Energy abundance isn’t a climate strategy. While cheap, plentiful energy may boost infrastructure and economic growth, it risks worsening climate change, repeating past policy mistakes, and further weakening global cooperation on climate action.
In a country embroiled in partisan conflict, the goal of “energy abundance”—prioritizing cheap and plentiful domestic energy—is a rare issue receiving support across the ideological spectrum. Abundance sits on best-seller lists and was a key theme of the energy industry’s flagship conference in Houston earlier this month. It is the common ground that Secretary of Energy Chris Wright found with Democratic senators at his confirmation hearing.
Bipartisan support for an abundance agenda can strengthen the U.S. economy if it leads to an improved ability to build large-scale projects that fortify the electricity grid, improve transportation systems, and reduce housing costs. In other parts of the world, energy abundance can lift billions of people out of poverty.
However, a narrow pursuit of energy abundance makes less sense in the United States—the average American uses the same amount of energy in one month as the average Indian in one year—and it is incompatible with mitigating the growing risks of climate change. The bedrocks of successful climate action are limits on greenhouse gas emissions and cooperation with the countries where emissions are growing fastest. A myopic and imperialistic focus on domestic energy production will take the world in the opposite direction.
The Global Addiction to Cheap Energy
Energy abundance is not a new phenomenon. Energy-rich countries have long prioritized cheap and plentiful energy as part of a social contract with (often undemocratic) rulers who provided low-cost fuels and electricity to their constituents. In Russia, for example, the value of subsidies for both electricity and natural gas in 2022 was estimated to be well over $150 billion.
Direct energy subsidies are less common in developed economies, but energy producers often benefit from advantageous tax rules, and energy prices are kept low by failing to capture the costs of local pollutants or greenhouse gas emissions. One way or another, we are all hooked on low-cost energy.
The salient problems caused by artificially low-cost energy can provide an impetus for policy solutions. For example, severe air pollution problems, including deadly smog episodes in major cities, prompted the passage of environmental regulations like the Clean Air Act starting in the 1970s.
In contrast, the harms caused by greenhouse gas emissions accrue slowly over generations and across the world, making climate change an inherently trickier problem. Wealthier countries have historically belched the bulk of emissions into the atmosphere and can afford to limit their emissions, yet most emissions growth today is from lower-income countries where increasing energy consumption remains key to economic prosperity.
The recipe for overcoming these challenges, therefore, must involve strong commitments to international cooperation. A tentative bargain slowly developed in the international climate negotiations from the United Nations climate treaty in 1992 to the Paris Climate Agreement in 2015, whereby developed economies agreed to act aggressively to reduce emissions—thus eschewing the temptation to prioritize domestic energy abundance—while providing heavy assistance to developing countries as they navigate a slower transition away from fossil fuels.
The Collapse of Climate Consensus
This tentative bargain has crumbled due to a series of unforeseen events, starting with President Trump’s first election and withdrawal from the Paris Agreement in 2016. Then, the pandemic and invasion of Ukraine caused supply chain readjustments that led to widespread shortages. After decades of low inflation in most advanced economies, rapidly climbing price levels caused hardship around the world. Europe’s recent economic struggles are due in part to its failure to prioritize energy affordability.
These events heightened policymakers’ obsessions with keeping prices low and ensuring domestic energy security. The United States has prioritized climate action in recent years but avoided placing limits on greenhouse gas emissions in favor of subsidizing clean energy and encouraging domestic supply chains. In many ways, President Biden’s Build Back Better agenda was the precursor to the abundance agenda. Other countries followed suit.
These policy shifts reflected coherent responses to political constraints, but they antagonized developing countries. While failing to meet commitments to support emerging countries in their efforts to navigate the energy transition and lift people out of poverty, the advanced world was using its fiscal advantages to keep the benefits of the transition to itself. The president of Guyana went viral last year by highlighting the hypocrisy of developed countries that caused climate change, pushing back on oil production in his country.
Hopes of resuscitating the shaky climate bargain between advanced and developing countries have been promptly squashed in the early months of the second Trump administration. President Trump is taking action to increase fossil fuel production, to restrict investment in renewables, to end U.S. cooperation on climate change, and to eliminate other forms of support for developing countries.
Abundance Isn’t a Climate Strategy
These strong headwinds have left policymakers and advocates scrambling for viable pathways for bipartisan progress. In the Venn diagram of the Biden and Trump agendas, energy abundance may be a small area of overlap.
Both political parties can see the benefits of a country that can efficiently build again. The Biden agenda was hampered by slow progress on infrastructure projects ranging from manufacturing facilities to electric vehicle charging stations to transmission lines that bring cheap energy to population centers. Republicans see opportunities for new oil and natural gas infrastructure in pursuit of President Trump’s goals of the world’s lowest energy costs and “energy dominance” over geopolitical rivals. An abundance agenda can help build millions of additional units of housing to address the affordability crisis facing many Americans, and it can help to fortify the electricity grid so U.S. firms can be global leaders in energy-intensive industries like artificial intelligence.
However, this abundance agenda will not lead to abundant emissions reductions in the absence of policies designed to achieve that goal. With the growing energy demands of an increasingly prosperous global population, clean energy can accelerate far beyond its current torrid pace without drastic cuts in fossil fuel production. The heat-trapping greenhouse gas emissions from burning fossil fuels will continue to accumulate in the atmosphere, causing temperatures to increase to ever more dangerous levels.
Energy abundance is perhaps best seen not as an emerging trend but rather as a reversion to the era of broad energy subsidies. Policymakers should not forget the difficult lessons learned from these experiences. Prioritizing cheap and plentiful energy has led to the neglect of competing societal priorities, including environmental protections, healthcare, education, and fiscal stability.
A modern version of this “resource curse” may arise if countries like the United States and China prioritize domestic energy over global leadership to address global challenges. How to avoid these failures is no mystery. But it requires long-term planning and a desire to cooperate with other countries rather than to dominate and squeeze resources out of them. Evidently, the world is heading in the opposite direction.
Dr. Tim Boersma is a consultant and a Fellow with the Center on Global Energy Policy. Previously, Boersma was a partner at a boutique consulting firm in the Netherlands, helped set up the Sustainability & Strategy Advisory within the corporate investment bank of ABN AMRO USA, was a Senior Research Scholar and Natural Gas Program Director at Columbia University, a Fellow and Acting Director of the Energy Security and Climate Initiative at the Brookings Institution, and worked in the Dutch electricity sector. He (co-)authored three book manuscripts, published in Energy Economics, Energy Policy, Foreign Affairs, and other leading journals, and holds a Ph.D. in International Relations (2013) from the University of Groningen.
Dr. Noah Kaufman is an economist who has worked on energy and climate change policy in both the public and private sectors. Noah is Senior Research Scholar at the Center on Global Energy Policy at Columbia University SIPA. He is also an External Fellow in the Transition Economics Program of the Bezos Earth Fund.
Under President Biden, Noah served as a Senior Economist at the Council of Economic Advisers. Under President Obama, he served as the Deputy Associate Director of Energy & Climate Change at the White House Council on Environmental Quality. At World Resource Institute, he led projects on carbon pricing, the economic impacts of climate policies, and long-term decarbonization strategies. Previously, he was a Senior Consultant in the Environment Practice of NERA Economic Consulting.
Noah received his BS in economics from Duke University, and his PhD and MS in economics from the University of Texas at Austin, where his dissertation examined optimal policy responses to climate change.
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