I will stand for this. Good morning, ladies and gentlemen, and as deputy Presiding Officer, it's my pleasure to welcome you to the debating chamber of the Scottish Parliament for the opening ceremony of the ninth annual meeting of the Organisation for Economic Cooperation and Development, OECD, parliamentary budget officials and independent physical institutions. What a mouthful. To those of you who joined me at the reception yesterday evening, I apologise for my speech. Welcome back. I hope you enjoyed your evening. I hope you had a good night's sleep. This is difficult when you come to a strange town. Although the OECD has celebrated its 50th anniversary, its roots actually go back further to the rubble of Europe after World War 2. Determined to avoid the mistakes of their predecessors in the wake of the First World War, European leaders realised that the best way to ensure lasting peace was to encourage co-operation and reconstruction rather than punish the defeated, tack-tent the European Union, I'm thinking Brexit. It was established to run the US finance-martial plan for reconstruction of a continent ravaged by war. It made individual governments recognise the interdependence of their economies and paved the way for a new era of co-operation that was to change the face of Europe. As you all know, the success of the OECD brought about the prospect of carrying out its work on a global stage. The US and Canada joined and signed the new OECD convention of 14 December 1960. Today, there are 35 OECD member countries worldwide who regularly turn to one another to identify problems, discuss and analyse them and promote policies to solve them. With a mission to promote policies that will improve the economic and social wellbeing around the world, people around the world, the OECD is focused on helping governments around the world to restore confidence in markets and the institutions that make them function, re-establish healthy public finances as a basis for future sustainable economic growth, foster and support new sources of growth through innovation, environmentally friendly green growth strategies and the development of emerging economies and ensure that people of all ages can develop the skills to work productively and satisfactorily in the jobs of tomorrow. As the OECD network of parliamentary budget officials, PBO and independent fiscal institutions, you play a fundamental role in working on improving parliamentary scrutiny of the budget process and the evolving role of independent fiscal institutions. I am very pleased that this conference has brought together senior staff from parliaments, PBOs and fiscal councils to debate substantive budgeting issues, share practical experiences on working methods, profile new institutions and significant changes in the mandates of older institutions, identify good practices and contribute to standard setting. If I may, I will speak very briefly about Scotland's budget to give you all an overview of the issues that are currently being debated in this chamber by my MSP colleagues. The Scottish budget and public finances will evolve in the coming years, with additional tax and welfare powers being devolved to this Parliament. Receipts from income tax, assigned VAT and air departure tax will form part of the Scottish budget during this parliamentary session. Those taxes, combined with the already devolved taxes of council tax, business rates, land and buildings transaction tax and the land fuel tax, will mean that the taxation as a share of devolved spending will make up approximately 50 per cent of that spending. Those new powers mean that the Scottish budget is moving into territory where its size is subject to some uncertainty, driven by tax policies set in the Scottish Parliament, revenue forecasts, which will be undertaken by the Scottish fiscal commission, as well as Scottish economic performance, which will influence, obviously, tax receipts. The Scottish economy has slowed in recent times—I hope that you did not read the front pages of the papers this morning—relative to the rest of the UK, largely due to the slowdown of the North Sea oil and gas sector. Despite difficult economic times, since the financial crash of 2008, the Scottish labour market has held up fairly well. The latest unemployment rate in Scotland stands at 4.9 per cent, with the employment rate being 73.6 per cent. Scottish productivity has also grown at the fastest rate of any part of the UK. That is a very brief overview of the current climate in Scotland in terms of our budget and economy. I am sure that you will have discussions with our in-house experts, the Scottish Parliament's financial scrutiny units throughout the course of the conference. On to the rest of the conference, I wish you all a stimulating, productive and enjoyable day in the Scottish Parliament. That is the end of my speech. I was not seeking applause—yes, I was. I would like to welcome John Blondell, head of division, budgeting and public expenditures, to address the conference. John, please. Thank you very much. Allow me to start by thanking the Scottish Parliament for hosting us and for you for welcoming us so kindly. It is a rare honour for groups to be allowed into this chamber, which is normally reserved for actual members of the Scottish Parliament. Thank you very much for that honour. When we were going through the various rooms that we have in the Parliament building yesterday for the breakout sessions and the various breakout rooms, and we were thinking back, Lisa and I, to when we started this meeting, that the smallest breakout room would have been too large for this group when it first started. It is truly a testament to how parliamentary budget offices and independent fiscal institutions as budgeting institutions have grown in a remarkably short period of time, from being a very small group to being a very large group, although they are of course very divergent in their mandates and resources. It is truly one of the greatest witnesses to the changes in budget institutions that we have witnessed. Now, we all know that Scotland has been a major centre of the study of economics. It was in this very city that Adam Smith wrote The Wealth of Nations. When I came here, I was hoping to visit his house, but I was told that it was under renovation. But his economic theories 250 years later live on, although parts of it are being renovated. The timing of this event is of course very appropriate, because this very week the Fiscal Commission of Scotland is getting its Goddard statutory footing, so it is now a statutory body. So we congratulate the Fiscal Commission, Lady Susan Rice, on this status, and we look very much forward to hearing more about this institution as she speaks. We have an agenda that features a broad range of experts, and we are very much looking forward to it, but before I close and give the floor to the next speaker, I would also like to mention that many of you know a person who is a member of the staff now, Sherri Nicholl, who is, of course, from this Parliament. We would first of all like to thank the Scottish Parliament for in the beginning lending us to her on succumbent and then for allowing us to keep her. Thank you, Sherri, for everything that you do, and without further ado, please to the next speaker. Thank you very much. Thank you, Mr Blond. I would like to welcome Lady Susan Rice, chair of the Scottish Fiscal Commission, to give the plenary address. Lady Susan, I am going to say a wee bit about you first. Lady Susan, a charter banker, was previously chairman and chief executive of Lloyd's TSB Scotland PLC, the first woman to head a UK clearing bank and managing director of Lloyd's banking group. She also held the position of senior vice president of NatWest Bankor in New York and earlier was a dean at Yale and Colgate universities in America and a published medical researcher. Lady Susan has degrees from Wellesley and Aberdeen University. There you go. I'm sure there's more to it, but that's all I've got down here. Lady Susan, please. Thank you very much, Deputy Presiding Officer, which is also a mouthful and thank you for not saying any more. Good morning to everybody. I must say at the reception last night and this morning, I was so pleased to see a number of familiar faces and I'm looking at some of you just now. That's one of the great things about this annual event and I'm especially pleased that you're here in our wonderful Scottish Parliament. Can I welcome you all to Scotland in what is one of the most exciting years in our fiscal history? The Scottish Fiscal Commission this week became a non-ministerial body, a landmark moment after a huge amount of work which some of you may also have experienced in your own institutions. Now my theme is good things come in threes. You might well ask why. Well, this is my third OECD PBO and IFI conference and there's no doubt that it's a good thing. Three years ago in Vienna, I described what was almost a brand new organisation. It comprised three, part time, unpaid commissioners, none of us were from within government and that was it. No staff, the Scottish Fiscal Commission was set up in June 2014 as a non-statutory body. Our job was to provide independent scrutiny of the Scottish government's forecasts of the receipts from taxes which were newly devolved to Scotland and we had to make a judgment as to whether their forecasts were reasonable or not. We had three, the magic number, three devolved taxes to consider in that first year. Land and buildings tax, landfill tax along with analysis of the economic determinants of non-domestic rates. We published a report, our first one, which was 12 pages long, a bit like a pamphlet and even though we were one of a tiny handful of sub-national independent fiscal institutions, IFIs, we still wanted to establish that we were doing things in the right way and we had to learn what the right way was. When you're doing this in a country you don't have any peers to turn to and that's why however simple our role was then we started at the beginning to mark ourselves against the 22 OECD principles for independent fiscal institutions and we bet quite a number of them even then in our first year but not all of them. Next when I saw you or joined this conference last year I described progress we had made in year two. At that point we'd added an administrator to research assistance, a small annual budget, we had no budget the first year, we developed a visual identity and a logo, started producing out-turn evaluation reports as well as our draft budget report, the commissioners were even being paid in the second year, the forecasts had moved from a two to a five-year horizon and our second report on the draft budget turned out to be five times longer than the first, a bit more like a short story. There was also during that year quite a lot of parliamentary debate about whether we could genuinely be independent of government. We were answerable to the Parliament and appointed by it but in response to ministerial recommendation and we were after all scrutinising the government's forecasts. We had a lot of debate about that and we therefore became rather more public in describing our alignment to the OECD principles because they gave us an external benchmark of good practice. We knew we were operating independently but it was the OECD