My Climate Journey

Ep 83: Harry Saunders, Managing Director of Decision Processes Incorporated

Episode Summary

Today’s guest is Harry Saunders, Managing Director of Decision Processes Incorporated. Harry has consulted at numerous Fortune 100 companies including Chevron, General Motors, and Hewlett Packard, helping executive teams make higher quality decisions in the face of risk. The 'Godfather of rebound,' Harry is widely known as an international expert on energy efficiency and consumption and has also published articles in the fields of evolutionary biology and legal theory. I very much enjoyed speaking with Harry, and he shed some light on 'the rebound effect', which is an important factor in the ability of energy efficiency improvements to help with carbon emissions reduction. Whether you agree or disagree with his perspective, it is an important one to learn about! Enjoy the show! You can find me on twitter @jjacobs22 or @mcjpod and email at info@myclimatejourney.co, where I encourage you to share your feedback on episodes and suggestions for future topics or guests.

Episode Notes

In today’s episode, we cover:

● The Rebound Effect and the ironic implications of improving energy efficiency

● Harry’s journey into Climate Change

● How Harry earned the moniker, “The Godfather of Rebound”

● Contention around rebound and its Climate implications

● Factoring in the welfare of those in developing countries and the plight of “energy poverty”

● The integral role of nuclear in any clean energy strategy

● Ecomodernism and the focus on GDP-driven solutions to Climate Change

Links to topics discussed in this episode:

● Decision Processes Incorporated: http://www.decisionprocessesinc.com/

● Khazzoom–Brookes postulate: https://en.wikipedia.org/wiki/Khazzoom%E2%80%93Brookes_postulate

● The Rebound Effect: https://blog.ucsusa.org/peter-oconnor/energy-efficiency-what-is-the-rebound-effect-946

● Amory Lovins: https://en.wikipedia.org/wiki/Amory_Lovins

● Rocky Mountain Institute: https://en.wikipedia.org/wiki/Rocky_Mountain_Institute

● Ecomodernist Manifesto: http://www.ecomodernism.org/

● Environmental Kuznets Curve: https://en.wikipedia.org/wiki/Kuznets_curve#Environmental_Kuznets_curve

Episode Transcription

Jason Jacobs:    Hello everyone. This is Jason Jacobs, and welcome to My Climate Journey. This show follows my journey to interview a wide range of guests to better understand and make sense of the formidable problem of climate change, and try to figure out how people like you and I can help.

Jason Jacobs:    Today's guest is Harry Saunders, the Managing Director of Decision Processes Incorporated. Harry has consulted at numerous Fortune 100 companies, including Chevron, General Motors, and Hewlett Packard, helping executive teams make higher quality decisions in the face of risk. Following Daniel Khazzoom and Leonard Brookes' work on energy consumption and behavior, Harry cornered the Khazzoom/Brooke's postulate, which broadly states that increased energy efficiency leads to increased energy consumption. 

Jason Jacobs:    Known as the Godfather of Rebound, Harry is an international expert on energy efficiency and consumption. He most recently surveyed and analyzed 30 sectors of the US economy for historical evidence of rebound. Based on his analysis and historical records, he argues that the interim governmental panel on climate change's estimate for carbon emissions reductions are based on improper estimates of the rebound effect. 

Jason Jacobs:    The rebound effect is not something that I personally was aware of before I spoke with Harry, but was introduced to him because the rebound effect is an important consideration than doing proper emissions modeling, and one that at least Harry claims is not properly factored in and has broad implications. I'll let you hear the episode, and you can form your own conclusions, but at minimum gives us a lot to think about, and another area to probe to make sure that our forecast and modeling is solid.

Harry Saunders, welcome to the show. 

Harry Saunders:            Well, thank you for having me, and Happy New Year to you.

Jason Jacobs:    Happy New Year to you, although by the time this ships, it's not going to be New Year anymore, but for us it is.

Harry Saunders:            There you go. That's what counts.

Jason Jacobs:    Yeah, I'm excited for this discussion. I think, as I told you when we spoke a little bit beforehand, I have much less experience interviewing scientists, and I've had much less of them on the show relative to people that are more in my comfort zone like entrepreneurs, just due to my experience, but given the importance of the science, and my commitment to not just making this a capital pursuit, but really exploring how to fundamentally solve the problem of climate change in a durable way, it's important to look at the science too, and so I'm going to kind of hold my nose, and jump in the deep end here because I think it's important to do so. I'm honored to have you.

Harry Saunders:            Well, thank you, and I think most people would place me more in the category of economist than scientist, but there's kind of a mixture there.

