On this episode of Columbia Energy Exchange, host Jason Bordoff is joined by Lord Adair Turner, Senior Fellow at the Institute for New Economic Thinking, Chair of the Energy Transitions Commission, and former Chair of the UK Parliament's Climate Change Committee.
In November 2018, the Energy Transitions Commission published a report entitled ‘Mission Possible: Reaching net-zero carbon emissions from harder-to-abate sectors by mid-century’. The report outlines the possible routes to fully decarbonize cement, steel, plastics, trucking, shipping, and aviation – which together represent 30% of energy emissions today and could increase to 60% by mid-century. Lord Adair Turner and Jason discuss the report in detail – its findings, recommendations, and implications for the energy transition.
We also hear Lord Adair Turner's thoughts on an array of issues, including climate change, the proposed Green New Deal, and the broader role of government in the energy transition.
Jason Bordoff: Hello and welcome to Columbia Energy Exchange, a weekly podcast from the Center on Global Energy Policy at Columbia University. I’m Jason Bordoff. On this episode of Columbia Energy Exchange, I’m joined by Lord Adair Turner, Senior Fellow at the Institute for New Economic Thinking, and Chair of the Energy Transition Commission. At the end of last year, the Energy Transition Commission - which Lord Turner co-chaired - published a report entitled ‘Mission Possible: Reaching net-zero carbon emissions from harder-to-abate sectors by mid-century’. The report outlines the possible routes to fully decarbonize cement, steel, plastics, trucking, shipping, aviation – the hard to abate sectors which together represent nearly one third of energy emissions today and could grow to up to 60% by mid-century. On today’s podcast, we discuss the report in detail: talk about it’s findings, recommendations, and the implications for an energy transition. And I'll also talk with Lord Turner to get his thoughts about a wider array of issues related to climate change, the proposed Green New Deal, the connection between climate action and economic growth, and the broader role of government in the energy transition.
Jason Bordoff: Lord Adair Turner. Thanks for joining us on Columbia Energy Exchange. So, talk a little bit about the energy transition commission, first for people who are listening, who just may not be aware of it and then let’s talk about some of the work you’ve been doing most recently.
Lord Adair Turner: The energy transition’s commission was set up just over three years ago. And it’s a somewhat eclectic coalition of both companies from across the world and NGOs, all united in the belief that we need to take action on climate change. So it includes from the fossil fuel company, Arena, BP, and include Shell. But it also includes Rocky Mountain Institute, World Resources Institute. It includes Indian companies like Tata, who are into power and into steel and includes Dalmia cement from India includes a Chinese wooden turbine manufacturer and now _____ [00:00:59] Group one of the biggest Chinese power company. You can see it on the website. There are about 30 companies and institutions which are part of the energy transition commission. It was created three years ago. It’s chaired by myself, co-chaired by myself and by Ajay Mathur who is head of the energy and resources institute of India. So, our focus is global. It’s fossil fuel companies through to new energy companies. But all united and it’s sort of a condition of being at the table that we want to drive an energy transition which will be compatible with the Paris climate agreement. And we’ve just produced a report, we produced an initial report back in April 2017 and we introduced a new report in December which is called mission possible and the message says it. We are arguing that it is possible for the whole global economy, developed and developing by about 2060 to get to zero emissions and we mean, you know, very close to zero emissions within the energy and industrial system itself. Not the purchase of large amounts of offsets from the forest sector. But actually running our energy and industrial and economic system with zero carbon emissions. Indeed, I would say having gone through the analysis that I am absolutely certain that it’s possible. The way I sometimes sum it up is if above us the word of benevolent adhere to and if she would send angels in the night to steal about two thirds or three quarters of our fossil fuels so that the only amount of fossil fuel reserves we have left stuff that we could safely burn and stay within 2 degrees limit. I’m absolutely confident that by 2060, we would have built a zero carbon economy and that we would hardly notice the economic cost of getting there because the technologies are available. I think the challenge is are we clever enough to coordinate the policies and make the decisions which drive us from here to there. But technically, I’m convinced after our work of the last three years there is zero carbon economy is possible not within five or ten years. If you try and do it incredibly fast, you just can’t change the capital stock of the economic that rapidly. But over 30 or 40 years, yeah it’s absolutely doable.
