The Oklahoman

Don’t let costs stop transition­s toward cleaner fuels

- Catherine Rampell

The world is entering — indeed, much of it has already entered — a massive energy crunch. Coal, natural gas, oil and gasoline prices have all spiked in countries around the globe. If this winter is severe, prices could well rise much further. Very soon, fossil-fuel companies, their investors and other political opportunis­ts will be talking about why this crisis proves how economical­ly painful the decarboniz­ation transition will be, how much political blowback it will cause and why we should doubledown on fossil fuels. But the correct takeaway is exactly the opposite.

Many factors have contribute­d to the current energy crunch, including the COVID-19 pandemic and recent economic rebound.

In 2020, while much of the global economy was effectively powered down, energy prices plummeted, as did energy extraction. Then, seemingly everyone around the world flipped the switch back on simultaneo­usly. Higher demand for goods caused factory production to ramp up, increasing demand for energy, as well.

Layer onto this the unusually cold winter in Europe, which drew down stocks of natural gas; storms in the Gulf of Mexico and India that disrupted supplies of oil and coal, respective­ly; and a diplomatic row between China and Australia that led Beijing to cut off Australian coal imports.

Additional­ly, slower winds blowing across northern Europe led to less windpowere­d energy output. Scientists aren’t sure what’s behind the stall-out, but calmer wind conditions may be driven by the warming of the earth’s poles. In other words: Wind farms, intended to help combat climate change, may have become less effective precisely because of climate change. This global energy crisis is poised to have excruciati­ng economic and political consequenc­es.

Heating homes and filling gas tanks will get more expensive. And because households cannot easily reduce their consumptio­n of heat or gasoline, these higher prices effectively act as a tax on incomes — a drag on consumers’ ability to spend on other goods or services. Other parts of the supply chain are being disrupted by power shortages, too, particular­ly as China rations electricit­y across factories.

Higher energy prices could filter through to more broad-based inflation, which is already a serious worry worldwide, especially in the United States. This is all happening as major economies appear close to making necessary, but politicall­y fraught, changes to their energy policies.

The United States appears on the verge of a huge investment in climate, through Democrats’ budget legislatio­n. And at a climate conference in Glasgow this month, global leaders will hopefully make more aggressive commitment­s to reducing emissions. But the near-term economic pain and potential political instabilit­y caused by high energy prices could cause leaders to lose their nerve.

To be sure, there is never a good time for an energy crisis. And in some respects, now might seem especially inconvenie­nt. But the timing could be fortuitous — if global leaders learn the right lesson from this energy crunch. It’s one they should have learned long ago: Fossil fuels are not so resilient after all. If we want more reliable, cleaner and, yes, cheaper energy sooner, we must make policy choices that expedite the inevitable transition away from carbon.

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