1 00:00:15,396 --> 00:00:25,076 Speaker 1: Pushkin from Pushkin Industries. This is deep background. I'm Noah Feldman. 2 00:00:26,236 --> 00:00:30,196 Speaker 1: Last month, we all saw the devastating images from Texas. 3 00:00:30,796 --> 00:00:34,276 Speaker 1: Plunging temperatures and two severe winter storms in quick succession 4 00:00:34,676 --> 00:00:38,036 Speaker 1: led to a breakdown of the state's energy grid. More 5 00:00:38,076 --> 00:00:40,316 Speaker 1: than four and a half million homes and businesses were 6 00:00:40,396 --> 00:00:44,076 Speaker 1: left without power. Not only that, water service was disrupted 7 00:00:44,116 --> 00:00:47,156 Speaker 1: for more than twelve million people because of pipes freezing 8 00:00:47,156 --> 00:00:51,116 Speaker 1: and bursting. It was an unprecedented failure of the state's infrastructure. 9 00:00:52,076 --> 00:00:55,036 Speaker 1: This disaster in Texas was a wake up call for 10 00:00:55,316 --> 00:00:59,996 Speaker 1: places all across the country. Our infrastructure is consistently and 11 00:01:00,156 --> 00:01:05,636 Speaker 1: concerningly outdated. It often was not built to withstand extreme 12 00:01:05,716 --> 00:01:09,436 Speaker 1: climate conditions of the kind we're seeing more of era 13 00:01:09,516 --> 00:01:13,116 Speaker 1: of climate change. We don't seem to be prepared for 14 00:01:13,236 --> 00:01:18,036 Speaker 1: more frequent and severe storms. Without a serious overhaul in 15 00:01:18,076 --> 00:01:21,196 Speaker 1: the coming years, our electric grid, our water, and our 16 00:01:21,196 --> 00:01:25,156 Speaker 1: sewage systems have the capacity to fail again, and to 17 00:01:25,236 --> 00:01:29,476 Speaker 1: fail massively. Here to help us get behind the story 18 00:01:29,756 --> 00:01:33,276 Speaker 1: of what really happened in Texas and what we can 19 00:01:33,316 --> 00:01:37,796 Speaker 1: do about it going forward is Alice Hill. Alice is 20 00:01:37,836 --> 00:01:41,876 Speaker 1: one of the country's leading experts on climate resilient infrastructure. 21 00:01:42,396 --> 00:01:44,756 Speaker 1: She's now a Senior Fellow for Energy in the Environment 22 00:01:44,876 --> 00:01:47,916 Speaker 1: at the Council on Foreign Relations, but before that, she 23 00:01:48,036 --> 00:01:51,556 Speaker 1: was Special Assistant to President Obama and Senior Director for 24 00:01:51,636 --> 00:01:55,036 Speaker 1: Resilience in the White House. She led the national policy 25 00:01:55,316 --> 00:01:59,876 Speaker 1: regarding preparing for the impact of climate change. In that role, Alice, 26 00:01:59,876 --> 00:02:02,596 Speaker 1: I'm very grateful to you for joining us. Welcome to 27 00:02:02,676 --> 00:02:05,996 Speaker 1: deep background, Alice. I wonder if we could start with 28 00:02:06,116 --> 00:02:09,796 Speaker 1: you walking us through what you see as the true 29 00:02:09,916 --> 00:02:15,356 Speaker 1: root causes of the disaster that we saw in Texas, 30 00:02:15,516 --> 00:02:17,436 Speaker 1: because there, you know, there are many opinions out there 31 00:02:17,436 --> 00:02:21,156 Speaker 1: about quote unquote what really went wrong, So maybe just 32 00:02:21,276 --> 00:02:27,276 Speaker 1: start with the temperature anomaly and what its immediate consequences were. Well, 33 00:02:27,276 --> 00:02:30,956 Speaker 1: I'll have to start with the statement of temperature anomaly. 34 00:02:31,196 --> 00:02:33,796 Speaker 1: I guess it depends on how far back you want 35 00:02:33,836 --> 00:02:40,236 Speaker 1: to go, but certainly these temperatures were not an unprecedented 36 00:02:40,276 --> 00:02:45,276 Speaker 1: event for Texas. Forty years ago, they had a similar 37 00:02:45,316 --> 00:02:49,836 Speaker 1: event of at least as long duration and as least 38 00:02:50,436 --> 00:02:55,556 Speaker 1: as cold temperatures. So if you want to drill down 39 00:02:55,956 --> 00:02:59,756 Speaker 1: on what's an issue here, it's a choice not to 40 00:02:59,876 --> 00:03:05,556 Speaker 1: invest in preparedness. You choose not to prepare your grid 41 00:03:06,276 --> 00:03:10,636 Speaker 1: or extreme events, You're going to line that those extreme 42 00:03:10,676 --> 00:03:15,516 Speaker 1: events can do heavy damage, and once your electric grid fails, 43 00:03:15,636 --> 00:03:20,236 Speaker 1: it just cascades through all the other infrastructure sectors, causing 44 00:03:20,356 --> 00:03:24,796 Speaker 1: widespread damage. And with climate change, we have an added 45 00:03:24,876 --> 00:03:29,196 Speaker 1: twist the extremes that we will experience in the future 46 00:03:29,956 --> 00:03:34,556 Speaker 1: that are fueled by warmer temperatures global average warmer temperatures 47 00:03:35,196 --> 00:03:39,836 Speaker 1: will exceed the extremes in the past. So if Texas 48 00:03:39,836 --> 00:03:42,316 Speaker 1: had done its job, it would have been if the 49 00:03:42,396 --> 00:03:44,476 Speaker 1: utilities had done their job, they would have been prepared 50 00:03:44,516 --> 00:03:47,036 Speaker 1: for a cold snap like what they just saw. But 51 00:03:47,436 --> 00:03:51,396 Speaker 1: going forward, they also need to prepare for what will 52 00:03:51,476 --> 00:03:56,236 Speaker 1: be unfamiliar events, events that have never occurred in recorded 53 00:03:56,396 --> 00:04:01,636 Speaker 1: human history, and that will take perseverance and additionally money. 54 00:04:02,516 --> 00:04:04,716 Speaker 1: We'll dive into that, but I think what you said 55 00:04:04,796 --> 00:04:07,716 Speaker 1: is already really fascinating. If something was just a one 56 00:04:07,756 --> 00:04:12,236 Speaker 1: in forty year probability, would you already have thought that 57 00:04:12,276 --> 00:04:14,476 Speaker 1: If something is a one in forty year probability, let's 58 00:04:14,476 --> 00:04:20,596 Speaker 1: say that an expenditure should be made to prevent that 59 00:04:20,756 --> 00:04:24,756 Speaker 1: from having disastrous side consequences. What metric would you have 60 00:04:24,916 --> 00:04:28,556 Speaker 1: used of costs and benefits. If someone had said, yeah, 61 00:04:28,556 --> 00:04:30,956 Speaker 1: well it gets this cold in Texas every forty years, 62 00:04:31,356 --> 00:04:33,756 Speaker 1: Well you need to do a cost benefit analysis of 63 00:04:33,876 --> 00:04:37,876 Speaker 1: what are the costs of reinforcing your grid, and then 64 00:04:38,116 --> 00:04:41,636 Speaker 1: what are the potential costs that you will suffer when 65 00:04:41,636 --> 00:04:45,716 Speaker 1: that grid fails. We're hearing that it could be upwards 66 00:04:45,716 --> 00:04:49,916 Speaker 1: of ninety billion dollars worth of damage, thirty lives lost, 67 00:04:50,836 --> 00:04:55,236 Speaker 1: and there may be other consequences that are never included 68 00:04:55,356 --> 00:05:01,076 Speaker 1: in that tallly. So, in terms of looking ahead, if 69 00:05:01,076 --> 00:05:04,276 Speaker 1: you just take the basic cost benefit analysis that the 70 00:05:04,356 --> 00:05:08,956 Speaker 1: federal government has provided across the board, if we spend 71 00:05:09,196 --> 00:05:13,196 Speaker 1: one dollar now in for example, hardening our grid to 72 00:05:13,276 --> 00:05:18,396 Speaker 1: extreme weather, we save six dollars in recovery costs. Now, 73 00:05:18,396 --> 00:05:21,796 Speaker 1: there's a reason why electric grids don't want to invest 74 00:05:21,876 --> 00:05:24,596 Speaker 1: in that, because it costs more money and that will 75 00:05:24,636 --> 00:05:30,436 Speaker 1: increase rates and then you might have your rate payers upset. However, 76 00:05:30,756 --> 00:05:34,596 Speaker 1: who ultimately bears the cost when the whole system collapses, 77 00:05:35,356 --> 00:05:38,116 Speaker 1: And in this case, there'll be many people bearing the cost, 78 00:05:38,196 --> 00:05:42,636 Speaker 1: but ultimately it could also be the federal taxpayers who 79 00:05:42,716 --> 00:05:47,476 Speaker 1: have had nothing to do with the calamity that befell Texas. 