Latest / Uncomfortable Conversations with Josh Szeps / "The Climate Optimist" with Saul Griffith

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"The Climate Optimist" with Saul Griffith · Uncomfortable Conversations with Josh Szeps

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  Get a humans, welcome to the safe space with dangerous ideas. Dangerous idea, number one,
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  the world is catching on fire and is becoming increasingly chaotic, expensive to manage
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  and traumatising and destabilised because of climate chaos. Dangerous idea number two,
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  you don't need to feel depressed or pessimistic about that, and the solution might be a lot
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  simpler than we've been led to believe. Imagine having a conversation like the one I just
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  had with one of the experts on climate chaos and coming out of that conversation, feeling
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  awakened and livened, reinvigorated, optimistic, passionate, hopeful, instead of depressed,
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  you've got a big grey cloud of bushfires and droughts and floods and hurricanes hanging
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  over your head. This is a terribly exciting conversation with a terribly exciting individual,
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  Saul Griffith, PhD, an Australian engineer and inventor. He has spent a lot of time in the states,
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  he's worked with NASA on research projects, he's worked at the Advanced Research Projects Agency,
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  he's worked at the National Science Foundation in America, he's worked at US Special Operations
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  Command, he was awarded the MacArthur Genius Grant in 2007, and most recently he's been in the
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  United States actually helping Congress and the Biden administration write the Inflation Reduction
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  Act and some of the electricity and energy and regular tree and climate provisions therein.
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  I'm not going to give you a lot of a preview about this, suffice it to say that stick with this
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  conversation because it gets quite inspiring I think. This is a vision of the future that is worth
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  seizing and if we can just take Saul's vision and articulate that to our elected representatives,
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  you know, business leaders, you know, we could be getting somewhere. It's already having an
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  impact, his book The Big Switch, Australia's Electric Future, has on its cover a blurb from
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  Australia's probably most important and visionary entrepreneur Mike Cannon Brooks and Mike Cannon
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  Brooks writes about fucking time we have an actual plan written down that can be executed and financed
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  in a decarbonized world, Australia is a winner, the opportunity now is ours for the taking and what
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  applies to Australia applies largely to America if you're listening to this in the United States,
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  Saul's other book is called Electrify an Optimist's Playbook for our Clean Energy Future. His vision,
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  not to sort of bury the lead here, is basically that we need to rewire America and Australia
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  by electrifying everything, electrifying everything in your home and the ramifications of that are
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  unimaginable, but you will have been able to imagine them after you listen to this impending
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  conversation rewiring America dot org is his American rewiring site rewiring Australia dot org
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  is his Australian site electrifying our cars and our homes is the concrete action of Australians
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  and make this decade that will save us money and save our kids future to find out why I listen
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  on and enjoy it, the one I know only, Saul Griffin
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  complicated is a good answer as well to how you power you, but I feel it's less I feel it's
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  less true now than it has been for a few years. No I'm needed in the sense that like
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  your middle age so you've got parents and you've got children and both of them are complicated
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  and that's not it, yeah, mortgages and Vladimir Putin, so you've got that complicated and you
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  may not have COVID, but you're honestly only a few days from another bout of diarrhea or something
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  because you've got children, it's true, yeah it's all true, it's all true, although I'm choosing
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  to be a glass heart full guy at this particular point given what we've gone through over the past
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  couple of years when things were truly complicated in the worst possible meaning of that word.
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  Now they're just complicated, they're not complicated.
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  It's true, Donald Trump might not even win. He might not win, you know COVID is over, the diarrhea is
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  here, it's fine, it's manageable. Let's start with I just want to get your brain about
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  I'm excited to talk about things that will make me feel good instead of things that will make
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  me feel terrible about the prospect of our climate, but let's just start with the terrible
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  because there are various ranges of people's visions about what the 21st century is going to look
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  like in terms of the climate and you know some people pessimistic to the extent that they think that
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  this is a civilization destroying crisis and then others are optimistic in the sense that they
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  think look it's bad but technology is going to lead us out of it and we'll probably be able to
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  use some hair-brained geoengineering schemes that have yet to be dreamt up to mitigate the worst
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  effects of climate chaos and then there's people who sort of float around bobb around in the middle,
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  I've probably put myself in that camp going I don't really know what it's going to be but at the very
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  least it's going to be enormously expensive and very disruptive and incredibly stabilizing and
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  really irritating at the total own goal as to why we put ourselves through the worst of this and
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  failed to head it off at the past. What's your vision of the inevitable future if we don't act
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  fast? So how do I feel about the climate outcome if we don't do anything? If we don't do anything,
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  it's going to be pretty bad. I think this is an awful question and I get frustrated. For example
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  there are people who seem to think that three to eight feet or you know one to three meters of
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  sea level rise this century will be manageable and I think it will be very difficult to deal with
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  the amount of refugees that that moves and that we usually be stabilizing.
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  Personally I worry about the health of all of their natural ecosystems which are degrading extremely
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  fast and I'm sort of worried about what we lose as a species when we lose all of the other species.
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  Is that the same problem so all as the climate problem or is that a related set of problems to do with
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  overfishing and habitat loss and so on? The climate stresser on top of all of the other problems
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  is a huge problem but it does couple with all of those other human systems problems.
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  Yeah but I worry you know we're losing the pollinators so quickly that affect on agriculture.
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  We're just going to be painful. We don't really know what happens to these complex ecosystems when
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  we lose the supporting species and so I'm concerned about the risk.
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  All right. We're losing those supporting species but you mean like bees and so on.
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  Is that a climate? I mean like we're losing krill at one end of the spectrum.
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  We're losing bees in different ecosystems. We're losing lots of birds. We're losing some apex
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  predators and I just worry about the feedback loops that has on those ecosystems and you know
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  he'll make the world less beautiful. That's one reason for it to worry about it but it will make
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  the support systems for agriculture and for fishing etc also less good and they're all under
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  extreme climate climate change pressure as well as all of the other pressures that we're putting on.
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  Right I say yeah. So anyway I worry about the sea level rise will be more difficult than people think
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  and the fragility of agriculture is going to be more difficult. I mean Australia's
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  agricultural productivity is down 20% or something over the last couple of decades
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  as an example so I don't believe the story that the increasing productivity in
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  in Russia and Canada will compensate for the decreases everywhere else.
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  Right and the decreases everywhere else are at least in the case of Australia things like floods
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  and bushfires and droughts. Plums bushfires droughts that's right.
