February Climate Leader: Bill Shobe
Bill Shobe, an economist, is a Professor of Public Policy at the University of Virginia and directs economic and policy research at the Weldon Cooper Center for Public Service. He is a UVA Sustainability Fellow. His current research includes emission market and auction design, environmental federalism, carbon removal technologies, electricity demand forecasting and deep decarbonization strategies for Virginia.
In 2007, he worked on the team that designed the carbon allowance auctions for the Regional Greenhouse Gas Initiative (RGGI) and has worked on design and evaluation of the RGGI program, the EU ETS and the California cap and trade program for greenhouse gases. In 2000, Shobe received a Fulbright Fellowship in environmental economics and policy. Before joining UVA in 2004, Shobe worked at the Virginia Department of Planning & Budget (DPB), where he coordinated state expenditure forecasts and the economic analysis of state regulations. While at the DPB, Shobe managed the design and implementation of the innovative Virginia NOx allowance auction. He also developed the Virginia Regulatory Town Hall website, the first in the nation web site for managing and publicizing state regulatory development. The Town Hall website won numerous awards for its innovative approach to openness in public decision making.
We caught up with him on the heels of his recent publication of Decarbonizing Virginia's Economy: Pathways to 2050 as our first “Climate Leader” of 2021.
How did you get involved in environmental stewardship?
I’ve been interested in protecting the environment since I was a little kid. My parents loved the outdoors. They were amateur naturalists: birders, hikers, rockhounds, wildflower enthusiasts, all of it. How could I have turned out any other way? I remember the first Earth Day really well. I was out picking up trash. At first, I settled on environmental law as a career, but after working in that field a bit, I came to the conclusion that economics suited me better as a tool for solving environmental problems. For me, it is a great fit. I love teaching environmental economics and working on designing new policies for protecting the environment.
Tell us what exciting work UVA/Weldon Cooper Center are doing to advance climate solutions?
The Weldon Cooper Center’s mission is to apply the best available expertise to addressing public policy issues, especially those facing state and local government in Virginia. We work to leverage the fabulous expertise at UVA for evidence-based decision making at all levels of government. While we have addressed many different policy areas, we have a long-standing interest in environmental issues, including climate change.
Since 2007, we have been involved in research on ways to reduce the cost of protecting the environment by using economic incentives like emission markets or emission fees. We were the lead researchers in designing some aspects of the Regional Greenhouse Gas Initiative (RGGI), the program which imposes a declining cap on CO2 emissions for 10 states, including Virginia.
The Cooper Center’s Energy Transition Initiative is a new effort to support Virginia’s decarbonization efforts. Virginia has jumped into a leadership role in the U.S. by committing to eliminating CO2 emissions from electricity generation by 2050. We are hoping to provide some help in achieving this goal at the lowest possible cost. But we also want to push forward to the next goal of decarbonizing the whole economy, not just the electricity sector, by the 2050 deadline. Our recent report outlines in broad strokes how we might achieve this in a way that provides net benefits to Virginia as well as the rest of the planet. We are also working to identify frictions and roadblocks in the transition to renewable energy deployment in Virginia and elsewhere. Setting an ambitious policy goal is only the first step. Now we get down into the trenches (well really into the lab) and figure out the details of how to get to our goal in a way that is both fair and cost-effective.
Along with other efforts at UVA, such as the Environmental Resilience Institute, the Environmental Law Clinic, the Global Water Initiative, we want to bring world-class expertise to bear on solving these critical, international environmental problems.
What are you hopeful about right now?
The momentum behind carbon-free energy now seems irreversible. Solar energy is now the cheapest source of new energy in Virginia, even without taking into account all of the damage fossil fuels do to the environment. We will choose solar now because it will generate the cheapest electricity for us. And we are on a clear path to electrify our cars and trucks so that they too will be part of a decarbonized economy. Electric cars will be cheaper than internal combustion engines within the next few years. Other new technologies are making it easier to reduce the emissions from our buildings and industries. Policy can help us move forward more quickly, but the technology for living well in a carbon-free economy is either here already or in the wings.
What is one thing that you think might be holding the state or local community back from greater progress on implementing climate solutions?
Climate change is a global problem that, ultimately, needs global coordination to achieve a solution. We have made the first steps in this direction with the Paris Accord. With the transition to the Biden Administration, we can now make up for lost time in developing national policies to support decarbonization. But much of what needs to be done is the responsibility of state and local governments. Transportation policies, building codes and local planning processes all affect how quickly we will decarbonize, even with federal policies in place. Another thing people may not realize is that the electricity grid is not a nationally planned system. The grid is the responsibility of the various states and even of individual local utilities and electric coops. The failure to coordinate grid and distribution system planning to facilitate the use of distributed renewable resources can really slow things down. We need to quickly put in place a process for planning and financing an efficient, modern electricity grid, if we are to achieve full decarbonization by 2050. This is not something that should be left to individual utility companies, and there is much to be gained by interstate cooperation in grid buildout.
What is a climate action personally or professionally that you are proud of?
Our work at UVA in helping with the design of programs that cap pollutants while giving the regulated firms incentives to lower the cost of emission reductions has had a large and lasting effect. Our team, working with other researchers, designed some key features of emission cap and trade programs. The features we designed and tested here at UVA are now in use all across the planet. They maximize the incentives that emitters face to reduce their emissions as quickly and cheaply as possible while accelerating reductions in the cap as new, cheaper technologies become available. It is this kind of detailed policy engineering that makes all the difference in reaching our climate goals.
In my personal life, I have worked to reduce emissions where it does the most good, our cars. I bought an electric motorcycle in 2018. It is super efficient; it will go a mile on the power a 100-watt light bulb uses in an hour. And recently, I traded in my last gas-powered car for a Chevy Bolt (a battery electric); you can find real deals on used ones. It goes 250 miles on a charge and is fun to drive as well. Best of all, though, I get to pass right by those gas stations and all that gasoline guilt.
It is important to keep in mind that, now that Virginia is part of the RGGI cap on CO2 emissions, when you switch from a gas-powered car to an electric vehicle, you are completely eliminating your transportation CO2 footprint. This is why I have switched. When I use electricity to drive to work, any emissions that were emitted to generate that electricity come from a reduction in emissions by someone else because all electricity generation emissions are under a cap. So I have reduced my emissions from the burning of gas without increasing emissions from electricity generation. It’s the closest an economist ever gets to a free lunch.
What is one thing we can do today to enact a climate solution?
Our priority today must be to quicken the transition of our transportation system away from dependence on oil. We need to push hard to ramp up the transition to electric vehicles, whether they be battery electrics or hydrogen fuel-cell powered, this is a critical step in the transition. But the stock of existing vehicles takes a long time to turn over. It is important to get started soon by building out charging infrastructure and investing in research for new battery and fuel-cell technologies. The change is coming, but it won’t happen fast enough without a strong policy push. A great step for Virginia would be to establish a plan for joining the Transportation and Climate Initiative, a cap on CO2 emissions from cars and trucks. As the cost of batteries continues to fall, capping emissions will greatly speed up the already inevitable transition.
This is challenging work. What is your favorite way to recharge and rejuvenate?
Every summer, our family gets together for a nice backpacking trip. Although the kids have moved on to their own professional lives, it’s still something we all love to do together each year. The pandemic has put a crimp in our plans recently, so I guess we’ll have to make up for lost time once we can all get our vaccinations. Twice the miles, twice the fun!