Jason Jacobs:    Maybe that's a good place to start, Harry. It would be great to hear, for my benefit and for listeners benefit, tell me about your background. How did you get into this, and tell me about the work that you do.

Harry Saunders:            Long story, don't know exactly where to start.

Jason Jacobs:    That, my friend, is up to you. You have artistic liberty, for better or for worse.

Harry Saunders:            All right, yes. Let's hope it's for better. Well, it really started in the 1960s when I was a college student, and got interested in the environment. I started life as a physicist, so I've always been sort of science engineering oriented around it, but got interested in the environment, but particularly the connection between energy use, or among energy use, economics, and climate change. That led me on a long journey.

Jason Jacobs:    Did you just hit your head in the shower, and those are the three areas that were converging, or how did that come about?

Harry Saunders:            Well, it really came about when I saw an article on peak oil. I said to myself, "Well, wait a minute, if oil is such a fundamental part of the economy, what happens when that happens? What happens to economic activity? In those days it was mostly the environment. Climate change wasn't ... We weren't aware of it yet. The signal to noise ratio was very, very low, so I don't know, it might have happened in the shower where I hit my head. I don't know, possibly.

Jason Jacobs:    Tell me about the difference between climate change, and environment, peak oil. If it's not climate change, that's the word peak oil, then what is it?

Harry Saunders:            Back then it was basically pollution, air quality, water quality. It was becoming very evident that economic activity was having a negative effect on the planet. Just by way of further background, I was not a full-time academic all these years. I made my living as a management consultant, and then all this academic research was kind of like a hobby. It was like hotel rooms, airplanes, nights, weekends, vacations, so I thought of it as sort of a hobby, and my wife and four kids think it's a ridiculous hobby, but it's been satisfying to me.

Jason Jacobs:    They must think you're pretty cool though, since your nickname is the Godfather of Rebound.

Harry Saunders:            Oh, where did you get that one? Oh yeah, yeah. I got into that in sort of the late 70s, I guess. To paint a bigger picture, what possesses me right now is sort of long-term civilizational sustainability. I look at it this way, okay, so there's something like 100 billion stars in our galaxy, most of which have planets. There's 100 billion galaxies in the visible universe. Somewhere out there is a civilization that has achieved indefinite sustainability within the bounds of their planetary natural capital, and I want to know what their economy looks like. How do they do this? That's kind of my current what possesses me at the moment.

Jason Jacobs:    You're suggesting it doesn't look like what our economy looks like today?

Harry Saunders:            That's the question I want to explore. Can you have a free market, private ownership economy that still allows indefinite sustainability for a civilization on a bounded planet? Done a fair amount of work modeling to see what does that look like, and it's kind of looking like yeah, you can do that. That may be the best form of an economy is free-market private ownership economy overlaying by government got to set the rules, and it only works if you have like perfect competition, so there's got to be a government there, but that engine, I worry a little bit that we've got to tame the horse, but we can't kill the horse that's going to take us into the future, especially when you consider the economic hardship we see today in developing countries. I've kind of wandered off there. Bring me back here.

Jason Jacobs:    Yes, you were talking about how you were management consultant, and there was this intersection of energy, and economics, and climate that were converging, and that you wanted to focus in these areas, and that you kind of switched back and forth between the management consulting and academia over the course of a long career. I think that's where we were.

Harry Saunders:            Yep, you got it.

Jason Jacobs:    Why do they call you the Godfather of Rebound?

Harry Saunders:            Oh geez, okay. Maybe let me first say a word about what rebound is, okay? The larger question is energy efficiency. If you look at all the projections of climate models and so forth, energy efficiency plays a very large role in determining what energy demand, and consequent emissions will be.

Jason Jacobs:    Is energy efficiency where you spent the bulk of your academic pursuits?

Harry Saunders:            So far, yeah. I would say that's fair. I'm moving away from that now, but yes, that's the bulk of it. Rebound is the idea that when you introduce an energy efficiency gain, you don't get a one-for-one reduction in energy use associated with that. Basic idea is, roughly speaking it, because it looks to users like a price reduction, and so there's a tendency to use more of it.

Harry Saunders:            The question is how much more? Is it trivial or is it large? It's all over the map really now. I mean there's probably hundreds now of peer review papers looking at the question, but it seems like it is significant and large. What that means is if you look at the projections of the International Energy Agency, for example. International Energy Agency calls energy efficiency the first fuel. Enormous amount of savings can come from energy efficiency, but studies are showing that rebound eats up a bunch of that.[2]

Harry Saunders:            That has obvious implications for emissions projections, and colleagues and I are trying to sort out how much, where that happens, and should we do anything about it? By the way, there's a little wrinkle in all of that, which is that energy efficiency in itself, and rebound in itself, actually increases economic welfare, so there are trade-offs there that especially lead to some thorny ethical issues when it comes to third-world countries, and whether they should try to suppress this rebound thing, or not.

