Biden’s Climate Fantasies Hit The Brick Wall Of Politics

The Biden administration’s attempt to lower gasoline prices before the November mid-terms has been both amusing and disappointing.

First, the president attributed the run-up in oil and gas prices to Putin’s invasion of Ukraine. Then his government drained about a million barrels a day from the strategic oil reserve. [bold, links added]

After six months of that and with gasoline prices creeping up again, Mr. Biden went to Saudi Arabia to ask Crown Prince Mohammed bin Salman for his help in keeping oil prices from rising at least through to the midterm elections.

The prince said no, which was totally predictable. It appears none of the foreign policy experts advising the president understands basic human relations, let alone Arab culture.

You can’t call someone a murderer and then expect him to turn the other cheek and meekly accede to your request for a big personal favor.

The substantial long-term damage to the important relationship between Arab countries and the U.S. has been driven entirely by short-term political expediency.

This greenest administration in history at first seemed very committed to dealing with climate change and accelerating the timeline to achieve net-zero carbon emissions for the U.S. as a whole.

A key driver for this goal is higher oil and gas prices. Economics 101 teaches that sharply higher prices for carbon fuels will reduce demand for them and promote the shift to alternative sources of energy, primarily renewables.

Well, Putin’s war on Ukraine and Biden’s war on fossil fuels have been very effective in delivering skyrocketing oil and gas prices.

But now it seems another key driver of climate policy has been discovered: that a Democratic administration remains in office, a necessity that has run into the reality that people do not seem willing to pay the price, at least not right now, for the transition from carbon to non-carbon sources of energy.

Ardent supporters of the energy transition keep suggesting it will lead to the creation of millions of new jobs. (“There is no trade-off between the economy and the environment.”)

There are at least two problems with this argument. First, it ignores the euphemistically named “adjustment process.”

As the economy moves away from fossil fuels, many millions of people will lose their jobs and not “transition” easily and smoothly to the new jobs that might eventually be created.

As with all dramatic policy changes, there will be winners and losers, and the losers likely won’t be fully compensated by the winners — or be happy about that. That reality could be ugly for politicians.

As for the claim that the transition will eventually produce millions of net new jobs, there is good reason for doubt. Consumer-oriented industries, with the possible exceptions of food and shelter, will have to make drastic changes in their business models.

The carbon footprints resulting from the continual introduction of marginally better products are substantial, which means the regular introduction of new products or of varieties of existing products will have to end.

Think of the effects in automobiles, iPhones, clothing, furniture, cosmetics, detergents, and so on. Further, until most electricity worldwide is derived from renewables or nuclear, the growth of the Internet will have to be curtailed.

The millions of servers that are its backbone require large amounts of electricity for cooling and power.

Will users willingly limit their reliance on social media and streaming services? Imagine the implications for business and commerce if they are required to.

If our production of carbon is to be reduced as much as the most insistent environmentalists want, market economies will have to move to much lower levels of production and employment.

The yellow brick road to Green Oz does not run smoothly. It might never actually reach Green Oz, and even if it does, there is no assurance that either the trip or the destination will be pleasant for everyone.

Until very recently, this political reality seems to have been forgotten. Politicians need to be careful in what they ask for and be much more honest with the people whose votes they seek.

Read more at Financial Post