How to decarbonize the grid and electrify everything

"The good news is it's now clearly cheaper to save the planet than to ruin it," says engineer and investor John Doerr. "The bad news is: we are fast running out of time." In this conversation with climate policy expert Hal Harvey, the two sustainability leaders discuss why humanity has to act globally, at speed and at scale, to meet the staggering challenge of decarbonizing the global economy (which has only ever increased emissions throughout history) -- and share helpful examples of promising energy solutions from around the world.

John Doerr: Hello, Hal!

Hal Harvey: John, nice to see you.

JD: Nice to see you too.

HH: So John, we've got a big challenge.

We need to get carbon
out of the atmosphere.

We need to stop emitting carbon,

drive it to zero by 2050.

And we need to be halfway there by 2030.

Where are we now?

JD: As you know,
we're dumping 55 billion tons

of carbon pollution in our precious
atmosphere every year,

as if it's some kind
of free and open sewer.

To get halfway to zero by 2030,

we're going to have to reduce
annual emissions

by about 10 percent a year.

And we've never reduced
annual emissions in any year

in the history of the planet.

So let's break this down.

Seventy-five percent of the emissions

come from the 20 largest
emitting countries.

And from four sectors of their economy.

The first is grid.

Second, transportation.

The third from the buildings.

And the fourth from industrial activities.

We've got to fix all those,
at speed and at scale.

HH: We do.

And matters are in some ways worse
than we think and some ways better.

Let me start with the worse.

Climate change is a wicked problem.

And what do I mean by wicked problem?

It means it's a problem
that transcends geographic boundaries.

The sources are everywhere,
and the impacts are everywhere.

Although obviously some nations
have contributed much more than others.

In fact, one of the terrible things
about climate change

is those who contributed
least to it will be hurt the most.

It's a great inequity machine.

So here we have a problem
that you cannot solve

within the national boundaries
of one country,

and yet international institutions
are notoriously weak.

So that's part of the wicked problem.

The second element of the wicked problem
is it transcends normal timescales.

We're used to news day by day,

or quarterly reports
for business enterprises,

or an election cycle -- that's
about the longest we think anymore of.

Climate change essentially lasts forever.

When you put carbon dioxide
into the atmosphere,

it's there, or its impacts
are there, for 1,000 years.

It's a gift we keep on giving
for our children, our grandchildren

and dozens and dozens
of generations beyond there.

JD: It sounds like a tax
we keep on paying.

HH: Yeah, it is. It is.

You sin once, you pay forever.

And then the third element
of it being a wicked problem

is that carbon dioxide is embedded
in every aspect of our industrial economy.

Every car, and every truck,
and every airplane, and every house,

and every electrical socket,
and every industrial processes

now emits carbon dioxide.

JD: So what's the recipe?

HH: Well, here's the shortcut.

If you decarbonize the grid,
the electrical grid,

and then run everything on electricity --

decarbonize the grid
and electrify everything --

if you do those two things,
you have a zero carbon economy.

Now, that would seem like a pipe dream
just a few years ago

because it was expensive
to create a zero-carbon grid.

But the prices of solar
and wind have plummeted.

Solar's now the cheapest
form of electricity on planet earth

and wind is second.

It means now that you can convert
the grid to zero-carbon rapidly

and save consumers money along the way.

So there's leverage.

JD: Well, I think a key question, Hal,
is do we have the technology that we need

to replace fossil fuels
to get this job done?

And my answer is no.

I think we're about 70,
maybe 80 percent of the way there.

For example, we urgently need
a breakthrough in batteries.

Our batteries need to be
higher energy density.

They need to have enhanced
safety, faster charging.

They need to take less space
and less weight,

and above all else,
they need to cost a lot less.

In fact, we need new chemistries
that don't rely on scarce cobalt.

And we're going to need
lots of these batteries.

We desperately need much more research
in clean energy technology.

The US invests about
2.5 billion dollars a year.

Do you know how much
Americans spend on potato chips?

HH: No.

JD: The answer is 4 billion dollars.

Now, what do you think of that?

HH: Upside down.

But let me press a little further

on a question that's fascinated me
about the Silicon Valley.

So the Silicon Valley
is governed by Moore's law,

where performance doubles
every 18 months.

It's not really a law,
it's an observation,

but be that as it may.

The energy world is governed
by much more mundane laws,

the laws of thermodynamics, right?

It's physical stuff in the economy.

Cement, trucks, factories, power plants.

JD: Atoms, not bits.

HH: Atoms, not bits. Perfect.

And the transformation
of big physical things is slower,

and the margins are worse,
and often the commodities are generic.

