Today’s guest is Phil Giudice, Board Member at Ambri, FirstFuel, PRIME Coalition, Clean Air Task Force and NE Clean Energy Council. Phil's climate background is extremely diverse, working in oil and gas, energy strategy consulting, state government, and multiple startups, over a long, successful career. Our discussion is wide ranging, and Phil is quite reflective on the lessons of the past, and how to apply them looking forwards. Great episode for anyone trying to make sense of climate change and how to help. Enjoy the show!
Today’s guest is Phil Giudice, Board Member at Ambri, FirstFuel, PRIME Coalition, Clean Air Task Force and NE Clean Energy Council.
Most recently, Phil was the CEO of Ambri. Ambri, formerly Liquid Metal Battery Corporation, is a technology company creating cost effective, reliable, wide spread grid electricity storage solutions, enabling separation of power demand from power supply. Phil has more than 30 years' experience in the energy industry as a geologist, consultant, executive, and state official.Phil was appointed by US Department of Energy Secretary Steven Chu to US DOE's Energy Efficiency and Renewables Advisory Committee as well as its State Energy Advisory Board. In addition, he is a board member for the energy business leadership trade group Advanced Energy Economy as well as the efficiency start up FirstFuel.
Prior to Ambri, Phil served the Commonwealth of Massachusetts as Undersecretary of Energy and as Commissioner of the Department of Energy Resources, the state agency with primary responsibility for fulfilling Governor Deval Patrick's vision for a clean energy future. Prior to his service in the Patrick-Murray Administration, Phil was senior vice president and board member at EnerNOC, a start-up providing electricity demand-management services to businesses, institutions, utilities, and grid operators that became a public company in 2007. He was previously a senior partner and leader of Mercer Management Consulting's global energy utilities practice for 20 years. He started his career as a metals exploration geologist with Freeport-McMoRan and with Chevron.
Phil is also active in the nonprofit realm, having help found the Center for Effective Philanthropy and serving as Board Chair for 8 years as well as currently serving on the President's Council of ACCION. In addition, he completed full terms on the boards of the City Year Boston, First Parish Church of Wayland, and Haitian Health Foundation. He was also the founding chair of Boston Cares. Phil is a geologist (B.S. from University of New Hampshire and M.S. in Economic Geology from the University of Arizona) and a management professional (M.B.A. from Tuck School of Business at Dartmouth).
In today’s episode, we cover:
Links to topics discussed in this episode:
You can find me on twitter @jjacobs22 or @mcjpod and email at firstname.lastname@example.org, where I encourage you to share your feedback on episodes and suggestions for future topics or guests.
Enjoy the show!
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. Today's guest is Phil Giudice. It's an honor to have Phil on the show because he has got 40 years in and around clean tech at a very strategic level from a wide range of perspectives.
Jason Jacobs: Phil started his career at Chevron, spent 19 years at Mercer Management Consulting where he ultimately led their energy practice, was employee number three at EnerNOC, one of the leaders in demand response that ultimately went public. He was also the CEO of Ambri for many years, a long-duration battery company. Phil also spent time in government as the Commissioner of the Department of Energy Resources for the Commonwealth of Massachusetts and ultimately the Energy Undersecretary for the Commonwealth of Massachusetts.
Jason Jacobs: Phil has also been on several boards of both private companies and nonprofits in the space. Phil and I have a great discussion in this episode where Phil goes through his background and the impressive things that he has done, but he also talks about where we are in terms of solving decarbonization and what it will take in order for us to get there and kind of the pragmatic realities that we're not in a great spot, but also really why he is an optimist and what some practical things are that each and every one of us can do regardless of our position.
Jason Jacobs: If we are switching careers and want to work on it full time, if we're looking at what do with our time, if we're looking at what to do with our resources philanthropically, if we're looking at the political landscape and what we can do with our votes, I think we pretty much cover it all in this episode. I learned a lot, hopefully you will as well. Let's get him out here. Phil Giudice, welcome to the show.
Phil Giudice: Thank you. Glad to be here.
Jason Jacobs: Well, you're in the house, of course you're glad to be here.
Phil Giudice: Yes, I am glad to be in the house and glad to be here with you.
Jason Jacobs: Well, thanks so much for making the time. It's funny because I'm... well, I'm nine months in, but I would still definitely say I'm new and I'm really glad. It feels like a good time to be bringing new energy and fresh ideas and beginner mind to the space, but at the same time, that needs to be married with deep institutional knowledge. When I carve out an hour to come and speak with someone like yourself, it feels like standing on the shoulder of giants. You've done so much in your career for such a long time in this area, in the private sector, in the public sector, on boards, with philanthropic pursuits, and so it's a real honor to be here.
Phil Giudice: Well, thank you. I appreciate the acknowledgement and we're all in the beginner mind still. Yes, I've done some decades work in the space, but I don't by any means have the answers and I'm looking to learn and try to figure out how to be productive in the next decades to come to really make a difference.
Jason Jacobs: Well, I thought the only reason I didn't have the answers was because I was new, so [crosstalk 00:03:04]-
Phil Giudice: I'm afraid not. This is a lifelong pursuit and we'll get into some of that.
Jason Jacobs: Awesome. Maybe just for starters, how did you get here?
Phil Giudice: It goes back to college days and in college I started off as many have done, thinking about becoming a psychology major and I got exposed to that and said, "The science here just doesn't really appeal." It didn't feel rigorous enough to me and somehow I got into geology as a field. The science there appealed to me very much and as well as the sort of thinking about 4 billion years of Earth history and thinking about the jigsaw puzzle of finding a few pieces, a few rocks around the surface and trying to tell the story of how this all came to pass. I did that for about six years as a professional.
Phil Giudice: I got a Bachelor's and Master's degree. Was in involved right from the get-go as an employee for Chevron looking for uranium. I started getting excited about minerals and energy and all of that and it has become a lifelong pursuit. From there, I went back to school and got an MBA from Dartmouth and then got into management consulting, which was a field I didn't even know existed when I went back to MBA land. I'd gone to the school thinking [crosstalk 00:04:16]-
Jason Jacobs: I thought that's the only field that MBA people know exists?
Phil Giudice: Well, investment banking and MBA and management consulting are the two dominant hiring for top people from MBA schools, but I went to school looking for the union card that said I wasn't just a scientist type, that I actually had qualifications beyond that and people. In particular, I wanted to be in management and kind of working with different people. I assumed I was going to go back into an energy company upon my graduation.
Phil Giudice: In the course of my MBA, I got introduced to management consulting actually through a class project, and one of the majoring consultants there came up to me and said, "Hey, you got some skills that might be useful in this field", and so I said, "Really? Tell me more." It became a summer job and then I got hired in full time with the assumption, again, that I was going to do that for two or three years then go to a client or go to a startup or go to something else.
Phil Giudice: Venture capital was the other world that I looked at out of MBA and I really didn't like the idea of being sort of an apprentice in the back room running spreadsheets for years before I would actually get out and start making things happy. Management consulting just sort of hit as, "Wow, these are really interesting problems that we get to work on, really interesting people. Pretty motivated clients for the vast majority of it and let's give it a go." It turned out to be about 18 years of my professional life. After two or three years, I realized, "I really like what I'm doing", and there isn't anything else on the agenda that actually was stimulating me nearly as much. It was a unique time in the world of management consulting I think in many ways.
