Yesterday, Al Gore braved the picket line in Silicon Valley to appear at the Commonwealth Club and discuss his new book, “The Future: Six Drivers of Global Change.”
Needless to say, Fresh Dialogues was keen to turn the conversation from issues of World Brain and Thomas Paine to Gore’s forte: climate change. Fortunately for the climate-concerned, the talented moderator, CwC Club CEO Gloria Duffy chose our burning question from the dozens of wannabees that landed on her lap.
Gore is forceful in his call for a carbon tax and optimistic in his description of the growing investment in, and the reducing price of renewable energy. He also explains why Silicon Valley will retain its preeminence in technology innovation, particularly in cleantech, despite future challenges.
Fresh Dialogues: What can President Obama realistically hope to achieve in his second term to combat climate change?
Al Gore: I’m hoping that tonight, just a few hours from now (during the State of the Union address), that he will announce that he’s going to have the EPA regulate for global warming pollution for existing existing power plants and facilities. It’s already been applied to newly constructed facilities, and being challenged in court; but there was a ruling in 2007 that global warming pollution is included under the Clean Air Act. So I’m hoping that he will do that as a minimum. But ultimately we’re going to have to put a price on carbon, either directly with a CO2 tax or indirectly with a a carbon cap and trade system, by whatever name.
Many other countries are now moving closer toward that. China has implemented a pilot program in two cities and five provinces; and has announced it has a pilot for a nationwide cap and trade system. India has put a tax on coal. Australia, the largest coal exporter in the world has implemented both, a CO2 tax and cap and trade. Seventeen other countries are moving rather quickly in this direction, South Korea, Ireland among them. European Union is already there. As of January 1, California has been the leader, once again…Quebec, British Columbia. Local and regional governments around the world. It’s not enough yet, and we do need a nationwide system. And for those who say, ‘it might make us less competitive,’ first I strongly disagree; but the World Trade Organization rules allow for border adjustments if some country doesn’t include its carbon pollution in its export prices, so it doesn’t affect competitiveness, except in a positive way, because we have invented most of these technologies, we aught to have the jobs created here.
Yesterday it was announced that the number one new source of electricity generation in the US in 2012 was from wind energy. Australia announced last week that electricity from wind is now cheaper than electricity from new plants run by either coal or natural gas. The price of renewables is coming down continually, the more we use, the cheaper it gets. It’s one of those virtuous circles, and cost down curves like Moore’s Law. It’s not quite that steep but it’s extremely impressive.
In 2010, for the first year in world history global aggregate investments in renewable energy exceeded global aggregate investments in fossil fuel….these are trends that are extremely powerful and I hope that the administration here does find a way to put a price on carbon. The idea that it’s a so-called externality that we can safely ignore is ludicrous. It’s just ludicrous.
Can Silicon Valley keep the crown as No. 1 tech innovation hub?
Having spent over two years researching future trends with futurist experts such as Ray Kurzweil, Gore remains bullish about Silicon Valley’s future as the innovation and tech capital of the world. He acknowledges that the Internet is a force for creative destruction that redistributes expertise, opportunities, and capital, but concludes that a need for innovation hubs will remain, attracting people with the best science, industry and technology skills.
“Silicon Valley is going to remain the epicenter of high technology development,” he says. “Principally in the digital technologies but increasingly in green technologies. Even though it’s been a roller coaster ride, the momentum of green technology around the world is incredible.”
He likens Silicon Valley’s expertise in tech to Milan’s in fashion, pointing out that despite our ability to get fashion trends online, Milan remains a center of fashion in the world, because the best minds in fashion go there. He adds, “The importance of people being able to meet and collaborate in person ensures the continued importance of particular geographic centers of expertise.”
Update on SOTU
Obviously, Al Gore was wrong in assuming that President Obama would announce an extension of EPA regulations to existing power plants in his SOTU; however, I have no doubt he’s delighted at the president’s call to action:
“For the sake of our children and our future, we must do more to combat climate change!”
President Obama also urged congress to pursue a bipartisan market-based solution to climate change and announced his plan to use his executive powers to speed up the transition to more sustainable energy sources and use some oil and gas revenues to create an energy security trust to drive new research and technology to shift cars and trucks off oil “for good.” Does that mean more federal funding for electric vehicles?
