Transcript: Rogé Karma Interviews Meghan O'Sullivan and Jason Bordoff

Ezra Klein hosts a discussion every Tuesday and Friday with Meghan O'Sullivan, Jason Bordoff, and Roge Karma. Listen

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EZRA KLEIN : This is 'The Ezra Klein Show', from the New York Times opinion.

ROGE KARMA : Hello, everyone. Roge is here. I'm Roge, the senior editor of 'The Ezra Klein Show'. Ezra is on book leave so I fill in. This will be my last guest-hosting episode. By the end of August I will officially be leaving the show in order to pursue a career as a journalist and writer.

In the outro, I'll elaborate on this. For now, let's get to today's show. We've already done several shows on the U.S. decarbonization efforts. Decarbonization, however, is a global phenomenon. Nearly 90% of the annual greenhouse gas emission comes from outside the United States. When we speak of decarbonization, we are really referring to a total transformation of the world's entire energy system. Energy is at the core of everything: the global economy; military power; relationships between nations. When you alter the global energy system, it will also affect all of these other things. I wanted to engage in a discussion that took a global perspective on decarbonization, and the types of transformations, collisions, and tensions it brings.

Meghan O'Sullivan, the newly appointed director of the Belfer Center for Science and International Affairs at the Harvard Kennedy School, has previously served in multiple government roles including as a deputy national security adviser during the George W. Bush administration. Jason Bordoff is the founding director of the Center on Global Energy Policy at Columbia University. O'Sullivan, the newly-appointed director of the Belfer Center for Science and International Affairs, is a former deputy national security advisor in the George W. Bush Administration. Bordoff, the founder of the Center on Global Energy Policy, is a former senior director for climate change and energy in the Obama National Security Council.

Bordoff and O'Sullivan, together with their research in recent years have done some of most profound analysis on the critical nexus that exists between the changing global energy system and geopolitical realities. I invited them to discuss this intersection and its implications for the future.

If you have any feedback or suggestions for guests, please email the show at EMAIL. Let's start.

Welcome to the Ezra Klein Show, Meghan O'Sullivan and Jason Bordoff.

Thank you for having us. It's good to be here.

MEGHAN O’SULLIVAN (to Roge): It's great to be here with you.

ROGE KARMA (ROGE KARMA): Your big picture argument is decarbonization doesn't just mean a change in the type of car we drive, or how we run our homes. It represents a fundamental shift of global geopolitics and economy. Talk me through this idea. What is energy transition? What does it mean to the world?

MEGHAN SULLIVAN : I think it's easy to underestimate this transition. Most people may think that it is simply a matter of switching from one energy source to another. Most people think of switching from a gasoline-powered car to an electrical vehicle. But it's much more complex than that. This is not about changing the energy source, but how we store, transport and use it. Energy is the basis of almost everything humans do.

We're essentially talking about the remaking of the entire global energy system. This is a huge undertaking, as it is the foundation of a global economy worth $100 trillion. It's even more complex because, unlike previous energy transitions, the climate change urgency makes this a much shorter timeframe.

Imagine the situation we find ourselves in right now. The summer of 2023 is expected to be the hottest ever recorded on Earth. In July last month, a Chinese town recorded the highest temperature ever recorded in the country, 126 degrees. John Kerry, U.S. Climate Envoy, arrived in Beijing on the same day to start talks between the world's two largest emitters of greenhouse gases.

Kerry was mostly ignored. China did not seem interested in speaking with us, because we are experiencing some of the most severe tensions between the two world powers. Clean energy is a growing trend in the world. This depends on minerals that are heavily concentrated in China. The forces of fragmentation are increasing at a moment when we need to increase cooperation and trade for clean energy, not decrease it. The developing world and lower-income countries are increasingly critical of the way the wealthy countries approach this problem.

There are many geopolitical challenges and trends that complicate the efforts to get to clean energy as quickly as possible. The reverse is also true: if we are not careful and thoughtful, the transition to cleaner energy could exacerbate some of these challenging geopolitical tendencies. Meghan and I have spent a great deal of time collaborating about how to think.

ROGE KARMA (ROGE): I want to start by defining where we stand in terms of the energy transition and transition. It can feel like we're at a crossroads in this transition. On the one hand, in the past year we have seen an unprecedented amount of clean energy investment, right? This includes the Inflation Reduction Act, here in the U.S.

These investments work with the fact the cost of solar, wind, and E.V.s has come down dramatically in the last decade. This means that despite the events this summer, we are on track to achieve much better targets for warming than just a few short years ago.

On the other hand, emissions are continuing to increase. Last year, oil and gas demand reached a record high and it is expected to reach another one this year. It is estimated that the fossil fuel industry will spend over $500 billion in this year to bring new oil supply on line. To put it into context, I.R.A. Originally, it was projected that the fossil fuel industry would spend $370 billion in 10 years.

Where are we in the energy transformation? How should we interpret what seems to be contradictory data?