Phil Giudice: I remember some of our first clients, we could go away. We'd get sort of the problem sort of defined then we'd go away for a month. We could take some government data and replot it as pie charts and bar charts and come back and they would just be wowed. "Where did you get these insights?" Over time it became a very different set of challenges to create value for clients, but it was always a lot of fun and really motivated clients.
Jason Jacobs: All sectors?
Phil Giudice: I joined into the energy practice at Temple, Barker & Sloane. We got acquired by Marsh & McLennan. We became Mercer Management Consulting. Under that time, I ran the energy practice for about 10 of those 18 years worldwide and it was really interesting projects. My very first project as a summer associate, I literally was handed a plane ticket on the day I joined, told to meet my project manager the next night in Philadelphia, and the next day after that we were driving into a nuclear power plant.
Phil Giudice: We had been hired by the Commission of Pennsylvania to look at the prudency of this management team in operating an outage at that nuclear power plant that was ongoing and it was an outage that had occurred because a short had occurred in the generator. The generator is larger, maybe 10 or 15 feet in diameter and probably 30 feet long. A big electrical piece of equipment and it had vaporized about three cubic meters of this generator because the short had gone off. Our task was in real time as they were managing through this outage to help them and help evaluate how prudent they were doing on this task. I was the young associate on the job and collecting data and analytics and going to meetings and trying to understand what was going on.
Phil Giudice: In the course of that summer, the plant manager came to me at about halfway through and said, "Now, tell me again, where you nuclear Navy before this experience?" It was my very first time in a power plant of any kind, certainly a nuclear power plant, but I started realizing that asking smart questions, being open-minded about it, digging into the data are all things that can be really, really helpful. We pointed out some things that changed their practices and they were able to move along more quickly and get the outage completed, but it was a really interesting set of management challenges. That was the first summer.
Phil Giudice: Subsequently, I worked on a really diverse set of clients and circumstances. We did a lot of utility work, so we worked initially again for utility commissions where we would go in and understand every aspect of a utility, from getting the trucks rolling in the morning, helping to understand how meter reading is being done, how power plants are being constructed, transmissions lines, every aspect of the utility we would be hired to sort of make an evaluation of and offer suggestions for making it better. It gave me a really deep grounding in how utilities function and what the challenges are and what the operations are like to kind of make it all work and a really deep respect for the challenge of what all is involved in making a utility work.
Phil Giudice: It also got me involved in helping the federal government spin out The U.S. Enrichment Corporation, which was the branch of the DOE that had been enriching uranium for the entire civilian and military uses for uranium. We got it set up as a public corporation that was traded on The New York Stock Exchange, which developed relationships at the Administration, this was during the Clinton Administration, that got me in a team of folks in helping Ukraine look at options for post-Chernobyl. This was the 10-year anniversary of Chernobyl. We were there in 1996 and we were looking to build a power plant with all sort of private sector funding for a power plant the size of the continuing operating reactors at Chernobyl so that they could then shut down those reactors.
Phil Giudice: It got to be a very complicated set of circumstances. We actually had letters of intent from financiers and from off-takers and stuff we're kind of moving forward towards a first close on this about a billion-dollar project and then it got stopped politically because of changes in Ukraine that got to be impossible for State Department or the White House to work through and so it didn't come to pass. Again, really interesting problems, really fascinating sort of challenges that got me exposed to a whole different world. In Ukraine, they were actually adopting the deregulation model that had gone through much of the U.S. and Western Europe.
Phil Giudice: We were meeting with the Energy Minister there and he was explaining... I'll never forget. He was explaining to us that their biggest challenge in this deregulation model is getting customers to appreciate that they actually have to pay for the electricity they consume because in the Soviet world, there was this sort of State controlled everything and owned everything. The idea of getting customers to pay for electricity was not automatic. The idea of having a revenue stream that you could actually build into a new sort of competitive market structure and be able to potentially privatize this was actually not straightforward of a challenge. It was also a time where Ukraine had undergone sort of the first wave after the disintegration of the Soviet empire and they hadn't sort of built in the civilian structures yet.
Phil Giudice: I think at the time, one of the State Department folks had told me that something like 60% of the nutritional intake for an average Ukrainian was coming from farms that they would grow themselves, their own garden plots. A garden plot in Ukraine meant that someone in a Soviet-style apartment was coming down to their lobby, getting on a bus, driving five or 10 miles out of town to their little quarter acre where they were literally growing the food that their family was depending on as they were also trying to do their jobs and kind of make the world work. It was a very different exposure than what we're used to kind of in the United States here in terms of how government and society works.
Phil Giudice: There was a lot of other sort of fascinating experiences. I got involved in China on building major factories in China. Got involved a little bit in South Africa in trying to deal with some of the challenges of their post-Apartheid utility structure, but a lot of our work was with U.S. and North American utilities, Canadian utilities doing reorganizations, downsizings, re-engineering, trying to find efficiencies in them. Then, mergers and acquisitions, helping them through the process of figuring how they could actually lower costs by getting bigger.
Phil Giudice: It was all very, very fascinating work and, again, it taught me tremendous respect for the challenges of a utility, but also it was like tremendous appreciation for the limitations of utilities in terms of their ability to do adopt new practices and be innovative. It's just not built into their business models in a productive manner, so it becomes a real challenge as we try and move our whole world economy post-fossil into a much more renewable and sustainable future.
Jason Jacobs: I'm sure there's a ton more stories there from your time in consulting, and I also know that you've done so much since then. You've been on a bunch of boards, you've built a battery company, you've done some philanthropic pursuits, you had big roles in state government, et cetera, et cetera, et cetera. We could definitely a whole episode, probably several episodes just on past, but then there's also, where are we now? Where are we going? Given all the things you've done, I want to make sure we capture those as well, so maybe just kind of summarize when you left consulting what kinds of things you've done between that and now, and then we can switch gears and we can start [crosstalk 00:13:28]-
Phil Giudice: Dig in.
Jason Jacobs: Talking about the good stuff.
Phil Giudice: Good, yeah.
Jason Jacobs: All that stuff is good stuff, too [crosstalk 00:13:31]-
Phil Giudice: Understood [crosstalk 00:13:32]-
Jason Jacobs: Just to be clear, but we [crosstalk 00:13:32]-
Phil Giudice: Let me dig in [crosstalk 00:13:33]-
Jason Jacobs: But there's a lot we need to squeeze into this little episode.
Phil Giudice: Let me dig in. From consulting, it was actually 9/11, 2001, the day that the towers came down in New York. I was there. 300 of our colleagues actually lost their life there and I took a step back and said... I had already built up enough capital that it didn't look like I was going to need to work for money anymore in my life, so I said, "Let's back down massively in my consulting world and figure out what's next." I decided that I was just going to spend my time doing what's productive. I'm in my early-to-mid 40s at this stage and kind of looking at the world and it turned out that there was two or three charitable activities that I got real excited about, people that I knew brought me into them. Creating The Center for Effective Philanthropy, getting involved with my family down in Haiti on healthcare issues down there.