Jason Jacobs:    Do you view your role as an academic, is it more to understand this issue, and then lead the others to debate the path forward, in terms of what we should do with this information, or do you form conclusions about that side as well?

Harry Saunders:            Conclusion, for example, would be we have to be very, very careful in trying to counteract rebound in developing countries. That will hurt them. I just want to point out, it's mostly kind of describing the playing field. Right now I've been writing a paper with some 18 colleagues from around the world where we're trying to highlight what we know, what we don't know, and what we need to learn. There are areas of contention that we want to highlight, so it's to try to display the playing field to policy makers, help them understand pitfalls, and also where these areas of contention are, potential areas for other researchers to find fruitful, productive research projects.

Jason Jacobs:    On what topic are you writing this paper on?

Harry Saunders:            This topic is, well the title is going to be Energy Efficiency, What Have We Gotten From Energy Efficiency in the Last 40 Years? Something like that.

Jason Jacobs:    You published a paper on this in 2013?

Harry Saunders:            I published several. I don't know which one, maybe, you're referring to.

Jason Jacobs:    I read, in some prep for this interview, I read one that you published in I think it was 2013, and then it seemed like it was pretty contentious where NRBC, and some other academics were writing rebuttals, and so I guess it would be good to understand where that paper fits into your overall body of work, but it would also be good to understand if it's been contentious, why has it been contentious? What form has that contentious took? Maybe more color around both of those things.

Harry Saunders:            Yeah. It really goes back to Amory Lovins made claim starting in the 70s that there were huge, huge reductions in energy use possible via energy efficiency. A few of us started challenging that. There are kind of two camps there that Amory was not the only one. Amory, by the way, is a very bright, brilliant guy, and for 30 years I have considered him a friend, but we kind of knock heads around this topic.

Harry Saunders:            There has been a camp that's sort of saying, "Well, rebound is overblown. It doesn't matter, it's second order effect at best. We can ignore it. Let's go full out in energy efficiency. It will save us a whole bunch of emissions and energy use." Organizations like the NRBC and so forth took pot shots at the analysis. That seems to have settled down. I think there's a pretty strong consensus among researchers world-wide that it is something that we definitely have to pay attention to.

Harry Saunders:            You worry about urgency. It makes urgency even greater if we're kind of fooling ourselves about how much it can accomplish by way of emissions reductions.

Jason Jacobs:When people like Amory have talked about energy efficiency, historically what do they mean in terms of actions, and by whom?

Harry Saunders:            Amory, Rocky Mountain Institute that he founded has done lots of studies that are right down on the ground, in the dirt, with companies and industries, showing them ways that they can reduce their energy use. He's got a host of practical suggestions along those lines, but then aggregates it all together into a global picture that doesn't, to me, fit reality very closely.

Jason Jacobs:    Those suggestions, just high level, what kind of things do they advocate for?

Harry Saunders:            There's many different, but one that springs to mind recently is just they figure out ways to adjust piping industrial plant that reduces energy loss in the flow of various products and gasses. It was quite concrete, and that's good. By the way, energy efficiency is good. We need to pursue it because it is welfare creating. It's a good thing. It's just I think we have to be careful about fooling ourselves how much it can do for us, emissions wise.

Jason Jacobs:    Okay, so is your contention is at this rebound effect, it's essentially ... Is a good analogy for this, let's say there's a snack, crackers, Wheat Thins Crackers, I'll even make it more specific, and they come out with Wheat Thins Crackers that say they're 50% less calories than fat. The rebound effect would essentially say that because these crackers have 50% less calories than fat, I'm going to eat three times more of them.

Harry Saunders:            Yeah. Yeah. There's probably a good way to tackle that issue that I think you're getting at is there's a difference between energy used by households and energy used by the productive economy. By that I mean industry, commercial transportation, and commerce. Household side is what you use in your home, and for personal transportation. We look around, and we say, "Well, geez, if I change my light bulbs to efficient LED light bulbs, I'm not going to run them twice as long." That kind of thing.[3]

Harry Saunders:            There is evidence that in the household side, where most of us are inclined to draw our picture, but what any energy efficiency does, or promises, is only about one-third of the energy use of the global economy, two-thirds is over on the productive side of the economy, and that's where we're seeing very large rebounds occurring. That analysis, and measurement, and so forth is quite troubling. It's a different thing because in economist speak, households maximize their utility, whereas producers maximize their profit, and that leads to different behavior around energy efficiency.

