BSR Conference 2013

The Power of Networks

November 5-8 / San Francisco

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BSR Debate: What Does a Low-Carbon Energy Economy Look Like?

One-Hour Conversation Session / November 5, 2013

Speakers

  • Amy Myers Jaffe, Executive Director, Energy and Sustainability, University of California, Davis
  • Mark Jacobson, Director, Atmosphere/Energy Program and Professor, Civil and Environmental Engineering, Stanford University
  • Eric Olson, Senior Vice President, Advisory Services, BSR (Moderator)

Highlights

  • Technological solutions exist to replace global energy infrastructure with renewable energy supplied by wind, water, and sun, but business models and policy incentives are needed to accelerate a transition to a low-carbon economy.

  • Transitioning to a low-carbon economy will take time, even while it accelerates, for society to build consumer demand, supply capacity, and products that meet consumer needs with low-carbon solutions.

  • The developing world in particular offers potential to improve air quality and health while stabilizing energy prices to better meet people’s needs through broader economic shifts such as distributed energy.

Memorable Quotes

“It is technically and economically feasible to convert energy infrastructure for all purposes to wind, water, and solar, but there are social and political roadblocks.” —Mark Jacobson, Stanford University

“The idea to technologicalize out of this problem isn’t the solution. It’s not really about coming up with an invention.” —Amy Myers Jaffe, University of California, Davis

“We need to use cultural leadership to change how we think about and use energy. We need to solve this commons problem by making a personal commitment to live differently.” —Amy Myers Jaffe, University of California, Davis

Overview

Olson opened the session by challenging the two panelists and audience participants to a debate that would move the economy forward to a low-carbon future. He explained that he wanted participants to think about the assumptions underpinning their views of the future, and then invited each of the panelists to describe their views.

Jacobson described a future energy infrastructure entirely supported by renewable sources. He said we could replace the world’s entire infrastructure for energy—including transportation, electricity, and industry—with solar, wind, and some hydro using existing technology. He added that doing so would reduce economic losses from air pollution, help avert or minimize the impacts of climate change, and stabilize energy prices. “The nice thing about wind and solar power is no fuel costs—higher capital costs, but no fuel costs,” he said. Jacobson noted that the biggest barriers to these solutions were political and economic, and he added that policies can incentivize investment in renewable energy instead of lower-cost natural gas and coal.

Jaffe offered a different view, one where policy alone cannot steer the shift to a low-carbon economy. She elaborated that the focus of her work is supporting business model development. “We have a team looking at how we organize the incentives that would make it valuable for business to invest in [clean energy],” she said. She went on to explain that consumer demand, product life, and supplier production all take time to change. For example, a car remains in operation for an average of 14 years in the United States, which means that it takes at least that much time to retire existing vehicles and manufacture the new, cleaner automobiles that replace them.

Olson asked each panelist to further discuss their assumptions and the policy mechanisms that would accelerate a low-carbon transition. Jacobson described laws in California with stringent emissions requirements that only zero-emissions vehicles could meet and policies in Germany that pay individual solar panel operators for excess electricity they produce for the grid. “There’s not a technological or economic limitation to doing a conversion. If the world believes it’s necessary, it can be done,” he said.

Jaffe responded by describing that the challenge is to create both consumer demand and producer incentive. “It must provide a sustainable business model where the manufacture and installation of product will continue,” she stated.

A participant challenged Jaffe and Jacobson about their assumption of the potential for consumer demand to promote change; he noted that incentives were not leading Californians to buy electric vehicles en masse. Jaffe described the importance of meeting consumer need with a story about her husband, who was tempted to buy a Leaf because of the low lease costs under California’s incentives, but he declined because he did not like the comfort or range of the vehicle. Jacobson highlighted the Tesla Model S—which can reach 310 miles on one charge—as an example of an appealing product.

Jaffe shifted the focus from demand for individual products to patterns of demand by highlighting the trend among her students who have chosen to use car-sharing as an alternative to owning vehicles. “My job is to take young people who study with me and have them think about how they live their daily life, accomplish the things they want to do, and have a lower carbon footprint,” she said.

The conversation turned to the developing world when a participant asked about the role of “culture-changing technology” that brings about rapid change, such as the Internet and tablet computers. “You cannot wait for an invention. It’s about how you live, the choices you make,” Jaffe said. She challenged the energy industry to explain how its current technology meets all needs while 2.4 billion people in the developing world live without modern energy. Jacobson elaborated by explaining that the biofuels, such as dung and wood chips, used by some in the developing world create devastating health consequences. He added that the path to change energy infrastructure around the world, which may include distributed energy as a solution to the developing world’s energy needs, is to reduce energy demand while replacing all remaining supply with clean energy.

Olson wrapped up by asking the panelists to share their advice for business. Jaffe emphasized the importance of compliance with and engagement on regulation to avoid more draconian policy, while Jacobson suggested businesses could learn from each other.


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