Monday, December 19, 2016

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ã¯â»â¿>>presenter: i want to great everyonehere tonight. i'm frances beinecke. i'm the president of nrdc, the national resourcesdefense council. we have a lot of friends here from nrdc, andi want to welcome you and also welcome, or at least join, all ofthe people who are here from google. this is a great evening for nrdc. we're ata real moment of change in this country, and the key issue that we'vebeen working long and hard on which is curbing global warming and the intersectionwith global warming and a new clean energy future, and how thatgets addressed in the current economy is absolutely top ofmind for us.

we're very fortunate tonight to haveeric schmidt from google address that issue. he has been a great leader, and as i thinkyou all know, is involved with the president elect's transition economic advisor teams,so i think this will be a wonderful opportunity for us to hear directly from him how he envisionsa clean energy future and how that merges withhow we can move the economy forward. we have many great friends here tonight, andi just want to recognize a few. our chairman dan tishman who is ã¢â‚¬â€œ whereis dan? there is dan. welcome dan. of course, our founding director john adams,who needs no introduction, but is one of the great leaders in the environmentmovement

for many, many, many decades.what we're going to do is eric is going to begin and tell us a little bit about his views,and then i want to introduce two other very important people.dan reicher is the director ã¢â‚¬â€œ i have to get this right ã¢â‚¬â€œ of climate andenergy initiatives at he's also a former nrdc staffer, of whichwe're very proud. he's currently on the obama energy environmenttransition team too, as well as being a former assistant secretaryfor efficiency and renewables in the department of energy, so he is a trueexpert. joined by our own co-director of our energyprogram, ralph cavanaugh,

who for 30 years, has really been leadingthe charge on how we promote energy efficiency and develop a new energyfuture for the united states as well. this is an amazing team, and eric's goingto start off and give us his views and strategies of how to move forward, andthen we'll have some questions and conversation among us, and thenquestions from you. >>eric: well, thank you. i've had the privilegeof working with nrdc, and with frances, in particular, for someyears here. this organization is the organization thatgets stuff done. there are a lot of organizations that sortof talk a lot, and something about the construction

ã¢â‚¬â€œ and i think we have a few peoplewho know how this was done, and i am certainly in awe of what you didã¢â‚¬â€œ you managed to figure out both the policy and the enforcement side ofwhat you're really trying to do. if there's anything that i can say about thenrdc, this is an organization that's worth supporting, following, and participating in,partly because of frances' leadership, of course,but also because it's a systemic solution to a big's been around for a long time, and it's got a pretty impressive track story ã¢â‚¬â€œ it's easier if i tell this as a story ã¢â‚¬â€œ is i went to an nrdc event,and someone said 40 percent of the energy

and emissions comes from buildings.i thought, "wow, that's a big number," and they had one of these terrible slides, we'reall going to die and so forth and so on. [laughing] i thought that's one thing that i can ã¢â‚¬â€œwe have a lot of buildings. i called the google folks in, and i said,"hmm-m, what are we doing about the 40 percent?" they go, "oh, well we have this idea, thatidea, this idea, that idea," and i said ã¢â‚¬â€œ i put on my sort of republicanceo tough guy tone ã¢â‚¬â€œ "what's the payback?" and they said, "18 months,"and i said, "what?" i said, "i don't have to pay for this?" theysaid, "no,"

so i said, "why don't you do it?""no one asked." this is a real conversation. all of a sudden i realized all i had had todo was to ask. these people had been coming up with ideas.they had done the math. it is relatively straightforward. these arepositive npv investments. i said, "good. do it. come back when you needmore money," so they did it. of course, we have millions of dollars ofsavings at google, which goes, by the way, right to our shareholders, sogood republican behavior, and by the way, it's the right thing, so ilearned a lesson. you have to ask. those of you that are in charge of thingsor participating in this,

it's time to can sit there and you can say, "oh, woe is me. this is a problem,"and so forth. take action yourself. after replacing all the light bulbs, by cflsand so forth and so on, it actually begins to compound.then they show up again, and say we have a new idea, "let's have the world's largest,private solar generating system here on campus." okay, and one of the side benefits is thatyou have carport which has solar panels on it, which shades the cars, plus you can havea little plug. with the electric cars, you can plug themin right to the solar panels. perfect. "how much does it cost?" "oh, i don't know,not that much."