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  And how does the how does the increase in water level in practice have the devastating impact
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  on people's lives because I can imagine people thinking well okay if you live by the beach that's
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  bad you're probably going to have to push your house back a few meters but a meter you know most
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  of us don't live within a one meters sea level rise of the ocean so is it is it that storms become
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  worse and that when you get you know flooding and when you get the sea pushing in and eating at
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  the coastline those extreme events become worse because the water is raised or are we talking
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  about places that are very very close to water level like the Netherlands and the Nile and
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  Bangladesh and places like that how does that play out well it's it's both problems you know there
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  are places like Florida and Louisiana and Bangladesh where everyone lives and then within a meter
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  and there's places like the Netherlands where everyone's pretty much already living under
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  sea level and now I worry about our capacity to maintain and you know even New York City out
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  of this problem I worry about our capacity to maintain robust dams and levies to try and keep
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  these things at bay and the expense of doing so and yeah we will have to do a retreat and that's
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  are going to be a lot of money that has to be flushed down the toilet and a lot of people are going
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  to have to be moved and people don't like Chang people don't like moving people and we've seen
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  the pressures of refugees everywhere but this will be something like one of those slow moving
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  century long refugee crisis I don't I don't think it will be easy to manage as for example
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  asked one of the New York Times columnists just came out and said oh you know it'll be fine
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  I think it'll be harder than that yeah right yeah okay that gives me a good picture and then
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  strangely when I look at your work you seem to be quite chipper in the sense that when I think of
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  out climate I just feel this overwhelming sense of sort of gray much descending upon me where I'm
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  like oh god this is going to be so fucking hard and the politics of it difficult and the science of
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  it is difficult and I don't really know where to start because I don't really think that it's
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  going to be resolved through individual action and you know individuals choosing to fly less
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  or something so I just feel like I'm trust up like a Thanksgiving turkey bound up in a billion
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  different strands of string not knowing where to turn and then I look at your book and it's
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  subtitled an optimist's playbook for our clean energy future why I actually fought the publisher
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  a little bit for a little while about using the word optimist my manager is talking
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  decide that you want to put it you know as the author you get to decide everything except what's on
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  the cover it's clever look the publisher was clever I think it was the right thing to go with and I
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  and I've decided to own optimism yeah to it and I am optimistic that we can very quickly
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  hit the targets we need to hit and I reject the notion that this will be expensive it could in fact
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  be very cheap and I think I can narrate a story of how we mostly succeed a climate mostly through
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  mitigation mostly through electrification and we can do it on time and to schedule and I can
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  support that with some optimistic data but to just in tone the other pieces I do think it will be
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  hard not because it's impossible or difficult because there are forces working against it still
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  and the two forces that I think are the worst one of the you mentioned the science is complicated
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  and just to tell you how I think it's complicated this might be an odd analogy but it was at the 150th
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  anniversary of the publishing publishing of the origin of the species you could sort of look around
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  the world and estimate that less than half of the world believed in evolution right by its
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  dervious religious and cultural affiliations and evolutionary theory is probably it's complicated
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  science but it's a little less complicated than climate science so I kind of feel like we're
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  going to have to solve this probably without strong core and belief that it's a real thing
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  oh really yeah I think you know Australia you probably got a majority in the US I think it's
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  marginal and in you know Africa India you know I know other places I think there's a lot a great
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  deal of just ignorance yeah I mean if it's any consolation this being the only field of the
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  climate crisis that I have some expertise in being there being sort of public opinion and the
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  interaction between the populace and the demos and their political leaders on this issue I'm
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  more optimistic than that I mean firstly I think something like a natural selection is abstract
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  and complicated in a way that is is totally removed from people's everyday lives because most
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  of us are breeding pea pods in our backyard to try to determine their genetic you know offspring
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  with this every time there's a more intense drought and a more intense flood and a more intense
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  hurricane like the link can be made and the suspicion or a heat wave or whatever and the
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  suspicion grows in the eyes of the population I think that's something wacky is going on there
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  are just too many irregularities and anomalies for people to ignore it anymore and with the exception
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  of the weirdness of the way the American right has dealt with this I think broadly speaking in Western
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  liberal democracies you've got majorities on board now so I think the the opportunity is there if
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  you can get the the business and political systems in line with populations and there you
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  and and here you've proven just how optimistic I am because I was even able to take you who didn't
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  want to be optimistic at all and I've turned you into an optimist because you were initially
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  metric on which I am optimistic which is that I think there's been a sea change in the past 10
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  15 years in in the public's attitude towards this I mean even just in polling if you look at
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  you go back to like the Kevin Wright election in Australia and you ask voters what their most
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  important issues are and the environment and climate is you know four or five maybe six just
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  that recently you talked about 15 years ago now it's number one all right so I'm optimistic and
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  it is changing there and you may have some optimism on my next point but there are still huge
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  forces of inertia people's general reluctance to accept or think embrace change
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  and then the resistance of the existing stakeholders you know mainly the state captured and I still
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  think we have around the world by or against coal right so you know it is a fight all the way to
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  the finish even though you might say we've got a majority in western liberal democracies who
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  now believe I don't think we have a majority that are like then take that to I have to act
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  immediately in my own life no that's true but then that I think the part of the explanation for
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  that is the sense of overwhelm and I have it as well I'm not going to not take international flights
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  because there's a collective action problem to some extent so let me let me let's step into the
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  optimism now so we've just we've set the table with a bunch of turds and share with with with
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  rusty dinnerware and wooden plates yeah but now let's show the banquet and I'm going to introduce
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  why I think there's a reason for optimism with with kind of why we've been thinking about this
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  the wrong way for a long time structurally and how thinking about a new way changes a lot of
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  priors so the majority climate changes caused by our energy systems and the first time we had an
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  energy crisis was in the 1970s and 73 our oil embargo that landed on Nixon's desk and there
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  was no Department of Energy in fact wasn't a EPA environmental protectorate and there was no
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  energy information administration all of those bureaucracies were traded in a hurry by Nixon and
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  forward after him and then sort of finished the job with Carter to understand and respond to
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  the that the crisis of that energy crisis it was a shortage supply shortage problem because
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  15 cent of America's energy was coming from foreign oil when they assembled some boffins to look
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  at that and these are the boffins who created the early time energy they said well the
