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Markham interviews Dr. Danny Cullenward, Stanford energy economist and lawyer, and co-author with Dr. David G. Victor, of the new book, "Making climate policy work."
Journalist Markham Hislop interviews leading energy experts from around the world about the energy transition and climate change.
And I think the thing that was really striking to us is for most of our careers, we've heard a level of conversation between academics, policymakers, members of the media, other elite actors in the energy system that is really prioritized and focused on this question of how carbon pricing can be used and maybe should be the primary instrument by which the world decarbonizes. And I think if you look at the history of climate strategy, particularly at international climate negotiations, carbon trading, carbon pricing has been at the heart of that for decades. When we look on the ground at the things that we see moving, really, emissions outcomes in serious ways, we don't see very many places where carbon pricing has been the primary driver of change.
Markham:Welcome to another episode of Energy Talks, the podcast where we discuss global energy issues and trends with experts from around the world. In this episode, I'll be talking to doctor Danny Cullinward, a Stanford energy economist and lawyer who has coauthored a very interesting book titled Making Climate Policy Work. Welcome to Energy Talks, Danny.
Danny:Thanks for having me, Markham. I really appreciate the chance to be here.
Markham:So if I were to summarize your book's thesis, it would be that market based climate policy, and we're primarily talking about carbon taxes and cap and trade, that kind of policy doesn't work and policy makers must put more emphasis on industrial policy like regulations. Have I summed it up accurately?
Danny:I think at a at a high level past that's that's accurate. I wanna be clear. I think there's a lot of nuance in this discussion, and neither myself nor my coauthor David Victor from, UC San Diego, we're not opposed to market based policies, and we think they can play important roles. We just think if you look really carefully at how they work and how they've operated, that role is a lot smaller than basically all of the discourse around this policy instrument has suggested it should be or could be. So it's a bit of a nuanced argument in the sense that we're not saying take a sledgehammer to all of these policies, but we do think that they've been overhyped and that understanding their practical limitations is a key part of getting the response to climate
Markham:change right. Now maybe I'll put a little framework around our conversation, talk about the 3 policy levers that I've discussed with other economists when we talk about carbon policy. And that would be number 1, carbon pricing, number 2, regulation, and number 3, subsidies. And so that might be subsidies to develop new technologies or some subsidies to adopt new technologies, say, 0 emission vehicles, something like that. Does that capture most of the policy instruments that, you might be talking about?
Danny:Yeah. I think, I think that's an important grouping. You know, the only other piece of this is something we focus a lot on in the book when we talk about nonmarket based instruments is is the role of the state. And I do think I'm not sure where in your typology you'd put this, but I think government procurement mandates and other standards, you could you can call that regulation, but particularly flexible performance based standards and procurement standards, I think, are gonna be an important part of the story. If that fits under regulation, you've checked all of my boxes, than And there's there's a broad spectrum of regulation, that frankly looks a lot like a market based policy if you focus it really carefully, on the needs of a sector and think very carefully about the options the sector could take to achieve a clinical.
Markham:Now maybe for the next question, Danny, if I could get you to give me an overview of the book.
Danny:Sure. So my co author David and I have been working on markets for really significant parts of our career. I'm quite a bit younger than than he is, so he's been doing this basically since the international community started meeting to discuss the climate problem. And I've been thinking about this for the last 10 or 15 years, and we've worked deep down in the trenches of both government policy systems and corporate strategies to address the climate challenge. And I think the thing that was really striking to us is for most of our careers, we've heard a level of conversation between academics, policymakers, members of the media, other elite actors in the energy system that is really prioritized and focused on this question of how carbon pricing can be used and maybe should be the primary instrument by which the world decarbonizes.
Danny:And I think if you look at the history of climate strategy, international climate negotiations, carbon trading, carbon pricing has been at the heart of that for decades. When we look on the ground at the things that we see moving really emissions outcomes in serious ways, we don't see very many places where carbon pricing has been the primary driver of change. That's not to say it hasn't been a driver, and and we'll probably talk about a couple of the the key examples where it has made a difference. But for the most part, we see what we've called industrial policy, regulatory standards, government procurement standards, flexible performance measures, driving a lot more of the innovation and deployment outcomes that make a difference to emissions and to the long term transformation of the energy system and other key sectors that, contribute to the climate problem. So what we set out to do in the book basically is describe why we see that even in places that have adopted and really promoted the concept of market based climate policy mechanisms.
