UCLA’s Carbon Upcycling Team Advances to Semifinals of Carbon XPRIZE Competition

By Stan Paul

An interdisciplinary team of UCLA researchers has advanced to the semifinal round of a global competition to reduce greenhouse gases through groundbreaking scientific and technological innovation.

The UCLA team, Carbon Upcycling — representing a campuswide collaboration of chemistry, biochemistry, materials science, economics, public policy and engineering (mechanical, civil and environmental) researchers — is among 27 teams moving one step closer to a share of the $20-million NRG COSIA Carbon XPRIZE.

“Advancing to the next round of the Carbon XPRIZE confirms the potential of our carbon upcycling technology, and further motivates the team toward its end goal, that is the realization of a carbon-neutral cementation solution at scale,” said Gaurav Sant, one of five UCLA faculty members leading the 13-member team. Sant is an associate professor and Henry Samueli Fellow in Civil and Environmental Engineering at UCLA.

J.R. DeShazo, director of the Luskin Center for Innovation and a professor of Public Policy in the UCLA Luskin School of Public Affairs, is one of the leaders of the project. “The XPRIZE competition not only inspires innovation, but also provides an opportunity to showcase the talent at UCLA and the incredible power of collaboration,” DeShazo said. “We look forward to the next stage of discovery and development.”

The competition, which was launched in 2015, “addresses global CO2 emissions by incentivizing innovative solutions to convert CO2 from a liability into an asset,” according to a Carbon XPRIZE press release announcing the selection of teams moving forward in the competition.

Carbon Upcycling uses CO2 emissions from power plants and turns them into a replacement material for cement called CO2NCRETE. Common concrete, which is produced in countries around the globe, is responsible for nearly 5 percent of emissions worldwide. The UCLA team is among six teams vying in both competition tracks: Track A — coal, and Track B — natural gas. Other semifinal teams from the United States, Canada, China, India, Switzerland and Scotland have focused on turning the climate-changing gas into products ranging from toothpaste to fish food.

According to the Carbon XPRIZE announcement, the semifinals will work as follows:

  • Teams will demonstrate their innovative technology at pilot scale at a location of their own choosing, using either real flue gas or simulated flue gas stream.
  • Over a 10-month period, teams must meet minimum requirements and will be scored on how much CO2 they convert and the net value of their products.
  • Following judging scheduled for November and December 2017, up to five teams in each track that score the highest will share a $2.5-million milestone purse and move onto the finals of the competition, demonstrating their technology at real-world power plants.

Read the full Carbon XPRIZE release online at:

For more information about the NRG COSIA Carbon XPRIZE, visit carbon.xprize.org

For more information about UCLA Carbon Upcycling team, please visit: http://www.co2upcycling.com/members/

Read the earlier UCLA story: http://luskin.ucla.edu/2016/03/14/carbon-upcycling-turning-co2-into-a-new-sustainable-co2ncrete/

A Guide to Turn the L.A. River Green UCLA Luskin Center for Innovation creates a toolkit to help communities navigate paths to improving the river’s greenbelt

By George Foulsham

If you’re looking for an example of what communities can do to take advantage of the land that adjoins the Los Angeles River, look no further than Marsh Park — 3.9 acres of greenway in the Elysian Valley neighborhood of Los Angeles, not far from downtown.

The park features trees, green infrastructure, play and fitness equipment, a walking path, picnic tables and an open-air pavilion, all built around a large industrial building that houses a company that takes modular shipping containers and turns them into residences for the homeless.

The park also serves as a gateway to the L.A. River and is one of the case studies used by researchers from the UCLA Luskin Center for Innovation in preparing a new Los Angeles River Greenway Guide. The guide is now available online.

“The L.A. River Greenway Guide consists of 14 case studies that highlight different parks, pathways, access points and bridges that have been constructed along the river,” J.R. DeShazo, director of the Luskin Center for Innovation, said. “What we have tried to do is to identify successful examples of improvements in the river greenway and then identify the challenges and the obstacles that those improvements faced so that other communities can learn from their successes, challenges and, sometimes, their failures.”

Marsh Park is one of the 14 case studies used by Luskin researchers to create the L.A. River Greenway Guide. Photo by Andrew Pasillas

The guide highlights four types of projects: bridges across the river, pathways along the river, community access points that connect communities to the river, and parks next to the river. It looks at the history of various efforts, identifies the challenges faced in each of those projects and spells out how those obstacles were overcome, leading to successful riverside gateways.

One example of useful information provided by the guide is a section on overcoming the hurdles associated with ownership and governance issues, with hints on how to deal with easement, maintenance and permit questions.

The guide will be unveiled at a free event, “A Night at the L.A. River,” on Saturday, Sept. 10, from 5 to 8 p.m. at the Frog Spot, 2825 Benedict St., in Los Angeles. It is co-sponsored by the Luskin Center for Innovation and the Friends of the Los Angeles River. The event will include a panel discussion on the “L.A. River Greenway Through Public-Private Partnership,” featuring Michael Affeldt of the L.A. mayor’s office.

The L.A. River, which starts in the Simi Hills and meanders 51 miles to the Port of Long Beach, has been called one of Los Angeles’ most ill-used natural treasures but also a neglected eyesore that looks more like a deserted freeway than a river.

In recent decades, concerted efforts have sought to revitalize and repurpose the river and its adjoining greenbelt. Graduate student researchers and scholars at the Luskin Center, part of the UCLA Luskin School of Public Affairs, are working with stakeholders, communities and organizations in an attempt to create a new future for the river and its environs.

The Luskin students, guided by DeShazo, deputy director Colleen Callahan and project manager Kelsey Jessup, produced the toolkit after receiving feedback at a workshop hosted by the Luskin Center earlier this year. Participants included staff, advocates and leaders from the communities, as well as nonprofits, government agencies, elected officials, policymakers, business and business associations, and academics, researchers and students.

The Luskin students have met with representatives from the communities that border the L.A. River, seeking their input and concerns. The new guide reflects the Luskin team’s research and recommendations.

“We think about the L.A. River greenway as an opportunity to enhance a 51-mile stretch adjacent to the L.A. River,” said Andrew Pasillas, a Luskin researcher who graduated in June with a master’s degree in urban planning. “In choosing a range of focus for the guide, we first held a lower L.A. River workshop which over 100 community residents and organizations attended. We heard from them what would be most beneficial in their efforts to develop projects, talking about these specific development processes and where they stumbled in the past.”

According to DeShazo, the researchers studied examples of successful projects — often near the northern part of the river — and “we thought about how those opportunities could be realized in the lower parts of the river where there are fewer river amenities and the greenway is more incomplete.”

The guide, Jessup said, is also a nod to what has already been accomplished.

“The Luskin Center’s Greenway Guide aims to do two important things,” Jessup said. “The first is to document the incredible work that has already happened along the river. Organizations have been implementing projects along all 51 miles and there is no real way for anyone to learn about all the projects, the details and the incredible work that has happened.

“Our second goal,” she added, “is to provide a resource for community members, government agencies and anyone who wants to do a project — to better understand the challenges that come with doing a project along the river and to come up with solutions to overcome those challenges.”

The researchers studied the history of the river — why it was ignored for so many years and what helped transform the region’s approach from what had been nothing more than a flood-control mechanism.

“Revitalizing the river has been challenging because there has been a long history of isolating it from the public,” Pasillas said. “Stretching back to the early 1930s and ’40s, there was a series of devastating floods that led to the thought process that we have to place concrete on the river itself to protect people.”

“There’s been a disconnect between the people of Los Angeles and the river,” Jessup said. “A lot of people don’t even know there is a river, and if they do, they think it’s this concrete channel that is in the way and dividing communities.

