By Jeffrey D. Sachs November 20, 2016
Part of a weekly series on the economic choices facing the United States and its relations with the rest of the world. For previous entries, click here.
Energy is the lifeblood of the economy. Without ample, safe, and low-cost energy, it is impossible to secure the benefits of modern life. For two centuries, fossil fuels — coal, oil, and natural gas — offered the key to America’s and the world’s growing energy needs. Now, because of global warming, we have to shift rapidly to a new low-carbon energy system.
President-elect Donald Trump has vowed to resurrect coal, promote gas fracking, and restart the Keystone XL pipeline project to bring Alberta, Canada’s oil sands to market. He won’t get far. Today’s low world prices of oil, coal, and gas reflect the fact that newly installed power generation and vehicles worldwide are shifting decisively to low-carbon energy.
The world has far more fossil fuel reserves than can be safely used. Many will stay in the ground, forever. Saudi Arabia, not Alberta, is the low-cost oil supplier. Investors in a resurrected Keystone would go broke, as have investors in coal. Wall Street figured this out long ago.