80 00:05:48,276 --> 00:05:50,116 Speaker 1: I do want to talk about bearing the costs, because 81 00:05:50,116 --> 00:05:54,076 Speaker 1: I think it's vastly important. Is the one dollar spent 82 00:05:54,276 --> 00:05:57,436 Speaker 1: save six dollars later a national statistic or is it 83 00:05:57,556 --> 00:06:01,396 Speaker 1: one that could have been applied concretely in Texas? I mean, 84 00:06:01,396 --> 00:06:03,716 Speaker 1: I guess what I'm wondering is how much would it 85 00:06:03,796 --> 00:06:09,036 Speaker 1: have cost Texas to harden its infrastructure grid against cold 86 00:06:09,196 --> 00:06:12,116 Speaker 1: Whether they're by saving the ninety billion dollars, Is it 87 00:06:12,436 --> 00:06:14,996 Speaker 1: one sixth of that or is it a larger percentage. 88 00:06:15,756 --> 00:06:18,556 Speaker 1: I think it's a lower percentage. The figure that I 89 00:06:18,676 --> 00:06:23,756 Speaker 1: read is sixteen billion. We will get a lot greater 90 00:06:23,876 --> 00:06:28,556 Speaker 1: granularity going forward on this. The vulnerabilities the electric grid 91 00:06:28,676 --> 00:06:33,636 Speaker 1: in the face of climate change are huge. The costs 92 00:06:33,676 --> 00:06:37,516 Speaker 1: are significant to harden the grid against those costs. But 93 00:06:37,676 --> 00:06:41,716 Speaker 1: because our electric grid is central to human existence at 94 00:06:41,716 --> 00:06:44,836 Speaker 1: this point in a developed nation like the United States, 95 00:06:45,356 --> 00:06:49,076 Speaker 1: if we lose our grid in an extreme event, we 96 00:06:49,236 --> 00:06:53,836 Speaker 1: will have enormous costs. It's not as if this hasn't 97 00:06:53,836 --> 00:06:57,876 Speaker 1: happened before. It happened with Hurricane Sandy, and in that 98 00:06:57,996 --> 00:07:01,156 Speaker 1: instance it was a very strong storm, but it was 99 00:07:01,196 --> 00:07:03,876 Speaker 1: the fact that New York had neglected to include in 100 00:07:03,956 --> 00:07:07,196 Speaker 1: its planning that lower Manhattan had suffered about a foot 101 00:07:07,196 --> 00:07:10,676 Speaker 1: of sea level rise, and because they failed to include 102 00:07:10,676 --> 00:07:13,036 Speaker 1: that in their planning, when the storm search came in 103 00:07:13,396 --> 00:07:15,676 Speaker 1: the water, the storm surge at wall of water that 104 00:07:15,756 --> 00:07:19,236 Speaker 1: comes in front of a storm quickly overcame the flood 105 00:07:19,276 --> 00:07:22,796 Speaker 1: berriers that Manhattan had built. Those were built to assuming 106 00:07:22,876 --> 00:07:26,476 Speaker 1: a maximum of twelve feet, came in close to fourteen feet. 107 00:07:26,796 --> 00:07:31,196 Speaker 1: The water immediately poured in, a substation exploded, and the 108 00:07:31,276 --> 00:07:35,676 Speaker 1: city that Never sleeps plunged into darkness. Eight million people 109 00:07:36,236 --> 00:07:41,036 Speaker 1: along the Northeast corrid or lost power, and huge downstream 110 00:07:41,436 --> 00:07:47,276 Speaker 1: failures of transportation, healthcare, communications, And that was a sixty 111 00:07:47,276 --> 00:07:52,516 Speaker 1: billion dollar event as well. Now, in response, con Edison, 112 00:07:52,916 --> 00:07:56,916 Speaker 1: after some pressure, has really emerged as a leader in 113 00:07:57,036 --> 00:08:01,196 Speaker 1: hardening its grid to future events. Also, I'm really fascinated 114 00:08:01,236 --> 00:08:04,476 Speaker 1: by the Sandy comparison for the following reason. Part of 115 00:08:04,516 --> 00:08:09,076 Speaker 1: the narrative about what went wrong in Texas is about 116 00:08:09,116 --> 00:08:15,556 Speaker 1: out a deregulatory environment in a state that believes in deregulation, right, 117 00:08:15,596 --> 00:08:19,556 Speaker 1: a state that like Texas, self consciously separated its grid 118 00:08:19,716 --> 00:08:22,596 Speaker 1: from the grids of other states in part, at least, 119 00:08:22,596 --> 00:08:25,836 Speaker 1: as I've read, to avoid being subject to certain kinds 120 00:08:25,836 --> 00:08:28,236 Speaker 1: of federal regulation, and so we sort of think to ourselves, Oh, 121 00:08:28,396 --> 00:08:32,676 Speaker 1: Texans don't want to be regulated. But you're describing that 122 00:08:32,916 --> 00:08:38,796 Speaker 1: events of comparable consequence and of comparable error were made 123 00:08:38,996 --> 00:08:42,836 Speaker 1: in New York, which is not characterized by that kind 124 00:08:42,876 --> 00:08:47,116 Speaker 1: of deregulatory impulse. So I'm wondering were the motives in 125 00:08:47,156 --> 00:08:49,996 Speaker 1: the Sandy case for the failure to harden the grid 126 00:08:50,676 --> 00:08:54,516 Speaker 1: similar to identical to the motives in Texas, namely that, 127 00:08:54,596 --> 00:08:56,556 Speaker 1: as you said, nobody wants to spend money right now 128 00:08:56,596 --> 00:08:59,316 Speaker 1: to save money sometime in the future unless they're obligated 129 00:08:59,356 --> 00:09:02,836 Speaker 1: to do so. I think that's the largest challenge, is 130 00:09:02,956 --> 00:09:06,916 Speaker 1: that everyone's trying to run a lean machine at low costs. 131 00:09:06,916 --> 00:09:11,356 Speaker 1: But I would just point out it's not just Texas 132 00:09:11,476 --> 00:09:15,996 Speaker 1: or New York. Look at California. We have utilities that 133 00:09:16,036 --> 00:09:19,316 Speaker 1: have underinvested in preparation for the wildfires. The wildfires have 134 00:09:19,356 --> 00:09:23,636 Speaker 1: been worsened by climate change. Going forward, you have to 135 00:09:23,676 --> 00:09:29,196 Speaker 1: ask how does the world's strongest economy function when it's 136 00:09:29,236 --> 00:09:34,996 Speaker 1: grid is not up to even historical risks, much less 137 00:09:35,076 --> 00:09:37,916 Speaker 1: the future risks that climate change will bring or is 138 00:09:37,996 --> 00:09:41,316 Speaker 1: already bringing these new extremes that have never been experienced. 139 00:09:41,476 --> 00:09:44,516 Speaker 1: There was just a study issued today by one of 140 00:09:44,516 --> 00:09:48,476 Speaker 1: the major consultancies, ICF estimating that there's at least five 141 00:09:48,556 --> 00:09:50,676 Speaker 1: hundred billion dollars worth of work that needs to be 142 00:09:50,716 --> 00:09:53,316 Speaker 1: done on the electric grid to harden it to the 143 00:09:53,356 --> 00:09:56,316 Speaker 1: kinds of extremes that we will be experiencing to get 144 00:09:56,356 --> 00:10:00,596 Speaker 1: ourselves prepared for climate change. I'm genuinely fascinated by this, 145 00:10:00,756 --> 00:10:03,036 Speaker 1: by what you're saying, and I'm also really surprised by it. 146 00:10:03,156 --> 00:10:07,316 Speaker 1: So right away, there's a takeaway here that I didn't anticipate. 147 00:10:07,756 --> 00:10:09,796 Speaker 1: And if I can say it and tell me if 148 00:10:09,796 --> 00:10:12,476 Speaker 1: I'm getting it right. You know, the social psychologists and 149 00:10:12,516 --> 00:10:15,796 Speaker 1: the behavioral economists have taught us that we as humans 150 00:10:15,796 --> 00:10:22,396 Speaker 1: are really bad at calculating improbable but very bad future events. 