Phil Giudice: From that, I also got involved in startups and one of the startups turned out to be EnerNOC. I was on several boards, made some personal investments, and in EnerNOC I became what was called... initially my title was Managing Director. This is a brand new startup. I was like the third person to get involved besides the two founders and the concept was, how can we sort of tap into all of the end users and be able to harness their demand to avoid blackouts in the same kind of structure as we do with peaking turbines basically? We won a chunk of a significant RFP that were the ISO New England issued for emergency need for capacity in the next two or three years down in Southwest Connecticut.
Phil Giudice: We ended up I think turning on about a hundred megawatts of capacity over the next three or six months that they didn't have access to without EnerNOC that was able to be responsive in the urgent times where the alternative was we were going to go to blackouts or brownouts. Instead, we could tap into these customers to either lower their demand or fire up their backup generation to be able to be an alternative. Already an existing asset, so it was only about the internet and an implementation force that could go out and tap into these customers and make a difference. The economics were better than it was if we had built a new power plant down there, so it was really kind of attractive.
Phil Giudice: That was four years, became a public company. On the day that we actually went public, I got a call. I had gotten prior calls from the governor's office. I got call from the governor's office to say, "Hey, we've built a team here. We want to go and do really interesting things from a public policy standpoint in Massachusetts." I signed on as the Energy Commissioner, later became the Undersecretary of Energy, and it was a phenomenal four years. Governor Patrick, his Secretary of Energy and Environment Ian Bowles only wanted to do what made sense and they wanted to do as much of it as quickly as they could. We got a ton done. Made major legislation, pushed forward lots of specifics. We created with nine other Northeastern states the Regional Greenhouse Gas Initiative. I was elected as the Treasurer of that and then the Vice Chairman.
Jason Jacobs: You're giving me a serious inferiority complex here. Keep going, keep going.
Phil Giudice: It was just a lot of fun and it was really neat. This is also during stimulus times, so Obama had gotten elected that fall, 2008, and I was elected the National Chair of Energy official, so I was down in Congress testifying in the Senate and the House on Waxman-Markey and on other bills as it related and working with the White House on stimulus as it relates to energy. It was making a lot happen and was a lot of fun. On the day that I accepted, I told my family... my Mom said, "Why do you want to do that? The press is just going to eat you alive. It's just not going to be what you expect."
Phil Giudice: A lot of friends told me that my impatience would never work in the government sector and I was going to be six months, a year just climbing the walls and needing to get out of there. That was not at all the case. I often talk about those four years as some of the most productive in my life, not economically, but in terms of making a difference in the world and it was because it was an amazing team that was really motivated. One of the signature pieces of legislation we got passed was called The Green Communities Act.
Phil Giudice: A hundred percent support at the legislature. Every Republican, House and Senate, including our then State Senator Scott Brown voted in favor of this. That made major changes in how efficiency programs and renewables were being done in the Commonwealth. It was all geared as it can be at state level with the idea that maybe if we really can demonstrate success here others will take this up and do it in their states, or maybe we'll even get it on a federal basis or do it in different parts of the world. That was a very clear mindset on all of our part. Let's take some risk, let's do some experiments, and let's see how we can make a difference in the world.
Phil Giudice: There was a great deal of enthusiasm during that timeframe about what we were getting done, not just for ourselves and our little state here, but as potential examples that could be applied to other parts of the country and the world. It has been in part, but it's a real challenge and it hasn't had nearly the progress that I would have loved to see anywhere in the world against these things.
Jason Jacobs: Well, you've still done a ton of great stuff that we haven't talked about yet, but why don't we try to squeeze that into two final minutes about Phil's background because there's a lot of other stuff I want to get to. There's stuff that we have to cover that you didn't talk about yet [crosstalk 00:18:59] because we didn't talk about Ambri, we didn't talk about PRIME Coalition [crosstalk 00:19:03], Clean Air Task Force.
Phil Giudice: The next phase is [crosstalk 00:19:06]-
Jason Jacobs: FirstFuel-
Phil Giudice: Next phase... After four years, I said, "That's great. I'm done. Time for the next team to come in here." I assumed I would go back to basically advising different firms and sort of taking a more leisurely workload on. That's when I joined the FirstFuel board. Fascinating company. Really interesting analytic insight that they could actually do the equivalent of an on-site energy audit basically from microweather data and all of the interval meter data from a building. Commercial buildings is the focus and be able to discern dozens of end uses just from those data streams. It was really phenomenal. It evolved and recently it has been acquired by Tendril and it will continue to evolve in terms of its analytic richness and what it can deliver.
Phil Giudice: I also got a call from a professor who I had known from MIT. I had worked with just a little bit as a kind of a friend who had requested me to help him on a different venture and he asked me for my counsel in recruiting a CEO onto what was then called The Liquid Metal Battery Corporation, and of course, that conversation was quite clear he was actually asking me to join as the CEO, but he didn't want to come out immediately and asked that. We met and met with the team and I got real excited about it. Very novel solution to a very important business problem, which is storing electricity, and we'll get into some more of the specifics around that.
Phil Giudice: The novel solution was using liquid metal, akin to how aluminum smelters work, which now taking enormous amounts of electricity off the grid, turned dirt, bauxite, into pure metal at a cost of 50 cents a pound. The insight from the scientific team, Dr. Sadoway and others was that they could actually make that a reversible process, not using aluminum but with different liquid metals they could actually generate and regenerate cathodes and anodes by charging and discharging what effectively becomes a battery. It has some amazing properties, including almost zero fade, so it's likely to be able to last tens of thousands of cycles with no fade using earth-abundant materials. It looks like it will come out as very low cost.
Phil Giudice: That was seven years of experience on my part and it was really fascinating. We had great backing at the initial when I joined between the Gates investments and also Total. Subsequently, Khosla Ventures came onboard and other investors came onboard, but it has taken a lot longer to come to a commercial marketplace than I had hoped at that time.
Jason Jacobs: You're on the boards of Clean Air Task Force and PRIME Coalition, so Sarah and Matthew from [crosstalk 00:21:44] have come on. Armand came on, actually we just published his episode today. Deepika from Clean Air Task Force, we'll be publishing an episode from her as well that we recorded. I knew a lot of what we just talked about, but it was important for listeners for two reasons. One, I wanted people to understand that the discussion we're about to have is... people should really listen to what [crosstalk 00:22:10] you have to say because you've done a lot and have experienced a lot, more than almost anyone I know in clean tech. I was going to say clean tech innovation, but much broader than that.
Jason Jacobs: That's one, but then the second thing is you're an example of what is possible from one person in terms of for people that say, "But I'm just one person. How big of a difference can I have?" You've made such a big difference, but switching gears, I want to reconcile that with Phil. How are we doing in the climate fight?
Phil Giudice: We're not doing well and we're not doing well.
Jason Jacobs: That's now the discussion I want to have because, you see, I just talk to you and I get so pumped up. I'm like, "Oh man, you've achieved so much. I can go and if I can even have a fraction of the impact that you've had, then I'm doing great." That's amazing and I'm so inspired and that makes me feel good, but then if you reconcile that with how we're actually doing, we're not doing well [crosstalk 00:23:04]-
Phil Giudice: That is [crosstalk 00:23:04]-
Jason Jacobs: That's now the discussion that I want to have.
