From his perch at the NYT, economist Paul Krugman has launched another attack on people with different political views. In this most recent piece, Krugman opens by informing readers that “Peter Thiel, Facebook investor and Donald Trump supporter, is by all accounts a terrible person.” Krugman then uses this casual insult to segue into discussing the amazing strides in renewables technology, and how the Trump Administration is doing what it can to hinder progress and threaten humanity.
However, even though the title of his article (which the editors may have picked) accuses Thiel and other Trump supporters as being “liars,” it is actually Krugman whose column is at best misleading. Yes, it is true that newly installed wind power—though not solar—is now becoming competitive with natural gas.
But that doesn’t mean it will be painless to eliminate fossil fuels, because of the difference between operating and installation costs, and because of the intermittency problems with wind and solar. Standard estimates put out by the federal government show that renewables (including hydro) will still account for only 16 and 18 percent of U.S. and global energy consumption (respectively) by mid-century. As we at IER explained last summer, there are some 1,600 coal-fired power plants planned or already under construction in 62 countries around the world.
If wind and solar were really the no-brainer that Krugman assures us, he and his allies wouldn’t be calling for government restrictions on coal or subsidies to renewables. He would agree with IER that competition and market prices are the best vehicles for delivery affordable and reliable energy to consumers.
Krugman’s Optimism on Renewables
To show that I’m not attacking a strawman, let’s allow Krugman to make his case in his own words:
Believers in the primacy of fossil fuels, coal in particular, are now technological dead-enders; they, not foolish leftists, are our modern Luddites….
About the technology: As recently as 2010, it still consistently cost more to generate electricity from sun and wind than from fossil fuels. But that gap has already been eliminated, and this is just the beginning….
To paraphrase the science-fiction writer William Gibson, the renewable energy future is already pretty much here; it’s just not very evenly distributed.
…
[T]here is no longer any reason to believe that it would be hard to drastically “decarbonize” the economy. Indeed, there is no reason to believe that doing so would impose any significant economic cost. The realistic debate is about how hard it will be to get from 80 to 100 percent decarbonization. [Krugman, bold added.]
The interested reader can digest Krugman’s entire piece for caveats, such as his admission that yes, intermittency is an issue. But as the passages above make clear, Krugman is quite plainly telling his readers that wind and solar are already competitive with fossil fuels, and that their edge will only increase. He literally says “the renewable energy future is already pretty much here.”
Well, this is only true, if by “already pretty much here” Krugman means “maybe in 75 years.” I’ll give some evidence in the next section.
What the Technical Literature Actually Says About Renewables
If we consult the reports of the Energy Information Administration (EIA), we see a much different picture from the one Krugman painted. For starters, it’s true that the 2018 Annual Energy Outlook says newly installed onshore wind is now competitive with natural gas, but solar isn’t:
Source: EIA
As the table indicates, under “Total system LCOE [levelized cost of electricity],” new generation in conventional combined-cycle natural gas costs $48.30 per megawatt-hour, whereas onshore wind costs $48.00. Yet offshore wind is still a whopping $124.60, and photovoltaic (PV) solar is still $59.10. (The cheapest source listed is actually geothermal, at $43.10 per new megawatt-hour.)
So if this is the case, and we can expect further improvements as people gain more experience with renewables, does the EIA project a massive switch in energy sources? Not at all. Here is the chart showing EIA’s latest projections in the baseline “reference case” for the United States:
Source: EIA
As the chart reveals, it is only by mid-century that renewables (other than hydro) surpass coal, and they are a far cry from supplanting fossil fuels altogether. Indeed, the EIA’s tables show that by 2050, renewable sources (including hydro) account for only 16 percent of U.S. energy consumption, while petroleum and other liquids account for 34 percent, natural gas for 33 percent, and coal for 12 percent. So for those keeping score at home, EIA projects that under current policies, by the year 2050 Americans will get about 16 percent of their energy from renewables (including hydro), and 78 percent from fossil fuels.[i] Not exactly the picture Krugman painted, is it?
EIA has a similar projection for long-term global energy consumption:
Source: EIA
Referring to EIA’s table for more specifics, we see that by 2050, all renewables (including hydroelectric power) provide for about 18 percent of global energy demand. Fossil fuels, in contrast, provide for 77 percent. (Nuclear picks up the balance at 5 percent.)
