We need a better way to fight climate change

We need a better way to fight climate change

Energy costs are climbing out of control. A gallon of gas costs nearly $1 more than a year ago. Americans are experiencing sticker shock this winter on home-heating costs. Though part of this is due to the world restarting after the pandemic, climate policies are increasingly driving prices up. We need a change of direction.

Fossil fuels still deliver the vast majority of energy. The European Union puts climate at the top of its political agenda, yet more than 80% of its primary energy needs are met by fossil fuels, according to the International Energy Agency. Despite endless environmental talk, solar and wind contribute only about 3% of Europe’s total energy.

Making a transition from fossil fuels to green energy is costly. Solar and wind can only deliver electricity, which accounts for less than a fifth of total energy consumption. Moreover, as Europe is learning, leaning on unreliable sources like wind leaves households vulnerable: Wind speeds were unusually low for most of 2021, causing much of Europe’s current energy pain.

When the sun doesn’t shine or the wind doesn’t blow, prices rise quickly and we have to revert to fossil fuels for backup. Batteries are inadequate and expensive, easily quadrupling solar electricity costs and failing to provide much power. In 2021, Europe only had battery capacity to backup less than 1 ½ minutes of its average electricity usage. By 2030, with 10 times the stock of batteries, and somewhat more usage needed, they’ll have enough for 12 minutes.

As countries move to “net-zero carbon” emissions — the target endorsed by President Joe Biden, the European Union and many others — costs will escalate much higher again.

The Bank of America has found that achieving net-zero will cost $150 trillion over 30 years, almost twice the combined annual GDP of every country on Earth. The annual cost of $5 trillion is more than all the world’s governments and households spend every year on education.

That estimate is based on the fanciful assumption that costs are spread efficiently, with big emitters China and India cutting the most. But India says it will only keep moving toward net-zero if the rest of the world pays it $1 trillion by 2030 — something that won’t happen. Most cuts will likely only happen in rich countries, which will mean a relatively trifling cut to global emissions. The rich world will get all pain for little gain.

In a new study, McKinsey finds most of the poorest nations in Africa would have to pay more than 10 percent of their total national incomes every year toward climate policy. This is more than these nations combined spend on education and health. This is not only implausible but also immoral on a continent where almost half a billion people still live in abject poverty.

Research published in Nature finds that reducing emissions just 80% will cost the United States more than $2.1 trillion every year from 2050, or more than $5,000 per person, per year. The cost of achieving Biden’s promised 100% reductions will be far higher.

To put this in context, the annual US cost of World War II is estimated at $1 trillion in today’s money. Every year by 2050, climate policy could cost Americans more than twice what they paid during the Second World War.

Moreover, energy policy will turbocharge inflation. BOA estimates it will lead to an additional 3% of “greenflation.” This will reduce growth dramatically.

Most people agree climate change is a priority, but surveys show few people are willing to spend more than a few hundred dollars a year on climate policies. Asking people to spend tens or hundreds times more is a recipe for failure.

This isn’t an argument to do nothing but just to be smarter. To ensure we can transition from fossil fuels, we need to ramp up research and development to innovate down the price of green energy. We should invest across all options including fusion, fission, storage, biofuel and other sources.

Only when green energy is cheaper than fossil fuels will the world be able and willing to make the transition. Otherwise, today’s energy prices are just a taste of things to come.

Bjorn Lomborg’s latest book is “False Alarm: How Climate Change Panic Costs Us Trillions, Hurts the Poor, and Fails to Fix the Planet.”