How do we stimulate
the kind of innovation in those worlds

that we actually need
in order to save this planet earth?

JD: Well, that's a really great question.

The innovation starts with basic science
in research and development.

And the American commitment to that,
while advanced on a global sense,

is still paltry.

It needs to be 10 times higher

than the, say, 2.5 billion per year
that we spend on clean energy R and D.

But we need to go beyond R and D as well.

There needs to be a kind of development,
a kind of pre-commercialization,

which in the US is done
by a group called ARPA-E.

Then there's the matter
of forming new companies.

HH: Yes.

JD: And I think entrepreneurial energy
is shifting back into that field.

It's clear that it takes longer
and more capital,

but you can build a really substantial
and valuable enterprise or company.

HH: Yes.

JD: Tesla's a prime example.
Beyond Meat is another one.

And that's inspiring
entrepreneurs globally.

But that's not enough.

I think you need also a demand signal,
in the form of policies and purchases,

from nations, like Germany did with solar,
to go make these markets happen.

And so I'm, at heart, a capitalist.

I think this energy crisis
is the mother of all markets.

And it will take longer.

But the market for electric vehicle
batteries -- 500 billion dollars a year.

It's probably another 500 billion dollars
if you go to stationary batteries.

I want to tell you another story
that involves policy,

but importantly, plans.

Now, Shenzhen is a city
of 15 million people,

an innovative city, in China.

And they decided that they were
going to move to electric buses.

And so they required
all buses be electric.

In fact, they required parking spots
have chargers associated with them.

So today, Shenzhen
has 18,000 electric buses.

It has 21,000 electric taxis.

And this goodness didn't just happen.

It was the result of a thoughtful,
written, five-year plan

that isn't just
a kind of campaign promise.

Executing against these plans
is how mayors get promoted, or fired.

And so it's really deadly serious.

It has to do with carbon,
and it has to do with health, with jobs,

and with overall economic strength.

The bottom line is that China today
has 420,000 electric buses.

America has less than 1,000.

So what other national projects are there
that you'd like to see?

HH: So this is a global effort,

but not everybody's
going to do the same thing,

or should do the same thing.

Let me start with Norway.

A country that happens to be
brilliant at offshore oil,

but also understands
the consequences of burning more oil.

They realized they could
deploy their skills

from their offshore oil development
into offshore wind.

It's a big deal to put wind
turbines out in the ocean.

The ocean, the winds are much stronger,

and the winds are much more
constant, not only stronger.

So it balances the grid beautifully.

But it's really hard to build things
in the deep ocean.

Norway's good at it.

So let them take that on.

JD: Are they taking it on?

HH: They are actually.

Yeah. It's pretty brilliant.

Another example: India.

There are hundreds of millions
of people in India

that don’t have access to electricity.

With the advances in solar
and advances in batteries,

there's no reason
they have to build the grid

to all those villages
that don't have a grid.

Skip the steps.

Skip the dirty steps. Leapfrog to clean.

But this all comes together,
in my opinion, in the realm of policy.

We need dramatic accelerants,
is what you're saying.

Accelerants in R and D,
but also accelerants in deployment.

Deployment is innovation
because deployment drives prices down.

The right policy can turn things around,

and we've seen it happen already
in the electricity sector.

So electricity regulators have asked
for ever cleaner sources of electricity:

more renewables,
less coal, less natural gas.

And it's working.

It's working pretty brilliantly, actually.

But it's not enough.

So the German government
recognized the possibility

of driving down the price of clean energy.

And so they put in orders on the books.

They agreed to pay an extra price
for early phases of solar energy,

presuming the price would drop.

They created the demand
signal using policy.

The Chinese created
a supply signal, also using policy.

They decided that solar was a strategic
part of their future economy.

So you had this unwritten agreement
between the two countries,

one buying a lot,
the other producing a lot,

that helped drive
the price down 80 percent.

We should be doing that
with 10 technologies, or a dozen,

around the world.

We need policy as the magic sauce

to go through those four sectors
in the biggest countries,

in all countries.

And one of the things that animates me

is that this requires people
who are concerned about climate change,

which should be everybody,

those folks have to apply their energies
on the policies that matter

with the decision-makers who matter.

If you don't know
who the decision-maker is

to decarbonize the grid,

or to produce electric vehicles
in the policy world,

you're really not in the game.

JD: Hal, you're an expert in policy.

I know this because I've read your book --

HH: Thanks, John.

JD: Designing Climate Solutions.

What makes for good policy?

HH: There are some secrets here,

and they're really important
if we want to solve climate change.

