US President Donald Trump took office as the 47th president of the United States and immediately set about rolling out his agenda. Among the first decisions he took was to withdraw the United States from the Paris Accord -- a landmark global agreement to restrict CO2 emissions in a manner that maintains global temperatures below or at the 1.5℃ threshold -- seen as the most effective way to avoid the catastrophic impacts of climate change -- and later doubled down on his plans to “drill, baby, drill.”
The comments have sent shockwaves through the environmental movement worldwide and through the oil industry, which witnessed a fall in oil prices. The industry expects there to be a glut in production, which is already at high levels — levels that make the USA one of the largest producers of fossil fuels in the world today.
Over and above the several problems that are obvious with such a statement, the statement betrays not only a deliberate ignorance of the risks the world — especially the developing world — faces if developed economies choose to continue on the destructive path that has got us here in the first place, but it also betrays a lack of understanding of how the energy market works.
For starters, the world’s demand for oil appears to have peaked not just because economies across the world including that of China are slowing down, but because today alternative sources of energy are available at prices comparable to that of oil. Huge strides have been made in the field of solar and wind energy, but also others that are today the cheaper option.
While it is true that electric technology -- especially in transportation has not progressed at the pace we would have liked, the world at large is increasingly moving towards a future beyond fossil fuels. The maxim, the stone age didn’t end because of the shortage of stone, will also be true for oil. The oil age will end, not because of a shortage of oil, but because technology will have to -- one way or another -- move beyond oil and fossil fuels.
This is especially true for countries like India and China who need to import most of their oil from foreign nations thereby stressing the country’s foreign reserves. If the world’s two most populous nations move beyond fossil fuels -- not so much because they don’t like them, but to reduce foreign dependence, it can only mean that the future of energy is pointing in one direction -- towards a future in which alternative sources of energy will be cheaper than oil thereby hastening its demise.
It is of course, yet some distance away. For the moment, of the four pillars on which modern civilisation is built -- energy, fertilizers, cement and steel -- only energy can realistically be produced without the use of fossil fuels, through renewables.
Trump’s America risks getting caught behind as the rest of the world moves ahead, a move that can endanger not only the US’s own domestic economy but, given the interconnected nature of the global economy, and its dependence on the US, being the largest of the world’s economies, is risking not just an environmental catastrophe but also an economic one.
Chest thumping and bluster can take you only so far. Sooner or later the chickens must come home to roost.
