The immense complexity of saving the world
High gas prices are a political problem from hell wrapped around an existential problem from hell
Biden’s choice
Joe Biden currently faces a choice between:
working against his own climate agenda by increasing domestic oil and gas production to try to decrease gasoline prices, and
enduring high and rising gas prices, which will: a) finance Russia’s campaign of ethnic cleansing in eastern Ukraine, and b) help the Republican Party, now overwhelmingly controlled by authoritarian forces, regain power.1
If the phrase “his own climate agenda” doesn’t resonate, we can replace it with “his attempt to preserve the livability of the only known life-supporting planet in the universe” without changing the meaning of the sentence.
This is a lot. I’m especially struck by the immense complexity, on so many dimensions, of the transition from fossil fuels to renewable energy. This complexity is definitely suboptimal, but it shouldn’t be surprising.
Fossil fuels enabled modernity
Before fossil fuels, all physical work – plowing fields, harvesting crops, constructing dwellings, building machines, weaving fabric, sewing clothes, printing books – was done by humans and animals. This put a low ceiling on productive capacity and therefore human population. Fossil fuels changed everything. From the book Move:
By the year 1 AD, [total human population] was estimated to be somewhere between 200 and 300 million people. One-thousand years later, it remained about the same. Even by 1500 AD, perhaps only 100 million people had been added. Then came the 18th century industrial revolution, during which fossil fuels replaced human and animal muscle as the primary source of power. The cotton gin and wheat thresher made farms much more productive, while steam engines and railroads carried food long distances. Better sanitation curbed the spread of diseases, ensuring that people lived longer and more children reached adulthood. All of these innovations help push the world population to 1 billion by the year 1800.
It’s not an exaggeration to say fossil fuels built the modern world. First coal, then oil and gas powered the industrial revolution, from factories to trains to ships, and enabled everything that followed: electricity, lights, cars, phones, planes, television, washing machines, and on and on. Modern cities weren’t possible before the construction methods unlocked by fossil fuel-powered machinery. Electricity, mechanization, communication technologies, long-distance transportation, and the wealth they generated created the modern conditions for the invention of computers and later the internet.
That’s the good news. The bad news is that burning fossil fuels is destroying the habitability of the earth. To preserve a planet compatible with modern civilization, we need eliminate the fuels that built it.
Electrification and renewables
Today’s world runs on fossil fuels more than ever before. They generate ~60 percent of our electricity (refrigerators, vacuum cleaners, dishwashers, coffee machines), and power our cars, trucks, airplanes, factories, and farm and construction equipment.
To stop the heating-up of the earth, we need to drive net greenhouse gas emissions to zero. The path to net zero emissions has three elements:
Electrify everything (cars, planes, ships, factories, etc.)
Produce 100 percent of electricity from renewable sources
Invent technologies that remove carbon from the air at scale
Number 3. is difficult; the technology exists, but is nascent. Fortunately, we recognize the stakes, and smart people are working hard on it.2 I’m a believer that when it comes to technological challenges, it’s usually a mistake, on a long enough timeline, to bet against human ingenuity.
The technologies already exist for numbers 1. and 2., electrification and renewables, and a large majority of decarbonization will come from those paired strategies. However, the road to 100 percent renewable energy is long, littered with obstacles, and has enemies of decarbonization lying in wait in the shadows.
In a March 2022 Foreign Affairs piece, Meghan L. O’Sullivan, Director of the Geopolitics of Energy Project at Harvard’s Kennedy School, and Jason Bordoff, Co-Founding Dean of the Columbia Climate School, wrote that although people “dream of a future defined by clean energy,” for the next couple decades at least, “the geopolitics of oil and gas are alive and well—and as fraught as ever.” They elaborate:
The combination of pressure on investors to divest from fossil fuels and uncertainty about the future of oil is already raising concerns that investment levels may plummet in the coming years, leading oil supplies to decline faster than demand falls—or to decline even as demand continues to rise, as it is doing today. That outcome would produce periodic shortages and hence higher and more volatile oil prices. This situation would boost the power of the petrostates by increasing their revenue and giving extra clout to OPEC.
In terms of Russia specifically (the piece reads like it was completed before the invasion of Ukraine):
[T]he energy transition will inevitably transform Russia’s relations with the other major powers. Russia is highly dependent on oil and gas exports, and in the long term, the clean energy transition will pose significant risks to its finances and influence. In the messy transition, however, Russia’s position vis-à-vis the United States and Europe may grow stronger before it weakens.
This is what we see happening now. NATO is semi-boycotting Russian oil, which reduces Russia’s willing buyers, but offsets that by driving up oil prices overall. If it’s a near-term net loss for Russia, it isn’t much of one. Part of what put Russia in a position to launch the invasion in the first place was the high price of oil and gas, which they knew would increase further when they attacked Ukraine.
