Podcast Details


Dan Stein | Chief Economist at IDinsight

2022-07-29
In this conversation we will be speaking with Dan Stein, the Chief Economist of IDinsight and the founder of IDinsight’s Giving Green initiative. IDinsight is a mission-driven global advisory, data analytics and research organization that helps global development leaders maximize their social impact. In our conversation we discuss what types of data help maximize climate investments and the work Mr. Stein is engaged in with regards to improving climate outcomes across several emerging markets. Hope you enjoy!

Transcript


00:06 Karan Takhar
Hello everyone. This is Karan Takhar, and welcome to the Zenergy podcast. Over the past decade, India has done an impressive job of integrating renewable energy into its energy mix. For this Fullbright podcast series, I sought to investigate the enabling factors and potential of India's global leadership in renewable energy, with the focus on solar. This Fulbright series is broken down into Four Seasons. This season, we look at the next set of key technologies and regulations integral for unlocking India's continued renewable energy success at the system level. It includes conversations with leading regulators and thought leaders across energy management, storage, transmission, and distribution. 
In this conversation, we will be speaking with Dan Stein, the chief economist with IDinsight and the founder of IDinsight's giving green initiative. IDinsight is a mission-driven global advisory, data analytics, and research organization that helps global development leaders maximize their social impact. In our conversation, we discuss what types of data help maximize impact investments and the work Dan is engaged in with regard to maximizing climate impacts across several emerging markets. I hope you enjoy it. 
Thank you, Mr. Stein, for participating in this interview. I really appreciate you taking the time. I would just like to ask you to briefly introduce yourself so that listeners can get a bit further understanding of what you do.

01:59 Dan Stein: 
Sure. Thanks, Karen. So I'm Dan Stein. I'm currently the chief economist at IDinsight, and ID insight is a nonprofit organization that uses data and evidence to help to help funders, governments, and entrepreneurs make better decisions when trying to improve the lives of the world's poorest. I've also started our giving green initiative, which is a project that is looking to help donors find evidence-based, cost-effective ways to fight climate change. My background is as an economist. I would Ph.D. in economics before working at IDinsight I worked with the World Bank.

02:39 Karan Takhar:
Great, and how did you connect to ID insight? Just curious.

02:45 Dan Stein: 
Well, yeah, I was working at the. World Bank, and I was, I'd been there for almost four years, and I was just starting to get a little antsy, looking for, keeping my eyes out for the next thing, and I had, it's actually through a colleague at the World Bank, a colleague, friend, and eventual roommate had gone to Grad school with these with the founders of ID Insight at the Kennedy School as we were speaking about before and kept telling me, you know, you need to talk, you need to talk to these IDinsight guys, they're building something cool, and I was like, I don't know, they're like some piddly organization, you know that they had. I think the first time I looked at them, they had like ten people and a little website. I was like, I don't know. He's got word, and I don't know who these guys are. Forget it, but, you know, eventually, my friend convinced me to talk to Buddy Shaw, who was one of the founders of ID inside, and we had this talk, and she's a very inspirational leader. You weren't gonna grow. We're going to be changing the world, OK? But they said, oh, but we don't have money to pay you, so let's talk, let's talk later. But then, they kept talking every three, six months or something, and then IDinsight was growing, and it really looked like they were ready for takeoff, and they were ready to hire an economist. I was the first, like sort of person with a formal background in economics and organization and yeah, I decided to to to make the plunge to a. Through a, you know, young, growing, like vibrant organization.

04:17 Karan Takhar:
I'm also just curious because, as I was mentioning to you, like a few of my friends during my Fulbright experience worked at IDinsight, and a lot of them like previously to get the Delhi where they're working in different countries. You know, if you worked in countries across Africa, have you also had that similar experience where you've been traveling a lot? What does that look like?

04:42 Dan Stein: 
Yeah, I mean when you're in. Love the line of work, you know, international work. I think it just comes with travel, so starting, you know, when I started, I mean, to be honest, even before I worked in tech before I did this and I had a job that had a lot of travel, I love to travel. So, I sought out. Various career paths include a lot of travel, and when I did my Ph.D., I was doing I was studying rainfall insurance in Gujarat in India, so I was going back and forth to and spent a long-running a lot of time in Gujarat and then, yeah, when I was at the World Bank, I was on the road constantly maybe 40-50% of the time in the beginning, at least in Bangladesh, Nepal, Rwanda, Mongolia, and Kenya. I had had projects all over the place, and then ID inside the same thing, you know, ID inside. I'm ostensibly based in the US, but I spend a lot of my time on the road. We don't have an office here in the US anymore, and all of our work is in Africa and Asia, so I've spent a lot of time at our office very often. In fact, for 18 months right before the pandemic, I gave up my apartment and just decided to float the idea, insights, and various offices and also work remotely for some places. So, yeah, I spend a lot of time, and all over the place.

06:00 Karan Takhar:
I'm so jealous, honestly.

06:03 Dan Stein: 
It's, you know, it's, it's got, it's, it's got its ups and downs, but I think if you if you embrace it and if you can, if you do it on your own terms, it can be really great.

