by Stephen Lacey
November 23, 2016

A lot of listeners have been asking us for transcripts of the Energy Gang podcast. We're now offering them to members of Squared. Below is version of this week's podcast, edited for clarity and brevity.

Stephen Lacey: Exactly two weeks after the election, we have more clues about how President-elect Donald Trump may form a domestic energy policy and position America against the rest of the world on climate. Now, keep in mind, these are only clues -- bits of insider information from the transition team, some new hires and some deeper portraits of the people guiding Trump’s early energy policy.

That’s where we find ourselves, dealing with a lot of speculation. We’re all in new territory here. The experts, analysts, world leaders and businesspeople all chiming in on what the Trump era represents are, well, coming from the same place. There are way more unknowns than knowns at this point. That doesn’t mean, however, there’s a lack of things to talk about.

There has been a lot of compelling reporting over the last couple of weeks that’s helped us try to understand the world we’re in. I’m recording this introduction after our conversation because just after taping, Trump hinted in a conversation with the The New York Times that he would “have an open mind about the Paris Climate accord.” That now has everyone speculating further.

The point is, this is a hard exercise. We thought it would be valuable to stick just to Trump’s energy and climate policy again this week because a lot of people are trying to figure this out, and we got a good response to our post-election show. The gang was joined by Lisa Friedman, the editor of E&E Publishing’s ClimateWire, whose team has been writing on the Marrakech climate talks that just wrapped upped and the transition team priorities for President-elect Trump.

She joined us last year from the Paris climate talks and she’s been focused on this wide range of issues. We started the conversation by talking about the climate negotiations that had just wrapped up.

I’ve had a few conversations with reporters who were there who said that the Trump win just completely consumed the place. What did you hear from your team about the Trump effect?

Lisa Friedman: It completely consumed the place. Yet, at the same time there, what you really seem to see coming out of Marrakech -- both from activists and the United States delegations still under Obama -- was a pretty determined messaging that...the world won’t abide by the unraveling of the Paris Agreement.

Stephen Lacey: There were two interesting stories that came out of the talks that I wanted to discuss. The first one was that you have all these countries that four, five years ago were hesitant to sign on to a global climate agreement -- and I’m thinking in particular China and India, who now say, “Well, Mr. President-Elect, if you’re not going to go ahead and live up to your commitments, then we are going to become climate leaders.”

China in particular has put its stake in the ground and made some statements to that effect. Then you also have questions around what the Trump administration could do to back out of the Paris Climate Agreement and because it would take years to renegotiate, many people have speculated, and some in the Trump transition team have hinted, that they might actually go after the UNFCCC, which was signed by President H.W. Bush and formed the foundation of the climate negotiations.

That could be a real blow to international diplomacy. That’s the underlying diplomatic structure of what we’ve seen over the last 20 years or so. Anyway, can you just talk about those two themes, one being the positive theme coming out of countries that may have been hesitant to act and then what the Trump administration might actually be able to do?

Lisa Friedman: First of all, let’s just put out that this could have been a trial balloon, right? I mean, the Trump administration, folks on their transition team let it be known via sources that one of the things that they were considering was withdrawing from the underlying treaty, the UN Framework Convention on Climate Change. That was certainly well-timed to provoke real outrage and fear in the international community.

Could it happen? Sure. There’s a lot of debate over whether and how difficult it would be to withdraw from the UNFCCC which was ratified by President Bush in 1992, President H.W. Bush, after receiving the Senate’s consent pursuant to Article II of the Constitution. Constitutional scholars like Dan Bodansky, who has given these issues a lot of thought, believed that withdrawing from the treaty might require the Senate’s consent. Others disagree.

That’s certainly a fight that we could see play out in the coming months. As for how the world is going to react, I think the initial thoughts and something that was mentioned on the podcast here, just after the election, the assumption the day after the election was that, “Gosh, if the U.S, doesn’t live up to its commitments, China won’t either, Brazil won’t either.” Pretty quickly, we saw countries saying, “No, that’s not true.” Others like China very willing to fill the void the United States might leave.

