Faculty Spotlight Series: Jason Jay

My name is Anne Connors I am part of the admissions team I’m sure I have met many of you during this time that we have been virtual If you are new, welcome to our Faculty Spotlight Series We are wrapping up the series tomorrow for 2020 and we will kick off again in January So without further ado– I know we still have a couple people joining us– I just want to let you know who’s on the call today Besides myself from admissions, I’m joined by Karen Cunningham and Catherine Hayes who will be on the back end answering any questions you may have If you have technical difficulties just send us a chat We are also welcomed by Emma Caldwell from the Sustainability Certificate and, of course, Senior Lecturer Jason Jay who will kick it off with our programming today So without further ado, Jason, take it away Great Thank you so much for having me and for all of you joining from around the world Really appreciate your being here and your interest in MIT Sloan Given that we’re getting close to the holidays I thought I would actually start with just some pictures of my kids Right? Why not This is some pictures of my family This is my wife and I. These are my in-laws, our son Vikram when he was a baby These are our two kids Vikram and Uma This is a more recent photograph of them As you can see, we are a global family I grew up in Boulder, Colorado and my wife grew up in Kolkata, India This past year, this is what Kolkata looked like during the cyclone Amphan Loss of life, loss of property, loss of economy And this is what Boulder, Colorado, where I grew up, looked like The Calwood fire burned down the Environmental Education facility where I first learned to start thinking about what’s going on on our plane Moments like this, events like this, they touch us, they move us, they mobilize us, and they might even get us out into the streets September 2019 was actually the largest global mobilization and action around climate change Four million people hit the streets, more than twice as big as any previous climate action And despite what I just said about being someone who’s moved by, who cares about, who wants to work on climate change, that morning I was kind of dragging my heels I had a lot to do, a lot of my inbox, to go marching around But I saw images like this one from London, from Australia, from Germany, from the time zones that were ahead of me that morning, and I said, you know? We’ve got to do something I have got to do something to support the next generation So I went to my son Vikram He was nine years old at the time He was just opening his eyes for a day at school And I said, you know, I’m going to this climate march today It’s going to be hot and there’s going to be a lot of people, it’s going to be crowded, it’s going to be a lot of walking, but if you want to join, you can And he opened his eyes and he sat up and he said, dad, what do you think? And this is a picture of a sign he made in a MIT classroom with a bunch of grad students, this is us with a few thousand of our friends in Boston City Hall, and this is our Sustainability Initiative Team And it reflects what’s happening right now, which is that we are globally getting animated around an issue that we see as an existential threat and as a source of new possibilities and new ways of running our economy and society that might allow humans and other life to flourish for generations to come And we can get swept up in it We can feel a sense of momentum around this This is what that momentum looks like in civil society, of people just getting out into the streets But that’s not the only sphere in which we see this kind of momentum We see momentum on the public policy stage So more than 180 countries got together to sign the Paris Accordance and to agree to a global goal to reduce global warming to 2 degrees above pre-industrial levels, ideally 1.5 And the US Federal Government left the Paris Accord

under the Trump Administration, but even when that happened, a coalition of cities and states and towns and cultural institutions and businesses and investors said, we are still in We are still in the Paris Accord We’re still committed to these goals We’re still committed to solving these global challenges And now, with hope, the US will come back to the table So there is momentum at the institutional level, at the policy level There is momentum at the business level So if we look at companies and what corporations are doing, there are big goals being set More than 276 companies now are part of the RE100, committing to power their operations with 100% renewable energy or to purchase renewable energy equivalent to their operations The Science-Based Targets Initiative, the SBTI, more than 1,000 companies have joined the Science-Based Targets Initiative to set targets to have their companies emissions fall in line with what the scientists tell us that our global economy has to achieve And more than 360 companies have committed at a level that is equivalent to what we all need to do to get to 1.5 degrees And companies are working in tandem with the investor community, with the capital markets There’s momentum and this process of building in the capital markets So the Climate Action 100 is a recognition that there’s about 100 companies that represent 2/3 of global emissions And so 350 investors with $34 trillion in assets under management have promised to engage, to use their shareholder power to drive companies to take those emissions seriously So they’re engaging with the 100 companies that are the 2/3 of global industrial emissions, and then another 60 companies that could play a critical role in a clean energy transition And then using that power to drive in those companies better governance of climate issues, decarbonization of their value chains, and disclosure of what they’re doing following the protocol of the Task Force on Climate-related Financial Disclosure So the TCFD There’s a Net Zero Asset Owners Alliance So the big heavy hitting investors, 33 institutional investors with $5 trillion of assets under management, have committed to investment portfolios that are net zero greenhouse gas emissions by 2050 And that includes pension funds like CalPERS, insurance companies like Munich RE, sovereign wealth funds like Caisse des Depots in France, high net worth family offices