Now Greens want to spend $6-8 trillion annually!
Now Greens want to spend $6-8 trillion annually!
When is reality going to sink in that Green energy policies do not work?
A key theme of this Substack column and my From Poverty to Progress book series is the critical importance of energy to material progress. Without energy, material progress is impossible. And for the last two centuries, fossil fuels have been the dominant energy source. That is why widespread use of fossil fuels is one of the Five Keys to Progress.
Today virtually every mention of fossil fuels highlights the negative consequences of their use, particularly pollution and climate change. But it is important to realize that fossil fuels, despite their drawbacks, are a key foundation of progress. Quite simply, the modern world that we take for granted would not have been possible without fossil fuels.
Despite this, many believe that governments should be trying to force a Green energy transition to wind, solar, and other renewable energy sources. Few realize just how expensive this forced energy transition will be and how likely it is to fail.
Earlier this year, Bloomberg New Energy Finance (BNEF) released its Energy Transition Investment Trends report. In this report, BNEF celebrates the massive increase in Green energy spending over the last two decades.
BNEF estimates that global Green energy spending has reached $1.769 trillion. This is more than three times the total global Green spending in 2019. As a point of reference, the total expenditures of the US federal government came to $6.1 trillion (or 22.8% of the US GDP).
This amount is roughly double current spending on fossil fuels and its associated infrastructure. So much for renewables being cheaper than fossil fuels.
See also my other posts on Green energy policies:
A simple and cost-effective plan to quickly lower US carbon emissions
More evidence that solar + wind cannot decommission coal plants at scale
You might also enjoy reading my “From Poverty to Progress” book series:
So what results did Green energy spending achieve?
So one might expect with double the spending for Green energy as for fossil fuels, then you would be getting some pretty impressive results. Sadly, no. The significantly greater Green investments are creating far less useful energy than ongoing fossil fuel investments.
Coal alone (3577 TWh) added roughly the same TWh as wind (1979 TWh) and solar (1608) combined. And the other fossil fuels far surpassed that amount. Natural gas added 8508 TWh, while oil added 6510 TWh. All fossil fuels combined added 18,595 TWh of energy, which was four times all Green energy sources combined (4615 TWh). And many of the modern biofuels and other renewables actually emit more carbon per unit of energy than coal.
In short, roughly $10 trillion dollars of Green energy spending has failed to produce the desired results. Coal, oil, and natural gas still dominate the global energy mix, and those energy sources are still growing at 4x the TWh as Green energy source. And nuclear and hydro-electric power, which are opposed by most Greens also make substantial contributions.
Combined together, solar and wind make up only 5.6% of the global energy consumption in 2023. Meanwhile, fossil fuels comprise 76.5%, and nuclear/hydro make up 9.7%. So with half the annual investment, fossil fuels get 14 times the result. Now I know that fossil fuels have a substantial advantage because it has an infrastructure built over decades, but that is a reason to keep using more of what works.
Even more disheartening to the supporters of the Green energy transition, fossil fuels usage as a percent of total global energy peaked at 81.3% in 1973. This means that the world has a decline fossil fuels usage as a percent of total global energy usage of only 5 percentage points in the last 50 years.
Now in fairness to Greens, there were no real efforts to reduce carbon emissions before 1990, so we should probably compare current usage with later years:
Since 1990, global fossil fuel consumption has declined from 77.8% to 76.5% (or 1.3 percentage points).
Since 2000, global fossil fuel consumption has declined from 76.8% to 76.5% (or 0.3 percentage points).
Since 2010, global fossil fuel consumption has declined from 79.4% to 76.5% (or 2.9 percentage points).
But this is a bit deceptive because total global energy use has increased substantially during this period. It is the total amount that affects the future climate
Since 1973, global fossil fuel consumption has increased 126% from 61.8 to 140.2 TWh.
Since 1990, global fossil fuel consumption has increased 68.9% from 83.0 to 140.2 TWh.
Since 2000, global fossil fuel consumption has increased 48.5% from 94.4 to 140.2 TWh.
Since 2010, global fossil fuel consumption has increased 15.3% from 121.6 to 140.2 TWh.
Or to put it another way, since 2010 global fossil fuel consumption has increased by as much as it did from Hunter-Gatherer times until 1965!
