Liebreich: The Pragmatic Climate Reset – Part I

By Michael Liebreich, Senior Contributor, BloombergNEF

It is seven months since Donald Trump was swept back to the White House in the US presidential election. Already the scale of Trump’s ambition to turn back the tide of clean energy and consolidate the U.S. dependency on fossil fuels has been made clear. And it is finding resonance around the world. 

Those who would build a clean energy future face a choice. They can either double down on their old narratives, press on with existing plans, and preach largely to the converted. Or they can refresh their offer. They can wind back historical over-reaches, address the legitimate concerns of voters, and come out fighting. 

I am going to make a strong case for a pragmatic climate reset in this first part. In Part II, I will lay out what it might entail. First, however, we need to have a conversation about where we are. With so many pundits and politicians explaining that the energy transition is nothing but a dream that is doomed to fail.  

I’m also going to explain why they are wrong, and why rumors of the death of the transition are greatly exaggerated. 

The troubling Troubled Transition

In February, veteran fossil industry advisor Dan Yergin and two co-authors published a piece in Foreign Affairs called The Troubled Transition. In it they dismiss the idea that there is or can ever be an energy transition, anchored on the fact that fossil fuels contributed 85% to so-called primary energy in 1990 and still contribute 80% today.  

Needless to say, their argument has been widely amplified by the oil and gas industry. For instance, in his remarks at the industry’s CERA Week conference in March, chaired by Yergin, Saudi Aramco Chief Executive Amin Nasser joked that “there is more chance of Elvis speaking next than the current plan working.”    

Well, through the wonders of AI, here’s Elvis. 

Delve below the surface, and it’s easy to see what the authors of The Troubled Transition are doing. The apparent stasis in fossil fuel dependency, of which they make so much, conflates periods with dramatically different trends. Between 2000 and 2010, China’s coal use surged by 130%; between 2015 and 2025, by contrast, wind and solar soared – so much so that these two technologies now meet 17% of global power demand.  

So, while overall fossil dependency may have declined only marginally, any forecast based on projecting out the global figures would clearly be misleading. 

Yergin and co. would have us believe that new energy technologies are only ever additive. Someone should tell the whale-oil, town-gas and marine-coal industries. In fact, in order to believe the “additivity” theory, you have to believe that increased use of hay, firewood, charcoal, peat and animal dung in the developing world is causally linked to their decline in the OECD. Global energy trends are actually made up of wildly different trends in different parts of the world. A heuristic that says new energy technologies can only ever be additive is worthless – except, of course, to fossil-fuel companies. 

Yergin and co. play several other games. They promote the so-called primary energy fallacy, by which the world’s apparent dependence on fossil fuels is inflated. The real figure is not 80% but 68%, because of the differential inefficiency of fossil fuels compared with clean energy, which is also missed by Lomborg, Smil, US Energy Secretary Chris Wright and others (See Superhero Number 5 for more on the primary energy fallacy). If you think the difference between 68% and 80% is not that important, think about the difference between clean energy meeting 32% or of 20% of demand – instead of one fifth of energy demand being met by zero-carbon sources, it’s already one third. The transition is considerably more advanced than its detractors would like us to believe.  

Yergin and his co-authors continue. They confuse investment in clean energy with cost. They compare apples with pears by ignoring the investment requirement of a purely fossil-based counterfactual. They gaslight proponents of climate action by pretending they are fundamentalists, interested only in achieving global net zero by 2050.  

Most cynically, they fail to acknowledge that ever-growing atmospheric CO2 means ever-increasing economic impacts of climate change, including severe damage to the coastal and offshore fossil fuel installations owned by their clients. 

They conclude with a demand for a new approach – which they call a “pragmatic path”. Pragmatism is needed, but not the pragmatism of defeat. Not the ‘pragmatism’ of believing fossil fuels hold the key to further human progress. Not the ‘pragmatism’ of addressing climate change only if it suits the interests of fossil-fuel companies.  

What is needed is the pragmatism of robust but affordable climate action.