Danny:And at its core, the book is meant to be a political model that explains from very simple first principles how you can think about the structural forces that render these programs less effective than theory would suggest they could or should be, how to understand that, and then what to do about it. And the two things we suggest you should do about it are start to reform these programs based on these political barriers and refocus on other strategies that drive the outcomes.
Markham:Let's talk about the 5 actors that are in your political model. Give us a description of them, please.
Danny:Sure. So, you know, honestly, when we look at these actors, we tried to see ask ourselves, who are the most important players when you think about the design and implementation of these market based systems? And to be honest, there's 3 that make a huge difference. The first is incumbent industries that are major emitters. Those are the folks who are there.
Danny:It's the electric utilities. It's the refining industry. It's the oil and gas extraction industry. It's the big players who are gonna be subject to whatever government policies are pursued. The second major, category of actors is the general public.
Danny:In democracies, those are the voters who decide who's gonna be in office or not. In more autocratic systems, it's the broad perception of whether or not a government is has legitimacy and can stay in power. The 3rd major category of actors is political leaders themselves. And I think this is something that David and I have thought a lot about because when you actually work on these systems, you know, you realize very quickly you're talking about individual people making political bets about their careers And politicians, whatever one thinks of them, they have to think very carefully about their careers and the politics of their careers. And my friends in the economics community sometimes don't sort of internalize that as a key focus area, but we think it's an important part of explaining the book.
Danny:The 2 other groups, that we talk about at times in the book, but which frankly don't do a lot, in in the way of explaining the outcomes we see, one is the role of civil society, like environmental nonprofits. For the most part, they're not terribly engaged in these systems, at least not on the macro design side. We could talk a little bit about that, but they haven't been as deeply engaged in most places as one might imagine. And the second group is new low carbon industries. And I think that may be one of the most challenging pieces of this puzzle.
Danny:If we're gonna make an energy or a climate transition, there are gonna be new players that are happy about climate policy. They, for the most part, don't exist. They're starting to come into existence now, but they are not a major political constituency. And therefore, we don't see them shaping the macro outcomes of these systems just yet.
Markham:There's a lot to unpack here, and I guess I wanna start with an example that illustrates the incumbency issue. So in Canada we have the Canadian Association of Petroleum Producers or CAP as it's commonly known, and it is the oil and gas industry's largest trade association. And it has for years, lobbied governments both federal and provincial arguing against, the need to design policy to limit carbon leakage. So that is the you put in climate policies that are punitive for your industry, which then migrates and takes its investment to jurisdictions where they have less punitive climate policy. And they call these energy intensive trade exposed industries.
Markham:And so a lot of the carbon pricing that's been designed in Canada around large emitters, has discounts, output based allocations for instance, that allow the industry to only pay a fraction of the actual carbon price, that's in place. So in Canada, it's been 20 or $30 a ton, and the general discount has been in the neighborhood of 80 or 90%, and so what you see is that the effective carbon price is actually 50ยข or a dollar a ton or some low number that really doesn't make much of a difference in terms of firms changing their decisions and lowering their emissions. Low and behold, that's exactly what you see, emissions growing and and not, not shrinking. So what's your take on that anecdote?
Danny:Well, my take on that anecdote is anybody who starts with that question kinda knows what's going on. And that's, I think, the key part of the book is look at practical reality and what's going on. So to back up, leakage is a real issue. And it's a particularly salient political issue because even though it's expressed in the language of what might happen to emissions, if we reduce them here and we simply shift where firms operate our competitors somewhere else, increase their production and their emissions. What we're really talking about in political terms is money and jobs and investment.
Danny:And that's what matters to the incumbent firms. And that's what matters to the politicians who have to adjudicate these questions in the design implementation of climate policies. So what you see in almost all cap and trade programs that include the industrial sector, that include the petroleum sectors, as you referenced in some of these Canadian systems, is a system that distorts the classical theoretical ideal of what a carbon price is by providing what is, I think, in practice, often a partial exemption. Now there's some really beautiful economic literature and thinking about how to design these systems so that the carbon incentive, the the pressure to reduce emissions prevails, but it all turns on getting extraordinarily complex calculations about industry and often facility specific needs correct. And in that environment, the incumbent industries lobby heavily for sometimes more allocations than they need for more generous outcomes.
