Is COP26 on Life Support and Could the 2022 Elections Pull the Plug?

Is COP26 on Life Support and Could the 2022 Elections Pull the Plug?
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Now that COP26 is over, it is time to take a critical look at the future direction of climate change policies, as opposed to the headlines and commentary. The conference is probably the new definition of cognitive dissonance, as leaders called for dramatic reductions in fossil fuel consumption while lamenting high energy prices and asking OPEC+ to increase production. In many ways, this could translate into a reduction of support for the most draconian climate change policies. 

This is partly due to the mandating and subsidizing of new energies without fully understanding the complexity of the industry, its operations and infrastructure. As a result, there have been mismatches and bottlenecks, creating price spikes, inflation and slowing economic growth, which is likely to raise the ire of consumers who were promised the new energies would be cheaper. On top of this, governments are losing revenue from sources like gasoline taxes at a time of high indebtedness, which will see some retraction of subsidies or additional fees layered on the public. 

It is important to recognize that policy is not always made based on reality but perceptions. Europe bans GMO foods not because they are dangerous, but because some in the public are afraid of them. Germany decided to phase out nuclear power after the Fukushima accident, even though the country is not at risk from tsunamis. The federal government banned MTBE as an oxygenate, costing consumers billions and billions of dollars, even though the CDC says “The human health effects from MTBE at low environmental doses are unknown.” 

The climate crisis is very real, but could very well prove to be similar to the 1970s Oil Crises, a problem which either proves solvable and/or tolerable. The next few years could easily see a shift from aggressive climate change policies to more nuanced approaches and the abandonment of, for example, mandates for renewable power and subsidies for electric vehicles. This could stem from one or more of four causes, political, technological, environmental or climatological.

Political support could wane as the public begins to experience crisis fatigue, as has happened with many other issues. This could be especially true if another problem appears more threatening, whether social, economic, or geopolitical. It seems unlikely that something like World War II ending the Great Depression could occur with regard to climate change, but the pandemic has certainly shown that the public has trouble maintaining a focus on multiple existential threats [sic]. 

And cynicism is rising for a number of reasons, including activists’ tendency to describe climate change not as a problem but an existential threat, which the science does not support. Increasing references to ‘the end of humanity’ will eventually desensitize the public. Claims that solar and wind the cheapest form of power combined with calls for ever-higher government spending and subsidies only increases skepticism. Further, the enormous land needs for low-density solar and wind are facing resistance from the public, as are the needs for long-distance transmission lines to transmit renewable power. And some environmental justice activists are questioning the bias of subsidies towards those with higher income. 

The recent reduction in support for solar power in some countries such as Germany and Japan and could serve as an early warning about reduced support for expensive alternative energies. Price surges due, in part, to variable renewable power will add momentum to opposition and greater government debt from pandemic fiscal policies should encourage a sharper look at the cost-effectiveness of various proposals. 

Reducing future emissions from China and India, especially from coal consumption, will likely prove difficult, and there are numerous rationales for them to weaken or even walk away from their pledges. Already, these and other countries are frustrated that the previously promised $100 billion a year in aid has only been partly provided. And if Republicans take control of Congress in 2022 and/or the White House in 2024, U.S. climate change action will likely grind to a halt, making it impossible to persuade other nations to abandon cheap coal, which will make their industry move competitive compared to countries that embrace expensive energy solutions. 

And technological progress could make many current climate change policies unnecessary, despite the naysayers. Those who argue for optimism about technology are often accused of ‘magical thinking,’ but that is reminiscent of Arthur C. Clarke’s remark that those who don’t understand technology believe it to be magic. Much of the neo-Malthusian fallacies stemmed from the unsupported assumption that technological progress would slow or end, leading to resource scarcity and mass starvation. 

Several possibilities exist for technological advances that could reduce the need, perceived or actual, for aggressive climate change policies. Nuclear power could prove much cheaper in the future, just as solar and wind costs came down in the past decade. This could sharply reduce coal use and deforestation for fuel. Carbon capture and sequestration, now expensive, could become cheaper than many other GHG reduction approaches, leaving a greatly reduced need to phase out fossil fuels. Indeed, cheaper electricity should make carbon capture much cheaper, since it comprises a significant fraction of those costs. 

Finally, there is no guarantee that the climate will continue warming at the recent rate. Steve Koonin, in his book Unsettled, notes that the climate from 1910 to 1940 was similar to the recent three decades, followed by three decades of cooling, then more warming. Even if climate models are reasonably accurate, and Koonins notes that they haven’t been able to match the historical climate, that doesn’t rule out the potential for a cyclical cooling period which would, rightly or wrongly, reduce pressure for the more aggressive GHG reduction targets. 

Policy makers need to accept that public support is necessary to address climate change, and while that support might be roused in the short run with cliches and promises, in the longer term, those create cynicism. The uncertainties need to be acknowledged and the costs and benefits of various approaches have to be discussed much more clearly, while the habit of using climate change policies to address unrelated concerns should be minimized. But constant re-assessment is needed to respond to both the evolving science and the technological progress, as optimal policies will shift with both, as the last five decades of energy policy-making has shown. 

 

Larry Goldstein is the former president of EPRINC and a co-founder of Petroleum Industry Research Associates in New York City.

Michael Lynch is a Distinguished Fellow at EPRINC and President of Strategic Energy and Economic Research. 



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