“But there’s been a shift over the past few decades and a lot of communities are seeing the river as a resource and an opportunity, especially along the greenway, for health, transportation, environmental and economic benefits,” she added. “The Luskin Center started this guide because we saw an opportunity to complement some of the other efforts that are being made to help connect the community to the river.”

According to the researchers, the guide is an example of how the Luskin Center can help communities in Los Angeles and throughout Southern California overcome obstacles.

“We hope that this guide can serve to empower communities by bringing forth the voices of river-adjacent communities that have never been heard before,” Jessup said. “The idea of a complete river greenway is the equitable distribution of different project types for different communities and residents to enjoy.”

UCLA and the Luskin Center chose to take on the guide because of the university’s expertise in urban planning.

“We bring together skills — whether it be ecology, park design or financing expertise — needed to help bring these projects to fruition,” DeShazo said. “We are very committed to engaging with Los Angeles and the communities that make up Los Angeles and working with them to make sure their vision of their section of the greenway is realized.”

The L.A. River Greenway Guide was made possible by donations from the Rosalinde and Arthur Gilbert Foundation, the Bohnett Foundation and the California Endowment.

Bicycle paths are just one of the many recreational opportunities along the L.A. River. Photo by Andrew Pasillas

Bicycle paths are just one of the many recreational opportunities along the L.A. River. Photo by Andrew Pasillas

UCLA Carbon Upcycling Team Enters XPrize Interdisciplinary researchers, including UCLA Luskin faculty and students, will compete with teams from around the world vying for $20-million NRG COSIA Carbon XPrize

Carbon Upcycling, an interdisciplinary team from UCLA, has announced its official entry into the NRG COSIA Carbon XPRIZE. Carbon Upcycling, headquartered in Los Angeles with 13 team members, is among a growing number of teams from around the world vying for a share of the $20-million prize purse.

The Carbon XPRIZE is a competition that challenges teams to develop breakthrough technologies that convert the most CO2 into one or more products with the highest net value. Co-sponsored by NRG and COSIA, the multi-year competition is designed to address CO2 emissions from fossil fuels, a leading contributor to climate change.

Carbon Upcycling is composed of UCLA professors, students, and staff. The team has formed over the past year to explore new approaches for developing construction materials. Led by five distinguished professors including Gaurav Sant, associate professor and Henry Samueli Fellow in Civil and Environmental Engineering, and J.R. DeShazo, director of the UCLA Luskin Center and professor of Public Policy, Urban Planning and Environmental Engineering, the team has succeeded in developing a new technology which transforms waste carbon dioxide from power plants into a new building material that can replace cement, a material responsible for approximately 5 percent of worldwide CO2 emissions.

“We have proof of concept that we can do this,” DeShazo said. “But we need to begin the process of increasing the volume of material and then think about how to pilot it commercially. It’s one thing to prove these technologies in the laboratory. It’s another to take them out into the field and see how they work under real-world conditions.”

By removing CO2 from power plant smokestacks this technology reduces the largest single source of greenhouse gas emissions and could be a game-changer for climate policy, DeShazo said.

For more information about team Carbon Upcycling, please visit http://www.co2upcycling.com/. High-resolution images, video and other team materials are available upon request.

For more information about the NRG COSIA Carbon XPRIZE, visit http://carbon.xprize.org.

Sustainable Cities Conference to Include UCLA Luskin Experts UCLA Luskin School of Public Affairs among co-sponsors of May 16 conference focusing on transforming urban centers into sustainability leaders

Leading academics and experts from across the country and the globe will gather at UCLA on May 19, 2016, to discuss one of the most pressing challenges of the 21st century: achieving sustainability. Expert panels at the Smart and Sustainable Cities Conference will focus on critical areas for transforming the world’s urban centers into sustainability leaders: transportation, water, energy, the built environment, and the digital city and sharing economy.

A closing panel will take an integrated approach to defining what makes a “sustainable city,” discuss the context necessary for innovative technologies and policies to take hold, and consider the broad social and economic issues involved.

UCLA Luskin School of Public Affairs is among the co-sponsors of the conference. Three Luskin faculty members and one Luskin Scholar — all with extensive experience in urban sustainability — will participate in the conference. They will weigh in on the cutting-edge policies, designs and technologies that are helping cities use limited resources as efficiently and intelligently as possible.

J.R. DeShazo is the director of the Luskin Center for Innovation, vice chair of the Department of Public Policy at Luskin and a professor of Public Policy and Urban Planning at the UCLA Luskin School of Public Affairs. His latest research highlights the importance of innovation in the quest for urban sustainability. In March, DeShazo and a team of interdisciplinary researchers at UCLA unveiled a method for turning concrete, an essential building block of cities, into an essential building block of a sustainable future.

While essential to the modern world, the ubiquitous material is one of the biggest contributors to greenhouse gas emissions. About 5 percent of global emissions can be linked to concrete.

DeShazo and his team worked on a process that captures carbon from power plant smokestacks and turns it into an alternative to concrete — called CO2NCRETE. The closed-loop method for producing the material is highly efficient and environmentally friendly. It both limits carbon emissions and produces a fundamental building material for the modern world.

DeShazo’s current research also focuses on making Los Angeles County water self-sufficient. The project aims to create a feasible local water market for trading and selling county water resources, with input from stakeholders.

Dana Cuff is a professor of Architecture/Urban Design and Urban Planning and the founder and current director of UCLA’s cityLAB. Established in 2006, the research center explores the challenges facing the 21st century metropolis through design and research. Cuff’s work focuses on urban design, affordable housing, modernism, urban sensing technologies and the politics of place.

One of Cuff’s project at cityLAB included concept development and executive production of the BI(h)OME, which was completed last June. The ultra-modern lightweight accessory dwelling unit has the potential to address current housing shortages in an affordable way.

The structure also addresses urban sustainability challenges. The environmental impact of the structure over its entire life cycle is between 10 and 100 times less than a similar conventional structure and the BI(h)OME also can function as a biome, providing a home for multiple species. The structure also can supply water to surrounding vegetation using its grey water drainage system.

In August, Cuff received the Community Contribution Award from the local chapter of the American Institute of Architects for her dynamic design contributions to Los Angeles.

Martin Wachs is a Distinguished Professor Emeritus in Urban Planning at the Luskin School of Public Affairs. Wachs was a professor of civil and environmental engineering and professor of city and regional planning at the University of California, Berkeley, where he also served as director of the Institute of Transportation Studies.

Prior to his work in Berkeley, he spent 25 years at UCLA, where he served for 11 years as chair of the Department of Urban Planning. Wachs was also director of the Transportation, Space and Technology Program at the Rand Corp. in Santa Monica.

Wachs is the author of more than 180 articles on planning and transportation and he also wrote or edited five books on transportation finance and economics, planning and policy.

He is the recipient of a UCLA Alumni Association Distinguished Teaching Award and the Carey Award for service to the Transportation Research Board.

Luskin Scholar Yoram Cohen of the Henry Samueli School of Engineering and Applied Sciences has dedicated much of his work to water issues. In 2014, Cohen, the director of the Water Technology Research Center at UCLA, unveiled his portable, self-operating Smart Integrated Membrane System. SIMS makes undrinkable, brackish water usable.

Cohen has taken his system from the university campus into the field and it is currently being put to the test in the San Joaquin Valley, where it has successfully treated 25,000 gallons of contaminated water a day for almost two years. The potential of the system is vast thanks to its cost effectiveness and scalability.

Cohen is also the driving force behind the conference. One of the forum’s themes will be Israeli leadership in urban sustainability. Six of the 22 panelists are from Israel, which faces many of the same sustainability challenges as California.

