So, good afternoon everyone,
and welcome to today’s Dean Speaker Series.
I am really absolutely delighted to welcome today’s speaker,
Mary has been described
as the most influential environmental regulator in history,
and she’s known as California’s #CleanAir guru.
She pushed forward clean air and decarbonization programs
under four California governors.
And as we know, where California goes,
there goes the United States.
Mary is perhaps most famous
for her long tenure
as the chair of the California Air Resources Board,
which runs California’s renowned Cap-and-Trade Program,
which we will talk about more shortly.
Today, Mary serves with Ford CEO Jim Foley
as the co-chair of the Coalition for Reimagined Mobility,
and as vice chair
of the California-China Climate Institute,
with former governor Jerry Brown
of California. - Right.
- During her leadership
at the California Air Resources Board,
California became a national and global leader,
developing clean energy and clean transportation solutions
that many other states and nations
have consequently adopted.
Mary has a deep understanding
of what businesses will need to do
to lead and support the many transformations
of our economy,
that will be necessary to avert the looming climate crisis.
Here at Haas,
we’re talking about sustainability and climate change a lot,
in particular, how businesses and industry
can take a leading role
in developing a sustainable climate-resilient economy.
We know that every aspect of business,
whether it’s agriculture, real estate,
energy, finance, corporations,
will need to be reimagined,
and will need to be redesigned,
to address the current environmental, social,
and economic crisis.
In today’s conversation,
we’ll be exploring that question,
and in particular, how government policy
can work with industry,
and the critical role that policy will play
along with business in this transition.
Thank you so much, Mary,
for taking the time to be with us here today.
Thank you. - We are absolutely thrilled.
Thanks for inviting me.
- So, Mary, let’s start a little bit with your background.
You studied law at Yale,
the greatest law school in the country.
Your first job after law school in 1971
was at the Center for Law in the Public Interest
in Los Angeles,
working as the air lawyer.
Now, what drew you to environmental issues,
rather than some other area of the law,
when there was not even such a thing
as an environmental lawyer?
- Well, first of all,
I think it’s important to recognize,
for many people, including me,
when you actually look back on your career,
you realize that a lot of it was based on avoidance,
as opposed to attraction.
(audience laughing) That is,
I did not want to go work for a corporate law firm,
which is what most people did
when you graduate from a school like Yale Law School,
especially if you have loans.
But even if you didn’t have big loans to pay off,
the feeling when I graduated in 1971,
was we were gonna be making policy for the country.
Because this was a time, you know,
right at the sort of peak, in many ways,
of the civil rights movement,
when people thought that law could be a force for good,
for social change.
Not just not bad, but actually,
the way that you could go about making change happen
was as a lawyer,
you could think of a good theory and go to court.
You could have clients
that had not previously had access to the law,
and make law for them using existing statutes.
So, it was a time when going to law school
was considered a progressive thing to do.
And I certainly didn’t go
thinking that I was going to make a lot of money.
I came from, this is, you know,
probably more than you need to know,
but my parents were first-generation college graduates,
so my grandparents were the immigrants,
and they were the blue-collar union people.
My parents both went to college,
actually got advanced degrees and became teachers.
And so I’m kind of the next wave.
My brother is a doctor and I’m a lawyer.
It’s the perfect, (laughs) the perfect storm, right?
The perfect scenario for Jewish parents.
They got one of each. (audience laughing)
So, bottom line is when I went to law school,
I had had experience working in the civil rights movement,
and working in a foundation
that was involved in criminal justice reform.
And I was very interested in both of those things.
But as it happened,
I was also moving to Los Angeles,
‘cause I’d gotten married to somebody
who wanted to move to LA,
and I was very happy about that anyway,
from a pure, you know, physical comfort.
I was very happy to get away from the winters
on the East Coast.
And so I went looking for a job.
And what was happening at that time,
what was going on,
was the beginnings of the environmental movement.
So, I found a way through air pollution, I think,
to link social action and environmental protection.
So, I wasn’t, in those days, you know,
a conservation lawyer.
I wasn’t so interested as some of my colleagues were
in preserving things, you know?
I wanted to be involved in, before it even had a name,
really, in promoting community justice
through the environment.
- Thank you for that.
And we’re all so fortunate that you made that decision.
California has really benefited.
So, along those same lines,
what do you see
as some of the most important sustainability challenges
that our students here,
in this business school,
are likely to encounter
as they become business leaders?
