[Scott] Coming up on "Energy Switch," we'll look at puzzling conflicts in the energy and climate world.

- Denying climate change is a problem, but blaming everything on climate change is also a problem, and figuring out how do we keep our scientific institutions robust and secure in this political environment is gonna be really important.

- We are facing an uncertain future so we need to embed flexibility in that policy.

Climate change, energy transition is an international issue and we are in a situation where actually, international cooperation is breaking down.

[Scott] Next on "Energy Switch," energy and climate paradoxes.

[Narrator] Funding for "Energy Switch" was provided in part by The University of Texas at Austin, leading research in energy and the environment for a better tomorrow.

What starts here changes the world.

[upbeat music] - I'm Scott Tinker, and I'm an energy scientist.

I work in the field, lead research, speak around the world, write articles, and make films about energy.

This show brings together leading experts on vital topics in energy and climate.

They may have different perspectives, but my goal is to learn, and illuminate, and bring diverging views together towards solutions.

Welcome to the "Energy Switch."

There are many paradoxes in climate and energy.

For instance, people want energy to drive their cars and heat their homes, but don't want any new power lines or pipelines to bring it to them.

Nuclear is a zero-carbon energy source, yet many climate advocates oppose it.

Some U.S. states impose EV mandates, but prohibit mining for battery metals.

We'll examine these and other paradoxes with two experts in economics, energy, and climate policy.

Dario Liguti is the director of sustainable energy for the U.N. Economic Commission for Europe, and a former managing director and global head of finance for GE Capital.

Roger Pielke Jr. Is a professor of environmental science at the University of Colorado, a former senior fellow at the Breakthrough Institute, and author of three books on climate policy.

Next up, energy and climate paradoxes and how we might resolve them.

All right, welcome.

Energy and climate paradoxes.

They're everywhere in the energy world.

Look forward to chatting about some of 'em.

Poor countries around the world, emerging economies, developing economies who don't have great energy security.

It comes and goes to them.

They want to expand their energy use.

The wealthy countries wanna decarbonize, we're sometimes saying to them, you should decarbonize too.

Is this a paradox?

- Well, you have to understand that first and foremost, for them, energy is development.

It's not about energy transition because they're not transitioning.

- From poverty to something else.

- Exactly.

So they look at energy with two different hats.

They're looking at the decentralized energy production, you know, solar, mostly renewable energy in rural areas, for example, to provide a minimum of energy services to a population.

- Just getting started.

- And then you look, they're looking at developing their own industry, of course, and there they're looking of course at, you know, coal and gas.

You cannot say you just only develop renewable energies because that's not enough.

They need the whole solution, the whole portfolio of technologies to develop, and that portfolio of technology needs to be adapted to their individual needs.

- It's complicated.

- So it's a complicated equation to pull it through, and it's difficult to say you should be doing that.

Actually not.

We should be helping them in doing the right thing by providing technology.

One thing it's which here instead in the emerging market is particularly true, is investment.

It's capital, and that's where I believe we, the western world, should help them is by providing technology and investment because we are rich of both.

- That's right.

Are the policies that we're trying to implement somehow hindering this developing growth, Roger, or how do you see that?

- Yeah, I mean, here's another paradox.

A lot, and I see a lot of this, there's a lot of well-meaning folks who are intent upon improving household energy access, electrification in very poor places.

And on one level, that's great, it raises standards of living, but on the other hand, we're keeping people in poverty, but at a little bit more tolerable level of poverty, and we have to realize that everyone around the world is striving for an economy with a 21st century infrastructure.

From the roads in front of you, to stores, to factories, to airplanes, and African countries, as you say, have noted this, again, a paradox that many of those countries are rich in fossil fuel resources, but cannot ask the capital to develop them, the institutions that are needed to govern them, and actually they face opposition, and this does have the pernicious effect of countries that have contributed nothing to the climate problem, and even if they were to develop their fossil fuels, would contribute, you know, marginally a little more are effectively being kept out of his path to development, which the rich parts of the world already took advantage of.

- Right, yeah.

Nuclear, I mean, it's zero-carbon source once it's built, reliable, pretty affordable once it's built.