Cohen also has deep ties to Israel. The Luskin Scholar and director of UCLA’s Y&S Nazarian Center for Israel Studies was born in Israel and maintains professional connections to his country of birth as a member of the International Advisory Committee to the Stephen and Nancy Grand Water Research Institute at Technion-Israel Institute of Technology and as an adjunct professor at Ben-Gurion University of the Negev.

The conference, at DeNeve Commons on the UCLA campus, is open to the public.

Many Happy Returns from Cap-and-Trade New Luskin Center study shows low-income California households are benefiting under the landmark climate program

By George Foulsham

Low-income Californians feel the pinch when gasoline, electricity and natural gas prices increase. And it’s logical to think that the state’s Cap-and-Trade program might add to those expenses. But this program is generating billions of dollars to provide an array of benefits to Californians, especially those living in disadvantaged communities.

Now, a first-of-its-kind study by the UCLA Luskin Center for Innovation has found that Cap-and-Trade has produced another very positive result. The study, “Protecting the Most Vulnerable: A Financial Analysis of Cap-and-Trade’s Impact on Households in Disadvantaged Communities across California,” revealed that the state has very effectively put in place measures to mitigate any disproportionate impact that might fall on low-income households.

According to the researchers, protective measures implemented by the state could more than offset Cap-and-Trade compliance costs that are passed on to electricity, natural gas and gasoline consumers.

“As consumers of these three industries, we asked what are the Cap-and-Trade compliance costs for these industries,” said J.R. DeShazo, director of the Luskin Center for Innovation and principal investigator on the project. “What is the cost pass-through from the regulated industries to consumers and what are the strategies to reduce those cost pass-throughs from Cap-and-Trade? And, finally, what is the net financial impact?”

Low-income households inevitably are going to bear a stronger burden from regulation because they pay a higher percentage of their income to electricity and natural gas bills as well as to gasoline. But, according to the study, the state has effectively put in place measures to protect low-income Californians as we transition to a cleaner, lower-carbon economy.

“We actually see that, once you factor in those direct and indirect measures, low-income Californians receive a small but still measureable potential benefit,” said Colleen Callahan, deputy director of the Luskin Center and co-author of the report. “We found that electric utility customers could actually gain $200-250 during our study period, which is the length of the Cap-and-Trade program, through 2020.”

The study also found that low-income households could receive an estimated positive impact of between $44 and $83 as natural gas utility customers.

“And for gasoline customers we are predicting a bigger net benefit,” Callahan said. “We estimate that our representative households could receive a cumulated, indirect benefit of approximately $350 to $700 by 2020.”

“I think it’s been a success because of the way they are implementing various price increase mitigation strategies for consumers, and low-income households especially, along with the Cap-and-Trade program,” Julien Gattaciecca, lead author of the study and a Luskin Center researcher, said. “It is very well made and very well thought-out, and gives the rest of the world a leading path to follow.”

Cap-and-Trade was created in 2012 to reduce greenhouse gas emissions. It requires that the biggest producers of greenhouse gas — including electricity utilities, natural gas utilities and fuel distributors — purchase carbon allowances. The costs of these carbon allowances create price signals that communicate to consumers the amount of GHG emissions associated with electricity, natural gas, and gasoline consumption. “They have to pay to pollute, or they have an incentive to reduce their emissions,” Callahan said.

“It’s a complicated program, but it’s an important one,” she added. “It’s affecting the lives of us Californians. And it’s generating billions — with a B — of dollars and will continue to do so.”

The state’s portion of the Cap-and-Trade proceeds are deposited in the Greenhouse Gas Reduction Fund, which are used to make climate investments that further the goals of the Global Warming Solutions Act of 2006 (Assembly Bill 32, Núñez and Pavley). Those climate investments provide tangible benefits — energy efficiency and weatherization upgrades for homes, clean vehicle incentives, tree planting and more — in communities across Californians.

Another portion of the Cap-and-Trade proceeds are being directly returned to the millions of Californians who are residential customers of an investor-owned utility, such as Pacific Gas and Electric and Southern California Edison. Customers of those utilities respectively received $50 to $60 in climate credits on their electricity bills in 2015.

The Luskin report assessed how the provision of climate credits directed to households would mitigate Cap-and-Trade related costs. The study also assessed two other types of strategies that indirectly mitigate these costs. As such, Gattaciecca factored in low-income rate assistance programs, which although unrelated to the Cap-and-Trade Program, can reduce households’ budgetary burden associated with electricity and natural gas consumption.

Gattaciecca also factored in state and industry predicted trends for electricity, natural gas, and gasoline consumption, which are affected by climate investments and other efficiency, fuel switching, and vehicle-miles reducing programs and policies that help households lower their use of energy and fuels. Because these policies and programs can help lower energy and gasoline bills, they indirectly lower any Cap-and-Trade compliance cost passed on to customers.

The Luskin report utilized a case study approach. The state developed a tool, called the CalEnviroScreen, to identify disadvantaged communities that have elevated environmental health and socioeconomic risks, including poverty and pollution. Using CalEnviroScreen, the Luskin researchers chose four California communities for their study.

Gattaciecca also examined American Consumer Survey data and other databases to learn about common characteristics of households within those four case study communities. He then constructed hypothetical but representative profiles of households in each of the case study communities.

“We looked at four households in California,” Gattaciecca said. “We didn’t do that randomly. We took one in Oakland, one in Traver in Tulare County, one in Los Angeles and one in San Bernardino to collectively have a diverse set of case study communities. All four present different patterns when it comes to transportation, racial composition, housing types, family structure, climate and more. That’s the beauty of the report. We cover four very different locations. It’s not just policy and crunching numbers. There’s a human story here.”

“Real households benefits from climate investments deposited into the Greenhouse Gas Reduction Fund,” Callahan said. Senate Bill 535 (De León) requires that a minimum of 25 percent of the monies in this fund go to projects that benefit disadvantaged communities in California, and a minimum of 10 percent go to projects located in these communities. “I went to Washington, D.C., last year and presented at a national environmental justice conference. This is seen as one of the most significant environmental justice victories of the past decade.”

The results of their study left Callahan and the other researchers impressed.

“The California Air Resources Board is the lead agency on the Cap-and-Trade program and has a lead role in implementing climate investments,” Callahan said. “They’ve done a very thoughtful, thorough job. There’s more that can be done, but we commend them.”

A full copy of the Luskin Center report can be found here.

Carbon Upcycling: Turning CO2 into a New, Sustainable CO2NCRETE Interdisciplinary research team at UCLA discovers a game-changing technology to capture and repurpose carbon dioxide

By George Foulsham

Imagine a world with little or no concrete. Would that even be possible? After all, concrete is everywhere — on our roads, our driveways, in our homes, bridges and buildings. For the past 200 years, it’s been the very foundation of much of our planet.

But the production of cement, which when mixed with water forms the binding agent in concrete, is also one of the biggest contributors to greenhouse gas emissions. In fact, about 5 percent of the planet’s greenhouse gas emissions comes from concrete.

An even larger source of CO2 emissions is flue gas emitted from smokestacks at power plants around the world. Carbon emissions from those plants are the largest source of harmful global greenhouse gas in the world.

A team of interdisciplinary researchers at UCLA has been working on a unique solution that may help eliminate these sources of greenhouse gases. Their plan would be to create a closed-loop process: capturing carbon from power plant smokestacks and using it to create a new building material — CO2NCRETE — that would be fabricated using 3D printers. That’s “upcycling.”