So what do we make of these numbers. If you had asked a Green in 1990 whether increasing global fossil fuels usage by 68.9% was a success or a failure, I think that it is pretty obvious what he would say: it is clearly a failure. The Green goal of fighting climate change by drastically reducing fossil fuel consumption has clearly failed.
One might say, “Well, every little bit helps when we are facing an impending climate catastrophe.” But they cannot simultaneously say that a little bit less of a climate catastrophe is worth tens of trillions of dollars spending. Either Green energy spending can achieve Netzero by 2050 or it cannot. The obvious trend so far is that it cannot.
Our energy system was already decarbonizing
What makes the results of these tens of trillions of investments over the last few decades even less impressive is that wealthy Western nation were decarbonizing long before the Green energy policies even started!
Above is a chart of the carbon intensity of the economy from 1900 to 1999. Below is the same chart from 1900 to 2022. Can you spot a change in the trend line? If Green energy transition were working, one should be able to spot a substantial break in the trend line. There is none. It is hard to see any effect of the Green energy transition.
Did BNEF wave the white flag?
So did BNEF look at the data and conclude that Green energy policies are not working? Did they conclude that Green energy policies were not cost-effective? Did they offer some fundamentally different path forward that could produce better results?
No!
Instead, BNEF celebrates Green energy policies as a good thing, but warns that current investment are still nowhere near enough spending. To reach global Netzero by 2050, BNEF projects that the world would need more than quadruple annual spending to $7.5 trillion per year! Now in fairness, this spending is supposed to substitute for the $1 trillion spent annually on fossil fuels, so the net cost will be projected at a mere $6.5 trillion per year.
So the BNEF did not just double down on Green energy policies. They quadrupled down on them!
And remember, Green infrastructure is not permanent. It has to be continually replaced, so this in an ongoing investment that will never end. Solar plants and wind turbines need to be replaced or at least repowered every 15-20 years. Fossil fuel, hydro, and nuclear infrastructure last 50 years or more. So this additional spending will likely persist for the foreseeable future.
As an aside, it is hard not to miss the conflict of interest in BNEF’s advice. Bloomberg is a financial institution, and BNEF focuses on energy investments. BNEF would make a significant amount of money and increase their status significantly if government of the world radically increase their spending on Green energy policies. If governments eliminated Green energy subsidies, BNEF would likely fade into obscurity.
BNEF reports are not unlike a stockholder pushing positive media coverage to make their stock go up. The difference is that BNEF is more focused on changing voter’s opinions so they will elect politicians who will keep the trillions of dollars in subsidies flowing. I have no doubt that ideology is the principal driving factor, but financial interest is a very powerful reinforcing factor.
So what would success look like?
So one might ask, what would success for Green energy policies look like? I modified a “Our World in Data” graphic to show trend line starting at each decade and ending at Netzero in 2050. Obviously, real-world energy consumption would not be in a smooth-straight line, but it gives an idea what success would look like. Basically, if global fossil fuel consumption is above the red line, then Green energy policies are failing. If the consumption is at or below the red line, we can call that a Green energy “success.”
If we start in 1990, which is when climate activists started to gain significant amount of influence on the world stage and nations started to make promises, you can see the lower red line. In 1990 global fossil fuel consumption was 83 TWh. Despite significant global action on climate change, global consumption failed to head anywhere near the “success” trend line headed towards Netzero in 2050. Instead, global fossil fuel consumption went up and since 1990 has fallen further and further behind the trend line.
The 2000 trend line is even worse. Global fossil fuel consumption increased far more in the following decade as in the first decade (largely due to coal-fired power plants in China. Same for the 2010 trend line, though perhaps not quite as dramatic. The sudden dip in 2020 during the global Covid pandemic gave some Greens hope, but then the recovery saw the upwards trend continue. At this point, the idea that global fossil fuel consumption will go down anywhere near the steepness of the top red line is farcical.
Peak fossil fuels is the easy part
This is what Greens refuse to accept. Every year, they stare at the data hoping that global fossil fuel consumption peaks out, only to be disappointed.