A lot of climate advocates, or those who are most concerned about climate, many of 'em are opposed to nuclear.

What's the thinking here?

- I think, well, the discussion around nuclear is really about safety.

- Right.

- And in the nuclear industry, because of this, this continued attention on safety has actually the highest safety standards in the energy world.

- Yeah, how do we counter that fear?

- How do we-- - It's education.

I think it's education, it's talking openly about that, and, you know, it's talking about data, it's talking with numbers, and is today, it's a political decision.

It's not really an economic or technological decision because certain countries are perfectly fine with nuclear, take France.

Other countries are totally against nuclear, take Germany, and they're both, you know, close to each other.

What's the difference between France and Germany?

It's a political issue.

[Scott] Language.

- Well, yes.

It's true, and as well, cuisine.

- That's right.

- But one of the issues around nuclear, I think, and that it scares a lot of people, scares or concerns a lot of people, is the budget and the time to build the nuclear power plants because typically, they've been over budget, and then by many years, delayed.

So I think, you know, the small modular reactors probably could help in assuaging that kind of resistance from the population because they are much smaller scale, they are more easily deployable, they cost less.

It's on the technology which needs to be proven.

[Scott] Right.

- I think we also have to remember that worldwide, there's something like 420 nuclear power plants.

That's not very many.

The United Arab Emirates has committed to building a series of nuclear power plants, which are coming in at successively lower costs.

So imagine a world where we committed to building 2,000 nuclear power plants.

If it's like other technologies like solar, like wind, we would fully expect that if we developed a sizable industry, not these one-offs, that costs may come down.

Even so, so you take the Vogel nuclear power plant in Georgia, which has recently come online.

First nuclear power plant in the United States in decades.

It was over budget, billions of dollars, there was court cases fought over it, a lot of money spent in trying to oppose it, even with all those expenses and all those difficulties, there is cost certainty for Georgia residents to 2080 and beyond.

And, you know, the last thing I'll say is if climate change is indeed, you know, the challenge of our generation, the challenge of our era, maybe it's okay we pay a little bit more for nuclear to ensure that we don't have these unpredictable, unexpected impacts of climate change down the road.

- Right, you know, you said the Georgian residents will be assured of a price stability to 2080, right?

But we have seen the impact of climate change last year on power plants, nuclear power plants in France when suddenly you have issues lack of water availability for cooling down power plants, and lack of water for hydropower plants, and I think that is an issue that, you know, when planning and looking at the different technologies, one needs really to take into consideration because you might find yourself with the infrastructure that is not performing as they were supposed to.

And therefore, and I think, you know, diversification is the name of the game because you don't know, we're walking into an era of uncertainty.

And so, if you deploy a wide variety of technologies each one resilient to a different aspect in climate change, you can play that game.

[Scott] Yeah, you gotta have optionality.

[Dario] You gotta have optionality.

- Listening to Dario's comments, it made me think, well, this is why natural gas is gonna be around for a long time because natural gas provides a firm backstop that is less weather dependent, and can be started and stopped quickly.

- Interesting.

- And the question is, well then how do we pay for these backup technologies?

How do we overbuild?

And maybe that's a cost of society in a world with more variability and uncertainty going forward.

But again, this is where wealthy countries can probably afford that backstop and redundancy, and, you know, the only way for poor countries to be able to develop that same level of redundancy and robustness is to become wealthy countries.

And so how do we create a virtuous cycle where we're getting wealthy, we're cleaning up the energy system, we're creating redundancies so that the economy continue to go.

That's the challenge.

That's how we beat the paradox.

- So, Canada was burning this summer, you know, a lot of fires and I thought, wow, that's a lot of fires.

And then go to the data and look at it, acreage burn has actually been coming down the last 20 years.

I mean, you've studied climate too.

I hear that a lot, extremes, and then I look at data and I say, well, I don't see the extremes always.

I mean, this seems like a paradox to me too, the paradox of communication.

- I think it is true that a lot of the discussion of extremes departs from the intergovernmental panel on climate change and our consensus understanding.

