Despite all the excitement, the much-vaunted green energy transition away from fossil fuels is not happening. With current policies, a meaningful transition is too costly and unaffordable. We need to drastically change the political direction.
Globally, we are already spending nearly $2 trillion a year to achieve an energy transition. Over the past decade, solar and wind power use has risen to record levels. But this has not reduced fossil fuel use – in fact, more fossil fuels have been added over the same period.
Countless studies show that the use of renewable energy in society will never replace coal, gas or oil, most of which will simply increase energy consumption. Recent research shows that for every six units of new green energy, less than one unit replaces fossil fuels. Analysis in the US shows that subsidies for renewable energy simply lead to higher overall energy consumption. In other words, policies to promote green energy lead to more emissions.
Humanity has an insatiable thirst for affordable energy, which is needed for every aspect of modern life. In the last half century, the energy we get from oil and coal has doubled, hydroelectric power has tripled, gas power has quadrupled – and we have seen an explosion in the use of nuclear, solar and wind energy. The world – and the average person – has never had so much energy at their disposal.
The grand plan underlying today’s energy transition largely insists that promoting heavily subsidized renewables will magically make fossil fuels disappear. But a recent study concluded that talk of an energy transition is “misleading.” For every time a new energy source has been added to date, the researchers noted, it has been “completely unprecedented for those additions to cause a sustained decline in the use of established energy sources.”
What makes us change our energy use? One study looked at 14 changes that occurred over the past five centuries, such as when farmers switched from using animals to work their fields with fossil fuels. The main reason was always that the new energy supply was either better or cheaper.
Solar and wind power fail on both counts. They are no better because, unlike fossil fuels, which can produce electricity whenever we need it, they can only produce energy according to the whims of daylight and weather.
That said, they aren’t cheaper either. At best, they are cheaper when the sun is shining or the wind is blowing at the right speed. The rest of the time, they are mostly useless and infinitely expensive.
If we consider the cost of just four hours of storage, wind and solar energy solutions become uncompetitive compared to fossil fuels. Achieving a true, sustainable transition to solar or wind energy would require many times more storage capacity, making these options incredibly unaffordable.
Moreover, solar and wind energy are only a small solution to a huge challenge. They are used almost exclusively in the electricity sector, which accounts for only a fifth of global energy consumption. We are still struggling to find environmentally friendly solutions for most transport, and we have not even started to address the huge energy needs for heating, manufacturing or agriculture. We are almost completely ignoring the most difficult and important sectors, such as steel, cement, plastics and fertilizers.
It is therefore no wonder that, despite all the rumors about a global energy transition, even the Biden administration has concluded that while global renewable energy sources will increase dramatically by 2050, oil, gas and coal reserves will also continue to grow.
On this course, we will never achieve an energy transition away from fossil fuels. It would require significantly more subsidies for solar and wind power, as well as batteries and hydrogen, and we would all have to accept less efficient technologies for essential needs like steel and fertilizer. But a real transition would also require politicians to impose massive taxes on fossil fuels to make them less attractive. McKinsey estimates the direct cost of a real transition at more than $5 trillion annually. This waste would slow economic growth and raise the real costs fivefold. The annual cost to people in rich countries could be more than $13,000 per person per year. Voters will not accept this burden.
The only realistic way to achieve change is to significantly improve green energy alternatives. This means more investment in green energy research and development. Innovation is needed in wind and solar, but also in storage, nuclear and many other possible solutions. Only by reducing the cost of alternative energy below fossil fuel prices can green solutions be implemented globally, and not just by the elite of a few climate-conscious, wealthy countries.
When politicians tell you that the green transition is here and we need to get involved, what they are really doing is asking voters for support and throwing more good money after bad. We need to be much smarter than that.
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Björn Lomborg is president of the Copenhagen Consensus, visiting professor at the Hoover Institution at Stanford University and author of “False Alarm”.
