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The $3.5 trillion budget bill could transform the US power sector—and slash climate pollution



The $3.5 trillion budget bill could transform the US power sector—and slash climate pollution

In the coming weeks, Congress may pass one of the most important climate policies in US history.

The $3.5 trillion budget plan includes a provision known as the Clean Electricity Payment Program, which would use payments and penalties to encourage utilities to increase the share of electricity they sell from carbon-free sources each year. If it works as hoped, the legislation would ensure that the power sector generates 80% of its electricity from sources like wind, solar, and nuclear plants by 2030, cutting more than a billion tons of annual greenhouse-gas emissions.

The measure would mark a foundational step in President Joe Biden’s ambitious climate plan, which aims to put the nation on track to eliminate climate pollution from electricity generation by 2035—and achieve net-zero emissions across the economy by midcentury.

There are real questions, though, about whether the program will achieve its aggressive targets. How the nation’s complex electricity sector actually responds will depend heavily on how the agency that oversees the program implements it, and particularly where it sets the payments and penalties, some economists say.

It’s also still unclear if the measure will pass in anything like its current form—or at all.

How would it work?

The Clean Electricity Payment Program is a twist on a clean electricity standard, a regulation numerous states have implemented that requires utilities to reach certain levels of clean electricity by specific years. The proposal mainly opts for payments and penalties over binding mandates because that could enable it to pass under a legislative process known as budget reconciliation, which requires only a simple majority of votes in the Senate.

Once companies boost their share of clean electricity above an annual target, they would earn payments for every additional megawatt-hour of electricity they sell that comes from carbon-free sources, according to an analysis by the Clean Air Task Force. Those that fail to reach that threshold would have to pay a fee.

The program wouldn’t require all electricity suppliers to reach the same levels at the same times. It would adjust the yearly goals according to the point from which each is starting. But the overall target would be for the US power sector to produce 80% of its electricity from clean sources, on average, in the next nine years.

US Senator Tina Smith of Minnesota has championed the measure, which the Department of Energy would likely oversee.

The budget plan also includes federal tax incentives for building more clean electricity generation. With those credits, the program would be funded at around $150 billion to $200 billion, according to Third Way, a center-left think tank in Washington, DC.

Added together, the measures in the package would amount to “the biggest, most ambitious climate and clean energy policies that the US has ever enacted, by far,” says Josh Freed, head of the organization’s climate and energy program.

What would the program do?

If the measures achieve the goal of 80% clean electricity by 2030, it would more than double the share of carbon-free electricity in the US and significantly accelerate the pace of the transition to clean energy.

Currently, about 38% of the electricity generated in the US comes from carbon-free sources: 18% from renewables and 20% from nuclear power.

Pushing the power sector to 80% would cut carbon dioxide emissions by 86% from 2005 levels, according to an analysis by the Natural Resources Defense Council, included in an Evergreen Collective report published this month.

That would eliminate well over a billion tons of annual climate pollution in the next nine years. By comparison, the power sector reduced annual emissions by a little more than 800 million tons in the 14 years leading up to 2019, driven almost entirely by the shift from coal to natural gas and the increase in renewables.

How else does it help?

That takes a giant whack at one of the largest sources of US climate pollution. The electricity sector produces a quarter of the nation’s total greenhouse gases, second only to the transportation sector at 29%.  

Cleaning up the power sector also makes it easier to address other major emissions sources. It ensures, for instance, that far more of the electricity used to charge electric cars, trucks, and buses is carbon free. The same goes for things like heating and cooking if regulations require more homes and businesses to shift to electric stoves, heat pumps, and other cleaner technologies.

“If we want to achieve real, deep cuts in emissions, we’ve got to do it through clean electricity,” says Leah Stokes, an assistant professor of political science at the University of California, Santa Barbara, who has consulted on the policy.  

Meanwhile, other studies have found the shift to around 80% carbon-free electricity would spur $1.5 trillion of investments into clean energy, create hundreds of thousands of jobs, and save hundreds of thousands of lives over the coming decades through reduced air pollution.

But will it really get us to 80% clean electricity by 2030?

“Who knows?” says James Bushnell, an environmental and energy economist at the University of California, Davis.

The downside to going with incentives over strict mandates is that you can’t guarantee the end result. The government will need to make some imperfect predictions, or continually assess and refine how big the sticks and plentiful the carrots will need to be to bring about the desired changes, Bushnell says.

It will also have to carefully design the program to prevent the industry from gaming it. He sees scenarios where utilities could pack together big additions of clean electricity in certain years and narrow misses in others, in ways that could minimize penalties, maximize payments, and slow the progress of the program.