“What this technology does is take something that we have viewed as a nuisance — carbon dioxide that’s emitted from smokestacks — and turn it into something valuable,” said J.R. DeShazo, professor of Public Policy at the UCLA Luskin School of Public Affairs and director of the UCLA Luskin Center for Innovation.

“I decided to get involved in this project because it could be a game-changer for climate policy,” DeShazo said. “This technology tackles global climate change, which is one of the biggest challenges that society faces now and will face over the next century.”

DeShazo has provided the public policy and economic guidance for this research. The scientific contributions have been led by Gaurav Sant, associate professor and Henry Samueli Fellow in Civil and Environmental Engineering; Richard Kaner, distinguished professor in Chemistry and Biochemistry, and Materials Science and Engineering; Laurent Pilon, professor in Mechanical and Aerospace Engineering and Bioengineering; and Matthieu Bauchy, assistant professor in Civil and Environmental Engineering.

This isn’t the first attempt to capture carbon emissions from power plants. It’s been done before, but the challenge has been what to do with the CO2 once it’s captured.

“We hope to not only capture more gas,” DeShazo said, “but we’re going to take that gas and, instead of storing it, which is the current approach, we’re going to try to use it to create a new kind of building material that will replace cement.”

“The approach we are trying to propose is you look at carbon dioxide as a resource — a resource you can reutilize,” Sant said. “While cement production results in carbon dioxide, just as the production of coal or the production of natural gas does, if we can reutilize CO2 to make a building material which would be a new kind of cement, that’s an opportunity.”

The researchers are excited about the possibility of reducing greenhouse gas in the U.S., especially in regions where coal-fired power plants are abundant. “But even more so is the promise to reduce the emissions in China and India,” DeShazo said. “China is currently the largest greenhouse gas producer in the world, and India will soon be No. 2, surpassing us.”


J.R. DeShazo, left, and Gaurav Sant. Photo by Roberto Gudino

Thus far, the new construction material has been produced only at a lab scale, using 3D printers to shape it into tiny cones. “We have proof of concept that we can do this,” DeShazo said. “But we need to begin the process of increasing the volume of material and then think about how to pilot it commercially. It’s one thing to prove these technologies in the laboratory. It’s another to take them out into the field and see how they work under real-world conditions.”

“We can demonstrate a process where we take lime and combine it with carbon dioxide to produce a cement-like material,” Sant said. “The big challenge we foresee with this is we’re not just trying to develop a building material. We’re trying to develop a process solution, an integrated technology which goes right from CO2 to a finished product.

“3D printing has been done for some time in the biomedical world,” Sant said, “but when you do it in a biomedical setting, you’re interested in resolution. You’re interested in precision. In construction, all of these things are important but not at the same scale. There is a scale challenge, because rather than print something that’s 5 centimeters long, we want to be able to print a beam that’s 5 meters long. The size scalability is a really important part.”

Another challenge is convincing stakeholders that a cosmic shift like the researchers are proposing is beneficial — not just for the planet, but for them, too.

“This technology could change the economic incentives associated with these power plants in their operations and turn the smokestack flue gas into a resource countries can use, to build up their cities, extend their road systems,” DeShazo said. “It takes what was a problem and turns it into a benefit in products and services that are going to be very much needed and valued in places like India and China.”

DeShazo cited the interdisciplinary team of researchers as a reason for the success of the project. “What UCLA offers is a brilliant set of engineers, material scientists and economists who have been working on pieces of this problem for 10, 20, 30 years,” he said. “And we’re able to bring that team together to focus on each stage.”

According to Sant, UCLA is the perfect place to tackle sustainability challenges.

“As one of the leading universities in the world, we see ourselves as having a blue-sky approach,” Sant said. “We see ourselves wanting to develop technologies that might be considered fanciful at one point but become reality very quickly. So we see ourselves looking at a blue sky and saying, well then, let’s come up with ideas which will change the world.”

Accepting a Grand Challenge UCLA Luskin Researchers Awarded First LA Grand Challenge Grants to Support Efficient Transportation and Local Sustainable Water Research

By Stan Paul

Innovative and sustainable use of water and energy in Los Angeles is at the heart of UCLA’s Sustainable LA Grand Challenge, and three UCLA Luskin School of Public Affairs researchers are at the forefront of this campuswide initiative.

Brian Taylor, Juan Matute and J.R. DeShazo are among 11 winners of the $1.2 million in competitive research grants awarded through the Challenge’s Five-Year Work Plan, which envisions a 100-percent renewable energy and local water scenario for the greater Los Angeles area by 2050. In addition, Jaimee Lederman, an Urban Planning doctoral candidate at Luskin, was recently named an LA Grand Challenge Powell Policy Fellow for a research/scholarly project that will directly contribute to advancing the goals of the Sustainable LA Grand Challenge.

Taylor and Matute said that their project will specifically study the viability of shared zero-emission vehicle (ZEV) and transportation network companies (TNCs) “to and from major transit stops to promote both ZEV and transit for commute-related traffic.” They believe the “meteoric rise” in use of TNCs, like Uber and Lyft, may address so-called “first-mile, last-mile” problems of daily transportation and encourage “mix-mode” travel that includes the use of expanding rail and bus rapid transit networks in Los Angeles.

“The TNC business model enables high daily vehicle utilization rates and high occupancy rates (percentage of seats filled) compared with personal vehicle ownership and operation,” said Taylor and Matute in their winning proposal. In addition, they indicated that the high rate of utilization rates will help zero-emission vehicle owners to “amortize the higher initial cost over a greater number of annual operating hours,” thus providing quicker returns on their investment.

Taylor, a professor of Urban Planning, is director of the Lewis Center for Regional Policy Studies and director of the Institute of Transportation Studies (ITS) at Luskin. Matute serves as associate director of the Lewis Center and ITS. DeShazo’s winning proposal will assess whether creating a unified water market, or “OneWater,” as he calls it, out of the current fragmented system of more than 200 community water systems in Los Angeles, is a real possibility. DeShazo is director of the UCLA Luskin Center for Innovation and is a professor of Public Policy, Urban Planning, and Civil and Environmental Engineering at UCLA.

“A regional water market could enable those systems with underutilized water resources to develop and supply water to systems facing higher costs, poor quality and unreliable supplies,” said DeShazo. “This opportunity to trade water expands the lower-costs supply options available to higher-costs systems, thus reducing regional inequality,” he said.

DeShazo pointed out that each system in the county’s fragmented market varies in numerous ways such as access to groundwater and aquifer storage, storm water capture, direct and indirect water re-use as well each of the current system’s potential for conservation. The proposal also calls for the creation of an advisory panel for a joint powers authority that would manage the OneWater market.

“The only way that all water systems in L.A. County can achieve 100 percent local water is if a system that enables the trading of water among systems is created,” noted DeShazo. “Trading would create a revenue stream that attracts new investment in blue infrastructure.”

Lederman’s proposed project is titled, “From Great Idea to Sustainable Outcomes: traversing political roadblocks of local participation in regional environmental initiatives.” Serving as her faculty mentor is Martin Wachs, Distinguished Professor Emeritus of Urban Planning. The fellowship award was made possible through a generous gift from Norman J. Powell.

The Sustainable LA Grand Challenge is currently engaged with more than 150 UCLA faculty and researchers from more than 70 campus departments who are seeking ways to improve the quality of life as population growth and climate change affect the Los Angeles area.

Read the complete story on the UCLA Newsroom website.

JR DeShazo

Professor DeShazo’s research areas are environmental policy and politics.

He advises the Los Angeles City Council, the Los Angeles Department of Water and Power, the Metropolitan Water District and the Los Angeles Planning Department, among key agencies. His work also supports the California Air Resources Board and the Southern California Association in their effort to implement AB 32, the Global Warming Solutions Act, and its complementary SB 375, transportation and land use bill.