Harry Saunders:            Then, of course, there's the whole, and I know this is dear to your heart, it's a really complex systems problem as it works through the economy, various sectors. It's a really complex systems problem. To really see if I introduce energy efficiency over here, how is it going to affect overall economy-wide energy use? People are working on that and doing great work, but it's complicated. The point being, getting back to your cracker analogy, it's a little different on the productive side of the equation when it comes to energy. I'm not sure about calories, so that has to be taken account of. We have to change our picture of what energy efficiency does outside our personal realm of experience.

Jason Jacobs:    On the commercial side, if that's where the bulk of the rebound is occurring, are there any examples that come to mind that are illustrative of this effect, and why it might be occurring? Is there any example that could just highlight what is occurring, and then it would be interesting to also then take a look at why it's occurring, psychologically, or incentive wise, or what's bringing this about?

Harry Saunders:            Most of the studies basically take time series data of energy use by industry, commerce, commercial transportation, and then track through, kind of measure the energy efficiency that has occurred over that time, and look to see how that matches with is it a one-for-one reduction in energy use per unit energy efficiency, or is it a lot less, or is there even backfire, and there's evidence that there's backfire? I know you want to get concrete.

Jason Jacobs:    It's just very theoretical. I'm just trying to understand it in the real world.

Harry Saunders:            Yeah. Suppose you have a production process, and some brilliant engineer comes up with a way to produce the same amount of output with a whole bunch less energy. You say, "Wow, that's good. Let's do that." Then, part of what happens is that well guess what, it allows for an increase in profitable output of that, which drags up energy use. It also reduces the price of the product that your customers see, so they want more of it, and more of it requires more energy.

Jason Jacobs:    Does this tie back then, more broadly, to the question about GDP growth, and where that fits into our future as it relates keeping the planet viable for life?

Harry Saunders:            Sure does, yeah. Researchers have been doing lots of work on the connection between energy use, and GDP, and emissions. It's a complicated problem, but there is a pretty tight link between energy use and GDP. I'd like to go back and just one of the things that we talked about earlier was you sort of said how has my perspective changed on things over the years? I'll circle it back to the GDP question, but it relates to third-world countries.

Harry Saunders:            In 1977, I was at the International Energy Agency. At that time there was something going on called the North South Conference. North being the so-called rich countries, G7, the South being the developing countries, G17, and I got to go to a session then. Developing countries, there's a lot of discussion, we need to industrialize. We've got to get some heavy industry in here. We really have to develop. On a break, I went over to one of the folks from the south, might have been from Ghana, and I asked him, I said, "Here I am, 60s guy, environment, you don't want pollution, what do you want industry for etc. etc.? " I said to him, "Don't you worry that if you do all this industrialization that you're going to pollute your environment?"

Harry Saunders:            This was a tectonic shift for me and my viewpoint. He looked me in the eye, and he said, "You've never been hungry a day in your life have you?" It was like boom. Okay, there's a shift in perspective. It's not just about pollution, it's about the welfare of people that are dirt poor, and struggling, and suffering, and just got a whole lot more complicated. When we come to GDP, they need GDP, using that as the proxy for economic welfare. There's billions of people in the world today that survive on traditional fuels like dung and charcoal, huge indoor air pollution problems.

Harry Saunders:            Something over a billion people don't have access to electricity. If there's something we need, we're going to need more energy.

Jason Jacobs:    If I could ask one question, one discrepancy I've heard from people coming at the climate world from different perspectives is that there are people that have worked on it a long time, and think it's an important problem that have very different viewpoints on one specific topic, and what that topic is is how bad are things going to get? For some people, they say, "You know what? It's going to get bad, but it's not going to get as bad as people say, and yeah, we need to focus on solving it, but we also need to factor in energy poverty, and the growth of the middle class in developing countries, and it would be hypocritical of us to say that they can't." I understand that perspective.

Jason Jacobs:    There's another group of people that say, "Yo, if we don't figure this out, it's not just the poorest that are going to suffer, it's all of us because we're all going to be the dinosaurs." The planet will not be inhabitable for human life any longer. There's catastrophic tipping point story about there's whatever the opposite of virtuous cycles are, where one thing feeds off the next, and then acidification of the ocean, and the carbon in the air, and the droughts, and the heat, and the certain parts of the planet are uninhabitable, and forced migration, and war.

Jason Jacobs:    Before we even get into equity, what is your view just in terms of at a macro level in the aggregate for our species, how bad are things going to get?

