I hardly dare predict anything for 2023, so please forgive me while I try

Right along with that, I see signs that a broader view of energy efficiency and sustainability is emerging, almost despite the wild political distortions. For one thing, a broader range of technologies is being contemplated, and even at the level of major agencies, like NYSERDA in NY, there seems to be a shift away from just a few technology silos towards a whole building approach, which is precisely where CAPM would lead us. Unfortunately, in board rooms, it is often still tough if you are dealing with some mathphobes who forgot the lessons they learned in college. In that case, you have to patiently explain the salvific value of the methodical use of the Capital Asset Pricing Model. But the discipline will be worth it. The shift I think I see is that the silo approach of promoting just cogeneration, or just solar PV, or just BEVs, we now have such a plethora of choices that we will be forced to be selective and, as long as we use the proper financial tools this will lead to a worthwhile financial prioritization. People are often amazed to discover that some seemingly pedestrian options can be very financially worthwhile. And more and more, we'll see that astute combinations of technologies can have a surprising impact. I was involved somewhat in the background when we turned then-Mayor Bloomberg's attention from solar PV on the roofs of city buildings, which has a ridiculously low potential in a high-rise city, towards ground source heat pumps as a strategic technology, and that became a focus of NYC energy policy. Successes are still hard to find, but I just saw another example with a project in one of the suburbs where the investors were blown away by the impact of a GSHP solution. Combine that with the increasingly better envelope technologies available today, and you have a winner.

In short, some people are learning something from the convulsions of endless energy crises. It seems as if they have been a leading theme all my adult life. In my first job, operating a fleet of bulkcarriers, I still remember the shock of the first energy crisis(see: Energy Crisis:What can 1973 teach us?), when the biggest daily operating cost of vessels like ours became fuel - accepted wisdom had been that crewing was the biggest expense. In recent times we are seeing much progress in new naval propulsion technologies, and I would argue that CO2 is not the biggest problem, but sulfur and other pollutants are acidification of the oceans is an issue. Hydrogen is being seriously explored in this industry, as well as other revolutionary concepts that provide very practical conversions. Making naval transport cleaner will make a massive difference for the world, and I am now aware of several potential options that seem poised to provide a real breakthrough. Even sailing cargo ships may make a comeback; who knows? There are some options in the works that revolve around conversions of existing ships also that could materially alter the pollution from ocean transport.

Other areas of improvement are the fruit of experience. It is not that the political process is improving, for it is not. Gavin Newsome announced the phase-out of ICE cars and, the next day, was begging people not to charge their BEVs because of brownouts. The same is true in NYC, we want to electrify everything, but nobody has realistic plans for the electrical supply for all of what is popular today. It is also becoming better known that there are issues with getting the raw materials for all the batteries, and there are issues that the extra weight is causing more wear and tear on the tires of electrical cars, so the time will not be far off that road taxes will be levied on BEVs. Will it be in 2023? I don't know, but it may be. There is also evidence that the particulate emissions from BEVs, in part because of the heavy tire wear, but also because of brake wear (heavier cars = more brake dust) and the electric motors are going to be a problem, mainly because a lot of metals in the dust are toxic - far more toxic than the particulates from gasoline or even diesel. Therefore I expect that, with experience, we will realize that BEVs will not get us to heaven. Hybrid cars will probably be with us a lot longer,  because of their long range and the fact that you won't get stuck without fuel so easily. For long-haul trucking, there may be alternatives in the works, as is shown by this contest entry for an IEEE contest, based on a thermal storage concept that offers 80x the energy density of Li-Ion batteries. In all, we've been at this for about a half-century now, and that means experience and integration are starting to contribute to more comprehensive solutions.

Another area where we need progress, but which will stretch well beyond 2023, is about realism in building materials and standards. By now, it is well known that a lot of insulation quickly becomes compromised by wall penetrations and related issues. Generally, the typical ratings are done under laboratory conditions that are not realistic. So your R-19 batt insulation may be R-18 in practice when it's new and deteriorate further over time. It's the difference between the lab and "real life" conditions. However, there are other solutions, such as high emissivity coatings, which can be used on roofs, and actually can even improve the performance of solar panels, but at times can also be used inside on the perimeter walls and block the heat from escaping in the first place. This is rated differently (emissivity), but in many situations, it can be a powerful complement to insulation or even be an alternative in situations where it may be impossible to fit any insulation. Similar issues exist in air filtration the standard model targets filters that all work like a sieve, where the size of the holes determines the performance, but alternatives are emerging that work on different principles. I became acquainted with one design that allows relatively free airflow and traps dust directly from the air by exploiting turbulence. Such a filter can work well for recirculating systems, but it cannot be rated with the standard MERV rating, which assumes that all filters are sieves. The practical limitation of the MERV rating again is that filters only meet that performance standard once, at the precise moment in time when the test is done, for a sieve gradually fills up. They start costing more and more energy, and at some point in time, they will shed dust if they are not being replaced often enough.

In short, I expect that we are entering a period of intensification of the interest in energy efficiency and clean energy, aided by both new technology and fifty years of accumulated experience and that with the rich choices that are at our disposal, common sense is the key asset, helped by astute financial analysis, for which I refer you back to your Brealy & Myers again. One truism remains: good retrofits are intramarginal investments with high alpha and low beta, high reward, low risk, and if any are available to you, they should be properly analyzed as part of your capital allocations, as they are likely to score very high. They should not be left to people struggling with an annual maintenance budget, for that ensures underperformance. These are investment decisions.