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tv   Brookings Institution Hosts Discussion on Renewable Energy  CSPAN  November 2, 2016 9:00am-10:31am EDT

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the university of north carolina at chapel hill. that starts up to the district polls show donald trump with a small lead in that state. mr. trump holds a rally today in orlando, florida, that starts at 4 p.m. eastern to the polls show a very close race with him slightly ahead in several national and state polls that are gathered recently at real clear politics. both campaigns are out also with new ads and we have more of them running in the presidential race in north carolina. >> putting a wife to work is a very dangerous thing. when i come home again is not what i go through the roof. grab them by the blank back. when you're a star you can do anything. they let you do it. spent more a tooth is coming for their sexual assaulted i donald trump. >> i will go backstage before a show and if one is getting dressed.
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spent donald trump walked in, while the contestants, some as young as 15 were changing. >> you see these incredible looking women. i would look or will they not that of the face of hers spewing she ate like a pig. >> so you treat women with respect? >> i can't say that either. >> all right, good. >> i'm hillary clinton and i approve this message. >> our health care system is failing. >> with premiums increasing 74% in six years. >> doctors like us now spend more time on paperwork and less time with her patients. >> donald trump is ready to change this. >> is plan creates a system centered on our patients. >> his approach will provide more choices with higher quality at lower costs. >> that's why doctors are choosing to donald trump.
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>> at the clinton foundation, 90% of all the money that is donated on behalf of programs of people around the world people what to do clinton foundation's own 2014 irs filings show? less than 6% spent winter program to nation's but 7.8 million was spent on travel. wellpoint 4 million on meetings and over $34 million on salaries and benefits. if this is what she does with her own charity imagine what she will do from the white house. >> at charlotte observer.com this is the headline. campaigns converge on north carolina in the final week before election day. joining us on the phone from charlotte is jim morrill. thanks for being with us. >> caller: nice to be with you. thanks. >> host: what has dr. lund become a battleground state transferred its turn from a red state over the years to a purple state and part of that is due to demographic changes.
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he got a lot of people moving down from the northeast and a lot of millennials moving to urban areas like charlotte and raleigh and the triangle. it's just the politics have become more moderate i guess. you still have an urban-rural divide with a lot of the old crowds can be people who used to vote for jesse helms, used to be democrats are now republicans and a lot of them in rural areas. the urban areas are pretty logistic across the country. >> host: with the president making to visit to the state, donald trump back in north carolina on thursday, what is the message and who are they appealing to? >> caller: welcome i think donald trump is appealing to the people that he has appealed to vote at his rallies. in fact, he's having a rally in a rural area near charlotte that is insane every ali had one rally this year. he's going back to his stronghold which is rural north
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carolina and again it's the jesse kratz turned republicans who are the base of his support the president obama is going to chapel hill which is in the heart of the triangle which is a college town. a lot of young people, young voters. and then he's also going to fayetteville and charlotte are fayetteville also has some college presidents and, of course, military presence and a large african-american presents. and charlotte, we don't know what the venues are yet this is a big urban area with a lot that he carried by 1000 votes four years ago turn one what indication give an overall turnout in north carolina country turnout is high. there's about 2 million people have already voted. the people to look at this stuff expected there to be about 60% of the voters of overall voters voting early i either by absente ballot or in person early voting.
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what the patterns are shown so far is that democrats are a little under their 2012 performance the republicans are a little bit over the 2012 performance. and independents unaffiliated voters are up like a third from what they were in 2012. i don't think anybody is quite sure what that means. >> host: based on all the analysis we've been following with regard to the electoral college, the general sentiment seems to be north carolina is a state hillary clinton would very much like to win. for donald trump it's a must win state. do you agree? >> caller: that's been the conventional wisdom. if clinton wins it's really a flip of 30 electoral votes, right? 15 that she would've gotten and 15 that he would not have gotten, which could be significant, although lately you were hearing that he is other paths to victory and maybe it's not as important but we like to think it is and he's sorely been
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here a lot. both candidates and their vice presidential nominees have been all over north carolina. so it's really a busy year for all of us. >> host: north carolina voters making choices not only to president but also give a hotly contested governor's race and the senate race that's become far more competitive callback definitely. nobody expected the senate race to be that competitive at the beginning because democrats, couple democrats who are more prominent turn down the race and deborah ross was kind of a little-known legislator from raleigh became the nominee. she has run a strong race and it's pretty competitive, a lot of polls show it within the margin of error. we had a poll last week became a children within two points of senator byrd, the republican. then we have a very competitive guba to raise. >> host: give us a sense of the demographics of north
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carolina. when the returns are coming in what will you be looking for to determine trends on the presidential level and also it is watched statewide races? >> caller: i think i would be looking for turnout figures in the urban areas, mecklenburg county, greensboro and also the rule returns to see what the turnout is in those areas which is trump country. i think those are the areas in the suburbs. if the suburbs are tending to be more blue than they normally are, that would be a bad sign for trump. deferred a lot about suburban women so suburbs will be an area to watch. >> host: we will work on to look for your reporting on line. thank you very much for being with us. >> caller: my pleasure. thank you, steve. >> live now to reform on how
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renewable energy is impacted the economy over the past 40 years and expectations for the next 40. this is just getting under way. >> they weren't even economically self consistent because the margin of cost were so high you would have to raise the energy price high enough it wouldn't be enough demand to pay for the cost of supply. it seemed to me that these unworkable solutions came from the stating the problem as how to get more energy, more of any kind from any source at any price. though i introduced the simple but radical notion of end use, asking first want services we wanted the energy to provide him a like hot showers, cold beer, mobility, comfort, victor brad
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pitt and then asking how much energy, of what kind of quality at what scale from was hosted each of those tasks in the cheapest way. soon might end use emphasis belted with rogers least cost language which resonated with the free market economics that soon emerged under president reagan. and that fusion is now called the end use least cost approach and ever since that is provided superior foresight into competitive market outcomes and has become widely accepted. the publication process was quite an odyssey. the magazines impressive an imminent editor bill bundy was somewhat disposed to take seriously such unfashionable notions as deficiency and even renewables which many considered outlandish and completely
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impractical it because his wife mary bundy whom we have the honor to have with us today -- she is also -- dean acheson's daughter by the way. mary and another lady, janet, whose husband worked on foreign relations and she worked for dick gardner at princeton, they have been feeding bill for some time some supportive articles. so he was a little bit softened up but he was quite skeptical that the article belong to their or that i would stand next to all the editing it would require. and mary told us at dinner last night that a long, difficult evening in which she struggled to persuade bill to accept the paper and finally succeeded. and i think, therefore, either the mother with a midwife of the modern energy revolution is here
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among us. [applause] and then when bill agreed to try it, he set it up to two technical referees, at harvard and carol wilson at mit, to get a technical read and they flatly disagree. harvey said he serious problems with a lot of the numbers. carol for hi whom bill martin ai were working at the time said if they are amory's numbers they're probably right. to his credit, a great indicator of his called it, bill said okay, i won't give you the benefit of the doubt. i will publish it and if he doesn't like it you can write us a letter. so bill did some wonderful developmental and structural edits, and but about draft 16 it was ready to go. now was temporarily in the hospital when jennifer seymour whitaker and i did the final
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line edit in a circle about a 14 hour phone conversation from a payphone in a shack in the maine woods with a hurricane approaching, which if it happened to be her our way, we take down the wires for a couple of weeks and we would miss the press date. of the hurricane forbore and with a marathon phone call we got it to press. at first the article toward the back of this big issue, got little attention. they didn't do features of titles on the front cover those days. but it turned out that there was an article i believe the one by, third article. mine was fifth. so this is rid of a shop and seven article in this issue in which somebody made a mistake drawing the map, and this was taken as an esoteric but important restatement of israeli official about borders in the middle east.
