[Scott] Next on "Energy Switch," we'll look at climate impacts and how we should respond to them.

- Part of that problem is the uncertainty.

The basic economics and the basic human behavior points out, well, when there's lots of uncertainty, actually, that's a cause for action, not a cause for inaction.

- Whatever the world does about emissions, we know it will adapt to a changing climate.

It's what we humans have done for forever.

[Scott] Coming up on "Energy Switch," how should we respond to climate change?

[Announcer] Funding for "Energy Switch" was provided in part by Microsoft and the University of Texas at Austin.

- 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."

Addressing climate change is complicated.

We need to understand the impacts today and predict the impacts tomorrow, then recognize the uncertainties of doing so.

The timeframes required in contrasting global priorities in order to quantify the costs and benefits of reducing greenhouse gas emissions and adapting to climate change.

My guests for this vital conversation are: Dr. Michael Greenstone directs the Energy Policy Institute and the Becker Friedman Institute at the University of Chicago and was a chief economist for the Obama administration.

Dr. Steve Koonin, a physicist, is director of NYU's Center for Urban Science and was the Department of Energy Undersecretary for Science, also under Obama, and provost of Caltech.

On this episode of "Energy Switch," how should we respond to climate change?

So let's dive right in.

We're gonna talk about the impacts of climate.

Is the temperature rising?

Michael, let's start with you.

- I think there's incontrovertible evidence that the temperature's rising.

You see it every day in our personal lives.

You see it compared to the historical record as well.

- Yeah.

- So there is, of course, nuance to that, as there is in all things in science.

The temperature that's commonly talked about is the average temperature over the globe relative to what the normal is, and it's risen by about two degrees Fahrenheit over the last century, since 1900 or so.

But that rise hasn't been steady.

It went up pretty strongly from 1910 to 1940, then it actually went down for 30 years, and then it's been going up since about 1980.

So that fact that it's not a smooth rise tells you already, it's a little more complicated than just greenhouse gases are warming the planet.

- Yeah, interesting.

Always a nuance there.

And so that gets us into the trends over this century and how do they compare to human drivers, carbon dioxide being one of the big human greenhouse gases.

Methane's another one.

How do you see that?

- Yeah, I think the evidence that greenhouse gases play a central role in increase in temperature is, I think Steve might not like this word, but it's consensus.

And I think the climate community, climate scientists have been very clear that we don't know that perfectly, the relationship, but there's been a narrowing of the range of uncertainty.

But there's no doubt that CO2 is causing increases in temperature.

And the latest kind of review would suggest that it's probably between, for doubling the CO2, maybe between two and five degrees.

And I think their most likely number is about three degrees and that's all C. - DDC, yeah.

- That's all C. But I just wanna be, I wanna be clear, because I think Steve's very focused on the uncertainty.

And I think the climate community, the climate scientists have been very clear about that uncertainty.

And that's why they don't express, "Well, it's gonna go up by three degrees C for sure."

They give this range.

- There's not a CO2 temperature knob in the sense of, I dial that in, I get that.

But that's a pretty big range.

[Michael] It's a pretty big range.

[Scott] And they're honest about it.

- Yeah, they're quite open about it.

- Not everybody's open about it, but the climate community.

- I think two things, one is about the treatment of uncertainties.

I think when you get back to the research papers and even the recent report, they're pretty explicit about the uncertainties.

It's as you get further down the chain into the summary for policy makers and into the media and the political discussion that you lose that nuance.

There are several factors that change the Earth's temperature.

Most obviously, as you mentioned, greenhouse guesses, which exert a warming influence, but also aerosols that humans produce, which exert a cooling influence.

The net effect of what we see is really not just CO2, but is that combination of aerosols and greenhouse gases that makes it particularly tough to disentangle things.

And even tougher is the fact that the climate system has long-term natural variations that extend over.