principles as a reference point that let us talk about ourselves when challenged in a positive way and not defensively. So quite a lot of progress in our second year but the evolution has continued. For our third budget round in 2016 income tax receipts as you just heard and threshold setting powers were added to the list of devolved taxes so we began talking real revenue for this country and as you might expect the report on the draft budget that we produced last December expanded even further, this time it was 10 times bigger than our first year, pretty much a novella and who knows next time maybe a novel, maybe Amazon will have to wait and see what happens and our activity throughout last year was like a well-oiled machine. We had matured as a group of commissioners who were scrutinising others' forecasts. We set the agendas, called the meetings with the Scottish Government forecasters, we challenged them, we also started a process of knowledge transfer beginning to work with the models ourselves, changing assumptions in order to test forecast sensitivities. At the same time two new bills were passed, the Scotland Bill 2016 in the Westminster Parliament and the Scottish Fiscal Commission Bill in the Parliament here. Together they both fundamentally changed our purpose and provided the primary legislation and framework for us to operate on a statutory basis. So just as we thought we'd matured into our role as scrutineers, we've spent 12 months in a transition program to put ourselves into statute. Last Saturday, April 1, I won't say that it's April Fool's Day, but it was April 1, we emerged from that cocoon as a non-ministerial body operating under statute but still independent of government. We've set the protocols and standing orders and agreements needed in order to operate to the highest public sector standards, that's very important to us, and we've hired a team of analysts. Why? Because today, while we're still called the Scottish Fiscal Commission, we now have to produce ourselves the central fiscal and economic forecasts for the Scottish budget. We're now responsible for forecasting onshore GDP for Scotland, income tax receipts, land and buildings and landfill taxes, non-domestic rates, demand-led social security expenditure with air departure tax coming our way shortly and after that aggregate levy. Around 17 billion pounds of taxes, which were formally set, received and redistributed by the UK government, are now coming under the control of the Scottish government. Our analytical team have been recruited or seconded into the commission from academia, the private sector, and both the UK and Scottish civil service, and I'm delighted that Mary Spowage is here, Mary, you're up there, who's our deputy chief executive and that she's participating in these meetings. Their experience includes fiscal forecasting, macroeconomic modelling, housing market analysis, public sector finances and data and statistics. As with any organisation, we also have a corporate services function and a senior responsible officer. That person, once appointed, will report to me as the chair, together with my fellow commissioners. We have Professor Alistair Smith and David Wilson, who are also joining us and I hope that you meet them. Over the coming months, our own staff now will develop the models and forecasts, the outputs with challenge and direction set by us, the commissioners, we're also their bosses. We'll have to scrutinise the work produced by our own staff in order to gain assurance around the reasonableness of these forecasts because at the end of the day, the forecasts are the commissioners. We are responsible in law and we're answerable to parliament. A curious structure. And if we're still one of only a handful of subnational financial institutions today, we're also one of only three ifsies to produce its own forecasts. Please wish us luck. So that's our story and I hope next year there'll be very little to report to you. But this year I thought I might just finish by summarising a few of the challenges we've had and how we're steering through them. First, along the way it was essential for us to influence the legislation to have clear boundaries for what we are and are not to do. Parliamentarians, the press, the public all have different views about what they want us to do. So it's been essential to have boundaries enshrined in law so that we can say we don't do that and we do do this. Second, it's also essential for us to ensure that the rather complex structure we now have still allows us to act independently in perception as well as in fact. Third, looking ahead we'll need to adapt our brand new organisation as it settles in. One always has to do that with new organisations and establish our professional credibility not only through reasonable forecasts but also through good communication. We think we have a chance of meeting these three challenges if we focus on three goals. One is to develop a strong reputation as an authoritative, independent and transparent body. That's about our forecasting. The next is to deliver value for money for the taxpayer. We need to be efficient, adaptable and operate to a high standard. That's about our organisation. Third, we'll do these things as we've done from day one by learning from all of you and drawing clearly on the OECD principles. So I'll close by saying thank you for your help even if you didn't know you were helping us and I salute all of you and I hope you enjoy these two days. Thank you. Thank you. Thank you, Lady Susan, for that address. I'd like now to call Alice Rivlin, First Director of the Congressional Budget Office United States to give the keynote address. Alice is a senior fellow in economic studies at the Brookings Institute Centre for Health Policy, an expert in monetary, fiscal and health policy. She has held several high-profile positions during her extensive career. She was the founding director of the Congressional Budget Office in 1975 and later director of the Office Management and Budget and Vice-Chair of the Federal Reserve Board. She's taught at Harvard, George Mason and the new school universities and has served on the boards of directors of several corporations and is president of the American Economic Association. Alice was named one of the greatest public servants of the last 25 years by the Council of Excellence and Government in 2008 and she's a woman. Excellent. Miss Rivlin. Thank you very much. That was a wonderful introduction, Deputy Presiding Officer. It's such a mouthful. I'm greatly honoured to be here in the Scottish Parliament for this remarkable gathering and I must say I think I hold the record of being the person in this room who has the longest association with the OECD and that's because I'm not young and my first job out of university was with the Marshall Plan organization in Paris as a very junior economist on the staff of our mission there and our job was, among other things, to represent the United States at the OECD and one Saturday morning in the summer there happened to be a review of the economy of Ireland and my senior colleagues all somehow had something else they wanted to do on a holiday weekend in the summer and it fell to the most junior person in the office to represent the United States at this meeting and I was exceedingly excited to be there in my early 20s as the voice of the United States and I can remember what happened but I remember it was very exciting. I'm very pleased to see this large gathering. 42 years ago when I was asked by the Congress of the United States to start the Congressional Budget Office there were hardly any examples of legislative budget or fiscal offices. We didn't get much guidance in the law as to actually what, how the CBO was to be organized, in fact none at all, and we looked around for models and we really didn't find any none in other countries that seemed applicable and a couple in American states, California had an active legislative advisor he was called and he was very helpful as we made nitty-gritty decisions about who to hire and what kind of staff and what would be useful to the Congress but now it's very different. We have a large group of OECD countries and some developing countries as well with legislative budget offices or independent fiscal agencies. They're able to reach out to each other to talk about technical matters to share stories of triumphs and defeats. New parliamentary fiscal offices as Lady Susan has emphasized here in Scotland and also in Ireland have a ready group of mentors eager to offer advice on how to get started and what to do and what not to do. So I find this situation very reassuring. I am proud of the Congressional Budget Office which has had able leadership over the years and has come to be a highly respected organization which Congress and the public rely on for budget projections and policy analysis despite sometimes strident sniper fire from politicians on both the right and the left. I'm not sure what the academic community that teaches and researches the U.S. budget would do without the CBO. It's a strong institution and I'm not worried about its coming through our current political turmoil. I'm especially gratified to see Bob Shunstein here. He was one of my early hires and has had a very long career at the Congressional Budget Office. So it's great that these similar organizations are sprouting out up and generally thriving under the varying conditions in many parts of the world. They're led by an impressively well qualified set of experts passionately dedicated to fiscal responsibility and producing solid information to help politicians make informed decisions. So it's exciting for me to interact with this whole roomful of smart people who care about assisting legislators to make more informed decisions. We must have proved our worth to the political world or we wouldn't all be gathered here in Edinburgh this morning. But at the same time I sense we gather in part for protection and mutual support in trying in turbulent times. It's never been easy to provide politicians with objective nonpartisan information on budget matters in time to help them with the hard decisions that they must make on tight schedules. But it has become more difficult in recent years. So I'd like to share with you some more this morning some thoughts about the difficulties facing our institutions and perhaps some thoughts about what to do about it. My remarks will draw on the United States experience because that's what I know about. But I believe we all face many of the same challenges. Nobody ever said it was easy to work as a parliamentary budget official or lead an independent fiscal institution. If you wanted a job that would not draw criticism and controversy you chose the wrong career. These are inherently difficult assignments that require not only technical and analytical skills but the ability to win the confidence of politicians without telling them what they most want to hear because they often want magic solutions and your job is to tell them there aren't any. Parliaments by definition are full of politicians with widely different views on what is best for their country. Disagreements are often an intense irrespective of whether the actual difference in views is wide or narrow. Politicians win elections because they believe deeply that their cause is