Podcast: Addressing Climate Change Through Innovation, With David Hart

August 23, 2021

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Addressing climate change requires accelerating clean energy innovation across the full range of economic sectors—from transportation to electricity, manufacturing, and agriculture. Rob and Jackie sat down with David Hart, director of ITIF’s Center for Clean Energy Innovation, to discuss the scope of the challenge and the best paths forward for policymakers.

 

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Rob Atkinson: Welcome to Innovation Files. I'm Rob Atkinson, founder and president of the Information Technology and Innovation Foundation. We're a DC-based think tank that works on technology policy.

Jackie Whisman: And I'm Jackie Whisman, I handle outreach at ITIF which I'm proud to say is the world's top-ranked think tank for science and technology policy.

Rob Atkinson: And this podcast is about the kinds of issues we cover at ITIF from the broad economics of innovation to specific policy and regulatory questions about new technologies. Today we're going to talk about clean energy innovation, at ITIF we believe that innovation is central to addressing climate change and without it we're not going to be able to solve the problems so we brought in the big gun for today's conversation.

Jackie Whisman: Our guest today is David Hart, he's a senior fellow at ITIF and professor of public policy and director of the Center for Science, Technology, and Innovation Policy at George Mason University's Schar School of Policy and Government. He directs ITIF's Clean Energy Innovation Policy Program which seeks to accelerate the transition of the domestic and global energy systems to low carbon resources. Welcome, David.

David Hart: Thanks Jackie, thanks Rob, great to be here.

Jackie Whisman: Let's talk about the Clean Energy Program's mission at ITIF, can you describe it?

David Hart: Sure. You sort of summarized it right there, our job is to elevate the role of innovation in the discussion about climate change and what to do about it. There are a lot of different ideas about climate change and how to avert it, it's a complicated issue but if we don't have innovation we're not going to solve it. And so our job is to raise that up, make sure policymakers understand what's at stake and try to come up with ideas that'll help them make good innovation policies to accelerate our response to climate change.

Rob Atkinson: So everybody now peers about climate change, the UN report just came out yesterday, at least when we're recording this, and raised the alarm even more, why isn't it enough that we're all just going to, I ride my bike to work, I buy all my energy as wind power, why don't we just all help out a little bit and won't that solve the problem?

David Hart: Well, I think if everybody was like you Rob, it really would solve the problem but the problem is a lot of people aren't like you, either they don't have the ability to get to where they need to go buy a bike or they don't have access to clean power on the grid. The basic challenge of climate change is that the problem stems from things that all of us need, whether it's shelter, whether it's food, whether it's mobility and most of those services which are essential to our lives are powered by fossil fuels and we don't have any way to collect the emissions from fossil fuels. And as long as we're dependent on that resource which is about 85% of the world's energy supply right now, we're not going to solve climate change. So it's a big transition, it can't be dealt with by individuals alone no matter how virtuous they are.

Rob Atkinson: So that's the case for government involvement. There's a lot of different approaches for folks on that, one, if you will, camp says we should just tax carbon and if we did that, if we put a price on carbon we're 95% of the way there, what's the center's thoughts on that question?

David Hart: Yeah. So we support the idea of pricing carbon within limits, it's part of the solution but it's not the whole solution and that's where we sometimes get into arguments with advocates of carbon pricing. The biggest problem with pricing carbon is first of all, it could make key resources unavailable to people that can't afford it. So a lot of people in the US and around the world need access to fuel to get to their jobs to do their work and so if they can't earn money they're going to oppose this. And then the second big reason is that even if you price carbon at moderate levels it might not induce any change in behavior, you might just have people paying the cost and that doesn't solve the emissions problem.

And the reason is that the difference between clean energy and dirty energy is too big to bridge with a carbon price. If you had a carbon price big enough to make the difference it would just put people out of business. So our view is that we need innovation first to drive the difference between clean and dirty energy down and then maybe carbon prices can make up the difference if there's still a gap. So we have a difference about what's the dog and what's the tail, so to speak, the carbon pricing, advocates think it's all about carbon pricing and innovation is just a nice to have and we think innovation is a must-have and carbon pricing can help clean up around the edges.

