Nori advisor and cleantech evangelist Ramez Naam came by the office to fill us in on his great analysis of how the Green New Deal could be successful, and the role of carbon removal within such a plan.
Full Transcript
Ross Kenyon: Hello and welcome to Carbon Removal Newsroom. I am Ross Kenyon, Nori’s lead strategist. We are a carbon removal marketplace. Today I have with us, well, something new, actually. We have Nori’s head of product, Michael Leggett here, and he’s going to be interviewing Ramez Naam, who is an We saw this great article that Mez had written on TechCrunch, and we wanted to talk about it in relation to the Green New Deal. So Michael, take it away.
Michael Leggett: Thanks so much for joining us.
Ramez Naam: It’s great to be here.
Michael Leggett: I was really excited to see something as massive a proposal as Green New Deal in scope. And then I thought there was a lot of wisdom in your article. And so those two together were just a really interesting week. I think your article came out about a week. Something like that, yeah. It was a pretty compelling week. Yeah. So that was back in February. It’s been a couple months. And we’ve been, some of the things you talked about in your article, you talked about investing in places that need investing. You really talked about how, you know, the biggest, you know, What are the biggest unsolved problems that people often when they think of climate change and the Green New Deal, they think about it through the lens of electricity generation and transportation and that these are not really our biggest problems.
They’re the ones that we’re actually making the most progress on, which is why there’s a lot risk. You talked about America’s responsibility, especially in terms of past emissions, not just an ongoing emissions. You took a swing at defining what is an ideal climate policy and said that it was one that makes meaningful impact, addresses progress. And one of the ones I thought was especially interesting was you talked about kind of this snowball effect of government investment. You talked about how Germany invested really early in solar before it was at all really early.
Really reasonable to do so and how that investment was able to kind of get the technology to a place where industry could kind of take over and start to get it to where it was cost competitive and efficient and cheaper and get it to where it is today. And so that Germany deserves some of the credit for where solar is at today for that really early investment. What other kinds of investments, you know, like that should we be trying to make through Green New Deal?
Ramez Naam: Yeah. So just to come back to that point. So the way I see it is this. 10 years ago, 20 years ago, if you asked someone what would it cost to tackle climate change, they’d give you some number. IRENA, the International Renewable Energy Agency, came out with a report yesterday saying the cost to tackle climate change has dropped. It’s dropped by $10 trillion, and it’s dropped by $10 trillion, still to $115 trillion, so it’s still not like a fire sale. But it’s dropped that much because renewables, solar and wind, and energy storage are now so much cheaper than they used to be.
Why did clean energy get so much cheaper? It got cheaper because in general, technology, as you scale it, gets cheaper. It’s the learning rate, or we call it Wright’s Law, which means that basically when you have a bigger market and you have more players doing it, they take some of the money they make, They reinvest it in research and development. They get more efficient and they make this stuff cheaper. So now solar panel per watt of power costs 300 times less today than it did in the 70s, right? Solar electricity has dropped in price by a factor of 10.
And that happened because when solar and wind were still entirely subsidy dependent, places like Germany did subsidize them and scaled them out. And so the impact, a lot of people are critical, climate skeptics mostly, but Solar and others are critical of Germany and Europe’s efforts on climate. They got nothing for it, right? By 1995, solar was only 1% of world electricity and Germany had spent tens of billions of dollars subsidizing solar. So that didn’t scale. But the big impact wasn’t felt by Germany, it was felt by the entire world because solar got 10 times cheaper in that timeframe.
And so then if you connect that to this other phenomenon, which is that now in the US, in the US is the single country most responsible for emissions up till now, but the US is only 15% of world current emissions. So we take the Green New Deal, So the way that it can have impact is to repeat what Germany did, which is to launch a Green New Deal that fundamentally drives down the cost of clean alternatives for everything that we do that causes carbon emissions, such that those new clean technologies are now the cheapest, best technologies and are just irresistible to every other country on earth to use for just the merits.
Michael Leggett: Absolutely. And since, you know, that’s been done or it’s not a solve, it’s not that, you know, energy generation and, you know, transportation is solved. But when you look at the other half of emissions largely coming out of agriculture, land use practices and, you know, industry or manufacturing, are those areas we should be investing in?
Ramez Naam: Yeah, so I think we have to keep the pressure on electricity. Like on electricity and on transport, we’ve only just begun. We still have only, you know, 8% of the world’s electricity is solar and wind and electric vehicles are still, you know, so long ways to go. But they’re starting to win Just on price. In India, this fiscal year, 93% of new electricity generation that’s been deployed is solar. Wow. Right. Now they still have a giant amount of coal they built and they’re still building new coal, but that’s basically just on price.