right, that the policies they espouse are going to lead to general welfare. In the face of uncertainty they choose to feature and genuinely believe the evidence that supports their point of view. They believe that their policy proposals will be highly effective and not very costly. This is a human trait. The psychologists have plenty of evidence that people tend to grab on to the evidence that supports what they already believe but I think it's especially true of politicians. Democracies need politicians dedicated to a variety of different policies and eager to argue their point of view but elected leaders also need reality checks. They need a competent neutral evaluator of competing policy claims and they need breaks on spending, taxing and borrowing, left to their own devices and knowing that they must remain popular in order to keep their jobs. Politicians would tend to spend more, tax less and pass the debt on to future politicians and taxpayers and they know it. They turn to budget technocrats to keep themselves honest and responsible. The congressional budget office was created for reasons that are idiosyncratic to the United States. Reasons having to do with the balance of power between the executive and legislative branches under our constitution. However, it has become increasingly important in recent years for reasons that are common to all advanced countries. The difficulty of making budget decisions that balance the needs of an aging population with opportunities for the young in the face of slower economic growth and rising debts. The drafters of our constitution in 1789 were the leaders of a successful revolution against the English crown in which resentment of English taxes played a significant role. That may resonate a bit in Scotland. They wrote a constitution with sharp separation of powers between the legislative and executive functions and gave to Congress, not the president, explicit power to tax and borrow, subject only to presidential veto that a supermajority could override. I stress this history, especially right now, because I'm often surprised at how many observers of American politics, even some in the United States, failed to understand how limited American presidential power really is. We make such a ridiculous spectacle of our presidential elections and we spend so much time and money on the election process that many observers naturally assume that the American president must have awesome powers. In fact, the American presidency is a fairly weak office, especially with respect to domestic affairs. The president cannot change laws, spend money, increase or lower taxes without engaging in detailed and often arduous negotiations with the independently powerful Senate and House of Representatives and occasionally with the courts. One might think that it would be easier for a president to win battles with Congress if his own political party had a majority in both chambers, and sometimes that's true, but party loyalty and discipline have not been strong features of American democracy, unlike many of the parliaments you come from, as President Donald Trump is in the process of discovering. Despite campaigning vigorously on the promise of repealing and replacing President Obama's signature health initiative, the Affordable Care Act, President Trump has so far been unable to get his own Republican party to agree on a way of fulfilling that promise. Disagreements between the right wing of his party and more moderate Republicans prevented a majority from coalescing around one proposal, even in the House of Representatives, where Republicans have a substantial majority. Even if the compromise were to pass the House, it would face an uncertain future in the Senate where the Republican majority is narrower and procedural rules give the minority more power. And the CBO's score of the president's replacement proposal played a significant role in that part of congressional debate. So the CBO was created as a result of President Richard Nixon's overstepping his presidential powers in the early 1970s. Congress reacted by reasserting their control over fiscal matters, creating a new budget process for making budget decisions, including a budget committee in each House and the Congressional Budget Office. This new agency was charged with providing nonpartisan objective budget forecasts and analysis of fiscal alternatives in both the House and the Senate. The president had such an agency already, established in 1921, and now called the Office of Management and Budget. Congress decided it wanted a similar agency working for them, but to fit into the congressional context it would have to be nonpartisan and responsive to both the House and the Senate. And that meant giving the director of the congressional budget office a lot more independence than the director of the Office of Management and Budget, who works directly for the president. I've held both jobs, and I much prefer the CBO. While the origins of the CBO reflected these idiosyncratic U.S. structures, its growing responsibility and preeminence and prominence stem from the economic and fiscal pressures that all advanced countries share. Beginning in the 1980s, the Congress began imposing rules on itself to enforce fiscal rectitude, rules designed to hold down annual deficits and keep the national debt from rising faster than the economy was growing. Similar rules appeared in other advanced countries that face comparable budget challenges. The fiscal rules on deficits and debt in the Maastricht Treaty embody the same concept, albeit without a workable enforcement mechanism. If fiscal rules are to be enforced, there has to be a referee or a scorekeeper. Someone has to provide an accepted answer to questions like how much will this proposed budget or spending measure or tax change add or subtract from the current deficit and the future debt. It was this scorekeeping role that put the CBO into the spotlight and made it necessary for staff to make estimates of the budget impact of exceedingly complex legislation as it was being considered, and a subjected CBO to often strident attack from politicians whose legislative objectives were threatened by the CBO score. The scoring role precipitated technocrats with their data sets and their statistical models and their algorithms into positions of power in the policy decision process. It became normal for the drafters of major tax and spending legislation to consult with CBO during the process of writing the bill because the CBO score would determine whether their proposal conformed to the budget rules. Indeed, the details of programmatic legislation are often drafted and redrafted in consultation with the CBO in order to achieve a more acceptable score. Some politicians and policy advocates complain that the CBO has excessive power and that designing the best policy becomes lower priority than getting the right score. CBO, of course, is only trying its best to help facilitate enforcement of the fiscal rules that the politicians in Congress have imposed on themselves, but they sometimes do come across as unelected technocrats presuming to prevent the elected representatives of the people from making the laws. Sometimes our budget rules have worked well in the sense that they produced a framework for opposing political forces to resolve their policy differences while containing deficits and debt. The rules adopted by the Congress in 1990 kept annual appropriations and required that the deficit-increasing effects of either tax cuts or benefit increases be offset. Those rules helped produce a budget surplus by the end of the decade, but weakening of the rules produced some bizarre consequences. In 2001, President Bush proposed tax cuts that were estimated by the CBO to inflate budget deficits in the long run. So, Congress designed the tax changes to be deficit-neutral over 10 years as the budget rule required, and then to terminate automatically at the end of 2010, which at the time seemed like a long way away. We'll think of something before then. But of course 2010 eventually came and the threat of a big tax increase in a weak economy brought on an artificial budget crisis that could easily have been avoided. The increasing polarization of our two major political parties has increased the visibility of the Congressional Budget Office as scorekeeper. The breakdown of negotiations between President Obama and congressional leadership over measures to contain future debt, which was then known as the grand bargain, led to a truly crazy budget scenario in 2011. Congress charged a select committee with coming up with a grand bargain and designed what they thought was going to be an action-forcing mechanism, proportional cuts in domestic and defense spending that were acceptable to neither party, and the thought was they were so undesirable that the grand bargain would be reached. But the threat failed to produce an agreement, and the result has been six years of short-run patches to keep the government running while divided political leadership failed to resolve basic differences over the path forward. Partisan ranker has led to gridlock, which is not a good advertisement for a representative democracy. The budget outlook in the United States reflects the same underlying forces familiar to most of the countries represented in this room. Commitments to an aging population for retirement income and healthcare. In our case, the population is aging less rapidly than most of yours, but we have a peculiarly expensive healthcare system. Slower growth, which increases the need for higher public as well as private investment in efforts to increase future productivity, science skills, modernizing infrastructure, and so forth. An out-of-date tax system that cannot be expected, especially in the face of slow growth, to produce sufficient revenue to pay for both the cost of maintaining the elderly, adequate government services, and finance productivity enhancing investment. This combination of forces leads to projections of a long-run rise in the debt-to-GDP ratio on top of very high levels of debt, currently about 73% of the GDP, largely attributable to the great recession that followed the financial crash, although other factors such as the cost of war in the Middle East have played a role. To pragmatic centrists like me, it seems obvious that compromise solutions are the answer. The United States needs to restrain the cost of healthcare, modify our commitments to older people, especially those with more than adequate incomes, invest wisely in future productivity, and overfall haul our tax system in ways that could produce more revenue in a less growth-inhibiting way. That could mean shifting from heavy reliance on wage and income taxes to more reliance on consumer taxation, adding a VAT, which is an important source of revenue to almost all of you, except us. A carbon tax is also an attractive option, but more to discourage the use of fossil fuels than to generate revenue. However, although this collection of reforms seems compelling to academics like me who don't have to face the voters, it involves compromises which are deeply polarized political leaders are unable to make.  