We know about some El Niño, for example, is the most familiar, couple years, every five or six years, but then there are things like the Atlantic Multidecadal Oscillation or the Pacific Decadal Oscillation that run over 70 years.

And the models have a hard time reproducing those.

And so depending on where we are in those cycles, the warming may be enhanced by those or diminished by those.

And we don't really know.

- When you say a hard time reproducing, it means the existing models struggle to fully understand and model the past?

- Yeah, yeah.

- It's a bloody hard problem.

- Yes.

[Scott] It's multivariate non-linear.

[Steve] It's a chaotic system.

- It's a terrible problem.

You haven't even mentioned the oceans.

And the oceans play an important role.

- Right.

- But I think one thing that, and I read Steve's book in the last week, it's a terrific book, but one thing that I don't think comes completely clear in the book is there really seems to be little uncertainty about what the impact of greenhouse gases are on changing temperature.

Again, there's this range.

We don't know exactly where it's gonna end, and there's things that don't make sense with the models or contradict the models.

Steve has pointed out several of them.

I think that there's probably many PhD dissertations that are gonna be written as a follow up to that, but I don't think it changes the central understanding.

- I would agree.

- That's interesting.

- But when society thinks about how it's going to respond to these, it's got to make some judgment about what the uncertainties are.

If you're 99% sure that the planet's gonna go to hell and become unlivable, then that's a very different discussion than, well, maybe two generations from now we might see a little more storminess.

Okay?

So the uncertainties are important in the policy discussion, I believe.

- I think it's really clear what you should do is, it's a cost-benefit problem.

You should decide how much it's gonna cost to reduce, let's say US emissions by a billion tons of CO2.

That would be not insubstantial reduction, not wild either.

[Scott] About 20% of the US.

- About 20%.

And then what are the benefits in terms of reduced climate damages?

And I understand the way you're describing it-- - Even the rest of the world doesn't do, or does very little, even if emissions still keep going up?

- Whatever the rest of the world does doesn't have any impact on what our, like, if we reduce by a billion tons, we've reduced by a billion tons, that's terrific.

And then we and the rest of the world gets the benefits from it.

- So even if we were to just do a little bit, you would say that would be worth it?

- What I'm saying is, we would wanna compare the costs and the benefits of that.

And, you know, just jumping to the conclusion here, small reductions in emissions, or even meaningful reductions in emissions in the United States, if done in an economically efficient way, have benefits that vastly exceed the cost.

- Are there some things we can agree that are changing in the timeframes of industrial activity that matter to us?

- Yes, but if I just take the cue from the latest IPCC report, so temperatures are going up.

Heat waves are becoming more common, although not in the US, but globally, which we see more heavy precipitation events even if the average precipitation is not changing much.

But when it rains, it rains more.

But in terms of hurricanes, thunderstorms, severe winds, mid-latitude storms, there are no trends detected.

- In counts?

In numbers of these things?

- In various metrics.

The one that's been in the news for the last couple years are wildfires.

And wildfires are a very complicated phenomenon, at least in the Western US and in Australia.

They involve how much forest is there.

They involve are there people living there or not, both because of damages, but also people start these fires as well, and certainly a drying climate.

The drought index for the West has gone down over the last 30 years.

Now, to what extent that's human influence or not I think is still a bit debatable, but it's clear that a changing climate, for whatever reason, is playing a role in that phenomenon.

[Scott] Sure.

Okay.

So fire is being a big one.

- Yep.

- Yep.

- Yeah, I think, so one thing is we're at the dawn of a super interesting era in economics where, up until about a decade ago, what we knew about economic damages from climate change, people didn't have computers that were up to the task.

And so now we can really begin to use data.

And a variety of exciting things are emerging from that.

I think one that sits kind of in my mind in a center place is the impacts of temperature on mortality are much more severe than personally I had realized and I think than the literature had realized before.

- Is that geographic, Michael?

- Yeah, so let me try to unpack that.

So what is part of the reason that we didn't know that before?

