President Biden’s first days in office mark a sharp shift in US climate and energy policy, with a slew of executive orders reversing several Trump actions and directing federal agencies to pursue a wide range of new regulations in what’s been framed as “a whole-of-government approach” to the climate crisis. Combined with Democrats now in control of both houses of Congress by the slimmest of majorities, the raft of executive orders raises the question of how climate policy will advance going forward. To what extent will it advance through legislation versus executive action? To what extent will legislative action be on party lines? Will there be opportunities for bipartisan cooperation on climate?
In this edition of Columbia Energy Exchange, host Jason Bordoff is joined by Rich Powell to discuss what to expect in climate policy moving forward, particularly on the Republican side of the aisle.
Rich Powell is the Executive Director of ClearPath and ClearPath Action, the DC-based organizations developing and advancing conservative policies that accelerate clean energy innovation. Rich frequently testifies before Congress on climate change and energy innovation. He served as a member of the 2019 Advisory Committee to the Export Import Bank of the United States, and is on the Atlantic Council’s Global Energy Center’s Advisory Group. Previously, Rich was with McKinsey & Company in the Energy and Sustainability practices. He holds a B.A. from Harvard College in Environmental Science and Public Policy, and a J.D. from New York University.
Jason Bordoff: Hello, and welcome to Columbia Energy Exchange, a weekly podcast from the Center on Global Energy Policy at Columbia University. I'm Jason Bordoff. President Biden's first few days in office mark a sharp shift in US Climate and Energy Policy with a slew of executive orders reversing several Trump actions and directing federal agencies to pursue a wide range of new regulations in what's being framed as a whole of government approach to the climate crisis. Combined with the Democrats now in control of both houses of Congress, by the slimmest of majorities, the raft of EOs raises questions about how climate policy will advance going forward, to what extent it will be through legislation versus executive action, and to what extent any legislative action may be on party lines, or whether there may be opportunities for bipartisan cooperation on climate moving forward.
To talk about this, I reached out to my friend Rich Powell to hear more about what to expect in climate policy in this Congress, particularly on the Republican side of the aisle. Rich is executive director of ClearPath and ClearPath Action, the DC-based organizations developing and advancing conservative policies that accelerate clean energy innovation. Rich frequently testifies before Congress on climate change and energy, especially on innovation. He served as a member of the 2019 advisory committee to the export import bank. He's on the Atlantic Council Global Energy Center’s Advisory Group previously Rich served with McKinsey and its energy and sustainability practices is a graduate of Harvard college and environmental science and public policy, and has a law degree from NYU. Rich, thanks so much for joining us today on Columbia Energy Exchange.
Rich Powell: Yeah. Thanks so much for having me. This will be fun.
Jason Bordoff: We have had Jay Faison on before whose philanthropy helped to create ClearPath, but it's been a while. So, I just wanted to start by telling, if you could tell our listeners a little bit about, about ClearPath, about your path, how, what your background was, and then how you came to be doing what you're doing, and then tell people a little bit about what ClearPath is all about and how it defines its mission and where it puts its resources and activity?
Rich Powell: Sure. Well thanks for having me on, thanks for having Jay on way back. So, ClearPath was founded in 2013 or so by Jay Faison. Jay made his fortune in a non-energy related industry. So, he made his fortune in the custom audio video industries with a company called SnapAV and sold them to private equity and endowed a philanthropy that was focused on finding paths forward on climate change and paths forward that worked for conservatives. So, Jay was a, Jay is a Conservative Republican, grew up with the party.
Jason Bordoff: I read somewhere that if you've ever seen a TV mounted outside, it's probably his.
Rich Powell: It is his, yeah, SnapAV I think is about 60% market share of outside TV. So, if you've watched, you know, a game at a bar outside you've contributed to Jay’s success and thank you for doing that, thank you for doing that by the way. If you've ever had anybody who has a big elaborate home theatre, they had somebody else install at their house. Thank you. Thank you for doing that, but so at the time I was with McKinsey, you and I share that DNA, Jason, and I realized that, that's like a dirty word these days, so we can call it something else, but I was with McKinsey I was in the sustainability and the energy practices.
Jason Bordoff: With the smartest McKinsey consultants tend to do studies, helping build organizations that they actually want to go run. I had several friends who did that, and I think that's where your story’s headed.
Rich Powell: I think that's where the story have. Yeah, I got a call that there was this guy, this crazy entrepreneur in North Carolina who had just sold his company and started a foundation. It was trying to find some path forward on clean energy and climate change that worked for conservatives. And that sounded really intriguing. So, I went and served it for a little while and I liked him a lot and the mission and it was great to have the resources and everything and so I never left. We've kind of built it together over the past now about six years and so that remains the mission is to find paths forward on power sector, and we were moving into industrial sector emissions as well this year that affect the global emissions trajectory, and it's heavily focused on innovation policy in DC and the federal space pretty broadly defined. We've now got a team of about 20 folks almost all in DC, and it's a combination of a lot of folks right off of the hill and out of the administration, a policy team, a research team, communications folks and the like, and so we mostly focus on Federal Clean Energy and Innovation Policy.
Jason Bordoff: For the focus on innovation. So, talk a little bit about that and that why is that where you focus? You're very familiar with the different schools of thought that say we mostly have the technologies we need, we just need the policies to deploy them and create the right financial incentives versus we don't have that at all, we can do this with a hundred percent renewables. We can't. So, why is innovation the place to prioritize your efforts?