and foundations like the Rockefeller Fund, and asset managers of various kinds that are looking to help these players, like Allianz So what you can think of this is like all of us are sort of mobilizing to take this problem seriously and to set goals that are in line with what it is that we need to accomplish But we’ve got three problems So the first problem is that the scale of this action and the magnitude of this action is really quite incredible, of what would be required to fulfill on, essentially, the promises that are being made If we look at the trajectory of global greenhouse gas emissions, right now our business as usual scenario is taking us close to 100 gigatons of CO2 being emitted every year in 2100 And that’s a future that the science suggests will be 3.6 degrees warmer in Celsius terms than we were in pre-industrial levels And I also report these numbers in Fahrenheit for those Americans among us who are Celsius challenged And the goal of the Paris Accord is to get to a two degree future, ideally to a 1.5 degree future, which means this dramatic reduction in global greenhouse gas emissions And that is an incredible gap and it’s a gap that is really, really important to solve Because what is 3.6 degrees of warming mean? Well, already we have warmed the planet about 1 degree Celsius above pre-industrial levels We’ve already warm the planet 1 degree So you can see this 1 degree line here And therefore we’re seeing those pictures that I showed earlier of our hometowns of Kolkata and Boulder, of wildfire damage, of food supply instabilities, of soil erosion, water scarcity, a whole suite of things Storm intensity and frequency like the cyclone I mentioned All of which we’re already seeing at 1 degrees And our business as usual future takes us

to 3.6 degrees Celsius Into a zone where those risks go from being detectable to being very high risk of severe irreversible impacts with limited ability to adapt This comes from the Intergovernmental Panel on Climate Change, the IPCC, which is the main scientific body around climate So that’s the first problem The first problem is that this is a big important problem to solve and it’s really hard There’s a big gap between our business as usual and where we want to be The second problem is that all those goals, all of that momentum I described– the countries setting targets, the investors setting targets, the companies setting targets, all of us in civil society setting targets– those are great Like, they’re saying, we want to follow the science But does action meet the level of those targets? So just as one simple example, the Paris Accord The Paris Accord said, our goal is 2 degrees And then each country made intended nationally determined contributions, INDCs And if you add up the emissions reduction that would come from those INDCs, the actions that countries were really prepared to take, they added up to a future with reduced emissions, but not enough Only 3.3 degrees Celsius So when the people are getting out into the streets, what they’re saying is, let’s get real Let’s get real about the magnitude of what’s involved here And let’s have a plan of action Let’s get strategic Let’s really understand, not just what you hope your successor does by 2050, but what we can do now So the first problem is the magnitude The second problem is our actions don’t necessarily match with our commitments And then we have a third problem when we want to engage and educate people, like you on this webinar, around this whole theme of climate change And that third problem has been articulated by my colleague John Sterman as the following “Research shows that showing people research doesn’t work.” So that means is, I could stand here and show you PowerPoint slide after PowerPoint slide, photograph after photograph, graph after graph, and you would change nothing about your actions Even your understanding of the climate system really wouldn’t improve all that much It would improve somewhat, but not at the level of insight and understanding that all of us need if we’re going to play a role in this big global transition So instead, what we’re going to do is attempt an interactive workshop here Now I just got an email right before this that 1,100 people had signed up for this webinar I don’t know how many of them are actually online at this very moment, but– so how do I do interactivity with 1,100 people? I’m not going to ask you to put your comments in the chat OK, I just got a note from my colleague that we have 610 people on the call So what we’re going to do is, I’m going to use a little technology here and we’re going to make use of a tool called Poll Everywhere And the way Poll Everywhere works is that I pose a question and you type in an answer And the way that you type in that answer is through a special website where I am putting the link into the chat right now com/btgbook And when I give you this link, what’s going to happen is that your answers to the questions I pose are going to show up on the screen for all of us to see And they’re going to be anonymous It’s not going to attach to your name or your IP address or your cell phone number or anything like that But it’ll just allow us to get kind of rapid fire input from this large number of people that we have on the screen So what you need to do is, in order for this to work, because you’ve got the Zoom going where you’re going to see me, and then in parallel I want you to open a web browser tab I actually recommend doing this on a phone just because it’s a separate device It won’t get in the way unless you have multiple screens And then what’s going to happen is that I’m going to ask multiple questions over the course of our time together and you just keep that web page open So whatever tab you’ve got open, either on your phone or your computer with this pollev.com/dtgbook You just keep that open and whatever question I pose will show up live on your screen, and then whatever answer you put will percolate up here