So we see that Krugman’s claims bear no relationship to the facts, unless he meant, “At some point, humanity will no longer need to use coal.” Well, yes, that’s not a false statement, but who disputes that? The actual policy disputes concern whether, say, plans to hit the goals of the Paris climate treaty will cause intolerable economic losses.
The Literature Agrees That Total Decarbonization Currently Infeasible
Finally, let’s consider Krugman’s claim that, “The realistic debate is about how hard it will be to get from 80 to 100 percent decarbonization.” Interestingly, Krugman’s buddy—in the sense that he cites him favorably—David Roberts at Vox has an article on this very topic.
Specifically, Roberts looked at recent studies of the technical literature to see how feasible it would be to completely “decarbonize” the economy. To end your suspense: it’s not.
For example, Roberts reviewed a study that “examines 24 scenarios for 100 percent renewable energy with enough detail to be credible. It then judges them against four criteria for feasibility…” And lo and behold, it turns out that all 24 scenarios failed, with the highest scoring one garnering only 4 out of a possible 7 points.
Now I want to stress, this is not the answer that guys like Roberts (or Krugman) want. And so let me provide some quotations from Roberts’ Vox article, to show how he wants to fan the flames of hope even though the technical literature didn’t give the answer that decarbonization hawks would have preferred.
First, here is Roberts’ initial reaction, after dropping the bombshell that nobody had proposed a solution to the demands:
It’s reasonable to ask whether we need that much confidence to begin planning for long-term decarbonization. If any new system must demonstrate in advance that it is fully prepared to substitute for today’s system, it’s going to be difficult to change the system at all (bold added).
So that’s a neat trick: Activists say we need to decarbonize, the critics point out it can’t be done, and the activists retort, “Let’s start anyway!” because otherwise those naysaying defeatists would win.
But an even funnier quotation comes later in Roberts’ article, when he declares:
It pays to be careful with literature reviews. They are generally more reliable than single studies, but they are exercises in interpretation, colored by the assumptions of their authors. And there’s always a danger that they are simply compiling common biases and limitations in current models — reifying conventional wisdom (bold added).
I wonder: Do climate “skeptics” get to use this same attitude? Can they “be careful with literature reviews,” when the reviews spit out the wrong answer? Do they get to throw out the “current models” because of their “common biases and limitations”?
Of course not. When the computer models produce results that Roberts et al. like, then it’s “consensus science” and anyone who doubts it is a “denier.”
So back to Krugman, when he says that the current debate is over how much we can easily decarbonize the economy, keep in mind that this “debate” has guys like Roberts writing—and again I quote from his Vox article—rigorous statements like this:
Models today cannot capture the effects of technologies and techniques that have not yet been developed. But this stuff is the subject of intense research, experimentation, and innovation right now.
It is viewed as irresponsible to include speculative new developments in models, but at the same time, it’s a safe bet that the energy world will see dramatic changes in the next few decades. Far more balancing options will be available to future modelers. [Bold added.]
To be clear, I don’t have a problem with the above mindset. But it would be nice if there were some consistency here. When guys like me point out that humans have adapted and solved problems in the past, and so climate change doesn’t pose an existential threat to the planet the way Krugman tells us, then we are denounced as pie-in-the-sky fools, grasping at straws for low-cost solutions that may not develop in time.
But on the other hand, when guys like me point out that the actual and proposed government interventions into the energy sector will raise prices and reduce economic growth, Krugman and his allies rely on magic asterisks to make their climate targets painless. They need to make up their minds.
Conclusion
As we’ve seen, the rumors of conventional energy sources’ death have been greatly exaggerated.[ii] As I always ask when proponents of renewables tout their cost-effectiveness: why then do you support government intervention in the energy markets? If and when it makes economic sense for wind and solar to expand in electricity generation, market forces will foster that outcome. If and when it makes economic sense for Americans to phase in electric cars, then prices will spontaneously lead to that occurring. Writers like Krugman want to have it both ways: He tells us—sometimes in the same column—that only “deniers” and “liars” think fossil fuels have a future, but also that the government needs to ban coal while subsidizing renewables or else our children are dead. Which is it?
[i] The “petroleum and other liquids” includes 1 percentage point attributable to biofuels, which I have removed from my figure for fossil fuels.
[ii] Apparently the expression commonly attributed to Mark Twain is a slight misquotation, but it’s good enough for energy policy analysis.
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