Rich Powell: Yeah, well so first of all, you know, all of those people are right and they're wrong, right? So, we have a lot of the technologies that we need. We don't have all the technologies that we need. We need a lot of policy that accelerates the use of the existing technologies, and we need a lot of policy that creates the new and innovative technologies. There does tend to be a lot more focus on the, if you call them pull side policies are things that create more demand for the existing technologies then there has been focused on the policy for the innovative new technologies, and so it was one place that there wasn't as much policy infrastructure, advocacy infrastructure, and we thought we could make a distinctive contribution.
We looked at folks like the International Energy Agency who I know, you know, very well who do their annual assessments at the state of all these technologies and it's really concerning, right? The, you know, 60 or so that they're tracking globally. They think we're on track, and I forget exactly the number this year, but you know, something like five or six, it's not good, and there's a lot of things that need to be scaled up a lot faster. And when we looked at the policies that seem to have been really distinctly impactful and especially were quite cost-effective and therefore appealing to conservatives over the past decade or so, it seemed like the innovation policies were really kind of punching above their weight in terms of cost-effectiveness and an impact on emission.
So, if you look at the things that for example, scaled up the Shale Gas Revolution, which has been so important in decreasing US power sector emissions, or if you look at the things that we used to scale up grid-scale renewables wind and solar, that was a lot of innovation policy. Some pull policy, some demand side policy as well, but a lot of innovation policy kind of pushed down, push those things down the cost curves. And then, especially in the case of Shale Gas markets just sort of took off and caused an enormous amount of deployment of that.
Now we've got a cheaper, better performing, more reliable and cleaner power sector as a result, and we think about the problem, I think a lot of conservatives think about the climate problem from a very global perspective and when you think not just about a country like the United States, which actually has fairly high appetite for climate policy, but the rapidly developing world, you know, Nigeria and Indonesia or whatever it's hard to imagine them enacting kind of heroic climate policy, mandates, prices, et cetera. It's easier to imagine them adopting clean energy if that clean energy is just a like for like substitute for whatever else they would have built and so we're really keen on providing them more options, cleaner options, so that they can pursue a different development trajectory than the United States did while still having all the terrific quality of life elements that you do from a high energy economy. So, that's kind of how we see the innovations fit in the policy mix.
Jason Bordoff: So, talk a little more about where, I mean, you the concern that is raised, there are many sizable segments of the environmental movement that refer to false solutions, carbon capture, carbon removal, hydrogen, these are technologies that are still quite expensive, need, if they're going to play a meaningful role, have some way to go in terms of commercialization and deployment. There's a concern that the more we talk about them, think we can rely on them, the less we will accelerate a transition away from hydrocarbons and as you just said, we've thanks to earlier investments in new technology, new innovation brought the cost of renewables, solar, wind batteries down. They can do a lot now. Why not just go big on those? And how do you think about the concerns I described around some of the other technologies that I mentioned?
Rich Powell: Yeah. Well, I guess my first concern with that line of thinking would be what if we had made those decisions about wind and solar a decade ago, when they look really bad and really expensive and potentially very unreliable. It was because we had faith in the future and faith in the power of innovation and faith in technological learning curves and the power of deployment and learning by doing and all of that, that we did bring down, you know, all of those costs and so, it's very unclear to me why we would freeze in time, the technologies we currently have and shift entirely over to deployment policies. I don't argue against the deployment policies. I mean, I think it's really healthy that we focus on deploying more of the existing, more of the existing technologies that we have.
I do just think it's very unclear, especially when you look at some of the hard to abate sectors, I mean, forget about power altogether, right? If you look at the really hard to abate sectors, if you look at heavy industry, what we're going to do about cement or steel or refining and petrochemicals or all these things. If we don't have some better options, some low carbon fuel options, a much more affordable way to capture carbon emissions and sequester them or utilize them or something like that. It's very unclear to me how we decarbonize heavy industry and maintain anything like the existing global industrial base, which provides so many great attributes to the global economy and sort of keeps everything running, and then even when you just zero in on power I think virtually all of the modelling that's been done in the power sector shows that if you can get some kind of a flexible zero carbon resource in there for some share of the mix, and I think in different parts of the country in different parts of the world, depending on their renewable resource endowment and how much hydro they have, sometimes that's 50% sometimes that that might be 5%, but if you can get that, that thing in there to cover the last ground, the costs of decarbonisation decreased dramatically.
And since it's so important to get to a net zero electric grid first, so that net zero electric rate can be hugely enlarged and then used as the backbone of a lot of other decarbonization efforts, finding ways to do that and maintain affordability are important because they'll increase the likelihood of decarbonizing all the other sectors. They should improve the political capital in the political calculus, if we can do that whole project affordably, and then lastly, I'll just say, you know, this gets to a different topic around kind of social license and regulatory reform. I think we assume a lot about how, you know, because renewables have become so cost-effective, we assume that we're going to be able to build as much of them as all the models say would be the economically optimal thing to build and I'm not gonna argue, we don't have enough land.
In United States we've got all the land we ever need to build all the things, but if people own and occupy that land and look at that land, and a lot of people are opposed to building anything in and around their communities where their view sheds or their land or their farms or whatever, and I think we need a portfolio of solutions that's robust to the possibility that we won't actually be able to build all of the energy non-energy dense renewable infrastructure and the accompanying linear infrastructure, the transmission lines, et cetera, et cetera, et cetera, but that we would need to build then the economically optical case, and so we may need some other options that are a little bit more power dense that you could imagine, like co-locating with existing industrial facilities, where the surrounding communities already comfortable with new heavy industry going in new nuclear plants, re-powering existing coal plants with nuclear or carbon capture equipment, all those kinds of things because we may need those sites and that, that flexibility in the future power mix.
