Innovation Is the Invisible Hand That Moves the Political Debate on Energy

March 24, 2023 by Dan McCue
Innovation Is the Invisible Hand That Moves the Political Debate on Energy
Dr. David Victor, professor of Innovation and Public Policy, School of Global Policy and Strategy, University of California, San Diego. (Photo by Dan McCue)

NATIONAL HARBOR, Md. — It almost seems here in Washington that the debate over energy, over the future of fossil fuels versus renewables, never changes.

Most everyone these days will advocate for an “all of the above” solution to meet the nation’s future energy needs and deal with the worsening climate crisis.

However, even those who appear to agree on that shallow basis have very different interpretations of what that means.

There are those, for instance, who are truly advocating for an “all of the above” solution that consists of a greater reliance on renewable energy in the future with a commensurate ratcheting down of fossil fuel use over time.

And then there are others for whom “all of the above” is simply a password, like Groucho Marx’s “swordfish,” intended to keep the door ajar just enough to allow for more drilling and pipelines and smokestacks ad infinitum.

It’s enough to make one throw their hands up and wail at the seeming all-too-human propensity for stalemate and frustration.

But Dr. David Victor, an expert on the relationship between technological change and political change at the University of California, San Diego’s School of Global Policy and Strategy, would likely beg to differ with that individual.

Speaking before a packed auditorium at the ARPA-E Energy Innovation Conference on Thursday Victor suggested, from experience, that as research leads to new technological breakthroughs, the needle on the public debate inevitably shifts.

“At the university’s Scripps School of Oceanography, one of the things I did was work on the decarbonization of electric power grids, natural gas systems and transportation … and what I can tell you is when we look at these activities … when they are successful … they alter the underlying political landscape by creating new companies, which create new jobs, and that process then begins to build upon itself.

“So what I see as somebody who studies these systems is that there is change across the political spectrum, on the left and on the right, as more people see job opportunities and political opportunities in these new industries … and that should give us quite a lot of hope about long-term solutions when it comes to the climate,” he said.

Shifting position behind the podium and punctuating his remarks with liberal gesturing with his arms, Victor acknowledged “the politics of climate change problems used to be very, very hard. It was like swimming against a storm.

“But the politics has become a little bit easier, in part because of partnerships encouraged by the Department of Energy and partly due to vested interests — good, vested interests — that want cleaner energy, that want to create more companies and that, like those of you in this room, are striving to create the new technologies.”

Central to the theory of change that Victor espoused from the stage was the concept of uncertainty and his assertion that we’ve all been misinterpreting it for far too long.

“People who have been studying this have viewed uncertainty as the enemy,” he said. “They thought that if the public doesn’t have confidence in what all of the side effects will be, then they won’t want to act.

“They have thought that if we don’t have all the technologies available on the shelf, ready to go, then we are not going to make progress on climate change,” he continued. “Again, this goes back to the assumption that uncertainty is the enemy, but the reality is, there are several examples that illustrate that this is not the case.”

As an example, Victor pointed to the sweeping international actions that occurred after the discovery of acid rain in the 1960s and a hole in the ozone layer was identified in 1985. In both cases, the passage of key pieces of legislation and huge investments intended to address the problems were made “before all the dots were connected” and the phenomena fully understood.

“And I think the role of uncertainty is even more important to people in this room because technological change … innovation and the transformation to new industries is intrinsically an uncertain process,” he said.

“We all can imagine potentials for new kinds of electrical grids or hydrogen systems, elements of what we think of as the clean energy economy, but frankly, we don’t really know which ideas are going to take off and be successful and which won’t. But that’s not a recipe for paralysis.

“There are a growing number of firms and governments out there that are highly committed to doing something serious about the climate change problem. … but, the truth is, they don’t know what to do. They’re committed. They’re acting. They’re investing in testing new ideas. But they don’t know exactly what’s going to work. Nonetheless, they’re motivated to make big changes,” he said.

In their book, “Fixing the Climate: Strategies for an Uncertain World,” Victor and Charles F. Sabel, of the Columbia Law School, posit that society’s solution to having a strong motivation to act with no clear idea what to do is to incentivize experimentation.

“It’s about creating strong incentives that allow people to go off and test new ideas and technology and business models, learn about the context, and figure out what works and what doesn’t work,” Victor said.

“Frankly, that was the reason I was so excited to come here and talk at ARPA-E, because I see it as a success story, going back to its very beginnings … it’s helping people and institutions pursue ideas and running experiments, and helping us as a society learn which of those experiments work and which don’t and scaling up those that do,” he said.

Despite his seemingly bottomless well of optimism, Victor admitted he doesn’t believe the goal of limiting global warming to 1.5 degrees Celsius above pre-industrial levels, as set out in the Paris Agreement, is doable anymore.

“We’ve simply waited too long to act,” he said. “Today, we’re on track for up to 2.5 degrees Celsius of warming.

“But at the same time, I think we need to think differently about the metrics of progress. Okay, maybe we don’t reach our decarbonization goals by 2030 or 2035, but every industry has started to get really serious about this and we are making programs.

“Adjusting or relaxing targets should not be viewed as a sign of failure; they should be viewed as a sign of learning. Any aggressive target set in the context of essentially unknowable things has to be corrected or adjusted as more data becomes available,” he said. “Sometimes goals are adjusted simply because of technological advances and what was possible at the time an initial goal was set.

“Another thing I’d say is that as entrepreneurs, we should be looking not only at the new technologies we are creating, but also the kinds of existing firms that are motivated and are likely to pick them up and carry them in practice. 

“Finally, the last thing I want to talk about is trade — which may seem really weird,” Victor said. “I mean, I’m standing on a stage where everyone’s talking about innovation and politics to some degree, and here I am suddenly talking about international trade policy.

“Why is that? Well, you should care a lot about trade. There are some very worrisome trends that are underway right now. There’s a terrific book by Greg Nemet called ‘How Solar Energy Became Cheap,’ and it tells the story of how the technological frontier for solar began in the United States, then moved to Germany before moving to Japan, and a huge manufacturing revolution really drove down costs. It was all the learning curve on a global scale. 

“That’s why solar is cheap today: because the best firms could sell products globally and run down on [the] global learning curve as fast as possible. That story is being replicated with batteries and we are on the cusp of replicating that story with many other kinds of technologies as well. 

“We have an interest in keeping enough trade doors open, and enough of a global trading system in place, that we can do the same thing for the kinds of technologies that all of you are inventing,” Victor continued.

“Why do I mention this? Because I think one of the dark sides of American politics right now is you do not have the votes on the Hill to be able to do things like an Inflation Reduction Act or a CHIPS Act, unless there’s a big American flag planted on top of those supply chains. 

“Now, some of that is necessary for politics. But we have to be careful that we don’t create supply chains that are all fragmented and Balkanized, undercutting the tremendous advantage that comes from job creation and innovation here,” Victor said.

Dan can be reached at [email protected] and @DanMcCue

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