Rob Atkinson: No, I like the way you frame that, I think that's a great framing. On the other side oftentimes there are some conservatives and free market types who like carbon pricing because it's a free market way and the idea is, well, it's the most efficient way but your point is, it's nowhere near enough. And even if it were enough, even if you could set a price high enough to really make a difference, you can't, populations won't accept it or at least democratic nations, we've seen that in France, we've seen it here. So on the other side you hear this view and we see it particularly now in the debate over the infrastructure packages and the broader spending packages in the House and the Senate that somehow we can just spend our way there, that if we install a lot of electric charging stations for cars and if we spend more on mass transit that somehow that will get us there alone, how do you see that as well?

David Hart: Yeah, so I think we're going to need to spend a lot of money to make this transition but if we have innovation we could spend a lot less. And in fact, there are some areas just as with carbon pricing that we can't spend our way to the solution. So if there aren't reasonably effective ways of making steel or making cement without releasing a lot of carbon dioxide which is the case right now, we could spend as much as we want, we're still not going to eliminate the problem. So there are areas where it is time to deploy solutions, I think electric vehicles are approaching the point now and excited to see the administration pushing them and getting them out into larger scale use will also drive innovation in its own way so there's a positive relationship between deployment and innovation.

But you have to have the technology to a level where deployment really pays off so if you move to a mass scale too quickly, you're going to spend way more money and you're not going to get the results that you need. So well, I think a lot of spending is going to be necessary, there would be ways to make this transition even more expensive, even more and effective if we just spend willy-nilly.

Jackie Whisman: But when you say “we,” you're really saying the government?

David Hart: That's right. I mean, governments all around the world because it's of course, as Rob likes to say, it's not American warming, it's global warming.

Jackie Whisman: Yeah. It just doesn't seem like we can solve it just with private sector incentives which is something that you say a lot.

David Hart: Yeah. There's no single solution here and it's going to have to be a package of different solutions in different sectors. There's a lot of different sources of carbon emissions and other kinds of greenhouse gas emissions, they come from transportation, they come from electric power, they come from building heating, they come from agriculture. So to some extent each of these areas needs its own solution and the idea that we're just going to solve it with one magic bullet is a myth.

Jackie Whisman: But lucky for us, you have solutions so I would like to kind of drill down a little bit in specific policy proposals that you've thought of, others have thought of, that can kind of allow the government to push forward or be a good steward of clean energy innovation.

David Hart: Sure. So one area that we're going into more deeply now is the industrial sector. While there are some promising solutions in electric power and in transportation, although even those sectors aren't solved yet, in industrial we really have a big gap between where we are right now and where we want to go. So we are diving deeply into specific industries like steel, like petrochemicals and plastics and it's going to be a combination. First, I think we need to invest a lot more in research and development and facilitate industry investment in those areas then I think the government has a role to play in scaling up the technologies that are promising because it's too risky for the private sector to do. So one area where we're particularly focused is demonstration projects for industrial plants, these can be very expensive, tens of millions or hundreds of millions and very few companies have the wherewithal to take on a risky project like that so there's a need to have government share the cost with the private sector.

There's regulatory frameworks that need to be developed, some of them may involve carbon pricing as well. And each country seems to be taking a different approach so some countries are focusing more on carbon pricing, I think in the US we're more likely to focus on incentives and on regulation and on standards in some areas of industry especially where government is a big purchaser like cement, right? We put a lot of cement into roads, bridges and buildings. Government can help out by buying cleaner cement and maybe paying a little bit more. But in doing so, making it easier for the cement producers to transition and then hopefully later purchases by the private sector will be less expensive.

Jackie Whisman: So sort of literal funding and also regulating our way towards a more sane structure.

David Hart: Yeah, that's right. And I think each sector is going to be a little bit different in different package of policies and solutions. So we're making some progress now but we have long ways to go.

Rob Atkinson: It seems like to oversimplify things there's three camps in this debate, there's either the climate deniers or the free market types. Well yeah, climate is real, it's man-made but the private sector is making commitments, they'll solve it, which clearly fanciful wrong won't work. And then there's the more camp a lot of environmental groups are in which is, look, we've got all these technologies today, we've got solar panels, you can buy a Prius or a GM Chevy Volt and we should just do this. You can get wind energy, I was on vacation driving around West Virginia and Pennsylvania and I saw a lot of wind turbines. So if we just had the government do that, we'd be good to go.