He added: “So tonight, I challenge you to join me in setting a new goal: By 2035, 80 percent of America’s electricity will come from clean energy sources.”
As the nation anticipates a “climate friendly” State of the Union speech from President Obama Tuesday, let’s take a look at what one of Silicon Valley’s most successful innovators and job creators has to say about the government’s role in climate change and innovation.
Last month, I interviewed Tesla Motors and SpaceX CEO, Elon Musk at the Computer History Museum in Silicon Valley and asked him what specifically President Obama can do to stimulate the economy. He acknowledges that presidents can only do so much, saying,”You’re actually like the captain of a very huge ship and have a small rudder.”
Musk argues that too much government regulation can stand in the way of innovation, especially in the auto industry; and is generally in favor of minimal government intervention in the economy. On climate change, however, he was forceful and described our oil based, carbon intensive economy as creating a “crazy chemical experiment on the atmosphere” with likely catastrophic consequences. He concludes that taxing carbon is vital.
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Here is the transcript of our conversation:
Alison van Diggelen: Do you feel the government is standing in the way of innovation at all?
Elon Musk: Well sometimes…I don’t think the government tends to stand in the way of innovation but it can over-regulate industries to the point where innovation becomes very difficult. The auto industry used to be a great hotbed of innovation at the beginning of the 20th Century. But now there are so many regulations that are intended to protect consumers…I mean the body of regulation for cars could fill this room. It’s just crazy how much regulation there is. Down to what the headlamps are supposed to be like. They even specify some of the elements of the user interface on the dashboard…some of these are completely anachronistic because they’re related back to the days when you had a little light that would illuminate an image. So we had to reserve space on the instrument panel of the Model S for where all of the indicators…that a car would have…you know you’ve got these little lights…
Alison van Diggelen: Check engine or whatever…
Elon Musk: Yeah…all these little things. There is a whole bunch of them. ‘We can’t have anything else in that space. ‘ But how about we have one space and render a different graphic? ‘Oh no, because people are expecting to see them in this space.’ Nobody is expecting to see them in that space.
Alison van Diggelen: So you can’t argue with these regulations?
Elon Musk: Well you can argue with them, but not with much success. (laughter). You can actually get these things changed, but it takes ages. Like one of the things we’re trying to get is: why should you have side mirrors if you could have say, tiny video cameras and have them display the image inside the car? But there are all these regulations saying you have to have side mirrors. I went and met with the Secretary of Transport and like, can you change this regulation…? Still nothing has happened and that was two years ago.
Alison van Diggelen: So you’re banging your head against the wall…
Elon Musk: We need to get these regulations changed.
Alison van Diggelen: So talking of government, President Obama is obviously trying to do what he can…if you had five minutes with President Obama, what would you advise him for one: stimulating the economy and entrepreneurship and (two) creating jobs. Is there one thing if he could successfully get through that would be a big stimulus?
Elon Musk: I think actually…the reality of being president is that you’re actually like the captain of a very huge ship and have a small rudder (laughter). If there was a button that a president could push that said ‘economic prosperity,’ they’d be hitting that button real fast…
Alison van Diggelen: Full steam ahead.
Elon Musk: You can imagine…the speed of light, how fast they’d be pressing that button. That’s called the re-election button. I’m not sure how much the president can really do. I’m generally a fan of minimal government interference in the economy. The government should be the referee but not the player. And there shouldn’t be too many referees. But there is an exception, which is when there’s an un-priced externality, such as the CO2 capacity of the oceans and atmosphere. So, when you have an un-priced externality, then the normal market mechanisms don’t work and then it’s the government’s role to intervene in a way that’s sensible. The best way to intervene is to assign a proper price to the common good that is being consumed.
Alison van Diggelen: So you’re saying there should be a tax on gas?
Elon Musk: There should be a tax on carbon. If the bad thing is carbon accumulation in the atmosphere, then there needs to be a tax on that. And then you can get rid of all subsidies and all, everything else. It seems logical that there should be a tax on things that are most likely to be bad. That’s why we tax cigarettes and alcohol. These are probably bad for you, certainly cigarettes are (laughter). So you want to err on the side of taxing things that are probably bad. And not tax things that are good. Given that there is a need to gather tax to pay for federal government…We should shift the tax burden to bad things and then adjust the tax on bad things according to whatever’s going to result in behavior that we think is beneficial for the future.
