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Reliance on fossil fuels remains virtually unchanged despite trillions for ‘clean energy’

Published

1 year ago

5 minute read

From the Fraser Institute

By Elmira Aliakbari, Julio Mejía, and Jason Clemens

” after tens of trillions of dollars spent on the transition away from fossil fuels, consumption declined by 3.8 percentage points as a share of total global energy. “

At COP28, the recent United Nations climate change conference in the United Arab Emirates, bureaucrats, politicians and activists from nearly 200 countries gathered to push for a “transition away from fossil fuels” and continue and indeed expedite efforts to achieve a global net-zero “carbon footprint” by 2050. However, despite significant spending on clean energy, the world’s dependence on fossil fuels remains largely unaffected, calling into question how realistic the commitment to zero emissions by 2050 is in the real world.

The UN staged the first “COP” conference in Berlin in 1995, marking the beginning of a collaborative international effort of energy transition and decarbonization. According to one report, global investment in renewable energy totalled US$7 billion in 1995.

Today, according to the latest data from the International Energy Agency (IEA), investment in “clean energy” by both governments and private industry reached more than US$1.7 trillion in 2023. That’s roughly the equivalent of the entire Australian economy this year. This spending includes more than just renewable power (wind, solar, etc.), which totalled $659 billion in 2023, but also electric vehicles, battery storage, nuclear, carbon capture and more.

More broadly, according to the IEA numbers, from 2015 to 2023, governments and industry worldwide have spent $11.7 trillion (inflation-adjusted) on clean energy. For context, this is basically the equivalent of all the goods and services produced in Germany, Japan and the United Kingdom combined in 2023. Simply put, an extraordinary amount of money and resources have been allocated to the transition away from fossil fuels for the better part of three decades.

So, what’s the return on this investment?

According to data from the Statistical Review of World Energy, from 1995 to 2022, the amount of fossil fuels (oil, gas and coal) consumed worldwide actually increased by 58.6 per cent. Specifically, oil consumption increased by 34.2 per cent, natural gas by 86.7 per cent and coal by 72.7 per cent.

There was, however, a small decline in the share of total energy provided by oil, gas and coal during that time period, falling from 85.6 per cent of total energy use in 1995 to 81.8 per cent in 2022. In other words, after tens of trillions of dollars spent on the transition away from fossil fuels, consumption declined by 3.8 percentage points as a share of total global energy.

Meanwhile, renewables increased from 0.6 per cent of total energy to 7.5 per cent over the same period but both nuclear and hydro declined (6.5 per cent to 4.0 per cent and 7.3 per cent to 6.7 per cent, respectively). In other words, the 3.8-percentage point decline in fossil fuels as a share of total energy in 2022 was offset by a net increase in clean energy of the same amount.

In addition to the massive amounts of spending, much of it paid for by taxpayers, this transition has come with other costs. Renewable sources such as wind and solar are not always available and therefore require back-up energy systems. Lack of investment in back-up systems and required infrastructure has resulted in marked price increases in energy and/or blackouts in parts of Europe and the United States.

At COP28, conference attendees including Canada’s Environment Minister Steven Guilbeault pledged to reach net-zero emissions—that our economy will emit no greenhouse gas emissions or offset its emissions—in 26 years. But given the trillions spent, the limited progress in reducing global reliance on fossil fuels, and the price increases and reduced energy reliability in countries that have meaningfully transitioned, that goal seems unrealistic in the real world.

Authors:

Elmira Aliakbari
Director, Natural Resource Studies, Fraser Institute
Julio Mejía
Junior Policy Analyst
Jason Clemens
Executive Vice President, Fraser Institute
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Business

Worst kept secret—red tape strangling Canada’s economy

Published on February 22, 2025

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From the Fraser Institute

By Matthew Lau

In the past nine years, business investment in Canada has fallen while increasing more than 30 per cent in the U.S. on a real per-person basis. Workers in Canada now receive barely half as much new capital per worker than in the U.S.

According to a new Statistics Canada report, government regulation has grown over the years and it’s hurting Canada’s economy. The report, which uses a regulatory burden measure devised by KPMG and Transport Canada, shows government regulatory requirements increased 2.1 per cent annually from 2006 to 2021, with the effect of reducing the business sector’s GDP, employment, labour productivity and investment.

Specifically, the growth in regulation over these years cut business-sector investment by an estimated nine per cent and “reduced business start-ups and business dynamism,” cut GDP in the business sector by 1.7 percentage points, cut employment growth by 1.3 percentage points, and labour productivity by 0.4 percentage points.

While the report only covered regulatory growth through 2021, in the past four years an avalanche of new regulations has made the already existing problem of overregulation worse.

The Trudeau government in particular has intensified its regulatory assault on the extraction sector with a greenhouse gas emissions cap, new fuel regulations and new methane emissions regulations. In the last few years, federal diktats and expansions of bureaucratic control have swept the auto industry, child care, supermarkets and many other sectors.

