In the United States, the philosophy behind many of the most important progressive climate proposals of the past few years—such as the Green New Deal and Joe Biden’s climate plan—were premised on three ideas. Each was rooted in a diagnosis of the 2010s economy—and each, unfortunately, is looking more and more out of date.
First, each plan almost universally assumed that the American economy remained bruised from the Great Recession. Climate policy could succeed by providing stimulus to the economy and creating jobs, just as the New Deal had done in the 1930s. Climate advocates, among the most forceful supporters of this philosophy, assumed that the economy’s real constraints—the cost of buying raw materials or hiring workers for any large project (public or otherwise)—were relatively low.
The second idea was that the world was awash in fossil fuels. America’s fracking boom had deluged the country in cheap petroleum, and gas prices could be expected to stay low indefinitely. Climate activists diagnosed that the planet’s biggest problem was an excess of oil and natural gas on global markets, which meant that, in every circumstance, activists should strive to “keep it in the ground.”
Finally, the plans presumed that the United States and its allies had few immediately pressing energy-security concerns. Although some scholars fretted about China’s growing centrality to renewable-energy manufacturing, activists generally rejected any claim that the two countries might be in competition. (Although this was not universal: Biden’s climate plan reflected much greater worry about China’s prominence in the new industry.) When American officials questioned Germany’s growing reliance on Russian natural gas, activists—not to mention the Germans themselves—saw their concerns as a stalking horse for the U.S. fossil-fuel industry, which wanted to turn Germany into a customer.
With a few exceptions, these three ideas represented useful, effective diagnoses of the world as it was in the 2010s. By discussing them, advocates helped overturn some of the old orthodoxies of climate policy, allowing a far more entrepreneurial and creative approach to take root. But the world has changed since 2020—it has changed, for that matter, since the middle of last month, when Vladimir Putin began his campaign to conquer all of Ukraine. And all three ideas that were once essential to the climate playbook now seem far less important.
The American economy no longer needs the kind of broad, brute-force stimulus that advocates once envisioned. As my colleague Derek Thompson has written, the labor market is as healthy as it’s been in years: More than 80 percent of prime-age Americans are working or looking for work, and the unemployment rate in some Great Plains and Mountain West states has fallen as low as 2.1 percent.
Inflation, not unemployment, is now the economy’s biggest problem. And that means that even if the country had workers to spare, it does not have raw materials. Any major domestic buildout of clean energy would require a large amount of steel, concrete, lithium, and other rare minerals. Yet global commodity prices are spiking to all-time highs, and the kind of supply chains required for construction projects are especially clogged. In this economy, it takes a year to finish renovating a kitchen. Restructuring an entire energy system will be far harder.
Moreover, the world’s energy problems are no longer quite as straightforward as they were in the previous decade. After a long lull, gasoline prices have started rising again, peaking earlier this month at their highest inflation-adjusted level since 2014. From an environmental perspective, gasoline remains much too cheap in the United States given its societal costs. But that ideal pricing matters little to the issue’s politics in a car-dependent country. The political challenge, too, is made worse by America’s polarized climate politics: If only one party is interested in passing climate policy, then the climate’s safety rests on the party’s ability to keep voters happy.
The Ukraine crisis has overturned the final dictum, reinstating energy security as a major issue for the West. In almost any world, Putin’s war would have thrown global markets into tumult: More than a quarter of the natural gas that Europe imports from Russia flows in pipelines that run through Ukraine, and large, violent military campaigns do not tend to treat fragile (and flammable) fossil-fuel infrastructure delicately. But Russia’s role as a major oil producer to the world, and Europe’s dependence on Russian natural gas (beyond just that which flows through Ukrainian pipelines), has brought the issue to the center of global politics.
That represents a mixed blessing for the most dogmatic American climate advocates. In the coming years, the European Union seems likely to go on a mad decarbonizing dash, electrifying as much of its energy system as possible so as to reduce its dependence on Russian gas. But even optimistic accounts posit that the continent cannot hope to regain “energy sovereignty” until 2027. It will need more than just heat pumps and solar panels; it will need someone else to sell it gas.
The math makes any other conclusion unavoidable. Last week, the EU promised to import 50 billion cubic meters of liquid natural gas from the United States annually through 2030. Right now, for context, it imports about 17 billion cubic meters of LNG a year, so it will need to find another 33 billion cubic meters to meet its goal.
That is a lot of gas. It exceeds the LNG imports of every country in North and South America combined. It seems reasonable to conclude, therefore, that if the EU follows through on its commitment—but no country produces more gas—then it will break the global market for liquid natural gas. That will make natural-gas prices rise everywhere, for all countries, even those that don’t buy LNG from the United States. And that will force middle-income countries—such as Bangladesh, Pakistan, and Thailand—that have been planning on importing natural gas to instead buy coal, a far dirtier and more climate-destructive fuel.
This doesn’t mean that climate advocates should become pro–natural gas, of course—especially when the fuel’s climate impact is looking worse and worse. But it does mean that American climate advocates must approach the new energy landscape with the same creativity and disrespect for orthodoxy that they brought to the old. If Europe’s democracies believe that their ability to import natural gas from a non-Russia country is essential to their survival, then American climate advocates should find a way to help them—without cutting a blank check to U.S. natural-gas producers or extending the gas system’s lifetime into the 2030s.
Climate activists remain correct in their essential diagnosis: In order to avoid catastrophic changes to the climate system, most undrilled fossil fuels must remain in the ground. But for the next few years, climate policy will require a subtler hand than advocates have been used to providing. It means that the U.S. must make strategic investments while grappling with the energy system as it exists today—which is fossil-fuel-dependent—not because fossil fuels have inherent value but because only by understanding the current situation can the U.S. plan for the future. Putin’s war has all but ensured that the path to decarbonization will not be a straight line. But if advocates navigate this moment carefully, then the U.S. and the EU can find a shortcut, not a detour.