onto the screen And right now I’m using a word cloud display, and the way a word cloud display works is that the words get larger if multiple people respond that way So we’ve got a nice contingent here from Boston We’ve got a nice contingent from New York, Chicago, Houston, London But I love the global reach of this kind of conversation because we’ve got Mumbai, Jakarta, Bogota, Ankara, Dubai, Accra, Pune, Rome, Miami So fantastic And what’s great about this is that this is exactly who we need at the table if we want to solve this kind of big global challenge One little technical thing I’ll point out about Poll Everywhere that you’ll notice is that, again, because I’m trying to incorporate data from, right now, 467 people I have to use this word cloud And the way the word cloud is, is that if you answer a question with two words it will break up your words and they won’t display together So for example, that’s why we have “New” as one word here and “York” as the other word, if what you need to answer is two words like that, you write “New-York” The way that the person wrote “Tel-Aviv”, I saw Tel Aviv with a hyphen in it Or maybe I did it a minute ago So that’s the way to do this In the future I’ll say, like, one word or hyphenated phrase What I mean is, try to be succinct, try to have it be one or two words, but if it needs to be two words use a hyphen OK So this was just sort of a test poll to get a sense of who we have in the room So now how are we going to do this interactively? How are we going to explore this climate challenge? Well what we’re going to do is that we are going to use a couple of tools that have been developed here at the MIT Sloan School in collaboration with our partners at an organization called Climate Interactive that is staffed largely with MIT Alumni These tools are C-ROADS and En-ROADS, which they stand for Climate Rapid Overview and Decision Support tool and En-ROADS These are tools that have been developed They’re based on system dynamics and modeling of the energy and climate system that goes back 40 years that have been gradually accumulating insights about how these systems work, but then calibrated with the most recent, freshly available data In fact, we just refreshed the tool this past week with updated data that interestingly changed our, sort of, view of the world But these are tools that are free and accessible to all with a web browser Any of you can open these up and start playing with them I’m not going to ask you to do that right here on this call, but that is something I’m going to suggest you do afterwards just so that we can keep our attention focused together They are transparent So all of the equations– one of these tools has more than 14,000 equations underneath the hood All the equations and structure are available in the reference guides These are calibrated and tested against integrated assessment models So those are big super computer models that can tell you about the impacts of the climate in particular places around the world and that take weeks to run and to try out different scenarios But our tool runs instantly in an ordinary web browser on an ordinary computer And the reason it’s able to do that is because these models are highly aggregated So they’re looking at the whole dynamics of the world all at once rather than trying to compute it separately for every single sub geography or sector And so what that’s going to allow us to do is to have a dynamic, interactive conversation– we’ll use it in quotes because we are 600 of us– about what’s going on in the climate system And this is very important The ability to have tools that allow this kind of rapid exploration is very important because it allows us to have conversations And some of you may know that I wrote a book called Breaking Through Gridlock: The Power of Conversation in a Polarized World I think conversation is fundamental to our ability to build the coalitions and to get the action that’s necessary And so this is a tool for conversation It has been a tool for conversation with more than 100 elected officials We’re close to 40 senators in the US Senate, more than 100 members of the House, business leaders, C-suite leaders, board-level leaders from a whole variety of different sectors and industries This is a photograph of one of my favorite workshops I got to do It’s in the largest bamboo structure in the world off the side of Bali We had 120 cross-sectoral leaders from Indonesia I did this workshop on a Tuesday On Wednesday I trained a subset of the people to be facilitators themselves On Thursday they translated the materials into Bahasa Indonesian And on Friday they ran it with another group

of political leaders in Jakarta So this thing is going viral– in the good way, not the COVID way– and we’re really excited about the impact that we’re starting to have We’re getting written endorsements from Republicans and Democrats here in the United States and people around the world who are engaging with this tool And this is exactly the same tools that we’re going to get to experience and play with today on this webinar So, coming back to where we were, which is the Paris Accord and this global agreement to limit emissions, to limit global warming to 2 degrees Celsius, or ideally 1.5 Now the national plans that were made under Paris are not enough to get us there Since then some other things have happened, some other commitments have come in, which everybody is sort of trying to understand what they mean, how serious they are But I’m just going to pose a question to you Which is, if we think about this in the global context– all those countries that you are coming from– what country do you personally most hope takes action on climate change? So what I’m doing here is I’m moving on to the next poll So you keep that tab open, that same browser tab on your computer or your phone, and then it’s going to pose this new question, what country do you most hope takes action on climate change? And again, the font size here reflects the frequency with which an answer is coming through the poll So I’m watching the numbers spin up here We’ve got more than 300 respondents And not surprisingly, the big ones here are China and the United States OK? Many of us know that China is now the largest total emitter in the world and the US is the highest emitter in terms of emissions per capita So our emissions intensity of the US is very high And so anything that’s achieved– in fact, the Paris Accord came together at the start because of a US-China bilateral agreement that John Kerry and Ernie Moniz helped to broker which then led to the larger thing But USA and China are not the only countries on here India comes in probably