UVA Clubs: The Future of Decarbonization - Innovation and Economics
- Good afternoon, and welcome to today's Earth Day Celebration webinar, The Future of Decarbonization, Innovation, Entrepreneurship and Public Service, hosted by UVA Clubs and the Weldon Cooper Center for Public Service. My name is Larry Terry, and I'm the executive director of the Cooper Center, and we'll be your panel moderator for the next hour. For those of you who are engaging with us here at the Cooper center for the first time, our organization has provided public impact research and capacity building for communities and institutions across the Commonwealth since 1931. This event's focus highlights a renewed spirit of creativity, collaboration and innovative thinking we have elevated within our organization in order to address some of Virginia's most pressing public problems, but that are also at the forefront of efforts being led across the globe. It is our hope here that this discussion not only highlights the work we have found important to contribute to conversations and actions around decarbonization, but also that we inspire hope and a sense of optimism at a critical time for both the future of humanity and our planet. Before we begin, I wanna thank the entire UVA Clubs and Office of Engagement team, and our very own director of development, JC Ignaszewski, for all their hard work in bringing this webinar to life.
Without further delay let's get started, and I'll ask all of our panelists to turn on their cameras and microphones and join us and I will introduce each of them. Great, we are all here. Good to see everyone. Our first panelist is Rishi Das. He's an environmental scientist with 12 years of experience in forest ecosystem ecology, natural resource management, climate change, and international development.
He has worked in 16 countries across Latin America, Africa and Asia on agriculture, watershed management, forestry, disaster risk and resilience, climate change mitigation and red plus and conservation protected area management. He joined GCF Task Force as a program officer for the 2050 Deep Decarbonization Pathways Project in August of 2019. Rishi, thank you so much for joining us, good to see you. - Hi, good to be here. - Our second panelist is Andres Gluski, and he has been shaping policy in the energy industry for years to accelerate a greener energy future for everyone. He served as a member of the President's Export Council from 2013 to 2016, and served as an expert witness at US Congressional Hearings on the subject of Energy Policy in Latin America.
Today, he is continuing to drive transformation as chairman of the American society, Council of Americas, and as a member of both the US-Brazil CEO Forum and US-India CEO Forum. He has been the president and CEO of AEs since 2011. Andres, welcome. - Thank you very much, Larry, great to be here. - Our third panelist is Michael Lenox, and he serves as the senior associate dean and chief strategy officer for the Darden School of Business. Prior to his current role, he served as associate dean of innovation programs and academic director of Darden's Batten Institute for entrepreneurship and innovation.
He helped to found and served as the inaugural president of the Multiple University Alliance for Research in Corporate Sustainability. Michael also has a longstanding interest in the interface between business strategy and public policy as it relates to the natural environment. Michael, good to see you and welcome, thank you.
- Thank you so much for having me. - Absolutely. And finally I wanna introduce our very own Bill Shobe, who's an economist and professor of Public Policy here at the University of Virginia. He also directs the Economic and Policy Research at the Weldon Cooper Center for Public Service. He's a UVA sustainability fellow, and worked on the team that designed carbon allowance auctions for the Regional Greenhouse Gas Initiative, excuse me, and has worked on design and evaluation for the RGI Program the EUETS and the California Cap-and-Trade Program for Greenhouse Gases. in 2000, Shobe received a Fulbright Fellowship in Environmental Economics and Policy.
His current research includes emissions market and auction design, environmental federalism, carbon removal technologies, electricity demand forecasting, and deep carbonization strategies for Virginia and beyond. Welcome, Bill Shobe. - Thanks very much, glad to be here.
- So again, thank you to all of our panelists for joining us. This is a very exciting, and in many ways, I wanna say a celebratory event, with it being Earth Day. And so I know that the conversation is gonna be certainly thought provoking and definitely directed towards teaching us all a little bit about some innovative work happening. Bill, I wanna start with you if that's okay. And so to avoid some of the greatest effects of global warming, current scientific opinion suggests that we need to reach very low or even net zero greenhouse gas emissions by mid-century. So Bill, can you talk to us a little bit about what an economy with no net greenhouse gas emissions would look like and what changes will be required in order to reach this goal? - Sure.
There have been a number of studies now, including our own study, of decarbonization in Virginia, on the how to eliminate emissions cost effectively by 2050. A lot of people are starting to focus on the suitability of that as a goal for states and countries. And these studies, including ours, tend to focus in on what we're now calling the pillars of decarbonization. What are the four things that have to happen in order for us to be able to cost-effectively decarbonize? The first of those pillars is efficiency in energy end use.