And I think one of the things that that ignores is, as you said I said, it's global warming, it's not American warming, we can cut our emissions to zero and we would still see a growth in emissions over the next 30 years. So the key I think, to put words in your mouth, David, is all of these policies should be in service of getting better and cheaper clean technologies not just deploying what we have today. Now some of that times deploying what we have today can lead towards cleaner and better or cheaper and better but sometimes it doesn't, you agree with that? And can you say a little more?

David Hart: Yeah, I think we need to do both. We need to innovate and deploy and the balance between the two depends on the state of the technology at the moment and how cost competitive it is and how well it serves people's needs. I think it's really important to remember the number of people in the world who don't have access to basic services that are provided by energy that we take for granted, whether it's air conditioning, whether it's access to a vehicle. There is something like a billion people who don't have access to basic energy services and those people deserve to live a better life and for them the priority is that opportunity not the global environment. So when we think about the world adopting new solutions it's going to require innovation to make that possible. And I think that's the uniquely American role or maybe I should say in another way, the role to which America is particularly suited.

A lot of other countries also have a lot to contribute to the innovation system of the world, but the United States is the world's science and technology leader and of course we can contribute by cleaning up our own act. The United States is responsible for the largest portion of greenhouse gases that are already in the atmosphere so we have some historical responsibility. But the biggest way we can contribute to the world solution is not necessarily by changing our own behavior or sacrificing ourselves, it's by taking this tremendous innovation resource that we've developed, our universities, our companies, our entrepreneurs, and putting them in the service of-

Rob Atkinson: Our federal labs.

David Hart:... how to solve the problem, our federal labs as well. Absolutely.

Jackie Whisman: So you think we need to create the space for developing countries to be a little more, I don't know how to put it, but a little more dirty.

David Hart: Absolutely. Yeah. In fact, in the Paris Agreement there's something called differentiated responsibilities. United States and other wealthy countries have become wealthy and afforded the lifestyle that we have in part by polluting our atmosphere. So if you add up all the carbon dioxide and other greenhouse gases that are already up there, right? And the portion amount to different countries, well, the rich countries did a lot more and the poorer countries are saying rightfully, hey, it's our chance and why should you guys impose this cost on us and you guys get all the benefits. So I do think we have to allow some space for countries to develop, hopefully they can develop in a cleaner, the trajectory, than the West and the United States followed. But I think it's inevitable that their higher priority it's going to be wellbeing especially meeting minimal standards but for a lot of people it's entering the middle class and I don't think the United States and other wealthy countries really have a case against that since we have already attained that status.

Rob Atkinson: So that really gets to a bugaboo of mine. That if you get me-

Jackie Whisman: Oh no, a bugaboo of Rob's.

Rob Atkinson: ... started, it's one of the several hundred I have but raised it is all these books now and articles that just drive me crazy about de-growth. And every time I see one of those I tweet back at the author who's almost always an academic somewhere in the West and I say-

Jackie Whisman: And we can't share those in the show notes because it would be too long of a list of tweets.

Rob Atkinson: ... I'd get a de-platformed. And I always say, okay, if you think that we need to consume less, feel free to start. Have you given up your car? Because I doubt you have. Have you moved to a much smaller house or apartment? I doubt you have. It just seems to me absurd and immoral to say I was in India a few years ago and they were talking about why climate is important. And I'm looking at these people who are walking around who have a fifth, sorry, sorry, a 10th maybe, sometimes a 20th of sort of the average working person's income in the US. So it seems to me the challenge is not about, yeah, of course we shouldn't impose a lot of costs on them, seem to be the challenges and how we could square the circles if we could get really good, low cost, clean energy, they can develop and not pollute if you will and that's our responsibility, I think is the West responsibility, do you see that?

David Hart: Yeah. I mean, responsibility might be a little bit too strong but I do think that's our opportunity and it is in some ways an obligation. But if we just view it from a more pragmatic perspective, these policies that we're talking about require and especially democratic societies, the consent of the governed and I just don't think there's a constituency for sacrifice to the degree that community is talking about. Maybe there's a few people that want to live a simple life like Henry Thoreau did and go back to the land and that's fine but that's not a solution for all of humanity, there's nine billion of us.

