Editors Note: Portions of an excellent documentary series on energy created by Erik Townsend called Energy Transition Crisis have been presented in The Prickly Pear video section. You should take the time to view the series. Townsend, an accomplished energy futures trader and the producer of the excellent podcast Macrovoices believes that mankind is causing climate change, and much like Bjorn Lomborg, believes we are going about facing the challenge all wrong. There are many cheap ways to mitigate climate change, whatever its cause, without destroying both our freedom and prosperity. However, we disagree on two fronts having to do with initial assumptions: We don’t think the case has been made when .04% of the atmosphere is CO2, with humans contributing 3% of that. There have to be other variables at play. As Ian Plimer has pointed out, the most recent ice ages began with CO2 levels higher than they are today. If that is true, the connection between CO2 and climate has not been established. Secondly, Townsend and others say we are “addicted” to oil. The word “addicted” has pejorative connotations, i.e., a dependence on an unnecessary substance for the purposes of fulfilling uncontrollable urges. That is not how energy use evolved. Humans have burned dung, wood, coal, and oil, and maybe in the future, we should be using nuclear energy. But that is sort of like saying we are “addicted” to food. We need food to survive and we need energy to survive. It is the transference of energy embedded in hydrocarbons that drives our machines and produces our standard of living. The least we should demand of our leaders is they are not only unequivocally correct in making their case, but in addition that they also have realistic plans to replace the system that has evolved naturally. We should not sacrifice our freedom and standard of living to satisfy some people’s hysteria. If some people wish to do so, that is their prerogative, but they have no right to force others, for that is the essence of dictatorship. The history of central planning, however, is force, strewn with failures of government having the ability to plan from the top down and determine what companies and what technologies should succeed. No one forced the use of oil, it evolved naturally out of the alternatives. To his credit, Mr. Townsend only asks the government for a reasonable regulatory regime while he wants to go raise the money and take the risks to bring the new modular nuclear technology to the market economy.
Calls for the elimination of fossil fuels suffer from much the same problem as central planning.
If one is on social media, they are likely already acquainted with the fear-mongering that is the “climate crisis.” While many rightly regard it as a manufactured crisis for government overreach, it also lacks an understanding of the structure of production in its demands.
The claim for this crisis rests on the supposed destruction of the planet that will come to be if humanity continues in its current industrial capacity. The common demands of the activists are the halting of fossil fuel contracts, the creation of federal agencies to address it, or legislation like that of the “Green New Deal.”
It’s not simply the cries of anxiety-ridden college students, though they certainly act as the foot soldiers for this cause. Political interests in the United States and Europe have expressed their care for this issue as well. President Joe Biden established an Office of Climate Change as a part of the DHS. Prominent progressive politician Alexandria-Ocasio Cortez (AOC) has made climate change one of her pet issues, accusing the President of not doing enough to tackle the issue. In Europe, even the monetary authorities have made it their role to play policymaker. Christina Lagarde, the president of the European Central Bank, has made a pledge to use monetary policy to reduce carbon emissions before the ever-touted 2030 deadline. Fortunately, her American counterpart—Jerome Powell—has so far rebuked the same demands of the Federal Reserve.
How feasible are their demands? Just for the sake of argument, let’s assume the science is correct in terms of function: that human action is the largest contributor to changes in weather patterns and the atmosphere. So, what of the demands? Is it feasible to eliminate all fossil fuel use? The short answer: no. The long answer demands an understanding of the structure of production and the complexity of getting common goods into our hands.
Fossil fuels are not simply used for gasoline and diesel fuel in vehicles. Fossil fuels typically include oil (or petroleum for those in the Old World) and natural gas (such as methane and fracked gas deposits). 80% of energy globally is produced by some form of fossil fuels. “Renewable energies” marketed by climate activists are simply unable to provide the energy needed to combat the elements—evidenced by the power failures of Texas.
But fossil fuels’ involvement in the economy hardly stops there. Oil is a primary ingredient in the creation of plastics, and not simply the single-use plastics that are so often decried. The interior of vehicles, for example, are made of plastic. Even the exterior of many vehicles as well. This is done not for style, but for safety. When cars are made of plastic that crushes during impact, they absorb much more of the force and save lives.
Simply think of Leonard Read’s classic essay “I, Pencil.” How many of the goods, and components for those goods, are transported by these vehicles every day? How many laborers create those goods? Those laborers need to be transported as well. If we eliminated the use of fossil fuels, how many lives would be lost because of the increased danger of vehicles?
Just from this one example alone, it can be understood just how critical even one product made by fossil fuels can be in the economy. And this is just scratching the surface. There are so many consumer goods and producer goods made with oil: tires, lipstick, synthetic rubber, crayons, fishing rods, dyes, anesthetics, fertilizers, and so much more. Many of these goods are valued in their direct service of human desires, others have value in their service of producing consumer goods, and some for both uses.
To remove fossil fuels from the economy would thus remove hundreds of kinds of consumer and producer goods from the marketplace. If one was to trace any given good backwards from its components to eventually land and labor, practically every single good in any advanced economy would intersect with fossil fuels at some point. Even the famed “I, Pencil” will eventually touch fossil fuels.
Fossil fuels are so ingrained into the production process that it would be simply impossible to remove them from the global economy without making everyone drastically poorer. Every attempt would result in the destabilization of the market process. So, what should be done? There is a good case that private property rights could be the key to protecting the environment. Markets deliver innovation and efficiency, and if the goal is to protect the environment, then they will deliver. We should not overthrow the standard of living provided by fossil fuels. Rather we should let the market do its work. To slightly modify a quote from 1993’s Jurassic Park: The market [uh] finds a way.
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As we move through 2023 and into the next election cycle, The Prickly Pear will resume Take Action recommendations and information.