Phil Giudice: It's really disappointing and sad, and it's not just we're not doing well in the United States, it's we're not doing well as a planet against this challenge. As I look back, I think of times where it was like, "Oh, there was that opportunity. We could have continued to moving along this path and we've stopped." We've stopped basically everywhere in the world. There are some good things that are happening. Solar prices have come down massively, wind prices have come down massively. Even lithium ion battery prices have come down massively and deployments have gone up substantially, and so there's reason to hope around some of those things, but they certainly are in the necessary but not sufficient level when you start thinking about how big this climate challenge is.
Phil Giudice: It's way bigger now than it was 10 years ago. The kinds of things we did hoping that there would be an example for the country or the planet are still not adopted in a significant manner. The Regional Greenhouse Gas Initiative, trying to put a price on carbon, really looking at the electric cycle, which ain't by any means the whole problem, but getting them to reconcile the need to get smart about carbon and start bringing the carbon emissions down. Really great example of what's possible but it's not nearly enough and it's not expanding. There's sort of a California trading emission that has some Canadian provinces that were going to trade or going to join with them, but it's just... The European trading scheme that has been place, it's probably 10 or 15 years old now, it's really not moving the needle significantly.
Phil Giudice: China, we could have a whole session on China. I had so much excitement about it and I've done a little bit of work in China over the years. They were spending half of all the clean energy spend for technology investments as well as deployments worldwide. They had some very aggressive programs in terms of incentives to get renewables built out and they had some very clear commitments to reducing their coal-fired fleet. They overbuilt steel mills in there and they're relaxing all of those. They're reducing their support for the renewable sector and they're relaxing their constraints around the conventional sector because they're just so driven towards short-term capital gains and trying to keep employment up as much as they possibly can.
Phil Giudice: I don't see anywhere in the world... I see Europe is basically more abound around these issues. The U.S., we have clearly lost any sense of leadership around it. There's some phenomenal work that's going on at different states. Massachusetts continues to do some neat stuff. We're getting to have offshore wind developed, like an amazing amount compared to our little state's footprints. New York State has done some amazing things also, offshore wind and other programs, air storage and stuff, but these are little glimpses.
Phil Giudice: I think they need to still be nurtured and supported and spotlights shined on the positive aspects of it, but the climate challenge now... I think when I was doing my initial work in the public sector, people talked about, whatever, emissions at 290 or 350, 350.org, and now our emissions are at 400 or 450 or whatever the current numbers are. It's like, "Holy cow." We're just so quickly moving by all of those sort of guardrails that we sort of said, "These are important metrics and we've got to do things to start making a difference on them." I'm not optimistic that we're on a productive path.
Phil Giudice: Consequently, you can look at me and, yes, I have spent 40-plus years in this industry, but by no means am I sitting here saying I've got the answers to what we need to do. We're all sort of beginners when it comes to figuring this stuff out and figuring out what can be done productively and go make a difference on it.
Jason Jacobs: I have a bunch of friends, they hear I'm eight or nine months in focusing on it, my full-time thing, and they come to me and they're like, "So [crosstalk 00:26:57]-
Phil Giudice: The answer?
Jason Jacobs: "Give it to me." It's like if this is how you're feeling after 40 years, then imagine how I'm feeling. I'm like, "Right", and-
Phil Giudice: Embrace it. Don't feel comfortable with that. This is where, and we've had this conversation a few times, I'm so in favor of people picking up a shovel and moving some dirt and finding a productive path. It may not be the ultimate answer, it may not be the full solution. Everybody wants the simple bumper sticker kind of solution and the silver bullet that's going to solve this.
Jason Jacobs: Carbon tax [crosstalk 00:27:32]-
Phil Giudice: The moon shot [crosstalk 00:27:33]-
Jason Jacobs: And then everything is solved.
Phil Giudice: The moon shot. We're going to somehow [crosstalk 00:27:36]-
Jason Jacobs: Nuclear, that's it.
Phil Giudice: It's like I don't really want to get into those debates. They don't interest me. Go make it work in the world and then if you can get momentum around that and make more and more work, more power to you. I do favor carbon price. I think that a lot of the challenge in this world is we're all dealing with plan B solutions or even plan C solutions because we won't face what we really need is to put a price on carbon and just let it kind of work out its way as to, "Wait a minute." It has to be clear, significant, and probably an escalating price until we start bringing the emissions down and then people can start making plans again. Oh, by the way, then you start getting new investor money into this, that really makes sense kind of investor money, not the times that we've had over past years where investors have only looked kind of halfway thoroughly at this industry and said, "Oh, it's just like telco or it's just like something else and we're going to be able to make a lot of money in three years because we're doing to flip it and go public or whatever."
Phil Giudice: It's just not responsive to the realities of this industry, but if there was a real economic incentive because there was a carbon price that was clear, that would actually drive basic research, it would drive new undergrad and graduate students saying, "I want to work on this field for the rest of my life." It would drive new investors into this. It would drive deployments, and so I think carbon price is really important. I don't see the political will for it. I'm excited about a few initiatives that I see trying to bring this up, both on the Republican side and the Democratic side. We'll see what kind of momentum gets under any of this, and I don't have a real valuation as to who is on a productive path yet.
Jason Jacobs: I get your point about picking up a shovel, and actually I think about it all the time because you've said to me plenty, and I appreciate that, but any time it comes to picking up a shovel I can't help but feel like I'm trying to fight a forest fire with a flower pot.
Phil Giudice: I hear you. I don't have a good solution for you. I think that finding what you think is going to be a productive path and then making it work and then building on that is the key, but that's part of the nature of where we're at.
Jason Jacobs: Are you optimist?
Phil Giudice: I'm basically optimistic because I've seen us address such difficult challenges in the world, especially young people as they come into it and accomplish so many things. I'm fundamentally optimistic about human nature and particularly America's ability to deal with difficult things. We have dealt with difficult climate things in the past. The ozone was a really big climate challenge for us about whatever it was, 20 or 25 years ago. The science behind it was roundly dismissed as kind of preliminary and not really thorough. DuPont was the major producer of chlorofluorocarbons that was actually destroying the ozone and they just solidly went against the early science on this. It was a couple of I think California University professors of one of the schools there-
Jason Jacobs: That were on the DuPont payroll?
Phil Giudice: No, the opposite. They pointed out that this was going to be a real problem and DuPont just unleashed holy hell against them saying, "This is just not true. Their science is bogus. It's just way too preliminary." In the course of, I don't remember, two, three, four years the science got better and better and better, and I think in particular NASA got involved and NASA started looking at all the global satellite data that they could marshal. They realized there's this huge hole around the Arctic, Antarctica in the ozone and it was like, "Holy cow, we didn't know it was going to exist there."
Phil Giudice: They started doing sampling and understanding it better and it turned out chlorofluorocarbons was like a really big problem. DuPont went from this incredibly resistant corporation, and they were like, I can't remember, 75% or more of the manufacturing of this, and they went from that sort of, "No, no, no, there's no problem here", to saying, "Yes there is and we've got to figure out how to get off of this over the next"... I can't remember, I think they had a 10-year implementation plan to invent solutions that weren't going to destroy the ozone and it's worked. It's not like it's perfect and this was all under the Montreal Protocol, so it was a UN-driven process that said, "We have identified this really difficult climate problem. We've got to figure out a solution and we got to start adopting this kind of in a very quick manner." It worked and it worked against all of the resistance that you would have expected from the incumbents.