So we've got to get the most value out of the energy we do generate. Second, we want emission-free energy and in particular emission free electricity. We know how to generate emission-free electricity cost effectively now, and in fact, new technologies are coming along every day that are helping us continue to lower the cost.
The third pillar, if you have emission free electricity, then you wanna electrify everything. You wanna electrify cars and trucks, you wanna electrify building energy services. So instead of using natural gas, for example, for heating and cooling commercial establishments, you would use electricity, use heat pumps for doing that. So third pillar electrify everything. The fourth pillar, for those hard to those hard to convert processes, those industrial processes for which it's really hard or expensive to get away from using fossil fuels, sequester carbon.
Use carbon capture and storage or carbon removal technologies to pull back out of the atmosphere the emissions you really can't afford to avoid. If you put those four pillars in place, you can get to a carbon neutral economy and you can do it cost-effectively and you can do it by mid century. - So Bill, just as a quick follow-up, what does decarbonisation mean for Virginia in particular, and what's the state's current policy towards decarbonization. - Yeah, sure. So again, just leaning on those four pillars, What do we need to do? Well, we wanna keep our carbon free, the carbon free sources of energy we have. We have about 25% of our electricity is generated by nuclear plants.
We need to keep those plants running. They're generating carbon free electricity for us. We need to map out and in fact, already are mapping out a strategy for large scale use of solar energy and offshore wind, and storage to go with it, especially solar and storage are great partners.
The third is electric vehicles, and we're again, on our way to advancing the use of electric vehicles and light duty cars and trucks, especially in Virginia. And then finally, in the buildings sector replacing fossil fuels with electricity. So here we have those four pillars again, but in the context of Virginia. Now, we already have some policies in place to help get us there.
In 2020, the Virginia General Assembly passed the Virginia Clean Economy Act. And while we're thinking about the contribution of Virginia alum in helping decarbonize the world, the champion and the Senate, the Virginia Senate for that bill was Senator Jennifer McClellan, who was a law grad from UVA. She was the chief sponsoring champion of the Virginia Clean Economy Act in the Virginia Senate. So the Clean Economy Act sets a clean energy standard for our electric utilities, it sets a schedule for renewables deployment, at least through 2035, and importantly brings Virginia under the cap of the Regional Greenhouse Gas Initiative.
So our carbon emissions are capped and that cap declines every year and hits zero in 2049. Zero emissions, our cap will be zero in 2049. So these are policies that will get us to zero emissions by the end of this, at least in the electricity sector. This last general assembly also added to that a clean car standard. So now we have a schedule for using zero emission vehicles and generally that means battery electric vehicles on Virginia's roads.
And so that should begin the process of moving our transportation sector into zero emissions. And so what we know in thinking about what it takes to implement these, is that if we start down this road, we can actually decarbonize Virginia's economy without increasing the share of the economy that we spend on energy. So we can do it in a cost effective way. - Great, thank you, Bill, for that.
And Andres, I wanna turn to you next in building in many ways on what Bill has just sort of laid out. You spent a great deal of your career contributing to this idea of greener for everyone, really. And so I wanna ask you a little bit about decarbonization by 2050, because it will require not only converting the current electrical grid to renewables, but also greatly expanding it to electrify other sectors.
However, new installations so far have only been to replace retiring gas and nuclear assets. So how can the pace of new solar wind battery and other projects be accelerated within the next few years by 400 or 500% over current levels to sort of meet this target that we know we have a date for now? - Well, let's say we were the midst of a really sort of quantum leap and the amount of renewables we have to build. But I'd like to build a little bit on what Bill said because the importance of storage.
Because, let me see, I'm a little bit out of focus, I believe, yeah. Because in a lot of the discussion about renewables people talk about energy. So today in most places, many places, renewable energy is the cheapest, that is by kilowatt hour, but you really need capacity. Capacity is the ability to be online 24/7.
So the problem solar is a lot of energy but it's not 24/7, and the same thing with wind. And in addition they're intermittent clouds pass, the wind gusts. So we actually started, we were the first in the world to start working on lithium ion batteries for energy storage 10 years ago, and it was prohibitively expensive. And this is a case where our global footprint really made it possible because the first really industrial, I would say, grid scale energy storage using lithium-ion batteries, we didn't Chile, and we proved the concept out.
And now we're in about 22 countries, and we have like 2000 megawatts in operation. And really my concern is supply honestly. So when we talk about the renewable growth, it's gonna be enormous because it's I think happening in two ways, one is electrifying the grid. And we can talk about what are the great challenges there, but then it's really greening the transportation sector and that's gonna be an enormous challenge. So part of that, I think is electricity, part of that's going to be green, hydrogen based fuels.
