Note: This transcript is auto generated and lightly edited.
KRISTINA: Your electricity inputs are one of your biggest costs. Regardless of what you're manufacturing, if you are going to continue doing it in the United States and you're building you're paying more for your electricity, at least some of that cost you have to pass on to your customers. Otherwise, you're not going to be economic. So you will see not only energy prices increasing, electricity prices increasing for consumers and for businesses, but I think you'll also start to see downstream cost increases on various manufactured goods.
MONICA: Welcome to Policy for the Planet, a podcast exploring the global response to the climate crisis. We'll unravel the complex tradeoffs of different policy choices to steer us toward sustainable solutions and public well-being.
I'm Monica de Bolle, a senior fellow at the Peterson Institute for International Economics.
Welcome to the conversation.
Businesses and large corporations always look for ways to cut costs, especially in their operations. Renewable energy sources are not just good for climate. They are an easy way for businesses to save on electricity and gas.
But do businesses actually buy into renewable energy?
The Inflation Reduction Act of 2022, known as the IRA, has already shifted business investments into renewable energy. Will these survive cost-cutting plans by Congress?
Joining me today to talk more about this issue is Kristina Costa. Kristina formerly served as deputy assistant to the president and deputy for clean energy innovation and implementation at the White House. She worked chiefly on implementation of the Inflation Reduction Act's clean energy and climate provisions. She joined the White House in September 2022 from the U.S. State Department. She previously served in the Obama White House working primarily on Climate Action Plan implementation, and she was a policy advisor on Hillary Clinton's 2016 presidential campaign.
Hi, Kristina. Thank you so much for being on the show with us. It's a pleasure. It's a real pleasure to have you. I'm just going to jump straight into the conversation and ask you. What can you tell us about your work on the Inflation Reduction Act, specifically as it pertains to energy particularly given the juncture that we're at?
KRISTINA: Yeah, absolutely. Well, first of all, Monica, thanks so much for having me. It's great to be here. Really looking forward to an interesting and obviously a very timely conversation. So my role was the Inflation Reduction Act passed in August of 2022. And shortly after that, President Biden followed a practice that he had piloted after the passage of some other major legislation and stood up an implementation team at the White House.
And that was led by my boss, John Podesta, and I was John's deputy and the staff director essentially of our operations. The Inflation Reduction Act was quite a significant investment economy-wide in building a clean energy economy. And so we'll talk a lot today, I think, about the power sector and about clean energy manufacturing, which are sort of two of the big of the law, but it also made investments in industrial decarbonization, in climate smart agriculture, in clean transportation through three primary mechanisms.
So the law did contain about $127 billion in grants in very sort of traditional and also some non-traditional federal approaches to awarding on a competitive basis funds to support specific projects and activities. It contained significant increases in authority and budget for the loan program office at the Department of Energy, as well as new authorities to help the loan program office offer financing assistance to projects that reused legacy fossil fuel infrastructure sites and to give those sites new life. It actually created a whole new program to do that. And then it contained about two dozen clean energy tax incentives. And so those accounted for the lion's share of the law and of our policy work over the next two and a half years.
And those tax incentives, I think you can think of in three buckets, generally speaking. There were some incentives directly for consumers to help individuals or families afford to purchase clean energy or clean transportation solutions. So there was a tax credit for electric vehicles that got a lot of attention, still getting a lot of attention. Extensions of tax credits that have been around since the George W. Bush administration to help homeowners do things like install rooftop solar or make energy efficiency improvements, just make those things a little more affordable for folks.
So that was kind of one category. There was a second category that were tax incentives for businesses. And this is what really you see driving a huge amount of private sector activity in the time since the Inflation Reduction Act passed, encouraging investment in clean electricity generation, in clean energy manufacturing and clean fuels production. And so that was sort of the second big category. And then there was a really wonky third category of tax incentives that I'm very fond of personally that we called credit monetization incentives. And these basically offered new ways for companies and also nonprofit entities to access and monetize and deal with the financing of clean energy projects. So three categories on the tax side, three categories across the law overall.