Let me give you two of the secrets.

First, you have to go where the tons are.

JD: Follow the tons.

HH: Follow the tons.

And this is such an obvious idea,

but it's amazing how many policies
tinker around the edges.

I call it green paint.

We don't need green paint.
We need green substance.

The second thing is when you set a policy,
insist on continuous improvement.

So what does that mean?

Back in 1978, Jerry Brown was the youngest
governor in California's history,

and he implemented
a thermal building code,

which means when you build a building,
it has to have insulation in it.

Pretty simple idea.

But he put a trick into that law.

He said every three years, the code
gets tighter, and tighter, and tighter.

And how do you know how much tighter?

Anything that pays for itself in energy
savings gets thrown into the code.

So in the intervening years,
we got better insulation,

better windows, better furnaces,

better roofing.

Today, a new California building

uses 80 percent less energy
than a pre-code building.

And Jerry Brown used his legislative
bandwidth once to draft that policy

that produces fruits forever.

JD: He got the words right.

HH: He got the words right.
Continuous improvement.

There's a counterexample,
which should be instructive as well.

So you and I are both of an age
where we remember the first oil embargo

and the energy crisis that caused

with stagnation and inflation
at the same time.

Gerald Ford was president.

And he realized that if we could double
the fuel efficiency of new vehicles,

we could cut in half their energy use.

So he signed a law
to double the fuel efficiency

of new vehicles sold in America,

from 13 miles per gallon,
absolutely pathetic,

to 26 miles per gallon.

JD: That's big.

HH: It’s pathetic by today’s standards,
but it was a big deal then, right?

It was doubling.

But by setting a number as the goal,
we created a 25-year plateau.

So imagine if instead he said

fuel efficiency will increase
at four percent a year forever.

JD: So Hal, goals are great things.

How do you find the policymakers
that set these goals?

And then how do you influence them?

HH: Well, so that's maybe
the most important question of all.

If we have a lot of concern
about climate change,

and not it's properly aimed,
it just dissipates.

It's a one-day headline about a march.

And that's not going to get the job done.

In every sector, in every country,
there’s a decision-maker.

And it’s usually not the senator
or the president.

It’s usually an air quality regulator
or a public utilities commissioner.

These are the people

that have the secret knobs
on the energy of the economy.

They're the ones that get to decide
whether we get cleaner and cleaner energy,

more and more efficient buildings,
more and more efficient cars,

and so forth.

JD: How many of these people are there
in an economy like the US?

HH: Electric utilities are monopolies,

and so they're regulated
by utilities commissions.

Otherwise they'd jack up
the price too high.

Every state has a utilities commission,
a public utilities commission.

These commissions
typically have five members.

So that’s about 250 people in America
who control the future of our grid.

None of them's a senator.
None of them's a governor.

They're appointed positions.

JD: How much carbon do they control?

HH: 40 percent of the carbon
in the economy.

JD: Wow. 250 people.

HH: 250 individuals.

Now, you can narrow that down even more.

So let's go for the 30 biggest states.
Because this is all about tons, right?

JD: Yeah.

HH: You're now down to 150 individuals.

And if you're content to win votes
on a three to two basis,

you're down to 90 individuals who control
almost half the carbon in the economy.

How do you make sure those 90 people
vote for a clean energy grid?

They have a quasi-judicial process.

They hold hearings.

They take evidence.

They consider what they're allowed to do
within their statutory framework.

And then they make a decision.

They have to look at human health,
at economics, at reliability.

And they have to look at greenhouse gases.

JD: Is there a breakthrough
you’d like to see

or an innovation
you’re particularly excited about?

HH: I'm keen on green hydrogen.

I mean, we need to drive down
the cost of electrolysis,

and it's always going to be more expensive
than just pure electricity.

That's a thermodynamic certainty.

But once you have hydrogen,

you can reform it with other
chemicals into liquid fuels,

like synthetic diesel for airplanes
or long haul trucks or ships.

You can use it to make fertilizers.

And we can rethink
the basics of chemistry.

Chemistry's built on hydrocarbons,

and we need to build it
on carbohydrates instead.

So different kinds of molecules,
but it’s not impossible.

I guess the other thing
that’s fascinating to me

is this term "stranded investment."

So if you own a coal-fired power plant
or a coal mine today,

anywhere in the world almost,
you have stranded your money.

You can't get it back.

Because they're uneconomic.

We analyzed every coal plant in America,
the economics of every one,

and 75 percent of them,
it's cheaper to shut them down

and replace them with a brand new
wind or solar farm

than just pay the operating costs
of that coal plant.