So we're gonna have to produce a lot of energy to produce whether it be ammonia or directly hydrogen, because the energy of density, the energy density of hydrogen is great. So for mobility, you'll probably need some sort of fuel-like hydrogen over the next years, and you're gonna need a lot of batteries, and batteries have to get even cheaper to do this. So in the short term, I'm very concerned about having enough supplies, whether it be solar panels and the trade war with China is not helping that at all, and getting enough batteries. So, for example, today, we announced a deal with Northvolt, which is a new battery startup in Europe, they're setting up a plant in Poland.
And so what we said is we'll take one train, about a third of the production of that plant in the future. That's a $900 million deal, so we're not owning part of the factory, but we made the factory possible by putting in a firm order for $900 million batteries into the future. So that's the great challenge, is capacity, the energy end.
Let's face it, there's also, you know, as you build out solar and you build out wind, you're gonna get more NIMBYs, people are in favor of green energy but not necessarily in their neighborhood. We in Virginia are close to finishing the largest solar plant East of the Mississippi, in Spotsylvania, it's almost 500 megawatts. And once you start getting into solar farms that big, handling local stakeholders is really key. So what do I think? I think we must do this, we're all gonna run to do this. There are going to be bottlenecks.
We have to work very hard to overcome those bottlenecks. I think we need a bit of a more sophisticated presentation to the mass audience, because I get a lot of like, well, you know, just put in wind farms and shut down all the fossil fuel, it's not necessarily going to work. To give you a case in Puerto Rico or in the Caribbean, you should have seen what our renewable plants looked like after Maria. The wind turbines were several miles away from the installation and our solar farms were 80% destroyed. So the fact is if you have 100% renewables, and again, you're living in Boston, you advocate this as an environmentalist for the people in the Caribbean, but if they would have no energy for two years.
So for example, we have come up with a solar farm design prefab which is very low to the ground, which has resisted, in actual, we did the test in Australia, category four hurricanes, but that's the sort of thing that's gonna have to come over. And we have to have a more sophisticated discussion because we can't do this overnight. You have to do this over years, you have to have the right policies. People like Bill have to come up with the right policies, and explain them to the politicians and to the public.
So an example of how to do this really is Hawaii. And we've been very active in Hawaii to get them to zero carbon working with the utilities and the co-ops, but it was a very well thought out program 10 years. And so we have to run fast, but I see a lot of things that technically can't be done. I mean, like turn them off tomorrow, just go with renewables. If they're all the batteries you need will be there, it's a lot of practice problems.
But actually they're great challenges and the private sector will step up if they're allowed to. - That's fascinating just to think about alone about the the business and economics angle associated with all this. And so I wanna bring in Michael in on this. And Andres and Michael, I sort of have questions for both of you, considering the nature of the private sector and firms really, and what incentive do they even have to reduce their carbon emissions, there has to be some thought to that. So are around this idea of incentives, sort of the first question, and I'll go to you first, Michael, what incentives do firms have to do this? And, secondarily, how can we harness entrepreneurial ingenuity in order to help solve the climate crisis, which of course intersects with many of the things that Andres just mentioned.
But if you could first tackle that, and then Andres, the same question sort of for you. - Yeah, I think, if you think about like the first 12 years of my career, kind of starting in the mid '90s, there was a lot of rhetoric around corporate sustainability that started to emerge in pledges that companies were making to reduce their emissions or reduce their footprint by certain percentages. That's not gonna get the job done, that's not what we're talking about here when we're talking about decarbonization. We're talking fundamental transformations of different industries, we're talking about fundamental shifts in technology. As bill was saying, we're talking 100% electric vehicles or some other non emitting source, 100% net zero emissions from electrical generation.
So how does that play out in terms of the marketplace? So one of the areas where I'm probably most optimistic right now is electrification of vehicles. What we've seen in terms of the decrease especially in battery prices, leads you to believe that we're not too far away from electric vehicles being competitive with regular internal combustion engines on current degrees of merit. And what I mean by that is you don't need people buying green to buy electric vehicles. Those will simply be the better alternative for people.
It's not to say that policy doesn't play a role, because timing is everything in decarbonization and climate change, so how do we accelerate this? How do we make sure this transition takes place? But that is one more, I think we're already seeing obviously the market forces take place and a lot of interests there. Every single incumbent auto manufacturer is now rolling out electric vehicles after seeing the success of Tesla and others. In terms of electrical generation, as Andrea's was saying, there's a great story here about renewables and the cost of renewables that are gonna need electric utilities to favor them over alternative sources, but there are some real technical challenges.
