#4

American Energy Politics in the Era of Biden

At the recent climate change conference in Glasgow, Americans were everywhere. Diplomats made bold promises to phase out fossil fuel subsidies while ramping up the countries cuts in the pollution that causes global warming.  CEOs filled the Glasgow stages with new announcements, especially on how they would help redirect trillions of private investment dollars to green causes.  The U.S. was central to a big announcement to cut pollution of methane, a particularly strong greenhouse gas, by 30%.  The U.S. even rejoined a coalition of countries that were make lofty promises to stop global warming at just 1.5 degrees above pre-industrial levels. America is back, or so it seems.

But behind the swagger, not much has actually changed in the U.S.  Across most of the country there are few signs of a massive “energy transition,” as the shift to zero emissions is often called. Change is afoot at a blistering pace in California and New York but not in Wyoming and Kansas or most of the rest of the country’s middle. Wind and solar technologies are advancing, but so is natural gas, which is the cleanest burning of all the fossil fuels but still emits warming pollution of carbon dioxide and methane.  Those advances are why coal, a less effective competitor, has dropped by half over the last two decades.  Market forces are now bringing coal back, a bit, because gas has doubled in price this year.

In transportation, the Biden administration talks about electric vehicles but that’s not what Americans are buying.  All of the top selling cars in America use internal combustion engines; the top three are giant trucks. (Only one electric vehicle makes the top 25–Tesla’s model 3, ranked 19th).  This is not a bold transition but the more normal, gentler process of market-driven change.  These changes, most unrelated to climate policy, have helped the U.S. cut emissions a bit—thanks mainly to the pummeling of coal – but far from the deep cuts needed for the country to play its role in stopping global warming.

The slowness to change is, to some degree, just inertia.  When a big industrial system transitions to new technology it rarely does that quickly.  When the world shifted from energy systems dominated by coal – such as the railroads – to oil-dominated cars and airplanes it took more than half a century.  That inertia, which is evident nearly everywhere in the global energy system, is why I have long thought that stopping warming even at two degrees would be next to impossible.  New studies released before Glasgow confirmed that even with big new policy efforts the world will blow through the 1.5 degree goal and also sail past two degrees.  The planet’s climate system and industrial inertia are much more powerful forces than bold agreements reached by consensus in Glasgow.

But the bigger challenge in America is political.  The nation is severely divided on almost everything, from vaccines to policing and infrastructure. Divided politics has a huge impact on energy policy because it is so hard to get the public – and their elected members of Congress – to agree on much.

When they do agree, it is on how to spend more public money – not how to penalize big polluters.  That’s why new legislation from the U.S. is filled with subsidies for clean energy supplies and electric vehicles and other worthy investments.  But it is silent on how to regulate the older, more polluting technology.  Absent regulation or other strong penalties like a carbon tax – all off the table, politically – the U.S. won’t do much cut pollution.

The current energy crisis is creating even stronger political challenges for change.  Electricity prices have doubled, mainly because price of natural gas has doubled.  The cost of gasoline is up as well.  One of the best studies ever done on U.S. public opinion about energy policy showed that American’s want cleaner futures – only if that future doesn’t visibly cost much.  Adopting policies for a green future when energy prices are soaring is a political loser.

In a politically divided country the federal government, for the most part, won’t do much.  That means that the states are the real places to look for leadership.  And the good news is that a state-driven policy—with potentially every state with its own plan—isn’t that much more expensive than an ideal nationwide policy because some energy services like electricity are traded between the states.

Of course America isn’t divided on everything.  One area where much of the American public agrees:  be tough on China.  That’s terrible news for climate policy because the world’s two biggest emitters need to find ways to cooperate if the planet has any chance.  There are some good ideas for how to make that work, and the two countries issued a hopeful statement in Glasgow, but political headwinds in both nations are strong.

To the outside world the U.S. thus looks very hypocritical.  It joins coalitions that claim they will stop warming at 1.5 degrees.  It says it will developing countries adapt to the harsh impacts of warming, even when the political consensus isn’t there to spend the money.

Hypocrisy is a dark word for what is the real art of politics, which is to do what is possible.  And, in doing that, hopefully change the feasible future.  That’s now happening in the U.S. just as it is in Europe.  As solar and wind gain market share they also get more powerful politically, for example.  As more of the public realizes the value of nuclear power in cutting emissions the same happens.

These shifts are reshaping the political landscape, but in a divided U.S. that process is slow and with many twists and turns as power shifts in Washington.  This is frustrating for the rest of the world that depends so much on U.S. leadership, but it means that if you want to know what the U.S. will do don’t watch political statements in Washington too closely.  Watch, instead, the industries that are shifting investments to clean futures and watch the states for a better sense of what’s durable.