Influential voices have been urging the world to move full speed ahead on the energy transition. UN Secretary General Antonio Guterres has warned that without progress on climate, “people in all countries will pay a tragic price.” And US President Joe Biden has explicitly made potential influence on climate from modern emissions a central principle of his domestic and foreign policy plans with ambitious binding pledges, such as a net-zero carbon electricity grid by 2035. Pledges like these imply rapid but impractical displacement of fossil fuels with alternative energy technologies, which, in themselves, bear numerous consequences—including emissions associated with supply chains and the need to ensure reliable energy delivery.
With “climate” now a central agenda item, an influential constellation of policymakers, financiers, and NGOs based primarily in OECD countries is increasingly promoting a two-pronged strategy. Part one entails accelerated investment in renewable energy sources, especially wind and solar, which are assumed to have lower emissions and are considered more environmentally acceptable. Part two seeks to simultaneously constrict access to capital for suppliers of “traditional” (i.e., fossil) energy. The green investment side of this strategy has made real progress. According to data from Bloomberg and the International Energy Agency, alternative energy developers invested nearly $3 trillion between 2010 and 2020, about half of what was invested in upstream oil and gas. And energy production from wind and solar assets globally rose six-fold during the past decade.
Yet in spite of these advances, alternative energy technologies supply a fraction of usable energy. Ancient carbon stocks pulled from the earth still power modern civilization. Oil and gas combined still supplied nearly 60% of global primary energy in 2020—roughly their proportional share in 1965, but for an energy system that is now more than 3.5 times larger. Coal supplied an additional 27% of global primary energy. Wind and solar only supplied about 4% of global primary energy in 2020, their banner year to date and one in which fossil fuel production and consumption were disproportionately depressed. Electric vehicles (EVs) in use presently comprise less than 1% of the global light-duty fleet, and in most places, the electricity to charge their batteries still predominantly comes from carbon-based fuels.
This essay is not a call for inaction. Far from it. Instead, the core purpose of our larger report (which can be found on the Rice University Baker Institute for Public Policy website) is to emphasize in realistic terms the complexity of the energy challenge and the scale necessary to effect meaningful change. These are critical—and thus far, largely overlooked—steps on the pathway to building a sustainable and energy-abundant future that fulfills the interconnected imperatives of human well-being and biosphere health alike.
Pushing to defund fossil fuels—before lower-carbon resources can credibly “fill the gap”—risks destabilizing a global energy-food-water-human well-being nexus that, sufficiently perturbed, would likely delay energy transition efforts for decades. The consequences of a delay would likely entail more cumulative carbon emitted than would be the case for a more orderly phasedown of fossil resources. The Biden administration’s “Long-Term Strategy” on climate itself points out that a delayed transition would entail a “higher likelihood of reaching catastrophic damages or ‘tipping points’ and potentially irreversible economic impacts.” In short, thermochemical and financial realities cannot be ignored—or we risk stranding the energy transition in the “valley of death,” upon whose rocky floor it now treads.
Unlike the multi-decade lock-in imposed by large capital investments, the persuasions of emotive and fallible human beings can dynamically evolve. The same fervor that over the past decade drove increasing acceptance of restrictions on investments in carbon fuel production could turn the other way far more rapidly if anti-carbon efforts trigger global energy disruptions and consumer hardship before delivering tangible climate gains. On a less overtly political but equally consequential level, carbon investment strictures that leave fund managers unable to meet minimum returns thresholds could also prompt an about face as legal and market pressures reinforce each other.
The emissions math of a carbon resurgence would be brutal; a 1% increase in carbon fuels’ share of primary energy supplies could overwhelm the emissions offset of prior wind and solar progress by multiple years. Political challenges will be commensurately large, because while consumers in higher-income countries consider it important to address climate change, enthusiasm often fades in direct proportion to the costs consumers must personally bear. An “energy deprivation” approach, à la President Carter conspicuously wearing a sweater while signing emergency energy legislation in 1977, will likely fail with American voters (and those in many other polities as well).
Ample energy supplies are the bedrock of modern civilization. As such, climate progress will require simultaneously seeking to maximize energy abundance, affordability, efficiency, and reliability. Successful approaches will emphasize “all sources on deck”—with a prominent role for wind, solar, and better grid batteries, but also major roles for vital but less popular characters: nuclear energy and carbon taxation. An “e pluribus unum” energy mindset that unites multiple resources based on the principles of (1) delivering energy abundance and security and (2) doing so in ways congruent with climate progress offers the most productive path to a much lower-emissions and prosperous 2050.
Gabriel Collins, J.D., Baker Botts Fellow in Energy & Environmental Regulatory Affairs
Michelle Michot Foss, Ph.D., Fellow in Energy, Minerals and Materials
Baker Institute for Public Policy, Rice University