And my job was basically to manage and run our tax policy interagency process issued. The Treasury Department and the IRS issued more than 90 tax guidance documents in two and a half years. Basically a land, it's a lot, basically a land speed record, for tax policy implementation. But also to manage a core White House team who worked with all the other agencies who had received funding to try to get those programs, stood up and operational and funds awarded and out the door, as quickly as possible. And so when, I turned out the lights in our office around 3 p.m. on January 17th, in addition to those 90 tax guidance documents that spurred upwards of $800 billion in private sector investment in that period of time, we had also awarded $107 billion in federal funds and obligated, meaning there were signed contracts between the federal government and counterparties. $98 billion worth of federal funds in just about two and a half years.
So I'm still a little tired from all of that. That is what my role was. That is what the Inflation Reduction Act was setting out to do. And that's what my team and I accomplished. And I want to underscore from what you were saying one thing that I think is really important for people to have in mind, which is the fact that this piece of legislation, much of it, if not all of it, was trying to get at certain objectives through the logic of incentives rather than the logic of regulation. Which, you can always combine these two ways of doing things, but the fact that the IRA, the Inflation Reduction Act, had this huge focus on incentives, I think speaks to exactly the things you were mentioning in terms of the effect that it's had on the private sector, how the private sector has reacted, and how businesses in general have been able, through these incentives, to take on the role of dealing with climate.
MONICA: So is it fair to say that as we look at the current landscape, there really isn't any sort of resistance on the part of private businesses to go ahead and continue to bring forward these changes that are necessary for climate transition? And part of that is because the IRA gave that sort of motivation, is it fair to kind of frame it in those terms?
KRISTINA: Yeah, I think so. What we liked to say was that by and large, the Inflation Reduction Act was a government-enabled, but ultimately a private sector-led approach to creating a clean energy economy in the United States, to addressing our urgent climate pollution challenges. Again, looking across the economy. And it really was set up to both help much more rapidly deploy technologies that were kind of ready to go and just needed some greater encouragement, greater incentive to deploy at scale, but also to invest in innovation in new approaches in new industries or nascent industries like carbon management and clean hydrogen. And these things that we know that we need longer term to decarbonize what in climate land people sometimes like to call hard to abate sectors. Places where the technology maturity isn't quite there yet, maybe the market maturity isn't quite there yet, but with some concerted effort you could, you know, create some alternatives to what is commonly used.
And I should say also that one of the really important things about how the Inflation Reduction Act was designed was that it took very seriously, I think, what you hear from businesses of all kinds, not just in the United States, but around the world, that what really matters is policy certainty is to have some predictability. Especially when you're looking at building physical things in the actual world. These are huge investments, right? These huge investments and these are technologically complex projects where you can only go so fast even when you have all of the right tools in place. so the United States has had some tax incentives for a long time for investing in certain clean energy technologies. But those would sunset every few years. And so you had this boom bust cycle of investment where when the credits were there, you got a bunch of projects. When they weren't, you got fewer projects.
At times, Congress would actually retroactively extend the credits, somehow violating sort of the linear nature of time to give folks bridges when these things had expired. And you got some stuff, but you just didn't get as much as you could possibly get. And so the Inflation Reduction Act said no for at least the next 10 years, these incentives are going to be in place. So the private sector can think bigger, can plan longer term, can be more ambitious in the kinds of projects that they are putting forward. There were other important structural changes too to what the IRA did compared to previous law. Like I said, there had been incentives for some kinds of clean energy technologies, but not for all kinds of clean energy technologies.
And so it transitioned these long-standing technology-specific incentives to, particularly for the power sector, two incentives that said, if you have a net zero generation technology, you can choose either an investment tax credit or a production tax credit. And again, we're going to say that it's going to be around for at least a decade.
That meant for the first time that things like geothermal or nuclear or innovative energy storage technologies had a path through the tax code to lowering their financing costs and having confidence in making those investments. And that is why those structural changes were super important to mobilizing that private sector investment, to seeing all of this activity and excitement. And of course, I think we'll get into this, but that's what is now in question.
MONICA: Yes, that is exactly my question to you now, because since you have spoken very, very clearly, I mean, you've put it very clearly. What is it that the Inflation Reduction Act is doing, how it's doing it, and the fact that because of its scope, because of its attempt to bring policy certainty to the extent that that's possible in any environment, right, but that very design of the legislation itself, it was something that laid the ground precisely for these investments in things that weren't exactly being done for them to be done.
But now, this whole issue of policy certainty has become policy uncertainty again, because as we know, we're having these conversations about what's going to stay with the Inflation Reduction Act, what's not going to stay, what's going to disappear. Can we talk a bit about that?
KRISTINA: Yeah, absolutely. And of course, the future of all of this is very much up in the air right now. But so I think one way to kind of conceptualize this and one of the ways that I'm thinking about this from sort of an energy policy analysis perspective, is that there are three realities that are existing simultaneously in the world of clean energy policy and investment right now. One is this Inflation Reduction Act current law baseline.
As we sit here today, the Inflation Reduction Act is still the law of the land. We have seen this massive mobilization of private sector capital into clean electricity generation, also into clean energy manufacturing. And this is a big change as well from how the United States has historically conceptualized taking climate action, investing in clean energy is that the IRA contained incentives. Some people like to think of it as much as an industrial policy law as it is a climate or an energy law.
And we could we could debate that. Maybe it has industrial policy elements. Yes, certainly does. At least. And so one of those really powerful tools is a tax incentive called the 45X Advanced Manufacturing Production Tax Credit that provides, again, a long-term, predictable per-unit incentive for manufacturers of specified clean energy technologies. So things like solar modules or batteries for the grid or for electric vehicles, wind turbines, wind turbine installation vessels… have a bit of an incentive in here to try to fill those supply chain gaps.
And you have seen a really incredible and rapid response from the private sector to these incentives to onshore manufacturing of these technologies. you know, when the IRA passed, the United States had less than 10 gigawatts of manufacturing capacity for solar modules remaining in the United States. This is a technology we invented that we really pioneered and scaled initially and over time first lost an advantage to Japan and then lost an advantage to Germany and then everybody lost the advantage to China. Since the IRA passed, that capacity has more than quintupled.
MONICA: Wow, that's critical. I don't think that's been known very much.
KRISTINA: It's enormous, right? So that capacity is more than quintupled. We now have more than 50 gigawatts of solar module capacity coming online in the United States producing panels here. We are seeing, you know, as you go farther upstream, it gets a little harder. The incentives were maybe not quite strong enough. The Chinese in particular have really globally dominant positions and things like solar cells and wafers that go into those modules. But we're also seeing those parts of the supply chain in part because of the guidance that we did coming online to coming onshore. We're expecting sort of at least,
I believe at least 10 gigawatts of cell and module or sorry, of cell and wafer manufacturing to be online within the next year in the United States. And you see this kind of on-shoring pull across the board thanks to the IRA incentives.
And so you're seeing huge investments in the grid. You're seeing huge investments in clean energy manufacturing. And over time, you expect those things to work, continue to work in concert with each other where more and more of the power that is getting put on the grid is using those components that have the incentive to be made in the United States into them, and you get this kind of virtuous circle.
MONICA: Yeah, sort of a multiplier effect.
KRISTINA: Yeah, exactly, exactly. A multiplier effect and also an important energy security outcome as well, right? Because as the United States, as the world increasingly installs clean electricity sources on their grid, 93% of our grid capacity additions last year in the United States were solar, wind, or batteries. Ninety-three percent. And so as that trend continues here, as it deepens in other countries around the world, the question of who is the supplier of the technology becomes increasingly economically important.
You did a great episode of this podcast with Dan Yergin a little while ago. And of course, Dan is an absolute legend in energy policy world, right? But he was talking very persuasively, and I agree with this that, you know, one of the major economic advantages for the United States over the last 20 or so years has been our increasingly, successful domestic production of oil and gas because it has allowed us to shift the geopolitical conversation.
And to, for instance, help our allies in Europe be in a stronger position to respond to Russian aggression than they would have been 20 years ago because we had these LNG export terminals permitted in the Obama administration that had come online and we could ship supplies to them. The reason that China has invested so heavily in these technologies is that they do not want to be dependent on other countries for fossil fuel imports, and they want other countries to ultimately be dependent on them for clean technology exports.
And so the IRA was trying and succeeding in breaking this dependence. So that's scenario A. Things are going pretty well. There's some gaps. There are some challenges. Some of the incentives are working better than others, but you're seeing really this this incentives first policy approach really pay dividends and other countries, I should say, following suit. So, you know, the Japanese have a sort of investment led strategy, the Australians, the Canadians, the UK, the EU looked at what we did and said, we want to do that too.
MONICA: And even countries in the global south, because there are countries in the global south that have looked exactly, India, that have looked to the experience in the United States with the IRA and have said, well, this is working. Why don't we try something similar?
KRISTINA: This is working. Why don't we try something similar? And by the way, we also don't want to be dependent on China for our energy supply chains, right? So that's world one. That is the world that we're currently living in. World two, which exists alongside of that, is the global picture. And we started to get into this a little bit. But globally, A, we are all expecting electricity demand to skyrocket over the next 25 years or so, the next 5, 10, but certainly the next 25 years. Bloomberg New Energy features has a global energy outlook that they update regularly.
They are saying most recently that they expect global electricity demand in 2050 to be 75% higher than it is today, right? Through a variety of things, increasing demand from data centers, increasing demand from electrification, all of these things, right? Even as that is happening, their projections are that they think that renewables globally will serve 67% of that electricity demand by mid-century.
Right? And that the coal, gas, oil, and the power sector drops to a quarter by mid-century. That is a huge change, right? That is where the rest of the world is going.
MONICA: In a relatively short period of time, we should add, right?
KRISTINA: In a very short period of time. And they basically say, you know, look, for the global energy picture, the United States is important and what happens to the Inflation Reduction Act is important.
But it's not going to knock the rest of the world off of this trajectory. There are various advantages that renewables have over fossil fuels. There's less price volatility. Absolutely. You don't have to worry about continually buying more inputs to keep it operational. That's why they're called renewables. Renewable. Right. And it's also, there's something attractive fundamentally about innovation in these spaces, right? And about finding better ways to power our world.
And so that is world two, and that is where, or that is sort of parallel world two, and that is what the rest of the world is doing, and they're gonna do it with or without us, right? Parallel world three is what is being debated on Capitol Hill as we speak, likely will still be in being debated to some degree when this episode initially airs. And that looks very different from World One.
So, the House of Representatives have passed the first opening salvo in the budget reconciliation bill. It is a massive tax cut for the very, very wealthiest individuals and for large corporations of all kinds. The score, I believe, of the tax portion of the bill is a $4 trillion tax cut. And there are various provisions in the law, in the bill across the board to attempt to quote-unquote pay for this $4 trillion tax cut. And of that, a total repeal, which is what was in what passed functionally what passed the House, a total repeal of the Inflation Reduction Act incentives comes to about $500 billion. And that so the bill, the tax portion of the bill costs 8 times as much as these incentives that are pulling hundreds of billions of dollars off of the sidelines into projects, into the economy, into projects that are creating jobs, into projects that are boosting local economic development, local tax bases, all of these things into real investment in stuff you can touch and feel.