JR DeShazo has previously advised the United Nations, UNEP, the World Bank, the European Union, The Central American Bank for Development and Integration, the Inter-American Development Bank, the Asian Development Bank, the Tinker Foundation, the McArthur Foundation, the Ford Foundation, National Wildlife Federation, the Nature Conservancy, RARE, Catholic Relief Service, Environmental Protection Agency, Department of Interior, National Oceanic and Atmospheric Administration, National Science Foundation, United States Agency for International Development, and United States Geological Survey.



Tropical countries may be willing to pay more to protect their forests
Description: Tropical forests, especially the primary tropical forests that are globally important for biodiversity conservation and carbon storage, are increasingly concentrated in relatively wealthier developing countries. This creates an opportunity for domestic funding by these countries to play a larger role in (i) closing the funding gap for tropical forest conservation, and (ii) paying for supplementary conservation actions linked to international payments for reduced greenhouse gas emissions from deforestation and forest degradation.
Author: J. Vincent, R. Carson, J. R. DeShazo, K. Schwabe, I. Ahmad, S. Chong, Y. Chang
Publication Link

Demand for Health Risk Reductions
Author: J.R. DeShazo and T.A. Cameron
Description: A choice model based on utility in a sequence of prospective future health states permits us to generalize the concept of the value of statistical life (VSL). Our representative national survey asks individuals to choose between costly risk-reducing programs and the status quo in randomized stated choice scenarios. Our model allows for separate marginal utilities for discounted net income and avoided illness years, post-illness years, and lost life-years. Our estimates permit calculation of overall willingness to pay to reduce risks for a wide variety of different prospective illness profiles. These can be benchmarked against the standard VSL as a special case.
Publication Link
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Empowering LA’s Solar Workforce: New Policies that Deliver Investments and Jobs
Presented by: LABC Institute, City of Los Angeles, JP Morgan Chase & Co., Global Green USA, UCLA Luskin Center for Innovation, and USC Program for Environmental and Regional Equity.
J.R. DeShazo, Director of the UCLA Luskin Center, and Manuel Pastor and Mirabai Auer of USC’s Program for Environment and Regional Equity, co-authored the report. They presented their findings at UCLA during the Los Angeles Business Council’s annual Mayoral Housing, Transportation and Jobs Summit, which was also attended by Los Angeles Mayor Antonio Villaraigosa and mayoral hopefuls City Council President Eric Garcetti, City Controller Wendy Greuel and City Councilwoman Jan Perry.
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Referred Articles – Under Revision

1. “A Comprehensive Assessment of Selection in a Major Internet Panel for the Case of Attitudes toward Government Regulation.” T.A. Cameron and J.R. DeShazo. Survey Methodology. (Revise and re-submit)

2. “Willingness to Pay for Health Risk Reductions: Differences by Type of Illness.” T.A. Cameron and J.R. DeShazo. Journal of Health Economics. (Revise and resubmit)

3. “Subjective Choice Difficulty in Stated Preference Surveys.” Eric Duquette, T.A. Cameron, and J.R. DeShazo.  Journal of Choice Modeling. (Revise and resubmit)

In Print or Forthcoming

4. “Creation of Malaysia’s Royal Belum State Park: A Case Study of Conservation in a Developing Country.” K. Schwabe, R. Carson, J.R. DeShazo, M. Potts, A. Reese, and J. Vincent. Journal of Environment & Development (JED). (Forthcoming)

5. “Designing and Implementing Surveys to Value Tropical Forests: A Malaysian Application.” J.R. DeShazo, R. Carson, K. Schwabe, J. Vincent, I. Ahmad, C. Kook, and C. Tan. Journal of Tropical Forest Science. (Forthcoming)

6. “Tropical countries may be willing to pay more to protect their forests.” J. Vincent, R. CarsonJ. R. DeShazo, K. Schwabe, I. Ahmad, S. Chong, Y. Chang, and M. Potts. Proceedings of the National Academy of Science (PNAS). (July 2014).

7. “Pricing Workplace Charging: Financial Viability and Fueling Costs.” B. Williams and J.R. DeShazo.Transportation Research Board 93rd Annual Meeting, no. 14-1137. (January 2014)

8. “Willingness to Pay for Public Health Policies to Treat Illnesses.” R. Bosworth, T.A. Cameron, and J.R. DeShazo. Journal of Health Economics. (October 2013)

9. “A multi-stakeholder perspective on the use of alternative test strategies for nanomaterial safety assessment.” Nel, Andre E., Elina Nasser, Hilary Godwin, David Avery, Tina Bahadori, Lynn Bergeson, Elizabeth Beryt, J.R. DeShazo, et al. ACS nano 7, no. 8 (2013): 6422-6433. (August 2013)

10. “Critical Review: Regulatory Incentives and Impediments for Onsite Graywater Reuse in the United States.” Zita Yu, Anditya Rahardianto, J.R. DeShazo, Michael Stenstrom, and Yoram Cohen. Water Environment Research, Volume 85, Number 7, pp. 650-662(13) (July 2013)

11. “Demand for Health Risk Reductions.” T.A. Cameron and J.R. DeShazo. Journal of Environmental Economics and Management. (August 2012)

12. “Scenario Adjustment in Stated Preference Research.” T.A. Cameron, J.R. DeShazo, and E.H. Johnson.Journal of Choice Modelling. (November 2010)

13. “Differential Attention to Attributes in Utility-theoretic Choice Models.” T.A. Cameron and J.R. DeShazo. Journal of Choice Modelling. 3(3) 73-115 (November 2010)

14. “Demand for Health Risk Reductions: A Cross-national Comparison between the U.S. and Canada.” T.A. Cameron, J.R. DeShazo, and P. Stiffler. Journal of Risk and Uncertainty. 41(3) 245-273 (December 2010)

15. “Is An Ounce of Prevention Worth a Pound of Cure? Comparing Demand for Public Prevention and Treatment Policies.” R. Bosworth, T.A. Cameron, and J.R. DeShazo. Medical Decision Making. 30(4): E40-E56 (2010)

16. “The Effect of Children on Adult Demands for Health-risk Reductions.” T.A. Cameron, J.R. DeShazo, and E.H. Johnson. Journal of Health Economics. 29(3): 364-376 (May 2010)

17. “Demand for Environmental Policies to Improve Health: Evaluating Community-level Policy Scenarios.”R. Bosworth, T.A. Cameron, and J.R. DeShazo. Journal of Environmental Economics and Management.57(3): 293-308 (2009)

18. “The Effect of Consumers’ Real-world Choice Sets on Inferences from a Stated Preference Field Experiment.” J.R. DeShazo, T.A. Cameron, and M. Saenz. Environmental and Resource Economics.42(3):319-343 (2009)

19. “The Environmental Consequences of Decentralizing the Decision to Decentralize.” W.B. Cutter and J.R. DeShazo. Journal of Environmental Economics and Management. 53 (1): 32-53 (2007)

20. “Activities in Models of Recreational Demand.” W.B. Cutter, L. Pendleton, and J.R. DeShazo. Land Economics. 83(3): 370-381(2007)

21. “Timing and Form of Federal Regulation: The Case of Climate Change.” J.R. DeShazo and J. Freeman.University of Pennsylvania Law Review. 155:1499-1558 (2007)

22. “Evaluation Reforms in the Implementation of Hazardous Waste Policies in California.” W.B. Cutter and J.R. DeShazo. California Policy Options. (2006)

