Politics & Policy

Paul Krugman Needs an Energy Reality Check

Paul Krugman (Nicholas Kamm/AFP/Getty)

It’s an odd thing to see an economist — and a Nobel Prize winner at that — write an entire column about energy policy that doesn’t contain a single number.

But then, math-averse energy analysis has become one of Paul Krugman’s specialties. In his February 29 New York Times column, “Planet on the Ballot,” Krugman slammed Republicans for their “denial of climate science and opposition to anything that might avert catastrophe.” He went on to claim that the next president “won’t need to pass comprehensive legislation, or indeed any legislation, to take a big step toward saving the planet” because renewable energy is getting cheaper.

To be sure, this isn’t a new tack for Krugman. In 2014, in these pages, I debunked a Krugman column that claimed that due to cost reductions in solar energy, “drastic cuts in greenhouse-gas emissions are now within fairly easy reach.”

Unfortunately, Krugman is again making similar claims. The problem is that Krugman doesn’t bother to provide any hard numbers to bolster his arguments. Instead, Krugman claims that we’ve seen a “miracle” in energy technology because the “cost of electricity generated by wind and sun has dropped dramatically” and that the cost of the batteries needed to store electricity are “plunging as we speak.” He goes on, claiming “we are only a few years from a world in which carbon-neutral sources of energy could replace much of our consumption of fossil fuels at quite modest cost.” The key words in that line are, of course, “much” and “quite modest.”

Equally remarkable is Krugman’s claim that “the Paris agreement from last year means that if the U.S. moves forward on climate action, much of the world will follow our lead.”

Let’s take that last claim first. The Paris deal that Krugman cites so approvingly was, in fact, meaningless. As my Manhattan Institute colleague, Oren Cass, has noted, the Paris meeting resulted in nothing more than a “pledge and review” process that called on each country to provide a document outlining possible emission cuts. There was no binding agreement to enforce those cuts, nor were there any baselines for determining how the cuts might be measured. For example, the document submitted by Pakistan (known as an “Intended Nationally Determined Contribution”) consisted of a single page in which the Pakistanis said they would “only be able to make specific commitments once reliable data on our peak emission levels is available.” In other words, Pakistan said: “We’ll get back to you.”

In other words, Pakistan said: ‘We’ll get back to you.’

As for Krugman’s assertion that “much of the world” would be following our lead, that claim was debunked within a few days of the conclusion of the Paris climate summit by Anil Swarup, the head of India’s coal ministry. On December 14, Swarup told Reuters that India remained on track to double its coal production by 2020. Swarup agreed that India would ramp up its solar-energy production, but he said that India’s “dependence on coal will continue. There are no other alternatives available.”

Or consider the numbers published by the Paris-based International Energy Agency in its medium-term coal-market report on December 18. The agency noted that while global demand had slowed, coal use would grow by about 0.8 percent per year through the end of the decade. Let’s put that in perspective: In 2014, global coal use totaled about 78 million barrels-of-oil equivalent per day. Thus, using the IEA’s projected growth rate of 0.8 percent per year, global coal use will likely reach 81.8 million barrels-of-oil equivalent per day by 2020, for an increase of 3.8 million barrels-of-oil equivalent per day.

How does that compare with wind and solar capacity? In 2014, production of all global wind-energy facilities totaled 3.2 million barrels-of-oil equivalent per day and production from of all global solar facilities totaled 850,000 barrels-of-oil equivalent per day. Thus, by 2020, just the increase in projected coal demand will likely exceed the output of all of the world’s currently operating wind-energy projects. As for solar, the projected jump in coal use will likely equal four times the output of all of today’s solar projects.

The latest example of coal’s continuing popularity: On Monday, a Chinese company, Harbin Electric, announced it will help build a 350-megawatt coal-fired plant in Karachi, Pakistan. Or look at Vietnam, which is building a $2.4 billion coal-fired power plant with 1,200 megawatts of capacity in Quang Tri province. That plant is part of some 60 gigawatts of coal-fired capacity now being developed in Vietnam. Meanwhile, South Korea is planning to build 20 new coal-fired power plants and Japan is planning to build 41 of them.

Krugman claims we can replace “much” of our fossil-fuel use at “quite modest” cost, but the reality is that countries all over the world are making rational economic decisions — and for many of them that means burning coal so they can produce electricity for their people.

Alas, none of this information appears to matter to Krugman, who insinuates in his piece that Republicans are “sacrificing the planet in the name of conservative ideology.”

That line, like the rest of his column, merely parrots the same shopworn claims that we’ve been hearing from the environmentalist Left for years. First and foremost, repeat the claim that renewable energy is our “salvation.” (Krugman writes that “salvation is clearly within our grasp.”) Second, ignore the fact that the U.S. is leading the world in cutting its carbon-dioxide emissions — reductions that have largely been made possible thanks to surging natural-gas production. (Thank you, hydraulic fracturing.) Third, don’t mention nuclear energy even though nuclear power must be part of any credible emissions-reductions strategy. And finally, claim that America must cut its emissions because those simpletons who lead other countries need a North American shepherd to coax them out of their hydrocarbon-induced prosperity.

As for the numbers? Well, never mind. It’s apparent that Krugman the economist prefers demagoguery to facts and figures.

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