And in particular,
what role do you see for private companies
to actually lead the transition to clean energy,
in a low carbon economy?
- I was at a dinner not too long ago,
with a man who’s made a fortune as an investor,
and is one of a number of people like that
who are giving money towards environmental protection
and towards climate change in particular.
And he expressed the opinion
that capitalism was incapable
of dealing with climate change.
And he wasn’t actually being facetious.
He was, he has come to the point in his own evaluation
of the world,
that he really didn’t think that there was a way
that you could harness capitalist impulses,
or to the system,
and address what needs to be done
in order to deal with the ongoing crisis
of climate change. - But do you feel
that way too?
- Well, I’m close to it. (laughs)
I don’t think it’s impossible,
but that’s because I have a career and a history
as a regulator,
and I do believe regulation
can contain the worst of capitalism,
and still allow for the best of it.
So, in other words,
I haven’t seen anything
that made me think that China or Russia,
when Russia was still a place that you could talk about,
is gonna do better than we are
at dealing with climate change at all.
But I do think that the current political climate,
which is one where governments are incapable
of mustering the political will
to act in a way that puts a check on capitalism,
and are relying completely on voluntary actions,
will not succeed.
It hasn’t succeeded yet,
and I don’t think it, I don’t think it will.
- So, the government isn’t succeeding,
and you’re worried
about the private sector’s ability to succeed.
But what about something like electric vehicles?
I mean, what role did the public and the private sectors
- I think that’s a terrific example
of how government and businesses can work together,
if there’s a general acceptance that each has a role to play
and there’s something that everybody agrees has to be done.
I mean, we’ve been trying,
we now meaning California,
you know, for decades,
to deal with the problem of vehicle pollution.
And we worked on the fuels,
we worked on the engines,
we were, and we adopted regulations
that systematically ratcheted down
on the allowable emissions.
So, before we really got seriously into zero emission
an internal combustion engine
that you could buy in a car in California,
emitted about one 100th of the pollutants
that it would’ve admitted
if you had bought that same model from Ford, or GM,
or whoever, you know, in 1970.
So, incredible progress.
Technology rising to meet the demand,
California making the demand,
knowing what technology was capable of doing,
and coming together with a strong regulatory program.
We also, of course, as California,
were a big enough market
so that companies design cars to, you know,
to meet our needs.
Global warming takes you to a whole new level.
I mean, we needed, we in California
need zero emission vehicles for urban air pollution reasons,
and so do places like Shanghai, or Beijing,
or Delhi, or Indonesia, et cetera.
But the, most of the world doesn’t really.
It’s, you know, it’s urban needs
that are sort of driving it.
But the world needs vehicles.
If you’re gonna have personal transportation,
or you’re gonna move, and any kind of a global economy,
you’re gonna move goods around,
you’ve gotta have emission-free transportation essentially.
So, we started to make that leap in California.
enough of the companies
could see the handwriting on the wall,
especially with Europe jumping in,
in a very aggressive way,
that they rose to meet the challenge.
And so we went from hearing that electric vehicles
were always gonna be a niche market,
and would never be able to be sold at prices that, you know,
real people would possibly be willing to pay,
to a point now where every auto company
is seriously making zero-emission vehicles,
and they’re marketing them.
And they’re still not the majority of what they sell,
but they’re gonna be there pretty soon.
- So, let me paraphrase that.
It’s a interesting world,
where if you have a big market like California,
a strong forward-looking regulatory framework
combined with an innovating, exciting,
visionary private sector,
can together, working together, solve this problem.
So, let me ask along those lines,
tell us about your experience in particular
with Volkswagen and Dieselgate as it’s called,
and then Volkswagen’s switch
to supporting California’s strict environmental standards.
This was a interesting example
where there wasn’t participation,
but a company saw the light.
What lessons would you offer our students
about business and government working together
in both designing, but even more importantly,
implementing environmental regulations?
- Yeah, well, so this is sort of a good and a bad example,
but the lesson that you draw from it to begin with
is that regulations are only as good
as your ability to enforce them.
And in this case, Volkswagen, for a number of years,
and they were not the only company that was doing this,
they just did it in a bigger and more egregious way,
they came up with a way
of evading our emissions requirements for nitrogen oxides,
which are directly related to combustion,
to how much, how much fuel is being combusted,
by finding a way to basically turn off the monitoring system
in the vehicle itself,
under certain driving conditions.