"what's the payback?" "less than ten years,and we have these great tax credits which are about to expire.""even better. do it." all of a sudden and for awhile until aboutsix months ago, we had the largest, 1.6 megawatts in fact, which covers roughly 20 percentof our electric needs in our campus. again, what's the compound of that, as ourelectricity rates rise over 10 years? these are very conservative's a no-brainer from a shareholder perspective. my point in those two stories is that youstart, when you actually do the math, you discover doing the right thing is also theright thing for business. if there's any message that you should takeout of nrdc's involvement in this,

and certainly my involvement, is that youdon't have to choose a good or a bad outcome.meanwhile, dan reicher shows up. we have a philanthropic on him.we give it a couple million dollars grant for energy efficiency to nrdc.we meet all these interesting people. he comes in and he says, "we can do better."we start looking at energy efficiency. we start looking at renewables.we start looking at technology. google's an information company, not so muchan energy company, so we start building things that involve smart grids and so forth,and i'll talk a little bit about that, but of course, he's the expert.this proceeds, we make investments in solar,

in histiothermal, and wind.we have a detailed strategy, tens of millions of dollars in investmentsin companies trying to get it kick-started, because i'm going to run out of normal conventional,oh yes, perfectly reasonable npv decisions as a company,unless these new technologies become available. we're a significant user of power, so i'vegot a good business reason to do it, plus i have a good social influence, also a goodreason to do it. we're having this conversation, is there away ã¢â‚¬â€œ question ã¢â‚¬â€œ is there a way to solve every known problem at once?i'm tired of everyone complaining, right, i've learned something here,which is that you do the right thing, you

can solve multiple problems.let's go through the list, energy prices are too high, energy security ã¢â‚¬â€œhow many wars are being fought over oil now and in the future?what about job creation, especially in the rural areas?what about building businesses that are exportable outside of the united statesto create wealth for americans, always a good thing in my judgment.oh, and by the way, why don't we solve the climate change problem too, at the same time?wouldn't that be great? yeah, sure, right, absolutely, so we had thisdebate. the first calculation was it would cost atrillion dollars,

and i said, "yeah, it's easy to get a trilliondollars, just put to the head of the congress." oh sorry, wrong discussion. sorry, that wasa different conversation. it's only a trillion dollars. you can getit in a week, okay. by the way, that's over 22 years. mtv is 200billion. u.s. energy business is about 1.5 trilliona year. two hundred billion in present value of investmentsover 22 years is not that big of a number.we published that model in september, and i'll take you through it,because it's open, people actually criticized a result, we discovered some errors in our calculation, and guess what?we started to make money. at $4.00 a gallon, we actually make about$1.8 trillion, as opposed to losing a trillion, so now it'shard to argue with me. at $3.00 a gallon, we'd make a trillion is pretty neat. it doesn't get better than this, i am with my businessman hat on making a trillion dollars,which everyone could use, plus we're going to solve every known problem at do we do this? this is pretty good. the first thing we do is we separate out energy,essentially generation, from transportation.

remember, energy generation is primarily coaland natural gas, mostly coal, in the united states with some nuclear and so there a way to take all the fossil fuels that are currently being used, roughly 70percent of most of the electric power used in the united states,and replace it, because you remember, these plants die.they have to be replaced and so forth. there's new demand.with some assumption, including holding energy efficiency per citizen,that is energy consumption per citizen, constant ã¢â‚¬â€œwhich has been true in california since 1973, not true in many other states ã¢â‚¬â€œ we'reable to take the money that's saved from that