Republicans are stridently opposed to any increases in taxation. Indeed, they favor reducing income tax rates, especially for upper income people. Democrats are just as vociferously opposed to any reductions in benefits to the elderly, the poor, the disabled. This standoff has led to rejection of many sensible centrist plans, several of which I helped right, and years of gridlock in which the only budget actions have been short-run measures to keep the government functioning while the basic issues remain unresolved. The prominence of CBO scoring in all of this has turned technical scoring issues into political fights. Even the exceedingly complex issue of how to score government lending and loan guarantee programs has attracted political attention. Two scoring issues in particular have loomed large, how to handle uncertainty in presenting forecasts to policy makers, especially long-run forecasts of spending revenues, deficits, and debt, and how to account for the feedback effects of fiscal proposals on economic performance at the macroeconomic level known as dynamic scoring, which is basically a special case of the basic question, what constitutes sufficient evidence for policy action. The problem of forecasting the future of anything, including the economy and the budget, is that it's impossible to do it accurately, and it's still necessary to make forecasts in order to have a basis for deciding to take actions that will affect the future. Budget forecasts obviously have to start with economic assumptions about GDP growth, part of Lady Susan's responsibility that she has emphasized, employment and inflation, and we all know how uncertain macro forecasts are, especially over the long run, and in the face of cataclysmic events like the financial crash of 2008. Contingent forecasts of spending and revenues given the macro assumptions and existing laws are more accurate, but over time laws change, and the cost of implementing the same laws also changes. We have a major example in the United States at the moment. Our healthcare spending growth, which has been very high over the years, has slowed down in recent years, and it makes a huge difference in projections of future debt, whether the slowdown continues or reaccelerates. The only sensible response of a forecaster is to make the best estimates they can, make their assumptions clear, give policymakers full information about why the forecast might be wrong and by how much. The Congressional Budget Office has been assiduous in drawing attention to uncertainty, providing ranges, confidence controls, and so forth, but admitting uncertainty has some risks in itself because politicians can easily make uncertainty an excuse for fiscal irresponsibility. In the face of uncertainty about future deficits and debt, it's very tempting, if you're a politician, to promise future benefits and tax cuts at the same time. And CBO often hears, you've been wrong before, so why should we believe you now? On dynamic scoring and the adequacy of evidence, our conservative politicians believe passionately in smaller, less intrusive government, but their most fundamental belief is in cutting taxes, especially income taxes, and they believe that will bruise economic growth substantially. The evidence is not nearly as strong as they think it is, and it obviously makes a difference whether the tax cuts are accompanied by spending cuts that might reduce growth or by debt increases that could increase interest rates and discourage investment. CBO has taken a lot of criticism from the right for not adequately recognizing the beneficial effects of lower income tax on economic growth, and now similar arguments are being made on the left with respect to growth enhancing benefits of social spending. Early childhood education and nurturing wellness or prevention programs in health. Advocates are often more ready than the CBO analysts to assume positive results from one highly intensive demonstration program can be replicated at the national level. Progressive anger at the CBO's alleged failure to recognize the future budget savings from social spending is as loudly expressed as conservative anger over the CBO's supposed sin of not adequately recognizing the benefits of income tax reduction. Both are special cases of the difficulty of assembling persuasive evidence of the effectiveness of policy changes. Now these kinds of issues have been debated by social sciences for decades, and the good news is that data and analysis are much more sophisticated than they used to be, and the potential for evidence-based policymaking is greater than it was decades ago when I started out as a junior policy analyst. But there's bad news too, which is why I started by saying these are trying times for people like those gathered in this room. Parliamentary and independent fiscal agencies attract people who value rationality, data analysis, ecometric models, evidence-based policymaking. We may have some difficulty defining what we mean by truth, but we do believe that some things are demonstrably true, and some are not, and that evidence matters. One of the later speakers at this meeting is talking about a post-truth society. I hope that is not what we now live in. But now we do find ourselves in a world in which evidence is widely disregarded, fake news stories circulate and are widely believed, and politicians, at least some of them, feel entitled to make up their own facts and attack those who question them. Maybe I'm overreacting to our newly elected President Trump, but I fear he is not unique and that his electoral victory is the symptom of a deeper problem. Populist reaction against elites in the establishment is not surprising. The governing elites have messed up badly in all of our countries in failing to avert the financial crisis that devastated so many lives, in tolerating extremes of distribution of wealth, income and influence, failing to take climate change seriously enough, and in failing to intervene in the devastation natural and manmade that's impelling millions to risk everything to find refuge in a safer place. Lots of swirling forces have come together. Political turmoil and desire for change, polarization of views and high decibel election campaigns, terrorism, xenophobia, fear of change, decline of faith in institutions generally, governments, religious institutions often for good reasons, explosion of information and the social media everywhere you look and falsehood, fake news and high tolerance for unverified claims. Independent official, budget officials and parliamentary budgeteers are caught in the middle of this, trying to do their jobs, produce accurate relevant estimates and projections and keep the nation's fiscal house in order. It's hardest for the newcomers who have not yet established a track record and gained the respect of contending politicians on the public. So what to do? I don't see any alternative to continuing to work hard at getting the analysis right and communicating results as comprehensively and as thoroughly as possible both to elected policy makers and the public. Politically motivated criticism goes with the job and should be expected. I have faith that providing the good information to elected representatives that you are all providing is still the best formula for good public policy making and I'm glad that so many intelligent hardworking people are gathered here to show that they're willing to take on the job. Thank you. If you'll allow me to say Alice, as I think the only politician in the room, I take your scolding of us on the chin on behalf of my species, though the caveat is I've always been a back bencher so I'm one of the good guys. What I was interested to, if I may also say, is what you said about President Trump. As we're lay observers, it took the judiciary challenging the presidential executive order about people travelling from certain countries to bring home to us the valuable checks and balances within the American constitution, which I don't think we were so aware of prior to that. What you said about the Republicans in Congress not always working on block, I'd like to see more of that in Scotland. We are a very small Parliament and we tend to find that the whips are too good at their job and there are too few and one of them I have to praise myself, back benchers who are prepared to take on their Government and it's really back benchers or members of the ruling party that can bring their Government to account more than any opposition. Your comments about tribalism in the coming months ahead because of the possibility of a referendum in independence I think we'll find political tribalism and fewer examples of being able to work together, which is just part of life. Your comments about an ageing population so true in Scotland, so many issues there. I'll take it on the chin as I say on behalf of all politicians. We do try and I do say to people when they want something, I'll say, tell me how much it costs and where the money is coming from and that's the simple question. It's hard if our Government is easy for fault in the back benches, that's why I like it, there's a comfy life. Anyway, thank you very much.  Thank you. Deputy Presiding Officer, you have, and providing as well, you have just beautifully summarised Alice Rivlin's comments and I won't repeat all of those but the point of talking about the institutions, the institutions in America, so that's where I'm from originally, but I wear a Scottish hat very proudly as well. It is different from this country and the impact that they have is different and I think one learns something about all of that. Could I thank all our speakers? Jan obviously always very happy to hear you and just my personal and our collective thanks to the OECD for guiding and pulling the conversations we have here forward every year. There's more and there are new things, so huge thank you there. Alice, I've just met you last night but I think like a lot of people have known of you and so for many of us we know a name and we think we know you but now we do. You're outspoken, you're clear thinking, I think you're right that we all here probably share this inclination to evidence, to rational thinking. I think what we've also learned recently is that there are a lot of people out there who don't absolutely look at the world the same way we do so you're right we should stick with what we're doing because that's what we believe in and what we do well but we need to be able to communicate even more effectively I think the results of what we do so thank you for a very interesting story history lesson right up to now and to the future that was very very good and behalf of all of us again thank you very much. Thank you very much ladies who didn't mean to pre-empt I just I can't stop myself talking I just wanted to say something from the political point of view which you threaded in and out of your speech it's very interesting can I thank you for all your contributions this morning I'd like to wish all delegates a successful conference here at the Scottish Parliament I hope you get time to see a bit of the city of Edinburgh the sun's coming out for you so take advantage of it doesn't happen every day in Scotland and I'll now close this meeting with Parliament