Harry Saunders:            Both those points of view are correct. It is a huge problem. It's urgent, and it's frightening, but I tend to be an optimist. I think these problems can be solved. Yes, the energy that's needed for the poor countries needs to be as clean as we can make it. I'm fortunate to be able to interact with climate scientists, and it does look very scary. I agree, but I just feel in my soul that it is solvable, and that we'll get there.

Jason Jacobs:    I'm an optimist too, and I agree, but the way we're going to get there is by ruthless prioritization. If we try to conflate keeping the planet inhabitable with ... You can justify continuing to burn coal, or you can justify making natural gas more than just a bridge fuel. You can justify a lot of things by the other quality of life improvements that don't have to do with our carbon budget specifically. Who am I? I'm a healthy white guy. I'm not in a position to talk, but I'm actually stepping outside of myself. If the planet is not inhabitable for humans any longer, we all lose, including the poorest of the poor. In the odds higher that that comes about if we don't have ruthless prioritization.

Harry Saunders:            Well, I do think ruthless prioritization is necessary. The solutions are, as you've worried about on your podcast, we need to do everything. We need to do it fast. We need to do it urgently, and I have no trouble with that. I do think, unlike some of your other guests, that technology in the form ... Nuclear powers' got to be part of that if we're going to get there. It just has to be part of it. It's not the only part. There are tons of other pieces, like you say. There's like thousands of things that we have to do.

Harry Saunders:            It is urgent, and we do need to do that, but we also, in my view, need to take account of the poor people in the world that need energy, and need economic activity. You talk to colleagues in India and Pakistan, it's like yeah, well. There's a trade-off there, and it's a tough trade-off.

Jason Jacobs:    Where does that fit in terms of ... There's people that say that efficiency is impactful and there's people like you that say actually with this rebound effect, efficiency isn't going to get us the gains that we think it will, but then there's this other of ruthless prioritization on carbon budget, with other things like equity, and living standards, and energy abundance, and things like that. Are those toggles correlated in any way, or are those two complete separate and distinct issues?

Harry Saunders:            I think what brings them together is the innovation, that you talk about, for clean energy technology. That's the path, and we should be having much greater R&D funding for that. The solution is on the energy supply side. That means technological advance, and that is beneficial to both sides of that equation. You develop clean energy for poor countries. That's good.

Jason Jacobs:    Okay, so I'd like to go one level deeper there. The rebound effect won't get us nearly as much as we think it will, and we also have to factor in making sure that the billion plus people without basic electricity in the world still get to rise up, and have the basic needs that we take, essentially, for a right here in the West. Given those, that means that we need to really step up, and get more aggressive in some other areas. That's what I'm hearing, right?

Harry Saunders:            That's part of it.

Jason Jacobs:    Okay, so I'd love to talk about, hear from you, what those areas are, in a way that maybe one level more specific, but it would also be great to talk about, if that's part of it, what are the other parts that we haven't yet discussed?

Harry Saunders:            The other part of it is that there's good evidence that as countries go through development and industrialize, that their emissions start to level off. There's something called the Environmental Kuznets Curve, and I just reviewed a paper yesterday from Pakistan showing that as they've shifted toward the services sector, countries that are in the stage of development have to build the infrastructure modernity and that's energy hungry, and dirty, and so forth, but once they get above that, all of a sudden, that begins to dominate their economy and emissions.

Harry Saunders:            A solution is getting those people wealthier because wealthier will, in and of itself, in the long run, reduce emissions more than if they stay at the current stage that they're at, and we just say, "Okay, well you're on your own now. We've done what we can. Yeah, we had it pretty privileged for a couple hundred years, and ate up most of the fossil fuels, and so you guys figure it out."

Harry Saunders: I guess the point I'm making is that as countries develop, we see that there are improvements in emissions, and that, I think, means that if we dedicate effort to that, to getting those people what they need, in the long run we'll be better off, emissions wise than if we don't.

Jason Jacobs:    I've heard lots of people come on this podcast and say that we can't forget about energy poverty, and we have to factor in energy poverty. You're the first person to say what I think I just heard, which is that by focusing on energy poverty, that is actually an impactful decarbonization solution. Is that what I'm hearing?

Harry Saunders:            That's right. Over time, I mean at the beginning, no. It'll look like it's more, but over time, yeah. The other thing that happens too is that as countries get rich, their fecundity rates drop, and population growth diminishes, and you get kind of a saturation of population. Right now, Africa is kind of the key uncertainty there because as to what population will be, but a lot of forecasters are saying that by 2015, we'll have peaked, will have topped out on population globally, with possibly a slight decline after that. Why? Well, because as they get wealthier, they have fewer children.