The intermittency issue is huge, and I think you can't emphasize enough the storage needs to make a renewable energy grid work. So whether it's lithium ion batteries or other types of lady hydrogen and the like, we need massive advances in those technologies, if we're gonna move to a true 100% renewable grid, that's gonna be a heavy lift without advances. And I would just add one more part to that, which is innovations in grid infrastructure itself, the needs for what people call smart grid technology. I think one of the great promises of renewables, is the potential for distributed nature, so commercial and residential solar. And so we can envision a future grid where we might have literally millions of point sources of generation on people's homes and on businesses, and the like tied into a smart grid where we're dynamically training electricity, both from a supply side, but also just from a market side.
And that allows us to create some efficiencies potentially on the grid. But that's a heavy lift, that's a heavy lift to get our infrastructure where it needs to be to support that vision of the future. - Great, yeah, Andres, please same to you. - Well, we're seeing enormous energy going into the space.
So for example, if you wanna hire a young talented people you have to be addressing the climate issue nowadays. Second, it's very interesting, nowadays for big US corporations you can't get a long-term energy contract, right, really power purchase agreement that's not renewable. So it's like, you can't build a coal plant today in the States, because they're simply the corporates don't want it.
So I think we have to say, look, that's what consumers want. I think it has to be put in a very clear way what you're getting, but that's what consumers want. Consumers are saying they want green and corporations are saying, we wanna provide them with green energy. Now, again, going back to Bill, Bill mentioned the efficiency aspect. I think one thing that it does not get enough talk is really how we're coming up with smarter networks and using artificial intelligence.
So we've had four unicorns over the past five years. That means that we were able to buy small startups with like 50 people and so forth, and having a big multinational corporation, we left them alone, but fed them, and they have more than a billion dollar valuations today. So one of them is, for example, artificial intelligence enabled bidding engine.
So you can not only, we have the software to charge and discharge batteries optimally from a technical point of view, but now we have the software to make it optimal from a financial point of view. We also have, we're the engine behind many of the big utilities in the US. AEs reaches 80% through Uplight, reaches 80% of the US households.
And so you don't know that we're there, but we're actually helping make energy efficiency articles and programs work. And the fact that we were the first and have become the biggest AI kind of feeds on itself, because our algorithms are more perfected. So it's kind of interesting, we are the biggest seller of nests in the country because of an algorithm that allows everybody to get their subsidies automatically. So I think that, you know, I've seen a lot of worrying things in the public dialogue, things that like, again, not worrying about capacity, not understanding the timelines, but I've also seen not understanding the role of the private sector. For example, the first version of the green new deal were saying, this is too important to leave to the private sector. But really the question I would ask, I don't know if any country that's massively changed its infrastructure in the post-Soviet era without using the private sector.
So China, which is the biggest builder of renewables today, does it through the private sector. India is doing it through the private sector. So the last thing I'd say is the importance of the global.
So for example, with our prefab solar, which again, doubles the energy density, by the way, so you need half the space. And with our battery storage, we're trying to franchise that in India because we can all drive Teslas and and buy renewable credits. But if India and Southeast Asia build all the coal plants they have on the drawing boards, it won't matter. So since our mission is to accelerate the future of energy, we had these technologies, including, for example, the AI, which would be fantastic in India. And we're working on that, and I've spoken with the prime minister, who set up fantastic goals about building up renewables. So I think that the other thing that there is, it's sort of incumbent on us and on the developed world, to try to make those technologies available, and it's simply because we won't achieve our objective if we don't.
- Thank you both for that and it's actually a nice segue, and sort of laying out that global context. Rishi, I wanna turn to you next to sort of build on this, these thoughts around sort of the impact globally. And we've certainly done some conversation about things that are happening here in the US, but what about other other countries that you have been in so far? But what are some of the strategies for helping to achieve the decarbonization in other countries, even as many of those countries are in some way, struggling to provide basic needs for citizens? So there's certainly a balance that has to happen, and so what's happening in other countries in that context? - Yeah, so my work really is with tropical forest countries and helping them envision what decarbonization means for developing economies. So I would say, the basic recipe that Bill laid out at the beginning of what long-term decarbonization entails and having these four pillars, certainly applies very well for developed countries. And I would include India and China and sort of the the middle income countries that are industrializing in that group, because a lot of their emissions increasingly are coming from energy and transportation and industry.
But for many developing countries, their economies still depend on forests and the land sectors. So forestry, agriculture, livestock, producing the major commodities like palm oil and beef and soy, that are associated with driving deforestation. So in those countries, I think, building the business case is certainly I think further behind where we are with developed economies.
But I think there have been some promising advances that have been made. I think for one thing, there are many co-benefits of pursuing longterm decarbonization. So when you act to preserve forest or when you are trying to drive more sustainability in the land sector, there are benefits for not just for global climate but there are also public health benefits that citizens of those countries can realize. There are lots of other environmental ecosystems and services that forests and other natural ecosystems provide. And whether it be mangrove forest on the coasts protect against the effects of a changing climate and storms, forests provide watershed services, clean water, clean air. So I think emphasizing what some of the co-benefits are and how decarbonisation actually aligns quite well with development objectives.
