Will Russia’s War In Ukraine Finally Spur A Clean Energy Revolution?
This week President Biden tightened sanctions on Russia, cutting off imports of Russian oil to the United States in response to Russia’s war on Ukraine. The conflict has put a sudden, sharp pressure on an already strained energy system, causing uncertainty—and rising prices.
However, in a recent Quinnipiac poll, 71% of Americans said they favored cutting off Russian oil imports, even if it resulted in higher prices at the pump. And the German Economic Ministry announced plans to speed up wind and solar projects as it seeks to lessen its dependence on Russian energy.
Ira talks with Dan Esty, Hillhouse Professor at Yale University, director of the Yale Center for Environmental Law and Policy, and co-director of the Yale Initiative on Sustainable Finance, about whether the Ukraine conflict might hasten a worldwide shift to greener energy sources. They discuss the role that pressure from commercial entities and investors might have on long-term climate policy.
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Dan Esty is the Hillhouse Professor at Yale University, and is Director of the Yale Center for Environmental Law and Policy and Co-director of the Yale Initiative on Sustainable Finance at Yale University in New Haven, Connecticut.
IRA FLATOW: This week, President Biden tightened sanctions on Russia still more, cutting off imports to the US of Russian oil. And it made me wonder. The rise of COVID-19, remember, disrupted the usual way research on vaccines are developed, the crisis speeding research development by up to months, if not years. Could this crisis of record-setting fossil fuel prices disrupt the normal way we do business with fossil fuels, disrupt them enough so that renewable energy development is kicked into high gear also?
Joining me now to talk about that and disruption in the energy economy is Dan Esty. He’s the Hillhouse professor at Yale University, director of the Yale Center for Environmental Law and Policy, co-director of the Yale Initiative on Sustainable Finance. Welcome to Science Friday.
DAN ESTY: My pleasure. Great to be with you.
IRA FLATOW: Nice to have you. As I say, we’ve seen how COVID disrupted the development of cycles of vaccine, accelerating that cycle from five years to, what, six months. Can this same thing happen with renewable energy?
DAN ESTY: One of the things that we’ve really come to recognize in the energy and the world of focus on climate change is that the key to progress is innovation. So I do think a sustained effort to drive our technology development processes more quickly to put incentives in place for breakthrough thinking and breakthrough innovation is possible.
Whether we could shorten from five years to six months the innovation cycle, I’m not sure. But we certainly could do much more to really focus on the special opportunity we face right now to shift people off of a fossil fuel energy foundation onto something that is sustainable out over time, a clean energy base for the future economy.
IRA FLATOW: I know that you’re talking to us from Denmark and you have a good view on Europe. And Europe has been leading the world in switching to green energy. And the Wall Street Journal reports just now that– I’ll quote from it– “amid heightened fighting across Ukraine, the German economic ministry announced plans to speed up wind and solar projects as it seeks to curb its dependence on Russia for energy.” You served in multiple administrations. How fast do you think this could happen, and what role would private industry need to take?
DAN ESTY: Well, I do think that there is a recognition in governments all across the world, with Germany perhaps most visibly demonstrating a changed spirit over the last few weeks, that we pay a price, a hidden price, for dependence on fossil fuels in multiple regards. The first price that we’ve known for some time is the buildup of greenhouse gases in the atmosphere, which is imposing ever greater costs on us.
But over the last few weeks, the Russian invasion of Ukraine has highlighted a second price, a strategic vulnerability price. And I think the German government, in what represents one of the largest policy pivots of recent decades, has decided they cannot go forward with an energy future that depends on natural gas and oil from Russia.
So it is quite clear that governments can change postures and that, frankly, the pressure to do so from these multiple burdens that fossil fuels impose on us– a strategic burden, a vulnerability to rogue states like Russia, and of course, the burden of an atmosphere that’s filling up with greenhouse gases, threatening to create serious problems of climate change all across the Earth.
IRA FLATOW: And it seems from polls– most recently the Quinnipiac Poll that cites 71% of Americans support a ban on Russian oil, even if it resulted in higher gas prices. So the American public may be behind this. Do you read that the same way?
DAN ESTY: I do think this is the moment to really shift gears in a fundamental way and move American society onto a more sustainable trajectory and to a clean energy future. I think if there ever were a time to have the public back change, including change that’s going to have some price, it’s now.
IRA FLATOW: In the midst of this, the president has pointed to funding new hydrogen projects. I remember in the State of the Union, he talked about this. But at this point, that relies on natural gas to make the hydrogen from that. Are we chasing the right clean fuels here? And why did the president focus on hydrogen at this point when so many people are focused on cars powered by batteries?
DAN ESTY: Well, I do think that there is a short-term opportunity to move to hybrid vehicles and ultimately to fully electric vehicles that exists right now. But the question is, where does the electricity come from for those vehicles? And in too many parts of America, it remains a fossil fuel based electricity.
