How China is taking a role in climate action - Assistant Professor Valerie Karplus

[00:00:00:22] I'm Valerie Karplus. I'm an assistant professor at the MIT Sloan School of Management, and the Global Economics and Management Group. I'm really fascinated by the complexity and beauty of natural systems on this earth. And I think climate change is one of the greatest threats to those systems.

[00:00:18:09] And so as I thought about where I wanted to focus my time and energy in my career, I felt like my role in the process could really be finding a way for human systems to coexist with these natural systems, in ways that lead to long term sustainability. But also, long term human growth and development. And I started out actually as a natural scientist, as a biophysics and biochemistry major at Yale, duel with political science. So there was already a shadow of my future interests in science, and policy, the management of the climate and air pollution problem.

[00:01:02:05] I spent some time living in China. I came back to MIT to do my graduate work. I again, went back to China. Also, on behalf of MIT as Director of the China Energy and Climate Project at MIT. Three years later, I was fortunate to find my current position at the Sloan School of Management, as an assistant professor, where I teach, do research, and lead a terrific group of graduate students and post-docs.

[00:01:35:22] This question of how Chinese decision makers really see a number of interconnected issues around air quality, around improving quality of life, around modernizing industry, I mean, this is really the challenge that is at the heart of governing every emerging nation in the world. China happens to be large, complex, very diverse, and has very uneven levels of development across the country. So to speak of China as one place, or as one stakeholder, one mindset, I think is overly simple.

[00:02:12:12] What they're trying to do is achieve a very delicate balancing act between providing opportunities for people continuing to grow the country, but also gradually nudging, when possible, the energy system, decision making, technology adoption decisions, through the levers that they have available today. I think there's a strong group within the leadership that is very committed to seeing China lead in clean energy and clean technology. And really address its environmental problems.

[00:02:51:15] Some of the challenges I think tend to come in the implementation at the local level, for a wide range of different reasons. And there are obviously, always conflicts at the top or between industries, the interests of local governments, short term versus long term. But at the end of the day, I think decision makers in China are trying to find solutions that work today with an eye to seeing what might become more possible in the future.

[00:03:30:21] The US and China stood together in 2014, during the APEC summit, and said, on the climate issue we are committed to cooperation, and beyond that we're going to offer our pledges in advance of the Paris climate summit. So if the US were to back away from the commitments that it's already made on climate change, I think the Chinese will continue to move ahead for their own reasons, to develop their own programs to promote low carbon technologies. While in the US we may not see an impact today, longer term I think we will see our competitiveness erode on clean energy technology, and in other domains that are very relevant to thinking about how you manage in a low carbon world where energy systems could look very different.

[00:04:17:15] We see a lot of willingness and interest in China in continuing to lead. And if necessary to go it alone in global climate mitigation efforts.

[00:04:30:29] The climate problem is a global collective action problem where the costs are immediate and the benefits are not realized until far into the future. Although, it is very, very important that we start today in making those changes to our economies, to our business decision making. And this again, requires some kind of incentive.

[00:04:54:05] So carbon pricing is unequivocally economist's favorite way to address the climate problem. And the reason is that a carbon price would actually make transparent the marginal cost, or so to speak the incremental cost, of taking additional emissions reductions. In most of the carbon pricing systems we have in place, carbon prices are too low.

[00:05:19:14] So the question is how do we think strategically about getting policies in place that work today, but will lay the foundation for moving to higher carbon prices in the future by fostering the growth of clean energy technologies, changes in behavior, changes and mindset. And then when those windows of opportunity come along, politicians will be able to act, because they'll have this the support that's necessary to move to the carbon price levels that we really need.

[00:05:59:26] At MIT, I think the most unique thing about the way we study energy systems is that we really view them as an interconnected whole, where new technologies are of course important. You need to understand the details, you need to understand the costs, you need to understand the possibilities. But you also need to understand how they can work or potentially conflict with the existing configuration of the energy system.

[00:06:26:01] So it's the idea that mind and hands should work together. So we can have the best ideas in the lab, but we actually have to take them out, work them and practice, figure out what works figure out how we can reconfigure the system, how we can understand the social, and behavioral, and institutional challenges, that might be holding back this set of changes that ultimately, might lead us in a direction of decarbonization. And I think that philosophy helps us to unlock solutions that wouldn't be possible if we just approached a problem from a single discipline, or with a single method