third And then you’re all naming countries that you are personally connected to, from Indonesia, Guatemala, Brazil, Denmark, Mongolia, Ghana, Netherlands, Sweden, Nigeria, Vanuatu, Beijing All of them have some kind of role to play Well, so the question is, what role do they have to play? And C-ROADS, which is the first tool that we’re going to play with is designed to explore this question Let’s start with the USA since that seems to be in the biggest font size here and is therefore the one that we’ll start with This is C-ROADS This gives us a picture about global emissions So on the y-axis here we have gigatons of CO2 per year And this is looking at carbon dioxide Of course, there are other greenhouse gases, which I’ll talk about later Methane, nitrous oxide, sulfur hexafluoride, et cetera This is essentially just looking at the CO2 emissions from energy on this particular graph We can look at other graphs that– so for example, this is CO2 equivalent per year, which is where you take the methane and nitrous oxide, which are much stronger greenhouse gases, and you calibrate them so that you are counting them as if they were in CO2 equivalents So, but the idea here is that, again our business as usual scenario is that our greenhouse gas emissions are increasing, our temperature is therefore increasing, and we’re blowing past that 1.5 degree target in about 2036 and we’re blowing past the 2 degree target and about 2054 So just to think about that, that’s the year where my son is exactly the age that I am right now I am 43 years old, my son is 10 2053, when we blow past the 2 degree target, is when he’s my age, with all the associated risks with that So what we see here is the default curve– and this is based on our best understanding of the global climate system So underneath the hood this is modeling all the basic physical dynamics of the climate as well as the energy system and the greenhouse gas emissions that come from the energy system So you guys all said, I want the USA to take action

Absolutely So the USA is this red line here What you can see is that we show the emissions kind of declining a little bit but sort of staying roughly level, roughly the same with some slight increases So let’s say that the US got really serious about climate change and we said, you know what? Biden’s coming in, we are done increasing our emissions, and in fact, in 2021 we’re going to start an aggressive plan of decarbonization And so normally if we were in a room I’d ask people to shout out how fast we should reduce I’m not going to do another poll for this But let’s say that we get very ambitious and we reduce our emissions at 5% per year And so that leads to us essentially eliminating the emissions of the United States, decarbonizing the US economy a little after mid century If we want to be even more aggressive, let’s say that we want to do an 8% reduction rate, you’ll see that those emissions will fall a little more rapidly And as a result, we’ve just changed the world We’ve just taken our future temperature increase from 3.6 degrees under the baseline scenario to a 3.4 degrees scenario, which is what’s drawn here in the bottom Now, for some of you that’s a bigger change than you thought it was going to be, because you answered the question, this is all about China and India For some of you, this is a much smaller change than you thought it would be You thought, gosh the US is such a big emitter I’m trying to imagine decarbonizing the US economy and this is what we can achieve I’d love to have seen that graph fall a lot more But this is the nature of the challenge, is that it is a global challenge We reduce all the emissions from the United States Let’s say that, for example, we were to shut down all of our coal plants and convert everything to renewable energy That’s kind of the trajectory we could be on and this is what it means to get to net zero and this is the impact of the US So now some of you are saying, yeah See? I told you it was about China and India So great Let’s look at that So China, in our baseline scenario here, we have them sort of peaking emissions by about 2080 Now what you may know is that recently Premier Xi Jinping made a new assertion about the Chinese climate trajectory He said that their target is now, that in 2030 they will peak their emissions, and by 2060 they will get to net zero greenhouse gas emissions in China So again, with all the caveats about, what do those commitments mean? How likely are they to be achieved? Let’s explore what that looks like So if China were to peak its emissions in 2030 and start reducing their emissions right at that time– 2030– and reducing it fast enough, such that by 2060 this graph would get down to net zero emissions That’s roughly a 10% annual reduction in emissions So now we’ve got a situation where China is reaching very close to net zero emissions in 2060 And now what we’ve done is that’s had a very big effect So we went from a 3.4 degree scenario to a 2.9 degree scenario So that’s 0.5 degrees of temperature change that could occur if China is able to fulfill that commitment And now together the US and China have sort of gotten us an important part of the way So if we look at our poll here of what you guys thought was significant, clearly those are big players that are very significant Now there’s a number of other countries here that are mentioned like the Netherlands and Canada and Sweden and Denmark and Germany and Israel and Japan These are all other developed countries that are in kind of a similar position to the United States So with US leadership, with American technology or technologies that we adopt from China, Taiwan, Norway, et cetera, then maybe other developed countries can also come on board and follow a similar trajectory to what the United States does So let’s see what happens if they also do something like an 8%– or maybe they follow China’s level of ambition and do a 10% reduction rate as their decarbonizing That’s going to be worth another 2/10 of a degree I’m sorry, that was other developed countries Let me get the EU in here, which we’ve broken out as a separate block And so now that we’ve got the entire developed world decarbonized And we’ve got China achieving its commitments And so now we’re at 2.6 degrees 2.6 degrees is a much safer world It is not a safe world