Part of the reason is that the only places that we had had data before were kind of rich, temperate climates, so Northern Europe and parts of the United States.

And so, yeah, when temperature goes up a little bit, well, that's good 'cause you get rid of some of the cold days that are dangerous and you're not really to the part of the temperature distribution that are causing impacts.

Now that we have data that covers most of the globe, a much richer and more nuanced picture is emerging.

A paper that I wrote finds that, by the end of the century, there would be about 74 additional deaths per 100,000 people, that's sounds super wonky.

If you wanna put it in English, it's about as much mortality as we have from infectious diseases, pre-COVID, on the planet.

And to your question though, it is not equally distributed around the world.

And in places like Pakistan and Bangladesh and Ghana, it's expected, it'll be like 200 per 100,000.

So like- - Equatorial.

- Yeah, places that are already hot and poor are in the bullseye.

- Let's come to the social cost of carbon.

And this is something you've helped lead and think through in the Obama administration, what all goes into that?

- Yeah, so I like to refer to it as the most important number you've never heard of.

[Scott] [chuckles] Okay.

- And it's kind of audacious in its hopes and dreams.

What it aims to do is to provide a monetary measure of the reduction in damages from mitigating or preventing one additional ton of CO2 from going in the atmosphere.

And it should, in principle, encompass whatever the health effects are, whatever the crop yield effects are, whatever the labor supply effects are, whatever impacts there are on migration, on sea level rise, everything.

- Right.

- Okay, so in that way, it's kind of almost-- - It should.

- Yeah, it should.

And it almost has- - But it's hard.

- It's very hard.

There's lots of uncertainty around it, and getting all of that exactly right is very challenging.

But, that led to a value of $51 per ton.

- Okay.

- The Biden administration has adopted that on an interim basis while reviewing the changes in scientific understanding that have taken place in the last 10 years or so.

- Okay.

- My sense, my read of the literature is it would be very difficult to come up with a number lower than $125.

I think our understanding about the impacts of climate change have improved and they are pointing to bigger negative impacts than we had previously understood.

And again, that is, it is so useful that I refer to social cost of carbon as the most important number you ever heard of because it provides this bright line of, well, anything that we spend per ton that is less than that number, it's a good deal.

The benefits are gonna exceed the cost.

- When you say the impacts, presumably you mean net impacts.

- Yeah.

- Because there are positive impacts from a rising CO2 and a rising temperature.

- Absolutely.

- Agricultural yields are greatly enhanced by an extended growing season, but also by the fertilization of CO2.

So you've gotta take that into account.

I don't know if people do that when they calculate the social cost.

- It's all in the benefits.

- So one number.

- And so like, let me come back to mortality where the largest net costs are, they are enormous benefits from getting rid of very cold days.

And those are counted in there.

And so if you're in Oslo or your favorite Northern Canadian city, climate change is really gonna be beneficial in terms of human health 'cause it's gonna get rid of these very deadly days.

It's just that when you add it up across the globe, and even within the United States, the damages of the hot days outweigh the benefits.

- So do you agree to curb CO2, Steve?

- All the things being equal, I would say yes, but in the end, it's, again, a values discussion.

You face a lot of problems in trying to cut down hard, hard enough to make a difference.

One is that we have the developing world who need energy in order to improve their lot.

We have the fact that fossil fuels are the most convenient and reliable way to do that.

We also have, for the existing energy systems, as we have in the US, what I'd like to say is the recalcitrants of changing energy systems.

The energy assets live a long time.

They have to be operated reliably, which takes decades of experience, improving the technologies and operating procedures.

The assets have to be paid off over time, and they all have to work together.

The fuel for vehicles has to work with the vehicles and the fueling infrastructure, and so on.

So the energy system, historically, doesn't like to change rapidly.

- That's interesting.

- The current discussion in the US is really too fast.

to be optimal.

- And I think a lot of big industries that are gonna have to do this would agree.