I think currently that what we’re doing right now, which is mining and burning trillions of tons of hydrocarbons that used to be buried very deep underground, and now we’re sticking them in the atmosphere and running this crazy chemical experiment on the atmosphere. And then we’ve got the oil and gas companies that have ungodly amounts of money. You can’t expect them to roll over and die. They don’t do that. What they much prefer to do is spend enormous amounts of money lobbying and running bogus ad campaigns to preserve their situation.
It’s a lot like tobacco companies in the old days. They used to run these ad campaigns with doctors, guys pretending they were doctors, essentially implying that smoking is good for you, and having pregnant mothers on ads, smoking.
Alison van Diggelen: Do you have a message for the climate change skeptics and the big oil people?
Elon Musk: Well, as far as climate change skeptics…I believe in the scientific method and one should have a healthy skepticism of things in general…if you pursue things from a scientific standpoint, you always look at things probabilistically and not definitively…so a lot of times if someone is a skeptic in the science community, what they’re saying is that they’re they’re not sure that it’s 100% certain that this is the case. But that’s not the point. The point is, to look at it from the other side. To say: What’s the percentage chance that this could be catastrophic for some meaningful percentage of earth’s population? Is it greater than 1%? Is it even 1%? If it is even 1%, why are we running this experiment?
Alison van Diggelen: You’ve called it Russian roulette. We’re playing Russian roulette with the atmosphere…
Elon Musk: We’re playing Russian roulette and as each year goes by we’re loading more rounds in the chamber. It’s not wise. And what makes it super insane is that we’re going to run out of oil anyway. It’s not like there’s some infinite oil supply. We are going to run out of it. We know we have to get to a sustainable means of transportation, no matter what. So why even run the experiment? It’s the world’s dumbest experiment (applause).
Read more Transcript Excerpts from our 2013 interview:
Environmental policy was front and center Tuesday evening at the Churchill Club in Silicon Valley as EPA Administrator, Lisa Jackson took the stage with former Michigan Governor, Jennifer Granholm. Fracking and the proposed Keystone pipeline were hot topics during the lively discussion.
In December, Jackson announced that she will leave her post after four tumultuous years in DC and didn’t rule out running for elected office. Speculation is rife about her running for Governor of New Jersey.
On Fracking
“It can and should be done safely..I’m enough of a scientist to say: the verdict is not in yet. We need more data.”
On the Keystone Pipeline
“I will be gone (from the EPA) before a decision is made. A revised environmental impact study will be done, then public feedback, then President Obama will decide ‘if it’s in the national interest’. This will take into account pollution, groundwater, and the economic perspective. It’s too soon in the process to say (if it will get the green light).
A Price on Carbon?
“The current climate doesn’t lead me to believe there will be a national law soon. But that doesn’t preclude state action (such as California’s), and the private sector, where important progress can be made.”
Jennifer Granholm, who was a strong advocate for cleantech during her eight year tenure as Governor of Michigan added, “The Federal Government could offer a pot of money to incentives states to take action and stimulate progress from the bottom up.” She likened her idea to the “Race to the Top” program for education.
On Green Innovation and the Role of the EPA
“The EPA can level the playing field by setting emissions standards and goals which stimulate the private sector to compete and beat them. It often costs less than EPA estimates, due to private sector innovation. But the private sector needs uniform and not patchwork standards…”
“The EPA works for all the American people, not special interests…it’s not a zero sum game. For it to succeed no one needs to lose. There are win/win strategies. Regulations need to be enforced. The work we do is vital and sacred.”
On Science and Climate Change
“I am a scientist and at the EPA we have more scientists than any other Federal agency except NASA…We face a roll-back in the Clean Air Act. Be aware that consensus is enough – unanimity is not required or you’ll miss the window for action.”
There was a vocal climate change skeptic in the audience whom Jackson addressed directly saying he wasn’t representative of the majority of Americans.
On her Greatest Achievements at the EPA
“The endangerment finding made pollution actionable…and we raised fuel efficiency standards.”