Again, the negative results are evident. Over the past nine years, Canada’s cumulative real growth in per-person GDP (an indicator of incomes and living standards) has been a paltry 1.7 per cent and trending downward, compared to 18.6 per cent and trending upward in the United States. Put differently, if the Canadian economy had tracked with the U.S. economy over the past nine years, average incomes in Canada would be much higher today.

Also in the past nine years, business investment in Canada has fallen while increasing more than 30 per cent in the U.S. on a real per-person basis. Workers in Canada now receive barely half as much new capital per worker than in the U.S., and only about two-thirds as much new capital (on average) as workers in other developed countries.

Consequently, Canada is mired in an economic growth crisis—a fact that even the Trudeau government does not deny. “We have more work to do,” said Anita Anand, then-president of the Treasury Board, last August, “to examine the causes of low productivity levels.” The Statistics Canada report, if nothing else, confirms what economists and the business community already knew—the regulatory burden is much of the problem.

Of course, regulation is not the only factor hurting Canada’s economy. Higher federal carbon taxes, higher payroll taxes and higher top marginal income tax rates are also weakening Canada’s productivity, GDP, business investment and entrepreneurship.

Finally, while the Statistics Canada report shows significant economic costs of regulation, the authors note that their estimate of the effect of regulatory accumulation on GDP is “much smaller” than the effect estimated in an American study published several years ago in the Review of Economic Dynamics. In other words, the negative effects of regulation in Canada may be even higher than StatsCan suggests.

Whether Statistics Canada has underestimated the economic costs of regulation or not, one thing is clear: reducing regulation and reversing the policy course of recent years would help get Canada out of its current economic rut. The country is effectively in a recession even if, as a result of rapid population growth fuelled by record levels of immigration, the GDP statistics do not meet the technical definition of a recession.

With dismal GDP and business investment numbers, a turnaround—both in policy and outcomes—can’t come quickly enough for Canadians.

Matthew Lau

Adjunct Scholar, Fraser Institute
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Business

‘Out and out fraud’: DOGE questions $2 billion Biden grant to left-wing ‘green energy’ nonprofit`

Published on February 22, 2025

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From LifeSiteNews

By Calvin Freiburger

The EPA under the Biden administration awarded $2 billion to a ‘green energy’ group that appears to have been little more than a means to enrich left-wing activists.

The U.S. Environmental Protection Agency (EPA) under the Biden administration awarded $2 billion to a “green energy” nonprofit that appears to have been little more than a means to enrich left-wing activists such as former Democratic candidate Stacey Abrams.

Founded in 2023 as a coalition of nonprofits, corporations, unions, municipalities, and other groups, Power Forward Communities (PFC) bills itself as “the first national program to finance home energy efficiency upgrades at scale, saving Americans thousands of dollars on their utility bills every year.” It says it “will help homeowners, developers, and renters swap outdated, inefficient appliances with more efficient and modernized options, saving money for years ahead and ensuring our kids can grow up with cleaner, pollutant-free air.”

The organization’s website boasts more than 300 member organizations across 46 states but does not detail actual activities. It does have job postings for three open positions and a form for people to sign up for more information.

The Washington Free Beacon reported that the Trump administration’s Department of Government Efficiency (DOGE) project, along with new EPA administrator Lee Zeldin, are raising questions about the $2 billion grant PFC received from the Biden EPA’s National Clean Investment Fund (NCIF), ostensibly for the “affordable decarbonization of homes and apartments throughout the country, with a particular focus on low-income and disadvantaged communities.”

PFC’s announcement of the grant is the organization’s only press release to date and is alarming given that the organization had somehow reported only $100 in revenue at the end of 2023.

“I made a commitment to members of Congress and to the American people to be a good steward of tax dollars and I’ve wasted no time in keeping my word,” Zeldin said. “When we learned about the Biden administration’s scheme to quickly park $20 billion outside the agency, we suspected that some organizations were created out of thin air just to take advantage of this.” Zeldin previously announced the Biden EPA had deposited the $20 billion in a Citibank account, apparently to make it harder for the next administration to retrieve and review it.

“As we continue to learn more about where some of this money went, it is even more apparent how far-reaching and widely accepted this waste and abuse has been,” he added. “It’s extremely concerning that an organization that reported just $100 in revenue in 2023 was chosen to receive $2 billion. That’s 20 million times the organization’s reported revenue.”

Daniel Turner, executive director of energy advocacy group Power the Future, told the Beacon that in his opinion “for an organization that has no experience in this, that was literally just established, and had $100 in the bank to receive a $2 billion grant — it doesn’t just fly in the face of common sense, it’s out and out fraud.”

Prominent among PFC’s insiders is Abrams, the former Georgia House minority leader best known for persistent false claims about having the state’s gubernatorial election stolen from her in 2018. Abrams founded two of PFC’s partner organizations (Southern Economic Advancement Project and Fair Count) and serves as lead counsel for a third group (Rewiring America) in the coalition. A longtime advocate of left-wing environmental policies, Abrams is also a member of the national advisory board for advocacy group Climate Power.

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