Jason Bordoff: And of course, the urgency gets greater as we continue to delay and don’t necessarily have 40 or 50 or 60 years given the trajectory we’re on. There is a lot to unpack in what you just said about the mission possible report, the hard to rebate sectors, the cost of the economy which I want to ask you about because it’s often something ways there is an objection to strong reaction on climate. But first just for our listeners who may not be familiar with you and your background, I’m just curious if you could talk a little bit about how you came to this issue from a career in financial services regulation in consulting in banking and now spending nearly all your time helping to think through how we drive deep decarbonization. Tell us a little bit about yourself.
Lord Adair Turner: Well, I’ve had a slightly varied career. I was at McKenzie consulting in the 1980s and 90s and McKenzie practice in Russia and eastern Europe in the early 90s. And I was then after that, I was director general of the confederation of British industry which is, you know what’s the equivalent in the U.S. It’s like a chamber of commerce but it’s the big companies. It’s a round table of major companies. And it was actually when I was doing that in the late 90s and 95 to 2000, then I became interested in people writing about climate change. It was after the Kyoto agreement and I ended up believing that the science was compelling. And I played a role in, you know, encouraging the members of our confederation to engage effectively with the climate change issue and we ended up with a policy response which says, we’ve got to take this seriously. We’ve got to find a way for business to be part of the solution rather than simply saying, you know, go away, you’re try to impose costs on me. So, it was really back in the late 1990s that I got very interested in the climate change issue. Thereafter after 2000, I was involved in a whole series of different bits of U.K. public policy from pension policy to the minimum wage. But I kept on thinking a lot about climate change. I became a friend of Nick Stern who was producing his major book on the economics of climate change and I wrote about the economics of climate change. And I guess that is the background of the fact that in 2008, I was made the first chair of the U.K.’s climate change committee which under our act of parliament, we had a climate change act which legally commits the U.K. to achieve an 80% reduction in our emissions between 1990 and 2050. And we have this independent body called the climate change committee set up by act of parliament within independence from government whose job is to work out how to actually achieve that transition. How fast you have to go in the early years to make it credible that you be there at the end. So, alongside, also being chair of the U.K.’s financial services authority, I was doing that from 2008 to 12. And you know, that reinforced my fascination with this issue. So, when the energy transition commission got set up, I was known as someone who know something about business. I’m on various boards. I’ve always had a business side to my involvement. But I was asked to become chair along with Ajay Mathur of the energy and resources institute of this new commission.
Jason Bordoff: So, let me, that’s interesting to me for many reasons. But let me ask you about one in particular. 2008. You were asked to take over the climate change commission and then at the same time, the financial services authority, as we’re headed into the great recession, so you’re taking over the body that oversees regulation of the U.K. financial system as the world economy is going into collapse. And it’s interesting because we’re having this debate in the U.S. now where a lot of conversation about the so called green new deal that is, that makes the argument that these things are linked. That issues of social justice, inequity, the way in which our capital system has evolved that isn’t working for everyone is tied to the problem of climate change and to the solutions to climate change. Talk a little bit about whether that makes sense to you.
Lord Adair Turner: Yes. I think because I’ve been chair of the U.K.’s financial services authority and also deeply involved in the global reregulation of the banking system after the 2008 financial crisis. I was head of the major policy committee of what’s called the international financial stability board which was in charge of introducing what’s called Basel 111 the reregulation of international banking. Because I’ve done that, I’m simultaneously been heavily involved in climate change. People expect me to sort of link the two sides of my brain and provide the integrated answer. And there is a bit of me that says well, hang on, you know, sometimes problems in life are most easily dealt if you keep them somewhat separate rather than declare that everything links to everything. So…
Jason Bordoff: I teach my students, the most important question of policymaking is what problem, we are trying to solve.
Lord Adair Turner: What problem, you’re trying to solve and don’t…
Jason Bordoff: Targeted policies, targeted at that particular.