23. “Frontiers in Stated Preferences Methods: An Introduction.” V. Adamowicz and J.R. DeShazo.Environmental and Resource Economics. 34(1): 1-6 (2006)

24. “Congressional Politics.” J.R. DeShazo and J. Freeman. Chapter 6 in “The Endangered Species Act at Thirty: Renewing the Conservation Promise” edited by Dale Goble, J. Michael Scott, Frank W. Davis. Island Press. (2006)

25. “Public Agencies as Lobbyists.” J.R. DeShazo and J. Freeman. Columbia Law Review. 105(8): 2217-2305 (2005)

26. “The Effect of Health Status on Willingness to Pay for Morbidity and Mortality Risk Reductions.” J.R. DeShazo and T.A. Cameron. California Center for Population Research. (2005)

27. “Upgrading Municipal Environmental Services to European Union Levels: A Case Study of Household Willingness to Pay in Lithuania.” R. Bluffstone and J.R. DeShazo. Environment and Development Economics. 8(4): 637-654 (2003)

28. “The Congressional Competition to Control Delegated Power.” J.R. DeShazo and J. Freeman. Texas Law Review. 81(6): 1443-1519 (2003)

29. “Designing Transactions without Framing Effects in Iterative Question Formats.” J.R. DeShazo, Journal of Environmental Economics and Management. 44(1): 123-143 (2002)

30. “Dissecting the Random Component of Utility.” J. Louvier, R. Carson, A. Anislie, T.A. Cameron, J.R. DeShazo, D. Hensher, R. Kohn, T. Marley, and D. Street. Marketing Letters. 13(3): 177-193 (2002)

31. “Designing Choice Sets for Stated Preference Methods: The Effects of Complexity on Choice Consistency.” J.R. DeShazo and G. Fermo. Journal of Environmental Economics and Management. 43(3): 360-385 (2002) (Paper identified as one of the three of the most influential articles of the year at the 2002 World Congress of Environmental and Resource Economics by Ian Bateman, Editor of Environmental and Resource Economics.)

32. “The Effect of Supply and Demand Shocks on the Non-market Valuation of Public Goods.” J.R. DeShazo.  Journal of Environment and Development Economics. 4: 471-492 (1999)

33. “Demand for Solid Waste Management: A Case Study of Gujranwala, Pakistan.” A. Altaf and J.R. DeShazo. World Development. 24(5): 857-868 (1996)

Unpublished Articles

34. “Two Types of Age Effects in the Demand for Reductions in Mortality Risks with Differing Latencies.” J.R. DeShazo and T.A. Cameron.

35. “The Effect of Health Status on Willingness to Pay for Morbidity and Mortality Risk Reductions.” J.R. DeShazo and T.A. Cameron.

Non-peered Reviewed Articles and Book Chapters 

36. “Pricing Plug-in Electric Vehicle Recharging in Multi-Unit Dwellings: Financial Viability and Fueling Costs,” B. Williams and J.R. DeShazo. UCLA Luskin Center for Innovation Report. (2013)

37. “Profile of Clean Energy Investment Potential – Los Angeles County.” J.R. DeShazo, C. Callahan and N, Wong. UCLA Luskin Center for Innovation Report for the Environmental Defense Fund. (2013)

38. “South Bay Cities Plug-in Electric Vehicle Readiness Plan.” J.R. DeShazo, A. Ben-Yehuda, N. Wong and A. Turek. UCLA Luskin Center for Innovation Report for Southern California Association of Governments. (2013)

39. “Western Riverside Plug-in Electric Vehicle Deployment Plan.” J.R. DeShazo, A. Ben-Yehuda, N. Wong and V. Hsu. UCLA Luskin Center for Innovation Report for Southern California Association of Governments. (2013)

40. “Moving Towards Resiliency: An Assessment of the Costs and Benefits of Energy Investments for the San Pedro Bay Ports.” R. Matulka, J.R. DeShazo and C. Callahan. UCLA Luskin Center for Innovation Report. (2013)

41. “Achieving Proposition 39’s Clean Energy Promise: Investing in Jobs, Energy Efficiency and Renewal Resources.” J.R. DeShazo, C. Callahan, and E. Beryt. UCLA Luskin Center for Innovation Report for the Los Angeles Business Council. (2013)

42. “Southern California Plug-in Electric Vehicle Readiness Plan.” J.R. DeShazo and A. Ben-Yehuda. UCLA Luskin Center for Innovation Report for Southern California Association of Governments. (2012)

43. “Southern California Plug-in Electric Vehicle Atlas.” J.R. DeShazo and A. Ben-Yehuda. UCLA Luskin Center for Innovation Report for Southern California Association of Governments. (2012)

44. “Climate Action Planning in Southern California: Progress Report.” J.R. DeShazo and J. Matute. UCLA Luskin Center for Innovation Report.(2012)

45. “Empowering LA’s Solar Workforce: New Policies that Deliver Investments and Jobs.” J.R DeShazo, M. Pastor, and M. Auer. Produced by the LABC Institute, City of Los Angeles, JP Morgan Chase & Co., Global Green USA, UCLA Luskin Center, and USC Program for Environmental and Regional Equity. (2011)

46. “Towards Measuring Green House Gases from Local Jurisdictions.” J.R. DeShazo and J. Matute. Oxford Handbook of Urban Planning. (In press, Oxford University Press)

47. “Making a Market: Multifamily Rooftop Solar and Social Equity in Los Angeles.” J.R. DeShazo, M. Pastor, M. Auer, V. Carter, and N. Vartanian. “ UCLA Luskin Center for Innovation Report.” (April 2011)

48. “Los Angeles Solar Atlas.”  J.R. DeShazo, R. Matulka, and N. Wong. Produced by the UCLA Luskin  Center for Innovation with financial and data support from Los Angeles County, the Los Angeles Business Council, and the UCLA Lewis Center. (2011)

49. “Best Practices for Implementing a Feed-in Tariff Program.” J.R. DeShazo and R. Matulka, “UCLA Luskin Center for Innovation Report.” (2010)

50. “Bringing Solar Energy to Los Angeles: An Assessment of the Feasibility and Impacts of an In-basin Solar Feed-in Tariff Program.” J.R. DeShazo and R. Matulka, “UCLA Luskin Center for Innovation Report.” (2010)

51. “Designing an Effective Feed-in Tariff for Greater Los Angeles.” J.R. DeShazo and R. Matulka. “UCLA Luskin Center for Innovation Report.” (2010)

52. “Early Steps toward Climate Action Planning in Southern California.” J. Matute and J.R. DeShazo. “UCLA Luskin Center for Innovation Report.” (2010)

53. “Economic Analysis of California’s Green Chemistry Regulations for Safer Consumer Products.” M. Kahn and J.R. DeShazo. UCLA Institute of the Environment and Sustainability Report. (2010)

54.  “Persistent Market Failures in the Chemical Sector: Consequences for Health and Product Innovation.”  J.R. DeShazo and M. Cohen. Report prepared for the California Department of Toxic Substances Control. (2007)

55. “Congressional Oversight of the Endangered Species Act: How Politics Influences Policy.” J.R. DeShazo and J. Freeman. In 30 Years After the Endangered Species Act. (2005)

56. “Hazardous Waste.” Southern California Environmental Report Card. W.B. Cutter and J.R. DeShazo.  UCLA Institute of the Environment. (2005)

57. “REACHING THE TIPPING POINT IN LOS ANGELES: An Evaluation of the Safer Cities Initiative in MacArthur Park.” J.R. DeShazo and M. Klieman.  Report prepared for Hanover Associates on behalf of the Los Angeles Police Department.  (2004)