JASON BORDOFF : I think that's an incredibly insightful and astute query. For the same reasons Meghan mentioned, I believe that two things are true simultaneously. There is much to be excited about when you consider where we stand in the clean energy sector. This year, the number of E.V.s will increase by 35 percent. In the last decade, solar, wind, and batteries have all been reduced by 80 to 90 percent. We'll add the same amount of renewables in five years that we did in 20.

On almost every metric, we have exceeded our wildest hopes. We are breaking record after record in terms of the deployment of clean energy and the cost reduction of clean energy. As you stated, aside from a pandemic, or a recession the oil consumption, coal usage, gas consumption, and emissions all increase every year. This is what happens with a global economy the size of ours, when there are so many people in the world using very little energy, when populations grow, and when people have more prosperity.

The history of energy, as much as we use the term 'energy transformation', is one of addition. When we think about transitions, what comes to mind is going from coal to wood, or oil to coal. These are the great historical transitions which took decades to unfold in the Industrial Revolution. This is true in terms of a percentage. The planet isn't concerned about percentages. The planet is concerned about the amount of fossil fuels that we use and the CO2 emissions we emit by burning them. This number has not decreased. Today, we use more wood than in the 19th Century. The denominator is getting larger. This is what happens as the energy consumption of the world increases due to rising income levels and population growth.

If we want a clean energy transformation that will solve the climate crisis, then we must do something that we have never done before. We cannot just add lots of clean energy to the mix and hope that the fossil fuel percentage goes down. We must reduce the amount of hydrocarbons and their associated emissions, or capture or store them.

MEGHAN O’SULLIVAN (English): Just to reiterate the excellent point made by Jason, in 2022 the world consumed more coal than ever before. Even though we are adding these massive amounts of renewable energy, this is essentially, simply, enough to fuel the global increase in energy consumption. It is only during a pandemic or a severe recession that energy consumption has decreased.

ROGE KARMA : You both made the argument that a way to think about this moment would be that we are leaving behind an era of energy security and moving into an era of energy insecurity. You need to explain that, because it appears that a world powered by fossil fuels would be much less energy secure than a world decarbonized. Oil and gas, for example, are zero-sum resources that are concentrated in a few countries. This means you can get price fluctuations, shortages, etc. when Vladimir Putin invades Ukraine or OPEC decides prices have gotten to low.

The sun and the wind are more than sufficient to power the entire world. They are not a country's exclusive property. It would seem that a more environmentally friendly energy system is also a safer one. Meghan, maybe we should start here. What is it that this view gets right and what is it that it misses?

MEGHAN O’SULLIVAN (Meghan O'Sullivan): I believe that this view is accurate when we discuss the geopolitics and security of energy in an energy-sustainable global economy. Often, 2050 is the date that people use. I believe that's the sort of global ambition, to reach net-zero. Jason and I wrote about this. This type of world would likely be more stable, with fewer uncertainties and even less volatility.

This portrayal is inaccurate, and Jason and I are very focused on this. The transition, say from 2050 to today, or from 2050 to today, is not smooth. It is anything but incremental. There are all sorts of uncertainties, fluctuations, and volatility within the system when making the transition. This is because we're not thinking about a market-driven transition, which in and of itself would be uncertain.

We are talking about a geopolitical transition, as many countries believe that the energy transition will give them a competitive advantage. We're thinking about countries who see the energy transition as a threat to their economy. You may find countries who want to stop the transition. Others want to accelerate the transition. There's an element of geopolitics and a large element of technology.

We can talk about all of these factors, but we also need to consider the oil producers. What is their view of the system and what does it mean for their power base relative to others? In a world of net zero, their geopolitical power will likely be less than it is today. It doesn't necessarily mean that the decline will be linear between now and then. We've argued, and we can see it now, that these countries are gaining geopolitical and economic influence due to the nonlinearity of this transition.

JASON BORDOFF : I believe that what you have described, Roge is the truth. The crisis caused by Russia's invasion in Ukraine has reminded us, if any reminder was needed, that we would be less dependent on global traded hydrocarbons if we moved toward a cleaner energy system which was more dependent upon electricity and renewable energy.

The urgency to address climate change is now being matched by a growing awareness of the importance of energy security. I believe that many people have forgotten for years how serious this issue was. The promise is to combine these two forces to move more quickly to clean energy. Meghan and I wrote about the risks associated with this transition she described. As she described, I believe they fall into three categories.

First, we need to get our economy to net zero. We aren't there yet but we will get there. This new clean energy system also has its own risks. This heavy dependence on minerals, which are mostly mined in China, will lead to a heavier dependency. The grid will be put under greater stress if there is a system with more solar and more wind. These are more variable sources of energy. You have to be careful how you manage these things.

Meghan pointed out that this is many decades away. If we are not cautious and thoughtful, the journey from here to there can be chaotic, volatile, and unorganized. This presents risks for the hydrocarbon legacy system and the emerging clean energy systems. Thirdly, climate change is going to have a significant impact on the future of our planet.