Connecticut and New England, more boardly, are quite lucky to the extent that we have significant not fossil-based electricity. So our shift would be more effective in terms of the transformation required. In terms of hydrogen, there are various colors of hydrogen. And you’re quite right that a good bit of what is produced now is what’s known as gray hydrogen, coming to us from natural gas. So we’re splitting natural gas apart to get at that hydrogen.
There are alternative ways, using a clean electricity, to break water apart through electrolysis. And if we were able to do that, we would have a much cleaner base of hydrogen. As of today, that’s still pretty expensive. But a lot of efforts going into bringing down those costs.
IRA FLATOW: You’re involved in something at Yale called the Yale Initiative on Sustainable Finance. Explain about how that might help influence the future direction of energy.
DAN ESTY: Well, after the Yale Initiative on Sustainable Finance, we are looking at ways that we can bring a flow of money, of capital, at large scale into investments that will help us move from where we are today to a clean energy future and in particular in the technologies required for deep decarbonization, which is what the world community now recognizes is essential.
In fact, the core conclusion coming out of the climate negotiations in Glasgow in November, the so-called COP26 summit, was the need for net zero greenhouse gas emissions by 2050. And if we’re going to get there, we know we’re going to have to bring a lot of money to bear to change out the fundamental infrastructure of our society. So we have a lot of capital that’s got to turn over to be part of this transition to a clean energy future and really move us to a sustainable trajectory for our economy going forward.
IRA FLATOW: How much do small investors, those without the multimillion or billion dollar portfolios, influence this? Or is this really targeted at select few companies, corporations, industry leaders with a lot of sway or power, so to speak?
DAN ESTY: One of the things that’s really come to the fore in the last couple of years is a growing number of mainstream investors, often pretty small investors, who have said to their investment advisors, to their pension fund managers, or to their 401(k) fund managers that they want better alignment between their values and the stocks in their portfolios.
And in particular, many are saying, we want a more sustainable portfolio. We don’t want to be invested in fossil fuel companies. And to the extent that some are saying, we want to actively invest in companies that are seeking solutions to climate change, that are helping us move towards deep decarbonization.
And those hundreds of thousands, now millions, of relatively small mainstream investors– meaning they’re not willing to forego returns. They still want to make a profit on those investments. But they’re saying, give me a different mix of companies. Give me companies that are part of the sustainable future. And keep my money away from companies, like oil companies, that may in fact collapse in value over the next if not two or three years, certainly 5 or 10 or 15 years as society moves decisively away from fossil fuels and towards clean energy alternatives.
But the most promising thing in some regards from my point of view is the fact that you’ve now got the corporate world absorbing this idea that we need net zero greenhouse gas emissions by 2050 and hundreds– now, in fact, thousands– of companies having made net zero pledges of their own.
IRA FLATOW: Do you see any other disruptions that may emerge from this time period given the role of Putin’s petro state in global instability and recent reports on climate change?
DAN ESTY: Well, I think we know that the climate science is getting ever clearer. Even in the last few weeks, the Intergovernmental Panel on Climate Change has produced its latest report focused on impacts and vulnerabilities and the need for adaptation. So we know there is a requirement that we take seriously the science, and that is going to require transformative change.
And I think what is interesting to me is that this moment with Russia in high profile is added to the sense of momentum for bringing about this big shift towards clean energy and away from fossil fuel dependence. And basically, Putin has given us all a gift who need that added boost in terms of focus on the shift away from fossil fuels. He’s added to the argument for freeing ourselves from dependence on something that has this hidden burden, this hidden set of costs.
IRA FLATOW: Now, you’re currently in Denmark, one of the world’s leading wind power countries and which has made that commitment to go green. Are we, here in the States, willing to trade the short-term pain– higher prices– for the longer term gain and not only energy independence but mitigating the effects of climate change?
DAN ESTY: So it is quite interesting in Denmark where you see a quite different pattern to life. One can’t help, when flying into Copenhagen, but notice hundreds of windmills, particularly offshore, some onshore, but hundreds offshore that have become a significant part of the energy base for the country of Denmark. And on an everyday basis, you see people walking, commuting by bicycle. So there are quite different choices that are being made in the most sustainable countries in the world, and Denmark certainly is among them.
But I think, beyond that, it is important for us to recognize that there is an opportunity to shift gears. But it requires some willingness to pay a short-term price. And I think Americans may, in this moment with the Ukraine issue and the suffering of the Ukrainian people evident, starting to realize that the price we would pay, in terms of a higher cost for gasoline and short-term impacts on our pocketbook, may well be so much less than the Ukrainians are suffering and a signal of what is to come if we don’t take action, that people are starting to step up and say, yes, this is the right time to shift gears.
IRA FLATOW: Well, that is a good place to wrap it up. I want to thank you, Dan, for taking time to be with us today.
DAN ESTY: My pleasure. And thank you for bringing these issues to the fore.
IRA FLATOW: Dan Esty, director of the Yale Center for Environmental Law and Policy and co-director of the Yale Initiative on Sustainable Finance.
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