As Dana Hull explains in the Mercury News, during Jackson’s tenure, the EPA finalized its endangerment finding which authorizes it to take reasonable efforts to reduce greenhouse gases.
The event was hosted at the Microsoft Campus in Mountain View by Rob Bernard, the company’s green czar.
On December 7, President Bill Clinton appeared at Celebrity Forum in Silicon Valley and talked at length about climate change, referring to Berkeley scientist Dr. Richard Muller as “a hero of mine.”
You may recall Dr. Muller, the self described “former skeptic” who frequently emphasized the fallibility of research on global warming and was funded by the Koch Foundation. But last summer, after thorough research with the Berkeley Earth project, he announced his dramatic conversion in an Op-Ed in the New York Times. He now concludes that global warming is happening, and that humans are essentially responsible for all of the warming in the last 250 years.
I happened to be sitting next to Dr. Muller last week, and although he was whisked backstage by some big secret service staffers after Clinton’s speech, he agreed to answer a few Fresh Dialogues questions by email about his research and how he feels about hero worship by number 42.
You might be surprised to learn three things about Dr. Muller:
1. He says Hurricane Sandy cannot be attributed to climate change.
2. He suggests individually reducing our carbon footprint is pointless – we need to “think globally and act globally” and encourage the switch from coal to gas power in China and developing nations. He’s a fan of “clean fracking.”
3. He says climate skeptics deserve our respect, not our ridicule.
Muller hopes that Berkeley Earth will be able to coordinate with the Clinton Foundation on their mutual goal of mitigating global warming.
Here’s our interview: (it also appears at the Huffington Post, together with a lively debate)
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van Diggelen: You wrote in the New York Times that the Berkeley Earth analysis will help settle the scientific debate regarding global warming and its human causes – how so?
Muller: Science is that small realm of knowledge on which we can expect and obtain agreement. I felt that many of the skeptics had raised legitimate issues. They are deserving of respect, not the kind of ridicule they have been subjected to. We have addressed the scientific issues in the most direct and objective way, and just as I have adjusted my conclusions, I expect that many of them will too.
van Diggelen: Regarding the human cause of global warming, you say that your conclusions are stronger than that of the Intergovernmental Panel. You concluded “essentially all of this increase in temperature results from the human emission of greenhouse gases.” The panel said “most of the warming.” Why is this significant?
Muller: The IPCC said “most of the warming” (meaning 51% or more) for the past 50 years. They could not rule out an important role from solar variability. We say essentially all of the warming of the past 250 years. Our analysis allows us to make a better prediction for the future since it does not have confusion from a solar component.
van Diggelen: What’s your message to climate change skeptics?
Muller: Most of your skepticism is still valid. When something extraordinary happens in weather, such as the accidental occurrence of Hurricane Sandy hitting New Jersey and New York City just at the peak of tides — many people attribute the event to “Climate Change.” That’s not a scientific conclusion, and it is almost certainly wrong. Hurricanes are not increasing due to human causes (actually, they have been decreasing over the past 250 years). Tornadoes are not increasing due to human causes. (They too have been decreasing.) So please continue to be skeptical about most of the exaggerations you will continue to hear! Proper skepticism is at the heart of science, and attempts to suppress such skepticism represent the true anti-science movement.
However, we have closely examined the evidence for temperature rise, and there are several conclusions that are now strongly based on science. The temperature of the Earth has been rising in a way that closely matches the rise in carbon dioxide. The history of solar activity does not match the data at all. Based on this, the human cause for this warming is strongly indicated. Read our Berkeley Earth papers and see if your objections are answered. I believe that the key objections have all been addressed. Based on this, you should consider changing your skepticism on global warming, even if you are properly skeptical about all the claims that are lumped together under the rubric of “climate change.”
van Diggelen: You’ve said that the difficult part is agreeing what can and should be done about climate change…any suggestions?
We need to recognize that the greatest contributors to climate change in the coming decades will be China, India, and the developing world. Thus any solution must be focused on realistic actions that they can take. The Clinton Foundation is doing wonderful work on energy efficiency and energy conservation, and working closely on this with the developing world. The only other action that we can take that could be equally important over the next 20 to 30 years is to help them switch from coal to natural gas. (For the same energy delivered, cleanly-produced gas creates only half to one third of the greenhouse emissions.) This was the subject of my WSJ Op Ed with Mitch Daniels. It is also discussed in detail in my new book “Energy for Future Presidents.”
van Diggelen: What are YOU doing to reduce your carbon footprint?
