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: 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.

John Doerr: Atoms, not bits.

Hal Harvey: 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?

John Doerr: Well, that's a really great
question.

The innovation starts with basic science
and 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&D.

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

There needs to be a kind of development, a
kind of

pre-commercialization, which in the U.S.

is done by a group called ARPA-E.

Then there's the matter of forming new
companies.

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.

Tesla's a prime example.

Beyond Meat is another one.

And that's inspiring entrepreneurs
globally.

John Doerr: 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 a year.

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

John Doerr: I want to tell you another
story that involves policy,

but importantly, plants.

Now Shenzhen is a city of 15 million
people, an innovative city, in China.

And then 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.

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

Hal Harvey: 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 is good at it.

So let them take that on.

John Doerr: Are they taking it on?

Hal Harvey: They are actually.

John Doerr: Good.

Hal Harvey: 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.

Hal Harvey: 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&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.

Hal Harvey: 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.

And 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.

Hal Harvey: We should be doing that with
ten 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.

John Doerr: Hal, you're an expert in
policy.

I know this because I've read your book-
Hal Harvey: Thanks, John.

John Doerr: Designing Climate Solutions.

What makes for good policy?

Hal Harvey: You know, 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.

The first thing is you have to go where
the tons are.

John Doerr: Follow the tons.

Hal Harvey: 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 much tighter?

Anything that pays 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% less energy

than a pre-code building.

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

produces fruits forever.

John Doerr: He got the words right.

Hal Harvey: 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.

John Doerr: That's big.

Hal Harvey: 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 4 percent

a year forever.

John Doerr: So Hal, goals are great
things.

How do you find the policymakers that set
these goals?

And then how do you influence them?

Hal Harvey: 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.

John Doerr: How many of these people
are there in an economy like the U.S.?

Hal Harvey: 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 is a senator,
none of them is a governor.

They're appointed positions.

John Doerr: How much carbon
do they control?

Hal Harvey: 40 percent of the carbon
in the economy.

John Doerr: Wow.

250 people.

Hal Harvey: 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?

John Doerr: Yeah.

Hal Harvey: 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 a statutory framework.

And then they make a decision.

They have to look at human health.

They have to look at economics.

They have to look at reliability.

And they have to look at greenhouse gases.

John Doerr: Is there a breakthrough
you’d like to see,

or an innovation
you’re particularly excited about?

Hal Harvey: 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 is built on hydrocarbons,
and we need to build it

on carbohydrates instead.

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

Hal Harvey: 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.

Hal Harvey: John, what are some of the
innovations or breakthroughs

that you’re especially excited about?

John Doerr: 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.

Hal Harvey: Yes you do.

John Doerr: 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.

I'd love to see legislation that required
the OMB score every piece of legislation

for its carbon impact.

Hal Harvey: Yes.

John Doerr: If we're serious about this,
we're going to measure what matters.

You measure what really matters.

Hal Harvey: Yeah.

John Doerr: 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?

Hal Harvey: The Paris Accords are quite
interesting animals.

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

John Doerr: They're not binding.

Hal Harvey: They're not binding.

They're individually determined national
contributions.

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

John Doerr: So what does that mean?

Hal Harvey: 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 create a 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.

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

is, we need a plan.

Hal Harvey: So elaborate.

John Doerr: 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 is 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?

Hal Harvey: Let me add on a couple
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.

John Doerr: 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.

John Doerr: You need to vote.

You need to vote
like your life depends on it.

So Hal, what does this all add up to?

What's the takeaway?

Hal Harvey: I'm an optimist, John.
I've seen it's possible.

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

I mean, 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?

John Doerr: 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.