Danny:Why wouldn't you if you were a self interested actor in these systems? And so the challenge that governments face is how to design these to be, as close to accurate as possible to be as, firm as is possible without, undermining the leakage concerns and the political consequences of industries moving abroad. And again, the big problem is you're you're shooting in the dark when you're a policymaker trying to do that. And so almost everywhere these systems exist in the industrial sector, we see significant exemptions. And these accommodations which policymakers provide to address the well organized and highly persuasive interests of these, you know, significant incumbent firms.
Danny:So what you see in the industrial sector is often very different than what you see in the electricity sector precisely for these political reasons, and it's an almost universal feature of these programs around the world.
Markham:Now, again, I can use the example of Canada, but I think this is a fairly widespread principle, and that is voters really don't like carbon pricing. They don't like carbon taxes in particular, whether it's the, the connotation of a tax, nobody likes a tax, or it could be, that they don't understand how it works, and they don't because often carbon pricing schemes will return some of or a 100% of what you pay will return them to you in lower taxes or in in rebates. But they really don't like them, and so governments in Canada have struggled with how to impose carbon pricing, both at the consumer level, the widespread society level, as well as at the industrial level. And so the politics of this has been very, very interesting because the academic economists have come out en masse to argue that the voters just don't understand carbon pricing. And if they only understood carbon pricing, then they would be far more supportive, than they than they currently are.
Markham:And it's been an argument that's fallen on deaf ears. Now despite all of that, the, Justin Trudeau government, prime minister Justin Trudeau at the federal level, has brought in a very ambitious climate plan that includes and this is quite, quite interesting because it was done before you finished your finished your book. But then in December, he, announced that the carbon price, the national carbon price, would rise from $30 a ton to $170 a ton by 2,030. So that's 14 or $15 a ton per year, and I think that's pretty aggressive. I'm not sure that there's another government in the world that's that's been that aggressive with carbon pricing.
Markham:But in addition to that, he has these other policy levers. So regulations and subsidies abound to work altogether. So would you argue that a climate policy program like that, that has a mix of all of those policy levers, and carbon pricing is is, becomes fairly robust in a short period of time might be a pretty good climate policy model.
Danny:So a couple of things to say. Maybe the first thing to say is that, one of the things we do in the book is we we take the question of carbon pricing not as a as a something to oppose, but we take all of the desirable premises if you could do it as granted. And we respond to how the system is in practice, when you look at the practical political function of their implementation, are distorted from those theoretical ideals. So I wanna be really clear. This isn't an argument that says having a carbon price of $170 is bad.
Danny:That's that's good from a climate policy perspective. Question is, how do you get there? How do you overcome the political barriers to do that? And if you can overcome these barriers, what's the appropriate mixture of policy instruments? And I think that the universal experience basically everywhere in the world is that, everywhere that has a carbon price and nobody has carbon price quite like the Canadian proposal yet, also has really ambitious complementary regulatory policies.
Danny:And often those are the actual focus of the policy efforts in those jurisdictions. A lot of academic thinking goes into the idea of could we just get rid of all of that with a high enough carbon price? And I don't think we've seen a successful example of that occurring anywhere. One of the arguments we make in the book is an economy wide carbon price is actually not a particularly useful thing if you're trying to think about the transformation of entire industries because a market wide, economy wide price might be a good enough price to get you from coal to gas and then to renewables. But it might not be at all a relevant price for a large scale technological demonstration project.
Danny:And I'll give you an example. We we cite in the book. The Norwegian government is pursuing, with a number of private companies, a large, carbon capture and storage facility in the North Sea. And Europe, which has far and away the most aggressive carbon pricing program in reality, not on paper, but in actual practice, those prices aren't high enough, and they're not reliable enough for that to justify, this large multibillion dollar project. And so even in the sort of best of all possible outcomes, a permissive government with a strong carbon pricing signal.
Danny:That project still needed direct government support mandates and other structures to lock in and make financeable a large project doing something very, very different. You will always have that kind of problem if you're relying exclusively on a carbon price to get things done. And that's, think, the primary reason why we're always gonna need a combination of these features because the different sectors are at very different stages of technological maturation as we're looking out to try and to get to a zero emissions economy. You're just never gonna have everybody in the same place. But the whole idea of a carbon price is is one price to rule all of the climate problems.
Danny:That's a mismatch to the nature of the problems we see. We can talk if you're interested about the the specifics of the But I think it also raises a number of questions we tried to talk about in the book about these structural problems sector by sector and constituency by constituency, where I think there are some open questions that that I'll certainly be paying close attention to as this proposal moves closer to implementation.