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so everybody went one to this issue to see what the fuss was about, event they couldn't help running across my paper because it was 31 pages, the longest they've ever published. so some people started to look at it, and pretty soon the newfangled xerox machines started humming away with mass military was the equivalent of a twitter store. we didn't have an internet, but we had a lot of places and institutions had access to xerox machines and stamps and envelopes. some people told me to receive between 50 and 100 copies individually from their frantic everybody was saying you must read this thing. and the general reaction was either you must read this because it changes everything, or how on earth could such an imminent journal at the heart of the establishment published is dangerous nonsense? the battle was royally joined
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and i was pleased to learn last night that as it went on, bill was quite proud of what he had done. it was the first time that energy policy and foreign affairs, foreign policy got mixed. they been in completely different silos, but bill had the courage and vision to see that it was time to talk to each other. energy would be at the heart of how the world evolves. and the affected me as a 28 year old author was like that of dropping a seed crystal into a supersaturated solution. suddenly there's a little crackling and th holding takes a different shape. that is, the energy policy that was stuck suddenly had a different way to look at the problem and that started to open up solutions that might actually work. the response was swift and rather ferocious.
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edison electric institute -- a good friend of mine. they put out a special issue of electric perspectives debunking this article, and altogether there were 36 at least critiques which the late ray was forced at the gaylord nelson lovingly compiled in this paperweight of a senate hearing record over the next year, it's fine print in the critiques ranged from fluttering with outrage together with my tedious responses. it makes amusing reading today but the critics were not amused. it's hard to remember how many experts in 76 consider deficiency miner or unreliable, or even risky, threatening economic collapse. people literally said we would be back to case and candles if we decoupled energy growth of gdp growth.
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city citizens were in a market economy we are already using energy as sufficient as possible, nothing more can be done. and renewables were thought strange or ridiculous or just technically absurd. but after a year or so and the dust had begun to settle, -- neatly capture the conclusion of many of the more sober up service when he said i, for one, don't care if he is only half right. that would be a better performance than i've seen from the rest of them. around that time, year after the paper came out, president carter called in for long conversation with him and his energy secretary jim slusher and your comp later my ally on greater security issues. i miss that guy. president carter is a first rate engineer and when jim made three comments all technical and all and put the pressure corrected him on all of them. two years ago president carter told me the article had been exceptionally important in framing his energy policy and
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that's okay because i thought apart from his attempt which soon died in a terrible attack of market forces, the carter energy policy was the most coherently proficiency and pro-renewables and visionary in architecture energy strategy before or since, and it laid the vital foundations for the investments and attention to lead to today's energy revolution. and over the next decade many of the articles harshest critics ended up hiring me or my team at the rocky mountain institute which we set up in 82 to adopt its recommendations, and by the current decade, places like utilities and power energy and russia were praising it. so let me rattle on a bit about what did we learn and what should we have learned, and where are we headed. first we learned of the valley
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of energy scenarios which have been pioneered, who i just missed, worked with them ever since. and, indeed, these hard and soft path graphs redrawn from the article -- i told this was the first time they ever had graphs if they first took shape in 1975 at shell group planning in london. then there's the course on not a forecast but rather they are powerful vehicles for telling stories that help people understand unfolding events. and at the time of few groups like the ford foundation's energy policy project led by dave freeman, from who we will hear shortly and even the academies study were introducing scenarios. they were often scorned by traditional asked apple to or forecasted but it turned out their tools proved a lot more useful and they could be reality
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check by a newfangled thing called at casting. one contemporary antidote to forecast i guess is the three decade lack of relationship between the wholesale gas price increase in official forecast of in blue comet dust is believing forecasts ayes or lost their shirts three times now. went for over $100 billion. the fourth one is under way. the inherent volatility of gas prices which are worth two or three bucks individual, that allocates -- dipping tool. even without counting volatility and efficiency are renewables have become surprised that often beats even the fuel cost of today's combined cycle power plants. and gas heat is also pressed to compete with efficient buildings come industria industrial proce,
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cogeneratcogenerat ion and even solar process he. so the new story about abundant and affordable energy for the long haul is less about fried gas than about its inexhaustible carbon free stable the price physical hedges was efficiency and renewables are outpacing and increasingly outcompeting it and together they and cogeneration in 2013 alone that over $630 billion of global investment. that transition is well underway. but back to the scenarios, the second thing we learned is to start with why, start with purpose, start with end-user which the job, the right tool for the job quite the article was so influential i think because it didn't send the proposed yet another portfolio of alternative investments, but because the redefined their purpose and their logic. so here are the two curves redrawn from the same data as my 76 article come and on the left the hard path builder the
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official forecast of that time from government industry which extrapolated historical growth. and on the right assuming the same gdp growth, the soft path combined in use and conversion efficiency with right quality, right size, renewable and widely accessible supplies which i dubbed soft technologies. friends like the anthropologist margaret mead will eagerly point out this terminology might arouse anxieties in the middle aged men who run the world but by then it was too late to change the language and multiply it was accepted and now when joe not i spread soft power all over, that term seems the least hourly to been accepted and is more gender balanced age. let's dissect how well the soft path graphs resemble reality a let's start on the demand side. that's the good news.