Jason Jacobs:    I guess, I'm no economist, but just from being a student of the world if you will, it seems to me that if you look at our country, the abundance that we've had, and we have now generations that don't know it any other way, that are on this planet, and so they think that's just like baseline because that's what they were born into, and so for those people, does the consumption really slow down because it seems like it just speeds up, or it just stays, or maybe even accelerates, but it's our path to point of diminishing return where it's not about utility anymore, it's just about consumption for consumption sake.

Harry Saunders:            I have a slightly different view of that, which is that I'm looking at civilization, 50, 100 generations from now, and cannot sustain, is that there is a saturation or satiation point for consumption. Taking myself as an example. I don't want any more than I have. I've got food. I've got shelter. I've got clothes. I've got internet. I live in California, which is fantastic. It's difficult when I generalize from one data point, but there is evidence that as countries get wealthier, there's a tendency for consumption to saturate, and move toward, you're talking about more generally, but utility toward say more leisure time.

Jason Jacobs:    Eating stuff when you're not hungry, just because it's there. Crappy food, buying stuff you don't need just because you had a bad day. All these things that are just like, they're like destructive symptoms of abundance of wealth.

Harry Saunders:            Yeah. There's something to what you're saying there for sure. Lots of us do stuff like that, but again, in the long of time ...

Jason Jacobs:    You're so used to getting handed things, or having it easy for you, that there's a reason why a high percentage of immigrants are entrepreneurs, because they know how to create from nothing. We think we know how to create from nothing, but we don't even realize that we started on third base.

Harry Saunders:            We are in such a privileged position. That's why, one of the reasons I think we should always hesitate to form judgements about others in the world that aren't nearly as fortunate. We should recognize our good fortune, and like I say, I think in the long of time, we'll see there'll be a saturation of consumption, and increase in leisure time, and a little more saving for retirement, and just general appreciation, direct appreciation, of nature, and natural capital. That part of utility function will come into play, and help us out.

Jason Jacobs:    Then, let's look at the portfolio of our time and resources. If you want to solve climate change most effectively, I mean you have energy poverty, you have policy stuff, you have innovation, you have R&D budgets, you have clean technology, you have micro mobility, you have fixing aviation, I mean you could do anything. What would you do?

Harry Saunders:            Ha ha ha, yeah, this is the thing I love about your podcast is that whole theme is that there just so many avenues. How do you pick a place to try to do something? I'm sort of taking this as equivalent to a question about, this is the billion dollar question, isn't it, you're asking me here?

Jason Jacobs:    I'm not. I haven't even gotten to that one yet. Right now, I'm just asking what area should we be leaning into? We haven't even talked about capital and allocate data. I'm trying to understand. It's like we've talked about how energy efficiency is not that, in your view. We've talked about how energy poverty is an area that is under invested in, but we haven't talked about where to prioritize it, and instead of what? Okay, instead of efficiency, let's say. If it's instead of efficiency, what fills out the rest of that portfolio, and is energy poverty where we put 80% of our attention? Is it where we put 5% of our attention? I'm just trying to understand context.

Harry Saunders:            I know. I know, and that's the thing that I was saying about your podcast. I love it that you're sort of saying, "Look, if we have limited resources, where do we put it, and how do we know?"

Jason Jacobs:    Yours is just one viewpoint, but I don't want to leave the show without understanding your viewpoints. I understand that you've done some work in the rebound effect, and I understand that you've been awakened about energy poverty. You're an optimist. Why are you an optimist, and what will we actually do that will make your optimistic visions come true?

Harry Saunders:            Yeah. Again, I'd say the first thing is nuclear power has got to be ... You look at the cleanest economies in the world, and it's nuclear power that has gotten them there.

Jason Jacobs:    Instead of wind and solar?

Harry Saunders:            No. Wind and solar is going gang busters, at least in terms of its cost advantages. There's got to be a blend of nuclear and renewables, and figuring out battery technology with variable sources like wind and ... We can't do that now. That's not going to get us where we need to go. It's part of it, but it's not alone going to get us there.

Jason Jacobs:    What do we do to get that because it's not cost competitive today, correct?

Harry Saunders:            That's probably true, but it kind of depends on how you evaluate cost, with the extra long lifetime of nuclear and so forth. New R&D, next generation nuclear, small modular reactors, that's got to be given a real high priority. Take China, for example. China and India are both projected to be installing so much coal capacity.

Harry Saunders:            I was involved in study for the Asian Development Band and this was 2012. At that point, the forecast showed that developing Asia alone, ignoring the rest of the world, emissions by 2030, we're going to break the two degree C limit. China's on top of it, getting better at nuclear, and so forth, but the best thing that could happen in the world is if they could magically change their plans from coal to nuclear, and their gasses, there's that whole thing.