So, it would meet the emissions requirements
when it was on the dynamometer being tested,
to be allowed to be sold,
but wouldn’t meet it in the real world.
And we become aware of that. (laughs)
- [Interviewer] How did you figure it out
that there was cheating going on?
- Well, actually, the Europeans,
who were very big on diesels,
were the ones who first started to complain
about how they weren’t seeing in the real world,
when they went out and measured air quality,
the benefits that they should have seen
from these new clean vehicles
that were out there on the road.
California started testing,
and we did roadside testing also,
and then we actually went and bought cars,
and put them on dynamometers with equipment,
and saw how they were operating during the test,
and figured out what was, what was going on.
This was helped a lot also,
by the fact that a sort of middle-level engineer
who had been working,
he was part of the government affairs team at Volkswagen,
confessed to one of my staff people
what was going on.
Because he saw that we were getting close
to figuring it out,
but he also was so, himself, so ashamed,
of what was happening,
so upset about what was happening,
that he felt like he had to tell somebody what was going on.
- That’s an incredible story. - So, that’s how we found out.
Then of course, this exposed into a huge enforcement action.
We brought it to the federal government.
It wasn’t because the federal government didn’t care,
but we sort of had a agreement with them
based on how we could allocate our resources,
that we’d start certain areas of enforcement,
and they’d do others,
and we would just share the burden of enforcement
on motor vehicles.
So, this one was ours to begin with,
but then they took it up,
and together we pursued the court actions,
which eventually resulted in a settlement,
which was the largest consent decree ever
for anything related to automotive pollution.
And while that was all going on,
the German government got involved,
the European Union got involved,
there was horrible publicity,
and the company was under investigation
by their own parliament.
You know, Volkswagen,
and in general, the EU regulations
were not as strict as California’s,
and they didn’t enforce them as much as the US did.
But in this instance,
they felt like they were being embarrassed.
And the German government,
which has a particularly close relationship,
because of its history with Volkswagen,
couldn’t just turn the other way.
And so they were threatening all kinds of reforms.
Volkswagen ended up throwing out its board of directors,
firing the CEO.
You know, they found that the knowledge of what was going on
went all the way up to the top.
And then at the end of it all,
not only did they pay their fines
and come into compliance,
but they decided to use this
as a way to actually reinvent the company
in a very major way.
And their decision was to, not just to satisfy
that they produce electric vehicles,
but to actually commit
to making all of their products electric
before anybody else was doing that,
and to spin off a company,
and this was part of the settlement with us,
a company that would build electric charging stations.
Because obviously, one of the things
that has slowed down the transformation of this industry,
is that you can’t just work on the vehicle,
you have to be looking at the fuel at the same time.
And there was a real question
about whether there was gonna be enough charging
for these new vehicles, so.
- That’s an incredible story.
I mean, to think that you turned around this company,
from your office where you were,
that that led to this incredible transformation,
is just such an amazing story.
- I think it’s a great story for Volkswagen.
And, I mean, the fact that in the end,
in the end, they chose to use this as a positive push
to do something that maybe some people of the company
had been thinking about for a while,
but they would never have been able to do it without that.
It is a good example, I think,
of how you can actually use enforcement
as a way to benefit the private sector as well.
- So, as an environmental regulator,
you’ve often faced extreme lobbying
against environmental regulations by industry and business,
but we know that at other times
some parts of industry have supported,
or even encouraged government efforts to regulate pollution
or emissions of greenhouses gases.
So, when do you see the interaction
between business and regulators
at their most effective and productive?
And do you think that businesses are more receptive now
than they were when you started your career?
- Well, over the years,
I think both sides have evolved.
And certainly, I spent a lot more time
in my last few years at the Air Resources Board
meeting with business representatives,
than I ever did in the early years.
And we were holding the kinds,
I mean we always had informal workshops
where businesses could come in and talk to the regulators,
but they weren’t, they were talking mostly
at the technical level.
As time went on,
and you know, and you could see this
as maybe government and business getting too cozy,
and people could be suspicious of it.
But I think both sides came to believe
that we had to understand each other’s motives,
and we have to also be able to make suggestions
about ways things could be done better,
which are very hard to really surface effectively,
if you are doing it at a public hearing
where you’re up on a dais,
and somebody is coming before you
and reading a statement.
You’re just not gonna be able to engage
in some of the best kind of thinking and policy making.