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now, my soft path graphs was explicitly not a forecast although it is often misinterpreted as one. it is super describe what i thoughfeltwas possible and plau, however unfamiliar. this chart is from the paper by john toomey who will hear from later in berkeley lab 2002 and they come my soft path curb was the only published mid '70s you of u.s. energy demand in 2000 as prove accurate. it was pointed eight or 4.0% above actual demand respectively with or without re- normalizing to actual gdp growth. the big black dot representing my suggestion for 2000 energy demand is rightly described by those authors as impressionistic but to them by a large number of engine and economic calculations. it actually prove more useful than the best econometric tools
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of the time, and those ended up typically 50-100% too high. sometimes far more. berkeley lab study also assembled grades from both traditional and reformist energy experts for a variety of leading energy studies of that period. mine scored a on influence. in fairness to the reviewers the book back up was opposed for at least another half year something a lot of folks didn't realize initially it was, i wasn't just making stuff up. and the authors of this comment one major theme that emerges is the interviews assessment differed regarding quality and influence and there was little correlation between the two. the survey authors observe studies regarded is hiding only came to be noncontroversial and integrated in nature, and reflect the ideas already known and accepted they're not as
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likely to attract attention and exert influence. other things being equal. striking and fiery conclusion to another theme is the assessment of analytical strength is correlated with the views of the reviewers. so my paper showed of the extreme both our favors with reviewers favoring renewables whereas analysts who are for traditional energy systems such as coal, nuclear power that the technically flawed. little has changed in anything quarter-century. and the same is not true 14 years later. minds in this business rife with what anthropologist would call energy tribalism, change merely one death at a time and even that is no longer a reliable method. some of the first generation nuclear advocates like my late friend were expert and well informed and honest, but i can't say the same for the new generation of often
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underinformed enthusiasts who continue to distort policy and miss allocate capital. what happened after 2000? let's do math at energy savings. remember that in 70 for our government and industry were virtually all in agreement the energy need to make 1 dollar of gdp wouldn't fall. a year later my article a radically suggested it could drop 72% in 50 years. so far it's dropped 56% in 40 years. and yet just the innovations already made by 2010 and far more powerful technologies and methods and regulation, maturing financing and marketing deliver channels can now save another threefold, twice what i originally thought, and a third of the real cost. and now six years later even that looks conservative. and important feature hidden within these aggregates by the way is that so far u.s.
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electoratelectorat e intended has fallen only half as fast as fuel intensity. there are about 10 good reasons for that including the way two-thirds of our state seal reward utilities are selling more energy and penalizing for cutting your bill. but as that is slowly reformed and other causes aid, electricity demand has been falling in absolute terms since 2007, as in most industrial countries. but in the long run, in the u.s. it could well keep falling by 1% a year despite complete electrification of the album fleet and robust economic growth. now, forecast demand moderated but on the supply side of soft path happened only in states like california that consistently pursued it. at the national level powerful lobbies and hence federal policy strongly favor the hard supply path. so on the left i've read drawn my 76 of soft path graphs to add
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based on information available in 76 both nuclear power and hydropower which the original graph left out. and then came my sketches about soft technologies, oil, gas and coal could behave. okay, what actually happened? what actually happened on the right differs for three main reasons that affect each element of supply. first of all natural gas was thought in 76 to be a scarce product of dwindling oil so federal policy outlawed policies to make it 78-87. and strongly promoted massive expansion of coal-fired generation, the red, instead as well as nuclear power subsidized to about 100% of its value. the vast coal fleet was been
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exempted from nixon air environmental laws. and it's only now fading as those rules start to be enforced even as the newly resurgent gas persists, aptly and more efficient as developed in the '80s. so gas and shift to goal driven by policy and subsidy and so on, that was the first big shift. then how about oil, the black wedge which is supposed to taper right down at once president forgot otto efficiency standards passed into law in 75, effective 78, u.s. will intensity fell by an average 5.5.2% a year and it turned out we had more market power that opec because we could save oil faster than they could conveniently sell us oil. so the resulting 1985-86 own price crash fostered complacen
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complacency. everybody hit the snooze button and lobbyists were able to persuade congress to go for 20 years in autos and about 17 for light trucks the legal mandate to ratchet up the efficiency standards in step with the technological process. so light vehicle efficiency worsened from 87-2004. at 22 years to just get back to 87 levels of efficiency. the pace fell by two-thirds, about 99% of the major gains in power trade efficiency boosted acceleration instead of saving fuel. john dingell block legislation until president george w. bush's 2007 update which was suspended a year later. so this stagnation wasted to hold turnovers of the car fleet that was supposed to be used to implement the available and cost-effective efficiency, and that's why we have this big fat oil demand continuing while oil interest sought to suppress
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competing biofuels. still high now declining oil demand today. instead of a small one we should have by now. thirdly, soft technologies. well, they didn't do that. the main reason is that the rapid progress in my soft path was explicitly predicated on aggressive support but instead they got largely hostile federal policies for 32 of the past 40 years. that's become a political football. ..