151 00:10:22,556 --> 00:10:26,196 Speaker 1: Also in probably very good future events, we hyperbolically discount, 152 00:10:26,116 --> 00:10:28,516 Speaker 1: and we do it very badly. And if I'm hearing 153 00:10:28,516 --> 00:10:33,556 Speaker 1: you right, the failure to invest sufficiently in hardening infrastructure 154 00:10:33,756 --> 00:10:39,116 Speaker 1: against climate extremes seems to be more caused by that 155 00:10:39,396 --> 00:10:42,916 Speaker 1: human tendency that's universal. Doesn't matter what your politics are, 156 00:10:43,036 --> 00:10:45,756 Speaker 1: doesn't matter where you stand on regulation, because as you 157 00:10:45,756 --> 00:10:47,716 Speaker 1: say it, exists in New York. It existed in New York, 158 00:10:47,716 --> 00:10:50,556 Speaker 1: although it's better now. It exists in California still, and 159 00:10:50,636 --> 00:10:53,556 Speaker 1: it exists in Texas. And so from that perspective of 160 00:10:53,596 --> 00:10:56,316 Speaker 1: the version of the story that's been circulating in I 161 00:10:56,316 --> 00:10:58,436 Speaker 1: guess it would be fair to say liberal elite circles 162 00:10:58,796 --> 00:11:02,916 Speaker 1: that tends to blame Texas distinctively is kind of misplaced. 163 00:11:02,996 --> 00:11:04,596 Speaker 1: You know, I mean, Texas got it wrong, and that's 164 00:11:04,596 --> 00:11:07,436 Speaker 1: not good. But California also got it wrong, and in 165 00:11:07,476 --> 00:11:09,716 Speaker 1: the past, New York got it wrong. And that's because 166 00:11:09,756 --> 00:11:12,316 Speaker 1: we're all humans, not because some of us have one 167 00:11:12,356 --> 00:11:13,836 Speaker 1: view of regulation and some of us have a different 168 00:11:13,916 --> 00:11:17,396 Speaker 1: view of regulation. Well, I would say that what's difficult 169 00:11:17,476 --> 00:11:21,836 Speaker 1: with climate change is that because we are risk is humans, 170 00:11:21,956 --> 00:11:27,436 Speaker 1: based on our own experience, the availability bias, we tend 171 00:11:27,476 --> 00:11:30,116 Speaker 1: to think that the last extreme is the very worst 172 00:11:30,196 --> 00:11:32,916 Speaker 1: thing that could happen. When someone says, you know, I've 173 00:11:32,956 --> 00:11:35,476 Speaker 1: lived here for fifty years and this has never happened before, 174 00:11:35,516 --> 00:11:41,036 Speaker 1: it's just unprecedented. That's understandable, but it's not really particularly 175 00:11:41,076 --> 00:11:45,876 Speaker 1: newsworthy because with climate change, we are going to be 176 00:11:46,196 --> 00:11:50,196 Speaker 1: seeing successively worse events, and so the challenge is what 177 00:11:50,916 --> 00:11:54,516 Speaker 1: level of preparation do you need. In Texas' case, they 178 00:11:54,636 --> 00:12:00,956 Speaker 1: didn't invest in preparing for past extremes. In California's and 179 00:12:01,556 --> 00:12:06,676 Speaker 1: in New York's it was future extremes that had then materialized, 180 00:12:06,876 --> 00:12:11,836 Speaker 1: so it was planning from based on historical path. In Texas' case, 181 00:12:11,876 --> 00:12:15,756 Speaker 1: they actually had had this experience. In California case, they've 182 00:12:15,756 --> 00:12:19,836 Speaker 1: had a lot more development in these areas wildland urban 183 00:12:19,876 --> 00:12:24,036 Speaker 1: interface that put more people in places where fire occurs, 184 00:12:24,156 --> 00:12:28,116 Speaker 1: and then there's more ignitions and can be more flammable 185 00:12:28,356 --> 00:12:32,076 Speaker 1: materials accumulating, and a lot of other complex factors. But 186 00:12:32,236 --> 00:12:36,116 Speaker 1: in Texas, there was a choice not to prepare for 187 00:12:36,756 --> 00:12:40,076 Speaker 1: an event that had occurred forty years ago and an 188 00:12:40,076 --> 00:12:42,996 Speaker 1: event they had a cold snap in twenty eleven that 189 00:12:43,116 --> 00:12:47,156 Speaker 1: they didn't choose to change how they did business after that. 190 00:12:47,556 --> 00:12:50,876 Speaker 1: With regulation, you might see improvement on that, and that's 191 00:12:50,916 --> 00:12:54,796 Speaker 1: what we've seen with con Edison. Regulation or agreement by 192 00:12:54,796 --> 00:12:58,476 Speaker 1: the company in the course of being regulated has led 193 00:12:58,516 --> 00:13:02,076 Speaker 1: to improvement. Am I right in interpreting what I've read 194 00:13:02,156 --> 00:13:07,436 Speaker 1: to suggest that Texas wasn't subject to federal regulation here 195 00:13:07,516 --> 00:13:10,636 Speaker 1: by virtue of the way that it chose to keep 196 00:13:10,676 --> 00:13:17,196 Speaker 1: its grid separate from adjoining grids. Yes, it consciously said 197 00:13:17,316 --> 00:13:19,276 Speaker 1: we don't want to have to deal with the fits, 198 00:13:19,796 --> 00:13:25,316 Speaker 1: so we're going to keep all our generation within our state, essentially, 199 00:13:25,796 --> 00:13:30,516 Speaker 1: and had increased its vulnerability because when you're having trouble 200 00:13:30,636 --> 00:13:35,676 Speaker 1: in one area, of classic solution is to ask somebody 201 00:13:35,716 --> 00:13:38,876 Speaker 1: else nearby to lend a helping hand, and that could 202 00:13:38,876 --> 00:13:41,316 Speaker 1: be in the utility in another state that could send 203 00:13:41,556 --> 00:13:45,116 Speaker 1: transmit some power to you. But Texas had basically made 204 00:13:45,116 --> 00:13:47,196 Speaker 1: a decision that it wanted to be an island and 205 00:13:47,276 --> 00:13:51,516 Speaker 1: to itself, which increased its vulnerability. Would you think that 206 00:13:51,596 --> 00:13:54,116 Speaker 1: a good solution for this is that federal law should 207 00:13:54,156 --> 00:13:57,436 Speaker 1: be changed so that states can, assuming it's possible, which 208 00:13:57,476 --> 00:14:00,396 Speaker 1: maybe it isn't, so that states can't really opt out. 209 00:14:00,636 --> 00:14:03,596 Speaker 1: I mean, under the constitution, Congress would certainly have the 210 00:14:03,676 --> 00:14:08,076 Speaker 1: power to regulate state power grids even if they were 211 00:14:08,196 --> 00:14:10,956 Speaker 1: separate from other states, because the power grade in a 212 00:14:11,076 --> 00:14:15,116 Speaker 1: state like Texas affects the interstate economy, even if they're 213 00:14:15,156 --> 00:14:18,556 Speaker 1: not literally physically connected to the grids from other states. 214 00:14:18,556 --> 00:14:21,596 Speaker 1: So that's just a policy choice by Congress to run 215 00:14:21,636 --> 00:14:24,036 Speaker 1: the regulatory system this way. I mean ought that to 216 00:14:24,116 --> 00:14:26,716 Speaker 1: be different, so that all states, no matter where they are, 217 00:14:26,796 --> 00:14:30,796 Speaker 1: no matter what choices they make, are subject to federal regulation. Well, 218 00:14:30,836 --> 00:14:36,956 Speaker 1: you've raised essential point when it comes to climate change, 219 00:14:37,556 --> 00:14:43,636 Speaker 1: because under our current system, the federal government largely differs 220 00:14:43,756 --> 00:14:47,596 Speaker 1: on these decisions to state and local authorities, and that 221 00:14:47,676 --> 00:14:55,636 Speaker 1: includes regulation of land use, regulation of building codes. And 222 00:14:55,676 --> 00:14:58,596 Speaker 1: what we get is a patchwork across the United States, 223 00:14:59,036 --> 00:15:02,836 Speaker 1: and in the area of building codes, all of our 224 00:15:02,876 --> 00:15:06,676 Speaker 1: building codes at this point only look to historic past. 225 00:15:07,116 --> 00:15:10,156 Speaker 1: We don't yet even have model that really look to 226 00:15:10,196 --> 00:15:14,396 Speaker 1: the future. But even with our history model codes that 227 00:15:14,436 --> 00:15:18,636 Speaker 1: look to protect us from extremes of the past, more 228 00:15:18,636 --> 00:15:21,356 Speaker 1: than