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  answer to this energy crisis is efficiency if we made every American car 15 cent more efficient if
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  we made them every American house meaning the sun is in the water heat is 15 cent more efficient
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  then we won't need all of that foreign oil and so that gave us literally energy policy which
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  was the cafe peel standards corporate average fuel economy standards which drove to the efficiency
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  of cars up in the US and it gave us energy star appliances and more efficient appliances but because
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  it was it sort of latched into the burgeoning environmentalist movement the modern one which was
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  sort of born Earth Day 9 in 70 they needed a mission and an answer to all of the ecological
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  environmental crises and they embraced this efficiency mindset and that efficiency mindset was
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  you know smaller cars colder homes reduced reuse recycle and it was a mantra that was
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  kept easily lantern by the writers anti-capitalists because it kept saying less of everything smaller
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  everything and I think is a large piece of the origin of the culture war you can then make the
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  observation that you can't efficiency your way to zero emissions that's just not possible you
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  you can't you can't get the 700 mile to gallon diesel car and even if you do it's still using a
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  gallon to go 700 miles so we've been throwing this efficiency at climate forever including
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  in the negotiations the Ecclation reduction act there were lots of people still arguing that if
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  you're going to give rebates and subsidies and market incentives to electric appliances powered by
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  renewables you needed to also give them to slightly more efficient natural gas water heaters
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  that fight is still ongoing but if you step back in the earth look at the whole energy economy
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  and all the flows from where we get energy from to how we use it and all the waste that happens when
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  you burn fossil fuels because when you burn gasoline or petrol in a car only about 20% of it is
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  converted into forward motion when you burn coal in a power plant only about 30 or 35% is converted
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  into electricity the current energy economy is hugely inefficient only yeah only around
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  40% of the energy you put in actually gets converted into the things that humans like doing
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  if you then reimagine every single thing that humans like doing driving and hating their homes and
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  etc and you just go through the thought experiment what happens when we electrify all of those
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  machines and and we power them all with wind and solar and nuclear and renewables
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  and it turns out that's the efficiency we were always looking for you you could run the entire
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  and the numbers are roughly the same piece right or America you could run the entire economy
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  on 40% of the energy we do today without shrinking the cars without shrinking the homes
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  without turning the thermostat down purely because we do it all electrically the machines the
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  electric machines are just that much more efficient in converting primary energy into the things
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  as humans like doing wait where's that measurement happening between the electricity coming down
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  apart and my device using that it's it's it's it's looking at the whole economy right so because
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  it doesn't like on how you're generating the electricity I mean if I was using it called well
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  you you you hurt you yeah you heard me say that you you have to electrify everything and power
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  it with renewables or nuclear if you do that if you do that you only need 40 or 45% of the energy
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  we use today without shrinking things without changing our life stuff and you can go through every
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  single thing that we do and then you wind up you know most of it's easy because it's electrifying
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  vehicles like yeah in fact I can actually tell you this story in terms of machines and you've
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  got an American audience and an Australian audience so I'll try and bridge those worlds in America
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  there's about one billion machines on the demand side that burn fossil fuels that's 280
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  million cars it's 110 million homes with 70 million gas cooking situations 80 or 90 million
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  gas water heaters and 60 odd million gas base heaters and you know golf cars and chainsaws
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  and aircraft you can go down the list and we now pretty much have a substitute for every one of
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  those machines that can be electric can be powered by renewables and can be zero emission so well not
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  so what was that only not aircraft only not aircraft then you get the aircraft aircraft is
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  about 2% of global energy use about half of that is short hop trips under 500 miles honestly we
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  could do with electric aircraft technology looks available today yeah and you can also close the
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  carbon loop on some of these things by you know I've spoken to some of the scientists who are
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  working with algae fuels and things like that where they're hoping to still be able to use fossil
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  fuels for aviation but the fossil fuels would be generated by a closed carbon loop where they're
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  ultimately absorbing carbon in the process of manufacturing the fuel yeah they're not even
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  they're not even fossil fuels at that point they're either fire fuels and yeah exactly yeah absolutely
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  certainly fossils yeah you know there's a wonderful so so there's enough biofuels in the world
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  potentially and pretty easily just using agricultural waste forestry waste in some algae
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  to do all of those things that you think are hard like a travel lens so I still just
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  notify the the energy saving for me be efficiency I still don't understand it so I've got a you know
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  I need to turn on my heater for an hour at a particular temperature that let's let's use this
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  fixed demand that I have for a certain amount of electricity the are you saying that the total
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  amount of energy that the wind is pushing through the turbines at the other end that's generating
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  the electricity that a greater proportion of that is captured than a coal-fired power station
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  captures of the energy that is in coal and isn't that kind of an arbitrary measurement because like
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  well these measurements aren't arbitrary and these measurements were established as methodologies
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  by the energy inclination administration in the late 70s and early 80s when we were first trying
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  to grapple with energy economy and we defined primary energy in various different ways for
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  various different energy sources and something that was even silly so primary energy is easy with coal
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  it's tons of coal it's barrels of oil it's cubic feet or cubic meters of natural gas it became
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  a bit trickier what is the primary energy for wind or solar or hydroelectricity or even nuclear they
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  didn't even use a sensible number for nuclear because there's an enormous amount of energy in
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  uranium and we only get a tiny amount out when we of that when we do traditional nuclear
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  vision and it would have made nuclear energy look so in a patient that you couldn't even draw
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  on it on the same graph right exactly so I mean there's one in my arbitrary like this it is arbitrary
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  but I'm better I'm still I'm waiting there but my point is not arbitrary and I'm going so
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  I'm going to try and help you understand that you do have to have an opinion upon these decisions
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  okay so with nuclear power they decided to just use the efficiency of the steam engine at the end
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  of the cycle that converts the heat into electricity and so actually nuclear looks like it's about
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  38 or 40 percent efficient or something by that measure of primary energy for hydroelectricity
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  that did something in more absurd they said well we should define the primary energy as the
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  amount of coal or gas we'd have to put on to create the electricity that wouldn't be generated
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  by hydro if there was a drought so in fact the way that you decide the primary energy of the
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  of hydroelectricity still today under the energy information instructions and that technology
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  is you say well this dam produces two gigawatts of electricity all year but if we turn it off
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  now to use coal that would only be it would have to it would be three times more than that
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  so we actually overreport the amount of energy that the US uses because of that methodology by a
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  few percent amazing but with wind you know there's a huge amount of it and we can extract it up to