Jason Bordoff: Yeah. It's a great overview and really important points. I think your points about sort of the abatement cost curve and for the last bit of reductions, whatever 10, 20, 30% that estimates are somewhat different, but broadly consistent with the modelling you see out there. I'm sure you've spent time with our friend Jesse Jenkins and his colleagues recent report at Princeton on net zero by 2050 showing that in their modelling too, you can do a lot with renewables in the power sector, but firm power does make it cheaper to get fully to net zero. And also I thought two of the slides in that 400 page deck that were relevant to what you said before, which is a view of the world the United States today, and how much is covered with solar wind and transmission lines and what that looks like in 2050 in a high electrification and high renewable scenario, and you're covering a lot of land and it's not to say we can't do it, but I wrote an op-ed in the New York Times over the summer about challenges with doing that a lot of the same environmental review permitting, local opposition challenges, and often cases you find a pipelines in many cases can be true for clean energy as well. Russell Gold's book about clean line the transmission line was about that we're challenged, environmentalist proposing transmission lines bring hydro-power into New York now. So, when you say power dense for everyone listening, I presume what you mean is you can generate the same amount of energy with a much smaller footprint say from a nuclear plant. Not that there aren't other challenges with that technology, than you can say with the same amount of landmass that would be required with solar panels?
Rich Powell: Exactly. So, that there aren't as many options there, but like on the power dense front, you have clearly you have nuclear and far further stuff like fusion, you have other renewables, right? So, hydro is actually a more energy dense renewable source. You have enhanced geothermal. This is the kind of really deep geothermal that you could probably do even East of the Mississippi, where folks don't typically think of geothermal, and then you have use of fossil assets in some way, shape or form. So, you can imagine existing fossil assets that you put carbon capture on the backend of, you can imagine retrofitting the fuel as my friend Bill Brown from NET Power likes to say, so that's doing blue hydrogen so generating hydrogen with natural gas say or with coal by-products, by capturing the carbon at that source and then using that hydrogen to power old fossil plants or new hydrogen powered turbines or it might even be continuing to use emitting natural gas plants, but then building centralized direct air capture facilities, somewhere else that offset and pull out and kind of use the sky as your CO2 pipeline, if you will, just as long as you're netting it back out.
And I'm not sure which one of those is going to end up being the economical thing, my guess is that some portfolio of all those approaches is going to end up being the economical thing, and it's going to vary a lot the place and the resources and the fuel availability and the local support for various things, but our old employer taught me that a portfolio of initiatives is always the best thing to do, not to bet on any one course or any two things and so I just think the world needs a lot more options ahead. I mean, this is an enormous challenge, right and everything is going to have to work well, if we're going to meet the challenge.
Jason Bordoff: And the concern I raised in the beginning that in the response to that portfolio, people will say, yeah, the problem is we know some things we can do today and you're going to, we're going to do less of them and there won't be as much political pressure there. Your response would be, we just kind of have to do all of it and keep our foot on the gas with everything?
Rich Powell: Yes, and this idea about the kind of a fixed pool of political capital or a fixed bag of money. It's just not something we've actually seen play out as we've worked a lot on policymaking in DC. So, I think people are constantly saying, well, you know, if we asked them to do this, they won't do that or if they enact that policy all of the wind is going to be taken out, they're not gonna be willing to do the next thing. In our experience, working with policymakers, typically the first thing they ask after they get a go pass is okay, what's next, what's the next thing we can do, right? And usually the next thing they want to do as a higher ambition thing than the thing they did, and so in our view, finding ways to involve more of these technologies also has, it's not only just the right thing to do from the kind of the tech or economic perspective and the risk production perspective, it's actually the right thing to do on the political economy and building a bigger, broader coalition for all these things.
I mean, there are people that just like these other technologies for all kinds of reasons, right? So, their states still produce coal or their states produce or could produce enormous amounts of natural gas. Their states produce uranium, they have traditional tax bases and employment basis around nuclear energy or university programs that support nuclear energy where they like its overlap with the defense apparatus. I mean, there's an enormous cross subsidization between the civilian nuclear enterprise and the defense apparatus. There's all kinds of reasons to like these other technologies as well, and if we need them, and if it's a way to bring more people in the climate conversation, why wouldn't we do that?
Jason Bordoff: Now the, your website I'm looking at has six conservative clean energy pillars, nuclear storage, natural gas, carbon capture, hydropower, geothermal. I'm not sure what's missing from there, I guess, renewables efficiency, maybe something else. Why are those conservative as opposed to the things that are not there?
Rich Powell: Well, I would argue renewables are there because storage is there, right and when you think about an innovation focused lens, right. Storage is kind of the big thing we need to do to move those things along. I think those are there and the things that we spend most time on in large part, because they're, that's the suite of things that actually is flexible, right? So those are the things that could operate and run 24/7/365 on demand, and frankly it's the set of things where sort of before we really got going, there was not a significant coordinated, conservative, there was a lot of conservative enthusiasm for moving those policies forward, but there wasn't a coordinated conservative effort to move conservative policy makers along on those things and so yeah, so that's where we ended up focusing.
Jason Bordoff: What did you think of, there has been a lot of headlines about climate policy in the last week or two with Biden's executive orders? What did you like about them?
Rich Powell: Oh, is that what was happening is that why there were all these headlines?
Jason Bordoff: Yes, there were other things happening too, but that was one of the things that motivated headlines.
Rich Powell: I'm also from Scranton, Pennsylvania, so I've just mostly been paying attention to that fact everything else has just been kind of lost in the noise.
Jason Bordoff: Yes. He is going big on climate change that that's what the headlines tell us and really, the kitchen sink. I mean, you've seen these executive orders a lot in them, domestic international, whole of government approach. These are all phrases you've heard recently. What did you like about them and not like about them?