Actually this man right wave man cuz he is the one that Everybody when I'll be listening they be like man right away go hard right away go hard. I look at you right wave Ray And the rest the pain in the music and just going to that place and singing these songs man. It am I missing somebody? Oh three mode three. Yeah, but he passed away. But yeah mode three that who had this style first Which the pain still yeah, that's singing pain style me. I came out first You had it first look times don't lie My dog came out 2014 When you think about just Are y'all consider the south Kansas West midwest so when you look at the music How do you feel like the music is now for us? Just on a whole do you feel like it's it's the music is growing and in the Midwest? Yeah Yeah, I mean we got places like Chicago Detroit I was just up there Detroit bumping Detroit's on fire. That's Midwest But Kansas is I'm coming with it. I'm trying to start to get artists out of Kansas, Missouri and Illinois It's more just not just a cargo in Detroit some other places like Nebraska's They don't get a shot No, I ain't never heard is there any rappers from I've never heard one from Nebraska No, there's one as we saw the technology King ISO King I so he pretty he's pretty popping out of Nebraska Yeah, take nine really different. He got like a coke following me Yeah, take nine can travel by himself. Madam niggas came over here looking for stuff one time I couldn't believe it.  It was exclusive stuff. I'm being real tech made them the Forbes list off of Merch, so that's what it was. He was like man.  He was wanting me to find this tech nine stuff Yeah, I couldn't do it. I'm I don't know where's that Yeah, yeah, he's big on March. So how are you doing on March? Actually, I'm about to buy two more machines. I'm gonna start running my own merchandise. Okay, I got the The machine that sells for you and then I got the yeah, I brought a remission Yeah, I went to LA and I checked out his guys factor I'm like, I can get up with these machines. I can do this myself. Mm-hmm. I make good money. I mean, I'm a I'm a seeing and can do type person I'm a Nick Cannon. You know man drum line. Yeah. Yeah. Yeah, I heard I can do I see I can do Yeah, Bob just play it when you see it. Yeah, let me ask you this man, right wave man, cuz he is the one that Everybody when I'll be listening like man, right way go hard right way go hard. I look at you right way Ray And the rest the pain in the music and just going to that place and singing these songs man It am I missing somebody? Oh three more three. Yeah, but he passed away. But yeah, I'm all three that who had this style first Which the painstown? Yeah, that that singing painstown me. I came out first You had it first the times don't lie My dog came out 2014 Another drink with my dog He didn't have first he did yeah, and I was first one to a booze. I do a booze for mo 3d. I think it was there is then there then No, no 3k no 3k three after three after me then there is I'm saying though And you just something there is old songs like that, too But then we wanted this came out newer songs you hear more. That's why I know there is then both three Had just started rapping. He ain't been rapping that long He ain't been rapping any longer. He passed. How long like six years? That's the long deal. No, it ain't but like when you first how long you were around that time with my eight Okay, so that I'm two years for three right year and a half, too Wow, so what you what do you plan to take this to man if you were gonna take it to the next level How would you take it to the next the reason I I probably don't get my full credit It's like I told you I wasn't making all those songs cuz of my child Yeah, I woulda gave you way more pain records rather had a Made more pain records like that. But yeah, well idea. I did another one call. I got to a boost He came right after that, okay? Then pay with Kevin gates. I was really did he do baby? I didn't know that I Got a song money bag yo before he even got super cracking. I'm worth it. I work for everybody, bro I've been really out here. I just ain't get this super tension. I'm not from Dallas where I got multiple people I'm from Kansas. Yeah, my demographic is mostly white Yeah, you know, so I think tech nine makes the music he makes. Yeah, it's so good Area, I don't have an urban fan base into in Topeka Kansas to promote to so the reason I took me so long as I have the travel So much I'm traveling right now every day. I can't make it from there. Yeah, I can't Go to the mall and get it cracking or do it. I can't go.  I love Atlanta That's a part of the process and then to get everybody to start seeing it more marketing any better And yeah, I get it. Well, it's the best thing happens you in the know The best thing that I mean a lot probably all the interviews I was doing Yeah, the networking the network is key.  It's black Hollywood for real Yeah, I'll be down there. I definitely know one day. I'm with one day. I'm with drummer boy next day I'm with Durez makes down with drove makes down with to see, you know, say like whoever I'm with you might meet somebody you can Salana, it's a lot of man. Who would you like to work with before I get y'all fear? Who would you like to work with? I don't work with the female artist. I'm trying to work with like her I'm working K. Lonnie. I'm working with I'm working on like Like like those women like you know the women artists that's cracking And if you want to go male wise type tie dollar sign, okay Pnb rock, I'm trying to get that style. Yeah, yeah, yeah, they don't bring it and flip it But you ever do something with reggae artist. Oh, yeah, like who would you choose? Um, I see I'm an empire. They got a lot of African artists that they do that was a fire boy He just went gold Hard they got they they even empire so it's easier to work with people with the label. Yeah, I mean I work with I like I don't work with all the rappers. I don't work a lot of rappers. Let's cook. You know what I'm saying like I've worked like I said I'm working money bag I don't work with I got a song with dovetube. Yeah, I got a song with uh Oh anybody probably probably think I pretty much know I didn't know I'm on cross paths with business studio Yeah, we on boss talk one on one


There's a problem. I'm I'm used to teaching classrooms So I'm used to shouting a lot because we in Moldova don't really have equipment like this, you know So if I'm shouting just to do this It works for my students So hi everyone, welcome to day one of Eurocam, I have the honor of breaking this My name is Ivan I work at the technical University of Moldova out of all places and I teach things like design patterns and such right before I start Talking about some of the experiments we had in the University I'd like to provide you with some context about where I come from and this is Moldova. This is Kishineau The IT industry in Moldova is primarily based on outsourcing Which is a bit different from what you have in innovation based industries or product based industries, right? Because for our country, it's very good Because it creates a lot of good salaries a lot of job positions right where people are paid very well Did I break something again? Not innovating a lot as you see Okay, good It creates a lot of good salaries, right? It It also because all of these jobs are usually accessible to everyone They also have a very low barrier to entry so you can basically write a bit of php. You're good to go You're good to have a job right for as an educational system It can be a problem because it also has a bit of a darker side to it a Lot of our students who come to the university are studying for the wrong purpose They only need to have a degree and not to have all the knowledge necessary for the degree, right? Can you hear me? Okay, this is better. I broke it for everyone else. Yay So getting back to the outsourcing industry and how it works for our country and for our university is that? Unfortunately, a lot of students are getting into the university for the wrong things they want to get a degree so they could apply to their jobs, right and Moreover because the barrier of entry is so low a lot of students already work While they are studying so they don't come to classes and this is a very bad thing for us as a university, right and Of course, this is a systemic issue We need to address it as a systemic issue However, as a small team at the university would try to switch the focus a little Instead of punishing the bad performers We thought of why wouldn't we provide more value to For to incentivize people to come to our classes Why wouldn't we give something that would be immediately applicable? So if you work right now at a Drupal shop, right and you come to the design patterns course you need to have something that you could apply today and For us as course designers, it means that we need to synchronize very well with the industry and Identify what is important from the industry so we could incorporate that into our curriculum Cool So let's find some things we can teach of course the first thing is the actuals are the actual subjects But for me design patterns have been the same for quite a while So what else can we give? Well? This talk will focus on two things skills and Values so skills that we want to have as an industry and values that we want to to believe in Of course while teaching skills and values We also have to make it fun and a bit of engage in engaging for students But always keep focusing on the fact that the skills and the values we pass need to be relevant to the industry So let's start with skills What skills are relevant to the industry that we can incorporate in our courses? And this is a pretty tricky question because it demands an objective answer now I would rather twist this question and pose a different one What skills instead of trying to identify what skills are important for the industry? Why not identify what skills are important for me or rather what skills? I would like my next teammate to have my future teammate right because we've all been Frustrated with the fact that someone comes along and they don't they don't know how to Google things or something else, right? So what are the skills that you consider important for your future teammate? I've tried to identify a couple For me it's reading the source code or not being afraid to dive into the source code Another skill I believe is debugging Right people. I think we need to debug and we need to teach debugging and We need to put people in positions where they have to choose tools. This is a skill that can be trained So going over them one by one. I'd like to discuss some of the examples we implemented As course designers in order to well facilitate these skills so Reading source code the most important thing about reading source code is not being afraid to go to the source as an authoritative source, right? This means that we have to do some life coding classes and The life code experience while we're teaching right and we're writing code life Actually eliminate some of the barriers that students have Because they see the typos we make They see the fact that I write pretty bad C++ code and They're not ashamed of it and they also are Engaged everyone is because they can write the simplest class They can tell me how to write it another way we could We could train reading source code is by giving Assignments with source code and not with a couple lines of it, but with a couple of files Then we can jump a bit further and show actual code to illustrate a concept For instance, well, I teach design