A carbon quandary escape hatch

Russia's war is laying bare a tricky problem — new oil-and-gas infrastructure may be needed now, but will help cook the planet if it operates for decades.

Why it matters: European plans to ditch Kremlin-backed suppliers are spurring calls for more LNG and related pipelines and equipment.

Tight crude markets are prompting U.S. officials to back more domestic output.

Threat level: Investors and energy companies seek long-term returns on costly projects. But new fossil assets that operate for decades collide with Paris Agreement goals.

Driving the news: A new Foreign Policy essay by Columbia's Jason Bordoff and Harvard's Meghan O'Sullivan touches on how to square this circle.

Some infrastructure built today could be what they call “transition assets.” They would be "retired earlier than the normal time period that investors would earn their expected return in if the world achieves its climate goals."

Zoom in: Bordoff said the Russia crisis shows more secure supplies are needed.

• Yet "many governments are simultaneously telling industry that they plan to move away from oil and gas even faster." There's a role for policy, he said via email.
• By designating transition assets, "governments might lower the cost of capital and long-term risk in exchange for agreements to wind the assets down sooner than companies typically would."
• Policymakers could also require fossil projects to have capacity for carbon capture retrofits, or be built to eventually use low-carbon fuels like hydrogen.

Elsewhere, energy analyst Nikos Tsafos recently explored how to spur more LNG development for EU buyers.

• Projects take years and have a 20-year "investment horizon" out of sync with EU climate plans, wrote Tsafos of the Center for Strategic and International Studies.
• One option: public financing for projects paired with pledges of attractive prices down the road for Asian countries looking to ditch coal.
• "In that sense, public money would provide energy security to Europe and, later, decarbonization in Asia," he writes. Emissions "lock-in" can also be avoided with requirements to shutter projects that lack a "credible path toward climate neutrality."

Yes, but: The landmark new report on limiting warming by United Nations-convened scientists is crystal clear on the need for immediate and aggressive moves away from fossil fuels.

It's stuffed with warnings of emissions "lock-in" from continuing to build polluting assets.

The bottom line: Climate economist Gernot Wagner, in an email, said that while "we can't switch from high- to low-carbon investments overnight," he cautions:

"Putting too much emphasis on the fact that some high-carbon investments will be necessary runs the danger of giving cover to those not wishing for the transition to happen at all."

Bonus: Paris-friendly fossil decline

The International Energy Agency's vision of a Paris-friendly energy future shows steep declines in oil, gas and coal reliance in the decades ahead.

This chart is adapted from its pathway for reaching net-zero global emissions in 2050.