Jason Jacobs:    Since they can't, how does energy poverty fit into all of this? Should we keep building coal plants because so many people in the world don't have access to basic energy?

Harry Saunders:            That's the ethical question that I leave in your hands. It's not for me to say that. It's for my colleagues in India and China to make that judgment, in my view.

Jason Jacobs:    Nuclear is one thing you'd like to see more of. What else?

Harry Saunders:            I would like to see a push for energy efficiency. It has other benefit besides reductions, and chances are, the evidence seems to say rebound is not going to be 100%, or increased energy use by deploying energy efficiency. Keep doing that. Keep energy efficiency front and center. Build on it, just don't fool yourself that that's going to be the solution. Between energy efficiency and nuclear, and renewables pour money at them.

Jason Jacobs:    What's the role of government in all of this, and what's the role of policy?

Harry Saunders:            I think governments role is first of all, the RD&D, bump that up a lot. Then, there's people like Bill Gates that are rich enough to do it on their own. RD&D and keeping the options open as long as we can, and not permitting to particular tracks except in as much as we have to, so that we'll have the flexibility to take an off ramp here or there and do something else. I think there's a role for government policy to make sure that that flexibility isn't interfered with.

Jason Jacobs:    Do we need a price on carbon?

Harry Saunders:            As an economist, there's always this appeal of a price on carbon. I like it. There are other economists that I respect that say, "No, it's not going to do the trick." There's thorny issues having to do with income distribution that I think can be solved with payments to users, and there's been examples like in British Columbia where it seems to have worked, but I think politically, it's just so many countries, I doubt that it will ... Even if it is a really good solution, and there's lots of reasons it gets all the right price signals. I doubt that we're going to see anything major in that direction. I think we have to turn elsewhere.

Jason Jacobs:    One other question before we get to the $100 million question is just that I saw your name and bio on Breakthrough Institute's website, so you're affiliated with them in some way, right?

Harry Saunders:            Yeah.

Jason Jacobs:    I know they're big proponents of this Ecomodernist Manifesto. Stewart Brand, and uncoupling GDP growth from the alliance on natural resource, but continuing to push strongly on GDP growth as kind of an engine of productivity and innovation for the future. Do you agree with that?

Harry Saunders:            I do. I do agree with that. I think they've got the right vision, and you've had Ted Nordhaus on your show. Jessica Levering I see has been on your show.

Jason Jacobs:    They have, both of them.

Harry Saunders:            They're really smart people. I always learn something from those people, and I always learn something from my colleagues at the Carnegie Institute, scientists there that I'm hoping you'll interview maybe Ken Coldare, I think you maybe said that you might be able to.

Jason Jacobs:    I would love to, yeah. He's nibbling. He's thinking about it. It seems like he's going to come on, but a little push from you can't hurt.

Harry Saunders:            Okay, well I'll prod him a bit. In the general framework of what you're doing, by the way, I just admire what you are doing, Jason. It's sort of like let's learn. Let's talk to a whole bunch of different people. Don't lock in your world view. Never lock it in. I tried to never lock mine in. Just learn and grow. Somebody like Ken Coldare, I mean he's so smart in that atmosphere, ocean scientist, energy systems guy. He has the ability to ask what appeared to be very simple questions. It's like, "Harry, why are you saying ..." I'd say, "Well, wait a minute. Wait a minute. Let me go think about that for a while."

Harry Saunders:            He does that with all his post docs. He has this stable of these incredibly smart post docs from all over the world, and he guides them that way, so it's keeping an open mind, learning as much as you can, and just what you're trying to do, and to your great credit, are bringing others along, helping them learn along with you. I think if we're learners, we've got to be lifelong learners, and allow ourselves to change perspectives as we go. Ken is a real good example of that, and highly respected scientist etc, etc, etc. Where did we start with ecomodernism?

Jason Jacobs:    You had said that you do believe that continued focus on GDP growth is the right path, and why do you think that is? What led you to that conclusion?

Harry Saunders:            Well, it was that incident in Paris in 1977, where this guy looked me in the eye and said, "You've never been hungry a day in your life have you?" That was like world view just shifted. Mostly I'm thinking GDP growth globally, but mostly should be for developing worlds.

Jason Jacobs:    How do you get out of the cycle of inequality though, whereas capitalism continues to play out, the rich keep getting richer?