At the same time, climate change is real, and it is affecting things like fire, weather, and heat waves, and so on.

Denying climate change is a problem, but blaming everything on climate change is also a problem.

[Scott] Right.

- And figuring out how do we keep our scientific institutions robust and secure in this political environment, especially for professionals who build things is gonna be really important.

- So EVs, you know, electric vehicles, they do require mining.

Some states and other countries are mandating them, yet they won't do the mining.

I guess the irony here, or the paradox to me, is still, somebody's gotta mine.

China processes today all these metals, 80% of the key metals.

How do you see this?

- Both the Europe and the U.S. have already taken important policy and important industrial decisions around that.

I mean, the EU is proposing the EU Raw Materials Act, which foresees a minimum, it mandates a minimum of domestic production of the raw material, a minimum of domestic processing capacity, and a minimum of recycling capacity.

We actually attach now, in Europe, to every EV battery, a digital passport.

That digital passport tells you exactly where the components are coming from, where is the supply chain, and how you're gonna dispose them.

- Interesting.

- But coming back to the mining thing that you mentioned, first and foremost, we need, first of all, to learn where are these reserves.

'Cause I can tell you one thing, and you're a geologist, you know better than me this, we haven't been looking for those.

- We haven't studied for a while.

- For a while.

We've been looking for all sort of other things, not for those things.

But other thing is we have mining methodologies and processes, which haven't really changed.

- No, they haven't.

- It's one of the industries where there's no artificial intelligence really not yet enough, you don't have a lot of other concerns around, you know, how do you diminish, they're starting out mining companies to take into consideration these aspects.

So certainly, I think there is hope to improve our mining operations if you can start with modules, you know, and then minimize that impact.

Of course there will be an environmental impact.

Certainly, mining operation you're, you know?

- I've never had anybody say it's really green, but- [Dario] You can do a lot better.

That's exactly the point.

- Interesting.

- And so that will go towards, you know, some of the concerns of the people that they don't want that in the backyard.

- Yeah.

- You know, there's an acronym BANANA.

Build absolutely nothing anywhere near anyone.

- Yeah.

- And that is an operating philosophy in many places, particularly in the United States, where we want all the benefits of modern energy services and modern energy supplies, but none of the costs, and certainly not in my backyard.

So again, this is one of those paradoxes.

It's a challenge, and every time I see protests against any kind of natural resource extraction, that's not gonna reduce the use of materials.

It means that they're gonna be sourced from somewhere else, and that means some other economy's gonna benefit, or we're going to increase our exposure to, you know, bad actors or pressure.

- And it may not be done as well, either human rights or environmental.

- That's exactly right.

- That's exactly right.

- Do we have anything analogous to this EU Raw Materials Act coming or existing?

Do you know?

- No, I haven't seen anything like that in the United States proposed, and it is an interesting approach certainly for energy security purposes.

In the United States, a lot of the debates are more about what should we ban next?

And that seems to me to be a very positive forward-looking approach that recognizes that, yeah, we're gonna have to take our medicine.

- We're banning a lot, mining, and pipelines.

- And another aspect of that Act, which I think is interesting is obviously, Europe is not as rich as the U.S., and so the EU has signed some of these strategic partnerships is with Congo, the Democratic Republic of Congo, with Ukraine, with Kazakhstan, which are rich in some of these critical minerals.

And the beauty about that is that the same standards that you apply in Europe will have to be applied in those minerals that are part of that agreement.

- Here's another paradox.

You know, U.S. states, and probably countries too I could think of, are kind of meeting their goals, if you will, by importing electrons, and fuels, and products, and not producing them there.

Only one atmosphere.

How do we get?

Where are we there?

- I mean, it's an age old problem in public policy is that when you set targets, they become subjects to be gained through accounting.

This has always been a problem with using emissions as the measure of success for climate policy.

Emissions are an outcome.

What we really wanna do is reduce the amount of burning of fossil fuels, or at least unmitigated fossil fuels.

I mean, one of the reasons we don't do that is it creates a degree of political accountability.

It's not just, you know, individual states, politicians, and advocates like these games too.

Carbon offsets are a perfect example.