And so that's world three. And the consequences of world three based on multiple studies from energy modelers and from financial analysts and all of that. We're looking at a decline relative to world one, relative to the current law baseline, a decline of probably about 600 gigawatts of new clean electricity additions relative to what you would otherwise see.
MONICA: That's huge.
KRISTINA: That's a lot of gigawatts. It's a lot of energy. And that's from the Rhodium Group, which is a nonpartisan energy modeling company. Energy Innovation, which is another energy modeling firm, estimates a cost to US GDP from full IRA repeal of a trillion dollars between now and the middle of the 2030s.
And so you're looking at, and there have been, I'd say, at least eight or nine different studies that vary in sort of the exact dollar amount, but they converge on the overall picture that consumer electricity prices will be higher as a result of a full repeal of these inflation reduction action incentives because you're going to have less new energy on the grid.
And because we are seeing rising electricity demand, we still have some pandemic overhang, right, from supply chain and inflation and all the rest of that. And so the consequence, if you don't install more energy on the grid, is that everyone's prices just increase instead. And so those are all sort of directionally saying hundreds of dollars a year for most consumers, higher in some states.
Some studies saying that you could see a hundred bucks more a year as soon as next year because of that's very, very quick. It's very quick and it's potentially very consequential. And so, you know, the lights will stay on. The question is how much are you paying for them and how much are we, you know, backtracking from this effort to really seize an advantage?
In what, again, in world two, which is happening no matter what, is going to be an energy future that is increasingly dominated by renewables. So those are the three worlds, the three world problem instead of the three body problem that we're currently living in.
MONICA: Yeah, and on that note, I mean, as you were speaking, I was just thinking about the implications. And as you were saying before, we have seen this incredible response from the private sector to these incentives in the IRA. And, you know, that is there, you know, for anyone to see. And of course, in world three, as, as you said, a lot of that is just not going to happen as it otherwise would. But then I want to ask you about projects that are already ongoing. Sure. What happens in those scenarios if there is indeed a full repeal or a significant repeal of some kind of these incentives?
KRISTINA: Yeah, it's a really good question and I think it differs by technology to a really important degree and here's why. So as a general matter, the way that in the power sector the electricity incentives work is that historically, including under current law, project developers essentially lock in their tax treatment when they commence construction, when they either begin physical construction of a facility or when they meet a certain financial threshold. And this is really important because it provides them financial certainty through the lifetime of their project as very, very few developers are sort of paying full freight upfront for the cost of building something. They're getting money from banks. They may be selling their tax credits on the market, they're engaging in tax equity arrangements, they're doing different things depending on what makes sense for them. And so to secure your financing, you need some predictability of what the project is actually going to cost. And part of the predictability of what the project is going to cost is how much tax incentive can you expect to get from the government once you actually build the thing and put it into service, right? You still got to build it. You don't just get the tax credit for thinking about building it, right?
And you got to plug it in. But it's important for the financing. It's also important to lock this in because stuff happens. And I mean, we just lived through so much of this in the pandemic and the aftermath. Supply chain shortages arise. You know, there are macroeconomic headwinds. You might have labor shortages. could have a state or local permitting problem that just takes some time to unstick all of that red tape. And so you want to give project developers the confidence, the certainty that they need at the outset to put the project in service on the backend. so for projects that are already under construction based on what the house passed, and I think based on general applicability of tax law, those will likely still be able to complete. Now, that's a lot of solar, it's a lot of wind, it's a lot of battery storage. Those are projects that are relatively fast to build. You might not think about them as being that fast to build based on some of the headlines that you sometimes see about permitting issues and everything else, but it takes one to two years basically to build a solar facility.
It takes three or so things that we already have the know-how of how to do them. We know how to do them. As opposed to things that you were saying before, these sort of more frontier things such as clean hydrogen or green hydrogen. That's something else entirely. Something else entirely or advanced geothermal, small modular reactors, everybody's favorite hoped for clean energy solution. We've never built one. We don't know how long it will actually take to do. Or even conventional nuclear, right? These are projects that take a decade to plan and to build. And so, you know, for things that have commenced construction, they should be okay. It's about what is coming next that there's just now a ton of uncertainty as a result, you know, so that I don't want to go too deep into the details because I don't know what the Senate is going to do to what the House did.