So what's going to get stranded next?

This is an important question.

I think natural gas is next.

It's already skidding along at low prices.

I think people who are putting
a lot of money into gas fields right now,

or gas turbines right now,
are going to rue the day.

John, what are some of
the innovations or breakthroughs

that you’re especially excited about?

JD: Well, one exciting development
comes from my friend and hero Al Gore,

who has the vision
and is working with entrepreneurs,

that by integrating data can produce,

for every place on the planet,

a new real-time estimate
of what their carbon emissions are.

You know, I come from the school
of measuring what matters.

HH: Yes you do.

JD: If we had a real-time
kind of Google Earth,

where we could zoom in
to individual factories, or oil fields,

or Walmart stores,

I think that could really change the game.

I'm also a believer in carbon accounting.

And so I've seen entrepreneurs
who are making systems

that will allow not just the owners

but all the employees
of an enterprise or organization

to see what's in
their carbon supply chain.

HH: Yup. Yup.

JD: I'd love to see legislation

that required the OMB
score every piece of legislation

for its carbon impact.

HH: Yes.

JD: If we're serious about this,
we're going to measure what matters,

measure what really matters.

HH: Yup. Yup.

JD: So let's talk about Paris
and the Paris Accord

because some people say that some
nations are ahead of their plans,

but others are not,

and that the agenda
is not aggressive enough.

It’s not going to get us
where we need to go.

What is your view of the Paris Accords?

HH: The Paris Accords
are quite interesting animals.

It’s not a national commitment
and it’s not an international commitment.

JD: They're not binding.

HH: They're not binding.

They're individually determined
national contributions.

That’s the term of art
that they use in the Paris Accord.

JD: So what does that mean?

HH: So that means Europe says:

We're going to do 40 percent
less carbon in 2030

than we did in 1990, for example.

If they fail to hit that number,
there’s no consequences.

If they go past that number,
there’s no consequences.

That, however, does that mean
the Paris Accords are not important.

They're really important.

Because they set up, I would call it,

a race to the top
instead of a race to the bottom.

They set up a dynamic where people were
sort of bidding to do better and better.

They created transparency
in how people are doing

in terms of their carbon emissions.

And there are some countries that take
these commitments very seriously,

and including the European Union
and China on that list.

JD: So I'm going to push on this,
and what we really need

HH: Yup.

is we need a plan.

HH: So elaborate.

JD: Well, I think what we have today
are goals, not a plan.

And I think a plan

would be a set of 20 focused
precision policy efforts,

each of whom's targeted
at the right decision-maker or makers,

in the right venues,
for these 20 largest nations,

in the four sectors of their economy.

And these precision campaigns
would be well-funded,

they'd be well-focused,

they'd have an awesome founder/CEO/leader,

an amazing staff of people,

an accountable set of objectives
and key results,

and be on a timeline.

We would measure their progress,
quarter by quarter.

That would give me hope that we'll get
where we need to go by 2030.

How about you?

HH: Let me add on
a couple of characteristics

to exactly what you just said.

And that is you need to have
a deep understanding

of who the decision-maker is,
ideally by person, certainly by position,

and understand exactly what motivates them
or hinders them in making this decision

so that you can put all your forces on
the decision-maker at point of decision.

It's one thing to have a general concern
about the environment or about climate.

It's quite another to focus that concern

on the most important
decisions on the planet.

And that's what we need to do.

I love this idea.

JD: Okay, so focus on the decision-makers.

I think there's other individual action
that we can and must take.

We've got to amplify your voice

so that you organize, activate,
proselytize, your company,

your neighbors, youth, I think
are an incredibly powerful voice,

and friends.

HH: Yup.

JD: You need to vote.

HH: Yup.

JD: You need to vote
like your life depends on it.

So Hal, what does this all add up to?

What's the takeaway?

HH: I'm an optimist, John.
I've seen this possible.

I've seen when nations
decide to do great things,

they can do great things.

Think of America’s rural electrification
or the interstate highway system we built.

Those are huge projects
that transformed the country.

What we did prepping for World War II:
we built 300,000 airplanes in four years.

So if we decide to do something,

or when the Germans or the Chinese
or the Indians decide to do something,

other countries,

they can get it done.

But if this is sort of
piffling around the edges,

we won't get there.

What do you think? Are you optimistic?

JD: My take on this is,
I may not be optimistic, but I'm hopeful.

I really think the crucial question is:
Can we do what we must,

at speed and at scale?

The good news is, it's now clearly cheaper
to save the planet than to ruin it.

The bad news is,
we are fast running out of time.