Rich Powell: Let's see so on the, I guess maybe I'll start with the not like side. I think that the avalanche of these things I think probably very predictably has already engendered some backlash from a lot of conservative policy makers who just see all of these things. I mean, the pre denial of the Keystone XL Pipeline, which I think at the very best from a climate perspective as a symbolic battle, I think most of the analysis shows that it actually doesn't meaningfully impact emissions to allow that thing or to deny that thing, but it clearly has become a symbolic sort of calling card for some element of the environmental left and has now been accepted by the administration and.
Jason Bordoff: Are the things sorry to interrupt, are the things that the conservatives in your view have had kind of a negative reaction to, are there things beyond what you might say are sort of the supply side oil and gas issues, the leasing on public lands and the permitting and the 60 day permitting and Pipeline Keystone XL, are there other things beyond that, that you would put in that category of not so helpful if from your standpoint?
Rich Powell: Yeah, and I think more than anything else, it's just the rapidity, just kind of like the avalanche of all these things that didn't seem to have a lot of, there didn't seem to be like any kind of a coordinated effort to reach out to broader constituencies about these things to sort of understand where policy makers especially for the most effective parts of the country were coming from on all of this. I wonder if a very similar set of outcomes couldn't have been achieved but with a very different kind of response from policy makers, if there had been some attempt at conversation and engagement and all that. And then obviously a lot of these things are frankly symbolic, right? So the, you got a lot of conservative policymaker consternation about shutting down or at least freezing leasing on public lands.
And it's very unclear what the actual climate impacts of a move like that are, right? And so you're burning your political capital to go back on my previous statement about there not being one fixed pool of political capital if there were one fixed pool of political capital, you're burning quite a bit of it, and you're not actually getting much emissions upside from that, and so are we setting.
Jason Bordoff: What did you like what was received favourably on the conservative side of the aisle?
Rich Powell: You know, I that's your I'm pretty nerdy went pretty deep into the thing. So, I don't know how broadly people saw this. A few things that I thought were encouraging where, there was a recommitment to the use of federal procurement for clean electricity, for example, and it was specifically stated as carbon free electricity, which is a departure. So, in the Obama Administration, it was renewable electricity that was purchased and our perspective has always been that we should be focused on the attributes of whatever energy we want. So, if we care about climate change, we should be focused on carbon free electricity. That should be inclusive of nuclear and hydro, large hydro and fossils with carbon capture and all these things and so that seemed like a step in the right direction. I've also been encouraged by a number of the folks that have been appointed to spots in the department of energy.
I think you have a lot of really sophisticated folks that are coming in to take over some of those programs and teams. I was very pleased to see that I guess Secretary Nominee Granholm has committed to continuing The Energy Storage Grand Challenge, which is a program that you know a new ClearPath team member Alex Fitzsimmons, who was the Deputy Assistant Secretary Of Department Of Energy had had a big role in setting up and that we were really supportive of in the previous administration, it's kind of a moon shot approach to breaking through on some of these really long duration battery storage technologies, and so that was encouraging that they decided to, because often folks will just come in and they'll regardless of the merits of the program, they'll just kind of like swipe away all the previous administrations program. So, was excited about that as well.
And lastly, I think it was a great move to put Chris Hanson into the chair position at the Nuclear Regulatory Commission. He's a deep expert in the technology and the policy in this space and I think he'll be an able new chair to replace chairman Svinicki who's really been somebody who's living led the drive to modernize the Nuclear Regulatory Commission.
Jason Bordoff: Thanks. I want to come back to nuclear in a second, but what, at a higher level, what I suspect some number of people listening to this right now have a view that it sounds nice, but Republicans don't really care about climate change. They're not serious about it. Yes. We can support innovation and technology. That's a good thing to do. It's not sufficient to the scale, the level, the understanding of the urgency, it's a crisis, the level of ambition. It's just not, it's not there and their support for continuing to increase oil, gas, and coal production, and I'm just broadly characterizing or caricaturing, whichever word you want to choose the way some might perceive the Republican side of the aisle. You work a lot with the Republican side of the aisle on climate change, just help people understand what you see and whether what I just said is wrong.
Rich Powell: Yeah, well, I think it is more of a caricature than a characterization. If you will, and I think one needs look no further than December and what was passed as part of the omnibus bill at the end of the year. So, the Energy Act of 2020 was included in there. It was 500 of the 5,000 pages, and so this is I think by all accounts by all observations, certainly the largest energy, comprehensive energy bill passed in more than a decade. I think it rivals the energy policy act of 2005, which was a major of legislation and it exceeds what we did in 2007 and even exceeds what was done in the recovery act, ARA, which is pretty massive thing.
It has three very large programs. One is a huge modernization of the department of energy. It's a kind of a massive innovation investment. I can talk more about that. The second was a regulatory phase down of HFCs, energy nerds listening into this will know that the Kigali agreement to the Montreal Protocol, which is a global agreement to regulate the use of ozone depleting chemicals. We add in this sub agreement called Kigali under the Montreal Protocol to phase down a specific category of these ozone depleting chemicals that also happened to be climate super polluters, HFCs, hydrofluoric carbons.
Jason Bordoff: Very, very potent warming.
Rich Powell: Very potent, extremely potent. So, we're talking about a half a degree centigrade globally worth of heating that’s in these things, and so phasing those down globally as it is an enormous climate lever and the US doing its part. US is one of the major manufacturers of these things is phasing those out. It is an enormous climate lever, and then lastly, there was significant clean energy tax policy enacted. So, a number of the existing incentives, which have been really had been the primary driver of a lot of things like wind and solar over the past decade, were further extended as were the incentives for carbon capture and sequestration electric vehicles, all these things.
