President Joe Biden has made fighting climate change the centerpiece of his presidency, primarily through restricting and eventually ending the use of fossil fuels. Why? Because, in Biden’s own words, “[Climate change is] the number one issue facing humanity. And it’s the number one issue for me.”
Biden’s vain war to control the weather, to prevent the climate from changing, is coming at a high cost to Americans. Energy prices are rising, and because energy is the foundation of all goods and services produced, so are the prices of everything else, especially food.
Among the initial steps Biden took to fight climate change, he canceled the Keystone XL pipeline partnership with Canada, and shortly thereafter, he imposed a moratorium on new oil and gas leases on federal lands and on the U.S. outer continental shelf. Since then, Biden has canceled oil and gas leases in the Arctic National Wildlife Refuge, proposed methane emission restrictions making it more expensive to develop, store, and transport oil and natural gas in the United States, proposed increasing the fees and royalty rate oil and gas producers must pay the federal government, and recently announced plans to ban drilling on more than half of the National Petroleum Reserve in Alaska.
Energy is the master resource, the lifeblood of the economy. Energy abundance and the low prices it brings creates jobs and keeps the economy humming. Biden has ignored this fact to the detriment of businesses, consumers, and homeowners.
How bad is it? My colleague at The Heartland Institute, Linnea Lueken, a research fellow on energy and the environment, has crunched the numbers for a forthcoming Heartland Institute publication. Lueken found that during Biden’s first year in office, residential electricity prices rose 11.3 percent, natural gas prices rose 86.3 percent, and regular gasoline prices have risen by 42 percent while diesel rose by 38.9 percent.
Because Biden has pledged to implement policies to reach net-zero emissions for the nation as a whole by 2050, it’s clear these higher prices are just a small down-payment on Biden’s ultimate energy plans.
As a candidate for president, Biden claimed his comprehensive climate/energy plans would cost $2 trillion over four years. As high as this figure is—equivalent to five times the amount that consumers and industry currently spend annually on electricity—it pales in comparison to estimates recently calculated by consulting firm McKinsey & Company.
McKinsey estimates the global economic cost would be a staggering $275 trillion by 2050, or approximately $30 billion per day for the next 25 years. In an almost laughable degree of understatement, the consulting firm’s report states, “Our estimates of the annual spending on physical assets for a net-zero transition exceed to a meaningful degree the $3 trillion–$4.5 trillion total spending estimates that previous analyses have produced.”
As high as these figures are, McKinsey admits its analysis isn’t comprehensive.
“As a result,” McKinsey writes, “it is likely that real outcomes will diverge from these estimates, particularly if the net-zero transition takes a more disorderly path or restricting warming to 1.5°C proves unachievable. Spending requirements could be higher, for example due to the additional investment needed to maintain flexibility and redundancy in energy systems, or heightened physical risks and commensurate adaptation costs.”
Nor does McKinsey’s report address the kinds of political losses one should expect to occur in the process of implementing a large-scale makeover of the energy system underpinning the economy, via special interest lobbying and the operation of government itself. Those who expect to be harmed or disadvantaged by the change, and those who expect to benefit from or be advantaged by it, will devote massive amounts of money and resources to shape the legislation as much as possible in their favor. In addition, significant money, resources, and manpower are diverted to government agencies to establish rules and mandates for the transition, monitor its implementation and measure its results, and police the programs and punish lawbreakers.
So, if all goes right and the transition is smooth, then the costs of hitting net-zero will only be $275 trillion by 2050.
Making matters worse, McKinsey concludes this fundamental transformation of the economy will likely not save the world from supposed climate disaster, noting, “It is not clear whether a 1.5°C scenario is achievable in the first place, nor what pathway the world would take to achieve it if it were. ... Indeed, even if all net-zero commitments and national climate pledges were fulfilled, research suggests that warming would not be held to 1.5°C above preindustrial levels.”
A forced economic transition greater than any in history, at costs that exceed any in history, and far above what has been previously estimated—that’s what net-zero requires. Yet the result is likely to be for naught with the dreaded 1.5℃ temperature rise still exceeded.
The good news is that the best evidence indicates the world isn’t on the brink of a climate apocalypse. Despite corporate media reports, extreme weather isn’t worsening or becoming more frequent and, largely because of the use of fossil fuels, by almost any measure, humans are living better now than they ever have.
Climate change doomsaying is unwarranted. Governments need not commandeer the economy to save us.
Unfortunately, to the detriment of most people of the world, this fact won’t stop elites from attempting to impose authoritarian energy restrictions. After all, that’s what will benefit the wealthy and politically powerful elites.