What they fail to realize is that “peaking out” is the easy part. The hard part is the steeper and steeper trend line that results every year because the peak has not yet happened. The longer the peak is delayed, the steeper the necessary trend line down. Now in 2024, Greens hope to finally see the fabled peak, but because global fossil fuel consumption has gone up in the previous 34 years, it does not matter.
It is already too late to reach Netzero by 2050. Nothing short of a global (and permanent) economic collapse will lead to Netzero by 2050.
Green failure is guaranteed! It is just a question of how bad the failure will be and the consequences of that failure.
But isn’t it better to try anyway?
No, you cannot have it both ways. Either a failure to achieve Netzero by 2050 will cause a climate catastrophe or it will not! Experiencing a slightly less catastrophic climate is not a viable goal. And remember the Greens chose that goal, not me.
We should either take it seriously and abandon Green energy policies, or dismiss the idea that we are headed for a climate catastrophe. And that is the bane of all previous predicts of apolocalypse. Sooner or later you actually get to the date of apolocalypse, and then everybody can judge whether it actually happened or not.
Fortunately, with Netzero by 2050, it is pretty easy to see that the trend is inevitable failure (ironically, unless a different catastrophe happens).
In my second book, Promoting Progress, I argued that we can only keep material progress going by embracing small-scale, results-based experimentation. The world is full of thousands of problems, and we have limited resources to solve them. All policies created unintended side-effects. Some of those side effects are worse than the original problem.
In reality, most good public policy ideas fail to produce results, and many of those that do are not very cost-effective. It is vitally important for those who believe in creating a better world to focus relentlessly on results. It is fine to embrace a “new idea,” but one must be careful to apply those ideas to small-scale experimentation before scaling up the solution.
Green energy policies went straight from “good idea” to “the entire world has to go Netzero by 2050.” If one is not willing to accept the failure of an idea, then one does not really care about other people. One should always focus on results because it is results that actually affect people. If a person is obsessively focused on implementing an idea regardless of results, then that person does not actually care about other people regardless of what they say.
I believe this government-sponsored Green Energy Transition is the wrong strategy as it will:
Fail to achieve its goal of Netzero by 2050
Make virtually no difference in future global temperatures.
Cost tens of trillions of dollars (an estimated $1.77 in 2023 alone)
Is far less applicable to some regions, particularly Asia where half the world’s population, than other regions.
Greatly increase energy prices
Undermine long-term economic growth
Undermine the material standard of living for the working class and poor
Make it far more difficult for developing nations to industrialize.
Is completely unnecessary.
More importantly, there are better energy policies that embraces the concept of human material progress:
Create an energy system that is abundant, affordable, and secure. This will keep human material progress going. This should include both wealthy and developing nations.
Mitigate the negative side-effects of that progress on the natural environment. This includes carbon emissions, air pollution, water pollution, wild habitat destruction, extinctions, and human health concerns.
Fossil fuels must remain part of the energy system. Fossil fuels power innovation. Fossil fuels power economic growth. Fossil fuels power our education system, our transportation system, our communication system, our food production system, our health care system, and our military. Fossil fuels are key to generating all the wealth that pays for every government program we have. Before we try to eliminate fossil fuels, we need to make sure that we do not also eliminate all the benefits that have come from their use.
To be clear, I not claim that we will never invent another energy source that has all the advantages of fossil fuels and none of their disadvantages. I believe that as long as progress is maintained for the next century, it is very likely, perhaps inevitable, that we will do so. In fact, I suggest policies that can help make it happen sooner.
Nor do I believe that solar, wind and other non-hydro renewable energy sources cannot play a role in Industrial societies. Their use is rapidly increasing and their cost is rapidly declining. That is a good thing, and it is a result of the vast, decentralizing problem-solving network that is a modern society.
My claim is that solar and wind have never fully substituted for fossil fuels, nor can they do so within the next one to three decades. Climate activists are naïve in believing that we can make such a transition quickly using current technology without major consequences for economic growth and progress. And to spend $5-7 trillion per year to force that transition is epic folly.
See also my other posts on Green energy policies:
A simple and cost-effective plan to quickly lower US carbon emissions
More evidence that solar + wind cannot decommission coal plants at scale
You might also enjoy reading my “From Poverty to Progress” book series: