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Insights2.16.2023
12 min read

“If you're not part of the revolution, you're going to be on the menu”, says UC professor David G. Victor

Insights2.16.2023
12 min read

“If you're not part of the revolution, you're going to be on the menu”, says UC professor David G. Victor

The opportunity to test new technologies is an integral step in the transition to a resilient future. “By showing what's possible, you make it riskier for other firms not to become part of the revolution”, says University of California San Diego Professor David G. Victor. In other words: those who don’t jump into the innovation wagon will be left behind.

New technologies aren’t, in themselves, a solution. Take renewable power, for instance. It is a category of solutions that, when applied in context and tested, has the power to solve a problem: create power while releasing less CO2 into the atmosphere. To have a more comprehensive positive impact, innovation has to be adapted to local realities and demands. It means being aware of the world and customizing technologies to meet specific needs.

This idea sustains the concept of “experimentalism in context”, one of several theories argued by professors Charles F. Sabel and David G. Victor in the book “Fixing the Climate: Strategies for an Uncertain World”, published in August 2022. By sharing initiatives around the globe, the authors attempt to answer how the world can meet the challenge of climate change while pointing to a way forward. 

Professor David G. Victor talked to Einride’s Editor-in-Chief, Fernanda Schimidt, about the importance of the problem-solving approach and collaboration between governments and companies to leverage experimentation in the pursuit of deep decarbonization – he serves as co-director of the campus-wide Deep Decarbonization Initiative that aims to share real-world strategies to radically reduce emissions.

Professor, your work mentions the need for a radical transformation in the energy system. What does that entail?

David G. Victor: If we knew exactly what it entailed, it wouldn't be radical. It would be something we could implement right now, and that's actually the key point. What we know is that some countries have shown that it is relatively easy to make modest reductions in emissions, what I'll call shallow decarbonization. The United States has done that, it has switched from coal to natural gas thanks to the fracking and horizontal drilling movement in the gas industry, which made gas inexpensive and much more competitive. We've seen that in Europe with renewables. Within existing infrastructure – the electric power system – and changes in power lines and the way the grids are operated, you've seen a modest reduction in emissions, and that's been a big contribution. Deep decarbonization probably is going to be different. 

Deep decarbonization is 80%, maybe 100% reduction in emissions. Nobody really knows what 100% reduction is. It's easy to talk about it, but hard to know what it means. And that's the challenge right now. We have some ideas: a lot of electricity, hydrogen, carbon capture and storage, a lot of renewables and new kinds of materials. The more radical the technological transformation, the more disruptive it's going to be to the industry. 

Your latest book, “Fixing the Climate: Strategies for an Uncertain World”, talks a lot about cooperation, including the importance of government and businesses working together to tackle the climate crisis. Could you elaborate on that? 

David G. Victor: Cooperation is extremely important. We often think that because we're in a global economy, we need to make sure everyone's operating on the same level playing field. We have tried to do that for more than 30 years. We have rules in aviation from the International Civil Aviation Organization (ICAO). We have rules in maritime practice from the International Maritime Organization. We have common procedures in the Framework Convention on Climate Change. Cooperation, in that sense, has frankly been overrated. It's not as important as people think. 

There's a different kind of cooperation that Chuck Sable and I talk about in our latest book, cooperation by the firms and governments that are leading, that want to change and cause these technological revolutions. They need to cooperate because they need to help manage the financial, technological and business risks that are associated with these new kinds of business activities. It allows them to team up and run experiments, learn what kinds of new technologies work and how. They also increase the amount of information that is learned by firms and governments as they figure out the way forward.

What would be, in your opinion, a turning point for decarbonization in the near future?

David G. Victor: It's an important and very interesting question because we used to think about that in terms of the economy overall. When would we know we're on a new track? Instead, what really matters is each individual major emitting sector. The answer is different from electric power, to vehicles or light-duty vehicles, to plastics or cement and so on. Because each sector is in a different technological state, with a different set of politics, a different set of opportunities. In 2019, a group of us connected to the British government published a study called “Accelerating the Low-carbon Transition”, which looked, sector by sector, where we are and made the larger argument that if you really want to make progress in the climate problem, you need to not think about this as global turning points, but work sector by sector. That argument was carried by the British government into COP 26 in Glasgow. Since then, that same logic has been played out in other parts of the world. 

The empirical answer to your question is that in the electric power sector, we have probably already reached the turning point. Renewables, in particular, have a lower cost. We see big investments in carbon capture and storage thanks, in part, to the Inflation Reduction Act in the United States. In light-duty vehicles, we are probably also approaching an inflection point where you see so many cars that are ultra-efficient and fully electric vehicles. You've seen a rapid shift in new car sales. In cement, plastics, aviation and long-distance shipping, I think we're far from it because the technologies are much less mature.

We live in uncertain times and currently see investments dropping in some industries. Can uncertainty be a driver of change?

David G. Victor: Yeah, a lot of people have thought of uncertainty as a reason for paralysis. We don't know the macroeconomic conditions, so, therefore, we don't do anything. In a lot of businesses, that is true, and frankly, a lot of them are still recovering from the pandemic. They are focused on survival. But to me, what's really interesting is that, for a problem like climate change, is where [action] could be really disruptive. A growing number of firms know they have to do something, but they don't know what to do. The governments don't know what to do. And that uncertainty has not been a recipe for inaction; it's been the exact opposite. It's been a motivator of experimentation.

The way you solve those problems is you go run experiments. Maersk, for example, is now making some very big financial bets on clean methanol for the ships. Aviation is another really interesting example, where you see the airlines and the equipment manufacturers and the governments that are most highly motivated to do something. I'm in Britain right now and meeting with people in the British government and industry on exactly this issue. They're now running experiments on hydrogen and electric aircraft, sustainable aviation and fuels on ultra-efficient aircraft, and then learning which work and don't work. The uncertainties around what this means technologically have not been a logic for inaction; they've been a logic for experimentation.

How can we go from knowing that solutions already exist to scaling them?

David G. Victor: I think there's been a false narrative around things that exist. There's this belief that we know what the solutions are, and they're sitting there on the shelf – we just need to take them, have the political will, and put them into practice. That is true a little bit. We need more renewable power, but renewable power is not by itself a solution. It's a category of solutions.

“What society needs to do is learn how to take those technologies and apply them in context. It's learning how to work with new technologies and businesses in practice.”

What is your take on the Biden-Harris blueprint for decarbonization in transportation?

David G. Victor: The blueprint is an example of an administration in the United States taking the climate change problem really seriously and wanting to know what to do in every single area. The really big contribution of the Biden-Harris administration is less on the blueprint side and more on the spending side, with Inflation Reduction Act, and the bipartisan infrastructure bill, that's called the Chips Act and is mainly focused on semiconductors but includes huge amounts of money for innovation and new technologies. My one critique is that it's too blueprinty, too focused on the things that we think we know, and not focused enough on things we don't know. Aviation is a great example of that. We still don't know if sustainable aviation fuels are gonna scale. 

What potential lies in the intersection of policy and technology?

David G. Victor: Well, I think there are two potentials. One is pushing out the frontier of knowledge and experience by working with new technologies and practicing context and technological function. That's the classic role for government and business working together: R&D spending and demonstration. The other role is what might be called industrial policy. Although whenever one uses the term industrial policy, we imagine the 1970s and government building projects that were not what society needed. This is a new kind of industrial policy, one where the role of government is to help businesses work together to lower the risk of experimentation and to learn quickly which experiments work and don't work.

