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S2E08: Unpacking Clean Energy with Dr Stephen Jarvis

What is the role of energy in the net zero transition? How effective are the policy solutions in creating a cleaner future? How can we balance the efficiency of transitioning away from carbon intensive sources with the equity of ensuring countries have access to clean energy solutions?

In this episode, we are very fortunate to have Dr Stephen Jarvis, an Assistant Professor in Environmental Economics in the Department of Geography & Environment at the LSE. Listen to this episode now to learn more about Dr Stephen’s insights on energy markets and his research on the link between air conditioning and global inequality!   

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Listen to the episode here and see the transcript below!

Xiao Wei: Hello everyone, and welcome back to another episode of The Greenhouse. We are Xiao Wei and Cass, and we'll be your hosts for today's episode. 

Cass: Today we've brought in a guest from the Department of Geography and Environment at the LSE. Hello Stephen, could you give us a short introduction of yourself, including your career journey and your areas of interest in research?

Stephen: Yeah, of course. Um, well, thanks very much for having me on. Great to be on the podcast. So, my name is Stephen Jarvis. I'm an assistant professor in the Department of Geography and Environment. A lot of my work is focused on environmental economics. I guess a bit of a background about me. So I was an undergraduate LSE student many, many years ago.

And whilst I was here, I ended up taking a course in environmental economics, and that part sort of sparked my interest in a lot of these issues. Since then, since I graduated, I went and worked for the UK government for three years on energy policy, lots of things to do with security of energy supplies, competition in the electricity markets, things like that. And I found that stuff really interesting, became particularly interested in topics related to energy and the renewable transition. Um, and so that's what motivated me to go on and do some further research in that area, ultimately pursuing my PhD research, which was in, in Berkeley, in California. And now I am back here in London, and teaching at the LSE.

Xiao Wei: Thank you for sharing your wonderful background and it's nice to hear that you're an LSE alumni. As your research mainly focuses on public policy, specifically in electricity markets and utility regulation, what do you think is the role of energy in the net zero transition? 

Stephen: Yeah, it's a good question. And the short answer is it's a pretty big role. So if we think about the net zero transition and the challenge of climate change. Something like three quarters of all carbon emissions comes from energy, mostly from fossil fuels and a lot of the energy we consume still comes from fossil fuels again, about three quarters of our energy still comes from those sources.

And so a key thing that we as a globally are going to have to do in the coming years and decades as part of this net zero transition is to transition away from fossil fuel sources of energy, towards cleaner, greener alternatives, and that process is underway, but it's a big journey. And so it's a pretty central part of tackling this net zero transition. 

Cass: Yeah, given energy has such a big role to play, the energy sector is also really large as well. So I believe governments probably have quite a big role to play as well. So how do you think government policies influence the energy market? And do you have some examples of that? 

Stephen: Yeah, so, definitely the government has a big role to play here, and in the absence of any government intervention, the sort of continued consumption of fossil fuels probably would go on for a lot longer than we would want it to.

So I think the classic government intervention in this area is to try and put some sort of price on carbon emissions and take that from being something that's free to being something that is actually costly. And you see this in various parts of the world through cap and trade systems or carbon taxes, like the EU emissions trading system is a good example.

So I think that's like the sort of classic intervention that we think of governments moving in to correct this failure in the market. But realistically, governments have been involved in all kinds of different ways, often sometimes because adding these extra taxes can be quite unpopular. So many of the other ways that governments have sought to intervene is either by subsidizing certain kinds of technology to encourage the adoption of solar power or wind power, investing in R&D to actually sort of trial some of these new technologies that needed to be developed like carbon capture and storage and things like that. So there's lots of different ways that governments can and do already intervene. Um, and there's probably going to be a lot more of that in the coming decades as well. 

Xiao Wei: Yeah, definitely. There's a lot of solutions that the government has provided, like, as you say, taxes and subsidies, but I just wonder, do you think there are any emerging technological or policy solutions that you find interesting that will make a net zero future possible?

Stephen: Yeah, so I think, um, one thing that increasingly comes up and has been an area where some of my research has focused is clearly one way of solving this problem is to make sure that the cleaner technology is cheaper and better than the existing dirty technology. And there's been a lot of progress made in that area.

Um, I think it can often be pretty depressing to read a lot of the news around things like climate change and a lot of it seems very downbeat, but I think one of the real success stories of the last 10, 20 years has been the incredible decline in the cost of solar and wind power and now batteries increasingly as well, to the point where it's now often just cheaper in many places than the existing fossil fuel approach even without any sort of government subsidy.