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>> in the early part of the harvest 35 years later. and of course, the official based forecast had gradually been coming down to approach reality. so the resulting dominance efficiency gains achieved half of the results thought for my soft path portfolio as data was revealed through 2015 if america total energy use had grown with the economy at the 75 level of energy used per dollar of gdp
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was inevitable and essential, we would have used that much energy. instead we cut that by more than half. roughly two-thirds through technical efficiency one through structural challenge. meanwhile total renewable energy output doubled. and that's wonderful. and yet it had a cumulative impact 31 times less than the savings. ratio headline is the opposite because the energy you don't use is invisible. no energy company foresaw this sufficiently revolution, none today fully realizes that the low hanging fruit will coop growing back faster that we can ticket. and there are a few other things it be the article i would like to mention about what now is my time, charlie? thank you, so among many elementses of that 76-article with the familiar ring 40 years
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later, readers will pick out some that are still current. and some of them are for example political economy of energy choices that's right with us because the article said in contrast to the soft path dependents on pluralistic comiewrm choice in a myriad hard path denning on projects requiring local social association. the hard path of free nps and free market would be a world of subsidies, 100 billion bailout, regulations, nationalization eminent domain, corporate statism. sound familiar? or if we go down the list, there's a lot of quite rich intellectual capital that popped
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up in here that is still being exploited. i want to focus now on the last one. the commitment that said that pawrp to a long-term coal economy many times the scale of today that is 1976's makes the doubling of atmosphereic carbon dioxide concentration in the next century, this century unavoidable with the prospect that are of stnl and perhaps ire reverse irreversible changes of climate only those changes are in question. are we there yet? cue the clean power plant and paris agreement. been a long slog my first professional paper on climate change was in 1968, 48 years ago. had the scientific community not just a few industry visionaries like my friends bob hefner and
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lake george mitchell understood in '76 that u.s. gas is often unassociated with oil and quite au bun daunt possibly recoveriable from deep and tide formations at least with pretty high prices. i would have treated it separately from oil and emphasized natural gas rather than advanced coal as a transitional technology used in quotes, briefly and sparingly to build a bridge to the energy income economy of 2025. so fair enough that wasn't clear until the last decade i did expect coal mining would peek at 1975 level and hit 18.2x but now coal is squeezed and has a smaller share of total u.s. primary energy than its previous world war ii low 1972. as my article warned also dangerous delays in the transition to a post fossil fuel and climate safe energy system,
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are are exactly what we can expect if we continue to devote so much money, time, skill, fuel, and political will to the hard technologies that are so demanding of them. and our continuing failure to exploit the power of example of market advantage to speed the orderly terminal phase of nuclear power which provides an innocent looking civilian cover for weapons programs continues to blow back on us and create self-inflicted threats from the likes of north korea, pakistan, and iran. say that was the article's biggest failure that i didn't get that across effectively enough. nonetheless, slowly but with gatt ring gathering speed markets have begun to triumph over incumbent mean was enforcing their natural desire to protect their legacy asset and capabilities yet the challenge of speeding that shift remains and the imperatives of
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climate, public health, security, development, and democracy heightened its urgency. i had a number of other slides about the energy revolution now coming at us. but i think it's better to go right to the pabl and some of those points will come up in discussion. which i think is going to get pretty rich. is it time to bring it up? [applause] [inaudible]
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[inaudible] while we're waiting to get micked up i would be remiss if i didn't note that one of the people behind this event in addition to brookings is my long stand friend bim martin, of course, was himself deputy secretary of energy previously, and also very involved as i think chief of staff and the original founding of the international energy agency delighted to have you here, bilk. it is my great honor i don't think in my professional career
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to be on a platform request such more distinguished energy observers and many of which go back many, many, many years. i'm not going to read the individual bios because you have them in front of you in the interest of time, but simply to say on this panel, we have phenomenal regulatory experience. we have entrepreneurial experience. we have someone like david freeman who transformed the way that tennessee valley authority thought about their long-term energy planning. we have john qumemy one of the most prolific writers among the younger group of people in the energy field today. and truly in my colleague david victor, of course, who has been in the forefront with the i.p.c.c. and many other parts u.s. energy and international energy and climate policy. so without further adieu i'm going to start the panel. we're going to start with you, peter and then we'll go to david. and then we'll go to john and
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david. so i want to urge the panel to stay within the five minutes if at all possible. >> usually i write me remarks while -- with apologies to those who heard me say this last night, let me begin with observation that i -- when i first met emory about the time this article came out, he was dominating a basketball court. if i have your attention now, in the state of maine, there are not many room large enough for major occasion so an awful lot of the important public proceedings take place on converging basketball courts and that was the case with 1976, 75,
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76 central main power company break case. which was primarily about raising the money to pay for the too broke nuclear power plant in which the nf was an owner and emory arrived at the hearing with a suitcase and then lightbulb -- size of a football. and promise that it would over time could replace a very large part of the electricity used for lighting and therefore also the heat that had to be taken away by air-conditioning. two 30-year-old commissioner trying to grapple with the various pentacle of what was the energy crisis, rising oil
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prices, electric rates that were a trouble in that decade. nuclear power controversies, this was a window opening on a very different world. but the challenge was how to move the actual infrastructure in that direction afterall emory would be going on the plane within 24 hours leaving behind the group of utility executives who didn't regard this as particularly congenial set of insights. and that struggle really has continued ever since. just a few observations, things that struck me in thinking back over these years, dick cheney was the white house chief of staff when the article came out.