patterns I found a little gem on on github. This is called YouTube DL It's a program not too small not too big It's a Python thing that downloads videos from YouTube, right and a couple of other places and during the course We took this thing. We had to read the documentation To go look at the source and see how to extend this app And this was exactly what was the strategy pattern So it wasn't a textbook example, but a live real example The second skill is debugging and by debugging. I don't mean attaching a debugger or setting break break points, right? I mean digging Digging into hard problems that are not at the surface. This I believe is something that is missing from a lot of engineers these days or any day And here's an example we used in class during debugging Right this is How the high scores leaderboard for flappy bird looks like remember flappy bird, right? It was it was one year ago the example. So it was a thing this is The highest score you can imagine that it's a couple of universes old and This is an interesting debugging question Because when we came to the students and when we asked ourselves How did they get this right? This is a software issue This incentivizes students to to dig a little and to find out how could they actually get this and while digging They develop a couple of other skills as well so to Teach debugging as a skill. We need to provide a good context an engaging context for students we need to teach debugging as a whole and That way we will have a couple of other skills developed along the way for instance googling googling is an important thing, right? And moreover in this very example, you're not Always thinking about googling how to convert 64-bit integers into something something, right? So that's debugging good tool choice We have a lot of pressure in our work because there's a lot of tools available and we need to choose them and Especially when we choose the wrong tools, we face pretty dire consequences for our projects, right? Sometimes so what if we could Help the students choose a tool and Eliminate the risk and the consequence Thus encouraging students to be pragmatic and reasonable in their choice This will actually provide them with an experience of choosing tools without the risk itself And then let's have a discussion About why did we choose a particular tool? For instance in our class we had to choose a Ruby HTTP library And there are 27 projects listed on Ruby toolbox This is something you need to go through a couple of times and then it would help you do that in real life So getting back to the skills. We have three skills with their respective examples We have to read the source code We have to develop debugging skills and googling skills and We have to go through an experience of choosing tools values Remember with skills, right? We had to identify what skills are important for the industry The same thing applies for the values, right? What values are important for the industry and we can of course Apply the same approach to Asking what values do I want my future teammate to have and for me? Here's a couple. I Want them to be able to appreciate constant progress over Larger jumps, right? So slow and incremental things. I Want them to think in concepts and not in particular implementations or in code and I would like my next teammate or my next pair if you will to be able to own their code to claim ownership of the things they built and This needs to be somehow integrated into the curriculum. So let's start constant progress The main thing about constant progress is that When we try to teach test-driven development, we focus on the test parts and A lot of the times this especially to students or to people who already work and who have already seen tests This highlights a different value of test-driven development that it helps us get rid of bugs whereas the the whole Why do we write tests first thing is that we Set small milestones and we get there, right? We take the bigger problem with split into smaller chunks and we take them one by one So how can we encourage that in our students? We can give them a program with existing code and tests They're not familiar with tests yet, but we can tell them Hey, if you run this in your IDE or if you run this script, you'll get a grade, right? The more green you see the better your grade is which is good. We conditioned Then we can give a program without code But with tests and you need to write the test and you can use the tests as a guiding tool for your design Then we can give you a program to write and Some students were so comfortable with the approach of incremental building that they had to write their own tests and Without highlighting the value of hey, it gets you rid of bugs We could I send incentivize students to write tests as An example they had to explore the builder pattern in small talk So they had to see a lot of green if you make all of these green you get the highest mark, right? Which is okay next value concepts over code a Lot of times when we speak about concepts and not code we try to make this this is a singleton in Java Look like this. This is a singleton in Ruby So we try to give all the possible implementations of a singleton and say to the student hey This is pretty much what it looks like try to distill what you need from it. I Tried that it didn't work very well what worked better was having a discussion and Trying to come up with metaphors and Being frank about the fact that hey, it's hard to take the singleton pattern and apply it to your JavaScript job Because you need to know lots of other stuff It's hard because we cannot introduce the same concepts of module pattern or things like that to someone who writes Java or Android right or sometimes we can even pair them and Help them identify the concept from the code so if you have someone who writes Android pair them with someone who writes Python for a living and Make help them Identify the pattern from the code and the last value. I think is Important for us as an industry is owning code a Lot of the times when we teach these or when we Have these best practices right or patterns or things like that They are because our industry as an engineering practice is slightly different than other industries the product of our creation as opposed to this very building Changes Radically changes over time and this is why we develop these practices that helps us design things for change now The important thing here is that when we teach the patterns themselves We don't incorporate change We don't build bigger things. So let's try and build bigger things during the course and incorporate change Try to change the requirements as a market would and then you will get a different kind of reward as A student you will get ease of maintenance and you can get features done quickly right, this is the reward and Otherwise if you cannot get the features done quickly You will feel the pain of poorly designed software without having to actually risk your business for it as an example last semester we had to Write a markdown parser so students got a subset of markdown a bit of custom markdown and They knew that there will be changes so they had to Upload their code Receive the changes to the format so something was different and They had to implement those changes as quickly as they could so back to the values. We had appreciation of constant progress We had concepts over code and code ownership Of course these things coupled with skills give a lot of our students Some of the things they need to apply today. However, it's boring Right, it has a lot of bullet points. It's boring so we need to make it fun and This is Alex say the chinchilla He is my ultimate tool of making things fun Doesn't work very well, but oh well For example, I tried to add a bit of stillness in the assignments By integrating the chinchilla For example, Alex is a bit older now, so he needs to make a family. So he wrote himself a dating app that downloads pictures of chinchillas from all over the internet and Since he has a 2g connection He You have to optimize the app basically, but he wrote some tests too. So he's good at that so While you're building this app, right? Well, you're solving this assignment. You have to look at a lot of chinchillas and You're sitting there at night, right solving the assignment for the course and then you see this And then you need to figure out what this is Even later right when they when the Sun is almost up you see something like this And you get to class you submit your assignment you go like you're very tired and such And then you have a thank-you note from Alex say the chinchilla because you helped him This makes it a bit more fun So these are skills and Values that are important for the industry and we have to wrap it them into a bit of fun However, I think there's something missing here I think there's something missing that defines us us the people who are here at uru camp that have something special than other communities do and This is the spirit we have the spirit that is better defined as the hacker spirit, right? the our way of taking things apart Putting them together seeing if they work Right changing things if even if they work properly Displaying curiosity towards new languages. I mean look at the look at the talks here. It's new stuff Continuous exploration and when you encounter something that doesn't really work for you. You just hack it Right. You just change it. So it would solve your particular problem and you can hack anything In our example Our teaching curriculum didn't really work for us Our way of teaching didn't work for us. So what we did was we took the Hacking philosophy and we applied it to the thing we knew which was teaching and as a matter of fact This was a very vivid example for our students because we're very open about it This was a very vivid example of hacking itself Because we were open and we said hey, we're not sure. This is the way it should work, but let's give it a try and It actually thought a bit of hacking While we were hacking teaching Thank you Do you have any tips how to convince our teachers at our universities to make something more applicable? This is a very good question. Can we make our teachers or help our teachers at our universities? Make something better. Is that correct? I believe we can we can't buy inviting Teachers here at Uru Camp by sharing the experience and being absolutely frank about the fact that the industry is moving at a much Faster quicker pace than the academia mostly but also it's It's very neat that some of these techniques and some of these skills and values are applicable to other ways of teaching like like Rails girls or or or Hack days or things like that and I believe we we as a community can can focus on Trying to incorporate these techniques or other techniques that we consider important in a newer format Something that maybe is not in academia Any other questions I have two minutes left so I can dance. Oh, come on Thank you