So that's been a huge win and has removed one of the main barriers to this transition. I think previously, dealing with climate change was seen as really costly because the alternatives were still quite costly, but increasingly that is not the case. I think what that's kind of led to, though, is yes, we have these emerging and now quite mature technological solutions, but increasingly that means that some of the barriers to this transition are kind of less about new technology and finding new technology, and more about just political and bureaucratic barriers to just building the new technology we have to build, right? So quite a bit of my research recently has focused on these issues around how can we get sort of local communities on board and local decision makers on board with permitting new wind and solar in their area, right?

And so this is often a really big barrier is we've got to build a lot of this stuff and it's got to go somewhere, but many of the processes we have at the moment are pretty slow to make those decisions and maybe don't have exactly the right incentives to allow a lot of this stuff to get built. So I think increasingly some of the challenges are on that front. And so I think that's also where it's been interesting seeing some new policy solutions to get local people on board. Be it allowing them to sort of share in the benefits of the project directly as one sort of example. And even some other sort of interesting ones in that space. There was a sort of recent paper that I saw, where again, a lot of the challenges around these barriers to new things getting built.

They also apply to things like new transmission lines, building new parts of the power grid that increasingly we need to do to get the power from where it's windy or sunny to where people live. But I saw a very interesting paper recently that maybe one way to get around that problem is not to solve the political problem, it's to just make better transmission lines. This is a sort of interesting new idea that was showing just how much of this new infrastructure you could roll out without necessarily having to build new transmission lines. You could just upgrade the existing ones. So I think there's a ton of interesting stuff going on. Uh, lots of new technologies, lots of new policy solutions, but by no means we are there yet, there's a lot to be done for sure. 

Cass: That's really interesting to hear because I feel like recently a lot of solutions to tackle climate change have been revolving around the technological space, but there's less focus on the political side as well, so that was very interesting to hear. Um, as we're on the topic of like emerging technologies, it was very interesting as we were looking at your research, there was also some phase out of some previous technologies that were seen as potential solutions to tackle climate change. For instance, Germany's nuclear phase out.

So in your paper, you mentioned that a lot of the nuclear energy capacity of Germany was replaced by fossil fuel production, given that there's like this common understanding that fossil fuel production generates a lot of carbon emissions. So, what were some main motives for Germany to move away from nuclear and not replace it with alternative energy sources like renewables?

Stephen: Yeah. So thanks for flagging this piece of work in particular. So yeah, this was a project with some co authors in the U.S. where we're looking at the phase out of nuclear power in Germany, which was sort of a big decision in energy policy and, and one that's also been looked at by other countries as well.

So this was the idea that certain people have some quite legitimate concerns about nuclear power and different countries have sought to deal with this in different ways. In Germany, I think there's long been a pretty strong anti nuclear movement. And in the sort of mid 2000s, around 2010, um, actually following the Fukushima earthquake and the sort of crisis there in Japan, um, there was a real push to speed up this phasing out of nuclear power in Germany.

And this was a particularly interesting case for us to study, because it sort of puts in opposition or in tension these two different environmental concerns, right? Climate change and air pollution on the one hand, um, which nuclear power doesn't really contribute to, and if anything does a good job of helping reduce. But also these concerns about things like nuclear waste, nuclear accidents. These are also long running concerns within the environmental movement. 

Um, and so we wanted to do a piece of research just looking at this particular policy as like an example of where these two things came into conflict. And what we found was that this decision to phase out nuclear power, whilst at least a portion of it was filled in by new renewable generation, and Germany's done a great job of building out a lot of new wind and solar power.

Definitely in the short and the medium term, a big chunk of that lost nuclear power was also filled in by things like coal and gas fired power stations. And at least in those intervening years, that has led to some real increases in CO2 emissions. But a particular focus of our paper was, one of the big impacts was actually on local air pollution and what that meant for people's health in that part of the world.

So I think this shows this sort of interplay between these two different concerns and really it's I think a lot of it is motivated by people's perceptions of the risks of these different kinds of technologies. Different places different people will come to a view as to what an acceptable trade off between those two is but I think what we wanted to do in this paper was really highlight that there is a trade off and sometimes it can be quite significant.

Xiao Wei: Yeah, I definitely agree that there is a trade off between using nuclear and fossil fuel usage. And I think maybe now that the countries are more aware that maybe the better solution is investing in renewables could potentially eliminate, like, the trade off between using fossil fuel and nuclear energy. So, zooming out from that, your other research paper on air conditioning and global inequality caught my attention, as I've never heard it being an indicator for inequality. So, what initially drew your interest in researching this topic? 

Stephen: Yeah, yeah. So, this was a sort of interesting piece of work. I mean, basically, when you think of climate change and the world getting hotter, you know?

There's sort of two main things we can do. One is mitigation, i. e. reduce the emissions, uh, and stop the problem getting worse in the first place. And the other thing that increasingly many of us are having to do is to adapt, right? There is going to be some amount of warming, and so we should engage in some sort of, you know, flood protection or whatever it might be to reduce the damages.

And one of the main damages that you can imagine is from heat waves and extreme heat. And one of the main ways to adapt to that is by getting air conditioning and sort of protecting yourself from that particular harm from the environment. So this is a sort of big issue when you think of growing rollout of air conditioning. Um, it could be a fantastic way to adapt to climate change, but it's also one that requires a lot of energy. And so you have to think about whether or not it's also going to contribute to the problem. So this paper, part of the motivation was a lot of the studies that were looking at things like air conditioning and heat.

Um, they were doing sort of country level analyses and just comparing different country averages. And my co authors on this paper had recently done sort of a deep dive on one country, on Mexico, where they really looked at, for a big sample of households across Mexico, who is adopting air conditioning and could really show that you learn a lot when you go beyond the average for the whole country.

You can see that it's primarily in the hotter parts of the country. It's primarily the wealthier households that are able to afford it that adopt. And so I think what we wanted to do was take that lens and try and apply it to many, many countries and think about it globally, but also think about inequality, even within countries about who can access this.

So that was the real, the real motivator for the paper. And we ended up collecting sort of similar data on, um, a big sample of countries and were able to show. Both who was adopting in which countries, um, but also this idea of inequality of the wealthier households, even within relatively low income countries, it was the wealthier households who were the ones that were able to access this and will potentially be able to protect themselves against this heat in the future. That was one of the key takeaways from the paper. 

Cass: Yeah, that's really interesting. I've really never thought of inequality from this perspective. So that was very interesting to hear. So kind of a follow up from the previous question. So you've kind of touched on this, but how might climate change and population growth further exacerbate air conditioning inequality issues? And are there any potential mitigation strategies that could be explored? 

Stephen: Yeah, it's a good question. And it's one that we tried to sort of get at a bit in the research. So I think the way I sort of described this was this idea that it sounded like what was driving the adoption of air conditioning is climate change is the world getting warmer.

And that's true to some extent, but I think one of the things that we were able to show in the paper is actually when you look at where a lot of the adoption is going to happen in the next 20, 30 years. It's primarily in low and middle income countries. These are in places that are already pretty hot. And the main limiting factor on them wanting to have and being able to have air conditioning is not actually the temperature. It's already very hot in India. It's already very hot in large parts of China. Uh, it's already very hot in Nigeria and Africa, things like that, and often for many of these people the sort of limiting factor is not that it's hot. It will get hotter, it's actually income and so what you see a lot when we did some projections out over the next 20, 30 years is that in most of these parts of the world that are also very populous, they have really large populations, the biggest driver of air conditioning adoption is not increasing temperatures, it's just the fact that everybody is getting a lot wealthier very rapidly.

Um, so that's what one of the key takeaways is that a lot of the growth in air conditioning that's also going to then require a lot of new energy consumption to power that. Um, a lot of that is coming in low and middle income countries that will become much wealthier, and they're already in places that are pretty hot. Less of the adoption is really probably going to take place in relatively high income places, maybe in Europe, where it's already relatively temperate.

What additional adoption there is may well be driven more by climate than by rising incomes. When you think here in the UK, I don't really think of the UK as somewhere that needs a whole lot of air conditioning, but we're starting to get these hotter summers. And these heat waves, and I think you could see people moving to adopt things like air conditioning or heat pumps as a way to deal with this.

So that was one of the key takeaways, um, was looking at where this potential inequality in the access and adoption of air conditioning might come from. And a lot of it was being driven by population growth and income growth in kind of lower middle income countries, um, potentially less so by rising temperatures, although that will obviously make things worse as well.

