Climate Ambition vs Energy Reality

David and Helen talk to Jason Bordoff, Dean of the Columbia Climate School and former Special Assistant to Barack Obama, about climate, COP26 and the enormous challenges of the energy transition. How can we balance the need for energy security with the need to wean the world off its dependency on fossil fuels? Why is China still so reliant on coal? Who will pay for the energy needs of the developing world? Plus, just how scared are the oil companies of public opinion? You can read more of Jason’s work here.

Talking Points:

Energy transition will require a lot of capital investment.

• Clean energy tends to be more capital intensive in the short term; although the long-term operating costs are lower.
• Private capital needs to be mobilized to make this happen.
• Can large financial institutions forgo significant returns if oil prices go back up?

There is a clash between climate ambition and energy reality.

• The reality is that, despite tremendous advances in clean energy, oil and gas usage are still going up.
• The more the ambition is elevated, the bigger this gap becomes.

During a lockdown that shut down half of the global economy, carbon emissions only fell 6%.

• To reach the 1.5 degree target, emissions need to decrease much more quickly.
• We might start seeing more disruptive and ambitious policies on the table in coming years. Or, maybe not.
• When questions of energy affordability, reliability, and security come into tension with climate ambition, there is a risk that climate ambition will lose.
• Is increasing efficiency enough, or will energy consumption also need to go down?

In many parts of the world, energy use will actually need to increase in the coming decades.

• What is needed to make significant investments in clean energy in the developing world financially viable?

Some people, like John Kerry, hoped that the U.S. and China might find a point of consensus on climate.

• In practice, that has not really happened.
• Could economic competition be a more effective driver than cooperation?

If we always see high oil prices as a political problem that we can’t afford, then how will we get to the point at which we allow high prices to reduce demand?

• The United States is the world’s largest oil producer, but the U.S. government has much less control over American oil and gas producers than OPEC states do.
• Should we be talking more about energy and less about climate?

Mentioned in this Episode:

• The Columbia Climate School
• Jason’s recent article in Foreign Policy on energy in the developing world
• Jason, on why everything you think about the geopolitics of climate change is wrong
• Jason’s podcast, Columbia Energy Exchange

Further Learning:

• How much will it cost the UK to reach net zero?