Muller: I am trying to get people to stop asking that question! It is very misleading. This is a problem in which we need to think global and act global (NOT local!) Reducing our own footprint, if it is done in a way that will not influence China and the developing world, is not a worthwhile action. It may make us feel good, and then in the future after the world has warmed (because our actions were not something that China could afford to copy) we’ll be saying “at least it wasn’t MY fault.” Wrong! We need to be acting to help China and the emerging economies. Focusing on ourselves at home is a way of avoiding coming to terms with the problem.
van Diggelen: What should others be doing? If you could have President Obama’s ear for 5 minutes, what would you say?
Muller: Double (or more) our efforts to help China become more energy efficient. And equally important: develop “clean fracking” standards. Work with China to expedite and accelerate their switch from coal to natural gas. Devise market-based approaches that will guarantee that the developing world will apply clean methods to their natural gas production. Show leadership by approving a US move to nuclear power; reverse your unfortunate canceling of the Yucca Mountain waste storage facility. In the US emphasize technologies that can work in China (e.g. natural gas), not those that are too expensive (e.g. autos with costly lithium-ion batteries).
van Diggelen: Just how urgently is action needed on climate change?
Muller: We need to act, but no need to panic. I see no tipping points that are scientifically valid. Of course, we don’t understand the atmosphere and biosphere well enough to be sure. Rather than speed of action, the key parameter is finding solutions that are profitable — because those are the ones most likely to be applicable to the poorer nations.
van Diggelen: How do you explain Hurricane Sandy? Some scientists say it was exacerbated by climate change? Warmer oceans, more evaporation? Higher sea level swells?
Muller: None of the above. Hurricane Sandy was a freak storm that happened because a relatively small hurricane (it wasn’t even a category 1 storm when it hit New York City) veered towards the coast during a very high tide. None of the causes of the damage can be attributed in a scientific manner to climate change.
The word “scientific” in that last sentence is very important. Many of the critics of the skeptics claimed that the skeptics were not being scientific. Yet that is also true of the alarmists. There is an unfortunate tendency, when the issue is very important (as in climate change) to abandon science and work from gut feelings. No, that is a mistake; when the issue is important, then it is most urgent that we stick to our science! We must be objective!
Hurricane Sandy cannot be attributed to global warming. The rise over the oceans, in the last 50 years, has been about 0.5 degree C. That’s tiny! In those 50 years, sea level rose by 4 inches. So the high tide, if not for global warming, would not have been 14 feet but “only” 13 feet 8 inches. There was a similarly severe storm in 1938 (my parents lived through it out on Long Island). We should stop attributing all freak storms to climate change. This is an important issue, so let’s emphasize the science.
Unfortunately, there will always be scientists with some credentials that will exaggerate, maybe even convincing themselves. I recall back in the 1950s, when I was a kid in New York City, that the freak storms and changes in climate were attributed by some eminent scientists to atmospheric nuclear testing. (Maybe the freak storms and changes in climate should now be attributed to the nuclear test ban.) It is not science to list the bad things that have happened lately and claim that they “may be linked” to climate change. Even scientists, such as those who were passionately afraid of thermonuclear war, tend to see connections in things that aren’t there.
Climate change is real, and we need to do something to stop it. But it is not strong enough (0.6 C in the last 50 years) to be noticeable by individuals. It takes scientists analyzing large amounts of data to see it. (A statistical analysis of hurricanes shows that they have actually been decreasing in number that hit the US coast over the past 150 years.) That gives us a good idea about what has been happening, and allows us to make predictions for the future. Those predictions are worrisome enough that we should act — always remembering to keep our focus on China. But let us not be deluding into thinking that every extreme event is evidence supporting our worry.
van Diggelen: How did it feel to be called a hero by Bill Clinton?
Muller: I didn’t know whether to correct him or just feel awed. President Clinton is the true hero for his fantastic foundation, and for addressing many of the most serious problems in the world, from AIDS to clean water to ending poverty.