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25 years later, as his energy task force laid out the energy plans for the bush administration, a hard path recipe if ever there was one, he said memorably that energy efficiency might be a sign of personal virtue. but it was no basis for the national energy strategy. so i think what the point that emory has already made and has made in the original article as well about exclusivity, about the fact that choosing one path excludes the other is one of the most important points that one has to absorb and to illustrate how important and how unabsorbed it is, consider that in many conversations about energy policy today on elevation in the
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media in the congress, it's regard as a sort of solemn and wise statement to say i'm for an all of the above energy policy. well, what could be more contribute rei to the concept of exclusivity than an all of the above energy policy. you can't have one. when i wrote a few years ago that we're not going to fight world hunger with caviar and not going to eliminate energy shortages with nuclear power. one of the most flattering things that happened to that statement is was that it popped up a few months later as a quote from emory. [laughter] and it does have a kind of
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lovin' ring to it. if you want another illustration of the fallacy of the all of the above or the nonexclusivity argument that were made vigorously when emory's article came out just look at what's happening now in illinois and ohio, new york, california. where reactors are threatened ty combination of things. low gas prices, their own rising cost, but also renewable energy. and the owners of those plants have turned on renewable development after years of more or less -- treating it with benign neglect. and are directly going after renewable portfolio standards to production tax credits, and
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seeking to meet. [inaudible] seeking to curtail the place of renewable and renewables and efficiency too in those states energy futures in order to keep the reactors running and in order to keep the price of electricity high enough to support the reactors. in fact, interestingly enough, no reactor undertaken after emory's article came out was ever completed. so in that sense, the proposition that we need not build more plants, and that the lights qowld stay on. for that matter that we would still reduce oil dependents in the electric sector hassen proven to be true, a number of react force that were under
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construction were completed, some of those plants that are closing -- now. but no new ones were built from then on. and the fact is, we haven't missed them. we've missed billions of dollars that we spent on some of the ones that were canceled but we haven't missed plants themselves. we're still left with rate making challenges that i confronted me on the basketball court 40 years ago. as emory said some states have now adopted rate-making methodologies that harmonize energy efficiency renewables and paying for their existing infrastructure. but many have not. the entire south is still very much on a south -- on a hard path rate making
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structure. and i think that in the utility sector remains the greatest challenge in furthering and speeding up the transition to a soft path energy future. not really a soft path kind of comment. but perhaps the most sing the sync from john roe the electric system later the ceo of exlon instead of rate making and energy efficiency you know the rat has to smell the cheese. and we're still working on getting the aroma of the cheese addressed into the offices of the -- let's not call them rats. but the folks who will build the system going forward. [laughter]
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>> thank you, poort very interesting as always. david. >> you know, we speak about emory in five minutes it is a challenge of a lifetime. i've considered myself a first lieutenant in emory's army over 40 years now. and of all of the people including myself, in the energy arena emory is the only person that i know that has said the same they think from 40 year and has been had right every -- every day, every hour, all of 40 years. and the frustrating thing is that even now when the evidence is overwhelming, and emory
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foresaw what the future needed to be, we still have intelligent people that are fighting city hall that are not accepting the fact that the renewable efficiency option is these low cost options. and what is frustrating is that -- that the environmental knowledge is reached the point that what emory is preached, advocated and sold to a lot of people over a 40-year period used to be desirable. now it's amount of leaf or death for the planet and we still have people with over 100i.q. that fight it. including some people in this room i suspect. you know, the issue is whether
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we human beings are a modern day version of a dinosaur. are we using our brains? are we willing to accept, yes, favorable fact. you know, i view emory in somewhat different perspective than i think most anyone else. because i had been advancing these efficiency ideas in the federal government. ever since the late 60s with some modest success. but i didn't have a voice. i was talking to myself primarily. and the world at large didn't know about this. emory gave breath, depth, understanding, and coherence to the notion that a combination of the efficiency and cleaner
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technologies was an option that was -- that made sense. and he is taught the world in a very unmistakable manner in a way that people like me just never had the ability to do. so i feel like we've had an unwritten partnership where i ran over my lifetime five different utilities and tried to implement with some success occasionally his ideas where as he was educating the world. i must say, though, that emory's numbers are as solid as gold. but they haven't always been. his ideas have always been solid as gold. but i have to resite when i was
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rung in central texas and he came to austin to teach the city of austin efficiency and he gave a lecture up there with his chalk and said they can save this percentage on this, and this. and i'm his buddy i came there to listen. but i do math in my head, and i realized that emory are them saving 110% of their load. an if i went up and whispered to him and made corrections. didn't phase him in the least, and oh, okay. but the important thing is the impact that he had on president carter and some of the other rest of us. the breakdown in american energy policy was the election of ronald reagan plain and simple. we were on the soft path in '79.
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the projections were pretty much in line with what emory was saying and we haven't been on the fence then. the great tragedy was a clinton administration where al gore is the personal buddy of mine and i know bill clinton they know much about this subject as anybody. they didn't do doodley squat in years that they were in office and that's another story. but emory is a young man. he's reached the midpoint in his career. and i think that he's going to be around to witness a all are renewable economy that is emerging that will hopefully, real issue is will it emerge in time? an that is the big question.
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can we persuade the people on earth that this is not sthng that is desirable but absolutely necessary and it is cheaper. what is so frustrating to me is that we with fought this fight wasn't it all clear that we were right? you know, we renewable energy was a kind of dream back then, now it is a reality, and still we do not -- we're not able to move to a simple law like all new power plants have to be green house gas free. no one is even suggesting i think this is as simple as that that are absolutely necessary. why are we fooling around with taxes which for 41 years no one has been had able to get enacted, a tax on carbon. why are we fooling around with things that incentivize and
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maybe when it's life or death when we -- when the d.d.t. killing the birds, the family doctor is telling us that the emission of green house gases is poisoning the environment. and plain language, and yet rather than outlawing it and we can outlaw it for the future and we have a better product. we're fooling around with complicated measures that nobody in paduca, kipe could understand cap-and-trade and taxes. you know, somehow or another we are so wedded to a market solution to things that we forgot that the only reason on god's green earth is to do the things that we can't do individually and you can have a
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carbon tax as high as it is rich people will buy gas guzzling cars if they want to. this is an issue that requires 100% participation. and it requires that we take mandatory action in my view so the big fight now is are are we going to implement emory's dream which has come true? but are are we just going to sit by and let the market do it which it will do over a 50-year period. but which may very well be way too late. so we've got to challenge and that's the challenge that we face are we nimble enough to break the habit that we've had awflg these years and recognize about that even though we don't trust either candidate for president that the government -- the governmental structure is the only structure that we can make things happen that are life
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or death matters. and this has got to be thought of in the category of a health issue. a health of the planet. so that is kind of where i am. but i will always be a fan of emory lovin's. >> thank you, david. >> i want to call out three conception changes that emory's work first encouraged. one is least cost energy services. the other is economy of skill, and third is path dependents. let's talk about each of these in term. in the 70s it was widely believed that energy and gdp had to grow together and that electricity had to grow at twice the rate of gdp growth that was known as ironclad link between energy and gdp, and now we know
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that people are smart and institutions are innovative and based, faced with policy changes and price changes, that they will change their behavior. they will modify their structures. they will change property rights. and they will alter how they think about a product given the right incentives. but it was a radical notion back then to say if you focused on energy services on the task that people wanted to perform, that you would be able to substantially increase energy productivity. and what we now know is when you think about energy in terms of the task we want to perform, there are many options for improving efficiency. in 1974 the american physical society published a now famous report that talked about looking at task and then thinking about these -- what's called the second law efficiency of those tasks and
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what they found at that time was that the overall second law efficiency of the economy was only about 5%. so that meant that prospect for improving energy efficiency was much, much greater than if you focus just on the the first law. so if you look at a power plant new gas combined cycle might be 55 or 60%, your livelihood of improving that efficiency is limited. at 100%. right? so by karno steven west. so-so if you think about the task and say what do we want to accomplish and least cost and least energy using an most emitting way to do that, there are many different possibilities and that allows you to achieve very substantial efficiency improvement. ...