There’s a lot of possibilities in there and I think we should divide up some of these country categories. Maybe what China would do is different than how India would react. I think there’s maybe more questions about whether India would meet its important targets, and let’s remember that theirs are contingent heavily on about $2.5 trillion in investment and assistance in getting to some of their very ambitious renewable energy targets.

China has said time and again that it will meet its targets no matter what the United States does. They have signaled and others have said that they would be very likely if not eager to assume the soft power that comes along with helping poor countries build wind farms, build solar farms, prepare for the impacts that climate change are going to bring.

Jigar Shah: I think the first point there is that this really is vindication for the efforts that myself and others have taken to prove to the world that this is the largest wealth creation opportunity on the planet. I mean, China and India are doing this because they think it’s in the well-being of their economies and their people, not because of any other magnanimous reason. Separately, I think that your last point is belied by the fact that OPEC and Export-Import Bank as well as European Investment Bank, etc. are still the largest funders of a lot of this technology around the world.

Regardless of what the Trump administration does, I can’t imagine them denying U.S. companies the right to export their goods and services to increase manufacturing jobs in the United States.

Lisa Friedman: I think that’s a great point. I think a lot of people are depending on the private sector to make the case really to the Trump administration that this is not about, that this is heavily about creating jobs in the United States and that this is part of the U.S. national interest.

Jigar Shah: Why would they have to make this case though? I mean the vast majority of wind farms and solar farms are regulated at the state level. Amazon and all these other companies that are moving forward are not doing so under the permission structure of the federal government.

Stephen Lacey: I see your point, Jigar, and I think maybe we can get in to that on the domestic policy front, but I think you’re conflating two different things here. I still think, as you’ve said previously when we had this discussion with Lisa, when we were talking about the Paris Climate talks, that the business community has such a strong role to play in proving that this kind of activity is underway that it truly does represent one of the biggest wealth creation opportunities on the planet.

That bleeds in to how negotiators talk to one another and how countries communicate this stuff. The discussion is so different from what it was five or six years ago when countries were really wondering how to implement this. And now that many of these technologies are economic, the business case is clear. I think it clearly does play a role particularly when you have this new policy uncertainty, the business community now needs to lead.

Katherine Hamilton: Stephen, right before the Marrakech talks, I was at the World Economic Forum meetings in Dubai and I’m co-chair of the Future of Energy council, and those are a mixture of corporate players and civil society. 

There was a real sense of we are moving forward. My group, the Future of Energy, has the oil and gas majors plus the disruptors. Everybody is in agreement about fossils being phased out. Distributed energy resources are on the upswing. Storage is critical. Energy access is a huge piece. Then also there are people that need to be brought along with this -- and I think we saw that in our election that there are a lot of people in older industries that need to be brought along. The message from the corporate is definitely we’re not going to stop investing. This is really about business and this is global. Whether or not the U.S. reneges on the Clean Power Plan, these investments are moving forward.

Lisa Friedman: Katherine, hearing you speak about the reaction from the World Economic Forum, I mean it really strikes me what a difference this is and the attitude that we’re hearing from countries, from Kyoto. I mean, this will be presumably the second time in those many decades that the United States has joined and then dropped out of a global climate agreement.

I’m still not sure if diplomats and others are just being overly diplomatic and very careful about what they say, but I fully expected at some point during this week to write a headline reflecting real anger and concern. We’re not hearing that kind of response from diplomats and from negotiators, and I wonder if part of that is because the business story has changed so much as you’re saying that there really is a sense that these goals can happen no matter what the United States does.

Katherine Hamilton: Lisa, I saw that some of the countries are even floating the idea of taxing U.S. imports to their countries that are highly carbon-intensive. I wondered if you had heard much about that and if that had gained any traction.

Lisa Friedman: I think we’re reading and reporting the same stories you’re looking at. Everything old is new again. When I first started writing about these issues at the end of the Bush administration, there was a lot of talk from Republicans and others in the U.S. about imposing carbon tariffs on countries that don’t act if we act. Even back then, there were countries saying to the effect if you want to play that game, we are happy to do so.