The role of government here is not just to spend and push new money into the system but to help organize supply and demand. Steel is a great example. There are lots of interesting, new technological ideas about how to make clean steel. We are testing some of them, but nobody's going to go off and build a steel mill unless they have confidence that when they build it, somebody else is going to buy it. One of the most emblematic roles is being played by the Swedish government to help orchestrate the demand for clean steel.

And when we look at the energy market, what role does policy play in the transition to low emissions?

David G. Victor:  One of the most important things in the energy markets has been to send a very clear signal about where we're headed with prices. I'm a big fan of that. But also what I find very interesting is the number of companies that are worried about the direction. They don't see all the regulations or all the market mechanisms in place. Still, they know that there's a significant risk that there's going to be very rapid political responses to the climate crisis, and if they're not working on solutions, they're going to be roadkill in that revolution. The more credible that belief is, the more experimentation happens and the more we could be actually optimistic about the progress. 

In the past, you have talked about education being dominated by the problem and not problem-solving. Is this approach reflected in other sectors? 

David G. Victor:  The quote comes from a reflection on what is the real theory of change. I think for a lot of my colleagues in the academic world, especially my climate scientist colleagues, their theory of change is that we have people who don't believe in climate science and if we just tell them with more chalkboards, equations and peer-reviewed papers, they're going to change their views. There's a role for that, and it's important to combat denialism. That's fantastic, but that's not the theory of change that is going to result in technological revolutions. Revolutions are motivation for leaders in industries to go change facts on the ground and for new technologies to come in and show what's possible. By showing what's possible, you make it riskier for other firms not to become part of the revolution. You also make it easier for bankers and other investors to see what these new technologies might look like. 

“If you're not part of the revolution, you're going to be on the menu.”

Did you see more solutions-oriented initiatives in Davos this year?

David G. Victor: Yeah. I see a lot of companies talking about that. And what I see that is even more encouraging is a lot more companies recognizing the need to do something and starting to do it. We have deluded ourselves into thinking that we're not making progress by focusing on the gap between what is going on and the goals, which keep getting more aggressive and are easy for people to talk about because they're collective goals. Nobody is responsible for 1.5°C (increase in temperature), and everybody is responsible for 1.5°. That gap is worrying, but the real measure of progress should be what we are on track to do in terms of climate change. It's a much more encouraging story precisely because you see a growing number of governments doing things, and you see firms learning how to experiment. It's not just in Europe. We're seeing a rapid shift in the United States, a huge Indonesian presence in Davos, and we see it in India. When you put all of that together, you see this revolution unfolding in lots of different corners of the world. 

The world is still investing a lot of money into fossil fuel subsidies. How can the global community put an end to this?

David G. Victor: It's one of the great challenges. It's where the politics smack right in the face of common sense. Common sense tells you you should let the markets work, and you should not be subsidized in different energy sources except for very legitimate reasons, and those legitimate reasons always seem to be moving around. The war in Ukraine has reminded people of the importance of energy security. But there are all these different arguments that get used to justify subsidies around fossil fuels and around electricity. These are powerful, well-organized interests that are very, very hard to undo. It is true in the industrialized world, which is a huge subsidizer. It's true in fossil fuel extraction countries. It is true in emerging economies. This is a problem that is shared around the world but has different manifestations in different flavors and different parts of the world. We need to think about this as the problem as it is: a political problem. If you want to reform fossil fuel subsidies or energy subsidies more generally, you have to start building a coalition that's disruptive and wants to have a change. So, for example, one of the various areas of success has been to identify ways of delivering subsidies directly to the least well-off in societies. By doing that, you can then make it easier to remove the subsidies on the rest of the country, kind of segment by segment. The overall numbers, though, are still pretty horrifying. 

Energy has become very rapidly, very, very expensive, and politicians know they need to solve this problem. The part of the energy subsidy reform that I am most concerned about is in the least developed economies because these subsidies are a real social cost for society. And there, we need to make quite a lot of progress to help create policies that encourage the parts of the political system in each country.

This interview has been edited and condensed for clarity.

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