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

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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:
http://carbon.xprize.org/press-release/27-teams-advancing-20m-nrg-cosia-carbon-xprize

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/

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

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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.

Susanna Hecht on Climate Change Professor Susan Hecht works to achieve the UC system`s goal of carbon neutrality by 2025

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By Stan Paul 

For Urban Planning professor Susanna Hecht, the future of life on this planet as we know it is a matter of degrees — a scant few at that.

Hecht is part of a group of 50 University of California scholars and scientists addressing the 10-campus Carbon Neutrality Initiative proposed by UC President Janet Napolitano in 2013. Under this initiative, the University of California aspires to become carbon neutral by 2025. Recent California legislation also calls for a marked increase in the amount of renewable resources providing electricity in California by 2030.

Hecht and her UC colleagues, led by Veerabhadran Ramanathan (renowned climate scientist from the Scripps Institution of Oceanography), are among those who want to “bend the curve,” or the “hockey stick” graph as Hecht refers to it, on the rise in global temperatures caused by greenhouse gases. A mere two-degree change in average temperature will portend future disaster from drought to sea-level rise, and changing weather patterns that most of the globe is not prepared for, according to experts representing a wide range of disciplines.

Hecht said, “We are already in the middle of this…and a lot of records are being broken on a weekly basis.”

The group of UC scholars, from fields as diverse as ethics and environmental justice to climate science and religion, met in October at the University of California’s Summit on Pathways to Carbon and Climate Neutrality: California and the World, led by California Governor Jerry Brown. The purpose of the meeting was to focus on solutions that could guide the state but also to provide solutions that could be used worldwide. UC research and recommendations were also part of the 2015 United Nations Climate Change Conference held in Paris.

In addition to carbon (which has a long life in the atmosphere), Hecht points out the many other factors that contribute to temperature rise, such as methane and HFCs (hydrofluorocarbons) released into the environment, as well as the “heat island” effect our built environment, roads and urban centers create.

As a “carbon sink,” the tropical rainforest absorbs millions of tons of carbon from the atmosphere, and Hecht points out that deforestation of the Amazon has dropped significantly in the last decade. This has had an impact, but the rainforest can’t do it alone, especially when deforestation continues in other parts of the world such as Indonesia.

Change will require not only scientific innovation but also social innovation that focuses on our relationship with forests, said the co-editor of “The Social Lives of Forests: Present and Future of Woodland Resurgence.”

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

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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.

A Conversation with Mary Robinson: Former President of Ireland on Climate Change Luskin Lecture Series features human rights and climate change leader on a sustainable future

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By Stan Paul

Mary Robinson started her career with a deep passion for human rights, from economic and social to food, education, women’s rights, security and peace.

It was only later that the former president of Ireland says she saw the link between human rights and climate change, while serving as the United Nations Special Envoy for Climate Change. Her work and travels in Africa made her aware that climate changes were tied to uncertainties of drought and flooding and that “something was happening.” She heard again and again, in countries such as Liberia, that “things were getting so much worse.” In areas where the focus was traditionally on poverty or other issues, there were now areas where the climate — and planting and harvest times — could no longer be predicted.

“We needed to be talking about the injustice of climate change,” which affects the poor and most vulnerable, even the U.S., citing the aftermath of Hurricane Katrina on the poor in the U.S., said Robinson, who served as a U.N. High Commissioner for Human Rights until 2002.

Following Robinson’s January 12 Luskin Lecture in UCLA’s Charles E. Young Grand Salon, former Los Angeles Times writer and editor Jim Newton moderated a discussion and Q&A session, asking Robinson about the impact of the recent Paris Climate Agreement.

Robinson, organizer of foundations including Realizing Rights: The Ethical Globalization Initiative and The Mary Robinson Foundation – Climate Justice, said she was energized by the talks in Paris, which provided a new way of describing the problem, and that she was encouraged that nearly 200 countries that all agreed on individual contributions to be made toward carbon emission reduction.

“It was actually a fair agreement, not strong but fair — that was extraordinary,” said Robinson.  She said that the Paris Agreement provided a new target for the world. “It put a stake in the ground.”

Even so, Robinson, citing a recent U.N. study, pointed out that if all of the countries realized their commitments to carbon reduction and climate change from the Paris Agreement, the world is still on course for a disastrous temperature increase beyond the oft-citied two-degree climate cliff.

Robinson said that more has to be done for a sustainable future, but the Paris agreement is nevertheless important because many countries would have given up, and that many small countries, island nations, will be “under water with 1.5 degrees.”

Robinson, who attended the climate talks in Paris, praised California, saying that the state was notable for its leadership in climate change and illustrating what can be done.

Prior to her presentation, co-sponsored by the Hilton Foundation and the Global Public Affairs (GPA) program at Luskin, a small group of UCLA Luskin graduate students had the chance to talk one-on-one with Robinson.

Jason Karpman, a second-year Urban Planning graduate student, said he was interested in this opportunity to talk with Robinson because of his interest in climate change, specifically carbon sequestration. “It’s the elephant in the room,” said Karpman, adding that, right now, “there are not a lot of options on the table.”

Robinson stressed to her pre-talk audience of Luskin students from Public Policy, Social Welfare and Urban Planning that the quality of leadership matters. “We need the policy decisions that are the right decisions,” and making policy more “people centered.” She added that the goal of sustainability should be to not leave anyone behind, which is what happened in the industrial revolution. She said that while the world must reduce carbon, at the same time, more than a billion people are energy poor, with no access to electricity and still burning dangerous kerosene in their homes.

“We have the gadgets,” said Robinson referring to LED lights, solar power, etc., and the ability to make payments on mobile phones via cell phone applications. “Most developing countries are interested in clean energy,” she said.

The discussion also included a range of important topics such as reforestation that is economically effective, the use of lighter materials such as carbon fiber in vehicles, technology and migration patterns. Migration patterns caused by politics and climate change are shaping up to be “one of the biggest issues worldwide,” said Robinson. “People have to move.” She said the real issue is how to manage migration in big numbers, pointing out how Syria and other countries have suffered both conflict and ongoing drought as well as the problems faced by countries due to an influx of migrants.

“They will come whether we like it or not,” she said. “We have to have leadership now.”

Robinson also has a very personal interest in the future of the planet — her grandchildren, who will be growing up in an age of severe climate change. She pointed out the intergenerational equity of the problem.

“This is about your children and grandchildren,” she said. “It’s their future.”

To view a video of the Mary Robinson Luskin Lecture, go here

To read coverage in UCLA Newsroom, go here

The Luskin Lecture Series

The UCLA Luskin Lecture Series enhances public discourse on topics relevant to the betterment of society. The series features renowned public intellectuals, bringing scholars as well as national and local leaders to address society’s most pressing problems. Lectures encourage interactive, lively discourse across traditional divides between the worlds of research, policy and practice. The series demonstrates UCLA Luskin’s commitment to encouraging innovative breakthroughs and creative solutions to formidable policy challenges.

Urban Planner Susanna Hecht Among Experts on Climate Change “Bending the Curve,” was released at the UC Climate Neutrality Initiative Summit

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Professor of Urban Planning Susanna Hecht is part of a team of 50 UC researchers and scientists who authored a report on climate change released Oct. 27.

“Bending the Curve,” was released at the UC Climate Neutrality Initiative Summit held in San Diego and includes 10 scalable solutions to reduce global greenhouse emissions such as methane, black carbon, hydrofluorocarbons (HFCs) and ozone. The report’s title refers to “flattening the upward trajectory of human-caused greenhouse gas emissions and consequent global climate change.”

Hecht, who focuses on political ecology, also was among UC scholars cited for providing “critical analyses and some of the quantitative estimates mentioned in the executive summary.”

Read the full UCLA story: http://newsroom.ucla.edu/stories/ucla-uc-experts-release-report-with-solutions-to-slow-climate-change

Read the report “Bending the Curve”: http://uc-carbonneutralitysummit2015.ucsd.edu/_files/Bending-the-Curve.pdf

 

Luskin Center Deputy Director Briefs U.S. EPA Leadership and National Conference Participants on Advancing Climate Justice Luskin Center representative at EPA Conference

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One of the most significant events in the arena of climate justice took place when California’s Senate Bill 535 (SB 535) was signed into law, stated Charles Lee of the U.S. Environmental Protection Agency and one of the nation’s most prominent leaders on environmental justice.  SB 535 mandates that at least 25% of the state’s Greenhouse Gas Reduction Fund investments go to projects that benefit disadvantaged communities.

Colleen Callahan, deputy director of the UCLA Luskin Center, was one of four SB 535 leaders from California invited by Lee to meet with senior EPA staff and also speak on a panel at the National Environmental Justice Conference on March 12 and 13th in Washington D.C. In addition to Callahan, the other panelists were the “father of SB 535” Shankar Prasad of the California Environmental Protection Agency (CalEPA, and formerly with the Coalition for Clean Air); Mari Rose Taruc, organizing director for the Asian Pacific Environmental Network and coordinator of SB 535 Coalition; and Arsenio Mataka, assistant secretary of environmental justice and tribal affairs, CalEPA.

The panelists shared the “backstory” of the efforts to conceive, pass and now implement SB 535.  They provided first hand perspectives on lessons regarding their successes and challenges—past and present, as well as implications for other parts of the nation.

Callahan emphasized that SB 535 and the Greenhouse Gas Reduction Fund (GGRF) represent a tremendous opportunity to advance climate justice. She also noted the challenge in implementing such a major and unprecedented initiative. Pulling from the UCLA report on SB535 entitled, “Investment Justice through the Greenhouse Gas Reduction Fund,” she provided key recommendations for implementing the GGRF to ensure the investments maximize environmental, economic and public health benefits for communities across California most in need. The recommended evaluation and performance management approach draws from an earilier report “Pathways to Environmental Justice: Advancing a Framework for Evaluation” created by the UCLA Luskin Center in collaboration with EPA and EJ leaders from across the nation.

