The narratives, they are a changin
The election of Mr. Donald Trump is going to upend many narratives that drive the world today. The most visible attack on prevailing narratives is on immigration, free trade and what is generally described as ‘woke culture’. One area that has not got as much attention in India as it might have is energy. This narrative change will have big implications.
What is the current narrative? My articulation:
‘Climate Change is an existential and urgent threat and the world must do everything to mitigate the threat regardless of cost.’
What would be the new narrative?
‘Energy is critical to the well being of the world. Reliability of energy and its low cost are crucial. Climate Change is one of the challenges that the world faces and any mitigation efforts should not ignore the impacts on cost and reliability.’
For a recent example of narrative change think of the Covid -19 virus. In the first year of the disease, Facebook would ban you if you suggested that the virus came from a lab in Wuhan. Journalists from the New York Times would cheer the ban and call you racist. Now the same New York Times publishes these kind of headlines:
The current narrative on Climate Change has dominated energy actions in the past few years. For example, it is very difficult to put up thermal power plants, especially coal based plants. Debt financing for such plants was not available, especially from International banks. Many equipment vendors had stopped making equipment for thermal plants at least partly because of the bad rep that thermal plants had got. Investments for oil exploration faced similar challenges. This will change and the new narrative is coming from the very top of the United States.
On the campaign trail, when President Trump was asked for his plan to reduce inflation, the summary of his answer? “Drill, baby, drill.” He said that by permitting a much higher level of oil exploration and production, he would bring down the energy costs, which in turn will reduce the price of most commodities. Mr. Trump has acted on his promises since his inauguration and has passed many Executive orders that make drilling for oil in the US easier. He has also announced his intention of withdrawing from the Paris climate agreement. His choices of cabinet members reflect this thinking. For example, take Chris Wright as the Secretary of energy.
Doomberg, an energy publication, has a piece on Chris Wright. Mr. Wright is an energy entrepreneur and a MIT graduate. His current company, Liberty Energy, has a policy document on its website. Its takeaways include:
Energy is essential to life and the world needs more of it!
Hydrocarbons are essential to improving the wealth, health, and life opportunities for the less energized seven billion people who aspire to be among the world’s lucky one billion.
Global demand for oil, natural gas, and coal are all at record levels and rising — no energy transition has begun.
Modern alternatives, like solar and wind, provide only a part of electricity demand and do not replace the most critical uses of hydrocarbons. Energy-dense, reliable nuclear could be more impactful.
Making energy more expensive or unreliable compromises people, national security, and the environment.
Climate change is a global challenge but is far from the world’s greatest threat to human life.” (emphasis mine)
President Trump’s rhetoric and actions have had an impact. Since his election, six large banks have exited the UN convened Net Zero Banking Alliance (NZBA). The NZBA commits members to align their lending, investment and capital markets activities with net zero greenhouse gas emissions by 2050 or earlier. The list of the withdrawals includes JP Morgan, Citigroup, Bank of America, Morgan Stanley, Wells Fargo and Goldman Sachs. The big banks are not going to be as committed to climate actions as they were just a few months ago.
The new administration has particularly gone after wind energy. One Executive order asked the federal government to assess the impact of all wind energy on wildlife. Another Executive Order killed the Lava Ridge project. Most disturbingly for the sector perhaps has been President Trump’s rhetoric. It will be very difficult for investors to be enthusiastic about wind energy when the President categorically says, “We don’t want windmills in the country.”
Another vector of attack on the prevailing Climate Change narrative will be via the attack on US funding agencies. The new administration has gutted the USAID. The media focus naturally has been the agency’s funding of ‘woke causes’. US taxpayers paying for “a transgender clinic in India” or “$ 20 Million for making Sesame Street in Iraq” make for better headlines than anything on climate. But, if the hatchet job on all US foreign aid continues then funding for climate related studies and activism will also be cut.
Is there anyone defending the current narrative? Yes, including many in the United States. The country has many well funded Non Governmental Organisations (NGOs) that provide the intellectual heft for any activist that opposes hydrocarbons. In a piece written in 2023, Robert Bryce, the energy journalist, showed that the top anti hydrocarbon NGOs had annual receipts that were nearly 3 times the gross receipts of Hydrocarbon industry associations. The receipts of the anti hydrocarbon NGOs were not trivial. Their funding was to the tune of 1.5 Billion dollars. This is the table from his excellent substack.
Who were those funders and will they continue their funding? It is anybody’s guess. Someone like Laurene Powell Jobs, the widow of Apple founder Steve, might. Someone like Jeff Bezos, who seems to have moderated his political views in recent months may not. We will see.
Meanwhile, most of Europe has not changed its policies much. Germany and the United Kingdom saw the highest level of renewable generation last year. In spite of concerns raised on account of Dunkenflaute — dark windless periods — Germany has not reduced its commitment to Net Zero. Even after the exodus of US banks from NZBA, the alliance has 141 member banks. These include all the largest European banks.
However, there are murmurs in Europe too. Here is Javier Bass, the energy and commodities columnist at Bloomberg.
The talk about energy and climate change policies is not just talk. The coalition governing Norway collapsed on January 30, 2025 and the dispute in the partners was on energy related policies. If electricity prices can become a political issue in the rich and energy-rich Norway, they will become an issue everywhere. Interested folk may do well to pay attention to the upcoming elections in Germany. If AfD gets power in Germany, then the pro-renewable narrative will truly be in trouble.
What are policymakers now saying in public that just two years ago, they could only say in private? Perhaps they are asking some of these questions.
- Is Germany’s renewable power grid supported by its neighbors? The Swedish deputy prime minister recently asked this question.
- Is burning wood in power plants really good for the environment?
- What is the wholesale price of electricity of over €900 per megawatt hour (Rs. 81 / kwh) during dunkelflaute in Germany telling us? What would such prices do to manufacturing?
- What are the environmental trade offs of wind turbines and solar panels? For example, do wind turbines really disproportionately kill birds and marine life? In any case, what are the benefits of these technologies? How much of CarbonDiOxide emissions have they actually reduced?
- Why do jurisdictions with high penetration of renewables, like Germany and California, also have high tariffs?
People working in the field of Climate Change may do well to keep an eye on this narrative change. Equipment makers may want to relook at their product offerings. Bankers may want to examine their policies. Individuals working in Climate Change organizations may want to focus more on adaptation and less on mitigation. Students studying environmental science in India could decide to focus on issues like water and air pollution. What they should not do is to be in denial.
The title of this piece is a play on the Bob Dylan song “The times they are a changin.” The song to me is about accepting that change is about to happen and not to be in denial. I leave you with the first stanza of the lyrics.
Come gather ‘round people
Wherever you roam
And admit that the waters
Around you have grown
And accept it that soon
You’ll be drenched to the bone
If your time to you is worth savin’
And you better start swimmin’
Or you’ll sink like a stone
For the times they are a-changin’
Indeed.
This story is part of a series called ‘Electricity deep dive’.
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