This week SolarCity made public details of its plans for a $200M IPO, an all too rare sunny event for the clean energy sector in this doom laden post Solyndra era. Yet the filing revealed information which might have some investors take a cloudier view of the company’s future.
Although the company has installed solar arrays on over 33,000 U.S. buildings, and revenues have been growing healthily, SolarCity is still in the red and relies on the 30% Federal Investment Tax Credit to keep expanding. As Katie Fehrenbacher reports, the company is being investigated for overvaluing its solar systems for the tax credit. To date, SolarCity’s business model has benefited enormously from the surplus of cheap Chinese solar panels, and prices (until recently) have been trending down. But that is due to change with the large increase in duties imposed on certain Chinese solar panel makers; and the bankruptcy of other Chinese panel suppliers. Investigations by the Treasury Department are ongoing, as is the evolving landscape of solar panel industry.
In a Fresh Dialogues interview earlier this year, CEO Lyndon Rive was bullish about the company’s prospects and even suggested SolarCity was seeking “world domination” in the energy supply sector. He addressed the increase in tariffs on Chinese solar panels:
“It’s more of an annoyance than a concern,” Rive said. “It’s a worldwide market…if China’s costs go up, we’ll just buy from somebody else.”
Rive talked about tempering the growth of SolarCity, to avoid the pitfalls of expanding too rapidly.
“We have a four month waiting list….four months is totally acceptable. Our customers totally understand it,” said Rive. “Could we grow even faster? Yes. But then the wheels may start getting shaky. So we are growing at a healthy rate to ensure quality, safety and also customer satisfaction.”
The IPO disclosures reveal that Elon Musk has over 30% of the shares in the company, followed by John Fisher of Draper Fisher Jurvetson with 26%. The Rive brothers, cofounders of SolarCity with their cousin Elon Musk have a combined 14% only. Here’s Lyndon Rive’s perspective on how Musk contributes to SolarCity as chairman.
And he’s got an historic precedent to back his case – from Medieval France no less.
“It’s a very powerful idea that could become something of great importance to California,” he said. “New ideas are never received as well as old ideas, but I think California is the one place where high speed rail can get its start for the United States.”
But with California’s budget in the red and more spending cuts on the table, can California afford to spend a penny on high speed rail?
The 74 year-old governor took a page from history and replied with a question: “How did the peasants of medieval France afford to build the cathedral of Chartres?”
He then enlightened Fresh Dialogues with this answer, “They did it slowly… they did it with community investment and a great belief in the future.”
This echoes Brown’s 2012 State of the State Speech in which he said, “”Those who believe that California is in decline will naturally shrink back from such a strenuous undertaking…I understand that feeling, but I don’t share it because I know this state and the spirit of the people who choose to live here.”
Governor Brown is thinking very long term. In fact, the high gothic Chartres Cathedral, famous for its flying buttresses, took almost 60 years to build.
But it’s an unfortunate analogy. In the 13th Century, the cathedral’s “free trade zone” was also the cause of bloody riots between bishops and civic authorities over tax revenues. An ominous sign indeed for the Governor of California. Plus ca change…
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Given Jerry Brown’s recent announcement that $120 M from a settlement with NRG Energy Inc. would be used to fund the provision of 200 public fast-charging stations for EVs in the Golden State (including some 5000 Nissan Leafs he confirmed have been sold to date), Fresh Dialogues also asked the governor if he drives an electric car. “Not yet,” he replied.
In earlier comments today, he referenced the new Tesla Model S, which will roll off production lines at Tesla’s Fremont Factory this summer. So is he considering a Tesla? He demurred. “I’m looking, looking, looking at it.”
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Fresh Dialogues: What can President Obama realistically hope to achieve in his second term to combat climate change?
now cheaper than electricity from new plants run by either coal or natural gas. The price of renewables is coming down continually, the more we use, the cheaper it gets. It’s one of those virtuous circles, and cost down curves like Moore’s Law. It’s not quite that steep but it’s extremely impressive.
Alison van Diggelen: So talking of government, President Obama is obviously trying to do what he can…if you had five minutes with President Obama, what would you advise him for one: stimulating the economy and entrepreneurship and (two) creating jobs. Is there one thing if he could successfully get through that would be a big stimulus?
van Diggelen: Regarding the human cause of global warming, you say that your conclusions are stronger than that of the 