single idea,and plow that into the construction of solar, wind, enhanced geothermal,as long as there's the proper grid to get the stuff around.i'll come back to that. the math works you say where do we get the trillion dollars?it's turns out that's roughly cost even in the current can read all of this, using your favorite search engine,just type "google 2030 energy plan." the second thing that we do is take a lookat transportation. most of the issues around oil are really relatedto cars and trucks. trucks will be solved largely by lng fleetsand other kinds of things like that, but cars

are this huge turns out that in the middle of all of this, google and a number of other companies,but in particular, google ã¢â‚¬â€œ and i think under dan's leadership,so i'll give you a little bit more credit here too ã¢â‚¬â€œcame up with this notion of plug-in hybrids and getting people using you know, what a hybrid is, is it's got a mixture of a battery and ã¢â‚¬â€œessentially think of it as an electric engine and a gasoline engine.the electric engine uses the battery, and so forth.plug-in hybrids essentially have a bigger battery,and they use the battery more, is the easiest

way to understand it.the latest technology uses the battery to power the electric motor,and that when the battery runs down, the gasoline engine turns on, charges the battery, batterypowers the electric motor, car goes off. what kind of efficiency can you get with sucha device? about 100 miles per gallon.if you assume fleet wide increases in roughly doubling from 37 to 70 miles per gallon, allof a sudden you save a trillion dollars, right, because gas prices held constant over thenumber of miles, and so forth. now you've got to get those cars in people'shands. you actually have to build them, so in ourplan ã¢â‚¬â€œ and you'll see this ã¢â‚¬â€œ

we actually accelerate the buy back of pollutingcars, also known as our current cars, and so forth.we presented this, and people said, "way not aggressive enough."i said, "not aggressive enough? we're already making a trillion dollars solving all knownproblems? like, what's your complaint?" "well, the first thing is you haven't accountedfor basically carbon sequestration for coal?" "yeah, but that's positive to our model.""you haven't accounted for the possibility that nuclear can be made safe."this is like skeptical, right? i said, "that's positive to our model. youcan prove that, we'll add that too." then somebody says, "did it ever occur toyou that if you made cars twice as light,

not twice as heavy, so half the weight, usingcarbon fiber and other technologies, and maintaining theircurrent strength and survivability, you'll get 200 miles per gallon?"positive to the model, better design, so forth and so can get the gasoline part of transportation down to 5 percent or 10 percent of what it'sused today, and wouldn't it be nice to cause the demand for petroleum to drop dramatically,after everything that's happened to us and been done to us?let's get back at this. i remember. my point here is you've got a plan that spansboth, so how do we put up this plan?well, in the first place, we need some cash.

thank goodness, there's a whole bunch of cashabout to happen, and i'm not talking about the bank bailout.i'm talking about the stimulus package, and president-elect obama, thank goodness, hastalked about that if you're going to have a stimulus package,you might as well invest in roads, bridges, schools, broadband,and energy efficiency, and these kinds of things.perfect, how much money do we need? "oh, a few billion dollars."these stimulus packages will be big enough in our little corner,the one we're working on, is relatively a rounding error,compared to the scale of the numbers that

they're talking about,so this is achievable, so that's where the money comes from.there's another thing that we need ã¢â‚¬â€œ and this is what i'm going to end on ã¢â‚¬â€œwe need intelligent regulation, and intelligent regulation recognizes a coupleof things. it recognizes first and foremost that mostof the money is not with the government, it's in the private recognizes that incentives need to be designed so that private money comes's an example. what's the best stimulus that you can do?give money to the energy efficiency programs that are already in place at the state levelrun by the utilities.