So, I have thought for a long time,
that, you know, the California’s success in the early days,
especially in our air quality programs,
is really largely dependent on voluntary goodwill
by companies in California,
which didn’t mean that they always agreed with us,
or always liked what we were doing.
But especially in the case of larger companies,
they tend to have,
Volkswagen being an example of why this isn’t always true,
but they tend to actually have a strong commitment
to following the law,
once it is the law.
And, so we got a lot more compliance
than we could have gotten
if we actually had tried to, you know,
be out there policing every car
that rolled off the assembly lines.
But with global warming,
I think we’re in a different world,
because the problem is so complex,
and we’re back at the stage where every sector
wants to claim that it’s somebody else’s fault,
or somebody else should be doing more.
And so coming up with a common vision
of what the program should be,
has proven to be pretty elusive.
I mean, over the last decade or more,
there have been groups, coalitions of different companies
that have come together around the idea
that there needs to be some form of a price on carbon,
which absolutely, by the way, has to happen.
I mean, whether it’s through a cap-and-trade program,
which is actually more difficult,
or through some sort of tax,
which you can then work through
how you deal with borders and boundaries and all of that.
But if there isn’t a way to spread knowledge and acceptance
of the fact that carbon is causing problems
throughout the economy,
we will not make it to anything like the goals that we have,
which may be too hard anyway right now.
But let’s just say, you know,
even if we decide it’s gonna be two degrees of warming,
or more than two degrees of warming,
and it’s not gonna be 2050, it’s gonna be 2060,
whatever it is, we won’t get there,
if we can’t figure out a way to put a price on carbon.
And industry has actually been, not always,
and not in every sector,
more forthright about saying that
than you, than many in the political world,
or in the, you know, in other forms of advocacy groups.
- I mean, the, putting a price on carbon
has been the goal for, I guess, for decades.
Do you have any idea how to do it,
since nobody’s been able to figure it out yet?
- Well, I mean the California Program of Cap and Trade
is a way of putting a price on carbon.
It just gives certainty to the allowable amount,
and then companies can trade underneath the cap,
versus the tax where the certainty is around
what the price is,
and people can make their own decisions
based on the price that’s allocated.
It’s two sides of the same coin really.
And actually, although it’s been very slow, you know,
other, there are other jurisdictions
that have actually implemented cap-and-trade programs
since we did.
Of course, we started with Quebec as our partner,
the province in Canada,
which you know, looks very different from California
in some ways,
but has a very similar kind of environmental ethic.
They’ve been joined by other Canadian provinces,
once Canada decided that all of their states,
all of their provinces,
would have to put some kind of a price on carbon.
So, they actually did that at the national level.
- So, let’s get back to the California cap-and-trade model,
which as you point out,
is a way of putting a price on carbon.
How in that case
were you able to get business in agreement with you,
to make that model work?
And even though we’re just a state
we’re the equivalent
of one of the largest countries in the world?
- Well, first of all, you know,
the program has been criticized,
because in the beginning,
we didn’t auction off the allowances,
we actually allocated them freely
to most of the businesses that were subject to the program.
So, within California,
we started with only the 700 largest emitters.
We added fuels after that.
So, natural gas, and gasoline, and diesel fuel,
came under the Cap-and-Trade Program,
in kind of the second wave.
The first wave was just the companies.
And we came up with a system
in which we allocated allowances by sector,
based on a sort of a average of efficiency
within that sector.
So, the most efficient company,
let’s say among oil refineries,
might get actually all the allowances that they could use,
and the least efficient would not get as many.
- So, the least efficient was forced to work,
to move harder. - Correct, right.
And within each of those sectors, let’s say oil and gas,
ultimately there was enough agreement
on the part of the companies
that thought they were gonna come out ahead,
so that they actually embraced the cap versus fighting it.
And they were also afraid,
that being California, if we didn’t,
if they didn’t come along and help design a program
that they could live with,
it would, it could be worse, you know?
We might have banned all oil drilling.
And there’s still people who are, you know,
mad at Jerry Brown,
‘cause he didn’t ban all oil and gas drilling in California,
which he could have done legally.
I mean, he made a decision politically,
that, and it was sort of a moral decision too,
that as long as people in California were using the product,
we shouldn’t just pretend
that we weren’t gonna produce any of it in California.
- Ah, interesting.
So, let me ask you another question about cap and trade.
So, I guess the idea behind cap and trade
is where the scope for improving efficiency,
and reducing pollution,
is the greatest,
is where you would do that.