So you can give the impression of making progress when the reality is a little bit more complicated.

So I think adopting policy targets that are much more closely associated with the nature of the problem we're trying to address reduces, you'll never eliminate the gamesmanship in accounting, but we can reduce the scope for playing those games.

- I hadn't thought about it that way, Roger.

To be honest with you, I've always thought about, well, it's not the fuels that are the problem.

It's the emissions that are the problem.

- It kinda proceeds in parallel track.

If we had carbon capture and storage or carbon capture utilization at scale, and that was available, then indeed, it would be about the emissions because then, that's a direct, but we don't have that at scale.

And so sure, let's pursue those technologies in parallel.

But until we do so, reigning in the demand for fossil fuel worldwide is probably a much better focus than saying, well, let's just focus on this output, which is emissions, because that's gonna more directly address a whole suite of issues, not just the climate issue.

- Yeah, absolutely.

I really think, I agree with Roger, and I really think it's about energy consumption.

The energy intensity of our society.

It's way too energy-intensive, our society.

- This is another paradox.

The paradox is, there is no scenario of the future where the world does not use vastly more amounts of energy, but at the same time, we want the energy intensity of the economy to go down dramatically at the same time.

And so we're trying to do two things, and I think that often gets confused in debates where people say, "Well, we should be using less energy."

And that's, you know, that's fine for those of us who are energy-rich, but when you realize there's billions of people who have almost none, the world as a whole is just gonna go up and up with air conditioning, with jets, and travel, and so.

So that's the world we have to prepare for.

- Look, speaking of electricity, we love energy, but electricity, but we hate pipelines, we hate power lines, but we need 'em, we need infrastructure.

Well, this is a paradox.

Are we gonna have to learn how to embrace some infrastructure?

- If you want to have a centralized or relatively centralized energy system, we will need a lot more electricity networks for sure.

Investment in grid is the real bottleneck today to the deployment of solar and wind at a massive scale.

There are very few manufacturers in the world that are able to produce those high voltage cables, and then certainly is the issue "not in my backyard," which is a very important issue.

[Scott] Which we now learned is BANANA.

- Right.

Exactly.

[Scott] And it becomes banana.

- Exactly.

- And pipelines too.

I mean, we won't build new pipelines here.

- I mean, we see this in New England, in the United States.

You know, New England north of Pennsylvania is close to some of the most accessible shale reserves in the world, and, you know, during winter last year, people were burning oil for heat, which makes no sense.

And that's partly, you know, what you call an own goal that, you know, by refusing to build the infrastructure necessary to move energy resources from one place to another.

[Scott] The natural gas outta the Marcellus, for example.

- Exactly.

Exactly.

We wind up burning a much dirtier, more polluting fuel because people aren't gonna go cold.

So this is an eternal problem, and I do think it is a luxury of rich countries to have all the energy resources you want and then simply oppose everything, which basically means we lock ourselves into the status quo.

- So in this emissions and other things, what are the pros and cons of a carbon tax?

- A carbon tax is, at some point, is absolutely necessary if we're gonna achieve deep decarbonization.

What a carbon price, carbon tax, a carbon fee can do is it can raise an enormous amount of resources to fund technological innovation and deployment, not just in the United States, but around the world.

For example, a five dollar a ton carbon tax.

That raises about $150 billion around the world, and the idea behind that is it doesn't matter where you start, but start low.

And then use at least some, I mean, politicians will siphon off some of that money for whatever they wanna do.

But as fossil fuels go down in their proportion of the global economy, it becomes politically easier to ratchet up that price.

- We have a tax on nuclear waste, and it has all been siphoned off.

We haven't done anything with it.

The skeptics might say, oh, another new tax.

- The example I use is the U.S. Highway Trust fund.

So every time you put gas in your car, you're paying a tax that goes into the Highway Trust Fund.

When you're driving around, you see the orange cones, and that's employment.

People are working, they're building infrastructure.

Is some of the Highway Trust Fund siphoned off for other purposes?

Of course it is, but that is the, I would say, the single most popular tax that the U.S. government has had in the last half century because they see the benefits of that tax every year.