So, you had a great big innovation push. You had an outright regulatory push and you had a tax incentives and sort of carrots push all combined together in this one big package and it is not an exaggeration to say that that bill was led by Republicans, right? So, Lisa Murkowski, chairman Lisa Murkowski of Alaska, chairman of the, until the beginning of the year, chairman of the Energy and Natural Resources Committee crafted the legislation that was the starting point for that massive innovation package and has really been a champion and all that. She's been attempting to do that for six years. This was kind of her last year as chairman of the committee, and she finally got across the finish line.
The HFCs portion of that bill was led by Senator Kennedy, John Kennedy Republican of Louisiana, and the final bill was a compromise that Senator John Barrasso, who was until the end of last year, the chairman of The Environment Public Works Committee, now chairman of The Energy and Natural Resources Committee. He sort of brokered the big bipartisan compromise that got that thing down again, Republican led legislation, and then a number of Republicans were involved and engaged in the extension of the tax incentives as well, and so you had a lot of Senior Republican policy makers, including from really energy intensive states, look at Alaska and Wyoming, right deeply engaged in this.
They all talked about climate change and solving global climate change, and global emissions as one of the big motivations for getting that bill done, and I would just say the proof is in the pudding. I completely agree that the rhetoric around climate remains dominated by Democrats and the left. I will just note that of the major pieces of energy policy legislation passed in the two decades actually passed, not proposed, not passed through one chamber, not that folks aspire to, but that were actually passed three of the four big bills were signed into law by Republican Presidents in 2005, 2007 and 2020, and both the 2005 and the 2020, sorry, 2020 energy bills were led by Republican Congresses as well.
So, I do reject the notion that Republicans don't care about this stuff. I think they've got a different approach and a really different way of viewing it. I think they have an entirely different sort of climate worldview if you will, which impacts a lot about the policy, but I do think they care and they now have a pretty strong legislative track record of taking it on.
Jason Bordoff: Some portion perhaps not all of the Republican side of the aisle that still is dismissive of either the seriousness or reality of climate or is going to stand in the way or block efforts to transition away from hydrocarbons. Is that still a significant barrier to making progress? I mean, I think that would be a view on the left. Do you think that's fair or not?
Rich Powell: Yeah, well, I mean, certainly there are folks that we need, you know, we climate advocates on the right need further work convincing folks. Right. And on the seriousness of this issue. I will say that the number of folks who are kind of vocal climate skeptics, if you will like left in the house of representatives of the Senate is kind of vanishingly small and not terribly influential. At this point, I think that there are a few folks that are kind of left with sort of pretty old, outdated talking points, but at this point I think the conferences in both the house and the Senate have really moved to a much more constructive position around this. And I mean, anyone who observed again, you'd have to be pretty energy nerdy to have done this, but if you watched any of the climate hearings, for example that occurred in that house last year where I had the misfortune of testifying it at seven of them as the Republican witness sort of virtually across the board, we're not as deep a bench as we need to be and so there needed to be more people that are available to testify at these hearings, but virtually across the board of those hearings the Republican position was very clear climate change is real, global industrial emissions are the primary contributor. We've got to take on solutions to this challenge. They've got to address the global nature of the challenge. Otherwise they're just kind of meeting with self-flagellation, that'll sort of set back the US economy and not actually solve the problem, and we're going to continue to use fossil fuels long into the future, maybe forever, but as long as we do it in a cleaner way every year, that gets the emissions under control, we should care about, which are the sources of energy, as long as the emissions are gotten under control.
And I think, to your last point there about Republicans kind of remaining committed to fossil fuels, I think it's less that they're committed to fossil fuels and more that they want to see the discussion focused on emissions, and they don't understand why fossil fuels would have to be written off or left entirely in the ground if there are ways that we could continue using that stuff and if that's the affordable course as it is I think at least today in many instances, as long as you can get the emissions under control
Jason Bordoff: And in some instances, right? I mean I, we do a lot of work on carbon management, carbon capture my colleague Julio Friedmann as you know, but I think you would agree that if we get on track with net zero, we may still be using some hydrocarbons, but probably a lot less.
Rich Powell: Yeah. I mean that well, I'm not entirely sure, right? I think it depends a lot on what you believe about how much well first how much global energy demand overall is going to increase over the next couple of decades, and it may increase as you know like a tremendous amount, and which may just mean that we, I think you have often said we don't tend to actually subtract any wedges in the total goal of what we do. We just seem to sort of pile more on top, and so it might well mean that we end up using about what we're using today, far into the future. It might be a lot more gas and a lot less coal and oil, and more of that gas might be primarily used to sort of generate hydrogen or run-in gas turbines that then have carbon capture you know, attached to them in the end, and those sorts of things.
I'm not, you know, it'll be fascinating to see in 2050 or whenever it is that we achieve kind of global net zero, like BTU for BTU are we actually using more or less hydrocarbon in the end, we may also just find that I mean, it's possible, right? That carbon dioxide removal technologies get so good that, I mean we got to remember like fossil fuels are just, they're really darn useful, right? Like liquid fuels are just really energy dense. We've got a terrific global infrastructure to move them around. That is highly reliable, and it may end up being the case that it's relatively inexpensive to do a lot of carbon dioxide removal. I mean, I'm not sure that's gonna be the case, but it may be the case and so we might just say it's okay for airlines to keep burning this stuff, as long as we've got great facilities that the airlines pay to remove the stuff and that may be where we end up. I, I'm just not sure.