But at the same time,
some groups don’t like cap and trade,
because companies can buy cheaper emission reductions
outside their own factory gates,
so they can find a way of not actually reducing pollution
in their own premises.
What’s your response to that critique of cap and trade?
- Well, from the very beginning,
it seemed to be that it was,
there was some confusion
about what we were trying to accomplish;
that if your goal is to reduce greenhouse gas emissions,
companies that are subject to the program,
are not going to choose
to keep their oldest, least efficient plants going,
they’re going to pump up production from their newest,
most efficient plants.
And so the idea that they would be deliberately continuing
to pollute in the low income, most impacted communities
because of this program,
just didn’t make logical sense.
But if you think about this
from the perspective of a community group,
who’s really not primarily concerned about global warming,
their real concern is the emissions from the diesel trucks
that are pulling up to the factory gate,
or the other toxic contaminants
that the factory is emitting,
you can see why they would not want to buy into a program
where those emissions at that site
were not being specifically addressed.
And so this has been a tension from the very beginning.
And one of the things I think it’s brought to the fore,
especially with the increasing organizational power
of, you know, environmental justice communities,
is a stronger emphasis on localized pollution controls
at those facilities,
and making sure that the program doesn’t do anything
that actually incentivizes
continued operation of the plants
that are the most irritating. - But of course it is,
it is less efficient than-
Yeah, that’s right. - Yes.
So, now the Cap-and-Trade Program is not pure anymore.
It’s less efficient. - Yeah.
So, for everyone here,
if you would give one message
to all our students in our community here,
what would be the one thing that you would tell them to do,
to try to address climate change right now?
- You know, I don’t think there is one thing
you can tell people to do.
I think the message is you gotta act with urgency,
wherever you see the opportunity,
but at the same time recognize
that this is a fight
that we’re gonna be in for the rest of our lives;
the rest of my life and the rest of your lives as well.
And so you need to figure out
how to, to incorporate that kind of thinking and policy,
and recognize that you’re gonna have to be a part of it,
no matter what. (laughs)
Nobody gets to escape being part of fighting climate change,
and no one entity can be the ones that solve it all either.
I mean, you could say energy as a thing is like 70%,
emissions from energy as a whole.
But if you try to break that down
into the various components,
it becomes pretty clear that, you know,
just building solar,
if you’re not retiring other things,
just switching to electric cars,
just doing a better job with waste,
or you know, stopping meat production,
you, no one of those things in and of itself
is gonna do it.
It’s gonna require we all do what we can,
and also that we be more holistic in our thinking, I think.
- So, that leads me to my next question.
California’s approach is perhaps less holistic
in the sense that the climate strategy
is to try to electrify as much as possible
from cars to buses to buildings.
On the other hand, our electricity grid in California
is increasingly subject to a lot of stresses,
How do we reconcile this push
towards electrifying everything
with the increasing lack of stability
of our electrical grid?
- We’ve known for a long time
that we were gonna need to build more generation
and also that we could do much better
at deploying electricity,
if we had a regional grid with other states,
that was more closely tied
to each state’s abilities and needs
to consume and generate at different times of the day.
So, we now, in California,
generate more solar electricity in the middle of the day
than we can use.
We literally dump electricity that could be put to work
because we don’t have enough demand for it.
We have more demand at the end of the day,
late in the day, and early evening hours,
and into the evening,
then we can satisfy with solar.
We have some wind,
and we have some other resources,
but basically, we need to be importing from Wyoming,
and other places in the evening hours.
There’s no reason why we shouldn’t be able to share,
if we could work out the politics
of making a more efficient and equitable system overall.
There’s also a lot of room for micro-grid technologies,
where you bring it down to the local level,
and work your timing of things.
We know we can do a lot more with storage,
so that when there is excess electricity,
you can save it in batteries or other ways.
And there’s also the possibility,
increasingly now being looked at and used,
where an electric car can be its own storage system,
and be part of a little electric system in its neighborhood
and within its house,
so that when there is access electricity on the grid,
you could be charging your car,
and when there isn’t,
your charge has a, your car has a bidirectional plug,
and you could actually be giving electricity
back to the house.
That’s a very simplistic explanation,
but that, but that actually can happen,
and now does happen.
You know, if you, a Ford 150 truck
comes with electric outlets on it.
So, a lot of people who could care less
about being in a zero-emission vehicle,
love the idea that they could be off road in their truck,
and be plugging in all sorts of other cool appliances
out wherever it is they are.
