Late last month, Joe Biden made what has been hailed as one of the biggest climate policy decisions of the past year.
He announced that the federal government would temporarily stop approving new export terminals for liquified natural gas. The move was celebrated as a victory by climate activists and lamented by fossil-fuel companies; Donald Trump promised that, if elected, he will reverse the move.
But what will the pause
really mean for the climate? Will it stop exports from rising in the near-term, and can we say with any certainty whether it will make carbon emissions go up or down? How should we even think about this decision?
In this inaugural episode of Shift Key, Heatmap’s new podcast, my co-host Jesse Jenkins, an energy systems expert and professor at Princeton University, and I unpack the president’s decision and try to figure out what — if anything — it means for the climate.
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Here’s an excerpt from our conversation:
Robinson Meyer: Since this news came out, I think there's been a lot of discussion online about whether this is necessarily the optimal choice. Could we be using that gas to do something else? How should we be managing it? And I just want to make a point before we go on that this is literally what climate policy means.
There’s a sense I see from some places, which is like, well, “Is cutting off fossil fuel exports at this very arbitrary place, the optimal policy?” And I just want to make the point that like, number one, we are not on an optimal policy pathway at all. And in the absence of a policy that I think both you and I think is very unlikely to pass, which is a globally normalized carbon price that's imposed evenly in all jurisdictions and is priced at a level that we can attain the 1.5C or 1.6C, whatever end temperature goal we want to achieve –
Jesse Jenkins: Yeah, I'm going to go ahead and say that's unlikely.
Meyer: Yes, in the absence of a global carbon price that is uniformly enforced across all jurisdictions, we are going to make suboptimal decisions. And not only are we going to make suboptimal decisions, but we are going to stop investing in fossil fuels below what would be economically optimal if climate change didn't exist. That's literally what climate change means.
And at the same time, we are going to invest above what would be economically optimal in all of these fossil fuels if you take climate change into account, because that is the signal failure of global climate policy, is that we keep plowing money into fossil fuels and under-investing in alternatives and in scaling up alternatives. We’ve underinvested in those things for at least 20 years. That’s a different show about whether we’re still doing it or how much we’re still doing it.
I just want to get into this whole discussion by saying when we talk about whether we're fiddling knobs in the right way, or enough this way, or enough that way, or whether we're taking all these things into account, we are never going to do this perfectly. And the whole point of climate change is at some point you just have to stop investing in the fossil fuel system.
Jenkins: Yeah, economists call this the second best policy or third best policy. I just call it “the real world.” We’re all just muddling through all the time and how we're going to make progress or not is whether we muddled through better or worse.
So I agree, it's theoretically helpful to think about what an economically ideal rationalized policy would be. But we're so far from that world that I think the question is, “is this better than the alternative decision you could make about this particular thing right here?”
And hopefully, that's the view that the Department of Energy is taking when they think about the public interest here. It's not like, well, could we have had some more ideal climate policy that meant we were doing something else over in this other part of the economy instead of doing this?
That's an interesting conversation to have on Twitter, but maybe not the core of the question that the DOE and the Biden administration are grappling with right here.
The full transcript is available
here.
This episode of Shift Key was initially sponsored by …
KORE POWER: Headquartered in Coeur d’Alene, Idaho with clients on every continent, KORE Power provides functional solutions that push the front line of the transition to clean energy and form the backbone of the decarbonized future worldwide. As a fully integrated provider of battery cells and clean energy technology and solutions, KORE Power drives the energy transition through direct access to superior tech, clean energy manufacturing, and unmatched support for clean energy jobs and resilient, sustainable communities worldwide. KORE Power’s manufacturing capabilities and robust portfolio of products provide the commercial, industrial, utility and defense markets with next-generation battery cells, advanced energy storage systems that scale to grid+, intuitive asset management, and EV power and charging infrastructure support. KORE Power - the future of clean energy is here.
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ADVANCED ENERGY UNITED: Advanced Energy United educates, engages, and advocates for policies that allow our member companies to compete to power our economy with 100% clean energy. We work with decision makers at every level of government as well as regulators of energy markets to achieve this goal. The businesses we represent are lowering consumer costs, creating thousands of new jobs every year, and providing the full range of clean, efficient, and reliable energy and transportation solutions. The U.S. market for advanced energy products and services reached nearly $375 billion in 2022. Together, we are united in our mission to accelerate the transition to 100% clean energy in the United States.
Learn more at info.advancedenergyunited.org/heatmap
Music for Shift Key is by Adam Kromelow.