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  the best limit so you can only extract about 57 percent of the energy in a moving column of wind
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  that's just the laws of physics say you can't do anymore we can already extract 90 or 95 percent
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  of that best limit which is pretty extraordinary and the way we've defined primary energy for wind
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  is really just the what is produced from the turbine and with solar you know it's only 20 or
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  21 or 22 percent efficient but it's not really fair or useful to say that we're losing 80 percent
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  of it because it's falling on the rooftop anyway it's falling on the ground anyway that's
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  sort of what I mean that's why I'm finding it hard to get my head around like I bet I'm glad I've
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  got you to where to hear yes so the final point is like if I'm using coal to run your television
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  I need three units of coal compared to one unit of wind down here when people have imagined these
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  solutions they haven't really taken into account all of these primary energies and what they
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  particularly haven't taken into account is the efficiency of the electric machinery that you're
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  using in your house for example the electric car is three or four times less energy per kilometer
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  than using gasoline to do the same thing if it's out by way of the solar yeah your electric
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  heat pump or media split air conditioning or heating system uses a quarter of the energy or third
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  of the energy of natural gas to do the same amount of heating inside your house so the efficiency
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  we're always looking for is just electrification so that's a useful thing because it basically says
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  that there's only one real pathway to zeroing in the great majority of emissions and that's by
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  electrifying the end use machines and by powering it with nuclear wind or solar because all of those
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  can in clear it be zero emissions to stop having these other conversations about slightly more
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  efficient cars and slightly more efficient gas things because we need to overhaul the regulations
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  and design the regulator and the policy settings for the future around what gets to zero got it
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  okay well I want to get to that but just to put a button on this efficiency thing just tell me
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  if I'm understanding this correctly there are two sides to this coin one side is on the consumption
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  side if I convert my car from being powered by fossil fuels to being powered by electricity then it
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  just it simply requires less energy to do the same stuff so that's one bonus for electrifying
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  things this is that's on the kind of the most immediate proximate like place to my actual use of
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  the energy I think I could some I think I can summarize all of our confusion year really quickly
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  we've had 50 years of environmental orthodoxy that says if we all suffer together and we have
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  smaller colder houses and smaller slower cars and we sacrifice a little bit more will be slightly
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  less fucked whereas you can now say if we electrify all the machines and we go rolling on
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  powering it was renewables that's so nuclear we can have everything we have except it'll be cleaner
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  it'll be faster and our lives will be more comfortable yeah no that's a very that's a very I just
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  also want to understand that that's what you're saying but I also want to understand the how behind it
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  so let me just finish my my ramble so there's the it's more efficient at the at the use end but then
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  at the production end if I need 15 units of electricity coming down a cable the efficiency is
• 31:40
  presumed with the same regardless of how that was created once it's in the cable but you're saying
• 31:47
  that to get it into the cable in the first place to actually generate the electricity there are more
• 31:52
  and less efficient ways of generating it where I get confused and say yeah but that's kind of
• 31:58
  academic is simply on say on the point that if we're talking about a resource that were almost
• 32:04
  infinite like wind then it doesn't really matter if we're only if we're capturing it inefficiently
• 32:10
  if it's essentially free and if there's another resource that there's not very much of let's fast
• 32:16
  forward 50 years and say that there isn't very much oil anymore and oil costs of an absolute
• 32:20
  fortune a barrel and it's very very hard to get then it can be as efficient as you want it to be
• 32:27
  but ultimately you have to pour a lot of resources into getting it and then using it
• 32:33
  so wouldn't you rather a resource that is extremely plentiful and easy to get even if it were
• 32:39
  inefficient to one that is highly efficient but scarce see you're you're being entirely
• 32:45
  unreasonable and and everything you said is exactly obvious but the problem is and it isn't
• 32:53
  exactly academic while you allow this the way we structured the thinking the way we
• 33:01
  structured the way we make energy policy based around the way we define primary energy and we
• 33:06
  measure these efficiencies that enables very powerful lobbies to say hey we made our
• 33:12
  coal slightly more efficient oh we're going to do clean coal now that's even more efficient
• 33:16
  again and maybe it'd be cleaner and then we divert precious resources to things that are
• 33:21
  distraction so you've already made the right conclusion let's just play the end game and I
• 33:27
  was trying to encourage everyone let's just play the end game and then this observation that oh
• 33:31
  this electrification of everything powered by renewables endgame turns out also is so much more
• 33:38
  efficient than we can actually kind of have the Western lifestyles that we criticize
• 33:43
  all these years and it can work out it numerically can work out so we don't have to sell
• 33:49
  less colder slower suffering anymore as as a movement price all climate change we can sell
• 33:57
  bright shiny better faster cleaner healthier higher air quality and also cheaper because
• 34:10
  you know and I think that maybe the best example is strain rooftop solar which financed
• 34:18
  on your roof now produces electricity at three or four cents to a kilowatt hour
• 34:27
  coal plants can produce electricity at two cents a kilowatt hour but they have to get
• 34:31
  transmitted over huge distances they have to go through a distribution network which cost a
• 34:35
  bunch of money etc etc it ends up being 15 20 30 cents kilowatt hour the more energy we can produce
• 34:44
  locally with things like that solar right there on your rooftop the energy is just going to be
• 34:51
  that much cheaper than we've ever had before a strained rooftop solar is it is true to say is the
• 34:56
  cheapest form of retail energy ever ever delivered to a consumer or customer in the world
• 35:05
  and so if you're using and here's the easy example if you're using petrol or two twenty dollars
• 35:10
  a liter for the Americans that gasoline at five dollars a gallon and to run an average size
• 35:18
  American Australian car it's costing you 20 to 25 cents per kilometer or you know pick a thing
• 35:24
  since 20 cents a mile if you're using a strand rooftop solar energy to power an electric car it's
• 35:29
  costing you one cent per kilometer more than ten times less right and in the southern isn't there
• 35:38
  a I mean I'm perhaps laboring under an old-fashioned assumption that gas is efficient in the home
• 35:45
  so talking about you know you see this is why I haven't this is why I have to do that long intro
• 35:50
  about all the efficiency you should be pulling it over tops and stuff like that so so speak to me
• 35:55
  about about that um so starting in the 70s we had you know we discovered gas in the North Sea we
• 36:04
  discovered it in Australia and vast straight and we quickly decided that it was going to be it was
• 36:10
  marketed to us as the clean efficient blue flame and yes using gas to heat your home is more efficient
• 36:17
  than coal or coal if I had electricity running an electric machine but it's far less efficient than
• 36:24
  using a modern heat pump so with a modern heat pump you can use one unit of electricity to create
• 36:30
  three or four units of heat and our heat pumps are basically for heat I mean as the name suggests
• 36:36
  they're for heating water and also air right you can do heat pump heating water in air in fact your
• 36:41
  air conditioner everyone's air conditioner is a heat pump and some of those are reversible
• 36:46
  reverse cycle which means they can you can turn the electricity into coal bear in the summer and
• 36:51
  run it and reverse in the winter and it converts coal there into warm air yeah initial electricity
• 36:57
  and now a lot of people are realizing that they can actually save money on their
• 37:00
  bills by also converting their gas hot water systems to heat pump water heaters which are more
• 37:07
  efficient than old fashioned electric heaters which were less gas and he's he's the optimistic thing
• 37:13
  and you know we we did this study through rewiring America in the United States and we did it in
• 37:17
  Australia it's a rewiring Australia but you can study total cost of energy use in the home
• 37:24
  which is about $4,000 a year US in the US which includes their gasoline their electricity and
• 37:30
  their natural gas in Australia it's five well it was about $5,000 a year but with the new two
• 37:36
  to the prices and pandemic crisis it's about $7,000 a year but if you electrified the 1.8 cars
• 37:43
  in the driveway if you electrified all the heating systems in the home the kitchen the
• 37:46
  water heater the space is even and you were running that on a mix of half rooftop solar and half
• 37:54
  off the grid you'd be paying about $2,000 a year for your energy so saving you know three or four
• 38:03
  thousand dollars a year in Australia saving saving about two and a half thousand yeah saving
• 38:08
  about two and a half thousand dollars a year in the US and you know that would be a saving of
• 38:13
  $30 billion a year in this grand economy about $300 billion a year in the American economy and
• 38:17
  the future we can easily make happen by 2030 and the largest barriers to it are actually regulatory
• 38:26
  and policy barriers because we've had a hundred years of the fossil lobbies writing the legislation
• 38:31
  for themselves and now we've got to kind of undo the building codes we've got to undo the
• 38:36
  rules of the how electricity flows on the electricity networks um we've got to get into the
• 38:43
  tax codes in these countries where there's still huge tax incentives to buy fossil fuel vehicles
• 38:48
  for example and we've got to reorient all of those pieces of policy in regulation to make this
• 38:54
  new electric clean cheaper future cheaper and what's the laying low hanging fruit there
• 39:00
  so if you were given one day as an emperor of Australia or emperor of America or emperor of
• 39:05
  the world and you're able to weigh the magic wand and say all right like here are five big policy
• 39:10
