Why do most economic models consistently underestimate the speed of energy transition?

Our guest today, Doyne Farmer, believes he knows why.

Doyne is the director of the Complexity Economics program at the Oxford Martin School at Oxford University, the Chief Scientist at Macrocosm, a modeling shop specializing in complexity economics, and the author of the recent book Making Sense of Chaos—A Better Economics for a Better World.

In this conversation, Doyne argues that traditional equilibrium economics falls short at capturing the realities of a rapidly changing world. He explains how a new approach called complexity economics, using agent-based modeling, provides a more accurate picture of how economic actors actually behave that can give policymakers and investors better guidance for navigating an evolving economy. It also indicates that the energy transition and climate action are likely to develop much more quickly than current forecasts suggest.

The outlook for energy transition in the US may feel bleak at the moment, but Europe continues to make significant progress. So if you’re ready for a little good news and thoughtful conversation about the energy transition in Europe, this one’s for you!

Our guest in this episode is Jan Rosenow, a veteran European energy observer, analyst, and policy advisor with extensive experience in energy regulation and market design. As Vice President of the Regulatory Assistance Project (RAP), he supports their European team with a focus on power market design, energy regulation, electrification, the gas transition and energy efficiency. Jan’s resumé includes roles at the World Economic Forum, the International Energy Agency, the European Commission, the European Parliament, the UK’s Office of Gas and Electricity Markets, and the British House of Commons, among many others. He is also an accomplished academic who has contributed extensively to hundreds of peer-reviewed articles, technical reports and opinion pieces on energy and sustainability.

In this episode, we explore where Europe’s energy policies are delivering results and where it is still falling short. We discuss the enormous need to improve building energy efficiency across the continent and how electrifying heating systems can help. Jan also explains why balancing electricity and gas prices is key to supporting the energy transition. And Chris offers a few thoughts on how the re-election of Donald Trump might impact energy transition in the years ahead.

Nuclear power is “having a moment.” Frequently in the news, it is hailed by proponents as a critical part of decarbonizing our economy and meeting rising power demand. But does nuclear truly have a role to play in the energy transition?

The fact is that nuclear power plants are only built when they have significant government backing. Around the world, the private sector avoids these projects unless governments take all the risk, and offer extensive financial support—below-market loans, grants, and subsidies—as well as unlimited technical expertise, personnel, research, and supply chain support.

This raises the question: Why do governments insist on pursuing nuclear power when it has continually proven to be the most expensive, risky, and slowest way to generate power?

Our guest this episode, M.V. Ramana, has conducted extensive research to uncover the reasons behind the enduring support for nuclear power. A professor at the University of British Columbia, Ramana brings a wealth of expertise from his career in nuclear physics, nuclear weapons, nuclear power plants (including SMRs), and public policy on international security and energy supply.

His recent book, Nuclear is not the Solution: The Folly of Atomic Power in the Age of Climate Change, delivers a comprehensive and unflinching critique of nuclear energy as a meaningful climate solution. In this conversation, we discuss the roles of government, industry, and politics in perpetuating nuclear power, and whether its future is compatible with the energy transition.

The energy transition is making good progress on several fronts. Renewables are displacing fossil fueled electricity generation. Heat pumps are decarbonizing space heating. Electric vehicles of all sizes are replacing oil-powered cars.

But the world’s industrial decarbonization is really just getting started. Industry generates roughly one-third of all human-caused greenhouse gas emissions, so solutions for this sector are critical for the energy transition.

We have made faster progress in decarbonizing electricity, transportation, and heating because it’s easier to replace a handful of dirty technologies with clean alternatives. Decarbonizing industry, however, is a far more complex task, involving thousands of materials, processes, and end products. That’s why they used to be called “hard-to-decarbonize” sectors.

Fortunately, there are clear starting points. More than half of industrial emissions come from steel, cement, and chemicals—which we know how to decarbonize. And there are solutions on the horizon for the rest of industry too.

In this conversation, Jeffrey Rissman, Senior Director of Industry at the San Francisco based think-tank Energy Innovation, walks us through each of the industrial sectors and the solutions for each one. Jeff is the author of a recent book titled Zero-Carbon Industry: Transformative Technologies and Policies to Achieve Sustainable Prosperity, and after listening to this episode, you’ll know just about everything you need to know about industrial decarbonization.

The energy transition in China is a complex picture. China is both the world’s largest annual greenhouse gas emitter and the largest market for electric vehicles. It’s the largest user of coal, and it deploys more wind and solar every year than the rest of the world combined. It’s both the largest worry in terms of rising CO2 concentrations, and the biggest hope for curbing emissions.

But in syndicated media, this complex reality tends to be boiled down to old tropes, generalized and unhelpful characterizations, and correct but irrelevant data, instead of any useful context and synthesis.

So you might be forgiven for not knowing that power sector emissions in China actually fell in the second quarter of 2024, and China’s CO2 emissions could be close to a peak in its CO2 emissions, which means the world probably is too.

The reporting on India and the rest of Southeast Asia is even worse, if not nonexistent.