And so we get down the road, what are the levers we can throw?

What are some of the big things that will have an impact in the timeframes at the scales that we can deploy globally?

- You know, in some respects, I think it's actually, to think of it, the climate challenge is you've got the microscope a little too close to the piece of paper.

I actually think the right thing is the global energy challenge.

And I think of it as a stool that has three legs.

The first leg is how do we get access to inexpensive and reliable sources of energy?

Every society wants that.

It unlocks increases in living standards that we take for granted here.

The second is, can that be done without causing air pollution that causes people to lead shorter and sicker lives?

- Three million a year.

- Yeah, and that's from regular air pollution.

And then the third is how do we avoid disruptive climate change while also satisfying these first two goals?

And the painful part of the energy challenge is that you can name policies or actions that improve one or two of those goals, but it's almost impossible to name one that hits all three at once.

And so that's why there's trade-offs.

- So let's talk about the decarbonization strategy a little bit.

The strategy is to basically electrify everything.

And so we're gonna electrify transport.

We're gonna electrify residential heating, and we are then going to, or perhaps, coincidentally, decarbonize the electrical system.

So everything becomes electricity except maybe for airplanes, which we can do with biofuels or heavy ships.

But the real question is can you create a grid that is simultaneously affordable, reliable, and clean?

And as we've been discussing, that's really hard.

The technical levers for doing that, I believe, are first of all, fission.

Right now, it's the only reliable emissions-free source of electricity that we have.

- And it's scalable.

- And it's scalable.

We have already scaled it.

The problem is, with nuclear right now, is that we've been building them big and each one is different in the US.

If we build them small and standardized, small modular reactors, when I was in the government, I was promoting that, I think there's a lot of potential for that.

- We talked about carbon capture a little bit.

I think we agree that's a piece of this puzzle.

- I think we should be throwing everything we can at trying to understand how it works.

- Yeah, we should certainly try to bring the cost down.

Right now, the costs for direct capture are $500 a ton.

And people are trying to get to 100, optimistically.

- Which would get us to a lot of playing.

- It starts to get-- - If you have carbon cash at $100 a ton, I think scale-- - You're there.

- If the price is $100-- - But the scale thing is an enormous problem.

- Yeah, it's a big deal.

How about, well, something we haven't talked about, what about energy efficiency?

What about doing more with less?

How do we get that translated into our worlds?

- So I have run some real experiments, randomized control trials, in the residential sector in the United States where some households were given energy efficiency investments, others weren't.

And the surprising finding was that the rate, the realized rate of return was much lower than what was promised and that a lot of these weren't very good investments.

- That's interesting.

- It does fit this idea that economists love to believe, which is there's not free money laying around.

- Well, actually, Mr. Jevons realized in the 19th century that improvements in efficiency don't necessarily translate into reduced energy use, because if it's more efficient, you'll use more of it.

And also if you save some money through energy costs, you're gonna go spend the money on something else that uses energy, like take an airplane trip or something like that.

- So kind of a rebound- - Yeah, a rebound.

- Built into all that.

- So you gotta be careful.

- These are all these different responses, and we've talked about the costs and benefits and the challenges.

One of the concerns I hear consistently is how do I know that that kind of investment's gonna have a payout?

What do we say?

- Oh, I think the best answer is we can run experiments.

In India, I've been running an experiment with the Gujarat, state of Gujarat's, pollution control board, where industries were randomly assigned to face cap and trade market for regulation versus the standard command and control, and the results are very striking.

The cap and trade approach is much more effective.

- Really?

That's interesting.

- Yeah, and so I think, yeah, we're facing an era where we're gonna have to make big changes.

And I don't think we should have the hubris to think that every idea we have is gonna work and we should, you know, we can run tests.

- Have the courage and give the political leaders to be able to say, "That didn't work.

Let's try something else."

Right now they're held to some standard that- - The gotcha, yeah.