Harry Saunders:            Yeah, that's a really difficult and I'd say urgent problem because there's inequality even within the developed world, right? We have poverty close to home, and serious poverty, and that's got to be dealt with. In the end, the solution is somehow getting people's incomes up so they have enough to save because my current working theory is that the problem with, a key part of the problem of inequality is that there's a shortage of capital. There's not enough capital. When there's not enough capital, what happens?

Harry Saunders:            Capitalist can claim rents. It's short. The labor surplus, capital is short. It claims rent, so what we need is to have households saving, which is a source of capital, and we see a little bit of that right now with the close to being full employment in this country. The wages are starting to tick up. Yep, so labor is gaining now because there's not a shortage of labor yet, but it's no longer a big surplus when compared to capital. I think the solution at least will look like low income cohorts having income high enough to be able to save. I think that will be a route to solving that really thorny problem.

Jason Jacobs:    If someone came to you and said, "Harry, here's $100 billion, and you're not the Godfather of Rebound anymore. You're the Godfather of Climate Change," and you can allocate that however you'd like. The only caveat is you need to do it in a way that maximizes the impact on the problem. Where do you put it?

Harry Saunders: I'm going to cheat on this a little bit because my first reaction is to say, "Well, I'll tell you what, you need to go listen to Jason Jacobs' interview of himself, and how he answered that question." That seemed like the right answer to me. We kind of need to do everything, but you'll force me into one thing, and that would be energy poverty. My sense is it has the long-term largest potential impact on climate mitigation.

Jason Jacobs:    We're going to tease this episode with that quote when we publish it, and that's going to stimulate a whole bunch of dialogue because nobody's ever said that before. Out of hundreds of people I've talked to, you're the very first person that's said that not only is energy poverty morally the right thing to do to care about that, but that actually it's the most impactful thing you can do for climate change. I wish that were true.

Jason Jacobs:    I don't know, personally, that I'm there. I think it's interesting that that's where you are, and I think that's a worthy discussion. I want to get more voices and more minds around that topic as well because it's a good one to push on. Last question, Harry, is this. I have to ask this a different way because I used to say, "Hey, what's your advice for people listening that want to figure out how they can help." I need to get a little more specific because our listeners, if I'm honest, it's not Aunt Mildred trying to make her windows more efficient. These people are serious because this is not an entertainment podcast.

Jason Jacobs:    If you come looking for entertainment, you don't say because as much as we might think we're entertaining, we're not that interesting, but if you want to learn, we're talking about a bunch of thorny stuff that's really important to talk about and press on in. Hopefully you come out of here with your mind expanded and learning. You've got to be serious because it's not interesting, right? For those people that are serious that are here, what advice do you have for them?

Harry Saunders:            Okay, my advice is to throw yourself into learning as much as you can. Listen to as many voices as you can. Don't close down your world view, and what will happen is you'll find a thread that you can pull on that indicates the pathway where you have mechanical leverage where you can have impact, and it'll be better informed. It'll be fully informed, and my sense is that's what happens if you talk to a whole bunch of smart people, and keep an open mind, and that something will pop that says, "Hey, that's something I could make a contribution in."[5]

Jason Jacobs:    I like that because I get this question all the time of like, "Hey, I'm whatever, doing this totally unrelated thing, and I want to focus on climate change now. What should I do?" I can't answer it, and so it's hard for me to even keep taking those because I can't answer it in a short way, but actually, the long form way that you just said, I'm probably going to write a blog post that tries to give the answer I would actually give because it's not the clean, crisp, easy to operationalize answer that everybody wants, but it's the true answer.

Harry Saunders:            Yeah. Yeah. The other piece of advice I'd say is listen to your podcast. There's some resources there. Very smart people that you talk to, all different perspectives. That kind of thing is part of listening, and learning, and not locking into a point of view.

Jason Jacobs:    I feel like this was a great discussion. Anything I didn't ask you, or any parting words for listeners?

Harry Saunders:            I can't think of anything. Just again, I admire what you're doing. It's the right thing, and I know that it comes at personal cost to you, and that's admirable.

Jason Jacobs:    Thanks so much, Harry. Thanks for all of your work in this important area as well. I appreciate you coming on the show so much.

Jason Jacobs:    Hey everyone. Jason here. Thanks again for joining me on My Climate Journey. If you'd like to learn more about the journey, you can visit us at myclimatejourney.co. That is .co, not .com. Some day we'll get to .com, but right now, .co. You can also find me on Twitter @jjacobs22 where I would encourage you to share your feedback on the episode or suggestions for future guests you'd like to hear. Before I let you go, if you enjoyed the show, please share an episode with a friend or consider leaving a review on iTunes. The lawyers made me say that. Thank you.