Squaring The Circle: The UN’s Climate “Code Red” Versus The Real World
Tilak Doshi Contributor
I analyze energy economics and related public policy issues.
With the dust having barely settled after the UN climate body issued its “code red” climate change report on Monday, the Biden White House urged OPEC and its allies to boost oil output to tackle rising oil prices. In a “jarring contradiction”, just two days after the UN’s IPCC published its 6th Assessment Report warning of a point of no return in its climate crusade to quickly banish the use of fossil fuels worldwide, US national security adviser Jake Sullivan criticized big oil producers including Saudi Arabia for what he said were “insufficient crude (oil) production levels”. “At a critical moment in the global recovery, this is simply not enough,” Sullivan said in a statement.
The Jarring Contradiction of Imploring OPEC While Yielding to Climate Zealots
In British parlance, this is a massive own-goal, while Americans might call it a self-own. From day one in office, President Biden did everything to punish US oil and gas producers in the name of “fighting climate change”. He unleashed a series of executive orders that was meant to reverse his predecessor’s strategy of “energy dominance”. At a stroke of the presidential pen, the Biden Administration revoked permits for the Keystone XL pipeline to transport oil from Canada to Gulf Coast refiners; suspended oil leasing in Alaska; halted oil and gas leases on federal land; and cynically invoked the Endangered Species Act to block energy resource development on private lands in the West.
Yet, what does President Biden do when US gasoline prices hit their highest levels since 2014? He implores the OPEC+ group of oil producers (which includes Saudi Arabia and its allies as well as Russia) to open the oil taps. Bob McNally, a former George W. Bush administration official and one of Washington’s most influential consultant in energy affairs had this to say: “The Biden administration is under enormous political pressure due to inflation, with galloping gasoline the most publicly visible and vexing.” Scott Angelle, a former Republican lieutenant governor of Louisiana and secretary of natural resources puts it more bluntly: “The White House doubles down on favoring OPEC production while giving the middle finger to American energy jobs, American energy consumers, climate advantaged American production.”
Liberal commentators try to explain away the inconsistency of the US position. Jason Bordoff, director of the Center on Global Energy Policy at Columbia University and a former energy and climate adviser in the Obama administration, said “I don’t see anything inconsistent in expressing concern over the pace at which OPEC+ is bringing oil back to the market and pursuing strong climate policy for the long-term.” But hard-headed analysts would likely suggest that this sounds perilously like the classic story of the heroin-addict asking for a last fix before cleaning up his act tomorrow.
Model Predictions and Practical Politics
But let’s step back a bit and start from Monday’s UN report. The UN Secretary-General António Guterres said it was nothing less than “a code red for humanity. The alarm bells are deafening, and the evidence is irrefutable”. The Biden administration and the EU, primary funders of the UN climate bureaucracy, are in lock step with this message. US climate envoy John Kerry, asserting Greta Thunberg-like that we have “9 years left” to avoid a global climate catastrophe, is now on record stating that the US is considering carbon tariffs on China which is the world’s largest carbon emitter by far. This is despite the risk of intensifying already fraught trading relations. The EU, international leader in all things green, has already stated its intentions of imposing a “carbon border adjustment tax” on energy intensive imports coming into force from January 2026.MORE FOR YOUSuddenly Worried About Gas Prices, Biden Wants OPEC+ To Produce More Oil‘Green Bitcoin Mining’: The Big Profits In Clean CryptoWhat’s Next For Historic Infrastructure Bill And Green Energy?
Yet in the practical world of politics, the Biden administration’s dysfunctional posture of imploring Saudi Arabia, Russia and other producers to increase oil production while doing its best to obstruct its home-grown oil and gas industry to satisfy the climate zealots of the Democratic party is not exceptional. Germany’s ban on fracking while increasingly depending on Russian natural gas imports is par for the course. Perhaps the news out of the UK, poster child for climate ambition, is most revealing. In a “fiery Whatsapp tirade” seen by The Sun, angry Tory MPs expressed their mounting concern over the electoral cost of pursuing green policies just three months before Mr Johnson hosts the COP26 climate change summit in Glasgow. As the true costs of “net zero (emissions) by 2050” pushed by the UN climate body and allies in the climate industrial complex become increasingly evident to British voters, Prime Minister Boris Johnson may well scale back ambitions for the Glasgow COP26 climate conference in November. According to an ITV report, the chances of keeping global warming to 1.50C above pre-industrial levels “had now virtually disappeared” and instead a “senior figure advising the UK government” argued that 20C would be a good outcome.
The Rest of the World Speaks
How is this seen in the rest of the world? China – which is ramping up its coal use to meet surging demand — is opposed to committing to the 1.50C goal and objects to any changes to the Paris Agreement which requires little of developing countries for many years hence. China’s chief climate negotiator Xie Zhenhua stated that while “some countries are pushing to rewrite the Paris Agreement… We have to understand the different situations in different countries, and strive to reach a consensus.” Both China and India, along with other leading developing countries such as Brazil and Indonesia, have argued consistently that industrialised nations were able to get wealthy before carbon emission reductions were called for and that developing economies cannot be expected to make sacrifices that would put their legitimate aspirations for economic development at risk. Only eight of the G20 countries have submitted more ambitious climate targets, as they are expected to do every five years under the Paris agreement. China, India, Brazil, South Africa, Saudi Arabia, Russia and Australia are among the countries yet to do so.
If one were a betting sort of person, the choice between predicted outcomes represented by two key individuals in the high-stakes game of the alleged “climate crisis” is an eminently fateful one. On the one hand is the hockey stick model-based prediction of an impending climate apocalypse by UN Secretary-General António Guterres on the basis of which he demands countries to commit to the most profound transformation of the global economic system since the Industrial Revolution. On the other is the recent vow of Saudi Oil Minister Prince Abdulaziz bin Salman. He is investing in expanding his country’s production capacity and he intends to “drill every last (hydrocarbon) molecule” as developing countries — which account for over 80% of the world’s population — aspire for higher standards of living based on cheap and affordable energy. What would you bet on?
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I have worked in the oil and gas sector as an economist in both private industry and in think tanks, in Asia, the Middle East and the US over the past 25 years. I focus on global energy developments from the perspective of Asian countries that remain large markets for oil, gas and coal. I have written extensively on the areas of economic development, environment and energy economics. My publications include “Singapore in a Post-Kyoto World: Energy, Environment and the Economy” published by the Institute of Southeast Asian Studies (2015). I won the 1984 Robert S. McNamara Research Fellow award of the World Bank and received my Ph.D. in Economics in 1992.
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