Joe Biden’s top climate advisor on how climate change will shape the US economy

Climate change is already taking a toll on the U.S. economy, according to the most sweeping national assessment to date, released earlier this week. Conducted every four years, this was the first national climate assessment to devote an entire chapter to the economy. The “conservative estimate” is that extreme weather, exacerbated by global warming, already costs $150 billion in damage per year. That’s just one example of how our changing planet will impact Americans’ wallets.

Extreme weather, exacerbated by global warming, is already costing the US $150 billion in damage per year

How will the Biden administration deal with this new reality? And do new technologies like AI help or hurt the cause? The edge spoke with Ali Zaidi, who was appointed national climate advisor by President Joe Biden last year.

This interview has been edited for length and clarity.

This is the first time that the national assessment has devoted an entire chapter to the economy. Why was that an important addition? And what are the biggest takeaways for you?

The natural sciences can of course contribute a lot to our understanding of climate change, but so can the social sciences. And understanding how the physical implications of a changing climate then flow through the economy is critical, both for understanding the nature of the threat and for formulating the most robust and beneficial response.

Extreme heat is a physical phenomenon. But through a combination of natural science research and social science research, we know that extreme heat impacts historically defined communities, places set aside in our communities because of racist housing policies from decades ago, where there is literally more pavement and fewer trees. This is therefore a combination of insights from the natural sciences and the social sciences.

Likewise, we know that that extreme heat will put downward pressure on agricultural productivity. It actually puts downward pressure on worker productivity and, if not effectively mitigated, leads to problematic public health outcomes. And it even reduces production, putting pressure on, for example, the water resources that help us produce things in factories.

“If you look at it from 15,000 meters away and say, ‘Okay, the planet has warmed by one point degree Celsius,’ that tells you so little about what’s going on.”

If you look from a distance of 15,000 meters and you say, “Okay, the planet has warmed by one point degree Celsius,” that tells you so little about what’s going on. The kind of work that contributors to the National Climate Assessment do enriches our understanding And and then the solutions that we formulate as a result. For example, what work do insurance markets need to do in this new normal? What work do the credit markets need to do in terms of underwriting practices, in mortgage underwriting, in project finance and underwriting in this new normal?

The US is currently the largest oil and gas producer in the world. What consequences will the transition to clean energy also have for our economy?

The transition is actively underway. It’s not in the future.

What we have seen under the President’s leadership is an unprecedented expansion of clean energy production in the United States. New, clean electricity is currently flowing over our electricity grid for more than 10 million homes. We’ve approved massive transmission lines that carry the equivalent of 10 Hoover Dams’ worth of clean energy from point A to point B. The number of charging stations along our roads and highways has doubled just in the time since the president took office. . The number of EV models available has doubled since he took office and will double again by the end of next year, vastly expanding consumer choice when it comes to the vehicles they buy.

“The transition is actively underway. It is not in the future.”

And that is a huge growth in our ability to actually produce the products ourselves: not just deploy them in America, but make them in America. Since the Inflation Reduction Act was signed a little over a year ago, we’ve seen a hundred factories announced to start making this stuff here: solar panels, green hydrogen electrolyzer, batteries.

What new technologies do we need as part of that transition, which may not be obvious, such as solar panels and wind turbines?

We don’t just look at opportunities in buildings, energy or transport. We are also looking at opportunities in heavy industry, in agriculture, in the fields.

From a technology perspective, let me give you a few examples of why I’m so optimistic that we can meet at this time. We are seeing a huge increase in climate-smart agricultural practices. Since the president took office, we have now signed up 60,000 farms to practice climate-smart agriculture. In many cases that means advanced agriculture, precision agriculture, the use of drone flights to locate or target where fertilizer is going, sensors being developed at low cost to help reduce the amount of nutrients and resources consumed. It will help the U.S. restore total factor productivity, higher yields, and more harvests per acre – while reducing net emissions from those activities.

Then a huge transformation will take place in the industrial sector. For the first time, we are producing steel, cement, aluminum and glass that are produced with lower emissions. There’s a company in California that captures carbon from the ambient air, just the air you and I breathe, and turns it into cement. Capturing carbon in that building material is transformative.

Then there is the application of machine learning and AI in a beneficial way for the climate crisis. And you don’t have to come up with a science fiction example. Here’s a very simple one that improves people’s lives: using machine learning to optimize traffic lights in a city. That helps reduce congestion, reduce idling, improve local air quality for those living near the interchanges, and subsequently reduce overall emissions. So things like that. That makes me so excited that we can improve not only our climate outcomes, but also local air quality, quality of life, energy security and job security. That’s the transformation we’re seeing block by block across the United States.

“I think there should be transparency”

Speaking of new technologies, crypto mining And AI both burn a lot of energy, and that means more greenhouse gas emissions. Are you concerned about the potentially threatening US climate goals? And how would you prevent that?

I think there should be transparency about the amount of energy consumed. I think there should be clarity about the energy mix that is used. I think it takes deliberate and concerted efforts from companies and their customers to strive for the least impact on the environment.

There’s an opportunity here, and that is to use this new electricity tax growth to actually drive the modernization of our electric grid, to fund some of the upgrades that we’re going to need. There’s an opportunity here for some of these high-tech customers to help get grid-enhancing technologies, efficiency technologies that are becoming more ubiquitous in use across the country.

So look, I think there’s definitely tension here when one sector of the economy decides to just pass the climate ball to someone else and say, “This isn’t part of my job description.” We’re all in this together. We all need to be part of the solutions.

The SEC has weighed in mandates on disclosures about greenhouse gas emissions and climate risks. What do you think is necessary?

The SEC is an independent agency. I certainly pay a lot of attention, as do many of us, to how this regulatory environment is evolving, whether it’s at the federal level or what California is doing or what jurisdictions abroad are doing.

What we know is that there are material risks to companies and to investment portfolios that are manifesting. They are clear. Scientific analyzes such as the National Climate Assessment show how widespread climate risk flows throughout our economy, resulting in both physical risks and transition and regulatory risks for businesses.

We know that companies that operate with foresight or a long-term vision secure value for their shareholders and for their stakeholders. They are strengthening their competitive position in a world where a stable climate is something you can no longer rely on, where climate disruptions to elements of operations such as supply chains are the new normal, and where the currency of the realm is clean energy and clean transportation. and clean products.

“The demand for fossil production is peaking”

When it comes to tackling this problem, a standard call we hear is to achieve carbon neutral emissions – allowing polluters to continue producing some greenhouse gas emissions as long as they offset or capture them. But some say this doesn’t go far enough and that we should phase out fossil fuels. Should we keep fossil fuels in the ground or just deal with CO2 emissions?

We must, as urgently as we can, reduce greenhouse gas emissions entering the atmosphere. That is the scientific imperative. The National Climate Report does not underline this with a period or comma, but with an exclamation mark. We know how to do that through carbon management, through cleaner generation sources, through new fuels that don’t result in the same pollution profile.

The fact is that the demand for fossil production will, as you can see, peak in the coming decades. It’s spiking because of the proliferation of alternatives that, quite frankly, offer consumers and businesses better choices in terms of how they get from point A to point B, how they produce a product, how they grow something. And that is why it is being adopted by the economy, because the product itself provides economic benefits in terms of public health and the environment.

I think this is the very clear and secular trajectory we’re headed. And a global phase-out of the need for this type of production is part of that journey.

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