When “either/or” becomes “and,” we have made progress in a policy dispute. And that is what has happened in the climate and energy policy debate. It should now be clear to all (save those on the extreme ends of the spectrum of views) that we must have fossil fuels in ample supply if we are to retain a growing economy and the political support to spur a transition in which they are used only to the extent that they do not contribute to warming the planet.
The interruption of oil and gas supplies from Russia has sent President Biden, an advocate of a vigorous attack on global warming, scurrying around the world for more supplies of both. He is a democratic politician elected to improve the lot of the electorate, not immiserate it. One part of that job is to see to it that there are sufficient supplies of crude oil to keep the prices of its products at affordable levels. Another part is to attack the problem many believe is caused by those supplies: climate change. That effort requires backing from an electorate that does not believe that a lower-emissions economy will require substantial reductions in the quality of their lives.
So it is not a question of should we have ample supplies of oil and gas and fry the planet or reduce production of those products to cut the emissions their production and use creates. We need both: more oil and gas in the here and now while we transition to a greener, less emissions-intensive economy. We need sufficient supplies of oil and gas to see us through to an orderly transition to an energy economy that can sustain the economic growth that provides the resources to fund needed change without over-heating the planet.
To meet those twin goals we need more of each of a set of seemingly contradictory polices, as Alex Bozmoski and Nate Hochman of DEPLOY/US and National Review (respectively) have pointed out recently in National Affairs. We need both higher taxes and lower taxes. Higher taxes on fossil fuels move the costs of that consumption from society to the user of the emitting fuel, if markets have not already done that. We need lower taxes on those least able to bear the higher taxes and on firms willing to step up research and development on the fuels and gadgets of the future.
We need more regulation and less regulation. We must regulate methane emissions, with their immediate and huge effect on warming, and produce markets for trading carbon credits. And we need less regulation to remove impediments to the construction of transmission lines, the siting of emission-free energy sources, and, perhaps, the construction of nuclear plants.
We need more subsidies and fewer subsidies. We need subsidization of the development of promising ways of reducing emissions and the development of domestic sources of materials necessary to the advance of battery technology. And we need to reduce the subsidization of construction of housing that does not meet the highest energy-efficiency standards.
We need deglobalization and more international cooperation. Deglobalization, which gains force from the drive to reduce reliance on foreign oil, is necessary to heighten national security and reduce exposure to international markets for some products. And international cooperation is necessary to assist developing nations to decarbonize their economies.
There’s more, but you get the idea. We need, first of all, a recognition that the dates for the achievement of this or that goal are aspirational and not immovable, and that it might well be foolish to damage our economy and weaken support for eventual decarbonization by attempting to meet those deadlines. Similarly, we need to recognize that those who say climate change is a hoax concocted by leftists eager to expand government power are ignoring evidence that there is indeed a probability that the globe is warming, and that prudential steps must be taken to confront that probability.
In short, we need a systematic revision of our energy and climate policies, ignoring if we must the extreme doomsayers and naysayers. Not easy for politicians eager to do the right thing and stay in office. Oddly, such politicians, shackled to an electorate, have been kinder to the environment than have those, such as Stalin, Putin, and Xi Jinping who govern in systems that place far fewer constraints on their policy decisions. There should be enough in an “and” policy rather than an “either/or” one to warrant support from all (save zealots for whom the debate must end in a rout for their opponents).
Conservatives get some deregulation, targeted tax cuts, and attention to national security, and liberals get some needed regulations, higher taxes aimed at fossil fuel consumption, and international cooperation needed for any program that hopes to cool the planet.
Irwin Stelzer is a Senior Fellow at the Hudson Institute and U.S. economic and business columnist for The Sunday Times and the former director of the Energy and Environmental Policy Center at Harvard University’s Kennedy School.