It’s winning. It’s not. We’re not doing that everywhere in the world yet. In the US Southwest, it’s happening, but not yet in the Midwest. In China, in the Deep West, the deserts, it’s gotten cheap enough, but we still have to bring it to the cities. So we shouldn’t let up on solar or on electricity. The electrification of transport, but we’ve almost got those technologies across the line where they just went on cost. We see the light. We see the light. If we keep up our policies, we should take the solar and wind tax credits that are expiring and Extend them.
We should take the EV tax credit that steps down at 200,000 vehicles per manufacturer, which is nothing in a country that has 260 million cars. And we should extend that out. It’s awesome to see more and more states, like in Washington state where we are, we’re probably going to pass a 100% clean electricity bill this summer, most likely. And more and more states have that ambition. Awesome, let’s keep on with that. And then if we do those things, solar, wind and batteries will win, at least for 70, 80% of electricity.
And electric cars now are, you know, we probably hit peak combustion engine car sales In 2017 or 2018. Electric cars are taking up all the growth of that market and it looks like they’re already cheaper on a per mile basis and they’re just better. Anybody that’s been in a Tesla knows it’s just better, right?
Michael Leggett: I’ve got a VWE Golf, which I love very dearly.
Ramez Naam: Yeah, there you go. And we’re going to have electric semis pretty soon, electric delivery vans going through the roof and just on cost, those are likely to win. It’s hard to believe right now, but that looks like it. So we should keep on the pressure there. But then in these other sectors, we haven’t really started to try, not in a big way. So 21% of global emissions is industry, which is like steel, cement, petrochemicals, manufacturing processes. And that’s a lot of like direct burning of fossil fuels to create heat that we use in industry is really what’s causing most of that.
Or we directly use coal to add carbon to iron to make steel.
Michael Leggett: I’m guessing it’s hard to make that heat with a solar panel.
Ramez Naam: It’s difficult. I mean, you can make it with electricity ultimately. So anything you can make heat of any temperature with electricity uses a lot of electricity. And so right now it’s cheaper to do that by burning natural gas or coal in most parts of the world. And it’s also, there’s a capital cost of changing the equipment from the old equipment. So we need to really start to develop the technologies there or push them forward. And then the hardest one is agriculture and land use change, which is that agriculture and land use change, which is mostly deforestation, but also conversion of like peat moss to grazing land is 24% of global emissions in 2014, 2015, remember that IPCC report came out.
That’s just one point short of electricity. It’s bigger than all of transportation and twice as big as cars. And it’s mostly driven by livestock and the deforestation that we do to graze livestock or to grow crops to feed livestock or to grow biofuels, which should also go away as we electrify stuff, at least for ground transport. So those are the sectors where what can the US, what can even individual states start to do to create a market for carbon-free cement in buildings, to create a market or a mandate for low carbon, low fossil fuel, low emission steel in the cars that are sold, that sort of thing.
Michael Leggett: So that sounds awesome. I loved that kind of focus on where do we need to make the investments that industry or the market isn’t making itself. At the same time, it doesn’t sound like a World War II size effort. Like when I think of World War II and I think of, you know, like... Like just like our way of life, the whole entire country seemed to shut down, right? Like we had the, what’s the women’s baseball leagues replaced the men’s baseball leagues because the men were off fighting in war. And do we need to have, like, I guess, is there a time to have such surgical investments?
It seems like, yes, do that, and? Or is that all we should be doing? What is the role of government? How big should this be? And even another interesting tidbit is World War II costs, I looked this up, about $4. 1 trillion in today’s dollars. So should we be spending more or less?
Ross Kenyon: Or is that the right way to even think about this, to think about it from a cost perspective? Apollo was what, $200 million? Is that what you told me?
Michael Leggett: Yeah, $220 billion. So putting a man on the moon is the other one that’s often considered of these clear milestones. That we didn’t, we said like, we’ve got to win the war. We’ve got to put a man on the moon. We weren’t really thinking of like, eh, if it costs us much, maybe we’ll do it.
Ramez Naam: Yeah. Well, I mean, the world spends about $300 billion in clean energy a year today. So that’s similar to an Apollo program every day or every year in deployment. But that’s not, you know, the Apollo program, a lot of it was R&D. We don’t spend nearly enough on R&D. You know, I don’t think about it as should. The should question is, when is the cost of investment equal to the cost of damages? Basically, and we have room for that to be a lot, lot higher than it is. I think of it as what is politically feasible.
