The Iran War’s New Fallout: Falling Emissions

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Back in March of last year, I coined the phrase “Degrowth Donald” to describe President Donald Trump’s accidental environmental impact.

Trump might say that climate change was a “hoax” or “scam,” I said. But when you looked at his actions, a different set of beliefs emerged.

He imposed a 10% tax on Canadian oil — a far more effective deterrent on consuming Albertan crude than a decade of protests against Keystone XL. He taxed foreign car imports and levied new tariffs on single-family-home building materials. You could say he had, I don’t know, rhubarb politics — a MAGA red stalk erupting in big green leaves.

Of course, Trump’s actual environmental politics are far more complicated. He has declared war on wind energy and gutted greenhouse gas rules. As you read in Heatmap AM this morning, the Trump administration announced today it would transform the Endangered Species Act to legalize a much broader range of animal killings.

But every so often, Degrowth Donald rides again. And so it is with the Iran war, which has gone on much longer than Trump initially envisioned, changed the global energy economy, and made China’s distinctive approach to energy security — which relies on electrification and large oil and mineral stockpiles — look more popular globally. It has triggered an energy crisis that is, at the moment, getting worse: Even in the United States, gasoline prices are surging again, and diesel is nearing its post-2022 inflation-adjusted record highs, according to Patrick De Haan, the head of petroleum analysis at GasBuddy. Energy prices are even higher in much of Europe.

One upshot of these higher prices, though? Emissions now seem to be going down. According to a new analysis from Carbon Brief, a U.K.-based nonprofit, global emissions from fossil fuels will fall by half a percent this year because of higher oil and natural gas prices caused by the Iran war and Strait of Hormuz closure. What’s interesting is that coal burning will actually increase — by more than 1% — but it will be swamped by declines from oil and gas consumption.

That’s a change from what authorities once expected. Last year, the International Energy Agency projected that global coal use would decline this year because of Chinese policies. But fuel switching will drive it up.

Of course, emissions declines caused by higher prices (or economic downturns) are the worst type of reductions. What we want to see, instead, is countries switching to lower-carbon forms of energy. But energy crises have a way of pushing every country’s energy policy in new directions. This year’s events have convinced Thailand, for instance, to reduce its liquified natural gas consumption and switch to renewables instead; they have caused Canada to open its market up to cheap Chinese electric vehicles and pursue an “associate membership” with the European Union. The 1970s oil crisis ultimately created the global energy regime of the 1980s and 1990s. What else countries might learn from this crisis is not too hard to guess.