Lord Adair Turner: Yeah, and don’t try probe all problems at the same time. So, I think that there are some ways in which there may be a link between thinking about the macro economy and thinking about the climate change challenge. But I don’t think, we should overstate it. The link which I think is clear is that in order to build a low and then a zero carbon economy, we will have to invest quite a lot in new infrastructure of renewable energy, new lower carbon mass transit systems, charging infrastructure etc. And although those are large investments, when you add them up and express them as a percent of GDP, they are still manageable investments. But they are large. We simultaneously have a world in which for reasons that we only partially understand, real interest rates are incredibly low. Indeed, they are negative in the major developed economies. And that seems to be suggesting that we almost have too much savings in the world pursuing too little private investment opportunities. In that environment, it is reasonable to say, well, if government can play a role in driving a low carbon economy why wouldn’t it borrow money to do it because governments can borrow money at unbelievably cheap rates of interest. And by the way, that maybe a good thing to do in order to stimulate the economic growth, this over lapse with Larry Summers has referred to as the problem of secular stagnation and he and other macro economists like Brad DeLong have argued that we should have a macro economic stimulus with large fiscal deficits that this is the right time to be running large fiscal deficits. So…
Jason Bordoff: Now, that then raises the question about what the right role for government is.
Lord Adair Turner: Yeah. So there is a case that if the things that we needed to do to drive a zero carbon economy required large amounts of public expenditure, this is a peculiarly good time to have large amounts of public expenditure because governments can borrow for incredibly low rates of interest and it might be a useful thing to do in any case. The reason to be just a bit cautious about about it is to step back and say, how important is large public expenditure and here you have to get, you have to get specific. You have to get down to the engineering details. Let me give you an example. Within the work of the energy transition commission, we just produced report called mission possible focusing in particular on some hard to abate sectors of the economy. One of those is aviation. Now, aviation, I think the solution to how we decarbonize long distance aviation is going to be to continue to use existing style aviation engines but to use a biofuel or a synthetic fuel going into it. That’s an important thing to do and there is an important role for government to impose a tax on conventional jet fuel, fossil fuel, jet fuel or to have a regulation that requires airlines to use a biofuel or a synthetic jet fuel. But what I don’t see in the aviation space is a huge need for public capital expenditure, just that particular problem doesn’t seem to give itself to large public expenditure. It seems to give itself to a tax and regulation. Now, there are other sectors of the economy where I might want public expenditure. I think for instance that we are now at the stage where electric vehicles where the limiting factor for their take off is not the cost of the electric vehicles. I think electric vehicles are gonna be cheaper than internal combustion engines within about five or six years. It’s charging infrastructure. So, in charging infrastructure, I can see a role for government that maybe a small city government, the national government of putting money into street charging infrastructure. So, once you go beyond the general theory, I think the crucial thing is to get down to the details. You’ll find some sectors of the economy where there isn’t a big role for public expenditure. There is much more of a role for tight regulation or taxes and there is others where taxes won’t be very, a carbon tax won’t be very effective but for some forms of public expenditure or subsidy maybe a good idea.
Jason Bordoff: So, I want to, yeah, talk about this mission possible report now which I would commend to people. It’s a really well done piece of analysis focusing as you said on what we can do in these hard to abate sectors. So first just explain to people why that focus and why this is important. We talk a lot about the growth of electric cars, about renewables in the power sector. Give people a sense of the magnitude and why the hard to rebate sectors which don’t get as much attention as they sometimes do, deserve that attention?
Lord Adair Turner: Well, in our first sort of year and a half of the work of the energy transition commission, we focused a lot on the renewable electricity sector and we convinced ourselves that we now have the technologies to decarbonize electricity, faster and cheaper than any of us did hope ten years ago and this is because the cost of solar energy _____ [00:15:00] energy has come down 85%, wind has come down 65%. So, those part of what we need to do to decarbonize the economy which is sort of relatively obvious and we can be relatively optimistic about. We know how to make electricity systems low and eventually zero carbon and once you do that, you can electrify a lot of the economy. But then you have to say, but there are bits of the economy where simply saying, if I had green electricity, I’ve won the game is not true and these are areas like steel production, cement production, petrochemical production, the production of ammonia for nitrogen fertilizer, the production of plastics which is a hugely growing part of the economy.
Jason Bordoff: And a larger share of emissions than many people appreciate.