So, you know, this is, this is a way more interesting
and diverse system,
than certainly seemed to be when, you know,
a few years ago
people were just thinking about one power plant
with lines radiating out,
and that was the, what the whole system was.
Still, we’re gonna need more.
I mean, there’s no way around that.
And we all want more things that are electric.
We do consider, by the way, not just battery electrics,
but fuel-cell vehicles are electric-drive vehicles.
And so there’s, there is a place in the economy for us,
and for many parts of the world,
for hydrogen running a fuel cell,
to be a big part of this electric future
that we’re talking about.
But there’s nothing in the fact that, you know,
on a very, very hot day this year,
we were worried
about whether there were gonna have to be some blackouts.
That tells you nothing about where we’re gonna be
in a few years,
because we’re just, we’re moving ahead
on all these other fronts.
- Thank you for that.
I mean, one of the things we really emphasize here at Haas
is the power of innovation,
and also we’re focusing on sustainability.
And so the intersectionality
of innovating and sustainability
is just so incredibly important.
As a trade economist,
I also like what you’re saying
about the opportunity to trade energy
across time zones and locations.
I think there’s tremendous potential there.
So, now we’re gonna change,
we’re gonna change the focus a little bit,
and talk about China.
So, China’s the largest emitter of greenhouse gas emissions
in the world.
But the China, the California,
further climate action between California and China.
So, that area,
climate change has long been one of the few reliable areas
of productive collaboration between the US and China.
Can you tell us more about the work of that institute?
And how does this current tension that we’re seeing
between the US and China
affect the work of that institute?
- Well, it has been affected
to the extent that exchanges of the kind
that we were hoping would occur,
where scholars from one country
would go and spend time in the other,
have been pretty dramatically affected.
But it is interesting that at a time when, you know,
between the US and China at the national level,
there’s probably more tension,
and general lack of sense of collaboration
than there has been for many, many years right now.
But the work of the institute
has continued both in China and in California.
We have people working together,
and they can share documents,
and, you know, work together over the internet.
And they are publishing a group of papers,
a set of papers,
that are gonna be coming out quite soon,
they’re in circulating and draft form right now,
where they’ll have on 10 sort of big topic areas;
papers that talk about what both China and California,
or really China and the US can do
to meet our goals under the Paris Accord.
And that is an effort which has been,
I wouldn’t say sponsored,
but it was, actually, it has been sponsored in a formal way
by the state department,
which had, at Glasgow,
they began a process of revitalizing a China,
I keep saying China California.
The institute is China and California,
but the agreement is between China and the US
to collaborate on developing China solutions.
That really goes back to Obama,
when he had invited the premier of China to come over,
and they spent time together,
and announced a series of things
that they wanted to work on on climate.
The Chinese are very serious about this stuff.
I mean, they’re having political problems of their own
internally as well.
And you know, the effects of COVID have been disastrous
as far as their economy is concerned.
But they continue to just produce renewable energy
at a record rate,
and they have implemented a cap-and-trade program
for electric generation in China.
- Yeah, no, I’m aware of that
having done a lot of research on China.
And if you just, if you look at aerial photographs
of Beijing over decades,
before you couldn’t see Beijing at all,
and the progress that has been made is really remarkable.
I have one final question before I open it up to the floor.
After I ask my question,
and you’ll give us your thoughts on that,
if you want to ask a question,
you can then go to the mic,
and you can identify yourself,
and ask your question.
So, my last question here is what would you recommend
for Haas students,
or for non-Haas students for that matter,
who wanna lead businesses,
and also contribute to sustainability and climate solutions?
So, where should they be looking to make the biggest impact?
- I really wish that I had a good, simple answer
to give to that question.
But one of the things that I think we need to recognize,
is that given the vast amount of change
that has to happen throughout society,
maybe the goal of being a leader,
even though we do need leaders,
isn’t necessarily the most important thing.
I mean, if you’re gonna be the leader in something,
you should be a leader
that makes climate a big part of your portfolio,
of what you’re gonna be working on.
But you don’t have to be,
your goal doesn’t have to be the leader,
if you are serving the purpose
of building a community of people,
or groups that are addressing this issue collectively,
because this is about doing things for the public good
as opposed to only for the good of your own company.
So, in, you know, it’s a little bit antithetical
in some ways,
to the desire
which I’m sure all kinds of people
who come and get degrees here, you know,
have that leadership gene in them,
and they all have the potential to be leaders
wherever they are.