And most of us want to have certain comforts in life that are dependent on energy and if we're going to get energy to provide those it should be clean. So I don't think it's a solution either pragmatically from a political economy perspective because it is ultimately a political economic problem. And I don't think it's practical, I don't think nine billion of us can go back to the land. We've got on this wheel of industrialization and until there are a lot fewer people, we're going to be on it.

Rob Atkinson: Well, I'm doing my part, I live in Chevy Chase, my house isn't anywhere near as big as the mansions that are being built on my street so I feel quite noble. And as I said, I buy all my energies from wind, I'll have to say I'm in the 1% there because about 1% of Americans who have the opportunity to do that choose to do that, maybe it's 2% now.

David Hart: But you are noble, I second that.

Rob Atkinson: Thank you.

Jackie Whisman: But I think it's an access problem. I just bought a car and to David's point, if that car afforded me the same performance on eco-mode that it did on high performance mode then I would drive it in eco-mode, people want to do good but it has to be made easy for them, I guess that's my point. My town just stopped picking up recycling and so sometimes I recycle, sometimes I don't, but I really want to recycle. And we live not in a third-world country, we do live in a rural area which doesn't have as many services but it just seems like the government could do a lot to make things easier. The government could regulate how we build cars and I think we're moving in that direction, the government could make recycling easier for municipalities to facilitate and things like that and I think putting it all on me and my family, I get resentful and I want to do a good job at being a good climate citizen.

David Hart: Yeah. I think it's a combination of public and private sector, the public sector needs to set the framework and enable the private sector to be its best self which is when it's innovative and taking advantage of that creative energy, that drive that people have often in that world. So I do think it's up to the government to lead but ultimately we're going to look to the private sector and academia and federal labs and other institutions to come up with many of the answers. But I agree with you Jackie, we need to make it easy and we need to make it no brainer, it should be a slam dunk and that's why need more innovation.

David Hart: The technologies that we have they've come a long way but they're still not good enough for people to think, oh, this is what I want, right? We need to make this a positive future that people want to live in not some future that looks like it's going to be sacrifice and hardship and I think that's the fundamental task of the climate policy leadership. And I think we're making progress there, I'm excited to see Joe Biden talking about, “When I hear climate change I think jobs and I think about opportunities,” and we need to turn that rhetoric into a reality.

Rob Atkinson: Yeah. I mean, you look about how many people now own a smartphone particularly an iPhone, it wasn't like, you should own an iPhone it's going to be good for the planet, all right, all right, I guess I'll get one, no, people got one because it serves a valuable need in their lives. And energy is a little bit different but, look, I'd put on solar panels if it was easy, if the cost was better, all these things. I'd buy an electric car, my problem is I don't drive enough miles to make an electric car affordable, it doesn't save me any money, it costs me more money. So I guess David, maybe a few things to close up. I know you've put together ITIF Clean Energy Project has put together a number of specific actionable recommendations for Congress, a number of them are actually happening now including the DOE Foundation and we've been big supporters of RPE, but what are a couple things that right now that you'd be encouraging Congress to move forward with on the innovation front in this space?

David Hart: Yeah. So in terms of immediate priorities or our big ask has been to put more money into demonstration which is expensive. So these are projects that scale-up technologies like power plants, like new kinds of industrial factories that are very expensive and very risky for the private sector to do but the government can help that along by sharing the cost. And there are quite a few demonstration projects now in the bipartisan infrastructure package that passed the Senate today and we're hopeful that the House will pass it as well and it will be signed into law. And it's something that the administration has advocated as well so there are somewhere in the neighborhood of $25 billion worth of projects over five years. And in this area of the United States is not leading the world so we're playing catch up especially in the area of industrial de-carbonization.

Jackie Whisman: Yeah, I'm going to say 25 billion sounds like a lot but that really isn't a lot, right?

David Hart: Well, it all depends on what your frame of reference is here but it's the starting point to get these technologies to where private investors will invest a lot more. So we're talking transition on the scale of multiple trillions of dollars over the next 20 or 30 years on a global basis. So this is really just the appetizer and ultimately when these technologies improve enough and the incentive structure is there for the private sector to invest, that's going to be the main course. We're going to rebuild the global steel industry, we're going to rebuild or replace the global chemicals industry, these are massive massive industries. So it's really incumbent on us now especially as we think about the solutions that we're going to need in 2030 to get them to the point where they are ready for that feast at that point, so to speak.