Phil Giudice: Same kind of thing happened in SO2 lands, so acid rain 10 years later was seen as a really big problem. It was defined as basically the Midwestern coal-fired power plants were generating so much SO2 into the atmosphere it was destroying all kinds of things in New England in particular and the lakes were becoming acidic. Scientists went about a whole process of saying, "What can we do about this?" Engineers and economists, and we came out with a really novel program called the Cap and Trade Program, and a certain amount of allowances were allowed and utilities had to buy equivalent allowances for whatever their emissions were. Lots of economists looked hard at this and they decided that those allowances are going to start trading at 2 to $3,000 I think it was per ton of SO2.
Phil Giudice: The reality was when that market structure, it's basically a cap and trade market structure was put in place, allowances traded at $200 a ton. Instead of building... The engineers, the economists all looked at the idea of these large coal-fired power plants, we need to spend a billion dollars", whatever it was, "To build flue gas desulfurization to take the acid out of their emissions before it went up the stack", which it was very clear what that could cost and how that would get translated down to a kilowatt hour and the equivalent possible allowances. It wasn't the solution.
Phil Giudice: The solution turned out to be Powder River Basin coal, which is very low sulfur coal compared to the Eastern coal, and all of a sudden those Powder River Basin coal, thousand, 2,000, 3,000 miles away depending on where they were, were being shipped in trains all the way to these power plants. I remember the Gavin Plant, which I think at the time was the largest coal-fired power plant in the United States, 5,000 megawatts, built by AEP, American Electric Power, and at the mouth of the mine for the coal production for that. It was built with the mindset that, "This is going to be the least expensive way to be able to produce power we won't have to transport it all. We'll have it at this mind." It was an underground mine and they were pulling it out of the mine and putting it right into the power plant.
Phil Giudice: They shut the mine down. They started importing coal from Powder River Basin. They never built a scrubber, at least at that time they hadn't built the scrubber, and then all of a sudden they were producing electricity at a lower cost than they were when they were operating that mine. The mindset of the incumbents was, "Oh, this is going to be disastrous, our electricity rates in the Midwest are going to go up by 20, 30, 40, 50%", whatever the numbers were. It turned out it was done at such a low cost because it created novel solutions and nobody necessarily had predicted the idea that this Powder River Basin coal could offset this high sulfur coal from the east until the market structure was put in place, so yes, I like a carbon price. I think a carbon price unleashes innovation, both from a technology standpoint and from a sort of putting together the pieces in a very different way than we otherwise would.
Jason Jacobs: You're an optimist because you feel like once a carbon price were in place it would have a big impact?
Phil Giudice: Not just a carbon price. I think that there's so much concern about this challenge and there is just neat, new people coming into it, yourself and others, that they will create solutions. I just hope they get busy and do it fast enough and significant enough to face the carbon challenge that we have, and carbon price may very well be a part of that. I'm not sure that it will for a lot of different reasons, but it might very well be part of that. Innovation is what is needed. Innovation in the incumbents, innovation in kind of new players. Innovations just like you're doing that is grounded in the facts and understand what the challenges are and bringing part of the solutions.
Jason Jacobs: In some entities or funds, for example, so if you take Breakthrough Energy Ventures as one example, they've have it's got to be X gigaton. If it's over a gigaton of potential impact on emissions reduction, then it's not over the bar to be worthy of them getting involved essentially. Then, there's others that say, "Hey, don't use a plastic straw." Then, there's everything in between. For listeners who are out there seeing both of those extremes of, "Hey, anything less than the big stuff is a distraction and we should only just focus on getting a few key things done", and then there's other people that say, "Every little bit helps and we need a nickel, a dime, a penny, whatever, just keep pushing things forward." Where do you come out on that?
Phil Giudice: It's all of the above, and I totally respect Breakthrough Energy Ventures and others that have 10- and 20-year timelines in terms of their planning horizon and thinking about making big impacts over that timeframe. That's great and that needs people who are there. I think there's opportunities in the three-year timeframes that are really important as well, and investors should be looking at those opportunities and should be figuring out how to fund those innovations that could actually deliver that. EnerNOC was a case example about it.
Phil Giudice: I used to screen any new technology company, not from the standpoint of... energy technology not from the standpoint of what's the eventual. When the revolution happens and everybody is really caring about this, how we're going to make money, but how do you ring the cash register today? That's where the EnerNOC solution was so interesting because they had a solution that could be better than building peaking power plants basically in certain markets at certain times to offset the capacity constraints. They delivered against that and delivered in a way that was economically attractive. It also meant they were wiring up what became thousands or maybe even tens of thousands of end users, understanding their energy load in a very different way than anybody has ever done and enabling all kinds of other possible value-added services.
Phil Giudice: Once the revolution comes in carbon prices or time-of-use rates or whatever is the mechanisms that get put in place, there's sort of a trusted partner that's already there that can actually monetize that. There's a range of different things and then individual choice. We have an all-solar home here. We've gone to very significant energy efficiency investments in this house. I drive an electric hybrid vehicle. I don't like to take a lot of airplane trips for a lot of reasons.
Phil Giudice: The carbon footprint of an individual is also important, not because it changes the needle necessarily for the planet, but because it gets a mindset going. I think every business, every individual needs to be thinking about their carbon choices in a way that says, "Let's not take business as usual for granted." It's not the whole solution, but it is a part of it and I think it will stimulate us to continue to come up with better ideas and hopefully better businesses that can really address this.
Jason Jacobs: If I'm a listener who has a job and is not necessarily looking to leave my job but is concerned about the planet and wants to know how to help, then what do you tell that person?
Phil Giudice: It all depends on kind of where their circumstance is. I remember talking to some folks that are in the commercial real estate business and they were saying that they can't rent non-energy efficient buildings to law firms anymore because new lawyers coming into law firms want to make sure that the corporation, the firm, is thinking hard about these issues and is putting investments and putting their real estate in LEED Plus buildings or LEED Gold or Silver buildings only. That's kind of neat, so if you were a lawyer and you were looking for a company to go work for, a firm, you'd choose the one that's sort of thoughtful about energy aspects and climate aspects of it. That's a really small thing, but it actually can signal in a marketplace that this stuff actually matters.
Phil Giudice: Also, go out and get involved in some of the nonprofits that are involved and some of the... Environmental Voters of Massachusetts and go to the 350.org meetings and understand what kinds of things people are talking about. There's lots of very specific tasks that they can do and learn from for their own energy circumstance, and then vote accordingly and put this as a priority. Ask the representatives at every level, at the mayor's office level, at the state level, at the federal level, as to, what are we doing on this? There's lots that can be done that isn't being done yet and all of us can sort of raise it to a new level. Then, maybe someday choose your career accordingly and go find... instead of working in the law firm, go find an in-house counsel opportunity in the nonprofit or the startup or for the public sector and go work there to try and help make a more direct difference in some of these aspects. There's a lot of opportunity for all of us.