But I’m personally at a point now
where I’m beginning to think that maybe we need more people
who are doers, (laughs)
wherever they happen to be,
working together to solve problems.
Because we’re seeing the levels of resistance and backlash
to anything that involves asking people to share
in the common good.
So, if you can’t do it by mandating people
to do whatever it is you want them to do,
you really have to have people agreeing voluntarily,
that this is what they wanna do.
And it may mean that being a leader means, you know,
being a leader of your PTA, you know,
just to pick an example.
I don’t mean to put down on PTAs.
I think they’re actually very powerful.
It’s a, but we have to agree with each other
that this is something that we, you know,
that we all can agree that we want to do.
And that means talking to other people,
engaging with other people,
which is kind of the opposite of what you think of,
as the, you know, the hard driving CEO personality.
- It’s interesting because leadership these days
is a lot about influence.
And so we had, in a former Dean Speaker Series,
we had general McChrystal
who led the armed forces,
and he talked about how in the military,
even though the military,
we think of it as a hierarchical organization,
it’s all about leadership through influencing people,
inspiring people, educating people.
So, on that note, I would love to hear the first question.
- Thanks for speaking with us today.
I’m a MBA student here at Berkeley Haas.
My question is, looking forward,
what regulation do you see as being essential,
that isn’t out there today?
Can you translate the question?
What’s the critical new regulation
that needs to be passed?
[Will] Yes, thank you.
Thank you, I’m sorry.
I have a little feedback in my hearing, I think,
but also it is hard for a person
who has to stoop down to speak into the microphone.
So, I appreciate your patience.
So, I think the most critical new regulation
that we need at the national level,
probably builds on what’s already
in the Inflation Recovery Act that was out there.
So, you know, we were able to get money,
very large amounts of money passed,
but very little in the way of mandates
as to how it’s to be spent.
Probably the most important thing though,
if you sort of took a step back,
would be to what we could get rid of
by way of subsidies for the oil and gas industry.
There’s still way too much in the current system
that is keeping us from making the changes
that we need to make.
So, in addition to my carbon tax idea,
which is not my idea,
but some form of a carbon tax,
I think we probably need to close loopholes,
or close very longstanding special benefits
that are enjoyed.
Because there’s no,
there’s really just no hope to make it to our climate goals
if we can’t hasten the departure
of our current system.
I’ll buck the trend of needing to lean down.
I have to go up to the mic. (Mary laughs)
And I’m Chris, and I’m a first year MBA student
here as well.
I just recently was working
on the Clean Energy Transportation Group
over at PG&E,
so we dealt a fair amount with Californian regulators.
So, my question to you
is how do you see the sort of like, need for regulation,
and in, with sort of private companies,
versus the like, stifling nature
that sometimes that can have for innovation?
So, for instance, our group,
we wanted to go out and like, install more chargers,
but we were actually limited by our regulators to do that.
And so how do you see
like, the balance of like, checks and balances
put in place for safety and other requirements,
versus like allowing pure innovation to take over?
- Well, I have been a fan of the kind of regulations
that we did,
going back into the 1970s,
that forced big improvements
in the internal combustion engine,
where we didn’t specify what technologies
the companies had to use,
we specified an emissions level,
and let them decide what was gonna be the way
to get there.
And I still think that performance-based regulation
is preferable to technology-based regulation,
and that there’s plenty of spaces
where that can still be applied.
I do think that there need to be more incentives
for breakthroughs in technology
than there are today.
And we also have to look
at the ways in which systems work together.
So, if we can’t ultimately find ways
to reduce the need for people to drive,
it’ll take a whole lot longer
to get to where we need to go
in terms of emissions from that sector.
So, certainly, in this country,
the thing that’s been the hardest to tackle
is how to, how to create the ability
to build new housing,
and at the same time, you know,
build it in ways and in places
where people can bike, walk, and otherwise, you know,
lead healthier lives
than if they have to be providing time and space
for their vehicles.
So, it’s a, it’s more of a holistic pattern.
And I think the failures of the regulatory system
tend to be more where one set of regulators
isn’t looking at what other regulators are doing,
and figuring out how to get them to work together.
One of the things that I thought President Biden did
sort of early on,
which I don’t think got a lot of attention,
but was actually one of the hardest things
ever to do in government,
is that he took two cabinet agencies,
the Department of Energy,
and the Department of Transportation,
and he made them start a new program jointly together
around electrification of the transportation system.