Jason Bordoff: Well, yeah, for things that are really need energy density, like an airplane, it is interesting to see as you know, United Airlines made an investment in carbon engineering for carbon removal technology, Boeing just announced a big investment in biofuels and is it an alternative fuel or will it be jet fuel and then remove the CO2 after the fact? That's probably not going to make sense for cars, light duty vehicles even trucks, I think but maybe.
Rich Powell: That does seem like that would be a heck of a lot to remove, but I mean, who knows?
Jason Bordoff: I want to come back to what you said about the relief bill in December and the bipartisan compromise there and what lessons you take from that about where we're headed from here. So, very small blue majority by one vote. The vice-president’s vote in the Senate, small, very small majority in the house, too and so now on the left, you're talking about reconciliation and how do you get a clean electricity standard through that or large climate and certainly spending, what might in your view happen in terms of continued economic recovery investments and how much of that could be targeted toward green priorities, and do you see that is the only way we're going to get stuff done with something like reconciliation, what do you think will happen there? Do you think it's going to be possible to, it looks like the filibuster is not going away, to get support from 60 Senators for something meaningful?
Rich Powell: Yeah, well, I think obviously there's all kinds of pathways going forward. You have especially building on the success of the energy bill, you've got pretty broad I think bipartisan enthusiasm for a bunch of things, right. I think you've got clearly, I mean, we set up this gigantic moon shot program to demonstrate sort of five or six big classes of new, basically all the pillars that you just listed there from ClearPath website. The Energy Act Of 2020 sort of set up a major demonstration program across all those things. It would be the largest one in the department of energy's history. They'd have to kind of set up more than 20 major commercial scale demonstrations, all these things for better for worse, they'd have to invest billions of dollars in the cost chairs with the private sector over that time period.
It will require an enormous effort to do that in any circumstance and conservatives have kind of shown that they're supportive of that effort. So, there's a lot to just implementing that big bipartisan bill, but everybody agreed on. I think there's bipartisan consensus on that. I think we get to 60 votes on appropriations bills for example, that would fund that big program. I think that there's a lot of bipartisan consensus on continuing to use an incentives based policy to decarbonize the power sector in particular.
So, for example, at the end of the year, separate from the passage of that big legislation another bill was passed not entirely, but out of the energy and sorry, the Environmental Public Works Committee in the Senate the American Nuclear Infrastructure Act, NIA. And NIA does a number of things to strengthen the US Nuclear Innovation Program and the US Nuclear Infrastructure, probably the biggest ticket thing just from a climate perspective is that it proposes setting up a program at the EPA, which would basically save the existing wholesale market, the deregulated market nuclear fleet, which energy nerds listening to this will know is challenged economically given the extremely low cost of natural gas and the subsidized renewables that those plants are competing with right now.
And so NIA would set up a new program where struggling plants that are about to close, could apply to the EPA and get a stream of credits from the EPA to stay open. So again, folks that are sort of keeping track, so this is the second time in a single Congress that a very conservative Republican Senator John Barrasso has been willing to authorize new significant EPA authorities in the service of climate and carbon, climate and greenhouse gas emissions. So, once was that HFCs thing, the second was this preserving the existing nuclear fleet. There's that bill passed I think only the Anti-Nuclear Democrats on the committee voted against that bill, all Republicans supported that bill. So, and that's the biggest single thing that could be done to preserve emissions or to prevent emissions in the power sector in the next say, five years or so.
And there's a number of other things like that. That are you have pretty broad bipartisan consensus. I mean, I think again, if those were all taken together, added together passed at a 60 votes bipartisan way, we'd look back on that and think of that as like another major climate and energy bill passed in this Congress, and I think again, it would start building the political capital and the political goodwill around energy deal-making. Our view has always been that solving climate change won't be the one mega bill that's the perfect solution. It will be the hundred singles and doubles that we gradually cobbled together as the energy mix continues on. That's I think the next big step would be to find what's that next 60 vote bill and I think it's out there that probably 80 vote bill.
Jason Bordoff: Are those singles and doubles, you know, carrots like that support for renewable support retention of existing nuclear. Does that leave off the table things like a clean electricity standard, cap and trade, carbon tax, the big climate legislation that just limits how much CO2 we can put in the air. And do you think that is necessary? Are we going to get where we need to be without something like that?
Rich Powell: Well, we have accomplished pretty remarkable things with in the absence of that in the past decade, right? So, we're down already I guess I haven't, I got to look at the latest, latest from 2020, obviously 2020 is numbers kind of skew everything, but we're down more than 30% in the past decade and a half in power sector emissions. Which is if we were able to maintain that trajectory more or less we'd be on a trajectory for net zero or some kind of full de-carbonization by 2050 in the power sector, if we were to maintain that trajectory over the next three decades to 2050.
Jason Bordoff: Which probably is not where we're headed absent policy intervention in my view. I mean, I think market forces did a lot of that work you're talking about. I don't know if they continue us on that trajectory.
Rich Powell: Yeah, right. Yeah. We may be have yeah, we've done a lot of shallow decarbonisation as some folks say, and renewables and gas are great for shallow decarbonization and it is possible that we're headed for sort of a cul-de-sac unless we've got breakthroughs and things that are a mix of things that's fully zero emissions and that the market will adopt them and take up going forward. The other thing that we have is a pretty remarkable new commitment from the utility sector with these net zero emission goals. So, it's now become effectively standard amongst investor owned utilities to pledge net zero by 2050, and at least to date, they're making very good progress against those goals. Many of them were actually exceeding the voluntary decarbonization goals that they made two or three years ago.
