Direct US fossil fuel subsidies alone have been conservatively estimated at $20 billion per year. The IMF has estimated that global energy subsidies (including oil and natural gas, along with coal), at either the producer or consumer end, run more than $5 trillion per year. Here are some things to do and not to do. The account that follows emphasizes those choices that seem clearly win-win, as opposed to policy decisions where tradeoffs are acute and reasonable observers may come down on either side. The most obvious steps, especially for the EU, are sanctions that cut demand for imports of fossil fuels from Russia.Ī review of different areas of energy policy can reveal more such steps. But there are plenty of steps that would benefit the environment and simultaneously further the geopolitical objective. Some talk as if the two goals are necessarily in conflict - because, for example, fighting back against Moscow by boosting domestic US oil production would contribute to air pollution and global climate change. The national security and environmental objective should be evaluated together, rather than via separate “stove pipes.” Both goals, geopolitical and environmental, are urgent. At the same time, they should not take their eye off the ball of reducing environmental damage and, in particular, slowing down greenhouse gas emissions. Russia’s invasion of Ukraine has amplified the importance of national security objectives when Western nations formulate energy policy. A shorter version appeared at Project Syndicate. Today, we present a guest post written by Jeffrey Frankel, Harpel Professor at Harvard’s Kennedy School of Government, and formerly a member of the White House Council of Economic Advisers.
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