President Joe Biden made lofty promises about transitioning America to clean energy both during the campaign and once in office. When Russia invaded Ukraine last month, it seemed like a natural moment to revive the calls for investment in clean energy and a greener economy.
Oddly, though, exactly the opposite has happened. Instead of spurring interest in investing in renewables and in building out green infrastructure, the rhetorical emphasis has been on the need to reduce dependence on foreign oil not by reducing our dependence on oil generally, but rather by drilling and fracking more at home.
In fact, the biggest energy policy move Biden has made since the crisis began is his decision Thursday to release a million barrels of oil a day from the U.S. Strategic Petroleum Reserve over the next six months. The question then is “why?” Why has Biden shied away from making the case for clean energy at this moment, even though it could plausibly be seen as enhancing national security and making the U.S. economy more resilient to turmoil abroad?
The simple answer is that gas prices have gone up a lot, and politicians know that when gas prices are high, the mood of most Americans is likely to be low. A series of studies by economists that have looked at the impact of gas prices on consumer sentiment have found that increases in gas prices not only make Americans more pessimistic about the state of the economy, but also make them less happy in general. And unhappy voters are most likely to vote against incumbents.
It's with that in mind that Republicans have attacked Biden for supposedly holding down U.S. oil production. While the charges are largely false, Democrats have generally responded by talking not about the need to reduce oil consumption, but rather about the things Biden has done to encourage oil production. And the administration itself has criticized domestic oil producers for being too cautious about investing in new projects and not drilling enough.
At the same time, Sarah Raskin, Biden's most recent nominee to the Federal Reserve Board, withdrew her nomination after it became clear that her views on fossil-fuel producers meant she was unlikely to get confirmed. Raskin argued in the past that banks should take climate-change risk into account, which would make credit more expensive for fossil-fuel producers, and has called oil and gas a “dying industry.” That position was always going to make her unpopular, but right now, with the bipartisan emphasis on boosting domestic oil production, it made her especially toxic.
So, it’s not surprising that what politicians are most interested in doing at the moment is working to bring gas prices down, which in the short run requires more fossil-fuel production, not less.
it’s not surprising that what politicians are most interested in doing at the moment is working to bring gas prices down, which in the short run requires more fossil-fuel production, not less.
In fact, politicians both in Congress and on the state level are so anxious to get gas prices down that they’ve proposed and in some cases already pushed through proposals to suspend gas taxes or hand out rebates to make it cheaper for people to buy gas, even though expensive gasoline, annoying as it is, encourages people to drive less. Connecticut, Maryland, and Georgia have all suspended their gas taxes, and California is planning to spend billions of dollars to hand out a $400 rebate to car owners.
It’s hard to blame politicians, given how much their constituents hate expensive gas. But what the gas-tax suspensions in particular make clear is just how hard it’s going to be to get Americans to make any meaningful changes in order to combat climate change. After all, burning fossil fuels inflicts costs on the environment that the people burning those fuels — that is to say, you and me — don’t pay upfront.
That’s why economists have long argued that a carbon tax is a logical tool to combat climate change, since it allows you to charge people for at least some of the costs the environment is incurring. But what we're seeing is why that idea has always been a political nonstarter: Americans want energy to be cheap, and whenever it gets too pricey, they’re willing to take any steps in order to bring prices down.
It’s not that the possibility of transitioning to a greener economy has vanished. Last week, Biden announced a joint clean-energy initiative with the European Union intended to reduce Europe’s dependence on Russian fossil fuels. And the administration is drafting an executive order that would invoke the Defense Production Act to make it easier for battery makers to get access to key rare-earth metals. Even Sen. Joe Manchin, D-W.Va., despite his coal-industry background, has reportedly told Senate Democrats that he’s open to a smaller version of Build Back Better that includes big clean-energy investments.
Dealing with the problem of climate change and transitioning the country to a green economy was supposed to be one of Biden’s highest priorities.
But when Biden was running for president, he vowed that if he was elected, he would spend $2 trillion over four years in order to make the U.S. a net-zero-emissions economy by 2050. After he was elected, he unveiled a clean-energy infrastructure plan that, while less ambitious than his campaign proposals, would still have entailed far more spending on clean energy than the U.S. had ever done before. Dealing with the problem of climate change and transitioning the country to a green economy, in other words, was supposed to be one of Biden’s highest priorities.
Russia’s invasion of Ukraine, followed by Biden’s ban on Russian energy, underscored the fragility and volatility created by our dependence on fossil fuels and on foreign oil in particular. That made it a prime opportunity to make clear what that dependence costs us, not just in terms of climate change but also national security, and to make the case for reducing that dependence. Instead, political considerations ensured that moment has gone to waste.