German Exchange Students Explore Policy in Los Angeles Hertie School of Governance students Niels Boehm and Oliver Loeffler share their experience studying at Luskin as part of an exchange program.

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Niels Boehm and Oliver Loeffler traveled from Berlin, Germany to spend Fall quarter here at the Luskin School as part of a reciprocal international exchange program with the Hertie School of Governance. The Hertie School is a private governance and political science school in Berlin. Two Luskin students, Naoki Yamazaki and Hirofumi Kyunai, returned from Hertie in January.

Boehm’s focus is on climate change policy, including energy and transportation policies. Loeffler studies international labor governance, looking at how governments can induce transnational corporations to uphold human rights standards. Before the two students returned to Germany last quarter, we asked them to share their experiences and unique perspectives with us about living and studying at UCLA and the Department of Public Policy at the Luskin School of Public Affairs.

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Luskin: Why did you choose to come to Los Angeles?

Loeffler: I thought living in a mega-city such as LA would be interesting from a policy perspective.

Luskin: Did you feel you could venture out into the city and get to learn about public policy that’s actually happening in LA?

Boehm: I had a great course about transportation policy planning. Urban Planning professor Brian Taylor was very engaged in giving us the opportunity to get to know what we were learning about in class in real life. So we did a one day field trip and visited the major transportation policy and planning institutions around the city. That was a good experience because it linked the theoretical class debates to the real world.

Loeffler:  I think what’s good also about the Luskin school is that it offers programs which are directly related to the challenges here in LA and offers connections to other public policy courses.

Boehm: This is also a great opportunity for us because we can take courses from different departments. I think that was also one of my major motivations to come to UCLA, that you offered students the opportunity to pick courses out of this really impressive curriculum.
 

Loeffler: That’s a great point. My policy focus is on the frontier between the public and private sector. The exchange program offered me opportunity of studying at the management school (Anderson) which I would have never had studying in Berlin only. That’s a big asset of the exchange program — that you can pick courses you’re really interested in and help you advance your focus area.

What’s also great about my stay here is that my girlfriend was able to visit me for a month. The scheduling of the university was flexible which allowed us to travel a little bit. We got a tent from the outdoor recreation center here at UCLA, rented a car and drove up the PCH.


Boehm: Yeah I would also underline you have this great combination of studying and opportunities to do all kinds of things, whatever you want.

Luskin: Was there any cultural shocks or things you thought were strange or funny about studying in America?

Boehm: We’ve both traveled around the world to a lot of countries… but we got to see how things differ in terms of daily life. You have these dining halls here on campus, all this school pride for example. I mean we knew it existed, but to live it and to go to a college football game and tailgates was different. It was a cultural shock I would say, how huge the identification with the school is.

Loeffler: In Germany we would watch American TV shows…and are aware of what’s going on in politics and society in the US. But living here and experiencing some of the major political and social discussions was a great experience. I got a much better feel about the inner functioning of this country.

Luskin: Can you elaborate on the difference between studying in LA as opposed to Berlin?

Loeffler: The structures of the courses are sometimes a little different and also in terms of class discussions, there’s a different style to it. But it’s not a difference of quality, just maybe the difference between the European and the American system.

Luskin: Would you recommend your other classmates to come here in the future?

Both: Yes. Definitely.

Boehm: We had a presentation on the Hertie School because there’s discrepancy between the students who go to Berlin and the students who come to UCLA and want to come to UCLA. We have like 20 to 30 applicants for the few spaces here, but there are very few people who would come to Germany, so we try to promote it and engage people more

Luskin: So, can you give your pitch for why your German friends should come to UCLA and why your American friends should go to the Hertie School?

Loeffler: UCLA is the policy capital of the US and in the US there are a lot of policy challenges, especially topics related to urbanization and social inequality, which really crystalize here. We are in California, where a lot of innovative solutions are explored. UCLA offers a lot of resources to students and is a great campus and it’s a fun place to be. It’s California.

Boehm: I think for Germany, my pitch is if you want to get to know Europe, Berlin is the best place to do it. Berlin is currently the most exciting city in Germany. Politically, its the most relevant city for both German and European politics. Also, it would be a great opportunity because it’s an English-speaking environment and Berlin has an international character,  so you wont have any issues to get along with your language skills which can be a major barrier for people.

—–

 

If you are interested in learning more about the Hertie Exchange Program, there will be an information session on Thursday, March 12 from 12:30 – 1:00p.m. in room 4371. Naoki Yamazaki and Hirofumi Kyunai will discuss their experience at the Hertie School and answer any questions at the info session.

Although the Hertie School program is a Master of Public Policy, many of the elective courses are relevant to all three Luskin School Departments. Applications will be due on Monday, March 23.

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

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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.

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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.