Markham:Well, let let's have that conversation, and I'll frame it this way. Like most federations, constitutional authority is split between the subnational governments and the national government. And so because this deals, the climate Canadian climate policy is, rightly concerned with energy, which is the purview of the provinces, that makes the the federal government, it makes it difficult for it because it doesn't have direct jurisdictional control over many of the these sectors, and so it has to use carrots and sticks to get the the provincial governments to fall in line. And I'll use the example of the premier Rachel Notley, who is in power in Alberta, which is the big oil and gas producing province between 2015 and 2019. And in late 2015, she brought in the climate leadership plan, which was very ambitious in an oil and gas producing jurisdiction.
Markham:That became the focal point for political opposition. And she was replaced in April of 2019 with a very conservative, very backward looking, United Conservative Party led by premier Jason Kenney and who immediately rolled back everything he could and canceled everything that he could from the climate leadership plan. And that speaks directly to the problem you've got of building political constituencies, around climate policy, I think.
Danny:Yeah. I mean, I think that the durability of these systems is is one of the major challenges we see. And, you know, I'm I'm not an expert in Canadian law or policy, but, you know, I think you have these challenges when people have envisioned, initially in the climate policy discussion, a global or an international carbon price strategy would be sort of imposed from the top down. That's the way people used to talk in the 19 nineties and early 2000 in the sort of post Kyoto era.
Markham:For a
Danny:variety of reasons, it doesn't work. In the sort of more contemporary era, we've talked a lot more about the idea of linking programs together. And California has a link to a program in Quebec and, of course, had one as well to to a program in Ontario before Doug Ford's government was elected. And, you know, I think one of the things we see when you look out there, in the real world is that these links are quite brittle. They're easily reversed, and that is not an accident.
Danny:It's very difficult to coordinate and sustain these kinds of efforts. And I'm not suggesting that anti climate governments can't roll back government support in the form of subsidy or regulation, but the complexity and the political challenge of implementing durable carbon pricing, I think, is more significant than than a lot of people appreciate. You see it rolled back and you don't see it rolled forward very often. And I'll give you just another brief example. In the United States, we are almost certainly going to see under the Biden administration a Trump administration.
Danny:That's gonna be easier to do than if we had carbon pricing and the Trump administration took it away, and you had to fight that fight all over again. I think that's significantly harder to do than these piece by piece provisions where you can go one at a time. So it is it is very difficult. And I I understand, you know, a huge part of the challenge in Canada is that the provinces have to implement these programs. And if they don't, a federal backstop is imposed.
Danny:We have a very similar construct in the United States. And I think, you know, that only increases some of the tensions if you have states that don't wanna pursue it and you have to have the federal government come in. That only amplifies the political concerns you've identified.
Markham:Let's talk about the American context, which is particularly relevant right now because the Biden administration will be taking power on on January 20th, and we're recording this on January 7th. And it seems to me that there are a lot of parallels in terms of the the jurisdictional split of power between the federal and the and the subnational governments. And one of the misconceptions because Trump has been in for the last 4 years is that the US doesn't have climate policy. Whereas in fact, at the state level, there's a tremendous amount of of policy initiative going on. Now obviously, some states are much further ahead.
Markham:California would be would be one of them, and some of the other West Coast states, but it's not like there's a complete and utter policy vacuum. What do you make of that situation, in the context of the political model you have?
Danny:So I think it's one of the sort of reasons David and I were so interested in this. We wrote a book that we think has global relevance. We spent a lot of time. The book came out in Europe in the fall, so we've been in dialogue with a lot of colleagues in Europe about these issues. But a huge part of the motivation was the US experience.
Danny:And as you say, there's a lot of climate policy and a lot of clean energy policy in the US. Most of it's at the state level. And I think one of the things that's concerning from my point of view is if you look at the history of US climate policy, the vast majority of the explicit climate policy efforts that exist at the state level were developed during the George W Bush administration, which, well, nothing quite like the Trump administration, was opposed to legally binding climate policy. And so you saw the states sort of come together and develop various models. And that was very much the peak of the notion in the United States that a set of policies designed around compromise with the center of the political spectrum with a market orientation would bring businesses and other elite actors on board that could convince conservative politicians to vote for these kinds of systems at the federal level.