But what the House did pretty much blows up all of that business certainty. So they changed the commenced construction standard to a placed in service standard for tax credit eligibility.
MONICA: Can you unpack what that means exactly?
KRISTINA: Yeah, so as I was just saying, right, the commenced construction standard lets you lock in your tax treatment when you start and you can do your financing and do all these things. This says, your tax treatment is going to be whatever happens when you place your project in service. When you finish it, you turn it on, you plug it into the grid. And if things change fundamentally in the rules, you don't know what that's going to be, right? They also move that expiration from later than 2032, which is the current law, to 2028. And so those bigger, more complicated projects.
MONICA: Forget them.
KRISTINA: Forget them. They're not going to happen. The most recent version that passed the House does something even wackier, which it says, if you don't commence construction within 60 days after the date of enactment of this bill, you get nothing. Oh. So again, you got some fast movers, right? You got some folks who can probably nudge their comments, adapt a little bit.
But others can't, including these exciting, more innovative, large capacity projects. That is really important, the large capacity aspect, because one thing that I keep thinking, again, as you were speaking, renewable is great. We know all about wind and solar and storage and storage, of course. But we also know that a lot of the times these sources of energy may not be sufficient or large scale enough to say power up an entire manufacturing sector as opposed to these larger projects like clean hydrogen, for instance, or geothermal. And it depends a lot, depends on grid management. And a lot depends, as I said, on energy storage. And actually, in the two years since the IRA passed, it used to be the case that energy storage was not eligible for any incentive. The IRA changed that.
And we went from, I want to get this right, we went from getting only seven gigawatts of energy storage on the grid in 2023, which was the first year that they had full eligibility to 18 gigawatts anticipated this year. So you're getting nearly a three X increase in just two years and a lot of hope for more storage, which helps firm up those renewable projects, gives them backup. It enables the management of what some energy wonks like to call virtual power plants where you're kind of, you know, intelligently managing the generation and the load across a geographically dispersed area instead of just having, you know, one big thing. But we want all of it, right? We also want those clean base load sources like geothermal, like nuclear. We want more of it and we need more of it because of the electricity demand increasing, right?
So, the projects that like they've broken ground, they'll probably finish again, pursuant to all of these uncertainties that are just the natural uncertainties that arise when you are building infrastructure. The things that become more questionable, even of the projects that have already started production is what happens to the manufacturing tax credits and what happens to all of these facilities that have ramped up production in the United States on the basis of business certainty, on the basis also of expecting that they're going to have customers to sell what they're making to. And so if you see a cratering of planned installations of renewable power on the grid, that is also a cratering in demand for the technologies being manufactured at these facilities, right?
And so, you know, listen, some projects even will get built even in the absence of the tax incentives because the demand is there. Because also, and we haven't talked about this yet, though we certainly should, the cost of building new natural gas generating capacity has skyrocketed in the last five to 10 years.
MONICA: That's a critical point.
KRISTINA: There are supply chain constraints in that sector. And so you can't just flip a switch and suddenly put 600 gigawatts of natural gas online because we don't have 600 gigawatts of natural gas turbines available and we don't have a workforce capable of building 600 gigawatts of natural gas. What we do have is the ability to build 600 gigawatts of renewables if the incentives are right. And so again, right now they are, and they're really at risk of not being based on what is being debated on Capitol Hill.
MONICA: What is your sense of how businesses are going to react to all of this? Because the impression I have from what I've read and from what you've said is that businesses have been, by and large, very gung-ho on the whole climate transition. Let's adapt. Let's invest in renewables. Let's do what's possible in these various arenas.
And now suddenly the game changes or the game seems to change.
