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Ernest Moniz on climate change, carbon pricing and the current energy crisis

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Ernest Moniz on climate change, carbon pricing and the current energy crisis

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Extreme weather will eventually force the US to put a price on carbon. Despite politics, climate change solutions are being worked on. Carbon removals are essential to net-zero goals.

These were the three distinct observations made by former US Secretary of Energy Ernest Moniz on climate change, which he shared at the Ecosperity conference hosted by Singapore's state investment company Temasek.

As of mid-2022, 46 countries were covered by carbon pricing initiatives, World Bank data showed. The US is not one of them.

Science vs sentiment

The world's second-largest carbon emitter is yet to implement a national-level carbon tax or cap and trade mechanism to curb emissions. Carbon pricing incentives are only implemented in four out of 52 US states – California, Oregon, Massachusetts, and Washington DC.

"I believe that we will, in the United States, eventually get to carbon emission's pricing," Moniz said. "And the underlying basis for that is that weird weather is going to get weirder. And the public opinion polls will continue to shift more towards demanding action."

He cited a "similar dynamic" around acid rain in the 1980s as an example when politicians argued over whether coal plants were the cause, but while they argued the science was clear and the Department of Energy was working on sulfur removal technologies.

"So the solution space was being worked on. And that's an analogy again to today where we are [with climate change]," he said. Moniz said the argument kept tipping every year towards the science because the science was getting more and more obvious.

"The private sector continuing on the track towards lower carbon across these administration boundaries is one of the most encouraging things that I have seen, because, it really says that business knows where we're going," Moniz added.

Beyond mitigation

Moniz is currently president & CEO of Energy Futures Initiative, a Washington-based nonprofit focused on the clean energy transition.

"I don't think we're going to get to net-zero directly through mitigation only. And I think most people are coming to that conclusion," Moniz said, adding that the world now needs to chart a path to negative carbon instead.

He said his organization has worked a lot to put carbon dioxide removal onto the map, but he was "getting nervous that this is getting adopted a little bit too enthusiastically to kind of make up a shortfall for mitigation."

"We've got to press on mitigation as much as we can," Moniz added.

Energy crisis

Moniz said Russia will still be "an energy superpower" after the current crisis settles down, but its customer base and production will be quite different, and China is likely to be its end-market.

He said oil markets are liquid and will rebalance eventually, but the wild card here is the withdrawal of western companies and the sanctioning of technology exports to Russia, which leaves the Chinese to move in and replace western expertise.

Moniz, a former nuclear physicist, said "Russia is the big international gorilla in the nuclear fuel cycle" and supplies more than half of the world's nuclear fuel enrichment, and around 20% of US enrichment.

"If Russia loses a significant market share somebody has to come in to fill that. And the players are China, Korea, Japan, Europe, France and potentially the US," he said. "It's got a slower fuse because nuclear reactors only refuel like once a year, maybe one and a half years. But that time will run out quickly if we don't start preparing now," he added.

Related blog: 'Disentangling' the global nuclear fuel supply chain after Russia's invasion of Ukraine

According to the World Nuclear Association website, 13 countries have enrichment production capability or near-capability, about 90% of world enrichment capacity is in the five nuclear weapons states and these countries along with Germany, Netherlands and Japan provide toll enrichment services to the commercial market.

More broadly, Moniz said the attitude towards nuclear had changed dramatically, including among environmental organizations in the US but whether the actions have changed remains to be seen.

He also said the phasing out of fossil fuels, or the "long tail," could be more of an issue for coal than natural gas, because coal is much more capital intensive, and gas is more fuel-cost intensive that can be dialed down.

"I'm not so worried about stranded assets in the natural gas case," he said, adding that more gas and renewables will move the hydrogen economy faster.

Mutually assured destruction

Moniz said Russian President Vladimir Putin, in making his rather rash statements about potentially using a nuclear weapon, has fundamentally changed the nuclear game in ways that have not been fully appreciated.

He said for many decades Russia and the US maintained nuclear weapon arsenals with both sides recognizing that the fundamental reason for these stockpiles was to prevent the other from using theirs

What Putin's saber rattling has done is to begin to confuse the difference between nuclear weapons as strategic weapons of deterrence versus battlefield weapons, Moniz said.

"That is a bad place to be going," he added.