Danny:That never happened, But the blueprint that was developed and implemented at the state level is what we have in place. And so if you look at the states that are doing climate and clean energy policy, we have 2 major carbon pricing systems, contribute to this misunderstanding that carbon pricing has been driving the change and effort you see, in these states. When I think in practice, they've done very, very little. And we could talk more about that, but it's it's a similar situation where, we call it in the book, we call these things Potemkin markets. They exist, but they act only on the surface of what's going on in the clean energy and climate policy systems in those jurisdictions.
Danny:And, you know, I think trying to understand that and get a state policy model that works and scales to the ambition of what we need by mid century is a key challenge for the incoming administration, particularly since they're likely to have fewer levers, in a narrowly divided, federal setting.
Markham:I actually wanna talk about an argument that you make in the book, and I'm gonna push back against it a little bit. And that is that carbon pricing only works in mature industries or industries like the power sector where the the new technology, the clean energy technology is already reasonably mature. So we're gonna be talking about wind and solar, and to a lesser extent batteries. And you have a wonderful chart on page 5 of your book, that shows an s curve, and the 10 secondtors that you talk about. And 4 of those sectors, well, really only 3, but, which is buildings, power, and cars that are have made any progress, significant progress up to the s curve and are maybe getting close to the inflection point.
Markham:And so your argument is that market that, carbon pricing will work perhaps with those sectors, because the technology is becoming mature and competitive and ready to displace the incumbent technology. But in all of these other sectors like steel and cement and so on, they're immature, and they really need novel technologies that are immature or not are still in the lab. And I would argue that the 3, 4 technologies that are close to the inflection point actually account for a significant portion of global emissions already. And there's a tremendous amount of, of energy related technology that during the 2020, this is going to be the disruptive decade where many of those technologies become economic and begin to push out the push the dominant technology out of the marketplace and displace it. And and I think, from my point of view, you kinda downplay that a little bit.
Markham:And and I think I think that carbon pricing, because of where the technology is, more developed in my view, could play a a bigger role. What's your take?
Danny:So these are all really good points, and and I appreciate the the pushback and the perspective. I think where we tried to focus on the book and that that material you're discussing is very much sort of in the introduction about framing the motivation for the book. And I and I think your points are well taken, at least it's certainly on my side. What we try to do is lay out a political model for how to think about the politics of these systems, how you develop coalitions in support of these things. And I think what's so intriguing and challenging from my perspective is name any of those technology areas or sectors where I agree with you.
Danny:There's you can see the momentum and you can see the possibility of in the very, very near future rapid escalation of adoption in a number of dimensions, batteries, electric vehicles, so forth. When you talk to the companies that are involved in those sectors and you say, where are you going to deploy your limited lobbying efforts? Rarely is the answer ever in carbon pricing. Rarely do they ever want to take on that challenge themselves. They focus much more on the direct government support mechanisms that have historically been much more successful.
Danny:So I don't disagree with you. To the extent technological progress makes those just marginally uncompetitive on the road to being perfectly privately competitive, that is a zone where carbon pricing can make a difference. And I think what we try to focus on in the book is under what circumstances you actually can get the kinds of political coalitions you need to get there. If you can give me a carbon price in those sectors, at those right times, it's gonna make a difference. And I don't disagree with that in the slightest.
Danny:The question is, what are the politics look like and how plausible is it that that is gonna be a direction that works? One last example just to make this concrete. If you're an electric vehicle manufacturer and you have to decide, shall I lobby for subsidies to consumers who buy my devices, or shall I lobby for a carbon price that applies to transportation fuels? The actual question you need to ask is, am I gonna be more able to convince politicians to spend taxpayer dollars for my private benefit? And I think the answer is unambiguously that it's gonna be a lot easier to try and direct those revenue flows than it is to convince a politician to impose a very visible cost increase broadly on the public at large.
Danny:We talk about which one's preferable from, like, an an objective or academic perspective, and there's an interesting debate to be had there. But when you get down to the ground on what people are actually doing, it's not an accident that an electric vehicle manufacturer is very likely gonna go the regulatory and subsidy route in terms of where it focuses its efforts.
Markham:Let's talk about environmental groups, as because that's one of your your actors in your political model, and I tend to think that they're more influential than, you perhaps argued, and let me explain why. I do a lot of reporting in both Canada and the US on environmental groups, opposition or in support of various policies. And in the US in particular, I think that it's had a those groups have had significant impacts on, policy development both at the State and the Federal level, but there's also many practical or, you know campaigns that have a big impact. So for instance the Sierra Club's anti coal campaign. They sued coal utilities and had them shut down a very large number of coal fired plants early earlier than they would have normally.