KRISTINA: Yeah. And again, it's going to vary a little bit by sector. And I should say that it's also interestingly, sometimes often increasingly, multinational oil and gas companies are investing in carbon management, which I think of as a clean energy solution. They're using renewables in the Permian Basin to decarbonize oil and gas operations. Instead of using diesel generators, they're using wind, right? Because for the same reasons that the world wants to use wind, right? Very ironic, but it makes their input costs more predictable.
MONICA: Well, it makes complete sense, right? I mean, given the world one, world two kind of scenario that we were talking about makes total sense.
And if you bring world three into the picture, that's when things start to look a little crazy.
KRISTINA: And that's when things start to look a little crazy. So, you know, if you are a major multinational company and world two still exists, you're going to keep doing some stuff, right? Because you have to compete globally. You are not only serving the United States. If you are a major technology company, like all of these folks building all of these data centers, your cost of electricity is one of your major inputs. And so you still, you need it. You want more of it. You want it fast. And so I think that you will continue to see at least some, you know, effective business to business cross subsidy as they want to procure electrons as rapidly as they can.
Even, you know, in the absence of the credits, because if, if, if I'm paying a hundred bucks more, on my electricity bill at my condo next year, you what is Meta paying? Yeah, exactly. What is Google paying? so you're going to get some of that.
MONICA: And more fundamentally, when I think about this, mean, you have basically you have these policy agendas which are in complete conflict with each other, right? Because on the one hand, you want to develop, you know, the data centers, the technology, everything you need to support, you know, AI and everything else that's linked to AI.
And on the other side of that, you are actually dismantling what would enable you to precisely do that first thing. So you've got two policy agendas that are in conflict with each other.
KRISTINA: Absolutely. And the same is true in the manufacturing sector of anything that you're making in the United States. Your electricity inputs are one of your biggest costs. regardless of what you're manufacturing, if you are going to continue doing it in the United States and you're building you're paying more for your electricity, at least some of that cost you have to pass on to your customers. Otherwise, you're not going to be economic. So you will see not only energy prices increasing, electricity prices increasing for consumers and for businesses, but I think you'll also start to see downstream cost increases on various manufactured goods.
This administration says that it wants more manufacturing in the United States, maybe not of the stuff that everybody was on-shoring to build the clean energy supply chain, but they say that they want more manufacturing as a general matter, that's going to be more expensive to do than it would otherwise be in world A in current law baseline.
MONICA: So, Kristina, to summarize, I think we're coming to a kind of a conclusion, correct me if I'm wrong, but we're coming to a kind of a conclusion where we've laid out some contradictions. We've seen how certain objectives don't match up with other objectives. And that naturally begs the question, where does it all go from here?
KRISTINA: Yeah. So, you know, I think that there's two scenarios as opposed to my three scenarios, right? And these are two different scenarios for the United States because like we've been talking about, I think the scenario globally, there's one scenario, is that there's going to be increasing electricity demand, but there's also going to be increasing electrification and that demand is going to be increasingly met by clean sources, renewables, also nuclear geothermal storage, etcetera. And so that is happening regardless.
The United States has to decide fundamentally what our role in that is. Are we leading that world? Are we inventing and manufacturing and deploying those technologies here and exporting our know-how, our IP, our goods to other countries around the world? Or are we dependent on other countries for our own energy security and our own energy demands?
And we have lived in the world in which we were dependent on imports from the 70s to the 90s. And it wasn't good for our economic competitiveness. It wasn't good for families' pocketbooks. And it wasn't good for our geopolitical position. And that's the choice before us fundamentally.
MONICA: I guess time will tell where we will be. Well, on that note, thank you so much. This was an incredibly rich conversation. I have to thank you enormously for your time. we would love to have you back.
KRISTINA: I would love to come back. Energy is everything. And there's so much to talk about. And so thank you, Monica, for the great conversation, the great questions, and look forward to seeing you again soon. Thank you.
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