Jason Jacobs: Given that I'm sitting on a nice, comfy couch, it almost feels like it could be in a psychologist's office, so Phil, doctor, what advice do you have for me?
Phil Giudice: The podcast, and I listen to a bunch of them, I thought it was really well done and they're very engaging. I worry about all of us getting so entertained by all of this, not just in climate but just all the issues. People watching MSNBC 24 hours a day and just feeling like, "Well, I'm doing my citizen's good work because I'm up to speed on what's going on", or Fox, or CNN, whatever. It's like, "Yeah, really?" Go out and make a difference in the world in addition to put together nice, well-packaged podcasts and help people on exposing your own climate journey to others. Over some period of time, draw it to somewhat of a close and go and make a difference in some of this.
Jason Jacobs: When you talk about picking up a shovel, how should I or anyone in my shoes go about figuring out where and how?
Phil Giudice: I don't have a lot... I have done this for a while and so that I have a network of people who reach out to me for assistance and perspective and I've very open about providing that and can help on those. I get a lot of inquiries especially from younger people, but even mid-career and older as to how to help and it's not easy to point the way for them. I think I would put the public sector on the list as far as a place to network with and see if there's a productive opportunity there in the state or maybe someday in the federal government to go be influential in trying to help be a staffer in some of those roles or lead new programs in some of those areas because I think they can really make a difference. It's not just for the lifers. I think that there's lots of models of people coming in mid-career with the right grounding and right outlook that can really make a difference in those areas as well.
Phil Giudice: I don't know is the short answer. I don't have like a simple advice. Often, five years ago or 10 years ago I could have probably given you 20 companies that were looking for different folks to come in and take on sales or marketing or other kinds of activities that could be very relevant to a person kind of in a mid-career situation who has not necessarily worked in this field but has demonstrated themselves selling big software to whatever, financial institutions or something. Right now, I don't see those dozens of opportunities out there of thriving or hope-to-be-thriving startup companies that have lots of great hiring opportunities for you.
Jason Jacobs: You told me before we started recording that it was important to you when you moved into the house to do a bunch of work to make it not just greenish tinged but like really environmentally friendly, which is commendable , but you also told me it was really hard and that there was a bunch of heavy lifting and cobbling together and it was like prohibitively expensive and all these other things. I feel like that's representative of everything for people that want to help with climate change today, and one of the things I've been trying to do with the pod is start to figure out how to grease the skids, if you will. Maybe the pod is just one way to do that or not the most effective way, but do you agree that we need to figure out how to remove the friction from getting people to move more in this direction regardless of in what capacity? If so, what ideas do you have for how we might do that?
Phil Giudice: Yeah. I definitely think we need more people rowing in this boat to make a difference in our climate future, and so yes, bringing new people into this, but it also includes major established corporations, utilities, or fossil fuel companies, or generators or the like, figuring out how to get them to be more excited about sort of a different future than this business-as-usual kind of model. I don't have good ideas of how to do that. I know I would love to give you... Jason, I'm not holding back at all. I think that it is [crosstalk 00:45:19]-
Jason Jacobs: You're saving the best ones for yourself [crosstalk 00:45:20] I get it. I get it.
Phil Giudice: I don't think... It is a little bit of the blind leading the blind on this stuff. You're looking at it accurately. It's not because you haven't gotten exposed to it far enough or well enough to not see really good smooth paths.
Jason Jacobs: Why are you an optimist?
Phil Giudice: I think human nature solves big problems. There were two meetings I had when I was in the public sector. One was with a UK minister and I didn't appreciate in the UK. He was a Conservative, liberal government was in charge, but he was considered the Shadow Climate Minister, so he would be the guy who would be named the Minister of Climate when Conservative government would be put in place. He was a Parliamentary member and they do this as a course of business for all the ministries that they choose a shadow minister. He was so excited because he saw Governor Patrick and all of what we were getting going and he said, "You Americans, you may take forever involved in something that matters, but once you get mobilized, you're going to make a difference in the world." He was just excited for the world in terms of what we could possible deliver.
Phil Giudice: I'm still fundamentally excited by that. I look at all of the accomplishments, not just that humankind has done, but in particular America has done in different times. The recent 50-year anniversary of the Apollo Mission. It was really inspiring to look at what all had gotten accomplished, how difficult that was. The climate successes we've had in terms of ozone and SO2 and the possibility of doing that in carbon is certainly there in front of us. There's a lot of reasons to be excited from that standpoint.
Phil Giudice: The second minister that I met with was the... This also is sort of in the back of my mind through much of this was a German foreign minister. This was at a Harvard event, so he was the Ambassador to the U.S. from Germany and he was telling me privately he doesn't want to be in a place that his grandparents were when the grandkids started asking them, "This guy Hitler started taking over. Jews were being sent away. What did you do? There weren't good answers for the grandkids." He wants to from a climate standpoint have good answers for his grandkids and do as much as much as he possible can. That sort of motivates me. I've got grandchildren that I care a lot about and I want to work on this and I want other people to join us in working on this.
Phil Giudice: I wish I had a roadmap for you. I wish I had an easy place for you and for others to say, "This is how you can plug in here and go make a difference." Right now, if you were just generic about all of this and especially in a situation where you don't have to meet your rent check every month, I'd get involved in the political processes. I would get involved in some candidate or candidates that really care about this issue and try and help them get elected, and not that any of them in my mind have the full answer on any of this stuff, but boy, moving forward, and not just at the federal level, but at state levels and even county and city levels, school board levels, to go make a difference on these matters I think is something all of us can do as concerned and engaged citizens.
Jason Jacobs: Talking about politics and upcoming elections and things of that nature, do you feel like what happens in the 2020 election is an important moment for the climate fight?
Phil Giudice: Absolutely, but it's not unique. We've had important moments and this is an important moment and we ought to take it seriously and act accordingly. 2016 obviously was an important moment for the climate fight and it clearly didn't go well from a climate standpoint in terms of how people got mobilized and how they acted on that. It's absolutely clear that there's a huge number of other issues that are also important. I wouldn't diminish any of them, but for the folks of us that really do care about the climate, we can't let that not be considered in this election cycle. The last election cycle, there wasn't a single question that was asked in any of the debates about climate as I understand, and obviously that hasn't been the case this time, but we need to do more to sort of make sure that this is a focused issue from the candidates' perspective.
Jason Jacobs: If climate is your number one issue and there's two Democratic candidates, one that has climate as their number one issue and the other one that statistically has a much better chance of beating Trump but doesn't mention climate barely at all, or if they do they just go through the motions, which one should you support?
Phil Giudice: I don't know yet, and I'll let you know as it gets closer. I definitely see a need to not have Donald Trump in the President's Office, and so that to me is beating that person will help on the climate front tremendously.
Jason Jacobs: I like talking to you retired people because anytime I talk to someone who actively has work to do in D.C. now, either they're not going to talk on the microphone or if they're feeling good in the morning, they talk on the microphone, they make me delete it before the episode gets [crosstalk 00:50:17], especially Republicans because I think they're all afraid of that man and they don't want to say anything that's going to lock them out of all the important discussions that they need to be in.