in our plan, we have $10 billion for immediately goes to work. what's the best insulation program you cando? there's already a low income weatherizationprogram that's unfunded, authorized, and in much money do you need for advanced r&d? you can't soak up more than $2 to $3 billionin investments, and that money would go to take over plants in places like michigan,where their people don't have any work, where there are sophisticatedand high-tech workers who could actually build the batteryand the battery trains that we need for this kind of architecture.without going through it number by number,

believe me,we're got the numbers that add up. the second thing that has to happen ã¢â‚¬â€œand i want to emphasize this ã¢â‚¬â€œ is that there is this infrastructure, i'm a computer scientist. i think about the internet,and i look at the electric grid and i say, "why is the electric grid the same as it wasin the 1960s?" because nobody cared. nobody tried to builda grid that was flexible, scalable, decentralized, and had decentralized control and the abilityto get on and off. in the vision, which we'll talk a lot about,of a smart grid ã¢â‚¬â€œ here's an example ã¢â‚¬â€œ you guys have all the batteries sittingin your cars?

what are they doing in your garage?why can they not add to peak load, when peak load is needed?the utilities say that the highest cost of being a utility is not average load, but peakload, which is in the afternoons. right, plug your car in, draw the batterydown, charge it up at night, straightforward. seems obviously, right? you can't do it.because the computerization of the internet and so forth,it seems obvious, right? the grid is not organized that way. that'spart of it. the other part has to do with transmissionlines and sort of a lack thereof. here we are, private sector, billions of dollars,solar, wind,

so forth and so on, plus the stimulus packageto get it going, all those unemployed workers, all the suppliersjust ready to go. all of these people buying up desert in newmexico for cheap, thinking that they're going to put their solar panelthere, and then they discover they can't connect to anything to get it out,and so the land is worthless. there are proposals now for very, very sophisticatedtransmission systems throughout the west which are needed for this,which are currently on a fast track to occur in ten years.we don't have ten years, guys. look at the map of climate want to be in a hurry, look at the compounding,

look at the math.we don't have time, so there's a series of things that the federal government, in particular,can do around renewable improved quality of standards and interconnect agreements to acceleratethat. the money is there. the utilities are willingto do it. the private sector is behind it. i would arguethat the compelling need is there, and i will finish by telling you, i cannot imagine abetter use of everybody's time than getting the energy infrastructure of america solves every interesting problem, all of the things we care about,all the things you care about, and it is achievable, and it's the perfect american challenge.thank you very much.

[clapping] >> ralph: i'm ralph canvanaugh, the energyprogram co-director for nrdc, and the plan for the rest of the evening is for me to commentvery briefly on eric's remarks, and then initiate a conversation which willquickly draw as many of you in as we can, so be thinking about your, what i wanted to say about the google 2030 clean energy plan,is that what you've just heard is a quite wonderful rebuttal for the most common mistakethat has characterized american energy policy for 30 years,dominated the congress that entire time. it was referred to during the recent presidentialcampaign as the

"all of the above" strategy.its fundamental insight is that to meet america's climate and energy challenges, you got todo everything as rapidly as possible, all the coal,all the nuclear, all the gas, all the renewables, all the energy efficiency.the congress of the united states never met a resource that it didn't like,and if you've got an articulate lobbyist or an attractive scale model ã¢â‚¬â€œand sometimes you only need one ã¢â‚¬â€œ you can be reasonably assuredof being included in the next federal energy bill.the problem is, we don't have unlimited resources, and eric has laid outthe time constraints that we face, and all

of the above just doesn't work.what he has given you instead, is a system where, after letting winners and losers emergeon their merits, you have a future you can believe in,driven by and dominated by energy efficiency and renewable tease out just a couple of pieces of it, and give you a sense of what we're tryingto do to realize that vision, notice the importance first of two thingsthat he talked about a lot that most people never talk about in this was the importance of energy efficiency as a resource.when i subject dan reicher and eric schmidt to merciless cross examination,i'm going to ask them a question about energy

efficiency that all of you want me to ask,in terms of why groups like nrdc have not been able to make it sexy. >>eric: why have you not been able to makeit sexy? >>ralph: i'm going to answer that question.i'm going to answer that question by turning to my friend dan reicher and telling ã¢â‚¬â€œ >>eric: he doesn't work there either. >>ralph: he doesn't work there either, buteric, he did at one time. >>eric: you work there. >>ralph: he's a credible guy, and he's goingto give you the first insight

into how we're going to make it work.the good news is even without making it sexy, we have succeeded,eric, to reassure you just a little bit ã¢â‚¬â€œ >>eric: okay. >>ralph: ã¢â‚¬â€œ in actually making it avery high priority resource, an investment candidatefor a sector you also talked about that most people don't,which is america is more boring, down home, hometown utilities.the electric and gas utilities that connect through their wires and pipes to more thanhalf the global warming pollution in the u.s. economy.a critical challenge ã¢â‚¬â€œ if you want

to think about the investment eric was talkingabout, about what we need to do to realize that efficiency and renewables vision ã¢â‚¬â€œthe utilities are incredible. they manage those ancient grids he talkedabout. they make the investments in the renewableenergy resources. they're in a position to push energy efficiencyas an alternative to power plants if you give them an incentive to do it.for most of the utilities in the united states, for most of its history,they had perfectly perverse incentives. if their customers used less energy, theyautomatically lost money. if they bought renewable energy from an independentsupplier ã¢â‚¬â€œ and more and more of them

want to sell ã¢â‚¬â€œ at best, they couldpast the cost through. they had no earnings opportunity, comparableto what they could get if they built one of those coal or nuclearpower plants. what did you get for most of the history ofthe utilities with those sorts of incentives?unsurprising and wholly uninspiring results, and that's changing.what i want you to know is just this past tuesday, nrdc and the nation's utilities,the edison electric institute, which represents them,which i expected to spend my career suing, went before the national association of regulatoryutility commissioners

and essentially embraced eric schmidt's vision.what we said was, "we are prepared to go before all of you state regulators to change therules, so that energy efficiency and renewables are profitablefor utilities, if done well, and so that utilities as a collective whole,those entities that account for half of the global warming pollution,can together work with us, with all of you, to get there.the goal is easy, simple, maybe not sexy, but rather's all cost effective energy efficiency, all the energy efficiency we can find at lowercost than power generation it replaces, and the google energy 2030 plangives you some sense of how big a deal that

can make.two other very quick points ã¢â‚¬â€œ one of the most powerful engines for making energyefficiency happen at the scale we need it, as quickly as we need it,is to lock in the gains we get through the incentive programsin efficiency standards. there's a lot more we can do there.the nations utilities pledged on tuesday to join us in advocatingmore aggressive efficiency standards in every category of energy give you an early example of the success of that partnership, most of you probablydidn't even realize that just within the last year,we managed to get an efficiency standard passed

by the federal government,drafted in at nrdc, with google's support, that will affect every oneof america's four billion sockets that light bulbs screw into.i bet you didn't know we had four billion sockets.a large fraction of them represented in the homes in this room. [laughing]every one of those four billion sockets, every one of them, will dramatically improve itsenergy efficiency by 2012, and even more dramatically by 2020, the average light bulb will use less than a thirdas much electricity as it does now. the notion is performance-based standards,guys.

you don't dictate the technology. you setthe standard. you let entrepreneurs figure out how to meetit. i think what i want to do now is begin a conversationabout the last, and maybe most important part of this discussion, howare we going to get congress. the one thing we clearly need congress todo is to act on climate, set mandatory limits on global warming pollution.this is a group that will have a lot of say abouthow that happens and how quickly. as a way of initiating that conversation,i want to ask my friend, dan reicher, former assistant secretary for energy efficiencyand renewable energy,

the question that i was asked at the mostrecent nrdc staff meeting, and eric, it was not quite the one i justframed. it was even more embarrassing, from my was how can we make energy efficiency as cool as google?dan, i know that you have thought deeply about that from both institutions,and i know that you have at least an initial illustration to provideas to how this might be done. >>dan: well, thank you, ralph, and eric, frances,john adams, great to see you all, great to be here.i'm really thrilled to be able to participate, and this is the questionthat we've been struggling with for decades,

which is the low hanging fruit,as we call it, the low hanging fruit that in fact grows go from incandescent bulbs to compact fluorescent go from there to leds. energy efficiency is what we've really gotto move into this system, and we have not succeeded very well in doingthat, despite lots of good work. i think we're on the verge of this turningaround, thanks to work by organizations like nrdcand people like ralph. i was talking to ralph earlier, and my greatestmoment during my eight years in the clinton administration, my most funmoment, involved energy efficiency standards,

not one of the most exciting achievementsof the clinton administration, but we were, in fact, after lots and lots of work,hundreds of pages of regulations that we set, we were issuing a new standard for the efficiencyof refrigerators, and nrdc had pushed on this very hard, asdid other groups. secretary of energy said to me, "so, dan,i'm getting up to make this announcement about the efficiency of refrigerators and standards."ã¢â‚¬â€œ to him not the most exciting thing in theworld ã¢â‚¬â€œ and he said, "so, what should i say?"i said, and i thought to myself ã¢â‚¬â€œ you know ã¢â‚¬â€œ a week ago, mr. secretary,the president of the united states gave his

second inaugural addressand he talked about building a bridge to the 21st century, and i said,"why don't you get up and announce we're building a frig to the 21st century?" it was the quote of the week in newsweek,front page in the new york times. i said, "that's it. i've done it."two weeks later, we were announcing an agreement with the mining industryabout how to improve their energy use, cut pollution,and he said, "so, reicher, what am i going to say now?"i said, "well, mr. secretary, why don't get up and announce that,"after all, a mine is a terrible thing to

waste." he said, "no, you do that one." in any event, the first step is humor.we've got to put something around this, but more seriously,i do think that energy efficiency is really the opportunitythat we really have to exploit. it achieves everything we need to achievefrom an economic, environmental, and security perspective.i will leave you with one, what i think, is a big thoughton how to make this happen, and that is, the power of information.i think if you sit back and realize what you

get once a month in the mail,which is this paper bill from your utility, and realize how little you understand fromthat other than how much you owe and where to sendthe check. that's all you basically get.imagine if you actually had real time information about your own energy use?that's something we're very interested in at google, bringing this to people,and we've begun to experiment with it, and five days ago,i had a little unit installed in my house, and i now can go on my laptop, and at anygiven moment, get real time information about the electricityi'm using.

>>frances: or that your household is using? >>ralph: that my household is using, so icalled up my wife last night. i had been away for a couple of nights, andi said, "you know those two lights in the front hall?i think you left them on." she hated me for this, but in any event, informationã¢â‚¬â€œ i think ã¢â‚¬â€œ is going to be very empowering for people,in terms of energy use. added to that ã¢â‚¬â€œ i think ã¢â‚¬â€œ >>eric: dan, you should use a different story.we have another engineer that has reduced his consumption by some huge number?

>>dan: yes, so we have an engineer at googlewho did the same-- >>ralph: with no assistance from his wife. >>dan: no assistance from his wife.he started monitoring his own house, and he realized that he had not one,but two refrigerators, and he looked into how old they were. >>eric: this is typical of engineers, notknowing exactly where they live, and those kind of things. he looked into them, and he realized thatthey each were over 20 years old. trying to figure out why he was using so muchelectricity, he went online and, in fact,

discovered that these were among the biggestenergy users of all refrigerators ever built, and he replacedboth of them. his electricity use dropped by 50 percent,so he got some information. it didn't take much time to do something withit. he made a change in his house, and will receivethe benefit. >>ralph: if he's a californian, his utilitypaid to cart that refrigerator away, and captured the chloro-fluoro carbons fromthe insulation. >>dan: he got not one, but two, incentives. >>frances: if he lived in new york, that probablydidn't happen.

>>ralph: what i want to do is ask eric anddan the two skeptical questions that many of you want me to ask them, andthen we're going to open it up to all of you, and frances is going to manage the conversation.the first skeptical question is, okay, guys, that was all very well as of mid 2008, butnow there's a looming recession, fossil fuel prices are going in the opposite directionvery rapidly. why won't we simply slip into apathy and paralysisonce again, and indefinitely defer the future you justdescribed to us?" >>eric: you want to go first, dan?in the first place, i'm not sure that all fossil fuels are falling indefinitely.people are aware that gasoline prices have

come down.all of the arguments are still true, even at the current prices.i suppose if gasoline went down to 10 cents a gallon, we'd have a different situation,but gasoline is still higher than it has been for many, many years.there is every reason to believe that the same incentives are addition to that, the government has wisely increased the standardsto 35 miles per gallon, although it's been delayed.let me point out that china has implemented one to the same number right now.once again, there are many reasons to go forward, and from my perspective,the arguments that we're making are really

independent of the current pricesbecause a long-term trend over a long enough period of time ã¢â‚¬â€œ we're runningout of these things, guys, and when you run out of things, prices go up,it's harder to find them, people fight wars over them, and so forth and so on. >>dan: i'd simply add that ã¢â‚¬â€œ i thinkã¢â‚¬â€œ in this crisis that we're facing is this great opportunity to make the kindof investments that we've long needed, and we finally have the justifications.we've had the environmental justifications. we've had the security justifications. nowwe have an economic justification. the electricity grid desperately needs tobe rebuilt.

we need to build 20,000 miles of transmissionlines, if we're going to move wind from the dakotas to chicago, or from the desert tolos angeles and las vegas. we need to put a smart meter in every homein the united states, so that all of us can, in fact,take advantage of real time information and real time prices.we're tens of billions, hundreds of billions of dollars should be spent,can be spent, with huge economic returns and huge benefitsfrom an environmental. >>eric: the other thing to note is that thereis a series of cap in trade bills in the congress which are clearly going toget debated in 2009.

in my conversations with senators and congressmen,they believe that these systems, in one form or another, will be implemented during thiscoming session, which is a 2-year session.even if you assume, collapse the previous prices, and so forth, with cap in trade inplace, the incentives around efficiency become so much clearer. >>dan: what also comes from that are the revenuesthat are derived from, essentially, auctioning the permits for greenhouse gas emissions,and those revenues are very significant, so instead of having to,in a sense, use taxpayer dollars, as we will in this initial stimulus, we willhave a new source of large amounts of fund

that can be invested in these changes thatwe desperately need to make. >>frances: i was just going to say to eric,you've been talking to members of congress about cap in trade program, but you're alsoin conversations with other ceos, leaders in the business you see them joining you in this view that this legislation has to pass?where do you see the business community, your peers, are they in these same conversationsthat you're in, or what do you think is going to bring them along? >>eric: you have some sympathy for the utilityexecutives, because they have a lot of stuff coming atthem.

they're regulated. they have all these peopleyelling at them all the time. they don't necessarily have a technologicalleverage point that a lot of other businesses do.the ceos that i've spoken with all express a concern that cap and tradebe done in such a way ã¢â‚¬â€œ you have a problem with cap and trade of what'syour starting point. once the starting point is established, itlooks like the market worked pretty well, but the primary concern is actually a tacticalone. if you've already made tremendous efficiencygains, you'd like as part of starting in the cap and trade system, to not be penalizedfor that good work.

you don't want the worse polluter to get thelargest gain, so there are many people working on makingsure that the starting conditions for cap and tradeis such a thing. that's, in fact, what i hear.most of the people that i've talked with either accept, or grudgingly accept, that there willbe a cap in trade, because they all have families and children,and they all understand that eventually, you're going to have to puta price on carbon. there are some people ã¢â‚¬â€œ and i was ina meeting on tuesday where we had this, sort of, i thought, relatively bizarre argumentamong the utility companies

of whether it was better to have a carbontax or a cap in trade system. there are complex arguments in favor of thetwo, but i observed that one has the word tax in it, and the other one does not,therefore the other one will win. >>frances: i want to ask you all to join mein thanking eric for his time. >>frances: thank you, ralph. thank you, dan. thanking our host at's been a great evening, and you will all see how this unfolds over the next many monthsand many years. we have a lot to do, and we've had a greatconversation about what the path is that we need to take, so thank you very muchagain.

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