An Economic View of the Environment

In our podcast series, “Environmental Insights: Discussions on Policy and Practice from the Harvard Environmental Economics Program,” I’ve had the pleasure of engaging with a number of real stars from the environmental policy world, asking them not only to comment on relevant policy issues, but also to reflect on their own experiences over the years.  To have done an adequate job of this with my most recent guest, I would have needed an entire day, not just the 30 minutes that we had for a podcast recording.  I say that because my guest was Mary Nichols, whom I first became aware of some 40 years ago in the early-1980s when I was working at the Environmental Defense Fund (EDF) in Berkeley, California, before I moved across the country to enroll in the PhD program in economics at Harvard.  What is astonishing to me is that at the time Mary Nichols already had a prominent and highly successful career in environmental protection and regulation, and she has accomplished so much more in the decades since then!  I hope you will listen to our complete conversation here.

Mary is the former Chair of the California Air Resources Board, having served on the Board under Governor Edmund G. Brown, Jr. (1975–1982 and 2010–18), Governor Arnold Schwarzenegger (2007–2010), and Governor Gavin Newsom (2019–2020).  She also served as California’s Secretary for Natural Resources (1999–2003), appointed by Governor Gray Davis.  If that’s not enough, let me note that when not working directly for the State of California, she founded the Los Angles office of the Natural Resources Defense Council (NRDC), and held the Senate-confirmed position of Assistant Administrator for U.S. EPA’s Office of Air and Radiation, in the administration of President Bill Clinton.  Suffice it to say that as an environmental lawyer and leader in government and NGOs over 45 years, she has played a key role in U.S. progress toward healthy air and a clean environment, including having led CARB in crafting and implementing California’s internationally recognized climate action plan.

A graduate of Yale Law School, Mary Nichols was first appointed to CARB by then-Governor Jerry Brown in 1975, and played a key role in the State’s intensive efforts to mitigate urban air pollution, and much later returned to leadership of the Board to help craft and then implement California’s climate action plan, including its well designed cap-and-trade system.

“I have had a lot of good fortune as a lawyer to be in places where there was important work going on and where it was an opportunity to actually make changes happen,” Nichols says. “For me, it was more a question of not wanting to join the corporate establishment, not wanting to do what at that time seemed like the default, which was to go join a big law firm, but to do something that was more aimed at making the world a better place, which is why I had gone to law school in the first place.”

In our conversation, Mary notes that her early work on environmental regulation was focused on clean air, but eventually progressed to climate change policy as well.

“My focus was, and pretty much always has been, on implementation, on taking the statutory enactments laws and using them to actually make something happen in the real world, as we like to say, and climate just seemed to be too esoteric as well as distant. Obviously, my views changed on that and so has those of most of the rest of the world. But it took a while,” she says. “The key was recognizing that when it came to dealing with the causes of climate change, what was actually causing the increasing buildup of greenhouse gases in the atmosphere, it was essentially the same root causes, the same fundamental issues about how we use energy, how we use electricity, how we move ourselves around.”

“The combustion of fossil fuels is at the heart of it all. It’s obviously more complicated and nuanced than that, but to me, the recognition that if you were doing your job correctly in terms of dealing with air pollution that hurts people’s health and that they can see you were also potentially going to be able to make a real dent in the climate problem as well,” she says.

Nichols argues that the early work on environmental regulation in California, including the path-breaking Global Warming Solutions Act, has had an important impact on national policy (and – I will add – on international climate policy) in the subsequent decades.

“Our goal, of course, was to try to push the US government to adopt meaningful climate legislation. And while we’re still only, I think in some ways, working around the edges of that in terms of having a single comprehensive climate law, the work that we’ve done absolutely has formed the basis for other states to act, as well as help to give some of the backdrop and provide the experience that enabled the federal government to pass President Biden’s very ambitious agenda,” she states.

When I ask Mary where she places herself on the spectrum of hope for climate policy today, she describes herself as an optimist.

“I see that there are signs all over the world of people demanding action to deal with the climate change, which is now no longer theoretical but real, and the massive disruptions in patterns of weather are evidence. It’s not something that requires statistics or a deep knowledge to see what’s happening,” she remarks. “I think politicians are being increasingly pushed to do something meaningful, and it’s not just a matter of mitigation versus adaptation, which used to be the big question. The big argument was, are we going to do things that will protect ourselves against climate change versus trying to stop it. We have to be doing both, and I think there’s a lot of interest in doing that, certainly among the larger financial institutions in all of the countries and companies that do business around the globe.”