fifty percent of the states don't even bother to 229 00:15:21,396 --> 00:15:25,596 Speaker 1: adopt those codes, including states that are in the path 230 00:15:25,916 --> 00:15:30,916 Speaker 1: of frequent extreme events. So that is just a decision 231 00:15:31,036 --> 00:15:34,076 Speaker 1: that we've said constitutionally, we're going to let the state 232 00:15:34,076 --> 00:15:39,316 Speaker 1: and locals make this decision. But this collides with the 233 00:15:39,356 --> 00:15:43,356 Speaker 1: expectation that has now grown among Americans that when things 234 00:15:43,396 --> 00:15:45,716 Speaker 1: go wrong, the federal government's going to bail us out. 235 00:15:46,676 --> 00:15:50,036 Speaker 1: So you saw Texas said, oh, look this is terrible, 236 00:15:50,156 --> 00:15:53,916 Speaker 1: we need help federal government, And we see that all 237 00:15:54,036 --> 00:15:57,236 Speaker 1: the time. And we've also seen a paradigm that shifted 238 00:15:57,396 --> 00:16:03,836 Speaker 1: from Eisenhower's time, when basically before Eisenhower, local communities were told, yeah, 239 00:16:03,836 --> 00:16:06,116 Speaker 1: you get to make your choices locally about what you do, 240 00:16:06,556 --> 00:16:09,516 Speaker 1: but you also are going to take care of the disaster. 241 00:16:09,916 --> 00:16:12,356 Speaker 1: We're just we'll send you help with the Red Cross. 242 00:16:12,436 --> 00:16:15,396 Speaker 1: At the federal government, we're not in the disaster recovering business. 243 00:16:16,556 --> 00:16:21,036 Speaker 1: But that changed with Dwight Eisenhower. And from a very 244 00:16:21,276 --> 00:16:25,196 Speaker 1: modest like I think it was about five hundred thousand 245 00:16:25,276 --> 00:16:29,596 Speaker 1: dollars or something under Dwight Eisenhower, it's now the federal 246 00:16:29,636 --> 00:16:35,316 Speaker 1: government typically pays seventy percent, sometimes ninety percent, and often 247 00:16:35,476 --> 00:16:38,836 Speaker 1: one hundred percent of disaster recovery in these big events. 248 00:16:39,396 --> 00:16:42,116 Speaker 1: So you've got state and locals making choices about how 249 00:16:42,156 --> 00:16:46,356 Speaker 1: they want to live, and those choices often involve significant risk. 250 00:16:46,916 --> 00:16:50,396 Speaker 1: Living in floodplains, living in areas prone to fire, and 251 00:16:50,516 --> 00:16:57,156 Speaker 1: building codes that are not floodproof or fireproof. Bad things happen, 252 00:16:58,036 --> 00:17:01,796 Speaker 1: huge losses, and then Congress says, oh, yes, we need 253 00:17:01,836 --> 00:17:05,076 Speaker 1: a bailout. Saint Paulson who called these climate bailouts, and 254 00:17:05,076 --> 00:17:08,356 Speaker 1: he astutely observed that it will be very hard to 255 00:17:08,396 --> 00:17:11,476 Speaker 1: turn off the spick it on climate bailouts. And that's 256 00:17:11,476 --> 00:17:15,796 Speaker 1: why it's so important to encourage local communities and states 257 00:17:15,836 --> 00:17:19,356 Speaker 1: to invest in risk production so we get take advantage 258 00:17:19,356 --> 00:17:22,596 Speaker 1: of this one to six ratio. You're really describing a 259 00:17:22,676 --> 00:17:25,916 Speaker 1: tremendous moral hazard problem. I mean, it's polite of you 260 00:17:25,956 --> 00:17:28,556 Speaker 1: to say that we should encourage the states, but the 261 00:17:28,556 --> 00:17:31,796 Speaker 1: truth is, if the states can spend less and then 262 00:17:31,836 --> 00:17:34,076 Speaker 1: be bailed out by the whole country, by the taxpayers 263 00:17:34,076 --> 00:17:37,876 Speaker 1: of the whole country, their incentive is precisely to underinvest. 264 00:17:38,276 --> 00:17:41,276 Speaker 1: I mean, that's you know, it sounds like you're making 265 00:17:41,276 --> 00:17:45,516 Speaker 1: a case for requiring the states to invest in hardening infrastructure, 266 00:17:45,596 --> 00:17:47,796 Speaker 1: not a case for encouraging it. I mean, you're being polite, 267 00:17:48,036 --> 00:17:51,076 Speaker 1: but it sounds like, given the incentives you're describing, if 268 00:17:51,116 --> 00:17:52,676 Speaker 1: you and I and the tax payers everywhere else in 269 00:17:52,676 --> 00:17:54,876 Speaker 1: the country are going to be paying for it, we 270 00:17:54,956 --> 00:17:59,636 Speaker 1: should be upfront demanding that and requiring as a matter 271 00:17:59,676 --> 00:18:03,676 Speaker 1: of law that individual states invest enough that they don't 272 00:18:03,676 --> 00:18:07,356 Speaker 1: have to be bailed out. Well, I agree with that policy, 273 00:18:07,836 --> 00:18:11,876 Speaker 1: but it turns out it's very difficult to gain the 274 00:18:11,916 --> 00:18:16,396 Speaker 1: political will to implement such policy. In the Obama administration, 275 00:18:16,476 --> 00:18:20,716 Speaker 1: there was an idea of a disaster deductible. So essentially, 276 00:18:21,116 --> 00:18:26,876 Speaker 1: if states would invest more in pre disaster reduction of risk, 277 00:18:26,996 --> 00:18:31,956 Speaker 1: better building codes, better land use practices, better investments in 278 00:18:31,996 --> 00:18:37,556 Speaker 1: their electric grid, when the disaster hit, the federal government 279 00:18:37,636 --> 00:18:41,716 Speaker 1: would pay more a higher percentage to that state of 280 00:18:41,756 --> 00:18:45,596 Speaker 1: their losses in recognition that they'd already spent money in 281 00:18:46,116 --> 00:18:50,116 Speaker 1: risk production. And those who chose like Texas, which has 282 00:18:50,196 --> 00:18:53,756 Speaker 1: not historically had strong building codes or land use practices 283 00:18:53,876 --> 00:18:58,716 Speaker 1: or electric grid requirements, you would say under that scenario, well, 284 00:18:58,756 --> 00:19:01,196 Speaker 1: you chose not to because you wanted to keep your 285 00:19:01,196 --> 00:19:03,596 Speaker 1: tax base a high and you wanted to attract all 286 00:19:03,596 --> 00:19:05,716 Speaker 1: this investment, but you didn't want to have the higher 287 00:19:05,756 --> 00:19:08,836 Speaker 1: prices of the homes in the land develop use issues. 288 00:19:09,236 --> 00:19:13,116 Speaker 1: So you will pay more in post disaster. You're going 289 00:19:13,156 --> 00:19:16,276 Speaker 1: to pick up more of the tab that it got 290 00:19:16,316 --> 00:19:21,116 Speaker 1: all the way to comment under Obama in the rags, 291 00:19:21,596 --> 00:19:24,716 Speaker 1: it was very quiet. Under Trump, I think it will 292 00:19:24,796 --> 00:19:28,836 Speaker 1: be difficult. The politics of it are so difficult. We 293 00:19:28,916 --> 00:19:31,516 Speaker 1: do have one example where we have successfully done this 294 00:19:31,596 --> 00:19:33,796 Speaker 1: as a nation, at least one and that is on 295 00:19:33,836 --> 00:19:37,236 Speaker 1: our barrier islands. We have passed the Coastal Barrier Act 296 00:19:37,316 --> 00:19:41,716 Speaker 1: in the sixties that essentially said, in those areas, we're 297 00:19:41,756 --> 00:19:44,796 Speaker 1: not going to give any more federal money to development 298 00:19:44,796 --> 00:19:47,356 Speaker 1: in those areas, and if a disaster occurs, you're on 299 00:19:47,436 --> 00:19:50,876 Speaker 1: your own. So we essentially said the federal government's interest, 300 00:19:51,036 --> 00:19:54,316 Speaker 1: it's just those areas are too vulnerable. The local communities 301 00:19:54,356 --> 00:19:56,036 Speaker 1: can go ahead and do it, but we're not going 302 00:19:56,076 --> 00:20:00,156 Speaker 1: to be supporting it, and that has held. We'll be 303 00:20:00,276 --> 00:20:12,436 Speaker 1: right back. Let's talk a little more about where the 304 00:20:12,516 --> 