Climate Tactics Absolve Autocrats, Weaken U.S., And Worsen Emissions

 

(Originally published at Forbes.)

No matter how well-intentioned a policy goal or noble a humanitarian cause, there are always tradeoffs to weigh before deciding on a course of action. But sometimes certitude, righteousness, and demonization of the unconvinced blinds us to the imperative of assessing those costs and consequences.

Climate activists offer a deeply concerning case in point. While their demands for reducing greenhouse gas emissions are qualitatively reasonable and relatable, they tend to believe the existential branding of their cause excuses them of the obligation to account for the costs of their mitigation plans.

The “no-cost-is-too-high” mindset has emboldened activists and public officials in the U.S. to bring lawsuits against entities across the fossil fuel supply chain. Their objective is to drive up the costs of extracting, refining, distributing, and using oil, natural gas, and coal to the point that electric bills are unaffordable and the economics of investing in the industry no longer make sense. What they fail to grasp – or maybe reflects recklessness or disdain for capitalism – is that shutting down the U.S. fossil fuel industry would endanger the economy, undermine national security and, actually, increase the level of greenhouse gases in the environment.

Since 1986, there have been 2,973 climate-related lawsuits filed around the world. Two-thirds of those suits have been brought in the past decade (after the Paris Climate Agreement was reached in 2015) and 85% of the cases were filed in U.S. and European courts. That’s particularly relevant given that most of the world’s production and consumption of fossil fuels takes place outside the United States and Europe. According to Columbia Law School research, only four suits have been filed in China, one in Russia, and precisely none in Saudi Arabia, Iran, or Venezuela.

Governments and non-government organizations (NGOs) have filed 86 lawsuits in the past 20 years against some of the world’s largest oil, gas, and coal producing corporations, primarily seeking compensation for weather- and storm-related damages. An attorney representing Boulder, Colorado stated that an objective of the litigation is “to raise the price of the products” so that the cost of climate change “would ultimately get priced into” energy products.

But, while publicly traded Western companies like ExxonMobil, Royal Dutch Shell, BP, Chevron, and ConocoPhillips are being blamed for climate change and facing damages claims in the trillions of dollars, most of the state-owned energy producers in Russia, Saudi Arabia, Iran, and Venezuela face no similar pressure and stand to gain handsomely from any production contraction in the West.

Shutting down U.S. and European fossil-fuel supply chains would do little to change U.S. or European (or more importantly, global) demand for oil, gas, and coal. In 2023, fossil fuels accounted for 80% of U.S. energy consumption, as compared to 83% in 2015. Fossil fuels comprised 81% of global energy consumption in 2023, as compared to 84% in 2015. A shift to renewables and nuclear power is occurring, but gradually. Building and deploying wind, solar, hydroelectric, and nuclear infrastructure takes time and sometimes the sun, wind, and rain are geographically fickle.

Realistically, unless the world is ready to endure the shock therapy of rationing energy supplies, which would curtail economic activity radically, there are no viable short-to-medium term alternatives to Western fossil fuel products other than fossil fuel products produced elsewhere. In other words, lawsuits that shut down investment and attempt to bankrupt Western energy majors won’t reduce fossil fuel production. They will only shift production to places where producers are not financially burdened by these legal actions, governments are hostile to U.S. interests, and popular demands go unaddressed.

Accordingly, Russia, Venezuela, Saudi Arabia, Iran, Algeria and other countries run by autocrats with grudges against the United States would once again dominate global energy markets. That outcome would give America’s adversaries leverage over the U.S. economy and U.S. policy, which would carry adverse national security implications.

This shock-the-monkey approach might have a sliver of merit if the U.S. economy were self-sufficient in renewables and if the autocrats weren’t poised to capitalize by filling the vacuum with their far more carbon-intensive oil and gas and less environmentally friendly refining techniques. But that’s not the case. Carbon emissions would increase because there is a dearth of renewables and the world would have to burn dirtier fossil fuels from non-Western entities.

We are nowhere near self-sufficient in renewable energy – nor can we rely on allies, who are also diversifying at a gradual pace. Let’s not forget that billions in taxpayer dollars are earmarked for industrial policies to develop domestic capabilities and ween us from dependence on China for technological imperatives, such as electric vehicle batteries, advanced semiconductors, and the critical minerals that go into manufacturing those products. Reliance on adversaries for basic needs is not in America’s interest.

Another shortcoming of the lawsuit campaign is the presumption that the United States contributes the most to carbon and other greenhouse gas emissions and, thus, should shoulder the burden of mitigation. Some scholars – even those who have been advocates of strong measures to compel CO2 emissions reductions – suggest that today’s climate activism suffers from a legacy of anti-capitalist suppositions about who is most responsible for warming temperatures.

Capitalism and industrial activity are historically joined at the hip and emissions are commonly considered externalities – costs thrust on the global public by the bustling West. Hence, the United States is often the focus of climate campaigns. But capitalism has generated incentives among competing firms in competitive industries to produce more efficiently and to respond to a rising middle class demanding cleaner air and water – considerations that are less salient in centrally-planned economies like China.

As Columbia University’s Adam Tooze points out, while activists were focusing their ire on the United States, about 20 years ago China surpassed U.S. CO2 levels and is today, by far, the world’s largest source of emissions. China’s insatiable demand for energy threatens to overwhelm efforts in the West to reduce carbon emissions, while propping up some of the world’s worst regimes.

https://adamtooze.substack.com/p/chartbook-316-putting-the-unipolar

Adam Tooze

It’s past time for climate activists and public officials to take into account the costs of their proposals, particularly climate lawsuits that aim to punish Western entities. The current agenda implicates U.S. economic and national security policy with consequences that may be too dire to bear.