So we are very pleased to welcome back Australian energy analyst Tim Buckley to the show. We sat down in person in Sydney for an hour and a half conversation about the trends and the data in all of those countries, as well as their trade relationships with Australia. And we begin to explore the potential for Australia to use its abundant and cheap wind and solar resources to produce green hydrogen, then use it to upgrade the ores and other materials that it exports to Asia and beyond.

After listening to this episode, we hope you’ll have a much better idea of the reality of the energy transition in Asia and Australia.

In August 2024, Chris commenced a three-month research trip across Australia and New Zealand to explore their unique challenges and opportunities in the energy transition, and to conduct interviews with the people involved. This episode kicks off a miniseries based on those travels.

We start by speaking with Giles Parkinson, a journalist for more than 40 years who has arguably covered Australia’s energy transition more thoroughly and consistently than anyone else. Giles is the founder and editor of Renew Economy and the co-host of the weekly Energy Insiders Podcast as well as the founder of two other websites: One Step Off The Grid, which provides information to consumers contemplating what they can do to support the energy transition, and The Driven, which is billed as “Australia’s most-trusted and well-read electric vehicle news site.”

In this roughly 90-minute conversation, we frame up the big picture on Australia’s energy transition, including the major themes and vectors of change. We discuss several significant energy transition projects as well as the politics of the energy transition in Australia, including the roles of various government agencies.

Can the energy transition happen fast enough if investor-owned utilities (IOUs) continue to operate the US grid under a regulated monopoly business model?

Our guest today says no.

These profit-driven utilities have used their monopoly status to protect their market position and undermine the energy transition. Their control over generation, transmission and distribution systems allows them to fend off competition and slow down progress toward a cleaner energy future.

That’s why John Farrell of the Institute for Local Self-Reliance (ILSR) argues in a recent report that it’s time to break up these utility monopolies, shifting grid ownership and control to the public. In this episode, we discuss how today’s dominant monopoly utility model arose, why it persists, how it is an impediment to the energy transition, and what can be done to reform the utility business so that it serves the public, and not the other way around.

Two decades ago, there was a surge of interest to make appliances, buildings, and utility meters smarter. Startups emerged to explore ways to monitor and manage electricity usage and optimize grid power, aiming to better align with the increasing supply of variable renewable energy.

At the same time, utilities began rolling out millions of so-called smart meters, promising to reduce costs for ratepayers. This advanced meter infrastructure would provide the information needed to use less electricity during peak times – shifting consumption to periods when renewable generation was abundant and prices were low.

However, the promise of a “smart” future didn’t exactly happen as expected, with many efforts fizzling out.

Now, with the advent of new technologies, making buildings and appliances smarter and more grid-interactive seems more achievable than ever. This shift can lower costs for everyone and make the grid more responsive to variable sources of renewable energy.

But to achieve this goal, we’ll need utility reform, proactive regulators, and leadership at the federal level. In this two-hour episode, we discuss the challenges that have held back the “smart home” vision with Mission:data founder Michael Murray. Michael has been on the front lines of this effort for 20 years, and has some clear ideas about what it will take to overcome the hurdles and turn this vision into a reality.

Why have our climate policies failed to significantly reduce carbon emissions? What new strategies could help us decarbonize the global energy system five times faster — as is needed to avoid the worst climate scenarios?

Our guest in this episode believes he has some answers to these questions.

Simon Sharpe has been personally involved in the crafting of climate policy in the UK for over a decade. He designed and led flagship international campaigns for climate policy in 2020-2021, when the UK hosted COP26, and has held key roles in the UK Government, including as head of a private office to a minister of energy and climate change. His diplomatic experience includes postings in China and India. Currently, he is Director of Economics for the Climate Champions Team and a Senior Fellow at the World Resources Institute. Simon has published influential academic papers and created groundbreaking international initiatives in climate change risk assessment, economics, policy, and diplomacy.

In his 2023 book, Five Times Faster—Rethinking the Science, Economics, and Diplomacy of Climate Change, Simon lays out why the institutions of science, economics, and climate diplomacy that should be helping us are holding us back. Chapter by chapter, he forensically analyzes why so many of our climate policies have failed to produce the desired results, demonstrating how science is pulling its punches, diplomacy is picking the wrong battles, and economics is fighting for the wrong side. More importantly, he outlines how to develop alternative policies that could actually work.

The transition from oil-burning vehicles to electric vehicles (EVs) has hit a few speed bumps over the past year, sparking widespread media coverage, but not much insight. A confusing tangle of narratives has emerged: Are EV sales surging or stalling? What does it mean for Ford and GM to adopt Tesla’s charger connector when Elon Musk just laid off his entire charging network team? And if the new federal NEVI program is expanding public fast-charger networks, why are so many of those chargers broken?

In this comprehensive 2.5-hour episode, we untangle these narratives and bring some clarity to this ever-evolving picture.

Joining us for this conversation is Raj Diwan, an expert with many years of experience in trying to actually build and operate networks of high-speed public chargers. We take an exhaustive tour through the state of the EV charging business, including the costs and challenges of deploying and operating chargers; the changing standards for EV charging cable connectors; the implications of Elon Musk’s recent decisions about Tesla’s charging network; the various business model challenges for EV charging network operators; the challenges that utilities have in providing power to the chargers; the varying costs of charging for EV drivers; the state of the federal NEVI grant funding program; and the state of the EV market.