So just to remind ourselves what this picture looks like, is that 2.6 degrees is still taking us deep into the red zone of very high climate risks So we need to do a little bit more We need to do a lot more And what you start to notice is that there’s still these growth of emissions in developing countries And you recognize that So India is in a pretty big font here That was sort of the number three in terms of what countries you all suggested And so what happens if India follows suit? So let’s say that India is able to do what China does and follow a 2030 peaking and reductions trajectory along a similar level of ambition to China That gets us to 2.4 degrees And we’re still blowing past these targets Now again, much safer world, but we’re still running the risk of runaway climate change in a variety of different ways So then the final truth of what’s reflected in your comments here, which is we got to think about Nigeria We have to think about Indonesia We have to think about Colombia, Ghana These are countries who are growing their economies rapidly, and so the question is, can they decarbonize? In the same way that they leapfrogged past landline telephony to mobile telephony, can they leapfrog over fossil fuel development to low carbon energy development? And that’s what would be reflected in something– and maybe it takes them longer Maybe there’s more growth of industrial economy so that they’re peaking in 2050 and then beginning a decline in 2050 that’s even a bit more modest, that gets us below 2 degrees So this is the rationale for why this is such an all hands on deck conversation And why it needs to be a global conversation And why it’s so exciting to have a global community like MIT Sloan thinking about this very intensively OK So the exercise here was intended to kind of explore that first problem How big is this challenge? And you can start to see the level of ambition necessary to be able to get us onto the right trajectory It also deals a little bit with the second thing, which is, OK, we made commitments but do we really know how to achieve them? And so we can see just how important it is to hold ourselves accountable for achieving these climate goals, whatever they may be But there’s another question which I really have not addressed at all, which is, how? How are you doing this? OK, so you say China is going to reduce its emissions by 10% every year But what does that actually look like? What are the policies, what are the technologies, what are the investment strategies, what are the business strategies that might actually get us to that place? So that’s the next question we have to ask ourselves And so I’ll put this out as the next poll This one is going to be a little bit challenging to get into this one word answers If you can do one word answers, that’s great If it needs to be a couple of hyphenated phrase, that’s also good So we’re going to see a whole array of cool climate solutions percolating up here I’m just going to change the color scheme here because I don’t like– Let’s see Can I actually fix that? No OK So we’re not going to be able to use color to help us We’re going to have to just use font size, which is fine OK But this is fantastic So we’ve got a huge array of possible climate solutions that people are suggesting Carbon tax, reduce consumption, renewable energy, renewables, nuclear energy, behavioral shifts, plant-based foods, ocean preservation, carbon sequestration, supply chain sustainability, technology sharing worldwide, circular economy, Pigovian taxed, vegetarian living, sustainable mobility So this is great So this is clearly an audience that has been thinking about this All of us are part of this global conversation And there’s a few things here that are coming up a lot So now the question is, well, how do we think about these? This is something that we’ve learned– going and engaging with senators and governors and congresspeople and people in presidential administrations,

or even city mayors or your own town councilor– they look at this menu and they say, OK All of these sound like reasonably good ideas Sorry I’m trying to make this a little bit bigger for you to be able to see on your screens Let me see if I can– well, actually, let me see I pull this off of full screen and then make it full screen again OK It is what it is So for a decision maker like that, all of these sound about the same If you come to them saying, hey, we need to provide a tax subsidy for renewable energy; and then somebody else comes and says, hey, we need a carbon tax; and somebody else says, hey, we need to get people eating more vegetarian food; we need to make our infrastructure more smart; we need to electrify our vehicles– Teslas for everybody It all basically sounds the same because this is my mental bandwidth for thinking about all of the issues that I have to worry about OK? This is COVID-19, this is getting the economy back on track, this is all of the environmental issues, this is climate change And now with that amount of mental bandwidth that I have, I have to sort of take all this in It all sounds the same So how do we understand the relationships between these different approaches? How do we evaluate them and understand how strong they are? How much potential they have to help us achieve these really critical and important goals? Well, that’s why we invented En-ROADS So the EN-ROADS tool is the next tool that we’re going to start playing with En-Roads is the Energy Rapid Overview and Decision Support Tool So initially we were developing it to think about the energy system But increasingly what we’ve done is add more So it really is a kind of climate solutions scenario There’s a lot of land and agriculture and other options here that are incorporated in this tool So on the bottom here we’ve got a whole variety of different levers to pull These are things that governments can do, investors can do, companies can do, citizens can do, to try to tackle climate change I can pull these and I can change in real time what’s going on Underneath the hood this is a globally aggregated model of sort of the techno-economic system and how it interacts with the climate system This graph shows us how much energy we’re generating from coal, oil, natural gas, renewable energy, which includes wind, solar, and geothermal and hydro energy This magenta color is