The Senate has passed the Democrats' mega climate, health care and taxation bill along party lines and after much griping from Republicans. "The Green New Deal Democrats are coming straight after American natural gas with huge tax hikes," Minority Leader Mitch McConnell (R-KY) said of the bill last week. "The result will be higher electricity bills, higher heating costs, less exporting to our European allies."
Senator McConnell has a point: The Inflation Reduction Act's emphasis on solar and wind energy seems misplaced and rife for profiteering by Wall Street and its allies. And yet, to call this bill a representation of "Green New Deal Democrats" is false. The opposite: There bill represents a promising shift away from the hysteria over the "climate catastrophe" and toward more reasonable and effective policies.
The Breakthrough Institute's Alex Trembath points out that the bill take a far more "pragmatic approach" than the much larger and more radical Green New Deal. It does not start an immediate jihad on fossil fuels, including natural gas, and opens the door to support for the country's beleaguered nuclear industry.
As we have learned all too well in recent months, this notion of a transition to "net zero" emissions has proven a poorly conceived fantasy with disastrous economic effects. Now, governments across the world, including the U.S., are starting to consider reasonable energy pragmatism over green dogmatism.
The green demand to rapidly eliminate fossil fuels, ban nuclear power and subsidizw renewables has created what economist Isabel Schnabel has aptly dubbed "greenflation." Restraints on producing fossil fuels, often pushed by woke investment banks, have resulted in high energy prices, particularly after the Russian invasion of Ukraine. These are a key driver of rising prices not only for fuel but food and industrial products.
But we are now seeing a shift toward moderation. The Manchin-Schumer bill now being discussed in Congress has plenty of green pork for the oligarchs and investment bankers, but it also allows new leases for oil in Alaska and the Gulf of Mexico. It also embraces nuclear power, arguably the most promising of all non-carbon based fuels.
In the coming weeks, we will be hearing cries from both the libertarian Right and the hard-green Left about the bill, a sign that the legislation actually makes sense.
Sadly, before the recent inflation surge and the Russian invasion of Ukraine, skepticism about zero emissions rarely impinged the hysteria mounted by the greens and their media allies. And yet, now it's become abundantly clear that fossil fuels cannot be easily replaced.
Indeed, despite trillions spent on green energy over the past 20 years, the percentage of global power generated by fossil fuels has just barely declined, from 87 to 84 percent, and the bulk of reductions have come not from wind or solar but by substituting natural gas with coal.
Here are the facts: By 2050, according to recent estimates by the Federal Information Agency, fossil fuels will still account for 75 percent of all energy consumed globally. To get to "net zero" by then will cost $6 trillion annually, according to McKinsey, equal to a third of all tax receipts globally. These realities are beginning to be felt in the marketplace, where green energy projects and ESG funds are languishing even with massive subsidies and massive public relations, while oil companies are enjoying bumper profits amidst shortfalls.
These realities are now impacting the political class. Europe, consistently more green-dominated than the U.S., has beat the fastest retreat. They now see that their gambit of importing oil and gas from Vladimir Putin in order to maintain their own green virtue has not turned out so well. The Russians have the Europeans by the neck, forcing Germany into its first trade deficit since the fall of the Berlin Wall, while the country's largest landlord announced a restriction on heating homes at night. Inflation has jumped to 8.3 percent in the Eurozone and 9.1 percent in the United Kingdom, the highest level in 40 years.
In the face of continued inflation and the prospect of energy rationing, EU regulators recently announced that both gas and nuclear power can now be classified by investors as green energy, acknowledging the futility of decarbonizing the energy grid by 2050 with wind and solar energy alone. Nuclear is making a comeback; France, too, has decided to renew its once vibrant industry.
The futility of the "net zero" obsession is particularly evident to residents of the developing world, where over 3.5 billion lack reliable access to electricity. There is widespread resentment of attempts by western banks, governments and non-profits to stop fossil fuel development, even as a desperate Europe seeks out sources of liquified natural gas and other fossil fuels. Narenda Modi, for example, suggests India will only address climate change by 2070.
For many governments in the developing world, this is a matter of survival. In recent weeks, there have been fuel riots in Kazakhstan, Ecuador, South Africa, Senegal and Ethiopia. Even before the imposition of bans on fossil fuel financing, energy supply in most of Sub Saharan Africa was completely inadequate to address basic needs. The likely result will be to push these countries into the embrace of China, which plans to build more coal power stations, as well Iran and Russia, who can supply them with oil. These regimes won't pontificate when developing countries like South Africa look to build fossil fuel plants.
We don't need to give up the fight for attainable green goals, but to pursue it in a way that sustains economies and families. Even Joe Biden must realize that climate issues, backed by the media tech and Wall Street oligarchs and numerous celebrities, are not primary concerns for most America. Gallup notes climate ranks as the first priority issue for all of two percent of Americans, compared to inflation that leads with 18 percent, the economy by 12 percent, and 5 percent concerned mostly with gas prices.
To save his tottering regime, Biden needs to curb high energy prices, in part by restoring U.S. oil and gas production. His ultra-green approach may be popular among big city dweller, academics and the media, but barely a third of Americans support the Biden energy polices, according to one recent survey; electricity shortages expected in much of the country won't be much help in the November elections.
The return to energy reality is beginning. Pennsylvania Democratic Senate nominee John Fetterman, for example, has stepped away from the fracking ban he once embraced. Even California, ground zero for environmental zealotry, has decided to delay shutting down nuclear and gas plants in order to avoid disastrous blackouts.
It's increasingly clear that we need to balance green dreams with realistic policies that don't destroy economies and whole societies. Reason, not hysteria, has never been more necessary.
Joel Kotkin is the Presidential Fellow in Urban Futures at Chapman University and executive director of the Urban Reform Institute. His new book, The Coming of Neo-Feudalism, is now out from Encounter. You can follow him on Twitter: @joelkotkin.
The views expressed in this article are the author's own.
Uncommon Knowledge
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