06:14 Karan Takhar:
Actually, we dwell on my next question, which of course, I know that IDinsight focuses a lot of work in the developing context. I recently read a statistic for developing countries to reach their climate commitment. I think it creates a $22 trillion market opportunity. How intertwined do you believe the climate and the economy will be, if that's not too broad of a question?

06:41 Dan Stein: 
Yeah, it's pretty broad, but I think I can tackle it. I think there are two separate points here. The first is that I think when you think about the climate challenge from a world perspective, you have to take into account that poor countries consume far less energy than wealthy countries, and there is essentially no historical precedent of a country getting wealthy without using much more energy. So there's this assumption that as various parts of Asia and Africa grow over time, they're going to be using way more energy. Now from a Climate perspective, we think that we should be emitting less carbon, which either means creating less energy or making energy less carbon-intensive and I think where these things come to clash is that, you know, from a pure environmentalist point of view, you might say like, well, OK, we as a world just can't afford, you know, poor countries to use so much energy, but then from a justice perspective, you'd think like, well, how is that fair? All these rich countries grew on their growth path with cheap fossil energy, now they're rich, and now they're going to deny that to poor countries. So I think no one is saying that, but I think that's this tension and problem, which is that like, not only do we need to decrease the amount of carbon we did, decrease them like we did, drastically decreasing the amount of carbon we're doing while drastically increasing the amount of energy we're producing, and that becomes this very fundamental dual challenge, and I think that essentially the only way that you can solve this problem is through. Uh, through massive technology adoption, let's say leapfrogging technology. So we need those poor countries to adopt a kind of leading-edge technologies. In terms of energy generation, you know, like solar, like wind, like electric cars, but then, but that's not always the cheapest, and I think that's where you get these types of funding gaps where it's like, well, if we have the wealthy countries have gotten rich of fossil fuels, and now we want to win the world off fossil fuels, it's like sort of the responsibility of healthy countries to help poorer countries develop cleanly, and then since that's the way I look at it, 

09:17 Karan Takhar:
That makes a lot of sense. The key question is, can countries develop sustainably? Is the technology, in your view, to the point where sustainable development and economic development can come together? 

09:35 Dan Stein: 
I mean, is the technology there like? Well, only sort of, I mean, and then it's also more expensive, I mean, so right now. The obvious answer is solar, which is the one tech, the one renewable, well, maybe not the one renewed, but actually one of few renewable technologies that really can compete with fossil fuels, compete with coal, but the problem that hasn't really been solved is the temporal problems with solar, i.e., The sun doesn't shine at night, and in certain areas, the sunlight isn't strong enough, so I don't particularly think that there's a great technological solution that is quite ready for poor countries to adopt off the shelf to like massively increase energy supply without fossil fuels, but I think that there's a little bit of technological innovation that still is happened, I mean, in theory, it's possible you could store the energy in batteries, or you can pump water up the hill, but these things aren't really quite ready for prime time, so can it happen? Yes. Can it happen right now? Uh, I think the answer is no, but which makes tension in a country like India that wants to go like right now, so I think the solution has to be that the technology just runs a little bit behind the electrification and that you take steps to avoid, known as carbon lockdown but like put avoid putting in places systems that can't be easily decarbonized later like say running natural gas lines as we have in the US I think you might say like well maybe that's not the best solution to be putting into new places because once that infrastructure is in place, it's very hard to back down from that. So maybe you have a system in place, and even if you have to put a fossil plant will be powering the electricity system now, make sure that it's built in such a way that if we wanted to replace it with a solar plant or geothermal plant, there wouldn't be huge costs to do that and I'll give you a quick example in India, I'm working on a lot of these mini-grid projects. Sounds great. It sounds clean, but most of the mini-grids that we work with actually have diesel backup because sometimes you need energy even if the sun isn't shining, and so it's just not. It's just not really feasible to do it 100% green. Right now.

12:07 Karan Takhar:
Could you talk a little bit more about the giving green initiative, how this venture came about?

