The Inconvenient Truth About Climate Summits

The night before the start of the latest UN conference on climate change in Dubai, activists from Extinction Rebellion disrupted the opening night of Richard Wagner’s Tannhäuser at the Metropolitan Opera in New York City. “Wake up,” they shouted, “there will be no opera on a dead planet!” 

Think what you will of their tactics, Extinction Rebellion and the like-minded Stop Oil are logically consistent. If we are genuinely living through a climate emergency that risks destroying life on the planet, we are not behaving like it. Countries around the world may be devising elaborate plans for reaching net zero by 2050, yet they also continue to use and produce fossil fuels. In fact, thanks to a dramatic increase in its oil production and a retrenchment of OPEC’s output, the United States is at the moment the world’s largest oil producer.

What explains the paradox, of course, is that, contrary to the doomsayers’ statements, we’re not literally living on the precipice of a climate disaster. True, man-made climate change is real and significant, but it does not threaten humankind with extinction. Moreover, the imperative of decarbonization must be and is tempered by other considerations—economic and social, and increasingly also by geopolitical ones. In particular, if there is an extent to which high oil and natural gas prices are driven by our reluctance to expand production further for environmental reasons, then we are unwittingly strengthening regimes that seek to destroy the U.S.-led international system.

Our two major adversaries, Russia and Iran, are using oil revenue to fund their respective machines of domestic repression and international revanchism. Allowing their depredations to continue unabated, even though the West has the tools to essentially bankrupt both regimes, represents at least as much of a threat to our future as our supposed complacency about climate change.

Sanctions notwithstanding, both regimes continue to benefit from high oil prices. Next year, a barrel of crude is expected to sell for above $80, and while Russian Ural oil sells at a discount, current market conditions help keep Russia’s public finances in better shape than those of most Western nations. A budget deficit of 1 percent is rather impressive for a country that is waging total war, faces an array of international sanctions, and has seen private investors flee since the beginning of its full-scale invasion of Ukraine. While Iran sits in a much tighter fiscal situation, its ability to wreak havoc in its neighborhood seems unaffected. 

Sanctions and Western divestment away from Russian sources of energy are not enough. The U.S. ban on imports of natural gas and oil from Russia had a mere symbolic effect, as Russia had accounted only for a modest fraction of U.S. imports. Europe’s turn away from Russian natural gas has been more significant, and has come at a price for European households. Following an initiative by G7 leaders, there have been attempts to impose a price cap on Russian oil exports, essentially by pledging to sanction maritime services for the transport of Russian oil if that oil were sold above the price cap.

The idea of the cap was to ensure that the supply of Russian oil remains available, especially to low- and middle-income countries, but that the windfall profits to the Russian state from such sales be eliminated. Indeed, the Kremlin’s oil revenue has fallen as a result; compared to the same period last year, oil and gas revenue is down by more than a quarter.

It did not take the Kremlin long to come up with workarounds. If Russian oil exports were once reliant on legitimate maritime services, there is now growing evidence of Russia’s use of a shadow, illicit fleet. Almost three-quarters of seaborne Russian crude exports reportedly travel on ships without any Western insurance. Combined with the fact that many ports in the Global South are willing to look away and that oil itself is a fungible commodity, existing measures have not harmed Russia’s public finances anywhere near as much as one would have hoped. 

Despite all of this, the collective West is not out of cards to play. While America’s success in inducing major oil-producing nations—most notably Saudi Arabia—into expanding output has been limited, the Biden Administration can tap further into U.S. reserves. The expansion of oil production in the United States has already been remarkable, much to the dismay of environmental activists. Since September, prices have come down by around 16 percent as a result of an expansion of U.S. oil output, which is currently roughly twice its level from a decade ago and way above production levels seen during the Trump Administration.

To damage Russia’s and Iran’s war machines, market conditions must change to drive oil prices further down in a sustained manner. That can be done by expanding production further and driving up expectations of future output. The United States alone sits on more than two trillion barrels of shale oil, the largest known reserves in the world. 

Making it easier for the private sector to move ahead with exploration of those sources—and signaling that such a regulatory move was permanent—would put a strain on Russia’s public finances, and might also provide a solution to President Joe Biden’s inflation problem as he seeks re-election next year. New projects matter, as the industry seems to have hit decreasing returns pumping out from existing wells.

Yet, as one of his first steps in office in 2021, President Biden imposed a moratorium on new oil and gas leases on federal land, making it harder to launch new projects. In addition to reversing the existing moratorium, simplifying and accelerating the permitting process for new projects—which now takes as long as eighteen months—would help. Unfortunately, new rules from the Environmental Protection Agency go in the opposite direction, creating additional obstacles to new projects at the state and local level. 

Yes, there is a cost to pushing climate considerations to the side. But the cost of allowing Putin and the mullahs of Iran to fund their respective war and terror machines, emboldening China along the way, is far greater. Amid a descent into Hobbesian anarchy or another world war, rising global temperatures would be the least of our worries.

To be sure, expanding fossil fuel output to drive prices down does not preclude investment in renewables or policies seeking to shift the demand from carbon-intensive to cleaner sources of energy. To a large extent, energy is fungible—a watt is a watt, no matter how it has been produced—and our current geopolitical moment calls for a policy agenda that will enable energy abundance, no matter the source.

Moreover, if the advocates of a rapid energy transition are correct in their cheerful assessment of the promise of renewables, carbon-free sources of energy are already close to being superior to fossil sources, and thus the switch is bound to happen in the not-too-distant future regardless of policy.

Even if that prediction turns out to be incorrect, fracking is a useful testing ground for new technologies that facilitate the world’s energy transition—most importantly geothermal sources, the potential of which hinges on the availability of sophisticated drilling methods. 

Ignore the noise of climate summits, which suggests that climate change has simple solutions impeded only by a lack of political will. In truth, climate change is a “wicked problem:” one that does not have a clear-cut solution because of its incomplete, contradictory, and changing nature. And managing wicked problems in the real world oftentimes requires counterintuitive moves, balancing acts, and hard choices. What the present moment calls for is for Western leaders to put some of their well-laid climate plans on the back burner to attend to a much more urgent global emergency.

Dalibor Rohac is a senior fellow at the American Enterprise Institute and a contributing editor of American Purpose. Twitter: @DaliborRohac

Image: Group picture with Luiz Inácio Lula da Silva, President of the Federative Republic of Brazil and Marina Silva, Minister of the Environment, Joko Widodo, President of the Republic of Indonesia and Climate Change of Brazil and His Excellency Dr. Sultan Al Jaber, COP28 President during the UN Climate Change Conference COP28 at Expo City Dubai on December 2, 2023. (Flickr: COP28 / Stuart Wilson)