00:20:17,596 Speaker 1: costs of this disaster have already fallen. One of the 305 00:20:17,676 --> 00:20:22,516 Speaker 1: issues that's gotten the most attention is that some individuals 306 00:20:22,836 --> 00:20:28,516 Speaker 1: and also some energy businesses basically had versions of contracts 307 00:20:29,236 --> 00:20:34,036 Speaker 1: where they would get a lower price of service for 308 00:20:34,716 --> 00:20:38,316 Speaker 1: the ordinary days in exchange for the idea that when 309 00:20:38,796 --> 00:20:43,596 Speaker 1: costs went up, they would pay some proportion of the 310 00:20:43,636 --> 00:20:47,116 Speaker 1: wholesale costs of energy, which is, in principle, was supposed 311 00:20:47,116 --> 00:20:48,796 Speaker 1: to be a fair contract. Right, I get a lower 312 00:20:48,836 --> 00:20:50,436 Speaker 1: price when the price is low, and then I pay 313 00:20:50,436 --> 00:20:53,516 Speaker 1: a higher price when the price is high. Then, for 314 00:20:53,556 --> 00:20:58,676 Speaker 1: a brief time, some number of days during the disaster, 315 00:20:59,036 --> 00:21:03,716 Speaker 1: when electricity went offline, the price of power skyrocket to 316 00:21:03,836 --> 00:21:08,396 Speaker 1: an enormous set of prices enough that it could bankrupt 317 00:21:08,876 --> 00:21:13,276 Speaker 1: ordinary people with some enormous power bills. Are contracts like 318 00:21:13,316 --> 00:21:16,756 Speaker 1: that just flat out irrational? Should we not be allowing 319 00:21:16,756 --> 00:21:19,316 Speaker 1: those kind of contracts at all because of the fact 320 00:21:19,396 --> 00:21:22,476 Speaker 1: that at the extreme they have these effects, or are 321 00:21:22,516 --> 00:21:26,316 Speaker 1: those contracts that actually would be morally justifiable provided that 322 00:21:26,356 --> 00:21:29,076 Speaker 1: they're actually carried through, you know, provided that you save 323 00:21:29,116 --> 00:21:30,636 Speaker 1: money when you save it, and then when you when 324 00:21:30,636 --> 00:21:31,876 Speaker 1: it costs a lot of money, you have to pay 325 00:21:31,916 --> 00:21:34,076 Speaker 1: the money. Well, I think this is a point where 326 00:21:34,116 --> 00:21:40,356 Speaker 1: the market collides with people's expectations. And yes, the Harvard 327 00:21:40,516 --> 00:21:44,876 Speaker 1: professor who helped construct the Texas system said the system 328 00:21:44,956 --> 00:21:48,676 Speaker 1: was working as it was supposed to when when their 329 00:21:48,756 --> 00:21:51,556 Speaker 1: resources scarce, the price is supposed to go go up. 330 00:21:52,276 --> 00:21:55,036 Speaker 1: But we're talking about ordinary humans at the other end 331 00:21:55,036 --> 00:21:57,916 Speaker 1: of this, and sometimes it's the utilities, but sometimes it's 332 00:21:57,916 --> 00:22:00,236 Speaker 1: going to be the individuals who were just shopping around 333 00:22:00,236 --> 00:22:05,076 Speaker 1: for a cheap break. And we're not investigating what would 334 00:22:05,156 --> 00:22:08,356 Speaker 1: happen if there's a forty year event that shuts down 335 00:22:08,356 --> 00:22:11,436 Speaker 1: the entire group in Texas and they have trouble generating 336 00:22:11,436 --> 00:22:16,276 Speaker 1: power that's just beyond the average consumer. And I think 337 00:22:16,276 --> 00:22:19,316 Speaker 1: it's naive for us to expect the average consumer would 338 00:22:19,516 --> 00:22:23,396 Speaker 1: in fact investigate that. So that's why it's shocking when 339 00:22:23,396 --> 00:22:26,476 Speaker 1: we hear these numbers. No one contemplated it when they 340 00:22:26,476 --> 00:22:30,076 Speaker 1: were entering it, certainly as an ordinary investor and probably 341 00:22:30,596 --> 00:22:34,676 Speaker 1: even sophisticated investors. Because of the availability bias and our 342 00:22:34,756 --> 00:22:38,076 Speaker 1: optimism bias, we think these bad things won't happen. We 343 00:22:38,196 --> 00:22:40,996 Speaker 1: never really pencil it out how bad it could be 344 00:22:41,076 --> 00:22:44,756 Speaker 1: and that it could drive us into bankruptcy. But when 345 00:22:44,756 --> 00:22:48,556 Speaker 1: we're dealing with extreme events, I think regulation is appropriate 346 00:22:49,196 --> 00:22:54,116 Speaker 1: because they're not ordinary events. There are events that are 347 00:22:54,236 --> 00:22:58,196 Speaker 1: not in the ordinary course of business. So just as 348 00:22:58,196 --> 00:23:01,156 Speaker 1: we need insurance for in case we have a terrible 349 00:23:01,196 --> 00:23:04,476 Speaker 1: car accident, we want insurance on our best and most 350 00:23:04,516 --> 00:23:09,396 Speaker 1: important assets, our home. We need to find ways to 351 00:23:09,396 --> 00:23:13,836 Speaker 1: provide insurance but also regulate this market. For me, it's 352 00:23:13,876 --> 00:23:17,676 Speaker 1: a bit of an analogy of these building codes. Building 353 00:23:17,716 --> 00:23:21,876 Speaker 1: codes have been around for thousands of years. People have 354 00:23:21,996 --> 00:23:26,476 Speaker 1: recognized for a long time that it's too hard for 355 00:23:26,516 --> 00:23:29,636 Speaker 1: the purchaser to figure out whether their house is sound 356 00:23:29,756 --> 00:23:32,956 Speaker 1: or not. We need building codes to help us make 357 00:23:32,996 --> 00:23:37,116 Speaker 1: those judgments, and that's where regulation can help drive better outcomes. 358 00:23:37,236 --> 00:23:41,516 Speaker 1: I think regulation of the electricity grid, for in terms 359 00:23:41,556 --> 00:23:45,356 Speaker 1: of hardening and in terms of limits on the extremes 360 00:23:46,196 --> 00:23:50,036 Speaker 1: of the prices, is just sound business. What we'll see 361 00:23:50,116 --> 00:23:53,476 Speaker 1: now is a lot of finger pointing saying you left 362 00:23:53,516 --> 00:23:56,036 Speaker 1: those prices too high. I saw that article this morning. 363 00:23:56,036 --> 00:23:59,636 Speaker 1: For too long and we will see a lot of 364 00:23:59,676 --> 00:24:03,276 Speaker 1: people trying to get out of these agreements. As a 365 00:24:03,316 --> 00:24:06,316 Speaker 1: former lawyer and judge, and I'm sure you appreciate the 366 00:24:06,436 --> 00:24:08,276 Speaker 1: lawyers are going to have a field day with this 367 00:24:08,396 --> 00:24:10,756 Speaker 1: for a long time. This will be in the courts, 368 00:24:10,836 --> 00:24:16,356 Speaker 1: the insurers, those who drafted the contracts. Lawyers will have 369 00:24:16,556 --> 00:24:19,396 Speaker 1: a lot to work with. So why not design a 370 00:24:19,436 --> 00:24:24,116 Speaker 1: system that can deal with these extremes and put those aside, 371 00:24:24,876 --> 00:24:29,276 Speaker 1: versus leaving ourselves so vulnerable and then spending a lot 372 00:24:29,316 --> 00:24:33,276 Speaker 1: on the cleanup. Since you are a lawyer and a 373 00:24:33,316 --> 00:24:37,636 Speaker 1: former judge, what are your intuitions. I'm not asking you 374 00:24:37,916 --> 00:24:39,956 Speaker 1: to decide on the legal issues, which obviously will be 375 00:24:40,036 --> 00:24:42,916 Speaker 1: very complexibill depend on the individual contracts. But do you 376 00:24:42,956 --> 00:24:44,996 Speaker 1: have a view about the question of what we should 377 00:24:45,036 --> 00:24:47,556 Speaker 1: do here. I mean, I'm very sympathetic to your view 378 00:24:47,596 --> 00:24:51,476 Speaker 1: that we should have regulation that doesn't allow contracts that 379 00:24:51,596 --> 00:24:55,356 Speaker 1: have the effect of bankrupting people for events that they 380 00:24:55,476 --> 00:24:59,156 Speaker 1: should have rationally as a pure economic rational actors calculated, 381 00:24:59,316 --> 