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and if you build a lot of something you are able to drive down the cost per unit. typically this is characterized in terms of what's called the learning rate. so the percentage change in unit cost. what you find, that learning rate is 2425%. every time you double producti production, costs come down 20 or 25%. we shall historic way for solar, wind, for mass-produced technologies, that is rates of learning can continue for
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decades. and so that power of economies of manufacturing scale was something implicit in amory's analysis data think many people at the time didn't understand. now we know because of historical developments that wasn't true. the last key point is the idea that our choices now affect our options later. that the future is not a question of fate, it's a question of choice. that's another radical shift in how people in those days thought about energy futures. i think there are still many people who still have this idea that the future is something that just happens. but really the future is what we choose. economies of scale and understanding those energy service path level analyses give you more options, allow you to do choose a future that's
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inherently more hopeful, lower a meeting, lower cost and allows us to accomplish our task in a way that is simply better for a planet and for society. >> thank you very much. brookings turns 100 this year. amory turned 40. i first learned about this from bill and mary bundy, my at a local actually. i learnt about it namely from there he told me those mother, my great grandmother cooked hamburgers and some a didn't kill all of us. about the insights of this peace. i have to echo something you said about the editorial process because i think it's easy to be controversial. it's hard to be insightful. it's extremely difficult to be controversial and insightful and maybe even harder to get all that published.
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i think it's telling that the most controversial insightful article about energy policy probably ever published was published in a journal to that date i think was published, i know -- very little about energy. it's hard, very hard to look in established journals and swim against the tide and want to commend you for konsyl swimming against the tide and get the tide to turn in your direction. i want to make three comments about the substance of the article in the debates and technology that have unfolded since then. first comment is when it read the article i see as really to broad arguments. one are given is an argument about efficiency and there's a lot of data and insight about how it is cheaper to save energy and to focus on task, as john says, and a function, people care about cold beer and warm
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readers and we don't want warm beer and cold breeders so there interested in forming a task and they don't care how much primary energy is used to do that. we can't approve that radically. i think only that part of the article has been, has really withstood the test of time. the other people at the time, art rosenfeld and california, john holdren who later became a colleague at harvard a lot of people talk about this, you did that argument voice. to put some numbers on it, when you first wrote a draft of this piece, the consumption of the comment was about 75 quadrillion btu multiple projections out the year 2000 were for 120 120-130 watts. some people were 200. we showed a chart earlier and even corrected productions were lower but so much higher than today. total primary consumption is based flat at 100 quadrillion
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btu's. really impressive because of the focus on efficiency, hardly -- we found ways to generate much more greater economic output for smaller primary energy input and he really, this article help focus the debate and i think that sent an incredibly important, it's not always pleasant to folks, most of the power industry is struggled with the reality that power demand is flat or if you're an in a busins that in some states in this country require increasing our sales and that's not a good business necessary to be an. when you look across the entire industrial is world you see the same story, flat primary and just to see some telltale signs of the same thing in china, maybe eventually in india. second thing i want to talk about is the other part of the article which is soft versus hard. i guess maybe to paraphrase bill clinton in a different setting, depends on what you mean by the
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word soft. i think when you go back and reread the article, the soft vision wasn't much more more decentralized energy system, probably less dependent upon electricity, much more local production, production from coal, and busters and so on and a lot of renewables. what's happened since then is we see a lot of renewables in particular but i think it's and since we've seen a hard version of the original path, which is more renewables, lower admissions, but much more interconnections through power grids. in some sense we continue to build out a fast machine, a fast electrical power machine. one of the interesting to point the debate is whether that's good or bad, whether we are in the cusp of seeing a decentralization or maybe the opposite, centralization of the power system. as charlie mentioned i spent some large fraction of the last few years of my life working on
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climate change reports and one of our main findings was in a world that is radically reduced, that is probably a lot more electrified. one of the question is one that will be centralized or decentralized electric power system. i had some insomnia last i saw watched the keynote address for the bloomberg new energy finance update. it cure insomnia but one of the things that was interesting to see that in annual interest is to talk about the world leaders, the best renewable energy contracts and they're all great connected. large grid connected. some parts of the world where you see decentralized power, is becoming more viable, parts of indians want to thank centralization around the grid is one of those interesting. blessing, third thing is what would you do if he wrote the article differently now than before? part of amory's answer is exactly right, about gas. the world of the 1970s was one
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where we were grappling come source scared the and looking beyond oil and gas. what happened since then innovation is made resource scarcity almost a for a non-problem, in a physical sense. the world is awash in hydrocarbons and we have in this country to gas and are not moved beyond oil for a variety of reasons. i think it's interesting to look back at history and realize in the 1970s, one of the questions where are we going to build three or 400 nuclear reactors. clearly we didn't do that in this country. we are in the process of retiring a quarter or a fifth of the fleet. i think there's a lot of people who are rightly concerned about what i that does to the balancef energy system if i was writing and looking at you questions i think there are two that stand out to be. one is climate. amory mentioned that was discussed in passing the climate
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really changes almost everything your you need to get to zero emissions, not small reductions, zero emissions. he got to envision an energy system that is radically different from today. one of the questions is whether it's a decentralized system or decentralized system. the last thing i think it's different it is the role of other countries. in the 1970s amory can see the united states can make choices about its nuclear fleet and the rest of the world will follow. and today i think the situation is very different. much of the frontier of innovation is playing out in emerging economies. frankly, what we do in our nuclear fleet is borderline and limit to what the rest of the world does because the frontier for low-cost construction of reactors has moved korea in particular, china perhaps, and it's a really different and possibly more difficult to operate in what is no hegemon if you like, the country can set the tone. thank you.