Phil Giudice: Understand. Again, it's not my circumstance, so [crosstalk 00:50:32]-
Jason Jacobs: That's right. No, I said the same thing yesterday. I tweeted that I was looking for... I talked to an oil and gas executive who left and he left a few years ago and you would think that means he can speak freely, but he's in shackles for five years since the severancing. It's like they really know how to get their tentacles into you. What I need to find is someone who left like five years and a day ago.
Phil Giudice: It gets back to your question on, do you go with someone that's got a "better chance" of beating him or someone who's purer on the climate issues candidate? I don't give a lot of stock to the prognosticators about who has got the best chance of beating someone at this stage and I probably won't for 12 months or so.
Jason Jacobs: Well, look at the last election.
Phil Giudice: Exactly. Exactly, and so all of the horse race stuff that's going on now and who is up, who is down, and who is gaining momentum or losing it, it's like, "Fine, let's let the process kind of work its way out." I almost wish there was no polling data for the next six or nine months so that people could just talk about ideas and then [crosstalk 00:51:35]-
Jason Jacobs: It's like companies that recently go public and the CEO says, "Don't let me check you, or catch you [crosstalk 00:51:40]-
Phil Giudice: Checking the stock price [crosstalk 00:51:42]-
Jason Jacobs: "Checking the stock price." Exactly.
Phil Giudice: Exactly. It's like [crosstalk 00:51:43]-
Jason Jacobs: Just put your head and run the company and then the stock price in the longterm will be worth the most.
Phil Giudice: That is actually a good analogy. It's tough, but this is really important work and don't diminish the role of the utilities. That is kind of one other perspective I would want to give you. The challenge that they do, the idea that they have to meet perfectly everywhere all the time the demand with electricity with the supply of electricity with no warning as to how that demand is going to change in an hour or a day or whatever other than their forecast and they do it in a way that keeps the power on 99-plus percent of the time is truly remarkable.
Phil Giudice: The U.S. National Academy of Engineering actually labeled the electric grid as the most significant engineering achievement of the last century. It's not appreciated or seen or known by a lot of folks because it works so darn well, but it's a very interesting business model that has sort of built up around the world basically. The ability to put these assets in place efficient to meet almost all the potential and actual demand and perfectly synchronize that with everywhere all the time is really a rather remarkable accomplishment.
Phil Giudice: Now, the challenge is how to do that with almost no fossil in the mix. That's not a small challenge, but it's one that I'm sure from an engineering standpoint and an innovation standpoint there are solutions for, and then once you do that, then it's like, "Okay, let's electrify all transportation. Let's electrify heating in all homes." Those are big, challenging issues to work, but boy, if we could get to a near-zero carbon electric utility structure it would empower so many other innovations to come about. Figuring out ways to make that happen is kind of really an interesting challenge from my standpoint.
Jason Jacobs: That's a great point, too, because on the one hand consumers say, "Stop emitting. We can't emit." On the other they're like, "I've had no power for the past 10 minutes. You jerks!" It's like, "Well, which one is it?"
Phil Giudice: The difference between having electricity and not is being in a civilized world and not being in a civilized world. You look at countries and regions that don't have reliable electricity and you know... I don't have current data, in Haiti where I've worked some, people's life expectancy is like 50 years old and part of that is not having electricity. Getting electricity, it's not just a nice to have, it's like survival for lots and lots of folks. It's a remarkable accomplishment that it in fact works and it's not fully appreciated. It's not a surprise.
Phil Giudice: This is the most intense fixed asset industry in the world. It takes $3 of assets to generate about a dollar of revenues and that revenue you get on the order of a 10% margin, so instantly you're in a world of 30-year horizons of thinking about making 10 cents on your $3 of assets over the next 30 years. It kind of looks like an okay business venture, and so you adopt all kinds of structures around it, like monopolies and franchises and it makes you hard for you to innovate and change. All of that is part of the reality of what you're dealing with and it's an exciting part. That's what has to get changed and adopted into a very low fossil world that we got to get to very, very soon.
Jason Jacobs: I've heard some people say that it's easy for you to say the climate is more important than energy poverty from a position of Western privilege, but for the billion-plus people that... It's like the dire conditions that you're worried about in the future [crosstalk 00:55:21]-
Phil Giudice: Exist [crosstalk 00:55:22]-
Jason Jacobs: There's a billion people that live [crosstalk 00:55:23]-
Phil Giudice: Exist [crosstalk 00:55:23]-
Jason Jacobs: That today, and what's more important to address?
Phil Giudice: Absolutely.
Jason Jacobs: That's a tough one because at the same time, the planet is not going to be livable if we don't get our act together from a carbon standpoint.
Phil Giudice: These aren't either/ors. These are opportunities to, again, pick up a shovel and move some dirt. You can get people electricity off-grid in lots of the world, especially now with solar and storage that doesn't have to depend on diesel fuel and doesn't have to depend on generators being shipped all around and figuring out how to get fuel to all of these. It's not the same mix as what's going to work in the U.S. or developed economies in the world, but there's opportunities to do a very low carbon footprint grid in lots and lots of places.
Phil Giudice: I don't look at these as either/or challenges, and I think finding the best solution to any of these is like, I don't know, you could take infinity to figure that out. It's find a good enough solution to some parts of this climate problem and then make it work really, really well and then hopefully build and expand upon that.
Jason Jacobs: Back to your point before about getting more people to care, one of the knocks I've heard on getting more people to care is that the way you get more people to care is you make a movement out of it, and by making a movement out of it it's like instinctually you think that's a good thing and all the positivity that comes along with that, but it also increases polarization and makes it harder to get anything done across the aisle. How do you think about that?
Phil Giudice: I'm not a politically savvy person in terms of political processes. I write a few checks occasionally for different candidates, basically people that know me, but I don't feel good about it and I don't feel good about the whole sort of finance structure of our election system. Getting people... Tom Steyer is a guy who is now running for President. He is a guy who I have met a bunch.
Phil Giudice: I have tremendous appreciation for his commitment and his devoting of a big chunk of or a chunk of his capital to try and make a difference in the world, and climate is a big part of what he is focused on, but it doesn't excite me to try and drive a movement. I wouldn't like denigrate people who are moving towards that, it's just not where... I'd rather be supportive of them in talking to my neighbors and saying, "Hey, guys, this candidate versus that candidate just seems to have better solutions from an energy standpoint than that one."
Jason Jacobs: Given that, what are your thoughts on the Green New Deal?
Phil Giudice: The aspirations of the Green New Deal, a hundred percent alignment for. I think if they had actually looked at a carbon pricing mechanism to fund the Green New Deal, it might have really changed some of the dialogue. I think there are aspirations beyond the energy side of the Green New Deal in terms of inequality, in terms of employment. I don't think it's thought through fully. I applaud those as well. I think we got to really deal with some of those issues, but I'm not sure that trying to create green jobs as the answer for income inequality is necessarily going to be a very productive path.
Phil Giudice: I think that the types of jobs... I've worked with an organization up in Lowell that works with basically with ex-convicts and tries to work with youth and tries to work with them to get them into sort of productive paths in life. One of the things the Executive Director was exploring was the idea of energy efficiency workers as a possible avenue. The more he understand, an appreciation that we're going to take ex-cons under very little supervision and put them into people's homes and businesses, it may not be a really productive aspect of this. That didn't become a path. They're actually doing amazing things around catering and corporate catering. They're doing amazing things around making chopping blocks from discarded wood for Whole Foods and stuff, so they've got a lot of other more productive venues.