00:25:02,516 Speaker 1: but in fact being mere humans that they didn't. I'm 382 00:25:02,556 --> 00:25:05,436 Speaker 1: a little less sympathetic. When it's a sophisticated economic actor 383 00:25:05,996 --> 00:25:08,676 Speaker 1: like a power company on its own, then I'm a 384 00:25:08,676 --> 00:25:10,476 Speaker 1: little more were inclined to say that they should be 385 00:25:10,676 --> 00:25:13,036 Speaker 1: they should have to say that they should have a 386 00:25:13,116 --> 00:25:14,996 Speaker 1: chance to sign a contract like this, dumb as it 387 00:25:15,036 --> 00:25:17,316 Speaker 1: may be, and be that they should be held to 388 00:25:17,356 --> 00:25:20,596 Speaker 1: account when they did sign such a contract. But do 389 00:25:20,596 --> 00:25:25,596 Speaker 1: you have a view, broadly speaking about whether either individuals 390 00:25:25,836 --> 00:25:30,436 Speaker 1: or businesses that are getting these enormous bills should actually 391 00:25:30,476 --> 00:25:32,436 Speaker 1: now have to pay them. Quite apart from the question 392 00:25:32,436 --> 00:25:34,756 Speaker 1: of whether we should allow people to enter contracts like 393 00:25:34,796 --> 00:25:37,796 Speaker 1: this in the first place, I would need to think 394 00:25:37,876 --> 00:25:43,756 Speaker 1: deeply about how much we can let people get out 395 00:25:43,796 --> 00:25:48,396 Speaker 1: of their contractual commitments. You know, they'll be that this 396 00:25:48,516 --> 00:25:52,996 Speaker 1: is an act of God forcemdu. I think going forward, 397 00:25:53,316 --> 00:25:56,716 Speaker 1: we need to say we don't want this to happen again, 398 00:25:57,356 --> 00:26:00,316 Speaker 1: and so what are the parameters we're going to put 399 00:26:00,356 --> 00:26:04,276 Speaker 1: on a system through regulation that keep this from happening? 400 00:26:05,116 --> 00:26:11,796 Speaker 1: And the thing that most people don't realize is that 401 00:26:12,236 --> 00:26:16,116 Speaker 1: this is the tip of an iceberg. It's going to 402 00:26:16,196 --> 00:26:20,556 Speaker 1: be repeated, not necessarily the deregulation of Texas, but the 403 00:26:20,636 --> 00:26:23,036 Speaker 1: failure of electric grids are going to be repeated across 404 00:26:23,076 --> 00:26:27,116 Speaker 1: the nation. And we need to talk now about what 405 00:26:27,196 --> 00:26:31,036 Speaker 1: we are going to require of the providers of critical 406 00:26:31,076 --> 00:26:36,316 Speaker 1: infrastructure and critical services to do to understand their future 407 00:26:36,396 --> 00:26:38,556 Speaker 1: risk from climate change and what they're going to do 408 00:26:38,636 --> 00:26:41,996 Speaker 1: about it. And I do believe that that will require 409 00:26:42,076 --> 00:26:45,316 Speaker 1: a major overhaul of how we do business. You're seeing 410 00:26:45,356 --> 00:26:49,916 Speaker 1: this emerge very starkly in the financial markets. You've seen 411 00:26:49,956 --> 00:26:53,596 Speaker 1: the Bank of Villian England impose a stress testing. New 412 00:26:53,676 --> 00:26:56,436 Speaker 1: Zealand has said it's going to require financial disclosure of 413 00:26:56,476 --> 00:27:00,676 Speaker 1: climate risk across its market. Switzerland has also indicated it's 414 00:27:00,676 --> 00:27:04,516 Speaker 1: looking at the same Canada tide. It's stimulus to disclosure 415 00:27:04,756 --> 00:27:07,636 Speaker 1: for large corporations, and France has already been doing this 416 00:27:07,676 --> 00:27:11,236 Speaker 1: since twenty sixteen for its thanks. We need to be 417 00:27:11,996 --> 00:27:18,356 Speaker 1: thinking about a similar system to require our executives to 418 00:27:18,556 --> 00:27:23,076 Speaker 1: begin to think about these risks that tend to be 419 00:27:23,196 --> 00:27:29,196 Speaker 1: viewed as black swans or things that won't happen, but now, 420 00:27:29,596 --> 00:27:34,196 Speaker 1: particularly with climate change, these are high consequence risks and 421 00:27:34,236 --> 00:27:38,396 Speaker 1: they're no longer low probability, they're now high probability. But 422 00:27:38,476 --> 00:27:41,516 Speaker 1: we have not changed our thinking to reflect that yet. 423 00:27:42,556 --> 00:27:45,436 Speaker 1: And I'll just leave you this just a stunning study 424 00:27:45,516 --> 00:27:49,116 Speaker 1: to me. MU Business School Stern Business School did a 425 00:27:49,156 --> 00:27:54,636 Speaker 1: study in twenty nineteen of the directors for the Fortune 426 00:27:54,676 --> 00:27:57,436 Speaker 1: one hundred companies looking at there did a survey of 427 00:27:57,436 --> 00:28:03,436 Speaker 1: their biographical information. It looked at it for ESG, environmental, sustainability, 428 00:28:03,436 --> 00:28:07,716 Speaker 1: and governance. When it got to the environment category, they 429 00:28:07,796 --> 00:28:12,436 Speaker 1: were out of eleven eighty eight directors and these are 430 00:28:12,516 --> 00:28:19,116 Speaker 1: running our top corporations, only five people, not five percent, 431 00:28:19,756 --> 00:28:25,236 Speaker 1: five people cited any climate change background. Meanwhile, we have 432 00:28:25,356 --> 00:28:29,636 Speaker 1: these huge events just coming along quickly and growing in intensity, 433 00:28:30,756 --> 00:28:32,956 Speaker 1: but we are ill prepared. So you've seen the financial 434 00:28:32,956 --> 00:28:35,356 Speaker 1: markets already saying we get it, we're probably going to 435 00:28:35,396 --> 00:28:37,516 Speaker 1: get regulated, so we're going to try to get ahead 436 00:28:37,516 --> 00:28:40,356 Speaker 1: of this. And in the utilities we're going to need 437 00:28:40,396 --> 00:28:42,796 Speaker 1: to do the same so that they're prepared. But it's 438 00:28:42,836 --> 00:28:46,636 Speaker 1: not just utilities. It's your wastewater treatment plants, it's your dams, 439 00:28:47,036 --> 00:28:51,196 Speaker 1: it's your bridges, every piece of infrastructure communications is vulnerable 440 00:28:51,196 --> 00:28:54,996 Speaker 1: to climate change impacts going forward. Alice, you have something 441 00:28:55,036 --> 00:28:58,596 Speaker 1: like a patent on the term resilience. In the Obama 442 00:28:58,596 --> 00:29:01,796 Speaker 1: White House, you were senior director for resilience. You've written 443 00:29:01,796 --> 00:29:04,676 Speaker 1: a book about how he can be resilient. Tell me 444 00:29:04,716 --> 00:29:10,076 Speaker 1: what resilience means to you, not only in the infrastructure context, 445 00:29:10,236 --> 00:29:13,276 Speaker 1: but more broadly. I mean it. It's one of those 446 00:29:13,276 --> 00:29:16,076 Speaker 1: sort of master terms of our era. Say say more 447 00:29:16,076 --> 00:29:20,196 Speaker 1: about it for me, Sure you know resilience. For me, 448 00:29:20,396 --> 00:29:26,676 Speaker 1: it means essentially the ability to prepare, for, withstand, and 449 00:29:26,836 --> 00:29:31,196 Speaker 1: respond to extreme events, and so that means that it 450 00:29:31,236 --> 00:29:36,756 Speaker 1: would include future extremes. But it's useful, and it's particularly 451 00:29:36,876 --> 00:29:41,716 Speaker 1: useful with a politically charged topic like climate change. Some 452 00:29:41,756 --> 00:29:44,356 Speaker 1: politicians want to talk about resilience when they don't want 453 00:29:44,396 --> 00:29:48,636 Speaker 1: to talk about adaptation because adaptation reads climate change, resilience 454 00:29:48,756 --> 00:29:53,276 Speaker 1: reads I don't have to have an opinion on climate change. Alice, 455 00:29:53,316 --> 00:29:56,636 Speaker 1: you lay out seven principles of resilience in your book. 456 00:29:56,876 --> 00:30:00,276 Speaker 1: Would you give us some