For this and much, much more, I encourage you to listen to this 46^th episode of the Environmental Insights series, with future episodes scheduled to drop each month.  You can find a transcript of our conversation at the website of the Harvard Environmental Economics Program.  Previous episodes have featured conversations with:

• Gina McCarthy, former Administrator of the U.S. Environmental Protection Agency
• Nick Stern of the London School of Economics discussing his career, British politics, and efforts to combat climate change
• Andrei Marcu, founder and executive director of the European Roundtable on Climate Change and Sustainable Transition
• Paul Watkinson, Chair of the Subsidiary Body for Scientific and Technological Advice (SBSTA) within the United Nations Framework Convention on Climate Change
• Jos Delbeke, professor at the European University Institute in Florence and at the KU Leuven in Belgium, and formerly Director-General of the European Commission’s DG Climate Action
• David Keith, professor at Harvard and a leading authority on geoengineering
• Joe Aldy, professor of the practice of public policy at Harvard Kennedy School, with considerable experience working on climate change policy issues in the U.S. government
• Scott Barrett,  professor of natural resource economics at Columbia University, and an authority on infectious disease policy
• Rebecca Henderson, John and Natty McArthur University Professor at Harvard University, and founding co-director of the Business and Environment Initiative at Harvard Business School.
• Sue Biniaz, who was the lead climate lawyer and a lead climate negotiator for the United States from 1989 until early 2017.
• Richard Schmalensee, the Howard W. Johnson Professor of Management, and Professor of Economics Emeritus at the Massachusetts Institute of Technology.
• Kelley Kizier, Associate Vice President for International Climate at the Environmental Defense Fund.
• David Hone, Chief Climate Change Adviser, Shell International.
• Vicky Bailey, 30 years of experience in corporate and government positions in the energy sector. 
• David Victor, professor of international relations at the University of California, San Diego.
• Lisa Friedman, reporter on the climate desk at the The New York Times.
• Coral Davenport, who covers energy and environmental policy for The New York Times from Washington.
• Spencer Dale, BP Group Chief Economist.
• Richard Revesz, professor at the NYU School of Law.
• Daniel Esty, Hillhouse Professor of Environment and Law at Yale University. 
• William Hogan, Raymond Plank Research Professor of Global Energy Policy at Harvard.
• Jody Freeman, Archibald Cox Professor of Law at Harvard Law School.
• John Graham, Dean Emeritus, Paul O’Neill School of Public and Environmental Affairs, Indiana University.
• Gernot Wagner, Clinical Associate Professor at New York University.
• John Holdren, Research Professor, Harvard Kennedy School.
• Larry Goulder, Shuzo Nishihara Professor of Environmental and Resource Economics, Stanford University.
• Suzi Kerr, Chief Economist, Environmental Defense Fund.
• Sheila Olmstead, Professor of Public Affairs, LBJ School of Public Affairs, University of Texas, Austin.
• Robert Pindyck, Bank of Tokyo-Mitsubishi Professor of Economics and Finance, MIT Sloan School of Management.
• Gilbert Metcalf, Professor of Economics, Tufts University.
• Navroz Dubash, Professor, Centre for Policy Research, New Delhi.
• Paul Joskow, Elizabeth and James Killian Professor of Economics emeritus, MIT.
• Maureen Cropper, Distinguished University Professor, University of Maryland.
• Orley Ashenfelter, the Joseph Douglas Green 1895 Professor of Economics, Princeton University.
• Jonathan Wiener, the William and Thomas Perkins Professor of Law, Duke Law School.
• Lori Bennear, the Juli Plant Grainger Associate Professor of Energy Economics and Policy, Nicholas School of the Environment, Duke University.
• Daniel Yergin, founder of Cambridge Energy Research Associates, and now Vice Chair of S&P Global.
• Jeffrey Holmstead, who leads the Environmental Strategies Group at Bracewell in Washington, DC.
• Daniel Jacob, Vasco McCoy Family Professor of Atmospheric Chemistry & Environmental Engineering at Harvard.
• Michael Greenstone, Milton Friedman Distinguished Service Professor of Economics, University of Chicago.
• Billy Pizer, Vice President for Research & Policy Engagement, Resources for the Future. 
• Daniel Bodansky, Regents’ Professor, Sandra Day O’Connor College of Law, Arizona State University.
• Catherine Wolfram, Cora Jane Flood Professor of Business Administration, Haas School of Business, University of California, Berkeley, currently on leave at the Harvard Kennedy School.
• James Stock, Harold Hitchings Burbank Professor of Political Economy, Harvard University.

“Environmental Insights” is hosted on SoundCloud, and is also available on iTunes, Pocket Casts, Spotify, and Stitcher.