So increasing incomes, increasing public health and education, all of those things can be aligned with the decarbonisation strategies, long-term decarbonization strategies. And eventually of course, all of these countries they plan to industrialize their plan. So if we're looking at Brazil is a good example, Brazil has significant industry and energy requirements looking towards the future. So eventually as, I think, as Andres was pointing out, if developing countries continue to use coal and continue to use sort of the old technologies that are very carbon intensive, we won't collectively, on a global level get to where we need to be. So I think, emphasizing what some of the benefits of decarbonization are and how they align with development objectives, and then also, leveraging the global community and bringing finance and bringing in the kinds of international support that's necessary to to drive ambition in developing countries is also quite important.
- Rishi, I wanna stick with you just for a second. You spoke at some length about deforestation, and it almost seems in the United States that we are a bit detached or removed from the the act of deforestation or the impact of deforestation in many ways in sort of a visual or tangible sense, but given your experience working sort of in the forest ecosystem, what can we do to encourage forest preservation as part of our efforts to achieve net zero emissions? - Yeah, that's a good question. I think because decarbonization in particular does not, it doesn't... it looks primarily at energy use because energy and transport and really the use of fossil fuels in different forms drives an increasing proportion of emissions, especially when you look at it at a national or an international scale, like the cheapest technology that we really have for removing carbon from the atmosphere is still plants and forests. And until the technology, for say carbon capture and storage, if the cost of that falls as low enough to be competitive with just planting trees or preventing deforestation which is probably not likely to happen for quite a while, it still represents one of the best investments. And I think our goal with talking about decarbonization with developing economies really has been on trying to emphasize what the global benefits are.
And there has been quite a bit of work done over the past decade or so on trying to create finance through mechanisms like red plus, which is through the UN climate change convention, an effort to provide payments. And I would say there've been mixed results. I think there has not quite been the scale of finance that was expected about 10 or 12 years ago, but in some of the cases where there have been bilateral agreements between countries like Germany and Norway, even the US, providing direct payments to countries to reduce deforestation, there have been at least short to medium term gains over the past decade. Unfortunately, a lot of that has been reversed. So between say 2012, and the present, especially in the last few years, countries like Brazil have seen a significant backslide, and an increase in fires and deforestation. So, one of the things that's tricky about forests and forest conservation as a way of addressing global emissions is that there are a lot of risks associated specifically with providing finance for forest and seeing that as an offset for not reducing emissions from fossil fuel burning.
But I think those things can be addressed, and I think the important thing with forest is that carbon sequestration is one of many services that forests provide. And forests are important for a lot of other reasons, for biodiversity, for the stability of global climate. And so there's not just one good reason and I think decarbonisation alone isn't enough to make the case that we should protect forests. I think that's why we have this standard recipe on reducing, on trying to make the energy sector go carbon free. But I do think that for developing countries it's an important source of finance. And I think there are broader global goods that forest provides that make them very important for us to continue investing in sustainability really for forests.
- Thank you, Andres, I see your hand is up. - Yeah. Yeah. I just wanna, I mean, 'cause it's interesting, I mean, we used to run the electricity of Cameroon, for example, we've been a big energy provider in many developing countries, I come from a developing country. So I just wanna say that, you know what Rishi is saying, we can, in a sense have both, they're often very complimentary. To give you a case, in the Dominican Republic, yes, they are using natural gas. But if you really go to the poorest part of the population, what is the alternative? Many times it's things like charcoal.
So one of my big frustrations is, you have Haiti next door. People talk a lot about Haiti, offer it money, but I'm really disappointed in the ability of the official agencies to get effective help in Haiti. So for example, if we could bring in propane gas to Haiti, it would so much improve people's lives. Women wouldn't have to go out to gather wood, they've cut down all their trees, now they're going into the Dominican Republic to deforest it. So you think, well, you're bringing in a greenhouse gas effectively probate, but it would have so many other effects.
The other one I'd like to say it's interesting, AES has had a very forward-looking founder. So back in 1980, he bought a piece of the Virgin Paraguay Rainforest to offset carbon emissions from a coal plant. Today, it's the last remaining piece of Virgin forest in Paraguay, it's actually being used to see the other ones. And we have as agreement, we've planted the 10 million trees, mostly native trees, to offset our carbon emissions, without getting any money for it.