So, like a 20, 25 sort of a timeline, of course, all those goals come with a great big asterisk right? And this is pretty uniform and they all say, we know we have the technologies we need to get 60, 70, 80% of the way to that net zero goal. What we don't have are the things that will get us the final that final lag, and so we need some combination of advanced nuclear or hydrogen or fossils with carbon capture or some extraordinary breakthrough on very long duration storage or enchanced geothermal or something.
Jason Bordoff: Help our listeners understand, why that is meaning your utility is committing to net zero by 2050 you're in some cases you're saying, going beyond what policy is requiring, which would be either, cause it turns out to be the cheapest thing and policy’s not binding because the market is actually moving in that direction faster or because people companies are willing to bear a cost and therefore presumably impose it on consumers, to move faster in that direction or maybe in a regulated utilities there are different considerations in terms of how one thinks about who bears the cost, but talk a little bit about that and then I want to hear your thoughts about what that means more broadly for this plethora of net zero by 2050 commitments and Larry Fink's notable letter that just came out sort of saying we expect any company we're investing in to do that, how much impact do those commitments have? Are they meaningful? Are people just putting out press releases to and have no idea how they're going to get there in 30 years?
Rich Powell: Yeah. So, I mean it's sort of fascinating, especially because it's become quite standard and there's a, there’s actually a pretty now uniform framework that most of the investor on utilities are taking up with this. I mean, I think this is driven by a combination of different factors. One, for many of them, at least the early stages of this decarbonisation had just been good just to have made good business sense, right. Either folks are doing the capital turnover anyway, and then it kind of helps them from an image perspective obviously and just, you know, being good stewards and social responsibility and all that to be accounting for the carbon that they're saving along the way as they do that, as they take advantage of more lower cost renewables, as they take advantage of modernizing their fossil fleets.
In some cases they take advantage of building new nuclear as well, and so there's that whole piece just to kind of the market-driven piece and the funding to make sure that they're getting this sort of the social upside for the market-based decisions they're making. I think they're also under frankly some pretty substantial pressure from Larry Fink and many other investors out there who are saying that, we want you to, you know, we own your company and we want you to make this change and be compliant with this, especially because it doesn't seem, I mean, there may be some incremental costs to consumers or some of it that you need to bear an effect your sort of your bottom line and your business model, but it really doesn't seem like it's like it's existential to the business model, but as an investor on utility to make this transition to net zero.
If you can do it in a way that kind of de-risks your business model from potential future carbon policy or other kind of activist pressure, why not get on that, why not get on that trajectory? Why not get on that track? It is interesting though, because these are extremely conservative companies and we, because of the regulated system, we require them to be extremely conservative companies, right. We just have zero tolerance for blackouts in our society, right. It's not like cell phone coverage where we're all okay with it going on and off and in and out because the phone is so great and we've just become okay with some level of signal outage, like with electricity, we require 99.999 % uptime and as folks in California know, people get very, very ornery when that's not the case, we don't have a great distributed backup system in the electricity sector.
A few of us have generators, a few critical facilities have generators, mostly we just require the grid to be up all the time. And so the culture that that creates and inculcates in these investment in utilities is very, very cautious. And it's why folks have made this big caveat on their pledges that says, we actually need federal policy in order for us to achieve these net zero pledges, but it's different federal policy that folks might think it's not a mandate for the carbon emissions productions, it's innovation policy, which will deliver us the tools that would actually get there because we don't see everything be of it being available to get all the way there, and so now a number of individual companies are really weighing in on this innovation agenda in a pretty big way. A lot of those were involved in the passage of this bill at the end of the last year, which covers a lot of the technologies that they're interested in seeing demonstrated and they're, I think they're preparing to weigh in on this in a more systematic way going forward.
Jason Bordoff: We've used almost all our time talking about 15% of the world's emissions. And I just want to use last couple of minutes, ask you about the other 85 and by the way, that comes back to what I said before. I mean, something I have heard I think I've heard often as a concern for moving faster, taking stronger climate action on the Republican side of the aisle is why are we doing this when the, all the emissions growth is coming from other countries in the world, China, India the fastest emissions growth is elsewhere concerns about US competitiveness and imposing costs on ourselves that others are not bearing. Is that a concern, is that a challenge to moving faster for some on the Republican side of the aisle? And then let's talk about what some of the solutions are?
Rich Powell: Yeah. well, I think it's real it's a concern I share, right. I mean, if you look at everyone constantly picks on China, but I think it's very justified in this case. I mean if you just, for example, look at what's being built as part of the Belt and Road Initiative and Secretary Kerry actually, I'm sorry, Secretary Kerry now, Climate Envoy Kerry actually mentioned this in his in his remarks of a couple of days ago. I think that 70% of all the coal that's being built in the world today is being financed by China’s Belt and Road Initiative, and as part of their recovery from COVID, they've greenlighted significant new domestic coal build. Their economy is far more tied up in coal. I think your shop has done some fantastic work sort of getting into the deep tissue of why this is and how it changes their decision-making you know, around it, but they basically have an enormous domestic constituency.
It's like literally more than an order of magnitude, more coal miners than we have in the United States, and a huge part of their industry and power sector remains kind of committed to this. So, that poses a real challenge when there are massive economic and technological kind of counterweight in the world, but they've got this commitment to this technology, which is at least with today's technology in compatible with a low carbon future, and by the way, they're often building, their coal fleet in China is actually very modern coal fleet it's extremely efficient. It has reasonably good controls, it's ultra super critical. They actually look good compared to a lot of the older coal plants that we still have.
Jason Bordoff: I mean, the flip side of being efficient and modern is they're pretty young unlikely to retire the way of the 50 year old coal plant in the US mine.