And so if we create a virtuous cycle in energy where, you know, the promise isn't you're gonna see benefits in 2100, but no, we're gonna invest this in communities, and we're gonna have research institutes, we're gonna actually have deployment projects for, you know, name your favorite technology in local places and create jobs, that's when I think it becomes more of a virtuous political circle.

- Thoughts on that?

- Yeah, I agree with Roger just said, but one of the issues around carbon taxes is that it has an asymmetrical impact on your industry and your cost of living if not applied everywhere.

And so what you have to do is we just, you have to start with different levels of carbon taxes depending on where your economic development level is, right?

You can't put a $50 carbon tax in Sub-Saharan Africa.

That doesn't make, you know, make sense at all.

That's why you have to think about, it's not all about energy transition, it's about the just transition.

I mean, I think the social aspect and social acceptance of the energy transition has been under-evaluated, under-considered, and I think now people just start realizing that if you don't have social acceptance of the energy transition, you won't have an energy transition.

- Right.

Look, we've talked about lots of things that are paradoxical, if you will.

Gimme some final thoughts.

Roger, if you don't mind, I'll just start with you.

- Yeah, you know, I think one thing this conversation brings out is we need a better policy approach to create a level playing field that's technology-blind.

Usually what people will do is say, "Well, we need more regulations for those technologies I don't like, and we need more subsidies for those that I do."

And then we get this mishmash of policies where, you know, coal is not treated the same as nuclear, and wind and solar are treated differently than natural gas, and, you know, in any plausible scenario of the future, we're gonna have a wide range of technologies that are deployed, including fossil fuels, but recognize that fighting against energy is pretty punitive for a lot of people around the world.

So having a positive outlook on how do we provide the energy services that people demand, that people need, while at the same time, trying to balance these other goals, I think, you know, I am actually very optimistic about the future and how we'll be able to do that.

Not least because there are billions of people around the world demanding that we do that.

And so if we can take some of the negativity and politics out of energy policy debates, and instead focus on, all right, let's get our minds together and, you know, we're gonna make a lot of mistakes and things aren't always gonna work out, but as long as we're moving incrementally, we might see outcomes like we see in feeding the world, and improving public health around the world, which are tremendous success stories over the last century.

So maybe at the end of this century, we look back and we say, you know, energy was the one of the 21st century that we really made a lot of progress on.

- Yeah, I like that optimistic thinking and technology blind.

Final thoughts?

- Yeah, two things.

I think policy making needs to be flexible.

We are facing an uncertain future.

So when you take a decision today, you don't know whether that decision will be as good as you think it's today, tomorrow, or the day after tomorrow.

So we need to embed flexibility in that policy.

- Allow for learning and change.

- Allow for learning, especially because the future is very uncertain.

- Yes, that's a great point.

- And diversification, you know, technology mixes complex options, create options, that's the way forward.

The second point, and I have to do that, it's international cooperation.

Climate change, energy transition is an international issue.

It doesn't know any boundaries, and we are in a situation where actually international cooperation is breaking down.

- Yeah, just one atmosphere.

- Exactly, international cooperation has never been as important as it is today.

- Interesting.

Look, I appreciate your thoughts, and really enjoyed our visit today.

- Thank you.

- And your knowledge and expertise is terrific as always.

Governments and markets need to solve many energy challenges, of which climate change is only one.

Sometimes, these challenges may be at odds with each other.

Such as the need to provide more energy while simultaneously emitting less.

Solutions will be imperfect, and may best work regionally.

We should expect some failure and look for compromise.

We'll need to accept that no energy is perfect, which may mean embracing solutions that are not universally popular, like nuclear, new mines for renewable energy minerals, new pipelines, and new power lines.

Carbon reduction goals are most likely to succeed if they're technology agnostic, open to whatever does the job.

Recognizing internal conflicts, increasing transparency, and prioritizing education will help policy makers and the public minimize these energy and climate paradoxes.

♪ ♪ ♪ [Narrator] Funding for "Energy Switch" was provided in part by The University of Texas at Austin, leading research in energy and the environment for a better tomorrow.

What starts here changes the world.