Yeah, we're live welcome back to Hawaii a state of clean energy on think-tek. I'm your host J. Piedel Our co-host for the show is Ray Starling the handsome guy over there Shot of Ray And our show today is called ice storage in Hawaii how unlikely and we're going to talk about whatever happened to it Our guests for the show are Les Taniama and Terry Andrews. Thank you for participating everyone. It's great to have you here So some background, you know, whatever happened is our series this month and Ray is in charge of that and we're covering all these Issues about whatever happened to this that and the other thing and one of them is ice storage and it presents always energy storage presents a technical challenge for Hawaii's renewable energy goal But there are many potential solutions and diversity is the day of the word a word of the day. Thank you We're going to learn about the past and present state of Storage energy storage in Hawaii from these guys as experts on the subject of ice storage So let's begin by by Ray. Why don't you tell us what ice storage is and tell us who these guys are? well We all got together back in the late late last century actually about 1996 or 7 and we started working on Ice storage here in Hawaii, which really I think they had one plant that they had tried Some years ago out at the airport and it kind of as they move things around at the airport. It got abandoned but we wanted to do it in hospitals schools and Large projects here. And so I linked up with these two guys and we put in a number of Ice storage units and of course at that time the the rates were different And there were some incentives that the state had to kind of encourage this kind of technology And it did sort of fell away fell fell away over the years for a number of reasons several of the ice storage units are still around Cuppulani women's and children's hospital and Mary in old school Yeah, mid-Pacific and so it's here But there are no new ice storage units going in but now We're interested in making the grid sort of diverse in terms of Stuff that it's that can be used on the grid to help the grid with all of the renewable energy Why why we're interested in making the grid diverse and I said the day of the word or the word the day as you like Is diversity, but why do why don't we just use batteries? Is it easy to use one technology and become expert and really, you know Supportive of one technology. Well, you know, I I think it's diversity is going to get us to the go faster than anything else and all large buildings in Hawaii have The need for air conditioning and of course ice storage Is can it be an add-on to any building that has ice or that has air conditioning requirements? and now it can be used to to help the grid to deal with the high penetration of photovoltaics and other other Items that are coming on to the grid that the need to be balanced So it's ice storage and I don't want to take up all that all of the conversation here Get less to jump in and tell us what ice storage does. Yeah, well, how does it work less? Well, basically we tried to in the day we had the tax credits So we're building up ice storage as a huge Thermal mass of storage of ice and we're melting it down during the day when air conditioning is needed And uniquely that's the oldest Air conditioning air cooling way back when yeah blow blow up air over ice. Yeah similar to that So that's why we're going to a place of a chiller. You don't need a chiller if you have ice storage Well, you do need a chiller to recharge the ice But we're charging the ice at a time during those periods when the rates were cheaper because we had off-peak rates That were utilizing now Thanks to Terry he brings to light what is happening throughout the country where we're diversifying that and not looking at total storage Disappation as opposed to using the compressors for cooling as well as the ice jointly and It provides a lot of how shall I say benefits that we didn't have so let me get the idea You're using refrigeration type compressors and you're making ice in a in a box somewhere And then now you have a box full of ice and you have pipes running through the ice in the box and now the the the ice is going to cool the water That's running through the pipes and then now you have effectively what you would get if you bought a big chiller for a building You have cold water that you can circulate all around the building and cool the building down and the operative word is You're circulating chilled water throughout the building. Yeah, so you're only using pumps. Yeah, you're not using big compressors But now we're capable of using the compressors at a smaller degree in conjunction with the ice Yeah, and that's what Terry is going to be adding to this Congress. Okay Well, it's one more point is that this is all about air conditioning then I mean, you're not you're you're saving storing the Energy in the ice, but you're not Converting the ice back to energy. No, right. So you're using this for air conditioning air conditioning type of At a later time or at a time where you need air conditioning or Reduce the loads during the day, right? Got it. You want to add something well But but the value of it is that it can match whatever the utility needs in terms of its variable needs during the day For load to come on and off that is, you know lights to come on or go off How does it do that? Well, it does that because you can run it to be making ice and cooling the building and the utility can give you a An electronic signal to turn off all of the compressors and The building will never know the difference the building still be cool because they'll go full ice and The chiller will go off until the utility says, okay, you can bring it back on and With the Kind of system that we're going to have in the future have now and are moving towards in the future It's going to be all renewable Having the ability to tell a large load to cut off whenever the wind dies down or the sun goes behind a cloud That's going to be that's going to be key Batteries do that so you could have a chiller and a battery But that's going to cost you, you know a lot of money to maintain a battery, but you can just put in an ice System with the chiller when you put it in your building and you can have the equivalent of a battery So let me clarify one thing never gonna go to Terry for Some technical if you don't mind so so you have actually you have the ice machine which creates ice Around pipes and you run the pipes water through the pipes that cools the water, but you also have You'll also have a chiller an old-fashioned chiller and the two work in tandem when you When you a good time of day, you know when solar is running high for example, you would use the I guess you can use the ice machine and store all that energy in the ice Otherwise what you would tell me how it works Terry But this is without getting technical I'm on an engineer, but I prefer to keep it on technical It's a battery and it does the same thing as a chiller It takes warm fluid and it sends it out cold right so from the larger perspective from the grid perspective We give two things to the utility and the customer and that is if you're charging Story energy by charging ice by making ice you're adding load well They're going to be times when the grid the utility needs to add load when we're adding a lot of solar And they want to keep plants running. That's what's changed. That's the big picture. Yeah, that's the grid now Traditionally, we're gonna melt ice. That's when we read the We release the latent heat of fusion and that's the energy released and we melt ice And we get cooling without running a compressor So that's a benefit to the utility at times and to the customer if they Schedule it right so it's all about schedule. It's all about schedule when the utility has plenty of power Then you I mean oversupply if you will then you're what creating the ice make right Okay, when the utility doesn't have so much power am I right you just brought off the heavy chillers that then you use the Chillers, you know, you know you turn those off turn those off and you melt ice historically the grid got more unstable as Air conditioning as the country grew and air conditioning was added the bigger and bigger more and more buildings, right and the diversity in the grid They would build a grid the match a daytime peak in less than half of it was being used at night Yeah, so traditionally there's been a sale on energy every night Historically nighttime energy has always been cheap and it was their pretty straightforward case Store of energy at night when it's cheap use energy during the day when it's expensive and Now the it's kind of exciting times because it changes in the grid and the renewables are driving everything and it's making How you apply it take a little more finesse, but also create more opportunity kill me and we go back to my attempt to Look at it from both sides when you have too much and too little so at night. You don't have any renewables, right? Correct. I mean They give away power some nights because they got to get rid of it Yeah, and you can build ice then and have basically free energy So it's whenever you have lots of energy that you would have to curtail or ground or not use Correct and and when that happens then you are going to build ice That's when you're going to use the compressor and build right, but when you don't have A lot right my right about this the other the other side of the coin is what? When you have when you have a lot of renewables, that's cheap energy You want to use it to store energy. Yeah when the renewables fall off Yeah, you want to use your stored energy, okay, right? So you never actually use the entity to drive the chiller now the ice always drive It's an equivalent chiller it's doing what a chiller does it takes cold fluid and it Tastes warm fluid and send it out cold. This is a whole new kind of chiller. Yeah, what's a very old chiller, but it's been Used the ice storage without replacing the existing chiller in the building You don't have to buy a new chiller because chillers are very expensive right and it's a tans on the type of chiller I've had to case specific well, so can I buy can I use a cheaper chiller if I have ice? It's gonna say well well no you at that point you can Use a chiller that is set up to be half the size You would normally write and then you you run the chiller and burn your ice and of course sometime during the night You you you have to build that ice back up, but so you can have a half-sized chiller, basically That's my yeah, that's my majority of our jobs are chillers that are 50 to 75 percent of the peak load you've downsized your chiller It's water cooled. They've downsized the cooling tower.  