But I do think that these efforts, a lot of times, in the environmental community tend to be say like, well, you're trying to greenwash it. You know what I mean? That you're trying to greenwash corporate efforts, but truly what we can do together is really amazing. So for example, we talked about batteries, we talked about USAID about putting in solar panels and batteries, for example, in Colombia post peace agreement with the gorillas. Because I know the area and to build high tension wires to all these remote villages is just horrendously expensive. You could use distributed energy which I think Michael mentioned. So the technology is there, now I can't do it as a business.
And I can't say I'm gonna go into 5,000 Colombian small villages, but the government agencies can, and the multilaterals can. And what I have found is that very often they're not brave enough to do these things. So they prefer to lend to me for a great big project rather than going into some of these more difficult things.
So I just mentioned that because sometimes people say, do we wanna leave these places, not contaminate them with modern technology. Modern technology is the only thing that's going to save the rainforest. And also quite frankly, improve the life of these people, that's what they want.
- Michael go ahead and have to jump in there, go for it. - I hope I'm not too depressing 'cause I think this is gonna be maybe the fifth pillar for Bill. This is not just a developing economy. - I'm adding as we go, Mike, I'm adding as we go.
- This is a developed economy problem as well. So 25% of global emissions come from the agriculture sector. Vast majority of that comes from methane as a result of typically cattle or livestock more broadly, and then of course the use of nitrogen-based fertilizers has releases as well.
Why this is so scary to me and the one that probably keeps me up the most at night, is we're looking at currently roughly 7 billion on earth right now and projections of 10 billion people by 2050. So we have to grow our global food production by 30% or so over the next 30 years, and simultaneously somehow massively reduce the footprint of that industry. I feel like reforestation is gonna be a critical component to decarbonizing just the agriculture sector. And it puts to me the primacy that we have to decarbonize vehicles and electrical generation like we're talking about, not through offsets, 'cause the offsets are already taken care of in terms of dealing with the agriculture sector alone because it's one of the seconds we can electrify, right? We can electrify fruit production, that's not an option- - Electric cows.- - Electric cows. (all laughing) So this one is a huge issue that I think doesn't get as much discussion in decarbonisation conversations.
And it's just a really critical one, and one I think, from a market standpoint, is gonna be the hardest one to address. - That's great, we have time for probably one more question, and then we'll turn it over to questions from the audience. And so I just wanted to ask both Rishi and Andres, of course, we have to bring everything back to UVA in some form or fashion. And my question is, when you all were students here at UVA, did you imagine that you'd be working on big environmental problems in your future? Rishi, I'll go to you first. - Yeah, well, I grew up in, I'm from India. So I think I came to graduate school at UVA and I think, I had a pretty good idea that studying environmental science and being from a developing country, I think I probably had at least the interest in working on global scale environmental issues.
So that was certainly the hope and I think I've been lucky to be able to do at least a couple of interesting projects here especially around forests and climate. - Andres. - Well, it's funny, as an undergraduate at Wake Forest, I was more concerned.
I remember I had to give a... I was one of the sort of 12 senior oratories and I actually talked about the problems of externalities and pollution. However, (laughing) when I was at UVA, I was much more into sort of macroeconomics to be honest. So I know I've kind of sort of come full circle because in the late '70s, there was much more concern about global warming. I mean, you can remember the movie "Soylent Green", it was all about global warming. And then that really died out in the eighties and nineties to some extent, in sort of mass culture.
So I guess I've come full circle. Now this is why I wake up in the mornings and go to work. - Larry, how about Mike, he's also a Hoo? - I'm a Double Hoo, I did my- - Yeah Double Hoo, sorry, sorry (laughing). - Systems engineering, but it's interesting because my interest in the environment dates back to my undergraduate days, I worked in the Center for Risk Assessment with Yakoff Hames as an undergrad and as a master's student. What was new to me was actually finding myself as a business school professor.
So I went into even my PhD studies in economics, with an interest in environment and environmental policy, and kind of found my way to the business route just because of the power of markets. And as Andres, I think articulated before, we're not gonna solve these problems if we don't leverage the power of, especially the innovation and entrepreneurial side of markets here, I just don't see how we get there otherwise. And so that's been a motivating force from our work since my professor days now. - And just sticking with the sort of the student angle here for a second, what do undergraduate students, what do they need to learn, what can they do to sort of prepare themselves during their undergraduate experience to address decarbonisation in the professional sphere? That's the sort of their vision or their goal for themselves, what can they do? And Rishi or anyone can tackle that one.
Michael, all of them. - It's interesting. So the time magazine, I think in honor of Earth Day, have this issue that I think is largely about climate change, but they use this term, I think they call it climatization which is essentially that everything ultimately connects back to the climate.