58. “The Congressional Competition to Control Delegated Power.” J.R. DeShazo and J. Freeman. Land Use and Environmental Law Review 35. (2004)

59. “Linking Growth in Tourism with the Conservation of Protected Areas: Toward a National Paradigm in Central America.” J.R. DeShazo. In T. Panayotou, ed. Environment for Growth: Environmental Management for Sustainability and Competitiveness in Central America. Cambridge, MA: Harvard University Press. (2001)

60. “Travel Patterns of Domestic and International Tourists in Central America.” J.R. DeShazo. In T. Panayotou, ed. Environment for Growth: Environmental Management for Sustainability and Competitiveness in Central America. Cambridge, MA: Harvard University Press. (2001)

61. “The Demand for Types of Recreational Sites in Central America: Comparison of Guatemala and Costa Rica.” J.R. DeShazo. In T. Panayotou, ed. Environment for Growth: Environmental Management for Sustainability and Competitiveness in Central America. Cambridge, MA: Harvard University Press. (2001)

62. “An Economic Model of Smallholder Deforestation: A Consideration of the Shadow Value of Land on the Frontier.” R. DeShazo and J.R. DeShazo. In International Symposium on Tropical Forest Management in Asia Proceedings, Oslo, Norway. (1994)

Luskin Center Director Briefs State Senators on Benefits of California’s Climate Policy Portfolio Faculty member J.R. DeShazo speaks at Democratic Senate policy retreat

California State Senators and Governor Jerry Brown gathered in Sacramento this week for the annual Democratic Senate policy retreat to discuss issues of statewide and national importance. J.R. DeShazo, director of the Luskin Center, briefed them on the economic benefits of California’s climate portfolio. The focus of his talk was the tremendous opportunity to build prosperous, healthy and livable communities through the State’s new Greenhouse Gas Reduction Fund (GGRF). The GGRF will soon have billions of dollars to support transit, clean vehicles, sustainable communities, energy efficiency, renewable energy, urban greening and more.

Senate President pro tempore Kevin de León invited Professor DeShazo to be part of a three-person panel moderated by Senator Fran Pavley. Pavley authored AB 32, the landmark Global Warming Solutions Act of 2006 that propelled California as a global climate policy leader. Now the nation and world are watching as California implements an important element of AB 32, the cap-and-trade program, which places the world’s first economy wide cap on carbon pollution and establishes market mechanisms to price carbon credits. These auction proceeds go into the GGRF. Senate Bill 535 (de León) requires that at least 25 percent of the investments benefit disadvantaged communities. DeShazo shared stories about how programs funded by the GGRF have already provided real benefits to low-income communities and households across California, including through job creation, houshold energy cost savings, and clean air health benefits.

Luskin Center research and event organizing is helping to advance the strategic and equitable implementation of climate investments to maximize local benefits to disadvantaged communities. For more information, see our SB 535 research report and this overview presentation.


New York & California Incent Climate Change Innovation Differently DeShazo mediates discussion on climate change incentives in California and New York.

On October 6, Richard Kauffman, Chairman of Energy and Finance at the New York State Office of the Governor, and Mary Nichols, Chairman of the California Air Resources Board, spoke with Dr. J.R. DeShazo of UCLA’s Luskin School of Public Affairs and Luskin Center for Innovation at the GloSho 2014 opening plenary titled, “Fireside Chat: Two Clean Economy Titans.” MIR presents edited excerpts from the conversation, focused on the public sector’s catalyzing role for innovation in both the California and New York clean-technology private sector. Reprinted from The Planning Report. 

J.R. DeShazo: What are the policy rollouts that are most important for private sector participation, in order to achieve climate change policy goals?

Mary Nichols: If there is one criticism I would make about our metrics in California, which I usually brag about, it is that we’re doing too much—not that we’re doing too little.

It’s hard for people to understand which proceedings they should participate in, where to go, and which agency to talk to. They’re all doing interesting and important things in many different sectors. We’re trying to address that issue in this administration through the work of the four energy agencies. It is amazing that, thanks to AB 32, the Air Resources Board is now considered an energy agency—even though for years we were doing work that had an impact on energy but were not ever considered to be leading in that space.

I think those working in California for a long time have just gotten used to the fact that we’ve got the PUC, the Energy Commission, the Air Resources Board, and the ISO all involved, spending money, passing regulations, and coming out with policies. Every one of these agencies and all of the programs that we have, going back to the Pavley Standards and the first carbon registry in California, are now clearly coming together under the umbrella of climate change. We obviously want to—and must—keep the lights on. Of course, it needs to be affordable. Everyone is in agreement that by 2050, around 80 percent of all carbon and GHG emissions have got to be out of our economy. That is going to take a very big effort. Starting now, we have to find ways to get ourselves there.

Richard Kauffman: I’ve been in the private sector and I know quite a bit about markets. I’ve been a clean-tech investor, so I know that the issues are less about technology, although we certainly need more innovation in technology. But there are plenty of good technology solutions.

The real problem is that there are tons of market constraints and market failures that prevent solutions from coming to life.
Generally, the energy sector is the most mature sector in the economy. It enjoys tremendous scale advantages. The utility industry is regulated, and in many cases, some fundamental regulations have not changed since the time of Edison. Understandably, there is a degree of conservatism about energy and electricity. We want lights to keep going and we want it to be safe. There are lots of issues that are appropriately conservative, but we have to get close and careful to see where the market barriers are.

We also have to do the same thing with government policy. Sometimes when we give grants, the grants don’t lead to new markets or businesses. The government becomes the market.

In New York, we’re trying to have a heavily market-led approach. In terms of our utility sector, we want to change the utility incentives so they are focused on having higher capacity utilization. Right now, the utility sector has 55 percent capacity utilization. How many industries that are capital intensive have 55 percent capacity utilization? None.

There has been a revolution in the last 20-30 years about different business models, adaption technology, and changes in financial incentives, but they have not yet come to the electric utilities sector. That’s because the regulatory incentives haven’t changed. We pay utilities, and the way they get their profits is through getting a regulated return on capital. We can’t be surprised that we have low capacity utilization. We should think about the utilities as getting paid for efficiency, and we stimulate third party app providers to create competitive markets around customers.

You need to draw in innovation to the end market and build the system from the customers-out as opposed to being a push model. With respect to government policy, I’ll give you one example: our residential energy-efficiency program. 70 percent of the houses in New York State are more than 70 years old, so there is a lot of opportunity to get energy efficiency from houses. We have a grant for somebody to do a residential audit, so residents don’t pay for that—ratepayers do. You can get a grant for up to 20 percent of the cost for the retrofit depending on your income. At the current rate of penetration of those programs, it will take 1,000 years.

We’ve got to change government policy and programs so they can stimulate the market. The way to do that is to think about community aggregation. We want to focus the grants on the reduction of soft costs, and customer acquisition and financing costs rather than being the only source of their financing and support.

Audience Question: As Chairman Kauffman mentioned, New York’s new energy vision has utilities rewarded more based on performance. Do you see California taking a similar approach?

Mary Nichols: That’s been the philosophy for quite a long time. Our overall policy has been to separate the ability of utilities to make money from the fact that they need to provide energy-efficiency services.

California has been the first state—now fortunately joined by many others—to separate the ability of utilities to get real return from the amount of sales of their product and pay them for energy-efficiency programs. That’s been probably the most fundamental change that we’ve made from early on.

The directive is to the utilities, but also there is a financial incentive built into it. We are leading in terms of work that we get in our economy and our homes out of kilowatt hours of electricity. We are extremely energy efficient. But there is still a long way to go. There is no question that we need to develop some new and more effective ways of delivering retrofits of existing buildings and such, as Chairman Kauffman was talking about.