Xiao Wei: Yeah, that's definitely a very interesting insight of like looking at the relationship between the income of a country and also how they adopt to use air conditioning in their daily lives. So thank you for all your insights based on your research papers. And it's definitely something that we all students desire to have, like, An extensive knowledge in environmental economics.

So based on your experience, what would be your advice to students aiming to pursue a career in sustainability, specifically the academic field? 

Stephen: Yeah, um, I, I can definitely speak to the academic field. I mean, I'll speak to it more broadly as well, but, um, I guess the first thing I would say is, you know, good choice.

I think there's a lot of work to be done in this kind of sustainability area, net zero, climate change, and just environmental issues more broadly. Be it biodiversity or conservation, there's a ton of stuff that people can work on that I'm passionate about. And I think a lot of people are passionate about.

So, yes, good choice. I think another reason is a good choice is there is a huge amount of opportunity in this area to growing space. There's lots of potential for people to find careers and pursue interesting work on issues that are related to sustainability. Um, obviously, I've ended up doing that in an academic context.

Um, so I'm now focused on research and teaching, and that is definitely a route you can go down. And again, there's kind of expanding opportunities in that area. Um, I think if the academic career is what you want to do, then it has a certain set of milestones to it. It takes a while, right? Um, but would involve people going and doing a master's degree or pursuing ultimately a PhD and really sort of pursuing some research that they're interested in, um, with a view to then turning that into a longer term career of teaching and doing research.

Um, so that's the path that I ended up going down. As I said, it's a time consuming one. And I think, one that has a lot of strengths in terms of it lets you work on what you want to work on. Like, I feel very lucky that, um, you know, I can get up each day and go and do some research and it can be on pretty much anything that I want to study, which is fantastic.

Um, so I think that's definitely a real plus. Uh, I want to get to talk to lots of smart young people like yourselves, um, when I'm teaching, which is really good fun. And it's nice to see the next sort of group of people moving through and into this side of the profession. So I think there's a lot to be said on the academic front there and definitely something worth pursuing if people are interested in, in doing research or things like that.

Um, that being said, there are many different ways to find a career in sustainability and most of them are not in academia. Um, there's a huge amount that people can do in industry or in government that allows them to work on these issues in ways that I think are really interesting. So. My own experience prior to, to sort of going through this academic path, as I said, I spent a couple of years working in the UK government on policymaking, and that was a fantastic experience that I would highly recommend to any student, particularly a student, maybe sort of graduating from an undergraduate degree or something like that.

I think often a lot of the advice that I give to my advisees is maybe they're thinking about doing a master's degree. Maybe they're thinking about, Oh, I want to do a PhD or academia or whatever it might be. And that's fantastic. But you have time, you don't need to do that straight away. And often I've found that one of the most valuable things can be is like taking a pause from being in education since you were like four and going out into the world.

And, um, Seeing what options are out there in terms of working on these issues and at least for me, it was a great experience where I learned a lot and even if I ended up coming back and doing research and pursuing a more academic career. I've sort of done that, using a lot of the knowledge that I gained from working on these issues kind of out in the real world as it was. So, I think that can be really really helpful in terms of shaping your interest but also finding some really interesting stuff to work on. So yeah, I think government policy making is a great option. I think many students go on and do things like the civil service fast stream or whatever it might be. There's many ways to get into that side of things, and it can be a really fulfilling approach to studying issues around sustainability.

Beyond that though, the final one I'll mention is one that I have less direct experience in, but is an area where a lot of students go on to pursue this sort of career, is in some sort of industry or private consulting or whatever it might be. All kinds of companies are having to think about sustainability.When you think about ESG requirements and reporting, having to meet various sort of net zero policies, even sort of huge companies like Google or Facebook or whatever it might be, increasingly have their own division that's devoted to tackling issues around sustainability. One of my old friends. Uh, someone who graduated from the same postgraduate degree program as me sort of heads up or used to head up Google's division that's all about trying to power their data centers using solar, right?

So I think there's like a ton of interesting ways that you can get into this space, be it through academia, government, or through private industry that would definitely encourage people to sort of think broadly and pursue many of these different options, um, for sure. 

Cass: Thank you so much, Stephen, for giving us such great advice and also for giving us so much insight about your work and expertise today.

We really, really appreciate your time and sharing. Unfortunately, we have come to the end of this episode, but I'm sure everyone has learned a lot from the wonderful experiences and insights that you have shared. This has been Cass and Xiao Wei from The Greenhouse, and we hope you visit again.

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