Rob Atkinson: So I guess one of the things that I find frustrating in the whole climate debate is when everybody says, this is going to be the greatest opportunity for mankind. You see this sort of frame coming from the Klaus Schwab with the World Economic Forum and all, and it's simply wrong unless these projects, these technologies are better and cheaper than what we have. If we spend a trillion dollars to replace steel mills with clean ones and we don't get any economic benefit from it other than carbon reduction, that's a cost, that's not a benefit.

And so it seems to me that the debate has to be shifted around to say, look, this can be an opportunity but really only if we're getting innovation, only if innovation is enabling this. I mean, for example, you can imagine the life cycle cost of a car being significantly less than what it is today but if it's just simply we're replacing pretty efficient and cheap gas cars with expensive electric ones, we're not better off, the climate is better off but we're not. So it seems to me that we have this opportunity of win-win but only if we get real innovation.

David Hart: Yeah. I agree with that up to a point. I think there are some sectors where that's going to be the case and I think transportation will be one, I think it will be cheaper and better to have electric transportation pretty soon compared to internal combustion engines. There may be some areas where we do have to pay a cost, it's going to be more costly, but I also think it's bearing in mind and maybe we return to where we started here with the UN climate report, there are tremendous costs which we're bearing collectively and some of us or many of us are going to bear individually. So my parents live in Denver, Denver the last week has had the worst air pollution in the entire world because of fires that are burning a thousand miles away from them to which climate change was a major contributing cause.

So I do think the environmental externalities of climate change are part of the equation and they should be factored in and they're becoming more and more visible. So I do think there are some areas where it would be worthwhile to pay a premium but wherever we can make something cheaper and better that's going to make whole process much faster, much more acceptable to publics. And as you were saying Rob, it creates a future in which there is a real benefit and not just having avoided costs and that's better if we can find those solutions and that's what we're all about.

Rob Atkinson: Absolutely. Yeah. I couldn't agree more and hopefully we'll see more of that not just in the US but really among other countries in the world which in some cases have been doing good work and other cases have been kind of relying on others like us to do the work. So.

David Hart: Yeah, it gives me a chance to do a little product placement so we'll have a report coming out in the fall that assesses how countries around the world are contributing to the global system and hopefully that'll be something that gets a little bit of visibility at the big climate conference at Glasgow.

Rob Atkinson: Will this be at least more interesting than the Olympics were?

David Hart: It'll be more interesting-

Jackie Whisman: It doesn't take much.

David Hart: ... it will be more interesting than weightlifting, let's say, I don't know if it'll compare to diving.

Jackie Whisman: And you guys are coming to visit my house next week so I'd like for you to take a trunk full of recycling back with you to Montgomery County and have them pick it up, I'd appreciate that.

David Hart: If I had an electric car I could take a front full but I don't have one yet so you'll have to toss it in the back of my old.

Rob Atkinson: I think the overall carbon cost will be higher if we do that.

Jackie Whisman: But it will make me feel better.

Rob Atkinson: Okay, that is the most important thing.

Jackie Whisman: It is, as you know.

Rob Atkinson: Exactly. We're all relying on Jackie and her family to solve this-

Jackie Whisman: Feelings.

Rob Atkinson: Feelings.

Jackie Whisman: I am a grand millennial, I have feelings.

David Hart: Nothing more than feelings I heard.

Rob Atkinson: Jackie, you're the best, that's all I have to say.

Jackie Whisman: Thank you for saying that. I haven't seen you in awhile, I really appreciate that.

Rob Atkinson: All right. Well David, that closes this. So thank you so much for being here with us today.

David Hart: Thanks for having me.

Jackie Whisman: Thanks for dealing with us David.

David Hart: I'll see you tomorrow.

Jackie Whisman: That is it for this week. If you liked it please be sure to rate us and subscribe, feel free to email show ideas or questions to [email protected]. You can find the show notes and sign up for our weekly email newsletter on our website itif.org and follow us on Twitter, Facebook and LinkedIn @ITIFdc.

Rob Atkinson: And we have more episodes and great guests lined up. New episodes drop every other Monday so we hope you'll continue to tune in and tell your friends about it.

Jackie Whisman: Talk to you soon.

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Podcast: Addressing Climate Change Through Innovation, With David Hart