Now, you’re seeing some countries considering taking some of these measures against the United States. We’ll see if that plays out. I don't know that that’s a real threat at this point.

Jigar Shah: Marcus Aurelius said that the impediment to action, advances action, what stands in the way becomes the way. Part of this is actually saying that Donald Trump is doing the world a favor by testing everyone’s resolve and finding out that everyone is actually willing to brainstorm ways forward. I mean, that really does, I think, change the nature of this entire argument that we’ve been having for the last 30 years.

Stephen Lacey: You’ve also done a lot of domestic reporting at your team. I want to get to some of that. You’ve got some new details on the transition team. We sufficiently talked about the Clean Power Plan last time we had this discussion after the election. Maybe there’s some more details there that we can talk about. Jigar, I want to turn to you first before we talk about some of these stories related to the transition team.

I heard from a number of listeners when I was traveling last week that they were looking for some Jigar Shah outrage after the election. It might not be necessarily Donald Trump outrage, but they were looking for some of your passion and I think a lot of people see you as an outlet. Many people were confused after the election and I’m just curious if you want to highlight any of your overall thoughts on where cleantech stands domestically under a Trump administration.

Jigar Shah: I think that there are four multibillion-dollar sectors. There’s fracking, ethanol, wind and solar. The vast majority of all of those four sectors are in rural areas. We are pumping billions upon billions of dollars into those markets. I don’t see anything changing there. I just find the whole thing to be so crazy how Donald Trump manipulates the media and gets us talking about his agenda as opposed to reality in our agenda.

Katherine Hamilton: I would say rather than outrage, we have to have vigilance because I think that there’s certainly maybe some defensive things we have to do to make sure that we don’t lose ground on the federal side. I think I agree that on the state front, there are a lot of battles worth fighting for to continue to win. Investment has indeed shifted but I don’t think we should just ignore the fact that the federal side is going to be very active because there is in fact no more gridlock.

Stephen Lacey: At this point, we just can’t really say what’s going to happen to growth rates with renewables because we don’t know what’s going to happen. In general, I think most people believe that the CPP will get torn down, and although that will impact states that don’t necessarily have a robust clean energy market, in the states that are already leading, the economics are front and center here. It’s not necessarily just policy.

Jigar Shah: We’ve already reached 2024 goals under the Clean Power Plan.

Stephen Lacey: Totally. Also all of our base forecasts at GTM Research don’t even take into consideration the Clean Power Plan. All the major growth numbers that you see coming out of our team don’t even take that policy driver into account. We’re going to see really enormous growth no matter what. I guess the question is what happens to the mechanics of decision-making at some of the most important agencies, most notably the EPA and the DOE, and ClimateWire has done some great reporting on some of these transition team members.

Myron Ebell who we mentioned on the last show is the transition team head of the Environmental Protection Agency. He’s a really interesting guy. We didn’t go into his background much, Lisa, but what do we know about him beyond the fact that he’s a climate skeptic? He seems to be the kind of guy who’ll actually lash out at Republicans who want to maybe see climate action or support a carbon tax.

Lisa Friedman: Someone like Myron Ebell, the fact that he is a climate skeptic is in fact the main piece of news about him -- not just a skeptic, you’re right, but appears ideologically driven. What Evan reported in a big profile piece out yesterday was that this is not someone driven by corporate backing necessarily, but by a real ideological concern about the science behind climate change. Some of that may have been shaped by his background.

Stephen Lacey: He does have a very deep skepticism of government which tends to influence his views on climate change. I mean he really despises government in many respects.

Lisa Friedman: That’s what we hear from a lot of people. There’s this very eye-opening exchange that Evan writes about at the opening of his story, where a gentleman who was part of the libertarian R Street Institute that supports the carbon tax was planning to push for this on the hill. And he went to Myron Ebell not to get support, but just to let him know that this was happening

And he told Kevin, “Myron, just cut to the chase,” and said, “Listen, you’re wrong and we are going to beat you.”I think that kind of attitude toward not just climate change, but policies that open the door to addressing climate change, are going to come under attack.

Jigar Shah: I think this is par for the course for Trump. I don’t think Myron Ebell is going to run policy within the Trump administration, nor do I think that Steve Bannon is going to do anything in the Trump administration. In the end, it’s probably going to be Mitch McConnell that runs the Trump administration because most of the stuff he’s not going to allow through the Senate. I mean, it feels to me like he is just bringing in these firebrand people to make sure that his white nationalists are happy.

Lisa Friedman: I don't know if I could speak to that but I think that if someone is bringing people in to their administration, one has to assume that they will help shape that administration’s policies. Myron Ebell right now is just leading the transition. He’s not actually in the administration, but I think there’s every reason to think that Steve Bannon will help shape the president’s thinking on climate change.

Erika Bolstad, one of our reporters, has a terrific story that came out earlier this week looking at how he’s attempted to do just that via Breitbart news. On the other sense, you’re right. I mean, we are getting exactly what Donald Trump campaigned on. He is going to drain the swamp and that’s what we’re seeing in some of the names that he’s been putting forward so far.

Stephen Lacey: If you believe what Myron Ebell has supposedly said and that there are other people like him surrounding the Trump administration, then you don’t have a lot of Republicans who are going to reach out to the folks who are trying to push for climate action around the edges in the house and senate. I don’t see where there are major alliances forged on that issue.

What’s interesting to me is that in Evan’s piece, Lisa, they talked about the R Street Institute -- and that’s an organization that has really gotten a lot of power in D.C. under the radar. I mean I understand that they’re hiring a lot of people. We’ve had Eli Lehrer on the podcast before and that’s a libertarian think-tank that is starting to gain a lot more traction in D.C. and has pushed for carbon tax for many years now.

Then hearing R Street get shut down in that story, I mean, it’s only one indicator. It’s an anecdote. At this point, we don’t know exactly what’s going to happen -- but they’re an organization that was once seen as a powerful push for a carbon tax and now everything is up in the air again.

Lisa Friedman: I think it’s a really good point and I think to me, one of the many interesting stories to look for is what happens to the small, but burgeoning Republican climate movements. Where do folks like Bob Inglis go? Where does RepublicEN and some of these other groups go, evangelical groups that have made climate change a big issue. What role do they have in this administration, in this congress? I don't know the answer to that, but I think that’s an interesting group to watch.

Katherine Hamilton: When we’re deploying projects and creating jobs on the state level, those are voters and those people who can get to their members of congress and can start educating and making members of congress. Maybe they’re not going to be pro-climate, but they’ll be pro-innovation, pro-job creation that is about clean energy and I think that’s where we’re going to start rebuilding our support. We already have a lot of support from those members. We just have to really make those linkages quite strong going forward.

Lisa Friedman: Is this is going to be another era where we can work on climate change as long as we don’t say the words climate change?

Stephen Lacey: It seems like that era will never end in D.C. I’m curious from you Lisa and Katherine, what’s the mood in D.C. generally? I mean, I moved up here to Boston in February, and I was curious what people are feeling within the city itself because the character of the city changes with each new administration. I talked to some friends but I’m just curious from a reporter’s perspective or maybe a more strict policy perspective whether or not you’re noticing anything around the edges yet that are starting to creep into the city?

Katherine Hamilton: I mean the day after the election, it was like death. Everybody was walking around with their head down. People have been confused not knowing what to do and then there’s this ban on lobbyists, so a lot of people that thought they’d be able to get in on the Trump administration can’t even do it because then they’re banned from lobbying for five years. There’s a lot of confusion. I think the most fun thing is the Obama-Biden memes on Twitter and Instagram. That’s kept everybody going.

Lisa Friedman: From a reporter side, does a new administration bring a different flavor into the city? Sure, but it’s obviously way too early for that. I would say that right now, since election day it has been nonstop for reporters.

It has been go, go, go trying to figure out who is on the transition teams, who might be tapped for what. Like Jigar said, I mean, Donald Trump is a master of owning the media cycle and so everybody recognizes that there is a little bit of an apprentice drama going on where candidates are being brought in, but only one person knows who the winner is going to be.

We’re trying to cut through that until some meaty stories about things like whether Trump can make good on these promises that he’s made to coal country. What it will take to cancel or renegotiate Paris. Can it be done? What the world reaction is going to be? Hopefully we’re along with doing big profiles on the folks who could be running energy and climate policy in the next 48 years. Hopefully we’re providing readers with the whole gamut.

Stephen Lacey: Let’s pivot over to finish up this discussion. There are lot of state level things happening post-election. We saw three major ballot initiatives in Nevada, Florida and Washington State. Of course, in Washington State, the carbon tax that Jigar was a big proponent of failed. But in Nevada, a ballot initiative won with overwhelming majority to start a process of deregulating the electricity market there.

Nevada of course is a state with very politically connected monopoly utility NV Energy. Then in Florida, an amendment which would have created this murky environment for regulatory environment for solar companies was shut down despite $25 million being spent by utilities. This was couple of good wins and shows that the activity still continues on the state level. Katherine, I know you were tracking those closely so what do we glean from those developments after the election?

Katherine Hamilton: I'd like to hear what Jigar has to say about the Washington state amendment. But the one in Nevada is interesting because the way it was written is very business friendly, very competition, very free market. Amending the constitution to provide a lot, to establish open competitive retail, electric energy market that prohibits monopolies and exclusive franchises.

I think that’s a path forward and a lot of states are trying to make sure that this is about open competition. This is about business and job growth. It was good to see that that happened in Nevada. And then in Florida, you need 60 percent to pass an amendment and the utilities put $26 million into this effort and they still lost. They only got 50 percent of the vote to little over 49 percent for the nose.

That was also a big win on the state level. I think those are going to continue to be really important going forward.

Jigar Shah: I was hugely impressed by the win in Nevada and in Florida. Now, note that Nevada has to pass the ballot initiative again in two years for it to go into force. I think the lesson that came out of Washington State is that there’s going to be a rethinking as to whether the renewable energy industry should be tied to the hip with unreliable environmental groups.

Stephen Lacey: Lisa, do you want to chime in on anything. For us at Greentech Media, I think this development shows that our coverage is going to continue to focus on the state level, both in legislatures and in regulatory bodies. I’m wondering if you see that similarly?

Lisa Friedman: I think you’re exactly right. I mean when we got together as a newsroom and we’re looking at how our coverage is going to change. Obviously, less of a focus on Clean Power Plan and the regulatory side. When we look out and see where the big climate stories are, they’re going to be in the states and in the courts.

Jigar Shah: I do see that California and New York and others are going to double down on positive legislation but I’m curious, Katherine on your side whether you think that the visceral reaction that Republicans have against environmental groups means that the renewable energy companies have to carry their own water without their environmental groups?

Katherine Hamilton: I think you just have different ways to message and there certainly is much more conservative messaging that can really be effective in some states. In Georgia, they were able to do some really conservative messaging, and I think that could happen elsewhere in the Southeast because what you don’t want is to create the sense that this is only because of some kind of a green climate change issue.

Certainly the environmentalist have a base of support, so they can go forward with their base. But I think the business community also needs to learn how to speak a little bit differently. One thing I wanted to bring up that does have a connection to the U.S, Congress is PURPA -- and that’s the ability of projects, small renewable energy projects to be able to sell to utilities. This is something to watch out for North Carolina, which right now is the second in the nation in renewables and solar development, and 60 percent of the nation’s PURPA projects are in North Carolina.

The utility, Duke Energy is starting to back away from those -- and PURPA is one thing we really have to watch for in congress because there have been several proposals to dismantle it.

Stephen Lacey: The PURPA strategy can be a risky one because there could be federal changes, and then also at the state level when you look at setting rates for avoided cost. I know a number of states utilities have petitioned for changing avoided cost rates in Utah and North Carolina and some other states. It can be a risky strategy if you’re a solar developer going for with the PURPA strategy, but also lucrative too if you can make it work.

Man, there are so many issues to talk about here. We dissected a few additional ones with Lisa Friedman who is the editor of ClimateWire at E&E Publishing. She joined us from Washington, D.C.

Katherine Hamilton joined us from Washington as well. And Jigar Shah joined us from Chicago this week.