The US Fracking Revolution Has Hurt Renewable Energy Technology

As per Daron Acemoglu, who is an MIT economist and Nobel winner, the United States’ historic natural-gas boom enhanced energy independence, but cheap energy prices stifled renewable-energy research.

Falling gas costs in the early 2010s “removed one of the impulse factors which pushed consumers more into renewables,” Acemoglu said at an online symposium on the climate change economics hosted by the Federal Reserve Bank of New York. “You can’t really expect the renewable shift to occur efficiently while gas, oil, and coal get even cheaper.”

According to Acemoglu and co-authors in a 2019 research report, the US Patent and Trademark Office granted over 3,300 renewable-energy patents per year between 1995 and 2015. According to the research, renewable energy innovation peaked in 2005, when United States gas prices were high, and then “collapsed” after 2010, when the fracking boom began. Canada, Germany, and France followed a similar pattern.

The EPAct of 2005, which excluded fracking activities from the EPA’s water rules and enhanced shale output, was a major contributor to the fall of innovative activity in renewable, green, and fossil-fuel power generation technologies, according to new research released in March of this year.

The reversal of US achievements in new renewable technology is significant since the country and the rest of the globe is dangerously lagging behind scientific advice to phase out fossil fuels as soon as feasible. According to a recent UN report, global emissions must climax by 2025 in order to keep global warming within the Paris Agreement’s lower range.

“A very essential element of the minimal progress we’ve had so far has been redirecting technology from clean sources,” Acemoglu added. “However, there has already been a pause.” According to climate experts, the costs of human lives and economic harm have already begun. Scientists can sometimes uncover traces of greenhouse gas emissions in wildfires, hurricanes, and floods. Climate change caused South Africa’s unprecedented flooding in April 2 times as likely, according to a major research group released.

Acemoglu stated, “The expenses ahead are pretty significant.  With mild changes, we’ll be beyond two degrees Celsius in most scenarios, and these don’t account for potential tipping points.”  And there’s a lot of ambiguity about what these mean for mass immigration as well as other social components of the cost that go beyond the economic.”

Nations have been slow to respond to what Acemoglu calls a “real emergency,” with present policies predicting catastrophic global warming of 2.7 degrees Celsius by the close of the century.

The ticking clock sends a clear message to economists and central bankers, according to Acemoglu: all micro and macro policies should be focused on the clean energy transition. “Today’s macroeconomic policy is largely concerned with third-order issues, ignoring the underlying issues,” he stated.

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