And I think that... To a certain extent, we don’t give enough credit to how effective some policies have been. Like if you ask the average person that cares about climate change in the US about US climate policy, they’ll say it’s terrible. But, you know, why is Because Germany actually sort of rolled back its subsidies by the early 2010s. And so did Italy and Spain. And so it really became the US became the biggest market in the world for clean energy for a while until China overtook us. And that was when the US became the largest market for clean energy.
Clean energy was still not cheaper than fossil fuel energy in the US without subsidies. But we had these federal tax breaks for solar and wind. We have 29 states that have renewable portfolio standards that say we have to deploy a certain amount of electricity as solar and wind by a certain date. And more and more of those are being lifted to 50%, 70%, 100% plants like California’s. And that has had way more impact than people realize because that scaling of the market brought down the cost. And that’s why, like why is it that India is deploying almost entirely solar now?
It’s not entirely because of Indian policies. It’s because of those past policies of Germany, Spain, Italy, the US, China. I think of it as not like what number should we be spending. I’m thinking of it as like what’s the stuff that we can get past that’s gonna like start the ball rolling downhill on some of these things that will then pick up steam over time.
Michael Leggett: So let me pivot a little bit since this is the carbon removal newsroom.
Unknown speaker: You’ve been well trained, yes.
Michael Leggett: Thank you. Thank you. How important is like when I read the Green New Deal and I read the FAQ as well that was pulled back, but I didn’t see carbon removal really talked about and I didn’t really see much discussed in terms of like past emissions. How important is carbon removal to solving climate change and how important is it to deal with past emissions? Yeah.
Ramez Naam: Well, I mean, the Green New Deal, I think it was in the actual document, but it might have been in the FAQ that was recalled. It talked about carbon removal only through natural ecosystems, through the stuff that Nori is doing, you know, enriching soils, agroforestry. Aforestation, that sort of stuff. That’s what I talked about. I don’t think we should rule out, you know, David Keith style giant machines. It’s not carbon in the atmosphere too, but clearly those are a lot more expensive than carbon sequestration on fields or in forests and that sort of stuff.
How important is it? I mean, it all depends. Like the IPCC puts out these illustrative scenarios that show different things. And the scenarios that show Very little need for carbon removal show us hitting 50% reduction in global carbon emissions by 2030 from 2010 levels, and then hitting net zero by 2050 or 2060. And I will tell you that 50% reduction by 2030 is just not going to happen. If we took out all electricity in all cars, which we’re not going to by 2030, that would be like minus 35%. And not even from 2010 levels, from today’s levels.
And so we’re just not on a path for that. So I think we will decarbonize. So we are definitely we’re in the timeline where we didn’t start quite fast. And on current path, if we want to stay below two degrees Celsius, there’s almost no way to do it without carbon removal, unless you’re also going to do solar radiation management, which I think nobody wants to be forced to do. So carbon removal becomes vital.
Michael Leggett: Yeah, so carbon removal is an essential part of basically you’re not able to stop emitting as much as you can. So you pull out, you remove what you weren’t able to not emit or avoid emitting.
Ramez Naam: I think we’ll probably get to close to net zero emissions from at least the non-agriculture parts of human activity. It’s just that we’ll get there too late. And so we’ll have an overshoot, if you will. We’ll have too much carbon in the atmosphere. When you’re going to net negative for a while. Yeah. And so you have to go to net negative for a while to cancel it out.
Michael Leggett: Yeah. That’s awesome. So if you could tell the architects of the Green New Deal one thing and one thing only, what do you think you would tell them?
Ramez Naam: I’d say it is all about driving down the cost of clean technology for the entire planet so that the other 85% of emissions in the rest of the world inexorably out of their own shallow self-interest, even if they don’t care about climate change, switch these clean technologies. That’s the way that we have the biggest lever on the world.
Michael Leggett: Awesome. Well, thank you so much for spending time with us.
Ramez Naam: Thanks, Michael. This has been fantastic. I hope to continue the conversation.
Ross Kenyon: Likewise. Happy to share the floor. Thank you so much for being here with us, man. Thank you, Michael, for hosting. If you like the show, please rate and review it in iTunes. If you think this is an abuse of the form by going closer to 20 minutes, you can let me know at hello at nori.com. If you like them shorter, I’d like to hear from you as well. We only know what you like when you tell us. That’s one of the shortcomings of podcasting and RSS feeds. But thank you so much for listening, and we look forward to speaking with you again.