12:14 Dan Stein: 
Yeah, definitely. So giving Green is a, let's say, a semi-autonomous initiative within IDinsight, and it's a little bit different than IDinsights main, Ah, main let's say, the main function of your IDinside is big and working in developing countries and conducting research and helping decision-makers their money, whereas giving Green is a little bit more meta in terms of it's basically trying to answer if you're an individual or you're a philanthropic donor, and you're trying to make a difference in climate change, you know, what are, Where are the places where there's really evidence, and you can make the most cost-effective intervention right now, and where I came from was so I've been working in International Development for over 10 years and working on this I would say evidence, policy Nexus where you had researchers that were trying to figure out what worked, running randomized trials, running impact evaluations, gathering data, trying to say like, OK, well if we have a solution, what works? What's the evidence, and what's cost-effective? And then let's try to get policymakers and donors to put money into what works. There's a whole ecosystem there of research organizations of which I would consider us one of them, and you know, you have people like Jaypal and IPA that are some of the big names, and then you also have people who have taken that information and then and packet repatched bit for donors. So I'm thinking of places like give. Well, like we've looked at all the evidence, and we think that charities A, B&C are the best bets for your money in public health. Now, as I started to work a bit more on climate. The change I was surprised by was that ecosystem didn't really exist, and I mean, there have actually been massive changes in even the last few years, but there are not that many good evaluations on environmental projects. The evidence is super thin, like what works to stop people from. Chopping down forests? I worked on the 4th Street for a while at the low back. Like, there's hardly any evidence, and then when you get even like more practical, if you're a donor, you want to put in $100 thousand dollars, $1,000,000 towards something that's really cost-effective and evidence back. It's kind of impossible to find. I thought that this was a problem I could just solve by going and Googling a little bit, and it's really hard, and not only is the evidence not there but there's also bad information out there, specifically around I think there's a lot of misinformation in the carbon offset market, which is kind of designed to solve this like, OK, I want to pay money and remove carbon, what's the cheapest way to do it? The offset market like purports to be that, but it's filled with misinformation, especially for someone who doesn't know the ends and outs of it, so we just felt like there was a need for a simple guide. Well researched that could present the evidence to the public and say, look, this is what we think the best bets are in fighting climate change, and that's, and so we decided to do it and given green.

15:27 Karan Takhar:
It's great, and What are some of the best bets?

15:32 Dan Stein: 
I think that. The best thing that people can do is to think about how to use small donations to really achieve systemic change. So I would tell people to stay away from these things. It's not fair to say stay away, but I don't think the best bet is to say, you know, buy support this solar farm in Africa or do this to try and support these, you know, this forest from getting cut down like all of these. Initiatives are worthwhile. But I really think you can't attack the climate problem piecemeal. It's a systemic problem that needs systemic solutions, so I really believe that the best. It's something solutions are going to need government. So I think that the best solution is trying to put your donations towards organizations that are going to influence the levers of power in government in terms of creating new regulations and setting new norms, you know, pushing for new renewable energy standards, etc., so we concentrated our research on the US because, first of all, I think the US, the US is this world's second emitter, but also its policies and technologies can tend to have wide spillover throughout the world, and so we focused on a couple of organizations that we think we're doing really good work, but we're underfunded. One is the. OK, just taking a step back, We thought. Your research, We thought that. In order to really affect. Uh, political change there are two basic strategies you can have the insider strategy, which is your work with the politicians, you're in the boardrooms, you're helping write laws, you're maybe having drinks with the politicians, you know, we call that inside baseball, that's how a lot of laws get made. You also have outside, which is grassroots activism putting pressure on lawmakers calling congressmen to protest, you know, trying to trying to affect the systems of power, that's the outside game, so within the inside game, I think it's unclear in climate which of those is going to be more effective. You certainly need both, so we tried to look at solutions in both, and For last year, for 2020, we're. Still working on the 2021 recommendations, but last year for 2020 mitigations, one is the Clean Air Task Force, which is pushing for New York. The US government supports and funds research and development of neglected energy technologies and also the Sunrise Movement Education Fund, which is a wing of the sunrise movement that's trying to grow the movement, and the sunrise movement is trying to put pressure on politicians to take climate more seriously and Act on climate.

18:34 Karan Takhar:
I just have one more question in terms of the technology side; I've always been curious in terms of when technology does get developed in the US market, and I know you work for us across like a lot of developing countries, So how does that process work where like say there's technology here in the US, Is not only applicable to the US economy, but also in these countries but maybe those countries have a smaller market than the US does, so like it's not a priority focus area for that company right now.

19:09 Dan Stein: 
I think that you get innovators within markets for developing countries that figure out how to make it work; I think one thing, Yeah, one thing, you know, there's a couple of examples that pop to mind. One is solar panels, which were developed in both in the US eventually, you know, China makes most of the solar panels, and I didn't work in the US what you get the biggest use of solar panels are, you know, putting big arrays on roofs Tier 2 to powerhouses, but you know, and these are like as a complement to the grid normally, and so that type of thing hasn't really taken off in Africa for a variety of reasons, but what has taken off is, you know, little tiny solar panels, but that power a small solar home system that allows people to charge cell phones and has a light, then maybe a little battery and a little radio. So I think it's just about I think that technology will spill over into other countries, and you need local innovators to figure out how to make it work there. The other thing I'm thinking about is the electric car market in China, like, OK, in the US, you've got $50,000 Teslas, and these electric cars are luxury cars, but I think you have entrepreneurs in China, and these Chinese car companies that are trying to make the battery smaller and cheaper and fit in smaller cars and empowering a real electric car revolution there that, if I were to guess, was probably going to eventually spill back into the US and push like pushing the original companies to innovate even more. So, I think the technologies you don't need; you don't necessarily need the CO2 to want to work in a developing country. Like if someone accompanied US works? Invent something, the technology will spill over, it'll get copied, or it'll get licensed, or whatever. You can't keep a good idea in the box for too long.

21:16 Karan Takhar:
Thank you, Mr. Stein, so much for taking the time. I hope you enjoyed that episode, and do check out the show notes For more information on my guest. See you next time.

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