highlights from the Big seven? Well, 457 00:30:00,316 --> 00:30:04,716 Speaker 1: there are seven key principles that we're developed through a 458 00:30:04,796 --> 00:30:08,636 Speaker 1: group co chaired focusing on what do we do to 459 00:30:08,756 --> 00:30:12,436 Speaker 1: have better outcomes for infrastructure in the phase of extreme 460 00:30:12,676 --> 00:30:16,796 Speaker 1: weather from climate change. A few of those are particularly 461 00:30:16,836 --> 00:30:23,556 Speaker 1: apt for the situation we're facing now in Texas. The 462 00:30:23,596 --> 00:30:26,276 Speaker 1: first thing is we need to no longer think of 463 00:30:26,516 --> 00:30:32,796 Speaker 1: infrastructure is separate components, that if we just protect one component, 464 00:30:33,316 --> 00:30:37,396 Speaker 1: we will be protecting everything else. The world is so 465 00:30:37,476 --> 00:30:41,836 Speaker 1: interconnected now. These systems are so interconnected and all of 466 00:30:41,876 --> 00:30:44,916 Speaker 1: them are connected to the grid that if we have 467 00:30:45,116 --> 00:30:48,516 Speaker 1: one system go down, it's a bit like dominoes, just 468 00:30:48,676 --> 00:30:52,876 Speaker 1: everything else collapses along the way. We also need to 469 00:30:52,956 --> 00:30:55,996 Speaker 1: think in terms of multi hazards, so we tend to 470 00:30:56,036 --> 00:31:02,036 Speaker 1: think just a flood problem, for example. But we have 471 00:31:02,196 --> 00:31:07,036 Speaker 1: had one of the most painful examples of what we 472 00:31:07,276 --> 00:31:11,076 Speaker 1: can and should plan for with the pandemic. So in 473 00:31:11,116 --> 00:31:15,556 Speaker 1: the midst of this pandemic, we've had thirty named storms 474 00:31:15,596 --> 00:31:18,356 Speaker 1: in the Atlantic, so many named storms that we had 475 00:31:18,396 --> 00:31:22,356 Speaker 1: to use the Greek alphabet. We've seen the hottest temperatures 476 00:31:22,356 --> 00:31:25,516 Speaker 1: that we've seen, we believe, ever recorded on the earth 477 00:31:25,556 --> 00:31:30,876 Speaker 1: in the aptly named Death Valley in California. We've seen 478 00:31:32,636 --> 00:31:37,876 Speaker 1: unprecedented cyclones and wildfires that have driven people out of 479 00:31:37,916 --> 00:31:42,316 Speaker 1: their home seeking shelter and putting them at higher risk 480 00:31:42,476 --> 00:31:48,356 Speaker 1: for infection from COVID nineteen. Our firefighters, our emergency managers 481 00:31:48,436 --> 00:31:51,996 Speaker 1: have all been put at greater risk during these events. 482 00:31:52,556 --> 00:31:56,916 Speaker 1: So we need to plan and think through that. We 483 00:31:57,076 --> 00:32:00,516 Speaker 1: are in a world now where we are going to 484 00:32:00,556 --> 00:32:06,996 Speaker 1: have compounding events, close in time events, simultaneous consecutive events. 485 00:32:07,316 --> 00:32:09,356 Speaker 1: We're just going to get hit a lot, and that 486 00:32:09,436 --> 00:32:13,116 Speaker 1: requires us to rethink instead of just preparing for one 487 00:32:13,636 --> 00:32:18,396 Speaker 1: particular hazard. And then I think the last end for 488 00:32:18,676 --> 00:32:22,956 Speaker 1: Texans right now, as they plan going forward, we should 489 00:32:22,996 --> 00:32:26,716 Speaker 1: always be anticipating that. Of course we are going to 490 00:32:26,756 --> 00:32:31,196 Speaker 1: suffer bad events, but how can we plan now to 491 00:32:31,236 --> 00:32:34,956 Speaker 1: build back better in the future. Where can we identify 492 00:32:35,156 --> 00:32:40,516 Speaker 1: to make improvements if something gets destroyed or something is damaged. 493 00:32:40,876 --> 00:32:43,996 Speaker 1: How can we come back bigger, stronger, better in the 494 00:32:44,076 --> 00:32:48,716 Speaker 1: face of disaster, And that usually requires planning and thinking 495 00:32:48,756 --> 00:32:52,716 Speaker 1: through where we can spend our precious dollars most effectively. 496 00:32:53,516 --> 00:32:56,556 Speaker 1: Lots we can do here. There is reason for optimism, 497 00:32:57,356 --> 00:32:59,996 Speaker 1: and there's hope for all of us to be engaged 498 00:33:00,116 --> 00:33:04,676 Speaker 1: in ensuring that we have a bright future ahead. As 499 00:33:04,716 --> 00:33:06,756 Speaker 1: I wonder if I could close on a personal note, 500 00:33:06,996 --> 00:33:10,756 Speaker 1: I'm amazed by your career path You ran the white 501 00:33:10,756 --> 00:33:14,076 Speaker 1: collar crime unit in the US Attorney's Office in Los Angeles, 502 00:33:14,116 --> 00:33:16,396 Speaker 1: which is a very high powered job to have had 503 00:33:16,436 --> 00:33:18,716 Speaker 1: in criminal law. You were a judge on the Superior 504 00:33:18,756 --> 00:33:21,836 Speaker 1: Court in Los Angeles, and then you ended up as 505 00:33:21,916 --> 00:33:27,916 Speaker 1: the true maven of preparing for responding to extreme climate 506 00:33:27,916 --> 00:33:32,276 Speaker 1: events within this resilience framework, what was the pathway that 507 00:33:32,356 --> 00:33:37,396 Speaker 1: shifted you from the very distinguished career in criminal justice 508 00:33:37,916 --> 00:33:40,356 Speaker 1: to the very distinguished career that you've had in the 509 00:33:40,596 --> 00:33:44,516 Speaker 1: totally unrelated I would think area of preparing our country 510 00:33:44,556 --> 00:33:50,276 Speaker 1: for climate change. Well, here's the essential piece of career 511 00:33:50,316 --> 00:33:53,916 Speaker 1: advice I can share. Be nice to those who sit 512 00:33:53,996 --> 00:33:58,516 Speaker 1: next to In law school, I sat next to Janet Napolitano, 513 00:33:59,316 --> 00:34:03,276 Speaker 1: and in two thousand and nine, she knew that I 514 00:34:03,356 --> 00:34:08,516 Speaker 1: was getting a little tired of being a judge being 515 00:34:08,556 --> 00:34:12,476 Speaker 1: dispute resolution. I deeply admire our judges. They shoulder a 516 00:34:12,516 --> 00:34:16,316 Speaker 1: great deal of responsibility and it can often be heartbreaking 517 00:34:16,636 --> 00:34:19,476 Speaker 1: the choices that they have to make. After over a 518 00:34:19,516 --> 00:34:23,876 Speaker 1: dozen years as a judge, I knew that I didn't 519 00:34:23,876 --> 00:34:26,836 Speaker 1: want to spend the rest of my career in dispute resolution. 520 00:34:27,356 --> 00:34:29,916 Speaker 1: I'm in a different form of dispute resolution when you're 521 00:34:29,916 --> 00:34:33,356 Speaker 1: in policymaking, but not head on, where there's a winner 522 00:34:33,356 --> 00:34:36,876 Speaker 1: and a loser every day with every case in courtrooms 523 00:34:36,876 --> 00:34:40,316 Speaker 1: across the country. So she knew that I was interested 524 00:34:40,356 --> 00:34:42,596 Speaker 1: in a career change, and she asked me. She called 525 00:34:42,636 --> 00:34:44,716 Speaker 1: me up and said, hey, what do you think about 526 00:34:44,716 --> 00:34:48,796 Speaker 1: coming to Washington? And after thinking about it for a 527 00:34:48,876 --> 00:34:51,316 Speaker 1: little while, I'm figuring out how to make that be 528 00:34:51,436 --> 00:34:54,596 Speaker 1: a success for my family, I chose to go. And 529 00:34:54,996 --> 00:34:58,836 Speaker 1: one of the very first assignments I got was this 530 00:34:58,916 --> 00:35:02,836 Speaker 1: issue of climate change. And the reason I got it 531 00:35:02,876 --> 00:35:07,196 Speaker 1: is because I was sitting around a large conference room 532 00:35:07,196 --> 00:35:09,236 Speaker 1: with a bunch of senior leaders from the Department the 533 00:35:09,236 --> 00:35:14,076 Speaker 1: Homeland Security, which, as you know, is the third largest 534 00:35:14,116 --> 00:35:17,196 Speaker 