I mean, Steve probably can tell terrible war stories about Solyndra.

- Yeah, right.

- Which was, you know, that program was designed to have firms fail.

- Right, that's what I said on TV and I got bashed for it.

- Let's talk a little bit about adaptation because we've agreed this is gonna take some time.

And so what do we do?

What are some of the better adaptation strategies, and again, cost benefits to those?

- So let me first speak generally about adaptation.

Whatever the world does about emissions, we know it will adapt to a changing climate.

And there are several reasons why I believe that that will be the dominant response over the next 30 or 40 years.

It's autonomous.

It's what we humans have done for forever.

It's politically saleable.

It does not involve having to convince most of the world or even a given country to reduce its emissions because of something that's gonna happen two generations from now and a half a world away.

And it's effective.

I mean, people adapt their societies.

We move from all the way up in Hudson Bay all the way down to Ecuador.

And those are quite viable societies.

They have different characteristics, of course.

So I think that's what, again, without trying to be normative about what society should do, I think that's what society will do.

- How do you see it, Michael?

- Oh yeah, adaptation is not free.

It's costly.

Anyone who's been to Houston in the middle of the summer or Montreal in the middle of the winter knows there's very expensive investments made to make those places habitable.

And those are resources that you could spend on your kids, a whole variety of things.

And so I think what government can do is balance what people are gonna do to protect themselves with reducing CO2 emissions and try and search for the optimal combination of adaptation and mitigation.

- Some of both are good.

It gives you a little bit more flexibility, optionality.

- There's simple things, I don't build or keep rebuilding in places that are prone to flooding even though the land might be wonderfully arable.

- Yeah, and I actually I believe the Biden administration just made this major change in how flood insurance is priced, which I think was really, probably has not received enough attention.

It used to be, or under the National Flood Insurance Program, that coastal communities, which tend to be richer communities, were being subsidized by inland people.

And so they were paying below market flood insurance.

And I think that is now going away.

To Steve's point, it'll begin to reshape the country.

You will not see vulnerable developments built there because it'll just be too expensive.

[Scott] Right.

- There's gonna be a temptation to blunt the message that markets are trying to send, that's the subsidized coastal people or people who are at risk from wildfires, to subsidize them so their current lifestyles can continue.

And it's a very appealing and strong force, but, ultimately, it limits the adaptation that is gonna have to take place in the end.

[Scott] Anything that either of you would like to add that we haven't covered?

- Just a knotty problem.

It involves humans, technology, the environment, and we need to really think it through and do it well.

If we don't do it well, we will create more damage than we might get from the climate.

- Yeah, yeah.

- Yeah, I would just say part of that problem is the uncertainty and there's uncertainty throughout it.

And I think for too long that uncertainty has been a cause for inaction.

And I think the basic economics and basic human behavior points out, well, when there's lots of uncertainty, actually that's a cause for action, not a cause for inaction.

- Uncertain doesn't mean unsolvable and unaddressable.

I think addressing the uncertainty is so important.

I worry myself that we take these binary kind of soundbites and people take positions.

And to me, if we could really bring these things together, like we've just done, and address these in investment ways, I think we'll be able to get a lot closer to solutions that are better for everyone.

Climate modeling is not precise, but shows that human activity is increasing global temperatures with varying impacts.

IPCC reports suggest heat waves and heavy rain events are increasing, but they're less conclusive on storms and wildfires.

Calculating the societal cost of carbon emissions is also very difficult, but offers a way to evaluate the price of different CO2 reduction strategies against the value of their expected benefits.

Ideally, we could find solutions that provide affordable energy while reducing environmental impacts.

In the end, we'll need to compare the cost of mitigation against adaptation and their likely benefits.

How much we choose to spend will be influenced by other global priorities.

♪ ♪ ♪ ♪ ♪ ♪ [Announcer] Funding for "Energy Switch" was provided in part by Microsoft and the University of Texas at Austin.