And I think that I'm not sure if I don't know if you can, if everything necessarily connects to the climate, but I do think one thing that is valuable over here to think about in terms of perspective is just that climate change isn't just about the concentration of a gas in the atmosphere. I think all of the efforts and this panel over here is a good demonstration of it, is that it affects all of us and it is sort of be there are aspects of how our economy works, our society works, how our own lifestyles are structured, how countries differ from one another in many different areas. And so I think, in terms of advice for undergraduates, you can be working on public health or you could be looking at the COVID pandemic or you could be working on food systems. You could be an artist, you could be working on issues of racial justice and equity, environmental justice, and there is an aspect that relates back to climate change. And so I think being informed on the science and the policy, but, I would say, working in every other sphere and thinking about how it relates back to climate is a good way to think about it.
- Michael, any thoughts- - Like I could not have articulated it any better than Rishi just did, and I think that was wonderful. The only thing I would add is I think this topic specifically of decarbonization is really important because I find that people get overwhelmed with climate change. And there's a sense of like, I don't even know where to begin to think. In my own work, I've taken a very sector-specific viewpoint 'cause I think it's manageable. Again, how do we electrify vehicles? Like, that's the question in here? How do we generate a renewable grid that works in dealing with intermittency? How do we deal with steel and cement, these backbones of our industrial society, but that it make greenhouse gases.
And you just go down the list, and I think it's still somewhat overwhelming, but at least it's a little bit more manageable when you break it into these parts there. And I love what Rishi said, like, it doesn't mean you're necessarily coming from a business perspective or an economics perspective. It could be the demand side, how do we influence public sentiment to change our preferences? I mentioned again, livestock, part of the greatest thing all of us as individuals could do is stop consuming beef. That would have a huge impact on our global footprint there.
Not easy to see how that comes about, right. We need, like I said, we need the people in the humanities to help us influence and change our perceptions, I think to get us there. So I think there's a role to play and if you break it down, you can get it more manageable than it often seems when we talk about it at the highest levels. - Well, I don't teach students, but I have young young sons and the new people we hire.
I think this new generation is much more concerned with equity and concern with the environment and it's very creative and very technically very capable. I'd say the biggest issue I see is that these are very complex problems, that we're still learning. I mean, something like the climate change rules, they're based on a linear concept of the world, who knows, the world could be nonlinear. Methane gas leaks, create harder climate, what about hydro methane in the bottom of the ocean? So it's very complex. So what I really think we need to do, is how do you educate people in a democracy to handle these very complex issues? And that's what's scary to me because you can get, sometimes it seems like the less people know the more certain they are of what they're doing, and this is a Rubik's Cube.
So being on the practical side and measuring your carbon emissions, it's not linear and it's not easy. - Well, great, thank you all for that. And we have about 10 minutes remaining. I wanted to spend the last bit of our time taking some questions from the audience that have been supplied through our chat.
And we've had a fair amount of questions about nuclear, as you might imagine. So where does nuclear energy fit into all of this, and how can and should nuclear energy be included into the decarbonization goal? And I'll turn it over to you all in terms of whoever wants to take a stab at that first. - I'll start and let people weigh in. I mentioned nuclear when I was talking about Virginia, because we got nearly 25% of our electricity from nuclear plants.
If we were to try to replace those right away with anything else, it would increase emissions. It's hard to imagine how we could replace those with renewables in the short run, we need those plants. We need to keep our nuclear plants running for the time being until we can either improve the technology of new nuclear plants that we may build after these ones age out or not use nuclear in the long run if we don't come up with a good technology. But there are lots of smart people working on all kinds of new nuclear technologies, including nuclear fusion, I was just reading an article about that. That's been around the corner since I was a kid and it still is just around the corner, I'm not holding my breath. But my point is that that we have to think first about the short run problem.
And the short run PA problem really requires us to use the best assets we have now. And then in the long run, we can make a study decision about whether nuclear fits into our long run plans or not. But to shut those plants down now, would mean a lot more greenhouse gas emissions and replacing them would be extremely difficult. - I completely agree with Bill. The thing I always point out about as nuclear as a potential solution, there's exactly one nuclear plant under construction in the United States.
The average time it takes to build a nuclear plant is over a decade, lots of regulatory and other barriers, NIMBY problems you can imagine. The two potentially, I guess, arguably largest countries in terms of their percentage of their energy that comes from nuclear are France and Japan. And both of them have been moving the other way, decommissioning their nuclear assets. So I agree with Bill, like you got to keep the ones that are going for now, whether it can be kind of that silver bullet solution that seems highly unlikely, but I'm right with you, Bill, that we got to continue to invest in innovation.