1: agency in the federal government, over two hundred thousand employees, 535 00:35:17,316 --> 00:35:25,276 Speaker 1: responsible for immigration, emergency management, our coastal waterways. And President 536 00:35:25,276 --> 00:35:28,716 Speaker 1: Obama just signed an executive order requiring agencies to engage 537 00:35:28,716 --> 00:35:32,396 Speaker 1: in adaptation planning in two thousand and nine, and to 538 00:35:32,516 --> 00:35:36,076 Speaker 1: some extent still now, climate change was not mute as 539 00:35:36,116 --> 00:35:40,236 Speaker 1: a career enhancer. It as a something that would probably 540 00:35:40,316 --> 00:35:42,596 Speaker 1: hurt you in your career. In fact, I was advised 541 00:35:42,676 --> 00:35:45,916 Speaker 1: that when I started working on the issue. But sitting 542 00:35:45,956 --> 00:35:50,596 Speaker 1: around this conference table, everyone's got their arms crossed against 543 00:35:50,596 --> 00:35:53,516 Speaker 1: their chests, They're leaning back in their chairs, and as 544 00:35:53,556 --> 00:35:56,076 Speaker 1: I remember it, somebody said, Oh, give it to her. 545 00:35:56,236 --> 00:35:59,676 Speaker 1: She's new, she'll do it. And I was handed this 546 00:35:59,716 --> 00:36:03,036 Speaker 1: assignment which gave me an extraordinary opportunity to learn from 547 00:36:03,036 --> 00:36:05,516 Speaker 1: some of the very best scientists across the federal government, 548 00:36:05,556 --> 00:36:08,956 Speaker 1: experts who had been thinking deeply about this, and it's 549 00:36:09,356 --> 00:36:13,036 Speaker 1: me on this journey and made me appreciate this is 550 00:36:14,116 --> 00:36:17,116 Speaker 1: one of the biggest threats and one of the most 551 00:36:17,316 --> 00:36:22,516 Speaker 1: unfamiliar threats humanity has ever faced in its long history. Alice, 552 00:36:22,556 --> 00:36:26,676 Speaker 1: thank you for just extremely clear analysis and thinking, and 553 00:36:26,756 --> 00:36:30,276 Speaker 1: for a very sobering message about what we can do better, 554 00:36:31,276 --> 00:36:34,316 Speaker 1: and for your ongoing terrific work on this subject. Thank 555 00:36:34,356 --> 00:36:37,836 Speaker 1: you so much. Thank you, what a pleasure to join you. 556 00:36:37,996 --> 00:36:48,476 Speaker 1: I so appreciate the opportunity. In the course of this 557 00:36:48,516 --> 00:36:53,836 Speaker 1: fascinating conversation with Alice, several key takeaways emerged in my mind. 558 00:36:54,756 --> 00:36:58,436 Speaker 1: The first is that what happened in Texas was predictable, 559 00:36:59,196 --> 00:37:03,436 Speaker 1: far from being a freak event. Texas had experienced. Alice 560 00:37:03,476 --> 00:37:07,316 Speaker 1: points out cold temperatures comparable to these as recently as 561 00:37:07,356 --> 00:37:10,876 Speaker 1: forty years ago, so it should have been possible for 562 00:37:10,916 --> 00:37:13,876 Speaker 1: Texas to realize that it did need to harden its 563 00:37:13,876 --> 00:37:19,716 Speaker 1: infrastructure against potential low temperatures. Second, and to my mind, 564 00:37:19,756 --> 00:37:24,236 Speaker 1: the most surprising of these takeaways, Alice points out that 565 00:37:24,316 --> 00:37:30,716 Speaker 1: it was not in particular Texas's distinctive deregulatory political culture 566 00:37:31,156 --> 00:37:35,916 Speaker 1: that led to the problems here, because New York and California, 567 00:37:36,276 --> 00:37:41,036 Speaker 1: places with more progressive governments and more regulation of various kinds, 568 00:37:41,076 --> 00:37:45,076 Speaker 1: made similar mistakes in failing to invest in infrastructure to 569 00:37:45,356 --> 00:37:50,316 Speaker 1: overcome potential serious climate challenges in the past, with Hurricane 570 00:37:50,316 --> 00:37:54,516 Speaker 1: Sandy as a prominent example. In other words, according to Alice, 571 00:37:54,596 --> 00:37:57,836 Speaker 1: our failure to invest more in our infrastructure isn't really 572 00:37:57,836 --> 00:38:00,956 Speaker 1: a product of any political commitment. It's rather the product 573 00:38:00,956 --> 00:38:04,916 Speaker 1: of the human impulse to fail to make sufficient investments 574 00:38:04,956 --> 00:38:08,116 Speaker 1: in events that seem low probability to us, but are 575 00:38:08,156 --> 00:38:12,796 Speaker 1: in fact extremely high cost. Yet another takeaway is that 576 00:38:12,836 --> 00:38:16,636 Speaker 1: as a nation, we face a genuine moral hazard when 577 00:38:16,636 --> 00:38:20,876 Speaker 1: it comes to how we ensure ourselves against extreme climate events. 578 00:38:21,676 --> 00:38:26,116 Speaker 1: Individual states spend the money on preparation, but the whole 579 00:38:26,156 --> 00:38:29,276 Speaker 1: federal government, which means all of us is taxpayers put 580 00:38:29,356 --> 00:38:32,036 Speaker 1: up the money to bail out those areas where things 581 00:38:32,076 --> 00:38:35,556 Speaker 1: go awry. Whenever the people who pay for the accident 582 00:38:35,596 --> 00:38:37,756 Speaker 1: are not the same people who are buying the insurance 583 00:38:37,756 --> 00:38:40,476 Speaker 1: in the first place. You have a moral hazard problem 584 00:38:40,556 --> 00:38:44,196 Speaker 1: and you get under investment in prevention, and that seems 585 00:38:44,236 --> 00:38:48,076 Speaker 1: to be the case with respect to climate right now. Last, 586 00:38:48,076 --> 00:38:50,636 Speaker 1: but not least, I walked away from my conversation with 587 00:38:50,676 --> 00:38:54,796 Speaker 1: Alice more convinced than ever of the need for us 588 00:38:54,796 --> 00:38:59,236 Speaker 1: to improve the regulatory schemes that enable states to get 589 00:38:59,276 --> 00:39:04,236 Speaker 1: away with not investing what they should. The federal government 590 00:39:04,276 --> 00:39:06,196 Speaker 1: isn't a solution to every problem that we have in 591 00:39:06,196 --> 00:39:12,316 Speaker 1: the world, but climate is as borders. Infrastructure is acrossed borders, 592 00:39:12,356 --> 00:39:16,156 Speaker 1: electric power grids are across borders, and for that matter, health, 593 00:39:16,236 --> 00:39:18,716 Speaker 1: as we've learned in the context of a pandemic, is 594 00:39:18,836 --> 00:39:22,356 Speaker 1: very much also across borders. In all of these contexts, 595 00:39:22,396 --> 00:39:28,356 Speaker 1: we need more, not less, centralized, rationalized planning regulation in 596 00:39:28,476 --> 00:39:33,996 Speaker 1: order to avoid extreme events actually having the impact that 597 00:39:33,996 --> 00:39:38,956 Speaker 1: the Texas cold snap did have on so many human beings. 598 00:39:39,996 --> 00:39:42,716 Speaker 1: Until the next time I speak to you, be careful, 599 00:39:43,116 --> 00:39:49,396 Speaker 1: be safe, and be well. Deep Background is brought to 600 00:39:49,396 --> 00:39:53,436 Speaker 1: you by Pushkin Industries. Our producer is Mo laboord our 601 00:39:53,476 --> 00:39:57,396 Speaker 1: engineer is Martin Gonzales, and our shorerunner is Sophie Crane mckibbon. 602 00:39:57,876 --> 00:40:01,756 Speaker 1: Editorial support from noahm Osband. Theme music by Luis Guerra 603 00:40:02,236 --> 00:40:06,196 Speaker 1: at Pushkin. Thanks to Mia Lobell, Julia Barton, Lydia Jean Cott, 604 00:40:06,436 --> 00:40:11,396 Speaker 1: Heather Fain, Carli Bigliori, Maggie Tay, Eric Sandler, and Jacob Weisberg. 605 00:40:11,756 --> 00:40:14,076 Speaker 1: You can find me on Twitter at Noah R. Feldman. 606 00:40:14,476 --> 00:40:16,836 Speaker 1: I also write a column for Bloomberg Opinion, which you 607 00:40:16,876 --> 00:40:20,556 Speaker 1: can find at Bloomberg dot com slash Feldman. 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