Another problem is that much of the data today on US electricity generation and sales is self-reported, while the “cleanness” of electricity purchased in real-time markets isn’t always clear. So the government will likely need to set up stringent processes for monitoring and verification, and develop reliable ways to certify or track where carbon-free electricity originates and where it ends up.

What would it mean for electricity prices?

Most assessments of the Clean Electricity Payment Program conclude it will drive down consumer prices. That’s because it’s funded by the federal government, and utilities would be required to use the payments to benefit customers.

“In a traditional [clean electricity standard], the cost is carried in electricity rates, and therefore by utility customers,” noted the Evergreen report, which Stokes co-wrote. In contrast, the payment program would shield Americans from rising electricity bills, the report said.

But Bushnell says that even if those performance payments are used to reduce prices, it’s still possible they could tick up in some instances. That’s because utilities will all be competing for limited sources of both old and new clean electricity, which would drive up prices. Prices for dirty electricity could fall for the same demand and supply reasons. But how all that balances outs from market to market remains to be seen, he says.

So why not just enact mandates?

While simply mandating utilities to sell set levels of clean electricity by certain times offers a clearer path to the desired result, the proposed payment plan has one powerful advantage: it’s politically feasible.

Specifically, it could enable legislators to include the proposal in the budget reconciliation process. That allows Congress to approve legislation on certain issues, related to taxes and spending, with 51 votes in the Senate—precisely the number Democrats have if Vice President Kamala Harris steps in to cast a tie-breaking vote.

A regulatory rule wouldn’t qualify for reconciliation, requiring it to secure 60 votes to overcome the threat of a filibuster.

So does that mean it will definitely pass?

Not at all.

There are tight restrictions on what sorts of measures can be included in the reconciliation process, under what’s known as the Byrd rule. The Senate can’t consider “extraneous” provisions requiring any proposals to alter federal spending or taxes in ways that are more than incidental to other policy aims, among other tests.

So there’s always a chance that the Senate parliamentarian could rule that certain measures don’t qualify, stripping them from the final bill altogether.


The hunter-gatherer groups at the heart of a microbiome gold rush



The hunter-gatherer groups at the heart of a microbiome gold rush

The first step to finding out is to catalogue what microbes we might have lost. To get as close to ancient microbiomes as possible, microbiologists have begun studying multiple Indigenous groups. Two have received the most attention: the Yanomami of the Amazon rainforest and the Hadza, in northern Tanzania. 

Researchers have made some startling discoveries already. A study by Sonnenburg and his colleagues, published in July, found that the gut microbiomes of the Hadza appear to include bugs that aren’t seen elsewhere—around 20% of the microbe genomes identified had not been recorded in a global catalogue of over 200,000 such genomes. The researchers found 8.4 million protein families in the guts of the 167 Hadza people they studied. Over half of them had not previously been identified in the human gut.

Plenty of other studies published in the last decade or so have helped build a picture of how the diets and lifestyles of hunter-gatherer societies influence the microbiome, and scientists have speculated on what this means for those living in more industrialized societies. But these revelations have come at a price.

A changing way of life

The Hadza people hunt wild animals and forage for fruit and honey. “We still live the ancient way of life, with arrows and old knives,” says Mangola, who works with the Olanakwe Community Fund to support education and economic projects for the Hadza. Hunters seek out food in the bush, which might include baboons, vervet monkeys, guinea fowl, kudu, porcupines, or dik-dik. Gatherers collect fruits, vegetables, and honey.

Mangola, who has met with multiple scientists over the years and participated in many research projects, has witnessed firsthand the impact of such research on his community. Much of it has been positive. But not all researchers act thoughtfully and ethically, he says, and some have exploited or harmed the community.

One enduring problem, says Mangola, is that scientists have tended to come and study the Hadza without properly explaining their research or their results. They arrive from Europe or the US, accompanied by guides, and collect feces, blood, hair, and other biological samples. Often, the people giving up these samples don’t know what they will be used for, says Mangola. Scientists get their results and publish them without returning to share them. “You tell the world [what you’ve discovered]—why can’t you come back to Tanzania to tell the Hadza?” asks Mangola. “It would bring meaning and excitement to the community,” he says.

Some scientists have talked about the Hadza as if they were living fossils, says Alyssa Crittenden, a nutritional anthropologist and biologist at the University of Nevada in Las Vegas, who has been studying and working with the Hadza for the last two decades.

The Hadza have been described as being “locked in time,” she adds, but characterizations like that don’t reflect reality. She has made many trips to Tanzania and seen for herself how life has changed. Tourists flock to the region. Roads have been built. Charities have helped the Hadza secure land rights. Mangola went abroad for his education: he has a law degree and a master’s from the Indigenous Peoples Law and Policy program at the University of Arizona.

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The Download: a microbiome gold rush, and Eric Schmidt’s election misinformation plan



The Download: a microbiome gold rush, and Eric Schmidt’s election misinformation plan

Over the last couple of decades, scientists have come to realize just how important the microbes that crawl all over us are to our health. But some believe our microbiomes are in crisis—casualties of an increasingly sanitized way of life. Disturbances in the collections of microbes we host have been associated with a whole host of diseases, ranging from arthritis to Alzheimer’s.

Some might not be completely gone, though. Scientists believe many might still be hiding inside the intestines of people who don’t live in the polluted, processed environment that most of the rest of us share. They’ve been studying the feces of people like the Yanomami, an Indigenous group in the Amazon, who appear to still have some of the microbes that other people have lost. 

But there is a major catch: we don’t know whether those in hunter-gatherer societies really do have “healthier” microbiomes—and if they do, whether the benefits could be shared with others. At the same time, members of the communities being studied are concerned about the risk of what’s called biopiracy—taking natural resources from poorer countries for the benefit of wealthier ones. Read the full story.

—Jessica Hamzelou

Eric Schmidt has a 6-point plan for fighting election misinformation

—by Eric Schmidt, formerly the CEO of Google, and current cofounder of philanthropic initiative Schmidt Futures

The coming year will be one of seismic political shifts. Over 4 billion people will head to the polls in countries including the United States, Taiwan, India, and Indonesia, making 2024 the biggest election year in history.

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Navigating a shifting customer-engagement landscape with generative AI



Navigating a shifting customer-engagement landscape with generative AI

A strategic imperative

Generative AI’s ability to harness customer data in a highly sophisticated manner means enterprises are accelerating plans to invest in and leverage the technology’s capabilities. In a study titled “The Future of Enterprise Data & AI,” Corinium Intelligence and WNS Triange surveyed 100 global C-suite leaders and decision-makers specializing in AI, analytics, and data. Seventy-six percent of the respondents said that their organizations are already using or planning to use generative AI.

According to McKinsey, while generative AI will affect most business functions, “four of them will likely account for 75% of the total annual value it can deliver.” Among these are marketing and sales and customer operations. Yet, despite the technology’s benefits, many leaders are unsure about the right approach to take and mindful of the risks associated with large investments.

Mapping out a generative AI pathway

One of the first challenges organizations need to overcome is senior leadership alignment. “You need the necessary strategy; you need the ability to have the necessary buy-in of people,” says Ayer. “You need to make sure that you’ve got the right use case and business case for each one of them.” In other words, a clearly defined roadmap and precise business objectives are as crucial as understanding whether a process is amenable to the use of generative AI.

The implementation of a generative AI strategy can take time. According to Ayer, business leaders should maintain a realistic perspective on the duration required for formulating a strategy, conduct necessary training across various teams and functions, and identify the areas of value addition. And for any generative AI deployment to work seamlessly, the right data ecosystems must be in place.

Ayer cites WNS Triange’s collaboration with an insurer to create a claims process by leveraging generative AI. Thanks to the new technology, the insurer can immediately assess the severity of a vehicle’s damage from an accident and make a claims recommendation based on the unstructured data provided by the client. “Because this can be immediately assessed by a surveyor and they can reach a recommendation quickly, this instantly improves the insurer’s ability to satisfy their policyholders and reduce the claims processing time,” Ayer explains.

All that, however, would not be possible without data on past claims history, repair costs, transaction data, and other necessary data sets to extract clear value from generative AI analysis. “Be very clear about data sufficiency. Don’t jump into a program where eventually you realize you don’t have the necessary data,” Ayer says.

The benefits of third-party experience

Enterprises are increasingly aware that they must embrace generative AI, but knowing where to begin is another thing. “You start off wanting to make sure you don’t repeat mistakes other people have made,” says Ayer. An external provider can help organizations avoid those mistakes and leverage best practices and frameworks for testing and defining explainability and benchmarks for return on investment (ROI).

Using pre-built solutions by external partners can expedite time to market and increase a generative AI program’s value. These solutions can harness pre-built industry-specific generative AI platforms to accelerate deployment. “Generative AI programs can be extremely complicated,” Ayer points out. “There are a lot of infrastructure requirements, touch points with customers, and internal regulations. Organizations will also have to consider using pre-built solutions to accelerate speed to value. Third-party service providers bring the expertise of having an integrated approach to all these elements.”

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