Kyle Gschwend: understanding how the private sector thinks about investments in climate resilience and adaptation
When Kyle Gschwend first arrived at Princeton University as a first year, he imagined his future career would involve building structures. But his interests began to shift when he enrolled in a course* on energy infrastructure.
In the class, Gschwend learned about the interdisciplinary factors — science, technology, policy, economics — that would be necessary for making a global shift away from fossil fuel dependence and toward a low carbon economy.
“I really became aware of what will be needed for the energy transition,” said Gschwend, who recently graduated with a bachelor’s degree in civil and environmental engineering and a minor in sustainable energy.
Looking to deepen his knowledge of energy and regulation, Gschwend was selected for an internship through the Andlinger Center for Energy and the Environment during which he helped analyze private sector investment in climate adaptation. Under the guidance of Chris Greig, Theodora D. ’78 & William H. Walton III ’74 Senior Research Scientist, and Richard Moss *87, a non-resident fellow, both of the Andlinger Center, Gschwend looked at data from water companies with the hopes of untangling the reasons behind why some companies invest in climate resilience infrastructure and others do not.
“We found that companies are really behind the game in creating financial frameworks to justify climate resilience and adaptation investments,” said Gschwend.
Using publicly available information on financial reporting from utility companies, Gschwend found that each firm recognized climate risks. Yet, it became clear that there was a disconnect when it came to financial investment in climate, especially in smaller utilities. Further analysis suggested that companies lack the framework to make informed investment decisions on climate adaptations. “Translating climate risk to the damages avoided thanks to resilience investments is an area that utilities consistently do not have the management bandwidth or tools to accomplish,” said Gschwend.
As a result, decisions to build hard infrastructure such as flood walls were trumped by measures such as getting insurance designed to partially compensate for losses in the event of climate disasters. “It was easier, and less likely to be contested, than investing capital to actually make infrastructure more resilient,” said Gschwend.
“As we continue to fall short of emissions reduction targets, climate change is making our critical infrastructure ever more vulnerable to extreme weather events,” Greig said. “We really need new business and financial models to make the case for investing in infrastructure resilience and adaptation, under uncertainty.”
Three years earlier, Gschwend interned through Andlinger Center for Moonshot Missions, a non-profit company focused on delivering safe and affordable drinking water to underserved communities, where he supported research at small rural water and wastewater utilities. “Having that opportunity to do that internship as early as freshman year was really interesting and helped provide a lot of context for my future classes,” said Gschwend.
Inspired by his experience at the Andlinger Center and his commitment to public service, Gschwend applied for and won a scholarship into the Scholars in the Nation’s Service Initiative (SINSI) Graduate Program to begin this fall. Through the program, he will complete a two-year Master’s in Public Affairs at the Princeton School of Public and International Affairs and a two-year SINSI fellowship under which he will be placed within a federal government agency.
“I want to focus on policy and regulation, specifically in energy, climate, and the environment more broadly, wherever that might take me,” he said.
The interest in the intersection of energy and policy Gschwend fostered in his time as an undergraduate has taken hold even beyond the classroom and campus at large. For the past three years, he has served on the local energy committee in his hometown of Windham, New Hampshire. “We do a lot of planning and working with energy companies and consultants in the area to come up with the best strategies for energy policy in the town,” said Gschwend.
It is to the credit of the Andlinger Center, according to Gschwend, that he has been able to find his future path.
“The Andlinger Center has been the home for my exploration from traditional civil engineering into the interdisciplinary world of energy policy, regulation, and economics,” said Gschwend. “The breadth of courses offered, combined with the research opportunities and career opportunities, has been foundational in shaping the career that I’m set to go into.”
*The spring course titled “Rapid Switch: The Energy Transition Challenge to a Low-carbon Future” was taught by Chris Greig and Eric Larson, senior research engineer who leads Andlinger Center’s Energy Systems Analysis Group.