bioenergy, biofuels And then there is a sliver of nuclear energy across the top here in this light teal On the right graph here, we can see the temperature change– which we are looking at before– and seeing that we’re going well past our 1.5 and 2 degree targets And with a final temperature in 2100 of 3.6 degrees Celsius over pre-industrial levels I’m going to change this right side graph to one that’s a little bit more action-oriented and will help us understand things better These are the greenhouse gas emissions by gas So how much of the global warming is being caused by land use change? The green band So things like deforestation How much is through CO2 burned and emitted by fossil fuels? Which is this gray band This orange color is F-gases, which are fluorinated gases like sulfur hexafluoride And then CH4, which is methane, and N20, which is nitrous oxide, which are about 30 to 50 times stronger than CO2– methane is And nitrous oxide is more than 100 times stronger than CO2 They don’t last as long in the atmosphere, we model that independently, but here we can sort of stack them up into CO2 equivalents So this is our picture where we’re going to explore the consequences of our decisions And we can explore those consequences in a whole variety of ways So not just energy and greenhouse gases, but we can look at financial impacts, on how much money are we spending on energy, or how much are we spending on taxes and subsidies realtive to a base case here So let’s try some of the things that you all suggested So in the poll here, the biggest font size here in my screen is renewables Especially when I look at renewable energy and renewable, are all on here separately as sort of big potential solutions So let’s look at renewable energy Renewable energy we can encourage by pulling this little slider right here Before I do that, I’m going to teach you a little mental habit that’s going to maximize your learning

from the use of this tool And that is to think like a scientist A scientist forms a hypothesis, then they gather data, and then they look at how that data matches with their hypothesis and whether it confirms or disconfirms it And then that difference between what you expect and what you see is the learning OK? So I want you to form an expectation When I pull this lever of renewable energy, which means I’m going to subsidize renewable energy all around the world, I’m going to use tax credits, renewable portfolio standards, corporate renewable energy targets, investor renewable energy targets We’re going to encourage renewable energy What are we going to see happen on this graph here? How is this going to change? And then what are we going to see on this graph about greenhouse gas emissions? And then what is that going to do to temperature? What kind of future are we going to be living in, too, if I go from a status quo to a pretty substantial global subsidy in real energy? OK You form that mental opinion, make your guess, and here we go OK So I’ve just subsidized renewable energy If I go into the details here it’s equivalent to a $0.02 cent per kilowatt hour subsidy ramping up pretty immediately You can see that renewable energy demand has grown relative to the baseline I can kind of rewind that change and you can see the delta So you can see this green band of renewable energy is expanding as a result of the economics becoming more favorable And as a result, you can see the bottom part of this is shrinking a little bit So people are using a little bit less natural gas and coal to produce electricity And as a result of that, we can see that this gray band of greenhouse gas emissions from energy is decreasing And as a result of that, we’ve gotten ourselves about a 1/10 of a degree of improvement in warming OK Now if we were in person I would say, raise your hand if that was a smaller change than you thought it was going to be Raise your hand if that was a– OK Oh, this is cool I actually can see your Zoom raised hands I don’t know if I can get a total count– Oh, yeah I think I can see Let’s see if I can get a total count of those if I click my participants’ window here And that may be possible All right So now you can put your hands down Everyone who just raised their hand, you can put your hands down So 160 people have said that was a smaller change than you thought it was going to be OK now I want you to raise your hand if that was a bigger change than you thought it was going to be OK I can see the hands are coming in a little bit more slowly right now We’ll get a final count in just a second from my colleagues here This is cool So it looks like 49 of you think that was a– so about three to four times as many of you thought this was a smaller change than you anticipated And that makes sense So then the question is, well, why? What’s going on here? Why is it that when we subsidize general energy– we get all this new wind and solar just got built– why didn’t that solve the problem? And to understand this, we need to think about the dynamics of the system System dynamics is the discipline of modeling complex systems using sets of differential equations, or just even visually depicting systems through stocks and flows and feedback loops It’s something that was invented at MIT Sloan by Jay Forrester, further advanced by John Sterman, who’s the head of the System Dynamics Department and the Faculty Director for the Sustainability Initiative, and it’s the basis of what we’re doing here One of the basic concepts in system dynamics is the idea of the stock and flow The stock and flow So stock and flow, we can always think about using the metaphor of a bathtub So if you’ve ever taken a bath, which hopefully you have, the amount of water in a bathtub is the stock And I’ll show you what this looks like for the stock of greenhouse gases in the atmosphere All right So here’s kind of the key thing that we need to understand So a stock and flow we depict this way We put this box around a stock, and then there’s the inflow, which is like the faucet pouring water into the tub And then there’s an outflow, a drain which is like the drain pulling water out of the tub So the central challenge that we’re all trying to deal with here is the fact that we’re turning on the faucet more and more and more every year Pumping greenhouse gases into the atmosphere They’re accumulating because the planet cannot absorb them

