A funny thing happened on the way to the “greens’ nirvana” of a zero-emission future without fossil fuels. Energy shortages started occurring, the cost of gasoline, heating oil, natural gas and electricity soared — and the voters did not like it.
Many things sound wonderful in the abstract, like an all-electric world with no pollution. And yes, that is likely to occur in the future — but that future is not next month, or next year, or even the next decade. Environmental zealots and their political toadies often have no understanding of basic physics and cost-benefit analysis.
Europeans who were farthest down the utopian green path suddenly found their homes were cold, and businesses were shutting down with the loss of good jobs. This was occurring because they could no longer compete in the world market with companies in low-energy cost countries.
Historically, increases in energy consumption per person were highly correlated with increased living standards. For the past 25 years, energy consumption in Europe has fallen by 30% to 1990s levels. The U.S. flatlined but then dropped 13% in 2020 in total energy consumption, again going back to levels of the 1990s. Falling energy consumption is not the sign of a healthy economy, despite efficiency gains. For instance, LEDs only use a small fraction of the amount of energy of the old incandescent bulbs, but much of that cost advantage disappears as people use much more lighting because it is so cheap.
Huge amounts of money have been spent on renewables like wind and solar power, while all too often the costs of necessary backups required when the wind does not blow and the sun does not shine are ignored. The cost of building the renewals and the unsightliness of them are also given short shrift. Wind and solar may be free, but their conversion into useful electricity and transmission to the market is far from free.
The Russian war on Ukraine has sped up the need to face reality, as natural gas supplies from Russia are being diminished, and the shortcomings of renewables can no longer be ignored. So, much of Europe and the U.K. are in a crash effort to take old coal plants out of mothballs and build new coal-fired plants — coal-generated power being relatively cheap and reliable. Coal is often viewed as the “dirtiest” energy source — because it often is — but again, it is cheap. That is why the Chinese and Indians are building new coal plants at a furious pace.
The U.S. made far bigger gains in reducing CO2 emissions than any other country because of the switch from coal to natural gas during the past two decades. Unfortunately, these gains have been totally offset by the increased CO2 emissions from the Chinese and Indians — so, U.S. taxpayers and consumers have borne a huge cost with no gain in global air quality because of the actions of others.
We have been told by self-proclaimed energy experts like John Kerry (Biden’s energy czar) that the environmental crisis must take precedence over all other human concerns — yet the reality is people to date are not dying from global warming. Plants (food) grow better in warm climates, and CO2 is like fertilizer to plants. One reason for the global decline in food prices for the last several decades (up to this past year) is the fact that the planet has gotten slightly warmer and atmospheric CO2 has increased.
Obviously, there is a limit at which point the negatives outweigh the positives — but those who give arbitrary dates by which they claim there can be no reversal have lost touch with reality. (Please note that over the last couple of decades a number of these dates have come and gone — and the world had gone on.) Wars, pandemics, and economic and political mismanagement are much more dangerous to people living now than climate change. If the electric grid goes down, mortality rates will soar, particularly among the aged and the very young.
It is often noted that many rich environmental extremists have large homes by the sea, private planes and huge “carbon footprints.” They had lobbied for years to get rid of coal plants — even though sufficient renewables and backups had not been put in place. Reality has now struck — brownouts and huge price increases in gas, oil and electricity are impoverishing people. The energy reality means that greens who fail to compromise are getting the worst all of possible worlds for them — the return of coal and an increased likelihood of loss of political power, credibility and influence.
Where do windmills and solar power structures come from? Do they just magically appear, or do they use scarce resources and materials that cause prices to soar in competing uses? How many new, highly polluting copper and other metal mines and refineries are going to be required? Are mines and structures going to be built in high-wage countries with strong worker and civil protections, or by oppressed workers in low-wage authoritarian countries?
To be a true environmentalist and also a realist advocate for more development of clean-burning natural gas and new technology nuclear power. The road to both a cleaner environment and lower energy costs — which will reduce global poverty and increase wealth — is clear.
• Richard W. Rahn is chairman of the Institute for Global Economic Growth and MCon LLC.
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