The International Energy Agency’s release of its “Net Zero by 2050” report has been welcomed by many. These include the Financial Times editors, who noted the agency’s “jolting” turn away from its traditional support of fossil fuels. Environmentalists around the world are celebrating.
Meanwhile, Thomas Edsall explained in The New York Times “How the Storming of the Capitol Became a ‘Normal Tourist Visit.’” As he relates, most Republicans in the U.S. House of Representatives and Senate refuse to support the establishment of a bipartisan commission to investigate the causes of and security failures during the January 6, 2021, insurrection.
Worse, the constitutionally mandated redistricting of congressional election districts after the 2020 Census may produce a Republican-controlled Congress that can steal the 2024 presidential election, according to Jonathan Last. He offers a frightening scenario in which Republicans toss out the Electoral College results for certain states and force the election outcome to the House of Representatives, where each state has one vote.
And while that is happening, economists’ worries about inflation are increasing. As a recent Financial Times headline reported: “Larry Summers accuses Federal Reserve of ‘dangerous complacency’ over inflation.” In the same issue, Martin Wolf asserts that inflation is becoming a threat due to “wildly expansionary” fiscal policy, the large overhang of private savings, the “ill-advised” change in the Federal Reserve Board’s monetary framework that attempts to compensate for the low level of past inflation, and, finally, the political shift that “has strengthened lobbies for cheap money and big fiscal deficits.”
From a distance, one sees four distinct silos. I label the first “net zero,” the second “authoritarianism,” the third “inflation,” and the fourth the “fossil fuel industry.” History suggests the disturbing possibility that the rapidly spreading desire for authoritarianism and the emergence of inflation will first doom the Biden administration and then lead to the abandonment of the push for net-zero emissions. At the same time, the fossil fuel industry, the occupant of the fourth silo, will sit back and wait. Radical politics, inflation, and the patient owners of fossil fuel assets will combine to trash progress to net zero and may, in the process, destroy us.
Start with the view that global warming is a real problem. Most policymakers, scientists, and informed individuals agree with this assessment. The data certainly support this conclusion, as the figure below depicting the world’s temperature change since 1880 indicates.
The problem, though, is that the United States is one of the largest emitters of global warming gases. If the U.S. backslides, the global response to climate change will be seriously slowed. The world effort to combat climate change was hampered from 2017 to 2020 by the intransigence of the Trump administration. President Biden has reversed those policies. Today, our country is trying to move ahead aggressively in this area.
However, the U.S. is paralyzed by the inability of Democrats and Republicans to agree on almost anything. The situation will be worsened by the change in the distribution of representatives in the U.S. House after the 2020 census and the ironclad control of “red” states by a Republican Party in which slow-walking the climate crisis is a mainstream position. There is a significant risk that U.S. participation in the fight against climate change could end as early as January 2025 if our democratic institutions fail and partisan animus continues to escalate.
The problem is complicated by rising inflation. The Biden administration has been admirably focused on environmental issues during its first months in office. Its intense efforts are reminiscent of Jimmy Carter’s concern with energy security in 1977. The Carter administration, though, was forced to divert its attention from energy in 1978 and after. The risk of the Biden administration having to do the same soon is high. Voters care about inflation. To much of the public, global warming is not a critical issue.
The problem of inflation later in this decade could become very serious if the Biden program for infrastructure spending and addressing global warming is passed without tax increases to balance the increased expenditures. The tax increases proposed by the Biden administration, or other revenue enhancements, are essential to balance the increased spending.
High inflation and a return of the presidency to a Republican Party that lacks a meaningful climate stance of its own could set the world back in this respect for decades. A second refusal of the United States to support international environmental agreements would likely lead to backsliding in China, Russia, and India. The objective of limiting temperature increases by 2050 would be doomed, as might be the planet.
With this background, one can only view the IEA’s net-zero scenarios as wishful thinking. Any attempt to slow or reverse global warming must start with all political participants agreeing on that goal. In the absence of consensus —the most likely outcome today — little will be achieved in the United States, and, sadly, not much progress will be made in China, India, or Russia as a result.
The IEA asserts that spending on oil and gas exploration should stop except in existing fields. Some investors will push the large multinational companies to follow the agency’s decrees. But national oil companies in many countries, as well as private investors, will ignore them. The latter may even boost investments, hoping to capture windfalls.
The weakening of American democracy, other political distractions such as inflation, and the fossil fuel industry’s willingness to capitalize on the promise of high prices seem poised to doom the efforts to achieve a net-zero world by 2050. A former government official once cautioned, “We must see the world without illusions, as it really is, like it or not — and however uncomfortable that may be for timid politicians” (P. Verleger, Oil Markets in Turmoil, 1982, p. 155). One might add climate scientists and environmentalists to that list.
The movement toward solving the global warming problem will not be enhanced by publishing scenarios that involve cutting off spending on fossil fuels, as the IEA has done. Real progress will only be achieved by breaking open the various silos and bringing their occupants together. Dialogue among the parties, rather than dictates from those who happen to be in power today, are needed to make progress. Failure in this respect could lead to disaster.