a number of loan programs that support biomass, biofuel, renewable energy in rural areas. We've seen net zero hospital campuses, for example, that are doing this without our funding even. So I think that there is a mix of both policy and business efforts already happening. And I just wanted to introduce myself and let you know that I'm back in my agency and if you ever want to reach out to USDA. Thanks. We certainly will. And WRI has a resilience program. I'd like to connect you with the woman who runs it. And I guess I would just also respond to your comments. I can think of sort of at least three forms of resilience that need to be sort of thought about, I think, in three categories. One is making both human infrastructure and even sometimes natural infrastructure more resilient to climate change. And that's really kind of the front lines. And I think USDA is doing work there as our other agencies. Another form of risk that I think you highlighted was financial risk of companies having stranded assets in the ground. There are companies that are going to have to devalue stocks of oil, gas or coal if this transition goes forward. They need to do things to manage that risk. And then I think the third kind of risk is sort of, I guess, maybe a financial stock risk of a company that's not in the fossil fuel business, but is somehow otherwise exposed to what happens in climate policy or climate impacts. How does it affect their bottom line? So I think three different ones that people need to manage in different ways. And it sounds like you're probably familiar with the first risky business report, which has tremendous relevance for that first kind of risk. And then the resilience we need to build to deal with it. I just wanted to thank you for raising the resilience issue because one of the things that ESI is doing is putting together a whole series of briefings on building a more resilient and secure infrastructure. And that gets to some of the points that Carl and Noah raised with regard to thinking about what that means in terms of overall physical infrastructure costs for cities and local governments that they are looking at in how to really reduce their risk. And actually, one thing I just wanted to mention too that follows up on a comment that I think you had made, Carl, is that we were also struck. It was a couple months ago that Moody's had announced that they were now taking into their rating accounts that climate as a risk factor in terms of their rating service. And I think that is another important sign of the times as we look at this very dynamic, quickly evolving world. Other last questions? Okay, here and then back here. Sure. I mean, I think probably the best example, sorry, did you say state or did you say local? Just local also. Okay, I mean, I'd say what's happening in California is probably the best example. I mean, it's probably the most well known too, but they really have put in place a comprehensive set of policies with a long term vision that I think, you know, you might disagree with exactly how they did it. But I think it's an important template they've set for the rest of the country. And then you have I think an increasing number of states and cities that are moving forward, particularly with wind and solar and energy efficiency because they see the cost effectiveness and you know, they see the growth in jobs in the solar and wind industry has just been you know, astronomical in recent years and that's of course an important issue for state and local politicians. So I think it's going to be really important over the next few years to keep pushing forward at the state and local level to make sure because if the federal government does not continue to push forward, you know, we can certainly survive a few years of a lack of sort of similar federal action that we've had in recent years, but it would help quite a bit if state and local governments took up this lack. I would just add to that on the low even on the local front, localities have a tremendous impact on kind of the shape and density and transportation options with within their cities is single vehicle, single occupant car, the dominant form or do you know what kind of ride sharing options do you have what kind of bus and mass transit options do you have what kind of bicycle and pedestrian options. You have all that will shape of course the demand for energy in that town as well as affect livability. And also local policy can be either friendly or unfriendly to distributed energy in various forms whether it's micro cogen plants or whether it's rooftop solar, you can be you know, friendly or unfriendly and that's going to affect things at the local level and you know, Noah cited some examples at the state level. We talked about you know, Texas and I just want to take one second to write my my personal hobby horse which one question or echoed is no matter what kind of fan of what energy source you are, you are going to face obstacles to building anything these days and I say that with all due respect to my friends in the environmental community, but sometimes if you want to site a solar plant, you got problems. Somebody's going to fight you going to want to build wind turbines on or offshore. Somebody's going to fight you because they don't like the view or because they don't want the transmission line that connect the wind to the grid. You want to build a nuclear plant, you got problems, you want to build a coal plant with CCS. There is such a you know, such obstacles to build a natural gas pipeline which you might need basically to keep the your house is warm until we get something else or you need a natural gas plant pipeline because you need a natural gas plant to generate when the wind stops blowing. You know, everything faces such opposition. I think as a country, we need to get together and find a way to choose which infrastructure energy infrastructure things we want and get them done. End of lecture. Sorry. And for whatever it's worth, we didn't have a briefing looking at at grid modernization and transmission issues a couple weeks ago. So in terms of thinking about some of that, I would just call that to to your attention as well. And we also have a briefing next Tuesday on the 14th on transportation and transit infrastructure. So I think that would be just right for you. There's one more question. One more question. There we go. Ron Munson from the Global CCS Institute. And I was curious if there was variability, cost variability across your four principal pathways that you presented earlier. And if there is, if you could discuss, you did a little bit of this earlier as regards nuclear, but if you discuss some of the actors that impact that cost variability across those pathways. In the in the risky business study, we did not vary technology costs across the different pathways. I think the notion was the the rates of deployment were not sufficiently different to affect the the projected price of the technology. Rather, what we did for each technology was carefully look at the literature and look at and extract kind of like a mainstream projection of, you know, what will CCS cost in 2030 on a coal plant, on a gas plant, what kind of and what kind of learning would take place between now and then same on on nuclear plants. We didn't assume big price drops for like say a small modular reactors or something. But we saw we're building full size reactors and looked and looked at prices coming down somewhat from here on on renewables. We had some small further decreases in wind, figuring, figuring it was a, you know, getting to be a mature technology, still some steeper decreases in solar, figuring it is less mature. And again, all this based on, you know, studies by academics or NREL or, you know, or the way projections on where we think prices might go in the future with deployment. And if I could just jump in, our study had two different cost scenarios. Both were developed on the energy side by the Department of Energy program offices that deal with the technologies. So in both cases, they considered considerable progress. Our sort of standard scenarios looked at achieving the program goals within the Department of Energy for for each technology. And I think that includes this, the various CCS plants. And then we also looked at one, we call it our beyond 80 scenario, where we asked the folks at DOE, what would happen if your funding would considerably increase or there would be an opportunity to to push even further than your current programs imagine. And that's where our other technological pathway came from. I think in both cases, this goes far beyond what you typically see out of the energy models. If you if you look at, for example, the energy information administration puts out their annual energy outlook reports every year. These do not assume much other than sort of incremental progress in various technologies. So I think we end up with very different results than that kind of model does, because we are imagining a world where we are moving forward and moving forward successfully on technologies like CCS. Any last questions? Okay. Well, I want to thank Carl and Noah very, very much for your presentations. And please join me in thanking them and