  changes nothing to do with human behavior but just in terms of regulation and tax and stuff like
• 39:14
  that this is what we need to change what specifically others well I did just go and do this in the
• 39:21
  US and spent the large part of my last three years helping a dedicated motivated group of people
• 39:27
  write the inflation reduction act and it was a spending bill so it couldn't write new legislation
• 39:39
  it couldn't regulate it could just provide carrots or incentives in the marketplace
• 39:46
  in a perfect world you'd say you'd have a phase out of fossil fuel vehicles by an own date you'd
• 39:52
  have a phase out of natural gas appliances by an own date you'd give everyone market certain you
• 39:57
  know that you can't sell a petrol or gasoline vehicle up to 2030 you can't put in natural gas
• 40:02
  appliance in a home after 2025 that would have been perfect low hanging fruit not being able to do
• 40:10
  that the best thing that you can do is okay make sure that there are no tax incentives
• 40:16
  indirect or otherwise to buy petrol vehicles and what other tax incentives because I think
• 40:22
  most people will have heard about tax incentives that you can get in some jurisdictions for electric
• 40:26
  cars you know the French are doing well on that are there are some states and territories in
• 40:31
  Australia where you get some kind of a rebate or you don't have to pay your you know stamp duty
• 40:35
  whatever it might be on an electric car so most people think that the policy that levers are
• 40:40
  currently skewed towards electric and away from fossil fuels where you have to pay tax on petrol
• 40:46
  and so on and so forth we we still have huge fuel tax rate possibly you know oil and petrol
• 40:54
  tax rebates in the US and in Australia so to much vehicles for example for some and a lot of
• 41:00
  for Australians you know put slap it slap it stick it on the side of their car call the commercial
• 41:04
  vehicle and then they qualify for tax incentives on that fuel we we have still huge amounts
• 41:13
  the incentives on the fossil fuel side of the equation still far outweigh the incentives on the
• 41:19
  electric and clean side of the equation but wait the the commercial vehicle tax benefits those
• 41:25
  apply to electric vehicles or fossil fuel vehicles right they're only
• 41:32
  planning to apply to electric but you'd like to phase them out for fossil vehicles because you've
• 41:37
  got to phase out fossil right I see I see you you can't you you've got to like we are still
• 41:43
  in batting me incumbent by having these rebates for petrol or gasoline you've got to save everything
• 41:50
  that we need to win yeah okay so you've got to have those things calculated to favor fossil fuels
• 41:58
  those are tax rebates because companies that are using a tool in the course of making their own
• 42:04
  business are able to deduct that tool and in this case that tool happens to be a vehicle that they
• 42:09
  need in order to try to make their business run so we give them a tax break on the vehicle just
• 42:14
  as we would a drill or any any other thing that they need to run their business or a cash register
• 42:19
  or a window or something but I say and point and we now yeah we need to make that for the electric
• 42:25
  thing and actually everyone says oh this is going to cost you so much over the lifetime of electric
• 42:31
  vehicle we know it will save you money in the US or in Australia today on the price of oil on the
• 42:36
  price of electricity so yeah the car that any any electric car that is born today over it's 10
• 42:43
  or 20 year lifetime will actually save net money yeah I mean the caveat to that is that if you're
• 42:51
  only going to keep a car for five or six years then the premium that you're paying for the electric
• 42:55
  one may may not pay itself off in that period of time right but that that's exactly true for
• 43:01
  their petrol or diesel car too right you pay the most in depreciation yeah that's true but you
• 43:09
  have less time with the electric vehicle to for it to to pay you back by having you not pay for
• 43:14
  petrol like the five years worth of petrol may not be more than the difference between the price
• 43:20
  of a petrol car and an electric car at the moment even if the 20 years of petrol would be
• 43:26
  yeah so it's about $2,000 a year for an average Australian car average amount of driving in petrol
• 43:33
  so if you got five years that's $10,000 you know mine is electricity priced so it's
• 43:41
  marginal today on a five year timeline for an electric car but we know that if you look at the
• 43:47
  rate of reduction in the price of electric cars so yeah you have to make policy for tomorrow
• 43:53
  we're still having riding policy for yesterday right so we know like you've got to write the policy
• 43:59
  for 2025 and in 2025 you know that the electric cars will be about the same price in the showroom
• 44:06
  yeah right petrol and diesel so you've got to I just you just have to reject all these people who
• 44:13
  want to use it today argument to fight against you because the day arguments aren't true because we
• 44:19
  get taking all of these new industries new technologies to scale and their prices are falling
• 44:25
  and what we know about fossil fuels is their prices are still increasing one reason the inflation
• 44:31
  reduction act is called the inflation reduction act is like think about this you can actually draw a
• 44:36
  chart super elegant in 1990 average Australian households spending about $2,500 a year on all of its
• 44:43
  energy and it's now spending five and a half thousand or six thousand and it's just going up and
• 44:48
  up and up and it's actually getting more volatile and we know that because it's based on fossil fuels
• 44:52
  it's going to continue going up into the future if you um finance that house to get sold with
• 44:59
  today to buy electric vehicles to electrify all the heating systems because you're not buying fuels
• 45:05
  in the future you're just you've bought the finance it's a fixed cost of energy for that household
• 45:12
  20 years into the future so instead of going up into the right the graph of energy cost for
• 45:16
  that house in the future now goes dead straight yeah yeah I mean I'm literally I'm leery about
• 45:22
  justifying any of this on the basis of assumptions about what fossil fuel prices are going to do because
• 45:28
  I think it's even if you're right there are good reasons for doing this even if fossil fuels would
• 45:33
  have become cheap and so we should insure insure insure as well against the well this I think I
• 45:39
  I think you've just stated the bleedingly talking obvious excuse my French but this is something
• 45:44
  that should make us all angry we the climate scientists did a bang up job and I knew what was up in
• 45:50
  the 70s raised instead of then handing the job to engineers who would use the reasonable logic
• 45:54
  that you just use like we have to do this anyway so just fix it we handed it to economists and said
• 45:59
  oh see if you can pull some economic levers and so that's why we're still fighting all of these
• 46:04
  fights on with economic arguments as opposed to no you just have to fix this yeah and the longer you
• 46:10
  wait the harder it gets to fix and the more expensive it gets to fix and the more inconvenient
• 46:14
  everything becomes in the meantime the more chaotic it becomes yeah so it's hard to read so
• 46:21
  anyway we the optimism part of me is like we're now at a point where and yeah it speaks also
• 46:26
  to the low saying truth green hydrogen is not a thing yet it may never become a thing
• 46:32
  we don't know yet how to do modern agriculture without emissions we don't know how to do cement yet
• 46:38
  we don't know how to do green steel yet so in terms but we know that we need to get early emissions
• 46:46
  reductions in vital and the sooner you do them it requires you more time to develop the solutions
• 46:51
  for those things we don't know how to do yet what does that mean that we know what do we know how to do
• 46:56
  today we know how to do in solar we know how to electrify our vehicles and we'll explain our homes
• 47:00
  and we'll explain our small businesses that in the US is about 70% of emissions so just go at it
• 47:10
  yeah focus on what we know and what's easy and right and and unfortunately there's still huge lobby
• 47:16
  groups spending huge amounts of money deserting policy and regulatory and this is even more true
• 47:21
  in Australian the US to try and like not emphasize those things we can do now because they're
• 47:27
  they would like the the incentives to go to things that we don't even know how to do yet
• 47:31
  yeah the gas industry is all over hydrogen for example yeah when you just give us some more
• 47:36
  examples of of regulatory stuff because I I think I need some flesh on the bones to understand
• 47:40
  to understand it so you've mentioned for example car you know subsidies for for well here's a story
• 47:45
  for your American audience yet rooftop solar and Australian installs on your route for less than
• 47:52
  one US dollar or what with no subsidies after subsidies is about 60 US dollars in the United States
• 48:02
  solar on the rooftop costs on average about three dollars of what to install more than three times
• 48:08
  as much that's the difference that's the reason why an Australia rooftop solar is three four or five
• 48:13
  cents kilowatt hour and in the US rooftop solar is 20 cents or more per kilowatt hour and in the US
• 48:18
  rooftop solar is more expensive than electricity from a grid in Australia it's far less than half
• 48:24
  the price the difference is the regulatory and the policy environment part of that is certification
• 48:32
  and training so Australia certified and trained the solar and solar networks so they could
• 48:37
  fill some of the job of committing an inspection as well as installing and be guaranteed to do a
• 48:44
  good job so that they didn't have to stack in extra overhead there's building code differences
• 48:51
  between Australia and the US that lead to these differences so you know if you could have a huge
• 48:56
  victory in the US it would be just doing what Australia did to make rooftop solar so cheap in it
• 49:02
  and Australia we've got 30% of households with rooftop solar in Australia in the US it's less than
• 49:07
  2% and it's because in the US it's more expensive than the grid and that's a regulatory and policy
• 49:12
  difference and the regulations and policies are basically you need to pay for another person to come
• 49:18
  in and inspect that the solar panels were installed correctly and safely in America in a in a
• 49:25
  in Australia you can get a permit in one day online in the US it's a three to four month process
• 49:32
  through people and councils and AASJs which is a dinkroom of authorities having jurisdiction
• 49:38
  and so it's secure to say it takes a long time and and people get coltied they're like oh it's
• 49:45
  never going to happen so when you're building codes is this because neighbors aren't going to like
• 49:49
  the look of your solar panels on your roof it can be building codes to determine how close
• 49:54
  the solar panels can go to the edge of the roof or it can be neighborhood codes to say we don't
• 49:59
  want them on the roof at all because they should be red terracotta so that your cookie cutter
• 50:02
  house can look the same as my cookie cutter house it is a whole suite of regulations like you've
• 50:08
  literally you know we've had a hundred years to write all these rags and these technologies are
• 50:12
  only a few years old so like they cry in the face of a lot of a hundred year old rags.
• 50:18
  I mean you're making me feel more sympathetic to the libertarian argument that we've just got too
• 50:22
  many bloody laws we should get rid of all of them and start from the beginning and start writing
• 50:26
  the ones that we actually want. You know my colleagues and I were testifying at the US
• 50:29
  Senate last year and Ted Cruz came to shout at us and spit venom in our face and tell us how
• 50:36
  we were all wrong because we were basically showing how electrification of American
• 50:40
  owners would save American owners money and he said oh this is all crap and all you need to do
• 50:46
  is deregulation and allow ingenuity to fix this and it's like yeah I'm about to agree violently
• 50:54
  we'd take Cruz yeah and I think that's actually a really important point like there is a
• 51:02
  ample opportunity to bridge some of these ideological divides here.
