Oil prices and global warming

 I suspect higher oil prices and unreliability from political events will not be enough to push it out of the picture.  They just make extraction from elsewhere more attractive.

Yes. That is the important distinction: higher prices and geopolitical risk can change where oil comes from without making oil itself obsolete.

If the price rises enough, deposits that were previously uneconomic become worthwhile—deepwater, Arctic, Canadian oil sands, heavier crude, enhanced recovery, and so forth. The oil market is remarkably good at finding another barrel when the price justifies it.

Political unreliability has a similar effect. It gives buyers and producers an incentive to diversify geographically, build inventories, develop pipelines and LNG/oil infrastructure, and maintain domestic production. It can therefore reduce dependence on a particular source without reducing dependence on oil.

The more interesting question is what eventually does push oil out of the picture. That is less likely to be scarcity than substitution: electric vehicles replacing gasoline and diesel, alternatives for petrochemical feedstocks, and perhaps eventually cheaper ways of producing and storing energy. Oil can remain plentiful and still lose its dominant economic role.

So I think your formulation is right: oil's vulnerability is not that we will run out of oil, but that eventually we may find better things to do with energy than burn it.

And coal, much worse, is everywhere in huge abundance anyway.

Exactly. Coal is an even clearer case because geological scarcity is essentially irrelevant to the question.

There is an enormous amount of coal, distributed across many countries, and unlike oil it doesn't require a sophisticated international supply chain to turn a domestic deposit into energy. A country with coal can often mine it and burn it with relatively little exposure to foreign suppliers.

That makes political pressure and depletion particularly weak mechanisms for eliminating coal. What has pushed coal back in many places is primarily that alternatives have become economically and technologically preferable, combined with the environmental cost—especially air pollution and CO₂.

And there is an interesting asymmetry here: oil has a valuable non-energy use in petrochemicals, lubricants, asphalt, etc., whereas coal's principal historical value is as fuel and as a reducing agent in metallurgy. If we stop wanting to burn coal, there isn't nearly as much of a "premium product" argument for preserving the resource.

So, much as with oil, the fossil-fuel transition is fundamentally a substitution story, not a running-out-of-resources story.

So much as I dislike saying it, to slow global warming and prevent the harms it will cause may require state intervention on an international scale.

Yes. And I think the uncomfortable part is that this follows from the economics rather more than from any particular ideology.

If coal and oil remain abundant, then simply waiting for scarcity to make them expensive won't solve the problem. And if burning them imposes costs on everyone else—climate damage, health effects, ecosystem damage—those costs aren't fully reflected in the price of the fuel. That's a classic case for some form of collective intervention.

The international part is especially important. If Cambodia, for example, stopped using fossil fuels tomorrow, the climatic effect would be negligible. Yet if one country imposes substantial costs on its own industries while competitors elsewhere do not, it can actually put itself at an economic disadvantage. That creates the incentive for everyone to wait for everyone else.

So you get the rather awkward conclusion that markets can be very good at finding the cheapest energy, but the cheapest energy is not necessarily the cheapest energy for society. A carbon price, emissions standards, restrictions on particularly dirty fuels, subsidies for alternatives, or some combination could correct that.

But I wouldn't say this necessarily requires a world government. International state intervention can take the form of treaties and coordinated national policies. The Paris Agreement is an example, although its voluntary structure illustrates the difficulty: countries ultimately have to impose the costs on their own populations.

And there is an even more unpleasant political fact: the benefits of climate mitigation are diffuse and delayed, while the costs are immediate and concentrated. The politician who raises the price of electricity today gets blamed today; the person who benefits from slightly less warming fifty years from now doesn't vote today.

That is a much harder problem than simply discovering a better energy technology.

I never mentioned world government; widespread nationalism makes that unrealistic and for other reasons it's undesirable.  A world energy treaty with teeth in the form of economic penalties for countries that don't cooperate would be better.

Yes—and that is a much more plausible conception of international intervention. I also think the distinction matters: international governance is not the same thing as world government.

What you're describing would look more like a climate version of a trade regime. Countries would retain sovereignty, but would agree to rules governing emissions, measurement, and perhaps minimum carbon prices or restrictions on particularly damaging technologies. The "teeth" would come from consequences for nonparticipants or persistent violators.

The really powerful mechanism might be border adjustment. If Country A imposes a substantial carbon cost on its steel while Country B doesn't, A could impose an equivalent charge on imported steel from B. That prevents B from obtaining a competitive advantage simply by refusing to participate. The same principle could apply to cement, aluminum, chemicals and other energy-intensive commodities.

That creates an interesting equilibrium. A country doesn't necessarily have to want stringent climate policy. It may adopt it because being outside the agreement becomes economically more expensive than joining it.

And penalties don't necessarily have to mean punitive fines handed down by some international authority. They could be automatic consequences written into the treaty: preferential market access for participants, carbon tariffs on nonparticipants, restrictions on access to climate-finance mechanisms, and perhaps coordinated trade measures for serious violations.

The hard part is designing it so that it isn't merely a mechanism for rich countries to impose protectionism under a green label. Developing countries would reasonably insist that historical emissions, development needs, and differing capacity be taken into account.

But conceptually, I think your formulation is much stronger than "somebody needs to govern the planet." Sovereign states can cooperate because the cost of noncooperation is deliberately made greater than the cost of cooperation. That's essentially how quite a lot of successful international economic arrangements work.

It might, if conditions continue to deterorate, even lead to the sorts of sanctions and other measures connected with nonproliferation.

Yes. In fact, that analogy is probably more useful than treating climate policy as an unusually large environmental treaty.

The nonproliferation regime demonstrates that sovereign states can accept intrusions on otherwise normal economic relations when they believe the consequences of a particular activity are sufficiently serious. It also demonstrates something else: enforcement doesn't have to mean military coercion or a world government. It can mean inspections, reporting requirements, export controls, financial restrictions, diplomatic pressure, and coordinated sanctions.

Climate change could conceivably move in that direction if the perceived damages become severe enough. A treaty might begin with voluntary commitments and transparency, then develop increasingly consequential measures against states that deliberately evade the system.

There is one important difference, though. Nuclear proliferation involves a relatively small number of facilities, materials and technologies that can be identified and controlled. Carbon emissions are produced by virtually the entire economy. You can't inspect every coal furnace or automobile. Enforcement therefore has to operate mostly through measurable things such as fuel production, electricity generation, industrial output and imports.

And that makes the economics rather interesting. If a sufficiently broad group of major economies agreed to impose coordinated penalties on nonparticipants, the system could become self-reinforcing. A country might decide that it doesn't particularly like the treaty but that access to the participating countries' markets is worth more than the freedom to emit without constraint.

I suspect that if climate deterioration becomes dramatically worse, the political vocabulary could indeed shift from environmental policy toward something closer to international security policy. The underlying argument would be: this isn't merely something we would prefer you not do; your conduct is imposing a sufficiently large risk on everyone else that we are entitled to constrain it.

That would be a fairly profound change in how sovereignty is understood—but history shows that sovereignty has never actually been absolute when states perceive a sufficiently serious common threat.