Rich Powell: Exactly but the other point I was going to make is that a lot of what their financing around the world are actually not best in class Chinese coal plants. It's the sub critical stuff that we wouldn't even allow to be built today in the US even if you could get the social license for new coal plants in the US and but they've just kind of taken a pretty laissez-faire approach to what they are willing to finance on the Belt and Road, and that's really, really problematic from a climate perspective.
I think the problem with that argument and what we have attempted to really drive home is that we shouldn't be using that as a shield to inaction, right? We shouldn't be saying well, because the rest of the world was on this really challenging trajectory and we only account for 15% of the emissions. That's not like a recipe for nihilism or throwing up our hands and saying, well, you shouldn't do anything about those. It's just one of the boundary conditions you need to work under if you're serious about solving the problem, right?
And so if you're serious about solving a problem and you don't have an answer for how you're going to use our country to then change the options available and change the trajectory of what's happening in other countries, especially the rapidly developing world, then we are taking on a lot of economic costs from very, very little climate upside. And so, in our view this is why everything continuously comes back to technology, because technology is the genie you can't put back in the bottle, right? Once that thing is available, once that amazing machine, which is maybe it's an advanced nuclear reactor, or maybe it's an incredible battery, maybe it's an incredible hydrogen electrolyser technology or whatever it is once that's available, that's just going to disperse around the world very, very quickly and so we think that, that's a priority just getting the technology right.
Then obviously there's a lot that the US can do and does do on pushing our exports to the rest of the world. I think we had this awful self-inflicted wound in the past two decades, we've had this big national conversation about how much export credit we should be doing and are we subsidizing just some industries and crony capitalism, all that kind of stuff and that led us to make some really unfortunate decision that kind of froze our export credit capacity. We didn't have a core on up the export import bank, for example which is our big export credit agency.
And in the meantime the Europeans and China vastly expanded their export in kind of an arms race, kind of vastly expanded their export credit and so we really got out of the game of exporting a lot of classes of big industrial equipment around the world in the past in past decade. Thankfully we finally had a breakthrough on that in the past couple of years, XM was reauthorized substantially for sort of seven years. Part of its reauthorization actually included a commitment to what were called kind of transformational and China competitive technologies and that included renewable energy, for example and XM has been very, very influential in financing the build of new nuclear plants around the world, but leverage US technology. The U.S International Development Finance Corporation was also kind of greatly expanded from the old OPEC by the build act passed three years ago now that just had its restriction on nuclear financing lifted.
So, we actually have a lot of tools that we could be using to much more aggressively push US clean exports into the developing world. We still don't have a lot of coordination around that. We were just getting to a point of good coordination and the Trump administration on the nuclear front, I think there needs to be a much broader coordination on these exports, much broader mapping of what's being built and all of the different parts of the developing world on the emitting front and a lot of coordination between the export credit agencies and USAID and the state department, and the embassies, and US industry, the commerce department, the department of energy all of that to really make that a priority of getting it out.
Jason Bordoff: Yeah, and it does seem like on nuclear, part of what helps to build some bipartisan consensus, not just it zero carbon energy, but as you have written right now, China and Russia are building the world's nuclear power plants and setting the norms for things like non-proliferation. So, I think that presents some security concerns. So, just close with what you predict for the coming Congress will get done, will we see a clean electricity standard done on a bipartisan basis, if not, what will get done?
Rich Powell: Well, I think that there'll be something there'll be one big bill, and I don't know whether I hope that that's you know as a 60 plus vote kind of massive infrastructure bill, but also has a quite a bit of support for new clean energy technologies. If that fails or sort of collapses under its own weight, I think it's likely it does go the reconciliation route, and there's some kind of large infrastructure and climate focused reconciliation spending bill and then obviously we'll do the typical appropriations bills and national defense bills. All of these things present a lot of opportunities to move things forward on this on this agenda. If it is that big 60 plus vote bill when it's bipartisan, I think that all of the technologies will receive additional support.
I think there'll be a lot of focus again on implementing that Energy Act of 2020, perhaps pre-funding a lot of those priorities to kind of like take pressure off the normal appropriations process and get a lot of those things paid for upfront. I think a few of these other priorities I think, I mean, the thing that came out better than anything else as part of Energy Act of 2020 was carbon capture. So, I mean, that is probably the single technology with the most bipartisan support. So, everybody is supportive of more carbon capture and that's maybe it's just because you only think it's good on the industry and maybe it's because you really like the direct air capture because you think we're going to overshoot in the bit too much and have to drop back down but I think.
Jason Bordoff: And I think the analysis I've seen of what makes the biggest dent in emissions after HFCs, it was that, it was 45Q.
Rich Powell: 45Q yeah. So, I think more, more support for carbon capture, whether that's incentives or pre-funding these programs or CO2 pipelines and infrastructure around this. I think that if I had to say one thing is going to sort of break through and have even more support in this Congress I'd say it's some form of carbon capture support and legislation.
Jason Bordoff: Great, thank you. We've gone long, but that is just a reflection of how interesting it is to talk with you and we could have gone even longer. So, thanks for making so much time to be with us Rich Powell, appreciate your spending time with us on Columbia Energy Exchange and all the work you're doing to try to build support across the aisle for a stronger action on climate.
Rich Powell: Absolutely. Thanks for having me. Thanks for everything you all are doing at the Center.
Jason Bordoff: Rich, thank you again for joining us and thanks to all of you, our listeners for spending this time with us here on Columbia Energy Exchange. For more information about the podcast or the Center on Global Energy Policy, please visit us online at energypolicy.columbia.edu, or follow us on social media @ColumbiaUEnergy. I am Jason Bordoff. Thanks again for listening. We'll see you next week.