• 51:09
  We want less regulation not more we want less rules we want more autonomy for the home owner
• 51:14
  we want that's the block that's but that's that's the block Fox News message the other one is like
• 51:20
  look we've got state they captured by the fossil companies let's go in and fix it
• 51:25
  and fix the rights. Yeah you know what I mean even even I broadly on the on the progressive
• 51:31
  side of politics I would say find more find something more instinctively appealing about the
• 51:37
  the can-doism of fighting back against sclerotic bureaucracies who are
• 51:41
  nanny stating us up the wazoo and finger wagging us about what I can't put on my roof and
• 51:47
  overcharging me for this and that and like trying to micro-manage my life I'd rather sweep
• 51:52
  that away than be like oh I'm going to get together and I'm going to stand up against
• 51:55
  big fossil big oil who have got a regulatory system in place. Yeah it's it's about for being
• 52:02
  you know you can totally make it it's about freedom it's about my right to generate it's about
• 52:06
  my right to sell my neighbor electricity without some regulatory body getting in the middle of it
• 52:12
  um and absolutely that's a that's a worthy fight and it's also happens to be true and be a part
• 52:20
  you know where a lot of these problems are. So you just mentioned you just said something
• 52:25
  revealing sell my neighbor electricity so once we've got once we're all like let's assume
• 52:31
  that we're all electrified then it becomes not just an equation of me not me having to take
• 52:36
  less power from the grid because I'm generating some and all my appliances are efficient and
• 52:41
  car and whatnot it also becomes what a smart grid where I'm connected back into the system selling
• 52:47
  electricity back to the grid and connected to my neighbors who and we're able to sell each other
• 52:53
  electricity when I'm away the electricity that my solar roof is generating should be able to power
• 52:59
  my neighbor and they can somehow pay me how will that all work. Well right now that doesn't work
• 53:05
  no that's correct. So right now the incentives and rules in this system
• 53:12
  are incentivizing you to go completely off-grid if you've got a big roof and you live in the suburbs
• 53:17
  and you can put in a ton of solar cells and have a ton of batteries and do it all yourself
• 53:21
  that's what you're incentivized to do but you got to remember that not everyone has a big group
• 53:25
  not everyone wants to do all of those things so I'm not arguing that we all go in Ireland
• 53:29
  ourselves and become their own little energy dictatorships like we're still there's huge
• 53:34
  benefits from us all being connected to each other and connected to a larger energy system
• 53:39
  that gives us robustness and it gives us liability but the rules of the road today
• 53:48
  don't really treat the solar on your roof the same as they treat a gas fire or coal fire
• 53:54
  generator so you can't sell your electricity on your roof your neighbor 40 feet away
• 54:03
  is that a technical impediment or a legal impediment? No that's a legal and regulatory impediment
• 54:11
  and as we now know even if fusion energy existed tomorrow compute fusion energy for free
• 54:18
  in the US it would cost eight cents to get it to the average house in Australia because
• 54:22
  about 15 cents to get it to the average house that's because the transmission and distribution
• 54:28
  networks cost money so right it's a simple obvious statement that the cheapest energy system will
• 54:35
  maximize the amount of electricity generated on your roof and in your local community
• 54:41
  you'll still want some of that other free fusion and low cost winters you coming over the
• 54:47
  grid to help balance it all out but maximizing on your roof will be the lowest cost system
• 54:54
  but if we we then need to write the rules that support you and motivate you to put the maximum
• 55:02
  amount on your roof and right now the rules only support you basically selling the electricity
• 55:08
  yourself so you design your system so you're not over investing in your solar to be a fairly small
• 55:12
  solar system and a fairly small battery and because you can't easily share it and sell that
• 55:18
  service back not a not a price that makes it worthwhile and technically speaking soul would
• 55:23
  there be an easy way for me to sell my electricity to my neighbor without having to install
• 55:29
  new wires or would are you envisaging new networks that would be installed we don't need new wires
• 55:36
  most distribution grids run at 15 to 25% capacity we design them for peak loads so we in Australia most
• 55:46
  of our electricity grids are designed for the peak summer air conditioning road just assuming
• 55:52
  which assumes that at 6 p.m. everyone has their air conditioner running full blast so because
• 55:57
  of that there's a lot of headroom or a lot of extra room on the wires to put a lot more electricity
• 56:02
  if you electrify all the cars electrify all the things in the houses you're going to need about
• 56:05
  250% of the electricity delivered to the house so we're going to need that extra headroom to put
• 56:10
  that electricity there but we also know that nearly all of that new electricity can be generated
• 56:16
  on the rooftops and in the communities so then we have to travel as far and fewer times over
• 56:23
  those wires and then we know there's going to be a huge number of batteries there right the battery
• 56:27
  in a modern electric car could run a modern home for three or four days so if you've got two of
• 56:33
  those cars sitting in the driveway there's plenty of capacity to use a little battery run
• 56:40
  for you know a few hours here and there and on sharing it with my neighbors thinking my engineering
• 56:47
  ignorance but if I've got if I've got a bunch of electricity and I'm away I'm not using it either
• 56:52
  it's in my car or it's stored in the battery in my house or it's coming straight from my rooftop
• 56:56
  and I want to share it with my neighbors then does that do those packets of electricity do those
• 57:01
  electrons actually go back into the wire on the street and move over to my neighbor's place and
• 57:08
  then go into their house is there a way of actually coordinating that or are they going
• 57:12
  functionally back into the grid my neighbors then taking them out and then some central authority
• 57:16
  the utility company the electricity company is saying oh well Josh had this much going into the grid
• 57:22
  but his neighbor took this much out therefore we're going to give you a discount on what we normally
• 57:25
  charge you for the wires because you only had them going over a hundred meters instead of going
• 57:30
  over the entire network like what's actually happening your vision is really correct so yes
• 57:37
  it is going you currently have a wire that comes from that pole on the street and connects up to your
• 57:42
  house that wire mostly goes one way at the moment you're getting electricity from the grid
• 57:48
  in the future you'd like to be pushing it back up to the pole and then it might just be going
• 57:53
  across the street and then down another string to your neighbor and like you said only traveling
• 57:58
  a hundred feet or a hundred meters there are there's no jurisdiction in the world right now
• 58:08
  that can provide for that billing mechanism even though it's easy to measure how much electricity
• 58:13
  you put up even though it's easy to measure how much electricity you're neighbor used to put in
• 58:18
  their electric car we don't do that and we don't have a local electricity transfer tariff that
• 58:27
  treats those with preference or privilege or it even equally with the electricity you buy
• 58:34
  from the grid though in Australia those things are controlled by Australian and regular
• 58:41
  industry and electricity market operator there's currently 800 pages of proposed rule changes submitted
• 58:49
  every week to this governing body most of those rules changes are being proposed by the existing
• 58:55
  gig fossil energy companies and they're they don't really express and interesting seeing this
• 59:01
  future play out as quickly as we need it to and obviously at 800 pages of proposed changes of
• 59:06
  week this is not a bureaucratic process that's converging on the right answer very quickly
• 59:12
  and so what would the right answer be like how presumably you have to wrestle the power over how
• 59:18
  all of this is coordinated out of the hands of existing energy companies don't you so does that
• 59:23
  mean some sort of smaller arrangement of of grids a smaller arrangement of billing how do you
• 59:29
  envisage it you you need all the players that are currently there you need the transmission companies
• 59:35
  you need the generation companies you need the distribution company the distribution companies
• 59:39
  the one that owns the local polls and then you need a retail of as the person who does the accounting
• 59:45
  and gives you the bill but you you can now build an easy argument that we can put a lot more
• 59:53
  electricity over those distribution wires without changing the wires yeah we'll need to put a few
• 59:58
  batteries on that local distribution grid but that's not a huge expense but why do we have to charge
• 1:00:04
  the same for that that electron that's going from my roof to your car as we do for an electron that
• 1:00:10
  has to travel 800 kilometers over transmission network et cetera we don't have to because we can
• 1:00:16
  account for those things digitally and electronically and but how does does that take place at the
• 1:00:24
  retailers HQ in your vision of the world because I can imagine the energy company we we could do
• 1:00:30
  how we could number of permutations of Joe selling to Sally and then Sally selling to or this is
• 1:00:35
  this is the this is the problem is like nobody has imagined an easy way of doing that honestly it
• 1:00:40
  should happen that you know in Australia you could do it with in a partnership between the
