Opinion | Missing Profits May Be a Problem for the Green Transition

This is one reason it has become less common for climate skeptics to talk about how much consumers would be burdened by price spikes brought about by a green transition, or to invoke Bill Gates’s “green premium” or the “cautionary tale” of France’s yellow-vest movement, and more common to hear them ask whether the renewable industry can survive without pretty massive public subsidies. Just this past year, a spike in interest rates kneecapped construction in the nascent offshore wind-power industry, not just in the United States but around the world. If you’ve got a big enough profit buffer, you can navigate around bumps in the road like that; if you don’t, it’s a bit of a different story. Things get even harder in the poorer parts of the world, where hundreds of millions lack basic access to electricity but capital costs of new infrastructure can be prohibitively high even in the absence of supply shocks and global inflation conditions.

For Christophers, this is a challenge that implies its own solution: public ownership of the power sector. If all that stands between our bumpy “mid-transition” status quo and an abundant clean-energy future for all is an initial hurdle of investment, why strain to extract that investment from private investors who’d prefer to invest elsewhere?

This is not really the course we’re on, in the United States especially. In November, Maine voters rejected a public power ballot initiative, and though landmark legislation in New York now requires the state power authority to transition to clean sources by 2030, similar laws are few and far between in the rest of the country. In fact, as the political scientist Leah Stokes has documented, America’s public utilities, including rural co-ops, have long been among the biggest domestic obstacles to a rapid transition, not its biggest champions. Elsewhere in the world, outside China and some of the Nordic states, state-owned and state-controlled power sectors are not exactly models of hyperdecarbonization, either.

Which all makes the current state of renewable growth even more remarkable. Globally, solar and wind produced only 32 terrawatt hours of electricity in the year 2000, Christophers notes; by 2015 it was 1,000, and by 2022 it was more than 3,400. Solar in particular grew fivefold between 2011 and 2016, and then threefold from 2016 to 2021.

These additions are not yet enough to even cut into existing fossil production, only to satisfy the new demand the world energy system is adding each year, but the pace of deployment is nevertheless accelerating. Globally, investments in green energy have been higher than those in dirty sources every year since 2016, and last year 62 percent of global energy investment went into renewables; in China alone, more capacity was added in 2023 than the entire world added as recently as 2019. The I.E.A. believes that renewable energy capacity needs to triple by the end of the decade. There is still much more investment in new fossil-fuel infrastructure than is compatible with the world’s climate goals. As Martin Wolf has put it, the market is producing a green transition, just not fast enough. But even without the promise of massive profits, the world is still moving pretty rapidly.