The key thing here is that the electric utilities themselves are not the only providers of these services. The market must make it possible for others to function effectively in that space—especially when some utilities are regulated by the Public Utilities Commission and others are regulated by their local governing boards. The legislature has been struggling with this for a while, in terms of how they can set the right kinds of standards that will get the market to work better and get regulations to not be an impediment, but a better inducement.

We’ve gotten a lot better in the transportation sector. The larger share of energy that we use in California goes to moving ourselves and stuff around our state, and the biggest sector of our economy is moving goods around.

We need to think more broadly about the relationship between electricity and natural gas as providers of electricity and providers of transportation. That’s where a lot of the new thinking is going on right now—how to make that crossover work.

J.R. DeShazo: For those unfamiliar, the chairwoman was referring to a decoupling policy adopted in the early ’80s by the CPUC.

Richard Kauffman: I am immensely respectful of all the things that the chairwoman has said. The great thing about states, as Brandeis said, is that they are laboratories of democracy. It’s fantastic that states have been experimenting with things. California has been a leader.

We have decoupling in New York, and what we’re talking about is going beyond California. The issue with decoupling is that it makes utilities indifferent as to the quantity of electricity their customers consume. It doesn’t create a proactive incentive for system efficiency or for things that relate, as Chairwoman Nichols said, to what is going on around customers.

New technology is providing opportunities to think about what it means to be a utility in terms of monopoly. The whole concept of a monopoly depends on the collective being cheaper than the individual. But if the technology changes so that the individual becomes cheaper than the collective, the logic begins to break down.

In Brooklyn, which is growing very rapidly, ConEd the utility would have spent $1 billion for a new substation—which would add about 55-57 percent capacity utilization, built for the hottest few hours or days of the year. That’s a lot of money paid for by all ratepayers, in terms of rates and power costs, which are very high in New York State in the summer and, increasingly, in the winter.

The alternative, which is now going to happen, is that instead of that $1 billion investment, they will be providing power through distributed generation using natural gas, solar, and demand-response energy-efficiency measures. That will cost ratepayers less and will result in a cleaner, cheaper system.

The way it’s being implemented is interesting: Utilities released enough data so that they’re getting all kinds of innovation from the market about how to solve this problem. We’re going to create competitive markets around customers. We’re going to free up data and let a whole variety of service providers come in with a whole variety of solutions that are going to help the utility become more efficient, but also help provide more choices and variety to customers.

Audience Question: What is the onramp for entrepreneurial technology companies that wish to deal with utilities in California?

Mary Nichols: To pick up on what Richard was saying, it’s not going to come from the utilities themselves, clearly. Government policy does play a critical role here in enabling the implementation of new technologies.

I think the source of innovation about financing and providing energy services is coming through the ISO. It is creating new markets for services other than plugging new plants into the system and getting power purchase agreements through the utilities. They are partnering with the Public Utilities Commission and the Energy Commission, in terms of allowing for other ways of services provision and other ways of demonstrating that the lights will stay on.

I completely agree that the solution for the longer term is not just about building more plants. We’re actually dealing now with the issue of what to do when there is an oversupply of electricity at certain times of the day and the year. That’s a small issue now but is going to be a much bigger one in the years to come, as we bring online more solar, wind, geothermal, and other facilities.

Instead of being worried about whether there will be enough to serve the demand at peak times, we are now worried about shedding load, which is a waste and a bad thing to do from an economic perspective. We’re thinking about how to make sure those electrons are being stored and used appropriately.

From the state’s perspective, we’re trying to responsibly look at the whole system and allow it to balance itself in the most efficient possible way.

J.R. DeShazo: I would add—because it’s sort of taken for granted in Chairwoman Nichols’s remarks—that if you’re a utility today in California, you have a set of push and pull factors. The push factors are the RPS and other state legislative requirements. The pull factor is the cap-and-trade program, which is changing the price of your kilowatt-hours as a function of the carbon content. Those incentives are acting actively now in California.

Richard Kauffman: I would add that when we’re thinking about clean-tech, we have to allow for the possibility that not everybody is motivated by saving the planet or saving money on electricity. When Edison helped set up the electricity system, he thought it was only going to be about lighting. Even in his own lifetime, he saw it become much more than just lighting.

I think the technology you guys are all developing provides a lot more value potentially for the electricity system than we have today. Nobody gets up and says, “I want to make more electricity.” It’s what the electricity system provides in terms of value.

I talk to healthcare companies that say, “We want to improve the quality of home health care and reduce costs by at-home health care monitoring. That’s going to require a home automation system.” Apple wants to provide more entertainment through a home automating system. The drivers for a new electricity system could be convenience, comfort, and health. That has potential for a much more energy-efficient system, but the driver may be other things than just saving money.  That’s why it’s so important to get innovation in the market.

Audience Question: Chairman Kauffman, I want to thank you and NYSERDA for funding a grant that my company seeded in early 2000 to study a hybrid biogas wind program for Wyoming County. Now, we’re faced with those issues in the Central Valley—yet, we have not seen the whole commercialization of biogas to reduce methane, to reduce NOx precursors, and the associated water issues. What are your agencies doing to promote those solutions?

Richard Kauffman: I think you have identified a classic problem of how we need to evolve our government policy. These projects would be supported by a grant here or there. It’s not really creating a market. I’m not saying that grants or incentives may not be necessary, but is that the only mechanism that we’re going to use?

We’re working in this area to make sure that the projects are really local. Is the cost for the developer and the customer acquisition cost really high? If you lower the developer cost, you’re going to get more projects done.

How do you lower the development cost? One way is to identify if projects are located next to something else—and whether the gas or electricity could be useful to the rest of the system. Let’s develop projects where it’s going to be better for the system.

How can we get local communities or governments involved in this, where there are opportunities for them to save money? Right now, each local government has to figure it out on its own. Is there a way to create a mechanism where there are off-the-shelf solutions that local governments can use? Government can do things like convening, which doesn’t cost a lot of money.

Another example is financing. Project financing is difficult for small projects. This isn’t about subsidized financing. We have a green bank that can do things like provide an aggregation facility for financing. These projects are just a few millions dollars—and it’s very hard to get a bank interested in that kind of money. But if the green bank can provide an aggregation facility, then you can actually provide the financing market for the private sector.

Mary Nichols: This is not in any way to dismiss the abstract of what you’re saying. But I want to focus on the practical problem of methane and dairies as a practical example of the range of issues involved and how the right mix of policies, regulations, and standards are necessary elements of the overall solution that will also drive investment.

We have dairies in the Central Valley of California that are located near each other. We’ve actually had dairy owners willing to volunteer to try to host digesters on their land.

We have a problem with nitrate in the water, and we have a problem of needing renewable natural gas. We have a problem of wanting to get methane out of the air. So we have all these reasons why we would like to make this system work.

We can set pipeline standards to get this stuff into the pipeline. We can promote the best technology that is now in the early stages.

We can’t make it economical for the dairy owner to truck the waste from the cows to a central location. The cows in the dairies are not located in a place where it’s convenient to put in some megafacility all in one place. We actually need to create, or have someone create, a company that would go out there and work to finance these things—aggregating a lot of these projects together. That would be the sensible market solution.

But until there is a sense that there is a long-term commitment to this—that there’s money out there to help finance it, there are regulatory tools in place, and targets that they’re going to meet (probably in terms of the nitrate standard for the underground water supply)—it’s not going to come together. Not to say that this isn’t the way it should go— just to say it’s going to take, still, a lot of work on the part of a lot of people to implement a solution that we all know is the right thing to do.

For more information see: http://glosho.la