• 1:00:45
  distribution companies and the retailers in the household in the US it will be between the utility
• 1:00:52
  provider of the local energy co-op and the health problem but we we we're not running those
• 1:01:01
  experiments fast enough we're not looking at how that system should operate quickly in us
• 1:01:06
  and and that is key to making the time this yeah that's the rug that will tie the room together
• 1:01:13
  here quote the big velocity and there have been some of these smart grid projects I've visited one
• 1:01:20
  of them in in Austin in Texas a few years back where they were basically everyone in the community
• 1:01:27
  was had an electric car and was hooked up to a smart grid and you know their appliances were all
• 1:01:33
  smart appliances so you'd try to turn on your washing machine at six in the evening and say would
• 1:01:38
  you like us to postpone this until two a.m. when electricity is cheaper and you hit okay and it
• 1:01:44
  would wait and the houses were connected back to the grid are those those experiments as far as
• 1:01:50
  you're aware do any of them involve your vision of being able to sell electricity between houses
• 1:01:57
  are they all bi-directional between house as a node and then big electricity supplier as the
• 1:02:03
  the other end of that string well they they all imagine they're all really testing that technically
• 1:02:10
  you can shift the loads technically there's enough storage that they haven't bought off the
• 1:02:15
  regulatory the economic and regulatory rules of the wires right so they're testing the right thing
• 1:02:24
  how much of this loads can we do and there they are they're doing the technical vision for the future
• 1:02:29
  but I'm doing the regulatory and the the business model vision of the future yeah yeah well I see
• 1:02:35
  oh so in Australia right now you're you know and we're limiting it you're you used to get a
• 1:02:41
  guaranteed feed-in tire for your solar or 10 or 15 cents a kilowatt out that would improve the
• 1:02:46
  economics for all the solar you put on your that has been whittled down to one or two or even
• 1:02:52
  no sense um effectively outlawing you're selling your electricity back to the grid and you know
• 1:03:00
  just because they like to resist operations the distribution grid is like well we don't yeah
• 1:03:05
  what I actually saw the quote yesterday 40 zone substations each zone substation serves about
• 1:03:11
  5,000 houses the same is true in the US and Australia um 40 of 200 of the zone substations in
• 1:03:18
  New South Wales were running negative low last week meaning electricity the amount of electricity
• 1:03:29
  generated under the substation in all those houses exceeded the amount of electricity being used
• 1:03:34
  so it was feeding electricity back into the big grid right right that's the future right the
• 1:03:41
  future is happening right now but we aren't motivated we don't have enough electric vehicles
• 1:03:46
  under all of those roofs to absorb all of our electricity we don't have the smart grid deployed
• 1:03:52
  everywhere and so back to those you know there's a hundred there's a billion machines in American
• 1:03:57
  households and a hundred million machines in Australian households that are currently smart
• 1:04:02
  enough to connect to that smart grid and don't live in a regulatory and business model environment
• 1:04:09
  where they are motivated to all play nice to make this zero emission future plan yeah
• 1:04:16
  and all right let's there are a couple of things that I just want to get your thoughts on no
• 1:04:20
  no no we're running out of time but um one model that I can imagine working if we're trying to
• 1:04:26
  electrify everything is just I mean what the one thing that you didn't mention about Australia's
• 1:04:30
  rooftop solar is that in Australia it's very easy to get the government to lend you money to
• 1:04:36
  to put your rooftop solar in right I mean aren't these government-backed subsidized loans now because I
• 1:04:43
  was I mean I was just thinking about doing it on my place because I just bought my first home
• 1:04:47
  and I was looking at it and you know you can basically amortize it over the cost of the
• 1:04:52
  of your electricity bill so you don't even really notice that you're paying it off and it's just
• 1:04:55
  kind of baked into the system there's no upfront fee for it and before you know it some years have
• 1:05:01
  gone by and you've paid off your rooftop solar that if you could extrapolate from that into all
• 1:05:07
  of the other these other things so that your conversion from natural I want to I want to I want to
• 1:05:12
  make an even bigger extrapolation right um this is all just a race to prioritize capital to do the
• 1:05:21
  right things right the money in the right places and like I said you know fossil fuel machines are
• 1:05:26
  cheap when you buy them but they cost you a lot to run over their life time because you're always
• 1:05:30
  buying fuels this one challenge of this electric future is it's expensive machines up front
• 1:05:36
  that cost you nothing to run over their lifetime so we need to figure out how to finance everyone to
• 1:05:45
  not only put solar on their roof but to put the electric vehicles in their driveway to put
• 1:05:49
  the electric stoves in to put the electric water heater and everything and to hear our climate any
• 1:05:55
  climate target under two degrees you've got to make sure that financing is available every time
• 1:06:01
  anyone replaces any of their dying fossil fuel machines hmm like we need a hundred percent of
• 1:06:07
  new cars to be electric a hundred percent of new generation of any electricity to be electric we
• 1:06:14
  need a hundred percent of new kitchens to be electric we need a hundred percent of water heat
• 1:06:18
  is to be all electric right that's the right globally you need to hit
• 1:06:23
  to do about 1.8 degrees
• 1:06:29
  so you've got to turn this financing ship around really quickly you're making me personal
• 1:06:33
  against all I can finish with some optimism but I think it's I think you've got to just state
• 1:06:40
  that you've got to state the bleedingly obvious right because we still don't have policy makers
• 1:06:45
  understanding this urgency right this is why honestly the only honest character out there
• 1:06:50
  he is Greta he says this is an emergency you need to treat it like one and she is specifically
• 1:06:55
  trying to say like the free market can't do hit any climate target you want to hit anymore
• 1:07:02
  like if you just wait through you know a few more elums to invent a few more things it's too slow
• 1:07:08
  yeah so we have dealt with emergencies like this before like in the United States for World War
• 1:07:15
  2 Europe was losing and going to lose and they said America unless you make us all of the weapons
• 1:07:20
  because this is a war of machines we're going to lose the war against Hitler so American government
• 1:07:27
  partner with American industry through something called the Defense Production Act to say anyone
• 1:07:33
  who can make a bullet gun a Jeep an airplane a boat tank will pay you cost plus 7% to go and build
• 1:07:43
  that thing and American industry turned around heroically and in two years went from making a
• 1:07:50
  thousand aircraft a year to 300 thousand aircraft a year from making no tank star thousands of
• 1:07:55
  tanks etc etc you need that level of emergency effort right that's a bit of a deep
• 1:08:03
  back to the financing so let's talk about the you know it's now a problem of financing all these
• 1:08:07
  things and I think it's important to understand in the 20th century we we thought about infrastructure
• 1:08:14
  as roads and bridges right and infrastructure was big engineering projects elsewhere and dams
• 1:08:22
  and stuff like the snowy project in Australia or the who the damn in the ux like that's infrastructure
• 1:08:28
  real-man building but the majority of our batteries in the future are going to be parked in
• 1:08:34
  driveways in small businesses in our cars the majority of generation at least a huge portion of
• 1:08:39
  is going to be on rooftops of residential homes and commercial buildings the the energy
• 1:08:46
  infrastructure of a country is going to be less and less these big mega projects and more and
• 1:08:52
  this hugely distributed memory driveway we have traditionally given governments low interest
• 1:09:01
  financing preferential financing to infrastructure projects because they were in the interest of
• 1:09:06
  the nation I'm really just making the argument that it is now in the interest in the nation all
• 1:09:12
  nations to invest in demand side or residential infrastructure see those electric vehicles as
• 1:09:18
  natural energy national energy infrastructure see those rooftop solar as national energy
• 1:09:22
  infrastructure and give them the same preferential financing that you do to
• 1:09:29
  other energy projects and then you know the ultimate version of this has interesting precedent
• 1:09:38
  right so Henry Ford was a little bit religious so he didn't believe in user your charging
• 1:09:46
  infrastructure so you couldn't buy a Ford motor vehicle until you got until you paid it all off
• 1:09:51
  essentially they were all bought on lay by Alfred P. Sloan invented auto financing in the
• 1:09:57
  1920s for general motors and general motors went from a small market share to the majority of market
• 1:10:03
  share because all of a sudden everyone could have who wanted a car could afford to buy one because
• 1:10:07
  they could get it on all alone that was hugely transformative to people being able to afford cars
• 1:10:14
  in the 1930s during the Great Depression most of the people who are out a lot of the people who
• 1:10:20
  were out of work were out before work from the construction industry and Roosevelt had to figure
• 1:10:23
  out a way to get money back into the construction industry regionally so that people could be
• 1:10:30
  employed building houses again people were not borrowing money from local banks so what they did
• 1:10:38