We'll come back. We're gonna talk about money Looking to energize your Friday afternoon tune in to stand the energy man at 12 noon Aloha Friday here on big tech hoy Aloha, my name is Danelia D. A. N. E. L. I. A. And I'm the other half of the duo John Newman welcome we are co-hosts of a show called keys to success which is live on the think tech live network series Weekly on Thursdays at 11 a.m. We're looking forward to seeing you then Aloha Aloha, I am reg baker and I am the host of business in hoi with reg baker We broadcast live every thursday from 2 to 230 in the think tech studios in downtown hololulu We highlight successful stories about businesses and individuals and learn their secrets to success I hope you can join us on our next show on thursday at 2 o'clock until then aloha bingo, let's Tanya ma let terry andrews and ray starling the iceman cometh So what are the numbers like? I mean am I gonna do better? I suppose we take for our case study. We take a building that has a chiller already And I come to you on the owner or the manager or whatever and I come to you and say I'm interested in ice storage How much money am I going to save and how much money is it going to cost me to put this in? Can I take that? Well, let me tell you back The truth is right now we we don't know because we haven't been in the business here doing ice lately for a number of reasons but uh We hope to get that going back again, but when we were doing it in the late 1990s we were we were actually able to cut buildings cooling costs down by about 50 to 60 percent So that that was a pretty substantial part of the The cost of electricity likely that would apply today Well, I that's that that's one of the issues and and maybe we'll get to it But one of the issues that we need in order to make this work so that it can be part of the diverse grid is Off-peak rates or rates that Time of use you need time of use rates that are That so we can design the systems to match The best rate for the customer then the customer will want to buy it because they get a good cut on there Really critical that's so for any batteries. I mean any storage system battery. That's correct. So the question is Doesn't that exist now? Isn't it time of use now? Yes, but uh right now there's an experimental Equal tariff for residential only And they're just looking at it But then on the other hand, and I'm going to turn it over real quick to terry Understand if I'm using let's say 30 percent ice storage and 70 percent Chiller That means I'm reducing my chiller load. So I am reducing the load And using ice as the other part where all we need is pumps, which we need anyway Yeah, yeah, yeah, right So before I can turn this over real quick one thing that I wanted to stick in here is from the utility's perspective Everybody in the world as you well know is looking at how I in regards to how our utility is going to handle The amount of PV penetrations we have right now. We have so much Energy being put into the grid We're slightly below the Area where the generators want to run They like to run fully loaded So now they have some potential I'm not saying they have but they have potential stability problems on the grid Yeah Had shifting loads and balancing loads will help that and this is a good solution. So terry the uh one of the biggest Issues is when you talk about time of day rates, it gets to be a more complicated issue And I don't want to get into the weeds too much But the commercial rates are more complicated and there's a demand component And demand is how much energy you suck in in any one moment time and demand can be 30 to 60 of a bill And the point is on a building that peaks in the day and has a high demand That gives it a time of day component You can be a great candidate for load shifting for stored energy If you have no time of day energy rates and you have high demand I have lots of customers like that in other parts of the country. Yeah, so Utility rates can be structured all kinds of different ways You can do time of day rates in the in the energy section. You can have high demand utility can Encourage any behavior it wants on how they structure those rates. The other important thing I wanted to get back to is cost here Projects were done Well, but they were relatively expensive because there was a tax credit, right? So so we went big We shipped it the entire that was in the good old days In the good old days there's no tax credit on ice now. There's no correct And the tax credit went away and we said, oh, we can't do ice anymore because it's too expensive Well in the other parts of the country where we're there were not these massive Tax credits they learned to do what we were talking about earlier partial storage Put it in a chiller the 60 of the peak load have the storage cover the days when you exceed the capacity of the chiller And so first costs on extra on jobs across the country have ranged as little as zero extra To maybe typically 20 to 25 percent more and a payback of a few three to five two to five years Maybe or more but the point is here because of the large tax incentive You know jobs were were done correctly because of the funds available, but they were all done Well, yeah on a very big scale Speaking of big This works best in a big building where you have big air conditioning, right? Because that's that's where the savings you can really shine on the savings And it's a sort of economies of scale kind of the bigger the piece of equipment the more likely The more money you're going to save right for right, but it I mean typically A building that might be I don't know over a hundred tons. So what's that in terms of square footage here? um Times full. Yeah. Well It's a small building 200 times. We do churches and schools elementary school. Yeah, that would be small Relatively small buildings that too and whereas my largest single customer is the University of Arizona That has hundreds of tanks. Okay. So I guess what I'm coming to though is that is hawaii a good candidate We have we have buildings We also have a lot of single family homes Correct who are not necessarily good candidates for this not not with the president You know technology, I guess But um, are we a good candidate for this? Is this something we should we would have a great benefit about? I say yes. Yeah, go ahead. Tell me why Nordstroms a brand new Nordstroms. Yeah, ice thermal storage Really is there really There's another one that I don't I just had this brainstorm Is that for those of us that visits bars and gets beer on tap Did you know that the tap the cake is warm beer? And they run it through a bath of ice. Yeah So that they can give you cold beer. Yeah, that's thermal storage because they make the ice at night. Yeah Yeah, how do you like that example? Let me get a discount beer Let me interject because uh, you know Back when we were doing it before It was sort of the traditional system the traditional utility system But now everything has changed and that's one reason why we're we're back Looking at ice again because it can have the same effect as a battery and everybody's looking to get their battery and so We're we're thinking that that this because it looks like a battery as far as the utility is concerned And the customer controls, you know, whether he's using ice to cool the building or using the chiller And so we believe that On top of what the benefits were before There are additional benefits that haven't even been priced yet in terms of what would the utility pay for the ability to Have the to turn you off At a moment's notice when when something happens on their system And they have to either crank up a new generator to keep the lights on or they can just turn you off your Chiller and just let you run on ice and your your building is the same now, you know in affordable tech Uh, they got companies like stem Right and they deal in software about turning on and turning off and you know refining the signals and communicating Between the you know the parts of the supply chain Um, do you use do you need that what what does stem help you does companies like stem help you? I can't Uh comment tells me in stem. I've never used it but but software and controls are very important Because now it's not it's still just a chiller based system. So but it's different now. There's more a few more control points There's more operating savvy more finesse. So controls These tanks mine my competitors Are just bundles of tube. It's like a pipe. Yeah, all about controls and good controls So that's controls are very important. So the controls come with the equipment Oh, absolutely. They're going to go in with any chiller based system. Okay You're representing some chiller based or uh ice based systems. All right, correct. What what are the brand names? Who is I work for CalMac? CalMac makes as a manufacturer. We're a manufacturer of thermal storage tanks Who also do ice rinks like rocket filler center ice rinks, but um, we do thermal storage tanks We've been doing it. We developed the industry. We're the old dog and we've done typically we do half the projects in a year So what are your new technologies? The the new technology The tank is very similar to what it's been for a long time The new is is the upgrade and controls that that we're teamed with with train a big air conditioning company Who will put together the pumps and controls on a package so it's more plug-and-play You know and the thing that's exciting to do with the changes in the grid, you know How all of a sudden things are going to operational finesse makes it more fun more interesting and more again You know if I go to kailua right now and I go to whole foods I will find on the rooftop of whole foods a desiccation system And then you know about this the desiccation system will dry the air out and when you have dry air It's cheaper to air conditioning your store, which is what they do and they save I can't remember the percentage, but a substantial percentage of energy by using this Desiccation system, which is just trying out the air. Um, how do you compare with that? That's an interesting technology. Are you as interesting? I'll defer to lasso now Know that ice is 32 degrees we never run things at 32 degrees because that's absolutely too cold But you need chilled water going across these coils when you run air over it to strip moisture out Just like your cup of ice at zippies. Yeah, it melts. Yeah That's exactly what we're doing to dry the air So it's a lot easier with a pump and a whole bunch of tanks than it is with a big children compressors Okay, what stands in the way between where we are right now today And a whole fleet of ice machines all over the state in every building that's bigger than that has an air conditioning system. Okay You want to take that one? That's a big. Well, yeah, I I think the technology is pretty solid I think the technology is there we need to get with the utility and Find out what they perceive their needs are given what we can Give them what we can produce for them in terms of ability to shut off power large amounts of power fairly quickly and so we we need to get together with them and And help them to see the value that they have once they know the value They can plug it in wherever they want to and then they just tell us okay if you can do this Turn it on and off in this way and that way We will give you a really good rate Whenever you do this and and do it consistently So I think that's that's the next step. I think the technology is good Getting a price point that the that the customer is willing to pay for the customer is actually paying for this Because they get value out of it, but the utility doesn't have to build a new generator Yeah, so they shouldn't be interested. They should be very interesting. Okay Well, that brings us to the end of the show guys. This has been very interesting a new subject I've enjoyed You know discussing it with you I'm Jay Fidel and we have here Ray Starling co-host and also expert and Entrepreneur at least at one point in time on the subject Terry Andrews Kaumack who manufactures these things and including ice rinks ice ice kid That's Taniyama who is uh, he knows everything about this kind stuff And we really appreciate it. I hope we can do it again. Um, you know, keep us in mind as you develop and