Markham:So that's been successful. Then you look at the groups that are allied against the Keystone XL Pipeline from Alberta down to the US Gulf Coast. They've essentially stalled that, and now it looks like Biden is going to going to cancel it. So I think that those actors have actually been more in you know, quite influential in the development of of policy and creating the political coalition to make that policy stick. What's your take?
Danny:I completely agree with that, and I think the point we were trying to make in the book, and I may have done a poor job of explaining here, is when we say we don't see them playing a very significant or influential role, we mean exclusively with respect to carbon pricing. And as to your points about the way that they have organized around different campaigns that have had, in some cases, profound impacts on the development of policy and industrial strategies, but you'll get no argument. In fact, one of the things I think is so striking is that you can point to so many groups that have been so influential in outcomes and in the policy debate. And you basically don't see anything registering anywhere near that level when it comes to carbon pricing. There are groups that are ideologically strongly supportive of market based instruments and are part of the sort of generic chorus in support of these policies.
Danny:But when it comes down to the details of these exemptions that industry demands to accommodate political considerations, there are very few groups that operate at that level and very few groups that, present a sort of countervailing political position to the interests of the incumbents. Maybe the most striking thing about environmental groups from from my perspective is the role they've played championing carbon offsets often to capture essentially what I think are rents, that effectively bypass the state. And conservation organizations and other organizations are able to direct to very specific policy outcomes where they basically allow a polluter that would be subject to these programs to get a form of partial exemption and direct the funds through a program that these NGOs help design and implement and then cloak in the green halo of it's good for the trees, it's good the planet, but it's really often a side deal between a conservation organization and an incumbent like the oil industry. And in that sphere, you see really sophisticated detailed engagement with environmental nonprofits. In Europe, which has been dealing with these policies for a lot longer, there's also more of an established history of environmental groups, really learning the details and and developing coherent positions, to engage.
Danny:But for the most part, in in the United States, that's not been the case. And I suspect, obviously, the the prominence of the Canadian proposal is likely to mean a a great many Canadian groups are gonna be closely involved in this process going forward. Danny,
Markham:I wanna finish our conversation with a discussion about narrative, which is closely tied to politics and creating the political environment for policy. And I have argued in columns that we should change the narrative from climate and emissions reduction to managing the energy transition, arguing that the very thing that the, climate movement has asked for, which is new clean, low emitting or zero emitting technology is on its way. It's now not a matter of if, it's a matter of when that will arrive. And when we frame it as an energy transition issue, now we're talking about 2 things primarily. 1 is mitigating risk, and everybody understands risk, risk to my job, risk to my business, risk to my pensions.
Markham:We wanna mitigate that as much as possible. And also seizing opportunities. Who doesn't wanna support the emergence of new industries and new good paying jobs and so on? And that I think changes the narrative and changes the politics around the kind of policy that you're talking about in a more positive way than it does if we're talking about climate and, you know, the fear based narrative around burning the planet, you know, plant burning up by 2,100 if we don't act now. What what's your take?
Danny:I mean, I think you have to build a broad coalition to engage on these issues seriously, and I think, you know, it's really easy to fall into an exclusively climate focus on issues. And I think that, you know, certainly in the United States, that's not enough for a broad coalition. In Europe, I think there's a lot more potential for that, and I would suspect I think it's fair to say that Canada is maybe better resembles the United States along that dimension than it does Europe. And, you know, I don't know what to say. I mean, I think I think labor issues are gonna be the key to a lot of these coalitions and managing industrial transformation, really talking seriously about the level of investment and build out that's required to replace even retiring infrastructure, let alone replace it faster and and along a direction that is consistent with the climate.
Danny:I mean, that is gonna be what I think gets people out of bed. And if you look, I know quite a a little bit about the history of renewable energy policy in the United States. When you look at the state level mandates to procure renewable electricity, they're often framed as a risk management question to keep prices down because you have fixed price contracts, which are now the cheapest option going forward for the most part. And they're also often specifically coalitions that involve labor where you say we wanna build the projects here and with jobs here and with labor standards that reflect the position of key constituencies within local, political structures. So, I mean, I think in some respects, that's kind of how we've been doing clean energy in a lot of places for a while.
Danny:And it's the climate conversation that's been a little bit abstracted. The more it looks like the clean energy deployment conversation, the happier I am.
Markham:Danny, thank you very much for this. It's been a fascinating conversation. I really appreciate it, and good luck with the book.
Danny:Thank you very much for having me. I appreciate it.