Climate Talks Amid Energy Shocks

This actually should be an opportune moment to rethink our energy system, as the current one goes haywire. But that’s not how things usually work out.

by

In a matter of weeks, the nations of the world will get together for COP26 in Glasgow, Scotland, to try and forge a cooperative agreement on reducing greenhouse gas emissions. The timing couldn’t possibly be worse for an energy crisis.

Global oil prices have jumped above $80 a barrel for the first time in seven years, with the oligarchs who control supply and the analysts who track it agreeing that prices could rise even higher, and stay there semi-permanently. Meanwhile, historic shortages of coal and natural gas have led to bidding wars all over the world, as countries chase enough energy for their citizens. India reportedly only has enough coal, which fuels 70 percent of the country, to last a few more days; some coal companies have stopped supplying to business customers. Meanwhile, Chinese power shortfalls and blackouts have become epidemic. 

The resulting scarcity will likely make home heating bills jump this winter. And energy stoppages from industrial powers are likely to cause more delays in global manufacturing production, increasing the Great Supply Shock, which subsequently increases the energy shock.

There are lots of causes involved here, from soaring demand catching suppliers short after they deliberately shut down supply to keep prices higher during the pandemic, to crises in global shipping and freight making transportation of energy difficult. In COP26’s host country of Great Britain, panic-buying of petrol has its roots in Brexit, and the expulsion of immigrant workers like truck drivers who the country now realizes were essential to its functioning. Even climate change has been a cause: Historic flooding in China’s main coal-producing region Shanxi shut down dozens of mines, wreaking havoc with global supplies.

More from David Dayen

But all of this makes anxiety about energy a more dominant concern going into Glasgow than weaning the world off fossil fuels. We’re already seeing blame for the current problems placed on attempts to reduce emissions, and the situation used to warn against constraining abundant energy, dirty or clean, in the future.

That doesn’t have to be the reaction, of course. In fact, it should be the opposite.

As Kate Aronoff explains, the current crisis could be an opportune moment to reject the current fossil fuel–dominated energy system as inherently fragile and prone to disruptions. Not only do we know the devastation of drilling and mining, it just no longer seems very feasible to meet global need. Indeed, the International Energy Agency warned this week in its annual report that we’ve underinvested in energy woefully relative to demand. It’s a perfect moment, however, for the world to come together on planning a more sustainable energy system that can generate that abundance.

It’s hard to disassociate these campaigns with the fossil fuel industry’s struggle for survival.

Unfortunately, that’s not the typical mindset when energy costs spike. Rather, you get movements like the Gilets Jaunes, the French protesters who forced the cancellation of a fuel tax as part of their demands for economic justice. Oil price increases set the stage for that revolt, notwithstanding the other factors of globalization and austerity that played into it. France is now facing a court order to bring greenhouse gas emissions under its self-imposed targets, which it badly missed.

This is the tension governments always seem to impose on themselves: They claim to want to cut emissions to protect the planet, but resist doing anything that will force even modest price hikes for energy. Corporate lobbying campaigns are sure to highlight this tension to turn public opinion in their favor, imposing a framework of an energy crisis caused by the green transition, not an energy crisis that necessitates a green transition.

Witness OPEC not raising production, with the convenient claim that they fear prices could drop at some point. It’s solid timing for oil extraction countries to allow a price spiral in advance of talks intended to put their main exports on ice. Witness the claims that environmental, social, and corporate governance (ESG) investing is forcing financial companies to stop investing in energy markets. (In reality, there has been trillions of dollars in investments since the 2015 Paris Agreement; if anything, it’s clean energy where the investments are too slow.) Witness the grumbling that Xi Jinping is ruining energy supply by mandating energy efficiency targets (well, China is funding 44 different domestic coal projects, so again, this seems at odds with reality). 

It’s hard to disassociate these campaigns from the fossil fuel industry’s struggle for survival. Chevron saying it will green production of all its operations but not any of its dirty-energy products suggests the nature of the marketing at work. The industry is banking on the usual energy-crisis mindset to dissuade governments from doing away with the energy sources they have. 

But at some level that’s crazy, right? The effective message is that we cannot abandon sources of energy that are depleted, volatile, and insufficient. The backup natural gas stocks that always filled in for coal whenever needed are no longer available; the fossil fuel industry’s dream of abundance looks to be waning and headed into decline. Even boosting energy production would require energy supplies that are not in evidence. 

There is some hope that this won’t play out like the energy crises of old. President Biden’s announcement of mass offshore wind farms along the entire U.S. coastline is a belated but welcome proposal. Resurrecting the 1975 crude oil export ban, a solution to another energy crisis, would in this case restrict oil industry profits and force decarbonization solutions. And there’s the Build Back Better Act, which could provide hundreds of billions in clean-energy tax credits and even a renewable-power mandate.

But the White House has been schizophrenic about its approach to energy, simultaneously calling for OPEC to ramp up production and building up oil and gas leases on federal land. And more than the U.S., the entire world’s resolve will be tested in Glasgow, as its citizens clamor to heat their homes and fuel their cars. Pledges made in Paris to reduce emissions have already been revealed as inadequate; can they be improved when coal and natural gas stocks are weak and oil is expensive?

A second Trump administration will cement a right-wing majority on the Supreme Court for a generation, and put our collective future in the hands of someone who will be virtually unchecked by our institutions. The country has shifted rightward, and the reverberations will ensue for potentially the next few decades. In this climate, a robust independent media ecosystem will be more important than ever. We're committed to bringing you the latest news on how Trump's agenda will actually affect the American people, shining a light on the stories corporate media overlooks and keeping the public informed about how power really works in this country.

Quality journalism is expensive to produce, and we don't have corporate backers to rely on to fund what we do. Everything we do is thanks to our incredible community of readers, who chip in a few dollars at a time to make our work possible. Any amount you give today will help us continue reporting on what matters to our democracy.

You can help power this newsroom by making a one-time donation or by becoming a member today.