Phil Giudice: Yes, we need an amazing amount of work done in people's homes and stuff around energy efficiency and solar panels and the like. I'm not sure it's going to respond to the challenge of income inequality in anywhere appropriate level. I'd rather move in my own mind to a $15 universal minimum wage and then maybe even grow it from there and figure out ways to help with a lot of the economic opportunity challenges of not having good schools and not having good training programs much more so than just the idea that the Green New Deal is going to solve all the income inequality aspects of it.
Jason Jacobs: You mentioned that you're a proponent for a price on carbon. Is there a particular model or a particular proposal or group that resonates with you the most?
Phil Giudice: Yeah, so the one that actually put in place for the acid rain which was done in George H. Bush's timeframe, which was the Cap and Trade, it's harder in carbon. There was, I can't remember, a few dozen or maybe a hundred or so power plants that were targeted in the acid rain initiative, so it was really easy to watch the emissions of those hundred or few hundred power plants. Carbon requires a universal global accounting scheme basically that says how much carbon is being sequestered, how much carbon is being emitted, and then figure out the pros and... or the consumption and the supply and demand of that and then work it down to a lower and lower emissions allowance. It's a lot more sources, it's a lot more difficult from an engineering standpoint, but I like that structure and basically for the same reason I talk about it with the acid rain is it created solutions that people didn't know would exist.
Phil Giudice: Instead of saying it was going to be a $2,000 in allowance ton per SO2, the market determined they could get it done for $200. Very similar things might happen in carbon as well. We get a lot of excitement around efficiency could solve a chunk of this climate problem. No, efficiency really isn't going to solve any of the climate problem. It doesn't matter. If you put a price out there and you see people move a lot of CO2 because they're wasting less of it from leaky buildings, it's like, "Great." If they can do that at a lower cost than putting solar panels out there or other solutions, it's like the market will determine it.
Phil Giudice: I really like unleashing the innovation of a capitalist market for this problem as aggressively and as significantly as we can. I think it's a lot better than just putting a price out there, a tax or the like, but then we get into the realities of implementation and what's politically acceptable and people don't like the idea of sending more money to government. "What are we going to do with these revenue sources?" It's not a simple set of political challenges, but from an economic signaling and seeing what could happen, it kind of excites me as to do a Cap and Trade kind of a sector.
Jason Jacobs: If someone were to ask you if you could change one thing to move the needle most in the climate fight, what would it be? Cap and Trade, is that your answer?
Phil Giudice: Yeah, and I would take it even smaller. I would do Cap and Trade strictly for electrical utility and independent power producers, but for generating power plants in the United States in the next three years and do it at a substantial enough level that shows that the allowances are at X now and a year or two years from X it will be 10% less and 10% less and 10% less so that we get back down. It's not the whole climate challenge. We've got to worry about cement and glass and all kinds of industrial processes. We've got to worry about agriculture, we've got to worry about transportation, but that part of the sector we actually could monitor. We could say is emitting X amount of carbon now, and over the next five years it's going to emit something X minus that amount of carbon.
Jason Jacobs: Along those same lines, if someone gave you a hundred billion dollars and said, "You can have this but only if you allocate it towards the thing you think will move the needle the most to maximize its impact on the climate fight, where would you put? How would you allocate it?
Phil Giudice: A hundred billion seems like a lot of money, and it is for a lot of reasons, it's chump change in the climate challenge that we're dealing with, so I'd want a hundred billion a year forever. I'd start addressing things like a carbon pricing scheme and I'd start putting a carbon counting mechanism around the world. One of the big challenges is leakage between folks that are caring about carbon and folks that aren't caring about carbon. It turned out to not be... We looked at that hard in terms of The Regional Greenhouse Gas Initiative, RGGI. People worry that states that aren't going to be participants are going to ramp up their coal-fired plants and be sending all this electricity.
Phil Giudice: It turned out not to happen in that circumstance, but that's kind of a big deal to appropriate, and then offsets and trying to buy some tree planting in Indonesia to offset emissions here. It's really, really hard to stay on top of all of those issues under sort of an ad hoc process, and so if you had a significant amount of capital that you could get the political will, get the laws put in place, get a market structure put in place, and then get a global accounting of carbon in whatever mechanisms is the most useful. Both the puts and takes, so the sequestration that's happening every day during summer months when plants are growing as well as during winter months when they're not growing and so that we're working the entire carbon cycle I think would be really quite exciting to see.
Jason Jacobs: Logistically, where would that money actually get allocated to bring that about?
Phil Giudice: The issue of... I would have that money go back to the governments and have them reduce their national debt, invest in schools, do whatever makes sense from a standpoint. The reality [crosstalk 01:04:47]-
Jason Jacobs: No, to actually... if you want to bring about the type of policy that you're advocating for and you have a hundred billion a year [crosstalk 01:04:54]-
Phil Giudice: Oh [crosstalk 01:04:55]-
Jason Jacobs: Where do you put it?
Phil Giudice: I would probably if it was that level I would probably start a think tank that is really aggressively putting this together as a practical set of solutions that could be implemented in Congress.
Jason Jacobs: It isn't a hundred billion a year, it's a hundred billion one time, but we'll give it... for sake of argument, we'll make a temporary exemption [crosstalk 01:05:14]-
Phil Giudice: Yeah [crosstalk 01:05:15], but the reality is, and there are phenomenal folks that are working on this issue and have given it some thought, but they're doing it in a very incremental standpoint. I love them and they appeal to me and some of them support, but they're doing it knowing the limitations of our political circumstances and they're doing it knowing the incrementalness of what... they're so focused on the art of the possible, which is completely understandable. They're taking lawsuits to the federal government, appropriately, to stop bad things from happening, but it's insufficient.
Phil Giudice: If you could step back from the capital requirements and really put in place a model that said, "Okay, this is how we could really get a handle on it." I do think I would start with the electric sector because even though it's hugely challenging and it's regulated by 50 states plus the District of Columbia Commission and it's got all these ISOs, it's FERC, it's got all these challenges for it, I think it would be a really interesting solution that actually could be put in place in less than five years that would actually show us moving our carbon future down pretty substantially.
Jason Jacobs: Well, we covered a lot of ground today, Phil. Anything I didn't ask that I should have? Or any parting words for our guests?
Phil Giudice: No [crosstalk 01:06:28]-
Jason Jacobs: Or for our guests, you're the guest. Any parting words for our listeners?
Phil Giudice: Yeah, I know that I come across in many ways as a skeptic and pessimistic, but it doesn't tell the whole story. I'm actually quite optimistic that we're going to solve this, I just wish we had done it sooner and I'm looking for what comes out of all of our efforts to make a difference for us all. Let's go make something happen.
Jason Jacobs: Well, if there's one message that I take from today, and hopefully our listeners as well, it's, "Get out a shovel! Start digging."
Phil Giudice: Move some dirt. Yep, sounds good.
Jason Jacobs: Okay, Phil, thanks for coming on the show.
Phil Giudice: You're welcome.
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. Note, that is .co, not .com. Somebody we'll get the .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.