as fast as we’re emitting And so the level of greenhouse gases is increasing in the atmosphere And as a result, it is forming kind of a blanket around the planet, which is causing us to get warmer and warmer and change our weather patterns So I moved through that very quickly I’m happy to come back to that later if we need to But the key insight here about renewables is that the stock of greenhouse gases in the atmosphere is not the only stock and flow dynamic that we’re dealing with The other one is, in addition to this atmospheric concentration stock with our emissions and removal, is the stock of our infrastructure So when we build a new plant, a new facility, a new power plant, that is construction We are adding to that stock of physical capital And over time we retire that capital So we retire a plant when it becomes defunct or sometimes when it prematurely explodes, which unfortunately does happen sometimes with our oil infrastructure But the idea here is that it takes time for the stock to turn over And in fact, the turnover time for the stock of power generation equipment is roughly 40 years So what that means is that, in our scenario here that we’re working on together, we subsidize renewable energy And so we caused more stuff to get built We caused the construction of new renewable energy, adding to the stock of our total energy generation physical capacity But we didn’t deal with the outflow Because the thing is that all of that renewable energy was piling in on top of a pre-existing fossil fuel infrastructure So we still had our coal plants and our gas plants and our oil refineries and extraction and production facilities all operating and running and emitting, and therefore we didn’t really reduce greenhouse gas emissions because we didn’t do anything that would shut down those emissions So very long-winded way of exploring this first idea Now, it doesn’t mean that renewables are a bad idea This is all stuff that is low carbon energy It’s not polluting One of the other reasons why we only saw 1/10 of a degree difference with the subsidy is that renewables are already becoming very price competitive They’re already scaling very rapidly You can see that renewables are already a pretty substantial part of the energy mix of the future And we’re giving it a boost, but it’s not enough to substitute away some of those emitting infrastructures So now let’s go to another concept here in your actions to solve climate change So another one here is carbon tax That’s the other one that’s in kind of the biggest, boldest letters And it’s not the only one, actually, that says carbon tax Someone says incentives, someone said Pigovian tax So for those of you who may or may not have taken economics in recent times, the idea of a carbon tax or a carbon price is that, when I go out and I drive my car and I push greenhouse gas in the atmosphere, it doesn’t cost me anything to put CO2 in the atmosphere If I’m running a big power plant, it doesn’t cost me anything to put CO2 in the atmosphere But it does cost other people Because those emissions add up to warming the planet, and that warming planet creates all kinds of economic costs on our infrastructure, on our lives, on our livelihood So I am inflicting a cost on other people And that is what’s called an externality or a market failure And what any economist will tell you is that the solution to this kind of a problem is to internalize the externalities Which means to change the public policy so that you don’t get to pollute for free You have to pay for the harm that you cause So let’s look at that So we have carbon price here as a lever, as a mechanism And what I can do is I can add a carbon price Now we call it a carbon price and not a carbon tax because there’s a whole variety of mechanisms that you can use to price CO2 You can use a carbon tax like they have in the province of British Columbia in Canada You can use a cap and trade system where you allocate permits to all the big emitters, and then you reduce the number of permits that they get to have You have a cap that reduces And then they’re allowed to trade those permits in case one plant can more cost effectively reduce their emissions, they can sell their permits to somebody else Here in New England where we live, across the entire New England seaboard we’re part of something called the Regional Greenhouse Gas Initiative, and it’s a cap and trade scheme for pricing CO2 emissions The state of California has a cap and trade

scheme to price CO2 emissions But it’s not just government action that can price CO2 Because companies can create internal carbon prices In fact, many companies have done exactly that So this is a map of– sorry OK This is a map of carbon prices around the world of where different governments and countries and provinces and cities have imposed carbon taxes covering about 20% of global emissions And here are the companies– this is actually quite old data I apologize for this But back in 2013 there were already a number of companies that were creating internal prices on carbon, so that when they go to build new infrastructure, they build it with their economic forecasting as if there were a $40 price in carbon In some cases, they’re actually charging that price to facilities that are high emitting And in fact, any time you hear of a company going carbon neutral, what that means is that they have agreed to buy carbon offsets at the level of their current emissions so that they’re offsetting their emissions And there’s a lot of good debate to have about carbon offsets I hope that we’ll get to that in just a second But the most important feature of carbon offset commitments is that you’ve imposed a carbon price on yourself You’ve promised to pay every year the amount of money that is scaled according to your emissions, and therefore you’ve created an incentive on yourself to reduce emissions So what’s the power of that incentive? If we were to impose a $50 price per ton of carbon, that is roughly equivalent to a $0.45 gasoline tax So if right now you go to the pump and it’s $2 per gallon of gasoline, this is going to make it $2.45 if I make this a $50 ton So again, formulate your hypothesis, look at the graphs What’s going to happen when I click Enter and turn on our carbon tax? OK So what we saw here with a $50 price on carbon– let me rewind that I’m sorry I’m having a funny thing where my mouse pointer is disappearing and therefore it’s a little hard for me to see OK So if I undo that we’ll be able to see And what you see is that the entire world changes under a carbon price because we’re incentivizing a whole array of different changes and we’re getting out of that a 0.3 degree temperature change So we got 1/10 of a degree difference by doing our renewable energy improvements, and then we got another 3/10 of a degree by doing this carbon price So clearly the carbon price is a stronger action This is a stronger action And the reason is that it is making it expensive to pollute And that has two important effects So if we look at these graphs, this shows us population times the economy times energy intensity times carbon intensity That’s what gives you your total emissions When we impose a carbon price of $50, what you’ll see is that you’re going to see two changes One is that our energy intensity goes down We become more efficient in the use of our energy because it costs us more And it disincentivizes high carbon electricity and so we shift our attention away from coal, oil, and gas and towards those new renewables that we just built And so carbon pricing is a very, very efficient mechanism for trying to tackle climate change Now, did it solve the problem? It didn’t get us all the way there Maybe the carbon price needs to be more ambitious If we amplify that up to more like $100 price on carbon, then we’re going to see an even stronger effect We can get another couple tenths of a degree from that stronger price on carbon Some might say, well, that’s going to put too big of a shock on the economy, which is fine We can just spread that out over 20 years so that we give the economy more time to adjust and we can get ourselves to that kind of a future So what I hope you can see here is this idea that we can explore how these different policies interact and how strong they are Now let’s look at a couple of other things that you put on your suggestions for climate actions So there’s a couple here that have to do with other new energy sources like nuclear and so on But there’s a few here that are not related to the energy system at all that have to do with agriculture

So I see agriculture, veganism, plant-based There’s a whole set of things here around changing the way that we eat Sustainable farming and so on So let’s explore the farming side of this The land and agriculture side So one mechanism that we can play with here is that– so people are talking about veganism The reason people talk about plant-based diets is because methane is a very strong greenhouse gas emission And one important source of methane is this friendly little cow here belching methane from the anaerobic fermentation that happens inside the gut of the cows So enteric fermentation methane So if I go for a more plant-based diet, if we move away from consuming beef, or we just get much more efficient in the way that we do that– so we reduce food waste, maybe we change the way we feed the cattle– and we create a significant decline in our agriculture and waste emissions from methane Forecast what’s going to change on this picture Nothing’s going to change over here because this is just energy What’s going to change over here? How big of an impact is it going to have? Let’s make a good, nice, big annual dent in our methane emissions so that we’re really substantially reducing our agricultural waste emissions And that in itself was worth another 3/10 of a degree So the same magnitude of change as that $50 price on carbon So this is why people are talking a lot about agriculture right now It’s not the whole picture, it is a piece of the puzzle, but it’s a critical one And of course methane is not the only agricultural emission Some people said, well, we need to farm sustainably Maybe we can even put soil into the ground by farming in ways that cause carbon to get stored under the soil Maybe you saw the recent documentary, Kiss the Earth, which is all about sort of the potential of soil Under carbon removal we can look at different technological options we have for carbon removal and we can go to agricultural soil carbon sequestration So if we ramp up our farms’ ability to store carbon in the soil– in fact, we get all of the farms in the world to shift to a more regenerative form of agriculture, forecast what that’s going to look like Here we go And what you see here is we created negative emissions We created a carbon sink and that got us another 2/10 of a degree The key here is that the magnitude of that change is small relative to our total greenhouse gas emissions So we need to think about it in tandem with all these other solutions So what I hope you’re seeing here is sort of the critical message of this work, is that there is no silver bullet for solving climate change But there is silver buckshot Meaning that there is an array of solutions that together can help us to solve global climate change If we get much more efficient in the way that we use energy both in transportation and buildings, if we electrify, if we slow down deforestation, if we plant trees, if we do the methane reductions that we’ve been talking about, the renewables investments, that’s what this portfolio looks like that can get us where we want to go where we can solve this problem But that is an all hands on deck conversation, and it’s one that I hope that you will continue to challenge yourselves and MIT Sloan on as you come to be part of our extended community Thank you all for being here I notice that we’re at the top of the hour and I’m about to get the hook, but I hope that this has been a enriching and interesting exploration of this topic And if you want to learn more, you can go to enroads.org to play with the tool, or you can learn more about the sustainability initiative at the website that we have placed here Thank you Jason That was fabulous Thank you all for attending As I said at the beginning of the hour, we do have our final Faculty Series tomorrow with Erin Kelly on gender and COVID And so that’s going to be really interesting So please join us for that But Jason, this was phenomenal So thank you all and I hope you all are well and staying healthy, and enjoying the holiday season Take care Thanks for having me