So beyond vision there's also the idea of small modular nuclear. So leveraging technologies that are used and like summaries and the like. And that's one that seems to be getting closer to market viability and it would be smaller applications. I'm not sure if it would be as much utility scale applications, but some industrial uses and the like, that might have some real problems.
So I think we've got to keep investing, we got to keep trying to innovate here. But unfortunately as kind of a major part of expanding our electrical production, it just doesn't seem to be where, at least where the market is right now. - Oh, what I would say is that, again, getting back to the capacity issue, so you have batteries, but batteries don't produce energy, they just shift from one, so you have to overbuild the renewables.
That means you may need thousands of acres of more solar to be able to store it up. Now, I think that modular nuclear is going to be an important component of the future. And I agree, we've got to continue to run our existing nucleus but these new ones are much safer, much better engineered. And I think the real problem is that, again, this sort of simplistic thinking is like, well, I'm not gonna let nuclear anywhere near me, and you can't get the permits.
So probably there'll be first tried out in places like China where you can get the permits, but that would really help us get that last 20% of defossil, decarbonization in the US. And quite frankly, from everything I can tell, there are a lot safer than running 50 or 60 year old plants. - Rishi, any thoughts there? - Yeah, I mean, I think that it probably is unavoidable, as Bill was saying, in the short run.
My personal view is, I don't know, it's always hard to predict. I think the interesting thing about decarbonization, if you look at States in the United States that have pursued it is that they, once they've sort of set themselves to achieve, like if you see what's happened with solar panels or even with batteries, is that they've been able to achieve way more than what they set out as initial targets. And it's always hard even five years out to see what technology will do.
So I think with nuclear, the handling of waste and the safety of the technology is always a big concern because of the duration that you have to manage the waste for. But I wouldn't say that I have a crystal ball where I'd be able to say that it's not something that we will be able to engineer our way out of. So I wouldn't be in the camp of saying never to nuclear because, because it creates its own issues that we have to deal with and there are trade-offs. - Great. Thank you. We've got about another minute or so, and I just wanna turn to each of the panelists for maybe 20 seconds or so for any sort of final parting words of encouragement and just about the importance of the work that we've sort of discussed here today. And Andres, I'll start with you.
- Now, this has been a great panel, and it's always fun to have an interdisciplinary panel to come at a problem from many perspectives. And that's what I think we need to do. I think we need intelligent, rational, and to some extent, non-emotional discussion because I'm very worried about sort of off the cuff policy. And just to give you an example is Germany, after Fukushima they shut down their nukes, they built coal plants.
Then they're replacing the coal plants with natural gas plants brought in from Siberia over leaky Soviet pipelines. I really doubt a scientific study would say that that's better for the environment, they even have a coal plant. In addition, they built out renewables too early.
So they paid for R&D for the rest of the world. Long story short, they have expensive energy and their carbon footprint has decreased much less than the US. So what's the point is that you need even a very highly educated capable country like Germany, if the population doesn't have the right information, they can force very bad decisions. - Michael, any final parting words for 20 seconds or so? - As the Business School professor, I'll make one further plea about the importance of innovation and markets. But what I will say in addition, is to recognize that markets work, in what I like to call, the institutional envelope.
The way in which we structure policy both at the federal level international trade and the like, has a huge impact on how businesses play out, how technologies play out. And what we need to think about is levers. Where do you get the most return from the investment or the policy that you made? And this is such a large, complicated problem. I've argued that we need to have a comprehensive technology policy, not only in the US but really globally as well to try to bribe this, again, disruptive changes across the very large sectors of the economy. So, again, there is no silver bullet here.
This is gonna take a lot of concerted effort, a lot of different directions. - Rishi, any parting words here in the final 20 seconds. - Yeah, I think I agree with what Michael said about there not being a silver bullet.
I think this is a very big challenge, but I think, I'm encouraged by seeing what the experience of states like California and various countries that are actually decarbonizing, have been de-carbonizing for a while. So it is possible, and I think, Andres's point about being informed and having a neutral discourse and kind of taking the politics and the heat out of these issues, will bring us all to a better place. Because it's something that we all have to... It's a global challenge that everybody is trying to solve to the extent that we can have well-informed discussion with lots of different people participating, we'll be well ahead, we'll be well-prepared to make this transition, which really is a very deep transition in the way that we live really. - And Bill, we're up against it, but please any final words of encouragement- - Let me just say, we're in a lot better position now than we thought we were gonna be in 15 years ago. And I take away from that a message that this is a problem we can solve.
We just have to concentrate and get on with it. - Andres, Bill, Michael, Rishi, thank you so much for your time and your expertise and perspective the past hour. And thank you all for joining us here today for this, again, this celebratory Earth Day event. We hope to see you all soon, and again, thank you so much for joining us here this afternoon. Take care, everyone.