Biden ushers in historical turn on clean energy and climate change
Like the curve of Earth we can’t see from the ground, we’re on a curve in history that we won’t fully recognize until decades in the future.
Driving the news: The inauguration of President Biden completes an economic and political consensus that climate change is an urgent threat the world should aggressively address. Whether this consensus produces action remains deeply uncertain.
The big picture: Sometimes history is recognized instantly, like the Capitol insurrection or the pandemic. Because climate change is inherently gradual, history happens so subtly that we may miss it in a world gripped by faster-moving crises.
I asked Daniel Yergin, an energy expert famous for writing a Pulitzer Prize-winning book about the history of oil, how he thinks historians in 2050 will look back on this time for energy and climate change.
- “History curving,” answered Yergin, whose consulting firm, IHS Markit, has traditionally been most focused on the oil and gas sector but whose fastest growing business today focuses on climate change.
- 2050 is a common benchmark year by which climate change progress is measured. It’s a generation away for us humans, but a blip for our planet.
Flashback: This historical curve began with the Paris Climate Agreement in 2015, which prompted investors, corporations, the public and politicians to prioritize the problem.
- Those shifts cemented the curve in history, despite President Trump vowing in 2017 to withdraw America.
- Biden, who officially announced on his first day in office that the U.S. is rejoining the accord, will accelerate policies and technologies that have been growing over the last six years.
By the numbers: Despite the pandemic ...
- Investments into clean energy technologies broached $500 billion last year for the first time ever.
- Venture capital investments into climate technologies broke records.
- Investors poured a record $27.4 billion into exchange-traded funds that are billed, among other things, as environmentally sustainable, per the WSJ.
- Sustainable debt broke records, per Bloomberg.
But, but, but: All this evidence indicating the world is beginning to address climate change doesn’t actually make the challenges easier. In fact, some are getting bigger and others are merely becoming clearer.
Where it stands: Oil, natural gas and coal accounted for 81% of the world's energy consumption in 1990. Thirty years later — in 2020 — that figure dropped to 80%, mainly because of the pandemic, according to the International Energy Agency.
- For all the money flowing to cleaner energy, we have a 1% drop in fossil-fuel consumption's share to show for it. It's questionable whether it would have dropped at all were it not for a terrible public health crisis.
- This percentage hasn’t dropped more because of, among other reasons, growing energy demand in rapidly expanding economies like India.
The challenges are many and overlapping. Let’s look at two foundational ones: Politics and technology.
Politics: To say we live in a polarizing democracy would be an understatement after recent events. Political polarization makes everything harder, but especially climate change, whose impacts are long-term and diffuse and whose solutions are unevenly distributed and uncharted.
- Jason Grumet, president of the Bipartisan Policy Center, a centrist think tank, compares the failures around the eventually successful moon launch to that of Solyndra, a solar manufacturer that got a federal loan guarantee in the Obama administration and then went bankrupt.
- “Three astronauts burned to death on the launch pad. And we went forward. A solar company defaulted on its loans, and a nation melted down,” Grumet said. “The tolerance for failure in our current political system is very low, and success requires taking some big risks.”
Technology: Let’s get back to 2050. Both the U.S. under Biden and the European Union are setting goals that their economies will emit, on net, zero greenhouse gases within 30 years. New research shows just how daunting this is.
- “Today, there are no cement plants that bury their emissions underground, and there are no facilities sustainably producing hydrogen, a clean-burning fuel,” writes the NYT about a recent Princeton study. “By the mid-2020s, several such plants would need to be operating to prepare for wider deployment.”
- For Europe to meet its target, "per capita emissions will have to decline to the level of India, where the per capita income is about $2,000 a year, compared to Europe’s $38,000,” Yergin writes in his new book “The New Map: Energy, Climate, and the Clash of Nations.”
- The only way to close this gap without lowering standards of living is with new technologies widely deployed.
The bottom line: We’re on the curve, but we don’t know its destination.
“Optimistically, historians will say that the Biden administration was able to create a sense of collective urgency that enabled the U.S. to take the kinds of risks that ultimately solved the problem,” Grumet says.
- "The other path would be that the U.S. squandered its last opportunity to change the structure of its economy in time to avoid the worst effects of climate change.”
Editor’s note: This is Amy Harder’s final column as an Axios employee. She will be continuing Harder Line on a monthly basis in the coming weeks as an outside contributor.