The Impossible Energy 'Transition' - WSJ - The Wall Street Journal
The Impossible Energy ‘Transition’ - WSJ
Dec. 18, 2023 5:51 pm ET
After two weeks of negotiation, the United Nations climate conference in Dubai agreed last week to “transition away” from fossil fuels. Left unanswered is whether governments are supposed to do that by reducing supply, reducing demand or both. A lot rides on the answer, but neither would affect the climate much.
In the demand-side scenario, technology saves the day with cost-competitive renewables. This is the vision of the International Energy Agency, according to which the more rapid the transition from fossil fuels, the more precipitous the decline in fossil-fuel prices. In its “Net Zero Emissions” scenario, oil demand drops faster than supply this decade, pushing oil prices below $30 a barrel soon after 2030, which corresponds to $1-a-gallon gasoline.
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