Lord Adair Turner: Yeah, and if you take those sectors and also take the heavy end of transport, the heavy and long distance end of transport, shipping, aviation and trucking, again where it’s not so objecty that you are gonna be able to just electrify it. Those sectors account for about 30% of all the emissions from the energy and industrial system. And if we don’t address those by 2050, they’ll account for 40 to 60% precisely because we do know how to take the emissions out of electricity. So, it’s great, taking the emissions out of electricity. But as we do that we better focus on the areas where the answers are less obvious. Now, the good news is that for each of these harder to abate sectors, we believe there are answers. And some of them do involve a role for electricity either directly or indirectly through the role of hydrogen. But some of them involve other technologies as well. In broadly speaking, there are four technologies which in different ways are relevant here. Electrification where it’s possible. Hydrogen made from electrification, from electrolysis is also _____ [00:17:00]. Bioenergy which we need to be careful about because there is limits to how much a sustainable bioenergy there is in the world. But it has to play a role as well. And carbon capture and storage which should not be just the sort of get out of free jail card for the fossil fuel sector. You know, let’s just assume that sometimes in 2070, 2080, we’ll do some massive amount of carbon capture and storage. You shouldn’t do that. But you do need to recognize that there are some sectors of the economy and the clearest one is cement. I don’t know how to take the carbon out of cement production without capturing CO2 at the back end of a cement kiln and either using it else where or storing it. So, we have this portfolio of technologies. We have points about the balance between them. We don’t need to centrally plan what the precise balance is and it will probably vary by different parts of the world. But the portfolio of technologies, electricity hydrogen, carbon capture and bioenergy is sufficiently powerful that we are convinced that even these six more hard to abate sectors of the economy, there is a root to take them to zero carbon.
Jason Bordoff: And the mission possible report stands in distinction, a little bit to some other analysis I’ve seen because it, I want to say minimizes but the role for carbon capture utilization storage is quite small in your view. And I’m just wondering why you have that sort of more skeptical stance toward CCUS and is that because you think there would be a problem with the hydrocarbon sector continuing to do what it’s doing or because you don’t think it makes economic sense to do this including direct air capture technology which is very expensive today but does exist.
Lord Adair Turner: Yeah. Well, we certainly don’t have direct air capture technology and if you look at the aviation sector, we are completely open-minded as to whether the way to fuel a jumbo jet across the Atlantic is a biofuel equivalent of existing jet fuel or a synthetic jet fuel which might be made from direct air capture of CO2 synthesized with hydrogen. So, with all of these, I think one should be open-minded. But on carbon capture and storage, I think the thing which has changed many people’s minds and certainly mine is the belief that this will play a smaller role in the power sector that we used to believe. If you had asked me ten years ago when I was the first chair of the U.K.’s climate change committee, how do you decarbonize a power sector, I would have said, we will have to use three technologies. We’ll have to use renewables. We’ll have to use nuclear and we’ll have to use carbon capture and storage on a fossil fuel plants. I think what has changed over the last ten years is that the sheer pace of reduction of renewables has been far faster than we anticipated. The pace of reduction of batteries which can be used to back them up has also been faster. And so, the relative role within decarbonizing the power sector, how much weight can be carried by renewables alone has shifted from ten years ago. I mean, when the fact changed, I should change my mind and the facts have changed. I don’t think, you can have a 100% variable renewable system. We talk about the sort of last 15% problem, a 15% problem where we…
Jason Bordoff: Because as you scale renewables, it’s not just the daily fluctuations that battery storage can help with but seasonal.
Lord Adair Turner: The seasonal stuff.
Jason Bordoff: Which may require significant over build of capacity to meet seasonal demand.
Lord Adair Turner: Yeah. The seasonal thing, I think is probably the biggest challenge in the long term. I think in electricity systems where in particular in the hot parts of the world where the fundamental thing you’re talking about in the residential home is cooling not heating, I think we can see a vision. There are a lot of the problem of how to you have cooling on in the evening when the sun has gone down will be dealt with by batteries. I think when you’re talking about New England and Minnesota and you know, northern England and Scandinavian heat demands, it’s much more problematic to say we’ll simply do that with renewables because you would have to over build. Now, you may over build what you require for winter and then make hydrogen in the summer. So there are some answers but we cannot exclude the fact that for that last 15% of the electricity load, we may need to have some thermal plants where the bioenergy or fossil fuels with carbon capture and storage. But the relative way to that looks less than it was ten years ago. So, that’s why our estimates for carbon capture and storage are much less than other people have. But we think it may play a crucial role possibly in some petrochemical processes, almost certainly in the cement process and in steel. Broadly speaking though there are two ways to produce zero carbon steel. We either continue to use coking coal in blast furnaces but we push carbon capture and storage on the back end of them or we use hydrogen direct reduction rather than coking coal direct reduction. And we think that both of those will exist and they will which will be applied in different environments will depend upon how cheap is renewable electricity in that particular environment and is there a supply of safe carbon storage facility like say _____ [00:22:44] in that particular geographic area. So there will be, there will be different answers in different parts of the world. Overall though, our story is less CCS in the power sector than certainly I would have thought required ten years ago. But still an important role within cement and steel and maybe some of petrochemicals.
Jason Bordoff: And the message of this report is that the technologies already exist. It is quite an optimistic report.
Lord Adair Turner: It is.
Jason Bordoff: Given the sense that permeates a lot of the climate conversation now that how far off course we are. Emissions are still rising and have sort of a can do attitude.
Lord Adair Turner: It is a can do attitude, as coal emissions possible on the title, it says what it says on the title. What we’ve done in relation to technology is deliberately not assume fundamental breakthroughs in the laboratory which, you know, are currently unknown unknowns. Now, I will tell you they’re certain to occur. I mean, the one thing, we know from technological history is that some state over the next 30 years, technologies will be created that we don’t know yet what they are. And in particular, let me give you an example, I will be amazed if some time in the next 5 to 10 or 15 years time there are not major breakthroughs in battery energy density. How much power we can get into a kilogram of battery. But we have not assumed that in this work. We have assumed that where there are existing technologies like lithium ion batteries that the cost will continue to decline. The cost of lithium ion batteries have come down from a $1000 per kilowatt hour storable in 2010 to 176 in 2018 on the latest Bloomberg new energy finance survey. They are predicting that, that could come down to about 62 by 2030. We are assuming that, that sort of reduction will occur. What we are not assuming is that people playing around with solid-state chemistry are gonna suddenly come through with something which is a half cheaper than that or five times more energy dense. With electrolysis, we’ve assumed there will be very significant reductions in the cost of electrolysis equipment but electrolysis of water into hydrogen, you know, that’s something that’s been done for years. And it’s rather interesting, you know, back in 1945, almost all the nitrogen fertilizer in the world was made in Norway from ammonia made from hydrogen which was produced from electrolysis. And it was only because gas then became so cheap that we moved away from electrolysis and started making hydrogen with methane and following. So, electrolysis of hydrogen from water, you know, is not a new technology. But what we need to do is drive the cost down. So we are confident that on the basis of technologies which are fundamental in technical terms exist today, we can drive this change. There are still some of those where there is a lot of scaled development and commercialization development required to make them commercially applicable. So what we are not assuming is that there are some sort of magic thing that happens in the laboratory which we don’t know where it is.
Jason Bordoff: But let me ask you about that point. I mean, there is a difference between technical potential and the aggregate cost of new policies and moving something from the zone of a possible to actually commercial viability. Policy makers look at the streets of Paris today and think, I need to stay as far away from climate policy as possible perhaps because look what, look how voters and consumers respond to even small increases in energy prices. So talk about the costs.
Lord Adair Turner: Well, that’s a very interesting point because and I think which one has got to be aware of is slow overall aggregate costs but particular costs that you need to manage very carefully. So, we’re confident that if you add all the costs of decarbonizing even these harder to abate sectors of the economy and you work it out what it would be as a percent of global GDP, it’s very small. It’s like sort of a half percent of global GDP. And it’s quite a robust process by which you work that out. You work out how big a carbon tax, a carbon price would be required to make steel producers logically move to a zero carbon and the answer is $50 or $60 a ton in that move.
Jason Bordoff: Just to be clear what you just said. It’s an aggregate cost but a small one. It is a cost. It is this idea that we transition to a green economy and the economy grows faster.
Lord Adair Turner: Yeah and we personally think there is a small cost. I would prefer to say there is a small cost not a zero cost. So, with steel, $50 or $60 a ton. You then work out how many tons of CO2, there are. You multiply that. You put it as a percentage of the global GDP and it’s a small figure. And it’s a small figure as a percentage of the impact on many aspects of and consumption. For instance, we think that if we made all our cars, all our autos from green zero carbon steel, it would add less than 1% to the cost of buying a new auto. But having said that you then got to accept that there are some high costs at intermediate points in the chain. If you impose a carbon tax of $60 a ton of CO2 on the steel producers, yes, it’s only gonna add 1% to the cost of the auto. But it is gonna add 20% to the cost of a ton of steel. And so if you impose it on one steel producer and not on another steel producer, you are gonna drive, you know, the first steel producer out of business. So, there is a problem of coordination at the wholesale level. The other thing to say is there are some things where to be blunt, I think we are gonna have to accept the higher price. At the moment, my assumption is that with aviation, the technological answers are fairly clear. We know how to create the precise chemical equivalent of existing conventional jet fuel. We do not need to change the engines to burn that. So, at one level that makes the transition clear. But my best expectation is that, that will be more expensive and that the world will have to spend, I don’t know, 15 to 20% more on airline tickets in order to buy the fuel in a zero carbon fashion. Now, because airline tickets are only, you know, 2 or 3% of the average person’s annual expenditure, paying 10 or 20% more for that is only a trivial impact on their standard of living. But we got to manage the process of that. Now, on that comes to the French thing _____ [00:29:49]. I suspect, we will be able to increase airline ticket prices and not have protest in the street. But if you do what Marcon did which is to impose diesel taxes just at the same time when the crude oil price was going up. So that the price of diesel in France went up by 16% in a year and looked as if it might go up by 23% in a year. And if you say, this doesn’t matter because you can use public transport or buy an electric car, the problem is that if you live in Paris, you can use public transport and you can buy an electric car because you’re only gonna travel a small distance and if you live in rural France, there isn’t public transport and your travel distances stuff, that the existing electric cars won’t provide the answer. And so, what the Marcon government failed to think about was first of all that within small overall costs, increasing diesel cost in a year by 15 to 20% is not a small cost and that the distributional effect on different groups of people was very different. So we’ve really got to get smart about the long term average across everybody and across the economy cost is small. That we got to make sure we don’t impose sudden short term increases on particular groups of people which will produce reactions.
Jason Bordoff: Yeah and some of those things airplane tickets and fuel costs are, you know, everyone incurs to some extent. There are also and I do give the green new deal credit for drawing attention to the issues of a just transition and the fact that certain particular communities can be especially adversely affected and I think that’s something policy makers probably haven’t addressed adequately in the past.
Lord Adair Turner: Let me give you an example. I mean, _____ [00:31:40] the French yellow jackets were facing a 16% increase in the diesel tax that they pay for their cars and their vans to do, you know, their ordinary middle income, sometimes lower income work in rural France. At the moment, there is no tax on the aviation fuel which took the private jets to davorce. Now, that has a certain distributional lack of justice. So, we have to get the balance right.
Jason Bordoff: So, let me, I want to ask you how do we achieve this and since we are a little short on time, ask you what the policy recommendations are, I’ll just quickly summarize, you talk about the need for pricing carbon in the report, the need for public support for innovation and infrastructure and the need for efficiency in an increasing recircular economy. I think it’s fair to say policy and all three of these areas seem to be under attack in different parts of the world or certainly in the United States and don’t seem to be winning the battle for attention and priority in many places. So, what do we do about that?
Lord Adair Turner: Well, we’ve got to win the argument and we’ve got to take the energy of the people who support the green new deal or this remarkable movement in Europe of children going on strike. There is an amazing Swedish girl Greta who has been talking about the need for change. We are gonna take that energy and we’ve got to try and make it into specific public policies which are required to actually have an impact. We do need carbon prices. It’s interesting though, some sectors of the economy where carbon prices are not the most important thing to do. I think the most important thing to do on helping electric vehicles now is charging infrastructure far more important than cities and states think about charging infrastructure with carbon prices. On the other hand, if I go over to the petrochemical sector of the economy, the petrochemical sector of the economy is so unbelievably complex with all these intermediate products between different industrial processes that you cannot solve that problem with as it were top down, you know, do this, do that. You need the search power of the price mechanism to say, you know, I’m going to impose a price on carbon. Now let the private sector work out what are the precise things that we do. So, we have to be intelligent that it isn’t just carbon prices. It isn’t just regulation. It isn’t just public expenditure. It is a mix all the way across. And we got to try and get public support for that. I think we’ve also got to try and be, you know, politically imaginative on carbon prices. And I do think these ideas are introducing carbon pricing and not just people feeling that this disappears into the general treasury pot and no idea where it goes but putting it as a dividend given back to citizens that maybe a way of capturing people’s imagination and saying, yeah, we do rather like a carbon price taxes. I think overall if we could have higher carbon taxes and lower taxes on income in particular on lower income taxes, that would be a good thing and I think there has been a lack of imagination among politicians about how to make carbon taxes which are part of the solution and all of the solution politically attractive.
Jason Bordoff: We’re just out of time but there is one more topic, I’m interested in your thoughts about. You mentioned how the energy transition commission is a broad coalition including companies in the oil and gas industry and you know, there is different views, I hear out there. One is the largest most important energy companies in the world, engineering capability, deep balance sheets. And another view which says they will always have a vested interested in maintaining the system, we have today. And be a barrier to progress. Talk a little bit about what you think the role the oil and gas industry is in this transition.
Lord Adair Turner: Well, here is the challenge. Right today, you can’t switch off oil and gas. If you switch off oil and gas and just say, we are not gonna have any of it tomorrow or in five years time or in ten years time, you know, our global economy would collapse and in particular the growth part of a lot of people in emerging markets would be stagnant. So, we do have to by in transition deliver oil and gas and in some cases, in the short term, there will be more oil and gas. I mean, not we’d absolutely don’t need that in Europe or the U.S. but there is gonna be more oil demand in the short term in India because Indians want to have cars and it’s you know, autos and we shouldn’t be saying to them, no, we’ve got autos but you can’t have autos. So, there is a role for the oil and gas companies to do that. The oil and gas companies have a very difficult challenge which is the responsible ones know that, that they have eventually got to move beyond fossil fuels. That the responsible ones are producing forecasts which the coal production in particular collapsing and in many of the oil and gas companies have deliberately got out of coal. And coal is we got to concentrate on getting out quickly. Oil has got to come down and although gas can probably go up for a couple of decades is gonna come out of the system in the 40s and 50s and 60s. And the intelligent oil and gas companies and the forward looking responsible ones know that. Now they have a challenge and their challenge is almost sociological within the companies which is, if you joined an oil and gas company, you feel good about oil and gas and an explanation, you know engineer what you do is discover more oil and gas. But you know, we don’t want more discovered. So, they have to rebalance a way, I think from exploration to producing what they have got at the moment while also, you know, diversing to the extent they can and a lot of them are trying to do that. A lot of them are thinking about how their gasoline stations could be charging infrastructure stations for the future. A lot of them are thinking about what is the role of hydrogen in the future and that maybe required for long distance…
Jason Bordoff: To make investments in electricity.
Lord Adair Turner: So, we have within the ETC, shell and BP involved. They are, you know, fully, you know, involved members of the ETC. And you know, there is a range, I think with the oil and gas companies from some who are more forward looking than others on this. But we have to engage with them. You can’t simply say, oil and gas is terrible because we have this challenge that we’ve got to produce some now. There are some parts of the world where it is going to increase but we’ve got to find a way where by 2050 or 2060, the amount of oil and gas being used in the world is much less than it is at the moment. While coal and let’s be clear, the thing with coal, that’s the coal used to produce electricity, we’ve got to get that essentially to zero by that 2050. And if we don’t take that to zero by 2050, which means that in the developed world, we should stop using _____ [00:39:14] coal within the next five years and that is just one of the things which we absolutely can do. We don’t need it and we’ve got to do it. So, the U.K., I’m proud to say will close its last coal fired power station in 2025 which is quite interesting when you think about it. Because Britain is where the industrial revolution started. The industrial revolution was based on coal and by 2025, we are a post coal society and you know, we still would be a pretty, you know, high standard of living place. So, it’s absolutely possible.
Jason Bordoff: Lord Adair Turner. Thanks for the work that you’re doing on this issue and thanks for making time to be with us today here in London on Columbia Energy Exchange. For more information about the Columbia Energy Exchange and the Center on Global Energy Policy, visit us online at Energypolicy.columbia.edu or follow us on social media at Columbiauenergy. I’m Jason Bordoff. We’ll see you next week.