One of the troubling characteristics of today’s civic discourse is the tendency to confuse predictions with reality. Nowhere is this problem more severe than in the debate over supposed anthropogenic climate change and its associated issues.
The last hundred years have seen increasing emissions of carbon dioxide, a natural and benign gas. The slight increase in atmospheric carbon dioxide concentrations from 0.03 percent in the nineteenth century to 0.04 percent today has brought only beneficial effects so far, including increased crop yields and greater drought resistance.
Nonetheless, climate alarmists argue that rising temperatures caused by carbon dioxide emissions are bringing catastrophic storms, disease, extinction, flooding, and general misery.
Unlike the benefits of CO2, which are clear and measurable, climate catastrophe remains nothing more than a prediction generated by computer models that have yet to produce accurate forecasts of climate impacts.
Energy Transition, Not!
A frequent corollary of climate alarmism is that the world has undertaken a radical transformation of the global energy system, replacing fossil fuels with zero-carbon, renewable energy.
A Google search of the term “energy transition” yields over 5 million hits, many accompanied by terms such as “unstoppable” and “irreversible.” But is this transition actually taking place? Three arguments are generally offered in favor of the claim this transition taking place—none of them are valid.
First, “energy transition” supporters point to the high growth rates for renewable energy sources, with wind increasing at over 20 percent annually since 2000 and solar at over 40 percent per year, compared to less than 2 percent for fossil fuels. Sounds significant, but the absolute numbers tell a different story.
In 2019, despite forty years and trillions of dollars of subsidies, wind energy contributed about 2 percent of total global energy use and solar just over 1 percent. Fossil fuels accounted for 84 percent, down just two percentage points over the last 20 years.
Second, even highly respected publications, such as the Financial Times, run articles questioning whether oil companies can survive the tidal wave of renewables.
The oil industry is indeed in serious financial trouble as a result of the pandemic-driven collapse of oil demand and the oversupply brought about by technological production advances such as fracking. However, oil is a transportation fuel with very few points of competition with renewables, which are primarily used to generate electricity.
To the extent renewables may be profitable today, it is only because of the huge support they receive from governments in the form of captive markets created by renewable energy mandates and massive subsidies. By comparison, oil companies live or die by the market.
It remains to be seen what will happen with oil company profits when the pandemic ends, but the issue deciding the fate of the industry will be supply and demand, not competition from renewables.
No Significant Electric Car Transition
Finally, the advent of electric cars is increasingly touted as the death of oil.
The US private vehicle fleet is currently on the order of 250 million vehicles, of which approximately 1 million, or 0.4 percent, are battery electric vehicles.
Electric cars are about twice as expensive to produce as comparable gasoline models and, like renewable power generation, depend on massive subsidies for their viability.
Take Tesla, the current darling of the auto industry, for example. In addition to direct subsidies for manufacturing facilities and purchase credits ranging from $2,500 to $7,500 per vehicle, Tesla sells emissions credits to other car companies to meet California regulatory requirements. The sale of these credits totaled more than $1 billion over the past year, accounting for Tesla’s entire free cash flow over the period. Tesla loses money on each car it manufactures.
Via an executive order, California Gov. Gavin Newsom (D) has banned the sale of new gasoline cars beginning in 2035. As with many such political promises, this “ban” is simply a goal, not a policy. Newsom is 53 years old and will be long gone from office by 2035, and the media will lose interest in whether his objective was met or not. For the moment, however, Newsom can bask in the glory of his signaled virtue.
The world may someday transition away from fossil fuels, but it is not happening yet. All we have so far are predictions, wishful thinking, and large amounts of money wasted just to make a small impact on a non-problem.
This is modified version of an article that originally appeared on the BizPakReview.