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[applause] >> i'm going to ask one question and then in interest of time since the expertise we have on the floor we want to hear from you all. the one thing that bothers me about some of the things we've heard today is yes, we have made phenomenal strides in the united states, and we know a number of other advanced countries particularly into scandinavia, japan and elsewhere have done so, too. but how do we really embark on a soft energy paths in the emerging markets of the world? amory has shown us very well that forecasts can be dead wrong by order of magnitude but yet most of the forecasts still show that if we look out 20, 40, over 90% of the growth in primary energy demand is going to be in asia. and in asia we have literally hundreds of millions of people that don't even have a lightbulb.
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we have unfortunately many of those countries also very large low-cost to produce, not environmental expert now these coal. there is awash in corporate 10 million people are in employed in the movement, whatever, of coal in india. so my concern is when you have societies like this that do not have cost reflected tariffs, the markets are not going to probably get you where you want to go, we have massive power theft that despite billions of dollars by many, many different donor agencies around the world, i'm not significantly improved in the last 30 years. and you have buildings that buildings and collection systems that often don't, they'll still get where they're needed, or bribery, bills don't get paid. how do you make these utilities functionally solid and yet at the same time do what i think david freeman has said, we've got to move away from fossil fuels altogether.
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this is were i think we sometimes get too caught up in the tremendous progress we are making in the developed world and not recognized the very real challenges that if we're really going to do with climate change with got to do something about it. unexpected response unless you want to invent we will go to the floor. >> five years ago we published a best -- [inaudible] >> do you want to borrow mine? >> so five years ago we published -- reinventing fire which showed how to run a 2.6 economy in 2050 than in 2010
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using the oil, no call, no nuclear energy, a third less gas, $5 trillion cheaper than business as usual record no new inventions and no acts of congress. but instead policy shifts at a subnational mainly state level were regulated our utilities for the most part, and the transition led by business for profit. so far the first five years that is on track. it's what the market is doing because private sector fell to $5 trillion which is just what to be happening. this got the attention of china's national development and reform commission, the super ministry that tells most of the other ministries what to do. so they tasked their top energy analyst at the g. research institute in beijing to see what this would look like for china with support from the in the rc sponsored china energy
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foundation, china, the department of u.s. department of energy's lawrence berkeley national and rocky mountain institute. 50 odd experts worked on this for three years. the results were published two months ago at the g20, and the finding was, again this is their best energy models, it's not telling care what to do, protected by 2050 have a sevenfold a bigger economy than 2010 but using today's energy. north sevenfold higher energy productivity. shift 62% of their primary supplier of fossil fuel cell that our carbon emissions would go down 30% while the economy grew sevenfold. that's a 12 fold gain in carbon productivity. $3.5 trillion cheaper than business as usual, and, indeed, our customers for this work with the authors of the 13-five your plan which was approved in march
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in it strong influence and inform the plan and all of china's energy strategy, thus helping create the trust and confidence that were important to the u.s. and china climate collaboration as presidential level that it was important to the paris agreement. i feel good about how this is turning out, ma and now our beijing office after many partners they are are pivoting to implementation. but to charlie's important point, china's coal burner action has declined in each of the past two years, despite roughly six or 7% a year economic growth. they now have a large surplus of capacity. they are in the process of suspending or canceling what our 200 gigawatts of coal plants are now clearly prestandard inspect every stranded assets. the next thing is that it international development agency is in effect the eighth biggest country in driving carbon
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emissions because it's mostly financing coal plants elsewhere, just like the bank of japan is to try to keep that power plant vendors in business without being properly aligned you with national climate policy. in india there are several things going on, the energy minister has done a brilliant job of using competitive bidding to bring down renewable costs a just a year or two to already less than imported coal power and within less than a year, less than domestic coal power. so he's recently been remarking difficult expansion he thought he would need will not be so necessary because renewables are taking over. and as we have a team racing rwandan electrification to 70% by the middle of 2018, now 24%, i just want to call your attention to what very efficient
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technologies can do any decentralized context. the 1.2 billion people without like the charlie rightly referred to typically $2 a day or less household income are spending $38 billion a year on kerosene because they were a country, those kerosene lamps of the eighth biggest carbon emitters either in nation's kill at least 2 million people a year from bad air. now, it turns out that there are sparks in this long night because in many places now you can get a package -- this is just called an example -- of a very efficient led. high temperature lithium batteries and good chip controls. this will sign -- shine like that very brightly for 10 hours on one days charge in the sun or two days in the cloud.
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or if i crank it up for not just them 150 hours per days of charge. it will set up on a coke bottle, shine down on the table. you can teach your kids to read, particularly your daughters, and his face back in weeks and months against kerosene is like a perpetual annuity give you a months extra income per year. there goes the last bit of rockefeller's 156 year-old kerosene business. so you get this from an entrepreneurial woman in the village, your finances or scratch cards or through the smart phone that you recharge here off the usb port. this sort of thing is spreading like wildfire, and i think it's an interesting play, david, on your important point about centralized and decentralized. a lot of the decentralized solutions are bubbling up in places where there's no grade educated afford a great. people are leapfrogging just like cell phones, leapfrog
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wireline phone companies. essentialist stuff is also changing economics rather radically because of course much of the cost, which is most of the cost in touch with our statutory the electricity. it's distributed. you can bypass that by doing it on your roof and then you can make the grade resilient so major cascading failures become possible by design since 98 or 99% power failures originate within the grid. there are a lot of other factors in play but i think the issues you raise are the right ones, and in that battle, and decentralized systems are gaining the upper hand. >> we need to go to the floor spent one of the nice things about sitting next to try one, it's a question comes up, the answer comes out of his pocket. pocket. >> please identify yourself and ask a question.