Meanwhile, high gas prices are a complete disaster for Joe Biden, the Democratic Party, and the future of democracy in the United States.
Gas and the price elasticity of demand
Because the world still runs on fossil fuels, perhaps the single worst peacetime problem a political leader can have is high gas prices. Per Econ 101, the price of a good or service is determined by the relationship between supply and demand. If demand rises, prices rise; if demand falls, prices fall. If supply rises, prices fall; if supply falls, prices rise.
With some goods, people buy nearly the same amount regardless of price, while for others high prices lead people to cut back or switch to a substitute (e.g., coffee instead of tea, oatmeal instead of raisin bran). Products where people’s buying patterns hold fairly steady regardless of price are said to have highly inelastic (steep) demand curves. This is the case when products don’t have viable substitutes, including, you guessed it, gasoline.
Whether gas prices are high or low, people have to get where they’re going, so people have no choice but to keep buying gas regardless of price (see chart, quantity purchased on the x-axis, price on the y-axis).
Because we have to buy gas, when it’s expensive it can feel almost punitive. As you fill up your tank gas, you literally watch the pump count how much money it’s about to extract from your bank account. It bites financially, it’s highly salient, and it’s extremely frustrating because you are powerless to push back. The one thing you can do in response to high gas prices is vote out the politicians who let it happen.
Keep it in the ground - wait, no, take it out
The familiar refrain of clean energy advocates, “Keep it in the ground!” articulates the insight that to slow global warming we have to burn less fossil fuel, and the surest way not to burn it is to leave it where it is. But leaving fossil fuels in the ground reduces supply, which cause prices to rise, and when gas prices rise, popular support for incumbent political leaders falls. This quickly creates a political imperative to reduce gas prices. One key lever to pull is to increase the oil supply; in other words, to take it out of the ground. (How, concretely, to increase oil supply is a separate and complicated question.)
In the worst case, the dynamic here is like a life saving surgery where the side effects kill you. More optimistically, in order to sustain the long-term shift to renewable energy, short-term increases in fossil fuel production may be necessary to mitigate political backlash.
In the United States, the imperative to reduce gas prices is more than just political. In many countries there’s agreement across the political spectrum that climate change is a human-caused, real, and serious problem. Not so here. The Republican Party runs the gamut from outright climate denial – Trump called it a “hoax” again three months ago – to predatory delay, i.e. rhetorically conceding climate change is real but opposing the steps required to meaningfully address it.3 In a two-party system4 political developments are zero-sum, so when high gas prices erode support for a Democratic president, it brings Republican climate deniers closer to power.
Because Republicans are opposed to climate action for political reasons (support from fossil fuel companies) and cultural reasons (climate mitigation is coded as progressive), they won’t govern to preserve a livable planet.5 In fact, they will likely try to take America backwards, to make us “great again.” Therefore, a Democratic president with sinking approval ratings is a significant risk factor in the civilizational effort to reach net zero emissions. In fact, one of the most important things a Democratic president needs to do to move the needle on greenhouse gas emissions is get reelected. That requires keeping gas prices reasonably low, in part by pumping more oil, even though it will directly contradict a responsible climate agenda.6
An unprecedented challenge
In this post I’m trying to capture two related things: A. the existential stakes and general vastness of the challenges facing the Biden White House, and B. the incredible array and magnitude of the obstacles to the energy transition.
Here, again, are the two options available to Biden that are pulling him in opposite directions:
working against his own climate agenda by increasing domestic oil and gas production to try to decrease gasoline prices, and
enduring high and rising gas prices, which will: a) finance Russia’s campaign of ethnic cleansing in eastern Ukraine, and b) help the Republican Party, now overwhelmingly controlled by authoritarian forces, regain power.
The net result of this chaotic strategic terrain is tremendous uncertainty and persistent destabilization. Given that we are trying to wean ourselves off of the very resources, fossil fuels, that allowed humans to build the modern world, it could hardly be otherwise.
We will need steadfastness to for the journey ahead, and I believe we have it within us.
Notes:
https://www.forbes.com/sites/markjoyella/2022/03/21/on-fox-donald-trump-calls-climate-change-a-hoax-in-the-1920s-they-were-talking-about-global-freezing/
https://www.cnn.com/2022/04/09/business/food-fuel-prices-political-instability/index.html
Power the Republican Party may not subject to free and fair democratic elections once they have it back.
Carbon capture and storage technologies exist today but not at scale. Whether they will eventually operate economically at scale is just one of 8 zillion variables that will determine whether we succeed in stopping climate change and ensuring the future of humanity on earth, though it is one of the more important of those 8 zillion variables.
There may be an individual Republican elected official here or there who supports climate action. They are not just exceptions, but likely targets for primary challenges.
That this is mind-blowing and hard to accept doesn’t make it any less true.
This logic can be taken too far if it’s used to justify not taking steps to reduce fossil fuel use, but other than at that extreme, it’s 100 percent valid.