So, you know, each one has its own pride,
it has its own ideas about how things should be done,
but when it comes to deployment of electric charging,
they are absolutely joined at the hip,
and one can’t move without the other.
That is really policy making at its hardest.
My name is Meredith Fowlie.
I’m a professor of economics from RCNR.
We’re the College of National Resources.
Thanks so much for being here.
Quick question about cap and trade.
So, I share your view
that it’s really an important part
of sort of the large policy landscape.
And California had been leading,
but as you see Canada, and Washington,
and Europe push forward,
it’s playing a diminished role in the scoping plan.
It has no official future past 2030,
which I’m concerned about.
So, I guess, given that you are such an instrumental part
of the launch of the Cap-and-Trade Program,
I’m wondering if you can comment on the future trajectory,
given sort of where things seem to be going,
and then where they could be going
with some sort of policy leadership.
- Well, you know, the, you reach a point
where you have to sort of decide
if the price of the allowances has gotten to a point
where that in and of itself
is gonna cause a political backlash.
And because there’s such a narrow set of people
who actually are subject to the requirements,
we’re not there yet.
But you could easily foresee that after 2030,
you could be at that point
in which case you’d be looking for a better way
to spread the costs,
than just through the carbon allowances.
I mean, California’s program, I think, is unique
in the way that it blends direct regulation
with a cap and trade program.
And the cap is the key thing,
not not the price on carbon.
But when you start to really lower the cap dramatically,
then the price of carbon obviously does have to go up,
‘cause there just aren’t enough allowances around
for the people who need them.
Then you have to decide whether there’s some other technique
that’s gonna come along,
that’s going to be more effective
at allowing for things like cement
to continue to be produced,
or you have to decide
you’re not gonna produce cement anymore.
And so I think they’re looking in a pretty scalpel-like way
at where you can do more with regulation,
and where you can do more with the cap and trade system,
and not ready to really come down one way or the other.
Meantime, if I’m right
that the United States, at some point,
is gonna have to kind of find a way
to work its way towards a carbon tax,
then you’re gonna have to figure out how to layer that
on top of the existing Cap-and-Trade Program.
So, I mean, I believed at the time we started the program
that there was going to be a federal program,
and that we would eventually have to negotiate
where our system could be folded into a federal system.
I still think that that’s the most desirable goal.
I don’t think we should be aiming towards a system
where every state has its own.
You know, if Oregon and Washington
are able to develop their programs
in a way that allows for meaningful linkage, real linkage,
between the three,
then it might become more possible.
But, you know, we’re not the, even as the Pacific West,
it’s still not a big enough market
to really, I think, keep things moving
as far as we need for them to go.
I think we have time for one last question.
Hi, my name is Arno;
a first-year MBA student.
So, up to now,
much of the focus has been on carbon dioxide,
very little on methane,
although it’s a much more powerful greenhouse gas.
What regulations and policies
do you think states and countries should take
to cut these methane emissions?
What policies should-
What to do about regulating methane?
Yeah, no, I, okay.
another big question.
I have been involved and still am involved
with a public private partnership,
which is looking at ways
to improve our methane monitoring using satellites.
So, I think that we need to do a better job
of pinpointing where the largest targets of opportunity are,
not just to, not just to enforce existing regulations,
but to develop better new regulations as well.
The focus has mostly been on oil and gas,
where certainly, you know,
there’s a number of hot spots
where you should just focus in
on what’s leaking in those places,
and probably through a combination
just of information,
as well as developing some form of regulatory system,
But the other big sources are the landfills,
which are also very large sources,
and need a different type of regulation,
which hasn’t been really worked on for a long time.
And then agricultural production,
especially animal, animal raising.
And there are separate strategies
that are sort of being looked at for each of them.
But again, I feel like it’s important
that we try to pick out where the places are
that are the biggest sources,
and work directly on those,
because we don’t have time to develop a set of regulations
that are gonna work for everybody.
So, if we can come up with better technologies
in some cases, alternatives to the product completely,
and then, and then work on the regulatory side,
I think that’s where we have our greatest opportunities.
- So, I want everyone to help me
in acknowledging and thanking Mary Nichols;
a pioneer in the clearing air movement,
continuing to make a huge difference every day.
Thank you so much
for joining us today. - Thank you.
(audience applauding) Thank you.
Everybody is gonna be a clean air warrior here.
This entire group.
- [Interviewer] I think we have a lot of warriors.