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>> i started something 10 years ago called the energy conversation funded by the defense department to get everybody thinking about energy and tremble and was one of her first speakers. my observation about this is we have enough talent to deal with a technical issue. my question is getting the public to understand what needs to be done and demand it. if two-thirds par three course obvious public do not know the we have three branches of government, we have a serious education problem. and i have a suggestion which that all people who write what i will call an academic or a dense paper have a requirement to write a version for non-technical, for non-technical people with lots of graphs. it's a very complicated story. >> thank you. >> and my question is, how do we make that happen?
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how do we get universities to require of academics and students and think tanks? >> thank you. does anybody want to take up on? >> i'm not sure you want to be completely successful in your suggestion because there's a lot of academic papers out of there, but i actually am pretty encouraged about this. i agree public dollars about how our government functions and so it is abysmal. is actually what's happening in the energy business right now. this in some respects not to be offensive to my colleagues up here but this used to be a very dull industry we woke up and he did the same thing he did the same thing yesterday. and that everything is changing. the attention to this by the younger generation is enormous so i'm very encouraged. i agree the academic world needs to be more articulate, but there's a real step change that's happened over the last decade or so. >> it's up to the president of the united states, and he's
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failed. >> another question? excuse me. >> i wonder though to what extent major changes in other sectors have ever depended on having a huge majority of the public deeply conversant with the policy debates as they go on. when amory's article was published there was another large monolithic, utility, the bell system. and everybody had either a rotary or a push button hardwired phone, the intelligence in the network was also where between -- and the switches. without the public being deeply involved in what been transpired in the '80s and '90s, we've gone from that system to which
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the intelligence is here. it's decentralized. it's migrated out to the customers. the old switches that were used to be involved in rate increases at how supportive, largely invalid but now, not completely but largely. and yet the public wasn't, the public was responding to the products and services that were available and prices, and yes, they have some awareness and feelings about the changes, the elimination of the bell system. but they weren't reading the academic or both, even the ones that were in plain english for the most part. >> and now this thing has more intelligence and more computing power than the strategic air command had figure i got out of high school. >> going to take three questions at a time. things will get the panelists to respond. >> andy katz, i work for ever
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source energy so we are one of these utilities on a death spiral i guess, but i think i still have a job. such as quick, i convinced our company to file an amicus brief in support of ferc for jurisdiction over price responsive demands. we won that come unit, i was inspired by amory as an early attorney out of the ferc -- >> can we get to the question of? >> my question is not spelling that she's. what we're finding is the standard market design rules and organize market that we deal with other new england has a lot of barriers to the transition not to the kinds of things that are desirable, the path that we want to be on. i say specifically treating all electrons the same regardless of how they're produced, the
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isos, or the does are neutral with regard to that and then there's a lot of barriers between commission of a federalism question i think. so i throw it out what kinds of barriers, d.c. barriers to achieving these outcomes that we won through federalism and the kind of interaction between state and federal policies speak with another question here. >> former director of operations at the world bank. excellent and the presentation and the panel. as we expected. my question regards shale gas actually typed structured you mentioned this as a transitional source. how transitional is this actually? reason i ask this is we've been having some very, there was a lot of enthusiasm in the earlier years that this is going to fuel a lot of more than nine
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environmental oriented development. as we went on later these projections became lower and lower out about how much action as there. of course, there is price elasticity and so forth but what is the real picture? how much can the u.s. and then by extension the rest of the world of the technologies in fact transferred, how much can really benefit from this transitional source? you other dude and i, you also mentioned something. >> rushing in the back. >> peggy knutson. hi, charlie. i worked at brookings for eight years. ecoa america worked with people that people trust like doctors and rabbis to message exactly the things you are saying. this is climate effects are held so the gentleman second from right sentencing with the government can do this and we don't need a lot of people on
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board. okay, i'm getting that wrong but i think it needs to be a combination of policy and people understand. we throw away 40% of food we buy, for examples like is the question is, how much of this is going to come from above with the policy and what kind of a campaign to we need to get americans on board the way we did with smoking, the way with other campaigns that got this society completely changed and on the right path? >> let's see what the panelists want to say about any of those. >> i think the poll evidence is very strong that there's an overwhelming majority of americans across the political spectrum who wanted viciously of renewables, and sooner than later. and private sector will have to give it to them. and when we now have u.s. energy productivity having more than doubled from relentlessly driving down all and electric demand, 68 i think percent of our new capacity last she was renewable.
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the market responding very nicely despite all the barriers still in the way. so i don't think this is a problem of lacking grassroots support and jeffersonian commonsense. on the fracking question, speaking for myself but i'm a member of the national petroleum council, i think there have been many bad practices in the industry that give everyone a bad name. we advise our clients to adopt gold standard is practice which inconveniences their competitors more than themselves but even if they did there are about eight major issues around fracking, some of which may end up being satisfactorily resolved. some may not because it is a big number. i wouldn't bet a lot of money on their all coming out right. and the depletio depletion curve methane leakage, some of the water issues are complex and difficult the methane leakage is
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particularly worrying across the entire supply chain, and maybe a lot bigger than we thought. and i think already we are seeing, even operating costs alone for combined cycle gas plans beaten by wind and solar in many places. so then you add to that the price volatility of gas that probably gets worse downstream if you have abundant cheap wellhead gas, that volatility you can reduce from the market is worth enough to roughly double the gas price. it's really not that cheap. and in the geology is generally a good deal worse in other countries, so i'm not very sanguine about what that's going to go. >> if i can just say in one sentence, the shale gas is not a transition to anything but hell. [laughter] the fatal flaw of the clean power program and the great

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