  was they invented sound email and they created the government backs mortgage and they used the
• 1:10:45
  model of Alfred P. Sloan's car loans in some respects to create this financial product so people
• 1:10:51
  could afford these homes back created the largest capital market in human history still today is
• 1:10:56
  the American mortgage market it's it's it's it's dwarfs everything else in terms of total amount
• 1:11:01
  capital so in essence that was a declaration that American households were national infrastructure
• 1:11:09
  and qualified for a special government backed interest rate all I'm really arguing here is if we
• 1:11:16
  if we move the levers of policy and regulations a lot of that should be about our policy and regulations
• 1:11:21
  around financing let's recognize all of these vehicles and homes as infrastructure let's
• 1:11:26
  have the government stepping with preferential low interest easy financing for everyone it's the
• 1:11:32
  purchase of every one of these machines so that we can get to zero emissions on time and you know
• 1:11:40
  an easy way to say it's like roughly half of people can afford to get a mortgage and have a
• 1:11:47
  great credit rating the other not can't solve climate change if only half the people can afford it
• 1:11:52
  yeah there's an easy analogy in Australia so which I would think of as the hex system which is
• 1:12:00
  the higher education contribution scheme where in Australia if you want to go to university and you
• 1:12:06
  can't afford to we don't anymore have fully funded tertiary education by the government but the
• 1:12:12
  government will pay your university fees and we'll give you a zero interest loan not specifically
• 1:12:18
  zero it's pegs or inflation but nonetheless functionally zero in terms of its purchasing power
• 1:12:24
  and you don't have to pay it off unless you earn more than basically the average income at least
• 1:12:29
  that's what it was I think it's gone down a little bit by now by now but when I was going through
• 1:12:33
  uni once you started earning more than the average income then they would then the tax office
• 1:12:38
  would just take a slightly higher chunk of tax going up a sliding scale depending on how much you
• 1:12:42
  earn and that's how you would pay it off there's no credit check you don't have to be reliable
• 1:12:49
  if you go on to live a life of poverty then you'll never pay it back and that's fine the
• 1:12:54
  government's got your back but if you do start earning you know decent money then the government
• 1:12:59
  takes back its share interest free why couldn't you have that system for changing your gas water
• 1:13:04
  heater to a heat pump water heater for installing rooftop solar for changing your gas stove to an
• 1:13:10
  electric induction stove top and for buying an electric car that's a bloody great idea we
• 1:13:16
  could do that and that that that gives me an enormous amount of optimism
• 1:13:24
  see I just came up with that so I don't know if you've thought about this before but
• 1:13:28
  no but like that's that's genius that's an e-key because I've got all the ideas I'm just saying
• 1:13:34
  you might want to know I actually I just quickly punched some numbers on that you know what you
• 1:13:39
  actually wouldn't cost the country any money really is that a fact what I just currently
• 1:13:46
  in Australia where we're importing 30 or 40 billion dollars of oil a year but I just did the
• 1:13:52
  numbers on Australian households and if they were not buying petrol and diesel for the cars and
• 1:13:56
  they were running electric cars at least some of it powered by their rooftop solar we'd be saving
• 1:14:00
  30 or 40 billion dollars a year so actually underwriting this saves the whole country money so
• 1:14:09
  if I was a government I could look at this not as a cost and I could shout down those right
• 1:14:14
  when people who keep telling me solving climate change cost too much you're
• 1:14:18
  basing it on dodgy nilton freedom and economics of the mid-night 20th century and we could
• 1:14:23
  base it on a remarkably 23rd century idea that this is the infrastructure that the nation can
• 1:14:28
  invest in and it will be revenue neutral or in fact it will return net money to the government
• 1:14:33
  on a 10-year time frame which is the time frame the government's going to think about money
• 1:14:38
  this is fantastic see I come up with so many good ideas uh you just have to just have to listen
• 1:14:45
  to me so late I'm you you you're for Prime Minister and President yeah I love it um look I'm
• 1:14:53
  going to let you go there's a whole other side of this question is about power generation and
• 1:14:58
  there will still be some people who are thinking uh yeah but don't you need base load power that's
• 1:15:04
  going to need to come from when the sun doesn't shine and the wind doesn't blow and what is that
• 1:15:08
  going to be and can we go 100% renewable or is that going to cost more money to generate the power
• 1:15:13
  that we can't generate locally at home and what role might micro nuclear reactors play at a community
• 1:15:18
  level and all of that which we now don't have time to get into but do you want to oh I love all of
• 1:15:23
  those conversations on that in short in us yeah sure um you base load and electricity is not the
• 1:15:33
  problem and it's a misnomer right that difficult thing about electricity is the peaks
• 1:15:38
  though even if you have base load nuclear it doesn't solve the problem that everyone turns
• 1:15:42
  their recognition around at 6 p.m because you can't dial up and down nuclear power plants that quickly
• 1:15:47
  they're not they're fragile right so you still have to have all the same batteries in the system
• 1:15:53
  you do in any way um so that's just to disavow people of this notion that base load is the problem
• 1:16:02
  it's actually reactive load can't they both do the problem because if you even if you don't have a
• 1:16:07
  high demand and you're not all turning your air conditioners on at 6 p.m if they're if you're
• 1:16:12
  fully renewable and there's no nothing generating that renewable energy then you're still in a problem
• 1:16:19
  might you don't you need a minimum base load reliability it's it's it's always windy somewhere
• 1:16:25
  and it's it's always sunny somewhere and so a lot of this is solved by the geographic averaging
• 1:16:30
  right if you're if you're relying on one wind turbine it's on your hill you're in trouble but if
• 1:16:33
  you're relying on the 80,000 windmills spread out all over Australia it's your in good shape okay
• 1:16:40
  there's also we're going we're not going to create exactly 100% the idea of getting to 100
• 1:16:45
  has put people off the scent here the current fossil fuel system is two or three or four hundred
• 1:16:50
  percent right there's a huge amount of redundancy and oversupply and over capacity and that's
• 1:16:54
  necessary to make a robust system we will have similarly huge amounts of wind and solar more than
• 1:17:01
  the 100% required because it's going to be so cheap and it's too sensitive kilowatt hour to install
• 1:17:06
  an industrial solar installing 25% more than you need only cost you makes the cost of they go
• 1:17:12
  to two and a half cents right and remember that's the tiniest fraction of your electricity bill with
• 1:17:17
  30 cents kilowatt hour though having a whole lot more than you need so if there's a bit of cloud
• 1:17:23
  of color you've still got plenty of headroom and the wind dies a little has to got pretty of headroom
• 1:17:30
  that over capacity goes a huge way to getting you to reliable all the time and remember that all
• 1:17:38
  of our hydro efficiency will start to be used as the buffer and the battery and it's a pretty big
• 1:17:43
  battery as well so in Australia you can you don't need to intone nuclear basically just well managed
• 1:17:50
  a little bit of oversupply of wind and solar and well managed hydro plus all of the batteries in our
• 1:17:55
  vehicles and homes well managed and we can do it in the US in the middle of winter it might be a
• 1:18:00
  little bit harder so they might need some nuclear they've already got you know 20% of that are just
• 1:18:05
  the already comes from nuclear they can they could continue to do that America also could go without
• 1:18:12
  nuclear and Asia however yeah I don't think you can really squint at Northern Europe or China
• 1:18:21
  and period how they get 10 to zero emissions without without some nuclear yeah or a lot of less
• 1:18:30
  so you know I'm not anti nuclear I'm not pro nuclear I think you have to be realistic we only
• 1:18:37
  got one nuclear power plant in the US in the last 40 years so it's not going to come online in time
• 1:18:44
  to salt climate change in the way you think because it takes so long to get certified and regulated
• 1:18:49
  you can have another libertarian discussion about how do we deregulate nuclear or not that's an
• 1:18:54
  exciting conversation ahead but you know nuclear is a slow moving big bureaucratic beast it's more
• 1:19:03
  expensive and and it's unnecessary in most of the world to get to zero right okay so I try
• 1:19:12
  on Mongolian listeners you need to deregulate your nuclear because you're probably not going to get
• 1:19:17
  there with solar but to everyone else oh the Mongolians get there with wind they're
• 1:19:23
  oh yeah yeah yeah yeah or so those big long flat plains yeah right Northern China then
• 1:19:33
  maybe yeah yeah big it's big crowded cities in in Southeast Asia and in Northern Europe that are
• 1:19:39
  hard yeah all right so I'm an optimist you've converted me thank you for explaining it to us
• 1:19:46
  and and good luck where can people find out more so there's rewiring Australia there's rewiring
• 1:19:51
  America and I guess your books there's the book the big switch in Australia I'm electrifying the US
• 1:20:00
  I'm on a lot of podcasts none as good as this one obviously Josh right you know if you
• 1:20:05
  if you want more you can go and listen to some more podcasts fantastic thank you so
• 1:20:21
  you